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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 9, 1999, commencing at

approximately at 9:35 a.m.

Reported by:

SANDI DiBENEDETTO-NARGIZ

Registered Professional Reporter

Registered Merit Reporter

Certified Realtime Reporter

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ACCURATE STENOTYPE REPORTERS, INC.

100 SALEM COURT

TALLAHASSEE, FLORIDA 32301

850-878-2221

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1 APPEARANCES:

2 Representing the Florida Cabinet:

3 JEB BUSH

Governor

4

KATHERINE HARRIS

5 Secretary of State

6 BOB BUTTERWORTH

Attorney General

7

BOB MILLIGAN

8 Comptroller

9 BILL NELSON

Treasurer

10

BOB CRAWFORD

11 Commissioner of Agriculture

12 TOM GALLAGHER

Commission of Education

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1 I N D E X

2

STATE BOARD OF ADMINISTRATION

3 (Presented by Tom Herndon, Executive Director)

4 ITEM ACTION PAGE

5 1 Approved 4

2 Approved 4

6 3 Approved 5

4A Approved 7

7 4B Approved 7

8 ADMINISTRATION COMMISSION

(Presented by Donna Aruduin, Budget Director)

9

ITEM ACTION PAGE

10

1 Approved 16

11 2 Approved 16

3 Approved 16

12 4 Approved 17

13

STATE BOARD OF EDUCATION

14 (Presented by Wayne Pierson, Deputy Commissioner)

15 ITEM ACTION PAGE

16 1 Approved 34

17

TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND

18 (Presented by Kirby Green)

19 ITEM ACTION PAGE

20 1 Approved 81

2 Approved 81

21 3 Approved 81

4 Approved 82

22 5 Approved 82

6 Approved 83

23 7 Deferred 83

8 Approved 83

24

CERTIFICATE OF REPORTER 85

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1 P R O C E E D I N G S

2 GOVERNOR BUSH: State Board of Administration,

3 Item 1.

4 MR. HERNDON: Item 1 is the approval of the

5 minutes of the meeting held on December 8, 1998.

6 COMMISSIONER NELSON: Moved.

7 COMMISSIONER MILLIGAN: Seconded.

8 GOVERNOR BUSH: Moved and seconded, without

9 objection.

10 MR. HERNDON: Item number 2 is approval of the

11 fiscal determination as required by Article VII,

12 section 16(c) of the Florida Constitution in

13 aggregate amounts not exceeding $223,474,000 for the

14 Florida Housing Finance Corporation Homeowner

15 Mortgage Revenue Bond Series 1999, and a second item

16 not exceeding $75 million of Federal Home Loan Bank

17 Liquidity Advance Line.

18 TREASURER NELSON: Move it.

19 COMPTROLLER MILLIGAN: I move it and comment

20 that I am pleased to see extending of this credit.

21 TREASURER NELSON: Second.

22 GOVERNOR BUSH: Any discussion? Moved and

23 seconded. Without objection, it's approved.

24 MR. HERNDON: Item number 3 is, with your

25 permission, Governor, I would like to recommend that

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1 this item be withdrawn.

2 We have been debating the question of this

3 policy addition to our proxy voting guidelines for

4 some time. It continues to generate far more

5 confusion I think than it really merits in terms of

6 substance at least.

7 And since we only had one item come before us

8 last year during the proxy voting season that invoked

9 this particular policy, no harm is done if we

10 continue to address it on a case-by-case basis.

11 And as we gain a little bit more experience and

12 facility with this particular issue, we'll bring back

13 to you a policy that we hope we can communicate a

14 little bit more clearer than we have.

15 COMPTROLLER MILLIGAN: Move withdrawal.

16 COMMISSIONER NELSON: Seconded.

17 GOVERNOR BUSH: Any discussion?

18 I would like to, first of all, we'll approve it

19 without objection. But I am glad to see that I

20 wasn't the only one confused by this. That's

21 heartwarming.

22 But it might be useful to explain the intent,

23 which I would hope would be to ensure that political

24 and social concerns that are described in board

25 proxies, we would not want to make judgments based on

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1 political decisions or political -- taking political

2 stands one way or the other.

3 And I couldn't tell by what was described

4 whether or not that was the end result of what you

5 were proposing to accomplish that. But so long as

6 that's the intent, I am supportive of this.

7 MR. HERNDON: It is, and I apologize. It has

8 proven to be a very confusing proposal, in large part

9 because it is recognizing a prospective action by a

10 shareholder to change a corporate bylaw without

11 necessarily knowing the act -- the impact of that act

12 on the specific shareholder's proposal.

13 And so, it becomes very confusing as you try

14 and talk about how abstentions are counted, and it

15 becomes fairly arcane. And I regret that that has

16 really occupied a lot more time than it deserves in

17 terms of debate.

18 We will look at these on a case-by-case basis

19 and as they come up this upcoming proxy voting season

20 -- we are not aware of any at present -- and make you

21 aware of them as they come along. And we'll have an

22 opportunity to make those case-by-case decisions, and

23 then bring back hopefully a little bit more refined

24 policy.

25 GOVERNOR BUSH: Thank you.

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1 MR. HERNDON: Item 4, (A) is submitted for

2 information review of the investment performance

3 report and fund balance analysis for the months of

4 November and December, 1998.

5 TREASURER NELSON: I move it.

6 COMPTROLLER MILLIGAN: Seconded.

7 GOVERNOR BUSH: Moved and seconded. Without

8 objection, it's approved.

9 MR. HERNDON: Item 4 (B), if I might suggest,

10 is an informational item. It is a submission of the

11 1998 Corporate Governor's Report. If you are so

12 inclined to approve that report except for the

13 proposed change in the proxy voting guidelines that

14 we refer to in item number 3, I think the balance of

15 it is --

16 COMPTROLLER MILLIGAN: I move approval with the

17 exception of the proxy.

18 TREASURER NELSON: And I second it.

19 GOVERNOR BUSH: Moved and seconded. Without

20 objection, approved.

21 MR. HERNDON: The last item on the agenda is to

22 bring to your attention as the Board a possible

23 legislative proposal that we understand is being

24 discussed at some length in the House Insurance

25 Committee.

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1 The chairman there and one of the members have

2 shown a good bit of interest in introducing this

3 legislation. It's not at all clear to us yet exactly

4 what form and content that legislation will possess,

5 but it does largely relate to, or exclusively relate

6 to the CAT Fund.

7 And it comes about I guess as a result of

8 conversations that have been going on in the CAT Fund

9 Advisory Council for almost a year now, certainly

10 eight to nine months. Actually the legislation has a

11 handful of items in it, but far and away the more

12 substantive item is this concept of second season

13 coverage.

14 As the board knows and those in the audience

15 may know, the way the CAT Fund works, storms that

16 occur during the entirety of a hurricane season are

17 covered as essentially one large drawdown against the

18 capacity of the Catastrophe Fund up to the

19 theoretical bonding and co-insurance level, which

20 right now stands at about sixteen and a half billion

21 dollars.

22 Once that single large storm or series of small

23 storms exhaust the capacity of the CAT Fund, there is

24 no automatic reconfiguration or restructuring of the

25 CAT Fund to allow for a second season coverage of any

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1 substantial amount except the actual insurance

2 premiums themselves, which are only a couple hundred

3 million dollars and really wouldn't go very far in

4 the case of a storm.

5 So what has evolved in this legislation is a

6 series of ideas about capping capacity at a level

7 that in this particular case happens to coincide with

8 the existing bonding capacity and co-insurance

9 capacity of the CAT Fund, and then creating a

10 mechanism that would be essentially automatically

11 triggered so that these second series or second

12 season storms aren't left without coverage.

13 There are additional items, and I don't wish to

14 make light of these in terms of providing additional

15 coverage for additional living expenses, authorizing

16 the consideration of commercial -- the exclusion of

17 commercial residential coverage, giving the State

18 Board some specific auditing authority and

19 enforcement authority, and so forth.

20 But by far and away the single largest item is

21 the second season or subsequent season coverage. I

22 know Commissioner Nelson has had some interest in

23 this topic and may wish to make some comments.

24 We are not suggesting that you endorse this

25 legislation as any official action by the board.

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1 Quite frankly, we haven't even seen a written copy of

2 it yet. It would be very presumptuous at this stage

3 of the game.

4 And as near as we can tell, there is certainly

5 less interest in the Senate than there is in the

6 House in this concept, although there may be some

7 interest as the session goes on.

8 But we did want to bring it to your attention

9 in the event that there were any concerns or issues

10 that you wished to express; we could convey those

11 back to the prospective sponsors and go from there.

12 TREASURER NELSON: Governor, this on as an

13 informational item for the SBA to have a concept.

14 This CAT Fund has been phenomenonly successful

15 and probably is the one single reason that we, if

16 more so than any other reason, that we have been able

17 to restore homeowners' market in the aftermath of

18 that devastating monsterous storm.

19 And so the essence of the proposal, in the

20 legislative process, the Department of Insurance will

21 weigh in on this and will basically support this

22 concept.

23 The question is what level should you cap out

24 the amount of capital infusion which is presently at

25 eleven billion dollars offset from the industry's

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1 losses after a catastrophic hurricane? Should it be

2 eleven billion? Should it be higher?

3 I don't know the answer to that, and we need

4 some further discussion on that.

5 With regard to the tinkering as to what are the

6 coverages that the CAT Fund offsets, I am not nearly

7 so sanquine about that, adding additional living

8 expenses as being part of an eligible item for the

9 CAT Fund to cover those losses in insurers and others

10 that were proposed to be deleted.

11 It seems to me that it's doing well as it is

12 right now.

13 So that's a thumbnail summary of where we are.

14 But fortunately, we can speak of these items and

15 tinker with this from a position of strength because

16 this CAT Fund has been an extraordinary tool for the

17 Florida free market to rebound in the aftermath of

18 the most costly natural disaster in the history of

19 this country.

20 GOVERNOR BUSH: The problem, is it as we build

21 up the reserves, is the unintended consequence that

22 private reinsurance no longer is necessary, or are we

23 making it -- are we lessening the need for it in the

24 minds of the insurers? Or is the price -- is this a

25 question of are we subsidizing insurance companies?

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1 How does the reinsurance fit into this, and how

2 would it look under some version of what Commissioner

3 Nelson just described? Is there enough market for --

4 to fill that void now?

5 MR. HERNDON: Dr. Nicholson is here, who is

6 director of the CAT Fund is here and may wish to

7 speak to that. But if I might make a brief

8 introductory comment.

9 One of the experiences that all of us learned

10 as a result of Hurricane Andrew was that when you

11 began to turn around and look for private insurers,

12 they were suffering from huge damages to their own

13 fiscal integrity and oftentimes were just simply not

14 available.

15 One of the things that the CAT Fund has done,

16 and this proposed second season coverage has done, is

17 allowed them to structure their financial situation,

18 bearing in mind the coverage that the CAT Fund

19 offers. So that really has become for them the first

20 line of defense, so to speak.

21 And I think has allowed them to recover

22 financially with a great deal more security and

23 comfort than in the absence of the CAT Fund or this

24 proposed second season kind of coverage.

25 I don't know that anybody could really tell you

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1 with certainty, Governor, what the situation would be

2 like if a storm or a series of storms were to occur

3 that would exhaust the entire CAT Fund capacity.

4 Remember that it's now at sixteen and a half

5 billion dollars, when you add in the co-pays and the

6 bonding capacity and the CAT Fund and everything. So

7 it would be a monster situation that we would be

8 facing when you look at just residential coverage

9 alone.

10 Whether or not the reinsurance market would be

11 there with enthusiasm I think remains to be

12 determined. This kind of second season coverage

13 seems to be quite welcomed by many of the insurers

14 that we've talked with. And I think there are still

15 some who got -- who are not totally sure yet exactly

16 what their posture is.

17 But by and large, I think the bulk of the

18 insurers in the reinsurance market look with favor on

19 this idea.

20 And as Commissioner Nelson points out, it's

21 still very early in the process. This needs a lot of

22 conceptual and detailed fine-tuning over the course

23 of the next several months and maybe years.

24 TREASURER NELSON: Governor, just to put that

25 in context.

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1 What we have in the CAT Fund capacity today is

2 $11 billion. That would, in effect, cover a sixteen

3 and a half billion dollar storm residential loss.

4 This is for residential losses only, not commercial

5 loss.

6 Compare that to Hurricane Andrew. Andrew was

7 $10 billion residential losses. So today, we are

8 talking about the coverage of a storm of the

9 magnitude of half again more than Andrew.

10 Lord help us, don't visit that upon us. But

11 that's what we are able to handle today with the

12 present CAT Fund.

13 So then the question is: Do we want to take

14 some of that capacity in Year 1 and slide it over to

15 Year 2 just in case we get to the mathematical

16 improbabilty that we get a monster in one year and we

17 get another monstor in another year? That's the

18 essence of where we are heading.

19 COMPTROLLER MILLIGAN: Governor, can I ask a

20 question. If and when we were to chose to endorse or

21 not endorse this legislation, should it be done by

22 the Trustees of the SBA or by the Corporation?

23 MR. HERNDON: Frankly, it could be done by

24 both. As soon as we get a written version and have a

25 chance to analyze it and bring back to you some

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1 recommendations, which is what we contemplate doing,

2 then I think it's a very appropriate question. We

3 may very well want to have both entities endorse or

4 object or whatever the case may be.

5 TREASURER NELSON: Thank you.

6 MR. HERNDON: That completes the agenda,

7 Governor.

8 (State Board of Administration Agenda was

9 concluded.)

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1 GOVERNOR BUSH: Thank you, Tom. Administration

2 Commission, Item 1.

3 MS. ARDUIN: Governor and the Cabinet, Item 1,

4 I recommend approval of the minutes for the meeting

5 held January 26, 1999.

6 COMMISSIONER GALLAGHER: Moved.

7 COMMISSIONER CRAWFORD: Seconded.

8 GOVERNOR BUSH: Moved and seconded. Without

9 objection, it's approved.

10 MS. ARDUIN: Item 2, I recommend approval of

11 the transfer of general revenue appropriations for

12 the Department of Corrections.

13 COMMISSIONER GALLAGHER: Moved

14 ATTORNEY GENERAL BUTTERWORTH: Seconded.

15 GOVERNOR BUSH: Moved and seconded. Without

16 objection, it's approved.

17 MS. ARDUIN: Item 3, I recommend approval of

18 the information resource management project for the

19 Statewide Automated Child Welfare Information System

20 for the Department of Children and Families.

21 COMMISSIONER CRAWFORD: Moved.

22 COMPTROLLER MILLIGAN: Seconded.

23 GOVERNOR BUSH: Moved and seconded. Without

24 objection, it's approved.

25 MS. ARDUIN: Final item, recommend approval of

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1 the transfer of general revenue appropriations for

2 the Department of Education.

3 ATTORNEY GENERAL BUTTERWORTH: Moved.

4 COMPTROLLER MILLIGAN: Seconded

5 GOVERNOR BUSH: Moved and seconded. Without

6 objection, it's approved.

7 MS. BLONDE: Thank you.

8 (Administration Commission Agenda was

9 concluded.)

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1 GOVERNOR BUSH: State Board of Education, Item

2 1.

3 MR. PIERSON: Just one item today, it's repeal

4 of 14 rules.

5 First rule is 6A-1.043, Guidelines for Unitary

6 School System; 6A-1.09411, Student Performance

7 Standards of Excellence; 6A-1.095, Requirements for

8 High School Graduation; 6A-1.10951, Private Tutors;

9 6A-1.0953, Minimum School Day for Experimental or

10 Innovative Programs; 6A-1.09532, Minimum School Year

11 for Experimental or Innovative Programs; 6A-7.065,

12 Adoption Period for Instructional Materials Requiring

13 Frequent Revision; 6A-7.075, Sales of State

14 Department Bulletins; 6A-7.097, Law Education

15 Program; 6A-10.013, Leave Provisions for Exempt

16 Employees, Department of Education; 6A-10.020,

17 Environmental Education; 6A-10.021, Environmental

18 Education Grants; 6A-10.037, Regional Centers of

19 Excellence in Mathematics, Science, Computers and

20 Technology; 6A-16.004, Delegation of Authority to the

21 Commissioner.

22 COMMISSIONER CRAWFORD: Move approval.

23 COMMISSIONER GALLAGHER: Seconded.

24 TREASURER NELSON: Governor, may I just make a

25 couple comments, more comments than in the form of a

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1 question.

2 It's my understanding that the repealing rules

3 will only affect a handful of items that are

4 currently brought to the attention of our State Board

5 of Education, and that some of items are going to be

6 put back into a future delegation rule.

7 So I just wanted to make sure that we are not

8 abrogating our responsibility as an elected

9 policy-making board. In other words, the policy

10 decisions would still be made by this board.

11 And that's the statement for the record that I

12 wanted to make.

13 A good example of that would be the recent

14 proposal to revise the way graduation and dropout

15 rates are calculated. And I am not sure if every

16 member has had a chance to review the information

17 that Commissioner Gallagher sent to us last week, but

18 they represented significant policy change in the way

19 graduation rates will be calculated.

20 We saw a lot of press on that over the course

21 of the last week. And in an effort to allow the

22 State Board a chance to better understand this

23 proposal and to generate some policy discussion as a

24 board, I would like to request that this issue be

25 placed on the next agenda item so that we could have

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1 that policy discussion.

2 GOVERNOR BUSH: Commissioner Gallagher.

3 COMMISSIONER GALLAGHER: I have absolutely no

4 problem with that; in fact, I am willing to discuss

5 it now. Because we have a short meeting, it might be

6 a good time to do.

7 GOVERNOR BUSH: We may not have a short

8 meeting. We have another -- but go ahead -- a lot of

9 things to talk about.

10 COMMISSIONER GALLAGHER: But this policy came

11 as a legislative policy, was the way that the dropout

12 rate is -- and the graduation rate is figured is --

13 was directly -- and is in statute -- so the

14 legislature proviso language last year directed us in

15 the Department of Education to look at those numbers,

16 and if possible, come up with a better way to give a

17 more realistic, real math as opposed to a bad math

18 answer.

19 So we put together a team from the districts,

20 representatives of -- 10 or 12 different

21 representatives from different districts throughout

22 the state, large and small, and a group of

23 statisticians and other people from the Department

24 of Education, and we took what is available to us in

25 regards to numbers.

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1 And this won't take long, but I can tell you

2 real quickly that the numbers in the past were

3 figured very simply. We took how many people were in

4 ninth grade and we added anybody that came into --

5 let's put it this way. How many people were in ninth

6 grade four years ago, and we said how many people

7 graduated, and we divided that number and said this

8 is a percentage of graduates.

9 We did it, of course, by county as well as by

10 the state average.

11 Well, the problem with that is that this

12 happens to be a very -- a large growth state. We

13 have 5- or 600,000 people moving in a year, we have

14 2- or 300,000 people moving out, or 2- or 300,000 of

15 the state, and a lot of these kids came to high

16 school and graduated, but they weren't in the ninth

17 grade class. So we never counted them on both sides

18 of the equation.

19 So we ended up having inflated numbers. And it

20 made everybody feel good and everybody look good.

21 This is not anything new. Commissioners, if you

22 remember, I am sure during the four years I was on

23 the Cabinet, your numbers that would come way back

24 from the federal government would tell us -- at least

25 back when I was here on the State Board -- that the

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1 graduation rate in Florida was in the low 50s. And

2 the Commissioners would say, oh, no, we figured it a

3 different way. Their way of figuring it isn't right.

4 And the bottom line is their way of figuring it was

5 probably closer to right than what our way of doing

6 it was.

7 So what did we do about this?

8 The committee came up with a way of doing it

9 that basically we tracked every individual student in

10 and out of the denominator, the cohort. So we take

11 -- there is two ways; you can take the graduates that

12 includes certificates of completion, or ones that

13 don't include the certificates of completion. The

14 difference between those two is 1.6 percent.

15 Certificates of completion is given when in

16 fact a student has all the credits to graduate from

17 high school but they do not have the passing 700

18 score on the HSGT, high school graduation test.

19 So we recommended excluding the certificates of

20 completion because they can come back and pass the

21 test later.

22 The results of that came -- how that's figured

23 is that we now would look for the graduation rate for

24 1997-'98. There were -- now these are early figures

25 because we allowed at least a year for the different

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1 Boards of Education to send in their numbers. But

2 there were 109,690 graduates in the early reports

3 from the districts.

4 And now we take the adjusted cohort as opposed

5 to just the number of children that were in ninth

6 grade. The adjusted cohort is all the ninth graders,

7 all the kids that came into the school are added in,

8 all the children it assumes that left the school are

9 taken out of each individual school. And we come up

10 with the number of children that would qualify to be

11 graduates for the Class of 1997-'98 -- by student,

12 individual by student.

13 And so when we end up with that, we divide that

14 number and we end up with a graduation rate, adjusted

15 cohort was 225,638 students. So we end up with a

16 graduation rate, and this is of students eligible to

17 graduate with the Class of 1998, that came to 48.6.

18 So that's the method by which the math was

19 figured. The advantages of doing it this way are

20 two. One is it's a more accurate calculation because

21 we are counting individual students.

22 And two, this number now can be used for school

23 account ability where the other number where you just

24 had how many people started in ninth grade and how

25 many graduated, which if you are in a growth county,

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1 you look good.

2 As a matter of fact, a major problem with the

3 old way of doing it was that we actually had a county

4 that had a 103 percent graduation rate.

5 TREASURER NELSON: Which county?

6 COMMISSIONER GALLAGHER: Washington County.

7 No, either Charlotte or one of the small ones. I

8 think it might have been Charlotte.

9 So they had a huge growth rate during one year

10 and ended up with more graduates than they started

11 with, which obviously helped inflate; because if we

12 look at the old way of doing the numbers, what we had

13 before was we had graduates in 1997-'98 at 111,403.

14 And the first time ninth graders in October '94,

15 which is the old way of doing it, was 154,901 which

16 gave us a graduation rate of 71.9 percent.

17 And that way of doing it, we also included the

18 special denominator and special certificates of

19 completion and GEDs for those that are 16 to 19.

20 The problem with the old way, as I said, it was

21 bad math, it assumes that the numerators were not

22 necessarily were the same ones that were in the

23 denominator. It doesn't track individual students,

24 and it can't be used for school accountability. So

25 that's why we recommended at the request of the

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1 legislature to do it this way.

2 I will be glad to answer any questions.

3 ATTORNEY GENERAL BUTTERWORTH: We have -- I

4 think in order to get your actual diploma, you need

5 a, what, 2.0 average?

6 COMMISSIONER GALLAGHER: Now you do.

7 ATTORNEY GENERAL BUTTERWORTH: Now you do.

8 COMMISSIONER GALLAGHER: Let's put it this way;

9 now you do if you are in ninth or tenth grade.

10 ATTORNEY GENERAL BUTTERWORTH: What happens if

11 you are in the eleventh grade?

12 COMMISSIONER GALLAGHER: You still fall under

13 the old rule. You need a two point average.

14 ATTORNEY GENERAL BUTTERWORTH: You need a two

15 point average for all four years or just your last

16 two years?

17 COMMISSIONER GALLAGHER: No, two point is what

18 it was when they started ninth grade, so it's two

19 point for all four years, which is what it has been.

20 ATTORNEY GENERAL BUTTERWORTH: A number of

21 parents have stated that there seems to be in some

22 school districts a problem as to the definition,

23 whether they need a 2.0 for all four years or 2.0

24 just for the last two years because of the rule

25 change.

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1 What has occurred is a number of students in

2 their freshman and sophomore years do very well.

3 Then they suddenly had a downturn in their junior

4 year. Now the counselors are saying you need a 2.0

5 just for the junior year and senior year, we cannot

6 count your ninth and tenth grades.

7 What happened early on this year is this

8 discouraged a lot of students, and you may end up

9 with a lot of dropouts. If you check that out I

10 think -- because --

11 COMMISSIONER GALLAGHER: Could well be some

12 people's interpretation.

13 ATTORNEY GENERAL BUTTERWORTH: But I think

14 what's happening is some of the school districts and

15 counselors are not speaking the same language. I

16 personally believe it should be for all four years

17 for everybody and not just -- because these rule

18 change, you're 2.0 must be the last two years. It

19 might benefit some who did very poorly in their

20 freshman and sophomore years. It cuts both ways.

21 But that's just one thing that has been some

22 concern and we brought it to the attention of the

23 previous administration, and I think we never got the

24 answer back because of change in administrations; I

25 don't want to be critical --

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1 COMMISSIONER GALLAGHER: I think if that's a

2 misunderstanding, I am not will totally clear myself

3 how they came to that conclusion. I will get back to

4 all the members of the state board with the way we

5 see it and it's interpreted by the state.

6 ATTORNEY GENERAL BUTTERWORTH: As long as

7 school districts, all school districts do it the same

8 way.

9 COMMISSIONER GALLAGHER: They should all being

10 doing it the same way.

11 GOVERNOR BUSH: This is kind of an interesting

12 debate about the graduation rate because here we are

13 talking about 48 percent or 51 or 67 or 71, the ones

14 I've seen in the paper, all of those are lousy.

15 COMMISSIONER GALLAGHER: You got it.

16 GOVERNOR BUSH: I hope in this getting confused

17 over numerators and denominators, we don't lose sight

18 of the fact that we should be striving for

19 significantly higher. That is the national standard.

20 That has been the norm for the last 10 years, and we

21 have got to figure out a better way of working on

22 this far earlier than waiting until the kids are 16

23 years old; when they are so far behind, that it's

24 kind of a moot point.

25 COMMISSIONER GALLAGHER: Governor, if I can,

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1 the good news, if there is one that can come out of

2 it, is that we are now looking as a state at what

3 some of the problems are with the students that get

4 to high school and when they show up in ninth grade,

5 they are pretty much -- a large percentage aren't

6 going to graduate because they aren't able to read

7 when they show up..

8 And so we are now moving to make sure,

9 especially with the legislation you proposed and the

10 legislature is looking at, to see to it that they do

11 and are reading at second and third grade which is an

12 absolute necessity, and that they don't get promoted

13 until they can. Because if they can't read by third

14 grade, they are not going to be able to read to learn

15 the rest of their lives.

16 And the other thing that is so important that

17 we just learned in recent years is the importance of

18 the ratings issue for kindergartners. Children that

19 show up in kindergarten that have a 1,000 word

20 vocabulary from the inner city compared to a child

21 that shows up with a 5,000 vocabulary from a middle

22 class family, that doesn't know the answer and

23 doesn't know the shapes and does know colors or and

24 doesn't know numbers and letters, whereas the middle

25 child knows all those things, starts -- that other

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29

1 child starts out so far behind that he never catches

2 or she never catches up.

3 So it's imperative upon this legislature this

4 year to pass the Ratings Legislation Minimal that

5 would gear into having kids ready when they come to

6 kind kindergarten so they have a fair shot from

7 there. Many of these students that are not

8 graduating from high school today is a result of they

9 never had a chance when they showed up at

10 kindergarten; and we have to concentrate on making

11 sure that we don't have another generation of that.

12 GOVERNOR BUSH: Anybody else have any

13 comments?

14 ATTORNEY GENERAL BUTTERWORTH: As we all know,

15 those -- whatever the percentage might be who drop

16 out of the school system drop into another system,

17 and that being the criminal justice system. And

18 that's the most expensive way to deal with it at that

19 end, when we talk about 25 or $35,000 a year to house

20 an inmate in one of our institutional facilities. So

21 this is such important, not just for education but

22 it's important for the whole other aspect of the

23 society, and has been.

24 GOVERNOR BUSH: I concur with Commissioner

25 Nelson's advocacy of having a discussion about these

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1 big policy issues. You know, I am new to this job.

2 I know that everything is suppose to be pretty

3 scripted around here, but these are big ideas and I

4 think really important things. And I know that

5 everybody gathered here once to accept the

6 responsibility, and this is something that I would

7 hope -- I would encourage us to make sneak attacks in

8 advance, however you want to do it, but talk about

9 these things that really will make a difference for

10 our state.

11 And the State Board of Education has a critical

12 role to play, from the perspective of much of what

13 we're proposing in our legislative package to the

14 legislature, the platform from which we jumped off of

15 was state board rules that were discussed and debated

16 in the last two or three years in this gathering.

17 So I would hope that we would have ample time

18 to be able to discuss these things. I appreciate

19 your comment.

20 COMMISSIONER GALLAGHER: Let me just say that I

21 fully respect and appreciate that this is a

22 policy-making board for the Department of Education

23 and for education in the state. And I look toward to

24 bringing these policy issues to this board. As a

25 matter of fact, having spent six years on this board

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31

1 previously, I felt then that there really weren't

2 enough policy decisions brought here to be discussed

3 openly among the members because the importance of

4 doing that is it gets public attention of the

5 importance of education.

6 One of the sad things that I saw in the people

7 choosing to have a not elected commissioner and not

8 the State Cabinet sitting as the board is that if, in

9 fact, this particular board operated correctly, the

10 issues that affect education have an extremely high

11 priority in this state if they would be discussed at

12 this level.

13 And they had not been in the past, and I think

14 that may be one of the reasons people said well, if

15 they are not going to really be discussing them at

16 Cabinet level, maybe we ought to just move it on and

17 have it be an appointed board in a different way.

18 So I think the state was losing during those

19 years when we didn't take the major discussion on

20 these policies and let the public understand the

21 importance of the policies and what's really

22 happening in schools.

23 So we will be most happy to deliver as much as

24 you can take.

25 GOVERNOR BUSH: I'm just jealous you didn't

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32

1 pass those out really cool maps you made.

2 COMMISSIONER GALLAGHER: I only had one copy,

3 and it shows apples and apples and apples and

4 oranges. That's the way I do my math. It's easier

5 that way.

6 GOVERNOR BUSH: It'd be much more effective if

7 you'd show it.

8 COMMISSIONER GALLAGHER: I wasn't prepared to

9 do it fully, but if you want me to do it with big

10 slides, we can do that.

11 GOVERNOR BUSH: Commissioner.

12 TREASURER NELSON: Fine. That's exactly what I

13 wanted.

14 (State Board of Education Agenda was

15 concluded.)

16 *

17

18

19

20

21

22

23

24

25

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33

1 GOVERNOR BUSH: You can have the charts back

2 now. Trustees Internal Improvement, item 1.

3 MR. GREEN: Item 1 is consideration of the 1999

4 Conservation Recreation Lands Annual Report and the

5 1999 CARL annual priority list.

6 Governor, we have a few speakers on this item.

7 And I need to make an introductory comment on it.

8 There has been a lot of discussion over the

9 last week, week and a half, over the impasse category

10 that we just created for the CARL list. The reason

11 that was created was a need to better indicate to

12 you, the board members of Internal Improvement Trust

13 Fund, how we were doing in land acquisitions and when

14 we were completing projects.

15 What we were seeing is we continued to bring

16 CARL projects to you that indicated that we were

17 someplace between 40 and 60 percent complete in the

18 acquisition, and we never seemed to be able to get

19 below that number. The reason we couldn't get below

20 that number is we had negotiated with the --

21 COMMISSIONER GALLAGHER: One second. Governor,

22 on the rule repeals, we had the motions but we didn't

23 have the vote. So if we could finish it.

24 GOVERNOR BUSH: Is there anymore discussion on

25 the rule repeal? It's moved and seconded without

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34

1 objections. It's approved.

2 COMMISSIONER GALLAGHER: I am sorry, Kirby, I

3 didn't mean to interrupt but if we forget it, we'd

4 have to do it all over again.

5 MR. GREEN: That's okay.

6 So we were is we kept bringing back issues to

7 you that showed we were between again about 40 and 50

8 percent complete of acquisition, where we had

9 negotiated with everybody that was in the project and

10 had had them refuse the offers the state had made.

11 So to better indicate to you where we stood in

12 progress on those, we created this new category, so

13 as we completed negotiations and had unsuccessful

14 negotiations, we could move projects into that and

15 come back to you and say: For this project, we have

16 completed the project because no one else wants to

17 negotiate.

18 In developing the impasse category, we debated

19 whether or not -- we being the Land Acquisition and

20 Management Advisory Council -- debated whether we

21 should just take those projects off the list,

22 completely, those individual parcels.

23 The fault was that we didn't want to do that

24 because at some point in time, either a generational

25 change or change in circumstance, those people may

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35

1 want to be reconsidered.

2 And if we did that, they would have to come

3 back on the list for us to be able to consider them.

4 So we created this impasse category which was kind of

5 the inactive category within the project list that

6 would just sit, projects would sit in when we

7 completed them and it would be an opportunistic list

8 at that point; if someone wanted to come back up,

9 they could come back to the state or the department

10 and say: Now we're ready to sell, would you

11 reappraise it and try to buy it from us?

12 So that's where that list came from, was in an

13 effort to try to better report to you on the state's

14 efforts, the staff's efforts, in negotiations and

15 completions of projects.

16 So that was the impasse list. It wasn't to

17 create a special category of projects that we dealt

18 with negotiations in a different manner or something

19 like that. It was just purely to set them aside in

20 an inactive category that would allow them to come

21 back up through the system, if they needed to, and be

22 ready for acquisition.

23 So I hope that, with that explanation of what

24 the impasse category is about, you better understand

25 why we thought it was necessary to create that

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36

1 category in the list.

2 We have three speakers that would like to speak

3 on this issue, unless there are questions.

4 GOVERNOR BUSH: Well, we are going to have

5 think -- I know the Commissioner wants to speak and I

6 have some thoughts on this, but why don't we ask the

7 people that are here to speak first.

8 MR. GREEN: First speaker is Jim MacFarland

9 followed by George Wilson and Eva Armstrong.

10 MR. MACFARLAND: Governor, Members of the

11 Cabinet, I am Jim MacFarland. I am a former director

12 of the Division of State Lands and for the last 10

13 years have had a real estate company representing

14 owners selling property to public agencies, mostly

15 the state, some local government and some federal

16 government.

17 And I was asked to come here today not to speak

18 on the list but maybe some ideas as to how the

19 process could work and go a little quicker.

20 And I would like to address, I would like to

21 address that if I could, if this is the appropriate

22 time or I could speak a little later.

23 I have got five suggestions or five ideas based

24 on my experience and conversations with a lot of

25 people over the years.

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1 The first is to define the goal of the

2 acquisition program. And the main issue there is do

3 you want to buy the best properties, or do you want

4 to get the best price or the best deal? I know the

5 staff -- there has been a lot of issues -- what do we

6 want to do? What's the most important?

7 Do you buy a grove next to the Governor's

8 mansion, if you have to pay 100 percent? Do you pass

9 on the Dearing Estate in Dade County because you

10 can't purchase it for 95 percent?

11 There is a lot of properties like that. I know

12 everybody looks at what's really the most important

13 thing. And the staff has a lot of concerns. They

14 are concerned about closing, they are concerned about

15 the auditors, they are concerned about what you are

16 going to think on an acquisition.

17 I think some direction on what is most

18 important would be beneficial. Even some properties

19 where there is a difference in appraisal, like Top

20 Sail Hill there is a difference in values and the

21 court came up with a value. I don't think anybody in

22 this room that has ever seen Top Sail would think the

23 state should not have purchased it.

24 The funny thing is that for what the state

25 paid, St. Joe Corporation would love to buy that back

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38

1 from you with more than the state paid for it because

2 of the way these properties increase. And you buy,

3 actually the state buys the cream of the cream. The

4 things that are on this list are the best resources

5 in the State of Florida.

6 The second point would be something that a lot

7 of people thought about for years, and that's to make

8 the appraisals public. You need a legislative

9 change.

10 Right now the appraisals are confidential and

11 you negotiate, staff negotiates with all property

12 owners, little old ladies with a lot in the

13 Everglades or a major corporation with 10,000 acres

14 in the middle part of the state.

15 This creates a lot of concern and mostly time.

16 It takes so much time to negotiate these things. Big

17 corporations, they don't care. They know what they

18 are doing. I personally love to -- it's a lot of

19 fun, but it takes a good period of time, and some

20 smaller owners don't understand that, and large

21 owners don't understand, when you know the value of

22 your property and somebody comes in and offers you 80

23 or 85, it makes a lot of people mad.

24 It makes sellers mad. Why are you doing this?

25 It doesn't make any sense.

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1 So I would suggest making appraisals public and

2 offer owners the appraised value.

3 All 49 states to my knowledge do this. The

4 federal government, all agencies, do it. Florida is

5 the only exception where you have appraisals that are

6 confidential and you negotiate. And there are some

7 benefits to that, you do save money and there is some

8 down sides. Most of it is time and maybe some of the

9 landowners not being real happy and not wanting to

10 sell to the state in the future.

11 And I will give you an example. One of the

12 projects on the CARL list that's being taken off is

13 Hutchinson Island. There were five property owners.

14 My company represented three, and four different

15 governmental agencies put money into the project.

16 It was very difficult. But one of them was a

17 federal government, so the federal procedures had to

18 be used.

19 The appraised value was offered, and the owners

20 could go look at the appraisals. My clients, we

21 hired an appraiser to go say -- these things are

22 quick -- looked at them, sort of facts that they

23 want. They were very close, they weren't wrong.

24 They didn't miss anything. The owner had to make a

25 choice: You either sell or you don't sell.

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1 Had not that level of trust been there -- you

2 could look at the appraisals, you could question it,

3 you eliminated this distrust of the state, maybe

4 trying to get a bargain or negotiate, you didn't have

5 to spend all that time, all the owners agreed to

6 sell, and have been closed and the project is off the

7 list.

8 Had that provision not been in there, I know at

9 least three owners that would not have sold. One of

10 them was mine and there were two others. They

11 probably would not have sold because they wouldn't

12 have had that level, that we can see it, the cards

13 are on the table, and you got to make a decision.

14 And they made a decision and it worked in the

15 state's favor. You acquired all the property.

16 The third one is to establish an acquisition

17 process goal. I don't know what it takes now from

18 start to finish to buy property. I hear from a year

19 to two years. I have been hearing two years

20 recently.

21 But the staff out there is really smart and

22 really sharp, and if you established a goal from

23 start, when you starting the boundary map and the

24 appraisal process to when you get a contract, say six

25 to nine months. That would be a reasonable time

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1 frame, I think, it would be a lot faster than it is

2 now but there's probably a lot of ways to make that

3 easier.

4 If appraisals were public, that would cut the

5 time frame down immensely. So I would suggest taking

6 a look at that. And this is kind of ironic, the

7 staff asked me to come out last week and talk about

8 the closing process.

9 And a number of recommendations were made, but

10 the goal there is the closing process is now many

11 months, to take that and make it three months, to

12 shoot for a closing within three months. It's not

13 what the private sector can do, but the state is not

14 the private sector. Three months seems reasonable. I

15 think most owners would recognize that.

16 GOVERNOR BUSH: You mean three months after the

17 --

18 MR. MACFARLAND: After the Governor and Cabinet

19 approves it. The goal would be three months. It's

20 not three months now.

21 COMMISSIONER GALLAGHER: It's well over a year.

22 MR. MACFARLAND: I think the staff told me the

23 average is five months. That is a long time, plus

24 what really hurts owners, Commissioners, when you

25 start the process, you have an appraisal done, and

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1 there is a value: My property is worth a thousand

2 dollars an acre.

3 When you go through the process, it gets to the

4 Governor and Cabinet, and you close, quite often it's

5 a year later, and the appraisals aren't adjusted, so

6 you just lost whatever value of the property, if it

7 goes up. If goes down, you made out okay. But --

8 COMMISSIONER GALLAGHER: But you don't know

9 what the appraisal is anyway. So --

10 MR. MACFARLAND: Well, once the Governor and

11 the Cabinet approves it, you can see the appraisal.

12 But by then the time frame, it's at least six months

13 old and it takes six months to close, you are selling

14 property for basically its value 12 months ago.

15 That bothers a lot of owners, especially the

16 small owners that have a mortgage payment. You know,

17 here they've got a contract and they are making a

18 mortgage payment for five months before they get

19 their money. So it bothers them a little bit, and I

20 have heard it a couple times -- big owners -- mostly

21 because I am just not going to sell to the state

22 again.

23 And that hurts because some of these owners

24 have property you really want, some of the bigger

25 companies, and they just aren't comfortable because

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1 of the time.

2 The fourth is to delegate more. I think the

3 staff in the last 10 years, they haven't screwed

4 anything up -- that I know of. When I was here, I

5 messed up all the time. I was always doing something

6 bad.

7 But the closings go off. There is nothing that

8 comes back that has bit the state that I know of in

9 10 years after spending hundreds and hundreds of

10 millions of dollars. I think would relieve quite of

11 the workload.

12 And there is a great deal of paperwork from

13 when they get a contract, and it has to go through

14 the DEP internal process and the public looks at it.

15 By the time it gets to you there is six weeks

16 right there. And then --

17 I would suggest that the staff be delegated all

18 acquisitions under say $500,000; so they don't bring

19 contracts to you -- you know, they have their own

20 internal mechanism, they have attorneys that look at

21 everything. They go ahead, they get a contract and

22 they close. That would save an enormous amount of

23 time and that your smaller parcels -- I really don't

24 think you ever had and problems with appraisals, or

25 if you have done, the amount is so small that it's

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44

1 worth the risk to keep those property owners.

2 And then you look at the big ones, where the

3 big decisions are and the big bucks are. But that

4 would be a suggestion for delegation, and other

5 things where they don't have to bring paperwork to

6 you, where you approve 99 out of maybe 100 times some

7 of these minor issues, but I would take a look at

8 that.

9 Another area is to maybe just establish a goal

10 in the appraisal or the negotiation process. I

11 understand that at one of the public meetings, DEP

12 bought about 33, 35 percent of the property that had

13 been appraised. You normally have a willing seller

14 and willing buyer on these state transactions, so

15 that low percentage, something doesn't add up.

16 I don't know what the answer is. It may be

17 they are appraising property with unwilling sellers.

18 If that's the case, don't appraise it, don't waste

19 time. But it may be in the negotiation process that

20 something goes wrong. But that success rate ought to

21 be I think up 60 or 70 percent.

22 Hillsborough County mentioned at one of the

23 meetings their success ratio is 80 percent. So to

24 establish a goal of trying to go through the process,

25 that would save an awful time and paperwork because

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45

1 if you are appraising a whole bunch of property and

2 you're negotiating and you are only buying a third,

3 that's a huge amount of resources that doesn't need

4 to be spent doing that.

5 I don't have the answers there, but that's

6 something that great minds can come up with.

7 Last, that was number five. I am going to go

8 over this one, just a real quick one. And it's not

9 real important. I had it below the line, but on the

10 CARL list that you are going to receive today, the

11 staff that puts it together is probably the finest in

12 state government. They do such a great job, and I

13 don't want them to get anymore work. I want them to

14 do less work.

15 But the process now is they do this wonderful

16 report but it's sort of -- it's a little inflexible.

17 If Commissioner Crawford comes across a great forest

18 he wants to protect, 10,000 acres down in Lakeland.

19 If he were to submit the application today, it would

20 sit there. Their cycle is such it would sit there

21 all this year, and then next year all the committees

22 would look at it and then you would get this report

23 basically two years from today.

24 Some owners are real patient. They will wait

25 around, but sometimes you have an estate or you have

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46

1 some owners that would like a quicker decision. Can

2 I make the list?

3 So maybe a process of a supplement so that if

4 an opportunity came up and owner says: I've got

5 something really nice, so a decision cold be made in

6 say 6 or 12 months, could look at it and say: This

7 is pretty good. We'll go through the process, and we

8 can do a little supplement and not do another look.

9 But that may be a plus.

10 GOVERNOR BUSH: Thank you. The Commissioner is

11 more worried when he see forests now, he sees fires,

12 not purchase.

13 COMPTROLLER MILLIGAN: Can I ask a question?

14 I appreciate your very first item which was to

15 define a goal when we have the best property and best

16 price, and with the number 6 item, the wild card

17 consideration.

18 Doesn't the priority list essentially say the

19 goal is to buy the best property?

20 MR. MACFARLAND: Yes.

21 COMPTROLLER MILLIGAN: And maybe we need to

22 have a wild card situation thrown in there.

23 MR. MACFARLAND: The question is, though, and I

24 have seen it here and I run into it, the question of

25 dollars. Sometimes we are criticized for paying too

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1 much. The auditor does it, the Cabinet.

2 If you are negotiating and you can't buy the

3 grove next to the Governor's mansion for 95 percent,

4 what do you do? What's the goal? It's a minor

5 thing. Everybody wants to save money, but if you

6 have that process, if you offered, the appraisal went

7 through, you wouldn't have anybody that you could

8 criticize.

9 COMPTROLLER MILLIGAN: That's somewhat of a

10 different issue than how we handle the appraisal and

11 how well it's known or not known. But really the

12 priority list does certainly infer very strongly that

13 the goal is the best property.

14 MR. MACFARLAND: Correct. Absolutely.

15 GOVERNOR BUSH: I think one of the problems

16 with this list is it's a list, one through whatever.

17 And maybe, as your suggestion is to consider looking

18 at this from a threshold basis.

19 We can have a priority, but there are certain

20 properties, given the potential of price reductions,

21 that might have higher value immediately where there

22 is a willing buyer and seller.

23 Right now the market mechanisms don't work for

24 the state. There is not enough flexibility; the fact

25 that you made number one on the list, my guess is the

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1 appraisal will raise the price because it's a higher

2 value; someone has determined that it is a higher

3 value because it's number one on the CARL list. And

4 there isn't the flexibility for someone to say I want

5 to make arrangements for my estate. I want a willing

6 buyer. This is the proper time for me to sell or say

7 no, I don't want to sell.

8 We don't have a mechanism in place -- I guess

9 that's your wild card suggestion -- where people who

10 are willing to close quickly and close at a discount,

11 that would create value for the state, that

12 inflexibility I think would be great to resolve,

13 because I think you would find that we could -- there

14 is a limited amount of resources here. We don't have

15 -- if you add up the projects that are on this list

16 or the ecosystems we are working with, and then you

17 take into consideration all the water projects of the

18 State of Florida, it's about the net worth of the

19 entire state.

20 It is billions and billions of dollars. And we

21 have got to find a much more efficient way of meeting

22 the needs.

23 SECRETARY OF STATE HARRIS: If our priority is

24 to buy the best properties, and then we want to focus

25 on the largest ones and then get down to the

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49

1 ancillary and other projects, I am not sure but I

2 understand historically there use to just be a list

3 of projects not prioritized.

4 If we end up being driven by willing sellers,

5 wouldn't we run into the concern that we are buying

6 the ancillary projects rather than the most important

7 first, would be these limited resources.

8 GOVERNOR BUSH: Not if you prioritize to allow

9 people to move up the list by showing their

10 commitment to selling. In other words, you could

11 make it a priority, you could say these are the

12 priorities of the state. But past a certain

13 threshold we want to buy this land. We want to buy

14 these properties.

15 But if someone wants to sell faster or someone

16 wants to sell at a lower price, today all the

17 incentives are the exact opposite.

18 Today it's to go up to appraised value. In the

19 real world people sell their properties and buy their

20 properties at below appraised value all the time, and

21 value is determined between a willing buyer and

22 seller, not by an appraiser. Appraisals are just a

23 guide to allow that process to occur.

24 Seems to me the appraisal process here slows it

25 down rather than speeds it up.

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1 COMMISSIONER GALLAGHER: Just for a comment,

2 Governor.

3 The CARL list has always been a priority list.

4 The land we are buying -- so Secretary Harrison

5 understands it. And so that as the committee puts it

6 together, and it's based on the number one priority

7 of the state, which right now happens to be Lake

8 Worth, Lake Wales Ridge, and it goes on down from

9 that order. And the state attempts to buy -- rather

10 than buy 1, we buy 10. If 10 is a willing seller,

11 they will buy from 10 if they have problems buying

12 from 1, and 1 may be like Lake Wales Ridge,

13 multi-sellers. I mean, it could be hundreds of lots

14 there.

15 COMPTROLLER MILLIGAN: They do have quite a bit

16 of flexibility on the priority list. I think if you

17 have a wild card approach is a good idea when it

18 comes -- gives them more flexibility.

19 So I appreciate the conversation, but the

20 appraisal business has been a really something like a

21 crawl. I hear about the appraisals, but I have seen

22 so many that just made absolutely no sense.

23 I recall vividly the Quickwide Railroad Bed

24 that went 110 miles and could be used for very, very

25 little, and the appraisal was $82,000 an acre. Just

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51

1 not something that one could swallow but follow the

2 best rules of appraisal across boundary state

3 utilization. And I think we really need, as much as

4 anything else, to really take good hard look at this

5 appraisal process.

6 I think it needs to be given some attention.

7 And I think Mr. Green knows that, and we are trying

8 to work on that. But I think we need to go after the

9 appraisal process.

10 I don't have any problem telling the

11 perspective seller what the appraisal value is as

12 long as it is derived in a manner that makes sense.

13 And I have seen too many that don't make sense.

14 GOVERNOR BUSH: Anybody else? I know there are

15 some other people that would like to speak.

16 MR. GREEN: The next speaker is George Wilson.

17 MR. WILSON: Good morning, thank you for the

18 opportunity to speak. I am George Wilson,

19 representing the Nature Conservancy.

20 We have been a partner with the state for about

21 47 years now, and I haven't been around all that

22 long. But we really thank you for the opportunity to

23 talk about this program.

24 If we sound defensive, it's because this

25 program is our best partner. In putting together

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1 nearly 900,000 acres conservation projects in these

2 40-plus years, the CARL program has been our best

3 partner, by far, better than the federal government,

4 better than any other program.

5 It is a dream program. It is sort of a

6 tapestry, it's woven together of landowner

7 relationships, relationships with contractors,

8 relationships with local governments, citizen groups,

9 other units of government, just 20 years of very hard

10 work.

11 So what is in front of you today is a Bible of

12 lots of activity and a lot of human interaction, and

13 it's a very, very involved process. But no program

14 is perfect. No program is beyond being tinkered

15 with.

16 I think the biggest tinkering is when you put

17 together the next 10-year program, Governor, in the

18 form of the Florida Program, which will have some

19 very good changes and suggestions.

20 I wanted to just briefly cover a couple things

21 in the last few years that made the CARL program a

22 much better program. The ability and the outreach of

23 the state's staff to work with other governmental

24 units, such as water management districts on doing

25 joint projects; your item number 3 today, Atlantic

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1 Ridge, is a really good example. It's a project that

2 Secretary Brogan, Lieutenant Governor Brogan, had

3 worked on very hard, the Atlantic Ridge, the Medalist

4 Course.

5 The activity there has been the dedicated work

6 of the South Florida Water Management District's

7 staff to put together a project that's on a state

8 list and a Save our Rivers, a critical watershed,

9 it's a project that's very, very important to the

10 people in Martin County, business community,

11 environmental community, and they negotiated on

12 behalf of the state a very involved large transaction

13 -- and now the Scrub transaction -- a lot of the

14 species in front of you today.

15 It's just a sample of how the state has reached

16 out, and that district has done just a marvelous job

17 of doing that with the State. But a few years we

18 broke down barriers with your help to get to allow

19 the programs to work together using the district's

20 process and the state's closing. And they put their

21 money together at closing, and we saved something for

22 the people. We don't really care who bought it but

23 wanted to protect it.

24 The other one is land management. A couple

25 years ago we -- you all in the legislature changed

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1 the CARL program to the Land Management and Land

2 Acquisition, the LAMAC committee. That puts land

3 management considerations up front for the first time

4 ever in the CARL process.

5 The critical things that were often avoided

6 because they were difficult to consider are now

7 considered more land management decisions, are

8 brought every month, twice a month to those

9 committees. People from all over the state are

10 working together more. We have cooperation on

11 burning units. We have cooperation on research,

12 water quality work. It's just been a great thing to

13 see the agencies working together on management more

14 and that LAMAC committee has made that happen.

15 The additional legal talent, DEP went from one

16 attorney to two attorneys to service thousands of

17 projects, have two really good attorneys there, and

18 that's -- Kirby Green has been a great help in

19 helping to put resources into the program.

20 And contracting out, one of the things they did

21 when it's difficult to add staff to an agency to

22 create the long-term fiscal impact, they have started

23 contracting out with more private vendors to do

24 survey work, more appraisal work, even review of

25 appraisals, title work, looking at closing work, even

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1 investigating all these type of things, when you

2 can't get additional state staff, you have to have a

3 program and they have been doing a really good job

4 looking at how to make the program more efficient

5 with private resources and public money.

6 A couple of suggestions we have is that one of

7 the things you might want to look at is reducing that

8 application review time. The 12-month process has

9 just sort of become a tradition, without a lot of

10 rhyme and reason behind it. But it's a 12-month

11 process.

12 If you look at the CARL book, there has also

13 been the ability, as Jim MacFarland suggested, when

14 Secretary Crawford's 10,000 acre forest comes up. We

15 had the ability to do interim lists. When Wakulla

16 Springs came to the state, when the Morris Foundation

17 put that on, we had an interim list to the Governor

18 and Cabinet in two months, the DNR did, and Wakulla

19 Springs was acquired.

20 It was not on the list. They would never sell,

21 and then all of a sudden they decided to sell. So

22 you have that ability of interim lists.

23 There is some flexibility, but I think it may

24 be taking the process to eight or nine-month period

25 might help.

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1 The consideration of using less than fee, more

2 conservation easements, it's something we own and

3 manage. Well, we monitor about 50,000 of easements

4 in Florida and in America some several million

5 acres.

6 It's a very effective tool. And if you look at

7 the 1990 map that we used to come up with the reason

8 for Preservation 2000, where are the critical

9 habitats and watersheds? There are a lot of places

10 where people, private landowners are doing an

11 excellent job. People have more money with the

12 state, and they are doing a very good job managing

13 critical watersheds and habitats.

14 If we can document how they are managing it, if

15 we can put that down in an easement, do the

16 documentation report to document exactly what was

17 there at the time of the easement, we should be doing

18 more of that.

19 The CARL process now has a 5 percent category,

20 5 percent of the funds. That's extremely

21 insignificant to hit some of the key watersheds and

22 habitats that we can work on now. It will reduce the

23 net outcost to the state. It will reduce management

24 to zero management cost. And It will also keep a lot

25 of really good people on the land who have

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1 demonstrated through generations of ownership good

2 storage of resources.

3 The other thing is, as Jim has suggested, being

4 able to let the state delegating to the division or

5 to the bureau, excuse me, to the DEP, the ability to

6 negotiate at -- and make 100 percent offers at

7 certain projects, you know, the lots that are

8 basically more timing consuming and it costs more to

9 negotiate, use some of the federal process, add a

10 certain number -- and DEP's staff can suggest it.

11 Let them make offers and give them the delegated

12 ability to close, not have to wait two or three

13 months to go to the Governor and Cabinet.

14 I think you'd offer a private landowner a lot

15 more if you can duplicate sort of the private market

16 process.

17 That's a very good suggestion, and it's up to

18 you all to decide what that threshold might be to

19 negotiate for that that would not have to come to the

20 Cabinet.

21 Federal projects. We've looked for years when

22 the Preservation 2000 started, looking at around the

23 Apalachicola forest to the Osceola or the Ocala

24 Forest or the federal properties. We would love to

25 work with the federal government on matching programs

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1 where we can add to their management onclaves. And

2 it would be more efficient to just let them add land,

3 they have plenty of money to manage land. But when

4 they ran out of money in the '90s, we ended up buying

5 a lot of land, and we have duplicated their process.

6 We have now state types of ownerships.

7 And one of the things you might want to look at

8 over the next 10 years is if you buy something that

9 is adjacent to a federal ownership and they have the

10 ability to manage it, could you transfer the deed to

11 them with reverter clauses so that the public has all

12 the rights they would have, and it would be managed

13 for environmental purpose or revert back to the

14 Trustees?

15 But in long-term it may be cheaper because they

16 would absorb the management costs and provide the

17 recreation and all the other resource protections.

18 That's something that they cannot manage land

19 if they don't have the deed under the federal rules.

20 On negotiation impasse, I would suggest, I

21 think as the arguments made by Dr. Brach at the

22 Cabinet Aides meeting, that we need to keep the CARL

23 program resource driven, not landowner driven.

24 That's a very important suggestion.

25 And one of the reasons is that landowners

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1 change, opinions change. We, the Nature Conservancy,

2 are working with one of the largest landowners in the

3 state, will be coming up in the next month with more

4 than 60 square miles of natural areas that the

5 landowner had always told the state no. Finishing

6 Big Bend, finishing the Wacissa, finishing the

7 Apalachicola River, and through an associated

8 foundation be working to try to add -- double the

9 size of Wakulla Springs under critical watershed.

10 And those were all properties that if we just

11 had to drop them because they were unwilling to sell,

12 we would have an incredible period of time now to

13 wait to come back to the CARL committee.

14 But since that project that's been sitting

15 there with minimal boundaries, because we knew they

16 didn't want to sell but they had been vanishing the

17 properties, we now can back in and do bonding

18 modifications and in basically a couple month period

19 and begin the appraisal and being the boundary

20 mapping process.

21 And that's why I think you need to keep it

22 resource driven, because times change and people

23 change.

24 One other issue on value, on negotiated

25 offers.

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1 Appraisals are very frustrating. I have a

2 board that is businessmen and women and educators,

3 and when we buy our own preserves, I have to explain

4 why -- how we came up with the value. I have to

5 explain are we getting the best deal possible?

6 The Nature Conservancy supports negotiations.

7 We think with this amount of cash and with the tax

8 tricks that you can employ on exchanges, bargain

9 sales, gifts, 1031s, 1033s, those type of IRS-allowed

10 exchanges that the federal government uses, that

11 those kind of tricks could be used a little bit more,

12 that we could get the bargain sales. And we have

13 been doing that for decades with you all.

14 But we think that you should still negotiate.

15 I think that is what this Governor and Cabinet could

16 pass, and that's what the legislature has expected of

17 us, to try to get the best deal possible. But be

18 reasonable, because appraisals that you get are a

19 professional guess and a wide range of value.

20 And I can -- the Bureau of Appraisal may not

21 agree with me, but I believe when government gets an

22 appraisal, it is often not the highest -- it is not

23 the highest and best use that a landowner could get.

24 If you are a landowner and you have a lot of land

25 and you have a lot of money and you have a lot of

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1 ability to hire the right people, you can take any

2 approved comp plan and get amendments and get

3 changes. A dedicated person can do that.

4 And government gets -- government appraisals

5 are really more of an as-is/where-is, without a lot

6 of extra effort to increase value.

7 And I would argue that there have been times

8 such as -- the railroad right-of-ways are

9 frustrating, that's why we don't buy those.

10 But I would suggest that we could fill this

11 room up with landowners who do not feel that they

12 have been overpaid, citizens of Florida who think

13 that we have negotiated in an honorable way but we

14 have not overpaid them. And if they think that, they

15 have the ability to go out and get their own

16 appraisal and take a charitable contribution. So

17 there is some advantage.

18 But those are some of the suggestions. I will

19 be happy to answer any questions.

20 GOVERNOR BUSH: Have you tried to get a comp

21 plan changed recently?

22 MR. WILSON: I have seen a lot of them changed.

23 GOVERNOR BUSH: Trust me, it's a challenge.

24 And these valuations shouldn't be based on the

25 ability to manipulate local land use laws and get

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1 some estimated value into the future.

2 I think property owners are getting a good deal

3 here. I am just suggesting that if we could find a

4 way to give them the chance because time, the time

5 value of money is a factor in this as well. It's

6 been mentioned previously.

7 And if there was a way for people who were

8 willing sellers to be able to sell at a discounted

9 price and the state saves money to do more deals with

10 the Nature Conservancy, I think it would be a pretty

11 good thing.

12 MR. WILSON: Thank you. While we sound

13 defensive because it is America's best land

14 acquisition program, and we are ready, willing, and

15 able to work with all of you any time on suggestions,

16 and there are a lot of good suggestions I think your

17 staff could give you, too, on how to tweak the

18 program to make it a little better. Thank you very

19 much.

20 MR. GREEN: Eve Armstrong.

21 MRS. ARMSTRONG: Good morning, Eve Armstrong

22 representing the Audubon Society.

23 You heard some great suggestions. What I want

24 to suggest is that you might want to hold a Cabinet

25 workshop.

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1 This is a complicated issue. The appraisal --

2 issue of appraisals alone, whether to be opened or

3 not, has caused controversy in past years. There are

4 a lot of intracacies to them.

5 And additionally, I think it's good timing.

6 With amendment five that we passed in the fall, the

7 conservation community has aggressively been pursuing

8 a new program this session, and I think it would be

9 ideal -- I mean, granted we are only three weeks

10 between now and the beginning of the session, but it

11 would be ideal if you guys had a discussion about:

12 Look, this is where we are now, how can we speed up

13 this process?

14 Because from my mind, I think it would be great

15 if we can cut the process in half. I think that

16 would encourage more landowners to come forward and

17 say, yeah, I want to sell. I would love to see this

18 preserved for the future.

19 And it's clear from the polling and focus

20 groups we did this summer that the citizens of this

21 state endorse Preservation 2000 because they are

22 tired of seeing in places that they thought were

23 really neat being developed or paved over for a road

24 or whatever.

25 So we have got a good -- the timing right now

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1 is wonderful. And I am suggesting if you guys have a

2 conversation and decide, yeah, this is what we think

3 ought to happen, we get it in a new bill, let's put

4 this in the new program and get a really aggressive

5 Forever Florida, Florida Forever, on the books moving

6 forward.

7 So with that, unless you have questions --

8 GOVERNOR BUSH: That's one I forgot.

9 MRS. ARMSTRON: Well, the House, Senate,

10 whichever one you talk to.

11 MR. GREEN: The last speaker, Steve Lewis.

12 MR. LEWIS: Governor, members of the Board, my

13 name is Steve Lewis. I am with the law firm Lewis

14 Longman and Walker. And I just wanted to make a

15 couple of quick observations.

16 I think the suggestions that have been made

17 here by the previous speakers are all excellent

18 suggestions, and I think doing a workshop is a good

19 idea.

20 But our firm was retained last year to settle a

21 lawsuit that involved a lot of individual lot owners

22 in a place called Southern Golden Gate Subdivision.

23 It's one of the mega parcels.

24 And they had a class action suit going against

25 the State of Florida, inverse condemnation, and it

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1 was about 3700 plaintiffs. And we were retained

2 specifically to look at ways to settle the lawsuit.

3 We weren't involved in the litigation, just to try to

4 structure something that would I guess bring these

5 people around to where they were willing to sell to

6 the state.

7 And we did that. And it was based on some real

8 simple principles of fairness. Basically two

9 things.

10 One is that we got to participate in the

11 selection of a state-approved appraiser. We could,

12 by committee, we could pick one.

13 And the second was is that we could also talk

14 to that appraiser and tell the appraiser what we

15 thought were the relevant evaluation factors that he

16 should consider.

17 And the second principle was simply that the

18 state would give them 100 percent appraised value and

19 give them a priority closing.

20 We floated that with the 3700 plaintiffs. The

21 agreement was that at least 50 percent would have to

22 agree to do it.

23 About 3300 of the landowners agreed to do

24 that. It was pretty phenomenal, about 90 percent of

25 them. And I probably talked on the phone to at least

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1 4 or 500 of them, and they all reacted very

2 positively.

3 Going into this they didn't know what the value

4 was going to be, but they felt like that they were

5 being treated fairly.

6 And they all signed off. And as of this date,

7 we closed on I think since August over 2100

8 individual lots.

9 So whatever you do to accelerate this process,

10 I think if you are going to accelerate it, you are

11 going to have to make these people think that they

12 are being treated fairly.

13 And it worked in that case exceptionally well.

14 So I think the idea of delegating down is a good

15 idea. I do think giving 100 percent of value makes

16 sense in certain circumstances. And so I would like

17 to participate in this process if it goes forward and

18 help come up with some ideas to make it go faster.

19 It has improved significantly. The staff is

20 doing an excellent job now. It's going much quicker

21 than it was even three or four years ago. Thank

22 you.

23 GOVERNOR BUSH: Commissioner.

24 TREASURER NELSON: Governor, in the spirit of

25 all these comments that have been very, very good,

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1 the issue before us is the CARL list, and I would

2 offer a motion to approve that list.

3 And what has been brought here by DEP and LAMAC

4 is this idea of this new category of negotiation

5 impasse. And I think it's a good idea, and it gives

6 to us as the Trustees a vehicle in which to better

7 address some of these CARL projects which have

8 reached an impasse.

9 I am wondering how we can be more creative to

10 look to see if this category with can eventually

11 become the closing category. Eventually all CARL

12 projects will either be completed or will reach

13 negotiation impasse. And this new CARL category

14 presents us with an opportunity to address what

15 heretofore has been missing, which is the way to

16 bring all of our CARL lists to an end and hopefully

17 to more favorable resolutions.

18 So what I want to move, Governor, is that the

19 Trustees approve this '99 CARL annual report and

20 priority list as it's been presented to us. And then

21 I would like to suggest in my motion that we direct

22 the DEP staff and LAMAC, either in a workshop or

23 whatever form -- it makes no difference to me -- to

24 investigate the possibility of further flushing out

25 the negotiation impasse category.

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1 And what I would suggest for consideration of

2 this discussion is creating two new subcategories to

3 bring this recommendation back to the Trustees from

4 negotiation impasse at a future date on the agenda.

5 We passed out to all of your Cabinet Aides a

6 draft, and what these two new subcategories would be

7 would be -- willing seller would be one and unwilling

8 seller would be another. The Trustees would leave it

9 to the staff to bring to us further ideas on how to

10 close out these negotiation impasse categories.

11 But it seems that there would -- we would come

12 to a point where we should either be more proactive

13 in our pursuit of the parcels or make the conscious

14 decision to forego the acquisition altogether and

15 move on to other projects.

16 And so clearly all of these ideas expressed

17 here, we fully support P-2000, we support CARL, and

18 we support the extensions of the programs beyond

19 2000.

20 I just am offering these ideas as a suggestion

21 for a better, stronger way of protecting the natural

22 resources that we want to protect.

23 COMMISSIONER GALLAGHER: I don't disagree with

24 certainly looking at what Commissioner Nelson says.

25 But I would like to have the motion to accept the

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1 CARL project be clean itself. So if he'll just do

2 that and add the other things, I think it would be a

3 cleaner way to do it. And I will be glad to second a

4 clean -- accept the CARL motion.

5 TREASURER NELSON: Okay. I move.

6 COMMISSIONER GALLAGHER: And I second that.

7 GOVERNOR BUSH: Any discussion? It's moved and

8 seconded. Without objection, it is approved.

9 And as it relates to asking DEP staff to either

10 come back to us in the forum or have a workshop, I am

11 not quite sure how we would proceed with this. I

12 don't know what a workshop is, to be honest with

13 you. I am counting on DEP staff to look at all

14 these.

15 COMMISSIONER GALLAGHER: They are not fun,

16 Governor, I can tell you that.

17 GOVERNOR BUSH: Sounds like a lot of work.

18 MR. GREEN: Governor, if I could just a

19 second.

20 This has been an evolving process. The CARL

21 process began in the early '80s as a result of some

22 scandal in previous land acquisition programs in the

23 state.

24 And some very, very good checks and balances

25 were built into the program as we proceeded from

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1 those scandals.

2 And we have tried a lot of things and we have

3 evolved a lot in the process.

4 For instance, in the early years of the

5 acquisition program we didn't really have a priority

6 list. We had a listing of projects. And anybody who

7 wished to sell from that list were encouraged to come

8 forward and we bought off the entire list.

9 What we found as we started to move on in time

10 and process is that we had an unfocused program. We

11 were purchasing in 35 or 40 different projects.

12 There was no completion of the projects that we

13 started.

14 And so we started moving to this priority list

15 and priority projects and essential parcels within

16 projects to try to focus on those things that were

17 really important first.

18 And we have done a whole series of things like

19 that in the program to try to improve our

20 responsiveness to the needs of the state in terms of

21 preservation of those ecological gems that we have.

22 We would welcome an opportunity to kind of step

23 through that process with you as a collegial body and

24 explain how it's evolved and how we have changed

25 through time, and things that we think we may be able

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1 to do to improve the process more.

2 We encourage that and we need that.

3 GOVERNOR BUSH: Kirby, I think that given the

4 fact that the legislature this year is certainly

5 going to look at this in the broadest context as it

6 relates to the extension of Preservation 2000 through

7 Florida Forever, Forever Florida, that this is

8 time-sensitive.

9 Any -- if these very good suggestions that

10 people brought to us and suggestions we might have,

11 we should be discussing them at the next Cabinet

12 meeting, I would think, if it's possible. That's the

13 23rd of February.

14 And if there is a consensus that can be

15 reached, it would be appropriate to have it done

16 prior to March, I guess.

17 MR. GREEN: We can bring an item back. We are

18 putting together that agenda now, but we can get an

19 item on that would flush it out.

20 GOVERNOR BUSH: I would like to see it broader

21 than just the question of the willing seller issue to

22 look at the appraisal question, possibly if there is

23 some suggestions, closing, why it takes so long. I

24 am more than happy to spend the time in a workshop or

25 whatever, this is a hugely important issue.

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1 We are about ready to embark on spending, if

2 you add up local, state, federal, regional,

3 commitments for purchases of lands, billions of

4 dollars. And it's got to be done in the best

5 interest of the state.

6 And if this is a chance to take a deep breathe

7 and build on a great system and make it better, I

8 think we ought to do it.

9 MR. GREEN: We'll get it prepared.

10 COMMISSIONER GALLAGHER: Governor, it might be

11 good if they prepared us maybe a little written

12 history -- we could look at it at our own time -- on

13 how we got where we are. I think if Kirby would get

14 staff to do that, that would get us -- it will make

15 decisions easier, recognizing that it evolved and

16 there are reasons that certain things evolved, and

17 there are reasons why it takes an abominably long

18 time to get things done.

19 And if we can maybe short circuit some of those

20 things, it may not be good reasons anymore. But a

21 good history lessen for us I think would make it more

22 comfortable for you and more comfortable for us

23 knowing how we got where we are.

24 MR. GREEN: We'll get it.

25 SECRETARY OF STATE HARRIS: Governor.

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1 GOVERNOR BUSH: Yes.

2 SECRETARY OF STATE HARRIS: And in doing that,

3 if you could kind give an overview not only on the

4 background but some comments in terms where we are

5 looking.

6 For example, on Commissioner Nelson's list on

7 the negotiation impasse, I really like the idea of

8 the willing sellers and the unwilling, but I thought

9 in a negotiation impasse there really wouldn't be

10 willing sellers. So I was confused by that.

11 And then on the other hand in terms of the

12 history, I think the timing and the wild card --

13 GOVERNOR BUSH: Semi-willing.

14 COMMISSIONER GALLAGHER: Willing for the right

15 price.

16 SECRETARY OF STATE HARRIS: I am just little

17 concerned on that.

18 But on the timing issue, that's absolutely

19 crucial when you are looking at the private sector.

20 It makes no sense. And the wild card, those are

21 great ideas that were given to us.

22 But perhaps also as we are looking at that

23 priority list, which a long time ago didn't work

24 historically -- that's what I was referring to --

25 maybe if with this session, they move up in that

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1 section because if -- because otherwise we are going

2 to be driven by willing sellers rather than the

3 priority list, and I think we are going back full

4 circle to the historical rhetoric we are going to

5 hear and which Commissioner Gallagher brought up.

6 Maybe you can couch a lot of those comments in terms

7 of the direction we ought to make.

8 MR. GREEN: Got a busy week.

9 ATTORNEY GENERAL BUTTERWORTH: Kirby, how long

10 does it take now on average to actually close a

11 purchase after the board approves them? What's the

12 average now? What's the -- maybe which one is the

13 furtherest or what is most delayed and what is the

14 average?

15 MR. GREEN: It depends on the size of the

16 parcels, and it depends on the complexity. Single

17 family lots in a mega parcel deal we can put together

18 real quick and we can close quick. We hire closing

19 companies to do that for us, title companies.

20 If we get a 10,000 acre parcel, the after we

21 get the survey we have got encroachments that have to

22 be resolved prior to closing.

23 One of the things that we have to do as a state

24 agency is to ensure to the state that we are getting

25 marketable title on that property. And so we go

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1 through every step of the title of that piece of

2 property and ensure that we don't have a cloud on the

3 title as we bring it to you and as we close on it.

4 Also, we ensure that we don't have any

5 encroachment problems in terms of neighbors or us on

6 other people as part of that closing.

7 As those things are disclosed in the review of

8 title and the review of survey, after we have

9 negotiated, we stop the process until those issues

10 are resolved.

11 Sometimes it takes an owner six months to

12 resolve a title issue with an adjacent owner or to

13 clear up a point of title where we may not have clear

14 title on that one piece of land.

15 So it may take us a year, 18 months, to resolve

16 those title issues before we are satisfied that we

17 can come back to you and say: Yes, we have got good

18 title to this piece of property, and we are not going

19 to have problems with it in the future when we move

20 forward.

21 And then we have again the lots that we close

22 in 60 days, and it's everything in between.

23 Typically, Pete, if you will help me, on the

24 average size parcel, when we don't have a lot of

25 title problems, about what is the closing average?

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1 PETE: Our goal is to try to close them in 180

2 days. And I think as Kirby mentioned, there are some

3 we can get done faster than that, and there are a

4 number that don't.

5 One thing that Kirby didn't mention is that we

6 typically get an environmental site assessment done

7 on every piece of land that we buy as well and that

8 also takes typically a month or more to get somebody

9 out to look at the property and to tell us whether

10 there are contamination problems.

11 Again, a lot of the rural property that we buy

12 is fairly large acreage tracts, and the surveys

13 themselves can take a fair amount of time to get

14 done.

15 ATTORNEY GENERAL BUTTERWORTH: Pete, as you

16 know, as once before we were delayed in closing,

17 there are agencies, including mine, assisted your

18 agency with a governmental backlog. As you know, I

19 have numerous transactional property lawyers who have

20 worked in very complicated closings, and I will be

21 glad, at no cost to your agency, to assign those

22 lawyers on a temporary basis to you in order to -- I

23 think six months on average is ridiculous. I think

24 it should be much, much lower than that.

25 And since time is money to obviously the

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1 purchasers and sometimes to us, that if there is

2 anything we can do to assist and get that done

3 quicker, we'll do it. You are hiring outside title

4 companies, are you paying them money for that or --

5 COMMISSIONER GALLAGHER: The seller pays for

6 that. But the actual closing of the property, that

7 can happen quick because the seller usually takes

8 care of that side of it.

9 The problem is in all the numerous things that

10 Kirby began to mention, there is probably another 5

11 or 10, that the seller is required to provide before

12 -- the seller is all excited, I've got a contract.

13 That's the first thing. And then a year and a half

14 later, he might get some money.

15 Their goal is six months later, but the truth

16 of the matter is the environmental thing can take a

17 tremendous amount of time.

18 First of all, finding the right people to do

19 it. The survey is not easy. Even though there are

20 already surveys, they have to have state approved

21 surveyers do it.

22 It's just -- and then you have all -- when they

23 finish the survey, there is encroachments because

24 you've got land out there that people sort of just,

25 you know, move their fence, and they got it on the

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1 other guy's land. So they are not going to buy that

2 until that's worked out. That just takes forever.

3 ATTORNEY GENERAL BUTTERWORTH: I thought you

4 said you hired a title company.

5 MR. GREEN: For large tracts like the Golden

6 Gates Estates we hired the title company that handled

7 the closing for those large numbers.

8 COMMISSIONER GALLAHGER: That's because they

9 were not large estates as much as -- how many

10 thousands sellers?

11 PETE: Tons of thousands.

12 COMMISSIONER GALLAGHER: If they had individual

13 people pay, they wouldn't have any money.

14 ATTORNEY GENERAL BUTTERWORTH: I understand you

15 might have the authority in accounting, you may have

16 lawyers in DOT and other agencies, and you may have

17 lawyers in house that are not going to charge you. I

18 don't know how much title companies charge you to do

19 this, but I would like to save as much money as

20 possible. And if we can assist you in any way

21 whatsoever to save the state money which would keep

22 more money in your program, we would like to do

23 that.

24 COMMISSIONER GALLAGHER: But you don't get a

25 title policy when you doing it.

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1 ATTORNEY GENERAL BUTTERWORTH: Well, if they

2 are only doing it for a title policy premium, which a

3 lot of companies do, a lot of times as I understand

4 it now, title -- you correct me because you were

5 there -- isn't title insurance one price only and

6 cannot be reduced?

7 COMMISSIONER GALLAGHER: Yeah, but they charge

8 you above it for other services and title clearing

9 and all kinds of things.

10 ATTORNEY GENERAL BUTTERWORTH: So if we can

11 correct that rule, we might be able to get better

12 prices.

13 COMMISSIONER GALLAGHER: I suggest you talk to

14 the Commissioner of Insurance about that not, the

15 Commissioner of Education.

16 GOVERNOR BUSH: Don't forget which one you

17 are.

18 COMMISSIONER GALLAGHER: That's why I was

19 mentioning it, when he was looking at me. Sometimes

20 I do.

21 GOVERNOR BUSH: If we can move on, but this is

22 the beginning of a discussion. Just write it off as

23 a newcomer -- I am one of the newcomers here -- does

24 not understand why it takes so long to do certain

25 things, and you will be able to explain it to me, I

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1 am sure. But six months to close a piece of property

2 on average for just a regular deal is just -- I know

3 we can do better.

4 We have the best land purchasing program in the

5 country, bar none. Now we've got to make the

6 logistics of it match it. I know you can do it.

7 Or increase the success rate of properties we

8 go after so that we can begin to frontload some of

9 these things, which is the way that people in the

10 private sector do.

11 They know what they are going for, they have a

12 sense of what the values are. They have a sense

13 there is a willing seller and they do these things

14 altogether and they reach a closing earlier.

15 But it's harder to do that when you have a

16 success rate of a third -- what's the number?

17 Because then you have to explain why we are spending

18 so much money on properties we don't close on.

19 This all goes together, I think, hand-in-hand.

20 You can't look at just one element of this.

21 But I am appreciative of the Attorney General

22 offering up his lawyers for the departments of

23 government. I am excited about that. I have a

24 couple others that I could use.

25 ATTORNEY GENERAL BUTTERWORTH: Governor, I

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1 would assign my best lawyer.

2 MR. GREEN: We'll look forward to these

3 discussions and will get a report to you.

4 COMMISSIONER GALLAGHER: Governor, the other

5 motion ended up approving the CARL list. We need to

6 accept the annual report they have done also. I move

7 to do that. That's part of one.

8 GOVERNOR BUSH: There is a motion and a

9 second.

10 COMMISSIONER CRAWFORD: Seconded.

11 GOVERNOR BUSH: Approved.

12 MR. GREEN: And I have our Everglades motion.

13 Item 2, the purchase agreement to acquire 320

14 acres within the Save Our Everglades CARL project.

15 COMMISSIONER GALLAGHER: Move.

16 COMMISSIONER CRAWFORD: Seconded.

17 GOVERNOR BUSH: Any objections? Been moved and

18 seconded. Approved.

19 MR. GREEN: Item 3, authorization to acquire an

20 undivided 50 percent interest with the South Florida

21 Water Management District in 871 acres within the

22 Atlantic Ridge Ecosystem CARL project.

23 GOVERNOR BUSH: Any discussion?

24 COMMISSIONER NELSON: Moved.

25 ATTORNEY GENERAL BUTTERWORTH: Seconded.

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1 COMMISSIONER GALLAGHER: I do have. One thing

2 that I do want to announce that my general counsel

3 was a lawyer for them, but did not have anything to

4 do with this particular purchase prior to him being

5 in government.

6 GOVERNOR BUSH: I would like to disclose I

7 played golf at Medalist.

8 COMMISSIONER GALLAGHER: Well, that's up to

9 you, Governor.

10 GOVERNOR BUSH: It's an incredible golf course.

11 Moved and seconded, without objection, and noted the

12 potential conflict. It's approved.

13 MR. GREEN: Item 4, authorization to acquire

14 undivided an 50 percent in 99 acres in the North Fork

15 St. Lucie River CARL project.

16 COMMISSIONER GALLAGHER: Moved.

17 TREASURER NELSON: Seconded.

18 GOVERNOR BUSH: Moved and seconded. Without

19 objection, it's approved.

20 MR. GREEN: Item 5, an option agreement to

21 acquire 15.2 acres and waiver of survey.

22 COMMISSIONER GALLAGHER: Move.

23 ATTORNEY GENERAL BUTTERWORTH: Seconded.

24 GOVERNOR BUSH: Moved and seconded. No

25 objection, approved.

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1 MR. GREEN: Item 6, issuance of a perpetual

2 nonexclusive access easement and a 50-year

3 nonexclusive utility easement to Clay Electric.

4 COMMISSIONER GALLAGHER: Now, did you remove

5 the LAMAC requirement on your recommendation?

6 MR. GREEN: Without the LAMAC requirements.

7 COMMISSIONER GALLAGHER: Without the

8 requirement.

9 MR. GREEN: Yes.

10 COMMISSIONER GALLAHGER: Okay. Move it.

11 COMMISSIONER CRAWFORD: Seconded.

12 GOVERNOR BUSH: Moved and second. Without

13 objection, approved

14 MR. GREEN: Substitute item 7 is recommend

15 deferral until the March 23rd meeting.

16 COMMISSIONER GALLAGHER: Move to defer.

17 COMMISSIONER CRAWFORD: Seconded.

18 GOVERNOR BUSH: Moved and seconded. Without

19 objection, approved.

20 MR. GREEN: Item 8, modification to a 25-year

21 sovereignty submerged lands management agreement to

22 increase the preempted area from 9,500 acres to

23 1,500,000 acres for managing anchorage mooring field.

24 COMMISSIONER GALLAHGER: Move subject to

25 approval conditions.

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1 ATTORNEY GENERAL BUTTERWORTH: I will second

2 it. Kirby, are we still doing 25-year management

3 agreements?

4 MR. GREEN: Yes.

5 ATTORNEY GENERAL BUTTERWORTH: (Inaudible)

6 MR. GREEN: No, sir, there are a series of

7 mooring fields around the state that are interested

8 or communities that are interested in establishing

9 mooring fields. And we have been looking at 25-year

10 management agreements associated with those.

11 ATTORNEY GENERAL BUTTERWORTH: That's a long

12 time. This one is five, but sometimes it's a long

13 time.

14 MR. GREEN: Governor, that completes our

15 agenda.

16 GOVERNOR BUSH: We have a move and seconded.

17 Does anybody have any conversation on that subject?

18 It's approved.

19 Thank you, Kirby.

20 (Trustees of the Internal Improvement Trust

21 Fund was concluded.)

22 (Proceedings concluded at 11:30 a.m.)

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1

2 CERTIFICATE OF REPORTER

3

4

5

6 STATE OF FLORIDA:

7 COUNTY OF LEON:

8 I, SANDRA L. DiBENEDETTO-NARGIZ, do hereby

9 certify that the foregoing proceedings were taken before

10 me at the time and place therein designated; that my

11 shorthand notes were thereafter translated under my

12 supervision; and the foregoing pages numbered 1 through

13 85 are a true and correct record of the aforesaid

14 proceedings.

15 I FURTHER CERTIFY that I am not a relative,

16 employee, attorney or counsel of any of the parties,

17 nor relative or employee of such attorney or counsel,

18 or financially interested in the foregoing action.

19 DATED THIS 19th DAY OF FEBRUARY 1999.

20

21

____________________________

22 SANDRA L. DiBENEDETTO-NARGIZ

100 SALEM COURT

23 TALLAHASSEE, FLORIDA 32301

(850) 878-2221

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