T H E C A B I N E T
S T A T E O F F L O R I D A
Representing:
VOTE ON PROPOSED 2002 MEETING SCHEDULE
VOTE ON EXECUTIVE DIRECTORS' SALARIES
DIVISION OF BOND FINANCE
DEPARTMENT OF VETERANS' AFFAIRS
DEPARTMENT OF REVENUE
STATE BOARD OF EDUCATION
DEPARTMENT OF ENVIRONMENTAL PROTECTION SITING BOARD
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
STATE BOARD OF ADMINISTRATION
The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush
presiding, in the Cabinet Meeting Room, LL-03,
The Capitol, Tallahassee, Florida, on Tuesday,
September 11, 2001, commencing at approximately
9:16 a.m.
Reported by:
LAURIE L. GILBERT
Registered Professional Reporter
Certified Court Reporter
Certified Realtime Reporter
Registered Merit Reporter
Notary Public in and for
the State of Florida at Large
ACCURATE STENOTYPE REPORTERS, INC.
100 SALEM COURT
TALLAHASSEE, FLORIDA 32301
850/878-2221
2
APPEARANCES:
Representing the Florida Cabinet:
JEB BUSH
Governor
CHARLES H. BRONSON
Commissioner of Agriculture
BOB MILLIGAN
Comptroller
KATHERINE HARRIS
Secretary of State
TOM GALLAGHER
Treasurer
CHARLIE CRIST
Commissioner of Education
* * *
ACCURATE STENOTYPE REPORTERS, INC.
3
September 11, 2001
I N D E X
ITEM ACTION PAGE
VOTE ON PROPOSED 2000 MEETING SCHEDULE:
Approved 6
VOTE ON EXECUTIVE DIRECTORS' SALARIES:
Deferred 8
DIVISION OF BOND FINANCE:
(Presented by J. Ben Watkins, III,
Director)
1 Approved 9
2 Approved 9
3 Approved 10
4 Approved 10
5 Approved 10
6 Approved 11
7 Approved 12
DEPARTMENT OF VETERANS' AFFAIRS:
(Presented by Jennifer Carroll,
Executive Director)
1 Approved 13
2 Approved 13
3 Status Report 13
4 Approved 22
DEPARTMENT OF REVENUE:
(Presented by James A. Zingale, Ph.D.,
Executive Director)
1 Approved 24
2 Approved 27
3 Approved 28
4 Approved 29
5 For Information Only 29
ACCURATE STENOTYPE REPORTERS, INC.
4
September 11, 2001
I N D E X
ITEM ACTION PAGE
STATE BOARD OF EDUCATION:
(Presented by Wayne V. Pierson,
Deputy Commissioner)
1 Approved 44
2 Approved 48
3 Approved 48
4 Approved 48
5 Approved 49
6 Approved 49
7 Approved 49
8 Approved 50
DEPARTMENT OF ENVIRONMENTAL PROTECTION
SITING BOARD:
(Presented by David B. Struhs,
Secretary)
1 Approved 52
Substitute 2 Approved 52
3 Approved 52
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT
TRUST FUND:
(Presented by David B. Struhs,
Secretary)
1 Approved 53, 56
2 Approved 53
Substitute 3 Approved 53
Substitute 4 Approved 54, 56
Substitute 5 Deferred 54
ACCURATE STENOTYPE REPORTERS, INC.
5
September 11, 2001
I N D E X
ITEM ACTION PAGE
STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
Executive Director)
1 Approved 55
2 Approved 55
3 Approved 57
4 Approved 57
5 Approved 58
6 Approved 64
7 For Discussion Only 64
CERTIFICATE OF REPORTER 69
* * *
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON PROPOSED 2002 MEETING SCHEDULE 6
September 11, 2001
1 P R O C E E D I N G S
2 (The agenda items commenced at 9:53 a.m.)
3 GOVERNOR BUSH: Now we have two votes that
4 we have to do -- or actually one deferral, and
5 one vote.
6 I think we all now have reached a consensus
7 on the schedule of the meetings for the
8 Governor and Cabinet for the year 2002.
9 Is there a motion to accept?
10 COMMISSIONER BRONSON: So move.
11 TREASURER GALLAGHER: Move acceptance.
12 GOVERNOR BUSH: Second?
13 Moved and seconded.
14 Without objection, it's approved.
15 (The Vote on the Proposed 2000 Meeting
16 Schedule Agenda was concluded.)
17 * * *
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTORS' SALARIES 7
September 11, 2001
1 GOVERNOR BUSH: And I've asked that we
2 defer the Executive Directors' salaries until
3 October 16th? Is that --
4 MS. CASTILLE: Yes.
5 GOVERNOR BUSH: Why not September 25th?
6 MS. CASTILLE: Commissioner Bronson won't
7 be here.
8 COMMISSIONER BRONSON: I'll be -- I need to
9 be gone on the 25th.
10 GOVERNOR BUSH: Okay. If -- if -- just out
11 of curiosity though, if we're looking at a
12 October 1st start date for compensation
13 increases, shouldn't we do this on the 25th?
14 MS. CASTILLE: November 1st.
15 GOVERNOR BUSH: November 1st.
16 That's right. I'm sorry.
17 Perfect.
18 TREASURER GALLAGHER: All the State
19 employees is November.
20 GOVERNOR BUSH: That's right. The -- that
21 was -- the Legislature did that last year.
22 So there's a -- is -- do we need a motion
23 to defer?
24 SECRETARY HARRIS: Motion to defer.
25 TREASURER GALLAGHER: Motion to defer.
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTORS' SALARIES 8
September 11, 2001
1 COMMISSIONER BRONSON: Second.
2 GOVERNOR BUSH: Without objection, the item
3 is deferred until October 16th.
4 (The Vote on the Executive Directors'
5 Salaries Agenda was concluded.)
6 * * *
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 9
September 11, 2001
1 GOVERNOR BUSH: Division of Bond Finance.
2 TREASURER GALLAGHER: Motion on the
3 minutes.
4 SECRETARY HARRIS: Second.
5 COMMISSIONER BRONSON: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 Item 2.
9 MR. WATKINS: Item 2 are resolutions
10 authorizing the issuance and competitive sale
11 of up to 110 million dollars of PECO refunding
12 bonds to reduce the interest rate, and -- for
13 debt service savings.
14 TREASURER GALLAGHER: Motion.
15 COMMISSIONER BRONSON: Second.
16 SECRETARY HARRIS: Second.
17 GOVERNOR BUSH: Moved and seconded.
18 Without objection, it's approved.
19 MR. WATKINS: Item Number 3 is a resolution
20 authorizing the issuance and competitive sale
21 of up to 190 million dollars in
22 Preservation 2000 Revenue Refunding Bonds.
23 COMMISSIONER BRONSON: Motion to move.
24 TREASURER GALLAGHER: Move.
25 GOVERNOR BUSH: Moved and seconded.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 10
September 11, 2001
1 (Commissioner Crist exited the room.)
2 GOVERNOR BUSH: Without objection,
3 approved.
4 MR. WATKINS: Item Number 4 is a resolution
5 authorizing the issuance of up to
6 twenty-five-and-a-half million dollars for
7 Housing Revenue Bonds for construction of a
8 dormitory at Florida State University.
9 TREASURER GALLAGHER: Motion.
10 COMMISSIONER BRONSON: Second.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 MR. WATKINS: Item Number 5 is a resolution
14 authorizing the competitive sale of up to
15 twenty-three-and-a-half million dollars for
16 construction of research facilities at
17 Innovation Park on behalf of the Florida State
18 University Research Foundation.
19 COMMISSIONER BRONSON: So move.
20 TREASURER GALLAGHER: Second.
21 GOVERNOR BUSH: Moved and seconded.
22 Without objection, it's approved.
23 MR. WATKINS: Item Number 6 is a resolution
24 authorizing the issuance and competitive sale
25 of up to 100 million dollars in Florida Forever
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 11
September 11, 2001
1 Revenue Bonds.
2 This is -- remember, we changed the
3 methodology for implementing this program based
4 on cash needs for acquisition. So this
5 100 million dollars is the second piece. We
6 did 50 million at the end of the last fiscal
7 year. This is the next 100 million dollar
8 piece, in effect, funding last year's
9 appropriation.
10 COMMISSIONER BRONSON: So move.
11 TREASURER GALLAGHER: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection, it's approved.
14 MR. WATKINS: Item Number 7 is a res-- is a
15 report of award on the competitive sale of a
16 hundred and eighty-five million two hundred
17 forty thousand dollars of Preservation 2000
18 Revenue Refunding Bonds. The bonds were
19 awarded to the low bidder at a true interest
20 cost of 3.97 percent, generating gross savings
21 of 14.2 million, or 11.3 million on a present
22 value basis.
23 TREASURER GALLAGHER: Motion.
24 COMPTROLLER MILLIGAN: Second.
25 GOVERNOR BUSH: Moved and seconded.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 12
September 11, 2001
1 Did I hear a second?
2 COMPTROLLER MILLIGAN: Yes.
3 GOVERNOR BUSH: Moved and seconded.
4 Without objection, it's approved.
5 Thank you, Ben.
6 (The Division of Bond Finance Agenda was
7 concluded.)
8 * * *
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 13
September 11, 2001
1 GOVERNOR BUSH: Department of
2 Veterans' Affairs.
3 TREASURER GALLAGHER: Motion on the
4 minutes.
5 COMMISSIONER BRONSON: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 Item 2.
9 MS. CARROLL: The next -- the next item up
10 for recommended acceptance is the third and
11 fourth quarter of 2000-2001 fiscal year
12 quarterly report.
13 TREASURER GALLAGHER: Motion.
14 COMMISSIONER BRONSON: Second.
15 GOVERNOR BUSH: Moved and seconded.
16 Without objection, it's approved.
17 MS. CARROLL: The third item is the
18 World War II project, update on that.
19 You should have a time -- a project
20 time line, as well as a breakdown of specific
21 project components.
22 At their last meeting in June, the Florida
23 Commission on Veterans' Affairs approved a
24 revised 1.9 million fund raising plan, moved
25 down from the 2.6 million dollars.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 14
September 11, 2001
1 They agreed to scale down this project,
2 which also includes a stone monument, which
3 will be located at the R.A. Gray Building.
4 We have given a copy of an artist rendition
5 of the approved monument. The monument will be
6 an exact replica of the Florida Pillar that
7 will also be a part of the World War II
8 Memorial in Washington, DC.
9 Our fund raising plan consists of direct
10 mails to corporations, veterans' organizations,
11 foundations, and individuals, which includes
12 letters and also personal follow-up.
13 Local, county veterans groups are
14 coordinating direct appeals, and they've also
15 made collective contributions.
16 Pro bono radio service announcements will
17 be airing to increase awareness of this
18 project.
19 And one thing, as I traveled throughout the
20 state of Florida, a lot of veterans were
21 unaware that the State itself was going to do
22 something to honor our World War II veterans,
23 and they were very glad to hear that.
24 Pro bono printing for advertisement will
25 soon be published in the upcoming Florida Trend
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 15
September 11, 2001
1 magazine. So again, increased awareness.
2 Our direct mail piece has hit the streets,
3 and within the last 10 days -- within 10 days
4 of it getting to individuals, we have raised
5 $6,000. And our mass, according to the direct
6 mail house, should be within our 14-day mark.
7 We're not stopping with that. We're also
8 coordinating fund raisers going into next year
9 with well-known figures such as Tom Brokaw.
10 And if we can get additional individuals to
11 help with their support, to get well-known
12 figures in here so that we can raise the
13 dollars needed for the total project.
14 The contributions individuals must
15 understand is fully tax deductible, and that
16 will aid to help raise the dollars and
17 individuals contributing.
18 We also have a --
19 (Commissioner Bronson exited the room.)
20 MS. CARROLL: -- our coordinated efforts
21 with the Department of State to fund our
22 activity on December 7th, which will be repaid.
23 As of last week, we have raised for the
24 project, $110,000 for the expenses, of which we
25 have 16,000 cash on hand, minus any expenses
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 16
September 11, 2001
1 that we've had thus far.
2 I was also approached by some State
3 legislators that they would like to appeal for
4 public dollars to be used for this project so
5 that the World War II veterans can feel that
6 the State actually gave into this project to
7 honor them.
8 Keeping this in -- in mind, some of the
9 questions that have come up is that we have a
10 total package that individuals are thinking
11 it's due on December 7th. The one thing that
12 we will have on December 7th is the opening of
13 the exhibit, and then we will move forward from
14 there with our stone monument, our interactive
15 website will be up and running, our curriculum
16 in the schools, as well as the endowment for
17 the project.
18 So our time line is until 2005 for the
19 completed project in itself, with all the
20 components attached to it.
21 And I welcome any questions about this at
22 this time.
23 GOVERNOR BUSH: Yes.
24 SECRETARY HARRIS: Governor, it's a -- it's
25 been a real honor to work with -- with
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 17
September 11, 2001
1 Veterans' Affairs to -- to create this
2 museum -- this temporary exhibit and the Museum
3 of Florida History. We're really excited about
4 it.
5 We -- we are partnering in an unprecedented
6 effort. We are always running everything
7 through our grant, so we never put anything in
8 our budget.
9 But we've -- actually have an extraordinary
10 relationship, because this is such -- such a
11 very, very important project. So we -- through
12 a budget amendment, we've been able to actually
13 front the funding to create this exhibit.
14 We did the website, and we'll be working --
15 once we finish that project December 7th, we'll
16 go on to work on the archived project, and --
17 and some of the other exciting things that they
18 have scheduled.
19 So it -- it really is a great honor to
20 honor our veterans in -- in such a unique and
21 special way.
22 MS. CARROLL: And we thank you very much
23 for your support.
24 The last item I have is for --
25 GOVERNOR BUSH: Are there any other --
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 18
September 11, 2001
1 MS. CARROLL: Sorry.
2 GOVERNOR BUSH: -- questions for the
3 World War II memorial?
4 MS. CARROLL: Sorry, Governor.
5 GOVERNOR BUSH: That's okay.
6 MS. CARROLL: Our final item today is to
7 request approval of Federal -- of FDVA's LBR.
8 There are portions of this year's request that
9 bear explanation. I will briefly explain the
10 most significant and costly issues.
11 This Department is proposing an overall
12 fiscal year 2002-2003 LBR of 37.8 million
13 dollars, of which 14.7 million is general
14 revenue, and 23.1 million is trust fund.
15 This is slightly decreased in our overall
16 budget, but the GR portion contains significant
17 program growth.
18 As you are aware, we are -- we commenced
19 construction of two veterans nursing homes this
20 year in Winter -- in Charlotte Counties and
21 Bay County. They will be completed in early
22 2003, which requires that we must request GR
23 funding for staffing of these facilities, and
24 for the initial year's operating costs as we
25 build the residence.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 19
September 11, 2001
1 The cost is 2.68 million of GR per
2 facility. In addition to these initial
3 start-up costs, our nursing home programs must
4 comply with the increased staffing requirements
5 of Senate Bill 1202 passed last year, which
6 mandates that -- that we increase our licensing
7 nursing from .6 hours per patient per day to
8 1 hour per patient per day, and CNA increase
9 from 1.7 hours per patient per day, to
10 2.3 hours per patient per day.
11 The cost of these increases --
12 (Commissioner Bronson entered the room.)
13 MS. CARROLL: -- increases our three
14 assisted nursing homes is 2.4 million dollars.
15 This -- this request for GR, as our TF is not
16 adequate to support this additional load.
17 Please note, the staffing portions of these
18 two homes is for full staffing and full -- with
19 State employees, including Senate Bill 1202 --
20 (Commissioner Crist entered the room.)
21 MS. CARROLL: -- increases.
22 Our LBR also states that if the
23 Pembroke Pines test staffing model favorably
24 supports outsourcing in the support service
25 area, then I'll report to you and the
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 20
September 11, 2001
1 Legislature this fall, will recommend the
2 staffing of the two new nursing homes be done
3 in accordance with the successful test results.
4 This is also the year in which all health
5 and human service agencies are challenged with
6 planning and implementing Health Insurers
7 Affordability and Accountability Act, which is
8 HIPPA, compliance programs required by 2002 and
9 2003.
10 We are requesting an appropriation of
11 $525,000 in GR to address the Federal standards
12 for privacy and security of this program.
13 This request was developed and cost out in
14 similar manner as that of the health and human
15 service agencies.
16 These full issues represent the majority of
17 the cost of the continued growth of the -- the
18 Department of Veterans' Affairs, and its
19 programs.
20 This year, we're also recommending small
21 growth in a program as far -- in our area of
22 benefits and assistance. This division assists
23 our veterans across the state with various
24 interactions with the VA, and includes those
25 who assist with claims and VA benefits.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 21
September 11, 2001
1 President Bush and VA Secretary,
2 Tony Principi, has generated significant
3 increases in Federal resources to assist in
4 eliminating the huge backlog that exists within
5 VA.
6 In Florida, the Federal staffing to process
7 benefits claims has tripled on that -- because
8 of that.
9 The FDVA needs small FDA -- FTE increases
10 to meet the associated workload of these
11 positions, and we have included that in our
12 LBR.
13 Finally, among other issues upon which we
14 place importance is a high priority to -- in
15 its creation of a recurring information
16 technology appropriations, of which we do not
17 have one. This makes it impossible to plan for
18 necessary improvements for our IT operations.
19 And a letter was sent to each Cabinet
20 member explaining in detail our IT requests.
21 While we have requested funding for major
22 issues, there are two specific areas with
23 meager resources which I consider vital to the
24 importance of our agency, and that is in
25 training and public affairs.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 22
September 11, 2001
1 These areas are -- need radical
2 improvements, with relatively small funding
3 increases. And a recent survey that I gave
4 among the -- the FDVA employees indicated that
5 there's a dire need for better training, or had
6 lack of training. So they need to definitely
7 come on line with having a training plan in
8 position, and we have developed that.
9 I would like to thank you for your
10 consideration and support of our efforts to
11 enhance the delivery of quality, long-term
12 care, and Federal benefits to our Florida
13 veterans.
14 I welcome any questions you may have.
15 GOVERNOR BUSH: Any questions?
16 Is there a motion?
17 TREASURER GALLAGHER: Motion.
18 COMMISSIONER BRONSON: Second.
19 GOVERNOR BUSH: Moved and seconded.
20 I'm abstaining from this vote in order to
21 make my own budget recommendations.
22 Other than that one caveat, the --
23 MS. CARROLL: Thank you.
24 GOVERNOR BUSH: -- the motion is approved.
25 MS. CARROLL: Thank you very much,
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF VETERANS' AFFAIRS 23
September 11, 2001
1 Governor.
2 GOVERNOR BUSH: Thanks, Jennifer.
3 (The Department of Veterans' Affairs Agenda
4 was concluded.)
5 * * *
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 24
September 11, 2001
1 GOVERNOR BUSH: Department of Revenue.
2 TREASURER GALLAGHER: Motion on the
3 minutes.
4 COMMISSIONER CRIST: Second.
5 GOVERNOR BUSH: Moved and seconded.
6 Without objection, it's approved.
7 Item 2.
8 DR. ZINGALE: With the events of the day, I
9 think I'll keep my remarks a little shorter.
10 Item 2 deals with the Department's
11 performance contract. The Department made
12 14 of its 18 legislative performance measures
13 last year.
14 Of the four that were not made, one deals
15 with the days to deposit. We're down to
16 minutes. We missed it by about 60 --
17 43 minutes. It was so insignificant, the
18 Legislature dropped that as a measure.
19 Return on investment was down slightly,
20 primarily due to the performance of the economy
21 and how that affects revenue. The Legislature
22 also dropped that measure.
23 In terms of property tax role oversight, we
24 missed one metric there dealing with
25 four strata. And while we made substantial
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 25
September 11, 2001
1 improvements in our child support call center,
2 achieving 69 percent of a -- of an answer rate,
3 that was a -- a percent below what our standard
4 was. That's substantially up from the
5 34th percent of just a few years ago.
6 Just going to highlight a few things that
7 the Department accomplished. I think we're all
8 kind of in awe of what transpired this last
9 year in terms of property taxes.
10 The Department concentrated its resources,
11 and focused its attention on better field work,
12 improving our statistical methodology.
13 Property appraisers though met the challenge,
14 and overwhelmingly, the 67 constitutionally
15 elected property appraisers did an outstanding
16 job. I think this is reflected by the overall
17 measure.
18 Going into the session, the estimate on the
19 role was scheduled to go at about -- a little
20 more than 6 percent. The role produced this
21 last year to about -- by about
22 ten-and-a-half percent. That's quite a
23 remarkable improvement in a -- in a
24 twelve-month period of time.
25 With respect to general tax administration,
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 26
September 11, 2001
1 you all know that story. We brought corporate
2 income tax and the SUNTAX. We integrated
3 unemployment compensation to the Department.
4 On the child support side, getting dollars
5 to children is a success story. Getting cases
6 to order is a substantial amount of work that
7 has to transpire in the remaining couple of
8 years.
9 In terms of service first, I did spend time
10 going around the state meeting all of our newly
11 elected members to our SES staff. I'm proud to
12 report that the -- there's an enthusiastic
13 response from our staff.
14 I think this was kind of validated in our
15 climate survey. We got an excellent climate
16 survey this year, with 89 percent of the
17 Department still saying they're proud to work
18 in -- in State government and the Department.
19 Request approval of the Department's
20 performance contract. There are some
21 questions.
22 TREASURER GALLAGHER: Motion.
23 COMMISSIONER BRONSON: Second.
24 GOVERNOR BUSH: Moved and seconded.
25 I abstain from voting on this item so I can
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 27
September 11, 2001
1 make my own budget to the Legislature.
2 Without -- other than that one abstention,
3 the motion passes.
4 Item 3.
5 DR. ZINGALE: Item 3 is the Department's
6 Legislative Budget Request. Overall, we are
7 requesting 5.1 --
8 GOVERNOR BUSH: I didn't abstain from that.
9 Item 2, I believe in that wholeheartedly
10 with --
11 DR. ZINGALE: Appreciate that.
12 GOVERNOR BUSH: Excuse me.
13 Item 3.
14 DR. ZINGALE: Item -- Item 3 is the budget
15 request for next year.
16 We have the 5.1 percent reduction in the
17 operating budget request, 7/10 of a percent
18 reduction in general revenue, 125 FTE
19 reduction, about an 8 million dollar reduction
20 in salaries coming --
21 (Governor Bush exited the room.)
22 DR. ZINGALE: -- from that reduction.
23 We have six budget issues I want to
24 highlight. The first deals with that role
25 approval process we just got done bragging
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 28
September 11, 2001
1 about a few minutes ago.
2 We are still asking for more resources in
3 that area, about 10 more FTE. To help our
4 performance in the child support side last
5 year, you approved, and the Legislature funded
6 the beginning of a new computer system.
7 We are asking 12 million dollars for
8 Phase II of that process. It's all trust
9 funded. Two-thirds of it is Federally funded;
10 one-third, State. Licensing agreement,
11 computer equipment for mail sorting, increase
12 in genetic testing workload, and to try to get
13 our Department infrastructure on a four-year
14 replacement cycle highlights our six
15 initiatives.
16 TREASURER GALLAGHER: Do we have a motion
17 on Item 3?
18 COMMISSIONER BRONSON: So move on Item 3.
19 TREASURER GALLAGHER: Motion.
20 SECRETARY HARRIS: Motion.
21 Second. Second.
22 TREASURER GALLAGHER: Motion and second.
23 Item 3 is approved, without objection.
24 DR. ZINGALE: Item 4 --
25 TREASURER GALLAGHER: The Governor is not
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 29
September 11, 2001
1 present, so he did not vote.
2 DR. ZINGALE: Thank you.
3 Item 4 is the Department's capital
4 improvement plan. Basically there are no plans
5 for any expanded capital outlay in the area.
6 This primarily reflects rent increases.
7 Request approval of the capital improvement
8 plan.
9 COMMISSIONER BRONSON: So move.
10 SECRETARY HARRIS: Second.
11 TREASURER GALLAGHER: Moved and seconded.
12 Without objection --
13 SECRETARY HARRIS: Five.
14 TREASURER GALLAGHER: -- it's approved.
15 DR. ZINGALE: On an information purpose
16 only, we had an inquiry from the Cabinet in
17 terms of the success of the income tax rebates.
18 As we have told you in the past meeting, we
19 had been intercepting those rebate checks as
20 part of our normal business. Initial tapes
21 showed us that we have collected about
22 3.5 million dollars.
23 The tape we ran this week shows that that's
24 up to 3,500 hits, and about 5.4 million dollars
25 in refunds pertaining to the child support
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 30
September 11, 2001
1 program. The vast majority of that will be
2 returned to children.
3 With that, thank you for your patience.
4 (The Department of Revenue Agenda was
5 concluded.)
6 * * *
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 31
September 11, 2001
1 SECRETARY HARRIS: State Board of
2 Education.
3 COMMISSIONER CRIST: Okay. Wayne is here
4 to discuss our budget.
5 I -- I'd like a moment to speak to the
6 Secretary of State.
7 Why don't we proceed, Wayne.
8 MR. PIERSON: Item 1 on the budget is the
9 presentation of the K to 20 Legislative Budget
10 Request.
11 I think Commissioner Crist has some
12 comments. Secretary -- or Chairman Handy will
13 introduce Secretary Horne, who will actually
14 present the budget.
15 And after the budget presentation,
16 Maureen Dinnen, President of FEA, has requested
17 to speak.
18 COMMISSIONER CRIST: Just to -- for those
19 of you who haven't heard, that there is --
20 additionally to what the Governor said this
21 morning about what's happening in New York,
22 also a situation with the Pentagon in
23 Washington.
24 And I think probably, Madam Secretary, what
25 we ought to do is proceed. I think the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 32
September 11, 2001
1 Governor will be coming back, and follow his
2 lead on what he thinks is appropriate to
3 continue.
4 But for the time being, I think --
5 Mr. Secretary, I don't think there's a lot we
6 can do to affect those situations. I don't see
7 why we might not go ahead and proceed with
8 presenting the budget for the Department of
9 Education, and await further word from the
10 Governor.
11 MR. HANDY: State Board of Education?
12 COMMISSIONER CRIST: Yes, sir.
13 Chairman Handy.
14 MR. HANDY: I'm Phil Handy, Chairman of the
15 Florida Board of Education. And on behalf of
16 the Florida Board, bring you today the first
17 coordinated K through 20 budget prepared in the
18 state of Florida.
19 The Florida Board acts as a resource to
20 you, the State Board, and look forward to
21 working with you. And we acknowledge our role.
22 And that's why today we're bringing you the
23 budget that we approved at our Florida Board
24 meeting in -- in August.
25 And with that, I'm going to let Jim Horne
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 33
September 11, 2001
1 quickly present the budget, given the events of
2 the day.
3 MR. HORNE: It's -- certainly feels kind of
4 trivial now in this moment. And I won't
5 beleaguer it, and give it the old college try.
6 I think many of you have been briefed, and
7 so I'll -- I will kind of go through it very
8 quickly. If you want me to stop and expand
9 upon it, I will.
10 Just recognizing, you know, what has
11 happened in our country, it's a little hard to
12 now be so serious about something that in many
13 respects is kind of trivial in light of
14 probably the mass destruction that's occurred
15 in New York City today.
16 This is the first, as you know, K-20
17 budget. It's historic in the sense that for
18 the first time, we are bringing a -- one budget
19 for all the delivery systems, for all of
20 education, and that is certainly historic.
21 In the past, you've seen three different
22 budgets. In many ways, they've been kind of
23 wish lists.
24 The revenues for education are obviously,
25 general revenue, Lottery, and other trusts,
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 34
September 11, 2001
1 PECO, local taxes, and fees.
2 Here's the revenue source allocations.
3 When you look at that, you'll -- you'll notice
4 that certainly general revenue is the biggest
5 source of revenue for education.
6 It's not through the one thing you --
7 you -- when you look at 53 percent, there's
8 also another 53 percent when you look at
9 general revenue. Fifty-three percent of our --
10 all of our general revenue goes to education.
11 This is not the same 53 percent. This is
12 just saying that, of all the money that goes to
13 education, 53 percent happens to come from
14 general revenue.
15 When you look at the -- pretty much the
16 total landscape of education, there's roughly
17 20 billion -- 21 billion dollars, and this
18 doesn't include some other additional Federal
19 monies for research grants and things like that
20 in the university side.
21 We decided we would take a whole new
22 approach, which we call the three Rs. And that
23 didn't mean reading, writing, and arithmetic.
24 This means realistic, responsible, and
25 relevant.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 35
September 11, 2001
1 In the past, the budget groups sent three
2 budgets that in many ways were a Christmas wish
3 list. Take last year for example. It exceeded
4 what ultimately the Legislature approved by
5 over a billion-and-a-half dollars.
6 The thing that we wanted to do for the
7 first time ever is to deliver what we believe
8 is a very realistic kind of a budget that would
9 be -- have credibility.
10 Our -- our budget guidelines with
11 continuation of programs, budget enrollment
12 growth, and then enhancements.
13 It includes a 5 percent tuition increase,
14 both at the universities, and at the
15 community college level. It's part of our
16 attempt to devolve many of these decisions to
17 the -- the lowest level. We also did that with
18 accountability.
19 This is the revenue and -- and request for
20 the general revenue. We looked at the
21 landscape, and we recognized that there
22 probably will be some corrections in the
23 forecasting of revenues with a downward
24 adjustment. I think everybody anticipates that
25 for the 02-03 budget year.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 36
September 11, 2001
1 And we believe that approximately
2 650 million dollars of general revenue will be
3 available. That would -- even under some of
4 the worst case scenarios would reflect,
5 you know, a high percentage of that new
6 revenue, 60 percent, roughly.
7 We believe that education should get the
8 lion's share of new revenue. We believe it is
9 the number 1 issue in Florida, and we believe
10 that we need to make a commitment to education.
11 Enrollment funding policies. Obviously in
12 K-12, we have a constitutional mandate to fund
13 the growth, and it's the paramount duty of the
14 State to make provision for the education of
15 our children, and we actually fund actual
16 enrollment.
17 Community college is a little bit of a
18 different animal. It's open door policy.
19 Primarily, it's really funded on prior year
20 enrollment, but we certainly do look at the
21 current year projected enrollment.
22 One of the things you're going to begin to
23 hear is enrollment is off the charts in
24 community colleges. And that is true.
25 Miami-Dade is experiencing nearly 18 to
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 37
September 11, 2001
1 20 percent increase.
2 We're seeing huge increases all over the
3 landscape in community colleges. I think
4 that's a good thing. People are going back for
5 some additional retraining. Sometimes when the
6 economy softens a little bit, people go back in
7 the community college system looking for
8 additional skills and enhancements.
9 The universities, we fund an enrollment
10 plan. We cap the enrollment, and -- and that's
11 what we do in that system.
12 The workforce is the true performance base
13 system, performance funding model. And it's
14 really not affected as much by enrollment.
15 The K-20 goals actually are in the statute.
16 These are not some that I've made up, or our
17 Board has made up. Highest student
18 achievement, seamless articulation, and maximum
19 access, a skilled workforce, and economic
20 development, and then quality efficient
21 services.
22 The FEFP funding policy, as you know, is
23 probably the granddaddy of them all. It's the
24 one that we need to focus on the most. And
25 what we've done is we've projected a 3 percent
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 38
September 11, 2001
1 increase in average increase per student.
2 If you look at last year's, the 01-02, an
3 estimated number, what we budgeted for this
4 year is about $153 increase per student, which
5 is about 3 percent.
6 Even with all of that, you look at the --
7 the State's share of general revenue, and the
8 local funds, we estimate that the public
9 schools, through the formula, would receive
10 about -- over 600 million dollar increase.
11 This number is a little bit misleading,
12 because actually we've gotten some good news.
13 If there's any good news to come out, the good
14 news is property values have gone up,
15 generating more local taxes.
16 So it will be a -- actually better than
17 what's on the screen. The workload alone,
18 we've been told for years that we would start
19 to see a lessening of growth, and we'd see a
20 bubbling up effect in the postsecondary. We're
21 not seeing it yet.
22 And last year, if you remember, we were
23 caught short. We projected about 35,000 new
24 students, and got hammered with about 52,000.
25 We missed our estimate by over 50 percent.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 39
September 11, 2001
1 This year, we're estimating a little
2 higher, at about 45,000 new students. In many
3 cases, a lot of these students are coming from
4 other countries. Strange as it may seem, we're
5 getting an influx from Columbia. Maybe
6 there's -- because of the civil war down there.
7 But we're seeing a lot of growth from
8 outside the country. And those tend to be
9 hard-to-serve students who don't speak English.
10 But the 01-02 funds, you know, 5100. Just
11 the workload cost alone, if we had no real
12 increase in the per student funding, just to
13 fund enrollment growth is --
14 (Governor Bush entered the room.)
15 MR. HORNE: -- over 232 million dollars.
16 Bright Future Scholarships, you hear a lot
17 about that. Continue to meet that growth,
18 about 244 million. That's about a 42 million
19 dollar increase in that program this year, and
20 that does include the 5 percent tuition
21 increase.
22 Next.
23 The -- the student -- the -- the needs
24 based financial aid package is one of the most
25 memorable parts of our proposal. A substantial
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 40
September 11, 2001
1 increase.
2 (Commissioner Bronson exited the room.)
3 MR. HORNE: What's not included on here on
4 this slide is the part-time, which is a little
5 over 14 million, and some -- a vocational
6 assistance grant of about 12 million.
7 So the total package in need base is about
8 112 million. Last year it was about
9 73 million. So it's about a 39 million dollar
10 increase -- really over a 50 percent increase.
11 And we're continuing to enhance the need based
12 financial aid package.
13 Work force development again has a pretty
14 significant proposed increase of about 55,
15 56 million. Over the last few years, as we had
16 the conversion over to the performance funding
17 model, there was some declining enrollment.
18 And now after three years, we're seeing
19 them switch into the high performing programs,
20 and we're seeing that climb so there's a
21 significant investment in enrollment.
22 Performance as well -- as you know, this is
23 the only area of education really in a
24 substantial way that we are funding
25 performance.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 41
September 11, 2001
1 And so they have that --
2 Adults with disabilities, not a real
3 significant increase, other than we wanted to
4 recognize the need to help adults with
5 disabilities in the workforce area. So there
6 is roughly about a million dollar increase for
7 enrollment.
8 Community college summary. You can see
9 that that lays out what -- what we are
10 proposing.
11 Most of it is a continuation, some of it's
12 in workload. Very little enhancement. This is
13 our base program, primarily the AA, two-year
14 degree in the community college system.
15 This shows you the head count. And this is
16 probably not even accurate for the 02-03,
17 because we do see that climbing almost
18 radically.
19 And we're seeing double digit increases,
20 some pushing over 20 percent increases. And we
21 need to recognize where we are in the community
22 college system, and we need to fund that
23 enrollment.
24 In the university side, we believe in --
25 that access is -- is very important. And --
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 42
September 11, 2001
1 but we also recognize that access without
2 having students adequately prepare for the
3 rigors of college is -- is not necessarily a
4 good investment.
5 But we are funding roughly 7600 new FTE
6 students in the university. With that, 38.7
7 with general revenue; 25.4 is generated just
8 from the tuition alone, just from the increase
9 in the number of students.
10 The medical school and then the
11 law schools, and then the local initiatives as
12 we move to local appointed Boards of Trustees
13 for universities, there is a need to provide
14 that flexibility in funding to them to
15 reexamine their missions, and pursue those
16 missions from that local level.
17 The 23.1 million is the tuition increase,
18 the 5 percent tuition increase, which we're
19 giving flexibility to the university to
20 allocate it to its missions.
21 This shows you, the final slide, average
22 salaries for the Florida high school and
23 university and baccalaureate, Masters, and --
24 (Commissioner Bronson entered the room.)
25 MR. HORNE: -- Ph.D. graduate programs.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 43
September 11, 2001
1 And while we do see clearly that the
2 high school average earnings are not providing
3 the kind of sufficient income levels to be
4 productive citizens in our state, higher
5 education is critically important.
6 We recognize that nearly 80 percent of the
7 workforce need are in technical programs, often
8 generated by community colleges. But in the
9 end, one of the major catalysts for economic
10 development in our state are the graduate
11 professional degrees.
12 And we need to recognize what that does for
13 the economy, and never lose sight that world
14 class universities are critically important to
15 our livelihood in this state.
16 That is the short, as quick as I can make
17 it, budget proposal in light of what's going on
18 in our -- in our country.
19 So I'd be glad to attempt to answer
20 questions, or if you would like to talk about
21 the efforts ongoing at the Florida Board, be
22 glad to do that as well.
23 GOVERNOR BUSH: Any questions?
24 COMMISSIONER CRIST: I'd just comment
25 briefly.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 44
September 11, 2001
1 Excellent job, Secretary. It's a great
2 increase, especially in light of the budget.
3 GOVERNOR BUSH: Thank you, Jim.
4 TREASURER GALLAGHER: I'll motion to
5 approve the budget.
6 COMMISSIONER CRIST: Second.
7 GOVERNOR BUSH: What item are we on?
8 TREASURER GALLAGHER: We're on Item 1 of
9 State Board.
10 Do you want to abstain?
11 GOVERNOR BUSH: There's an item -- there's
12 a motion and a second.
13 I will abstain from voting.
14 Without objection, other than that
15 abstention, it's approved.
16 MS. DINNEN: Good morning.
17 GOVERNOR BUSH: Good morning.
18 MS. DINNEN: Let me also make my remarks
19 very short, in light of today, because I think
20 we're all very concerned, and that -- that is
21 primary.
22 I'm going to submit my remarks though to
23 you, because they are a little bit more
24 detailed, and I'd appreciate you reading them
25 later.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 45
September 11, 2001
1 Let me just make a few points off the top
2 of my head.
3 We have an education budget. This is --
4 the process is just beginning, we understand
5 that.
6 (Governor Bush exited the room.)
7 MS. DINNEN: We would ask that you remember
8 a couple of things here. First of all, let me
9 start out with good things.
10 The workforce development money, we applaud
11 that. We applaud the fact that in this new
12 budget, the bonus situation is -- is put aside,
13 and that has proved very divisive and very
14 problematic.
15 We applaud the money in there for national
16 board certification. That's a very good idea,
17 and it's an incentive to our people.
18 We also ask that it -- that this budget
19 continue the idea of improving our education
20 system based on what we -- what the research
21 shows us are good methods of education.
22 Okay. Those are the good things, those are
23 the things I agree with.
24 The things that my members would want me to
25 make a point about is the fact that, yes, the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 46
September 11, 2001
1 spending per student is up 3 percent. That's
2 laudatory.
3 But the overall aggregate amount of money
4 is not up. And we're still finding out, 40 of
5 our 67 districts haven't settled. We're still
6 finding out that in the places where those
7 settlements have been made, that class sizes
8 are being cut, buses are being overcrowded, and
9 programs -- vital programs are being stepped
10 back from or cut.
11 So those are important elements that
12 I think we remem-- we must remember. Realizing
13 the process is just beginning.
14 The idea of being responsible, of being
15 relevant, of being realistic is something we
16 would applaud as well.
17 That's something that we would like to see
18 happen. Because basically what we're doing in
19 this state, we all believe in public education.
20 The Governor himself had said that education
21 budget, education must be protected.
22 I think that's a basis of agreement between
23 the --
24 (Governor Bush entered the room.)
25 MS. DINNEN: -- employees of this state,
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 47
September 11, 2001
1 and the officials of this state.
2 So I think that gives us a basis for going
3 forward.
4 So I hope that you would take some of these
5 ideas into consideration; you will take a look
6 at the amounts there, realizing we have a lot
7 of growth. We add, what, a county a year? We
8 have tremendous healthcare costs, and we have
9 other items that we need to account for.
10 I know we have a -- an estimating
11 conference coming up. This process is -- as I
12 said before, is just beginning.
13 But I would hope that you would take into
14 consideration some of the things that the
15 districts are finding it very difficult to deal
16 with this year, and put that into next year's
17 accommodations.
18 Thank you. And I'll leave my -- rest of my
19 remarks for you.
20 GOVERNOR BUSH: Thank you very much.
21 MR. PIERSON: Item 2 is a resolution for
22 PECO bonds, 110 million.
23 TREASURER GALLAGHER: Motion.
24 SECRETARY HARRIS: Second.
25 COMMISSIONER CRIST: Second.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 48
September 11, 2001
1 GOVERNOR BUSH: Moved and seconded.
2 Without objection, it's approved.
3 MR. PIERSON: Item 3 is an amendment to
4 Rule 6A-1.001, District financial records.
5 This rule amendment is to adopt an updated
6 version of the County manual used by
7 school boards.
8 TREASURER GALLAGHER: Motion.
9 COMMISSIONER CRIST: Second.
10 GOVERNOR BUSH: Moved and seconded.
11 Without objection, it's approved.
12 MR. PIERSON: Item 4 is amendment to
13 Rule 6A-1.09412, Course Requirements, Grades 6
14 to 12, Basic and Adult Secondary Programs.
15 TREASURER GALLAGHER: Motion.
16 COMMISSIONER CRIST: Second.
17 COMMISSIONER BRONSON: Second.
18 GOVERNOR BUSH: Moved and seconded.
19 Without objection, it's approved.
20 MR. PIERSON: Item 5 is an amendment to
21 Rule 6A-1.09441, Requirements for Programs and
22 Courses funded through the Florida Education
23 Finance Program for which the student may earn
24 credit towards high school graduation.
25 TREASURER GALLAGHER: Motion.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 49
September 11, 2001
1 COMMISSIONER BRONSON: Second.
2 GOVERNOR BUSH: Moved and seconded.
3 Without objection, it's approved.
4 MR. PIERSON: Item 6 are amendments to
5 rules to reflect changes in statute governing
6 educator certification: 6A-4.001, 6A-4.002,
7 6A-4.003, 6A-4.004, 6A-4.0051, and 6A-4.006.
8 TREASURER GALLAGHER: Motion.
9 SECRETARY HARRIS: Motion.
10 COMMISSIONER CRIST: So move.
11 COMMISSIONER BRONSON: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection, it's approved.
14 MR. PIERSON: Item 7 is amendment to
15 Rule 6A-10.024, Articulation Between
16 Universities, Community Colleges, and School
17 Districts.
18 TREASURER GALLAGHER: Motion.
19 SECRETARY HARRIS: Second.
20 COMMISSIONER BRONSON: Second.
21 GOVERNOR BUSH: Moved and seconded.
22 Without objection, it's approved.
23 MR. PIERSON: Item 8 are repealed rules:
24 6A-4.050, Florida Educators Certificates with
25 Degreed Vocational Class Coverages; 6A-4.052,
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 50
September 11, 2001
1 General and Professional Preparation for a
2 Professional Certificate; 6A-4.066, Florida
3 Educators Certificates with Nondegreed
4 Vocational Class Coverages; 6A-4.068,
5 Professional Preparation for Professional
6 Certificate with Nondegreed Vocational Class
7 Coverages; and 6A-4.072, Specialization
8 Requirements for Certification and Occupational
9 Specialist.
10 TREASURER GALLAGHER: Motion.
11 COMMISSIONER BRONSON: Second.
12 COMMISSIONER CRIST: Second.
13 GOVERNOR BUSH: Moved and seconded.
14 Without objection, it's approved.
15 MR. PIERSON: Thank you.
16 (The State Board of Education Agenda was
17 concluded.)
18 * * *
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DEP SITING BOARD 51
September 11, 2001
1 GOVERNOR BUSH: For people that are in the
2 audience that -- that may have -- may -- their
3 offices are at the Capitol, we're -- we are
4 evacuating the Capitol, in the process of doing
5 so.
6 So if you need to make arrangements, call a
7 colleague or something, to get paper or
8 information or whatever, you may want to do
9 that now.
10 I'm not sure exactly logistically when that
11 will happen. But the Speaker and the President
12 and I've decided to do that as a -- in the
13 abundance of caution, given what's going on
14 around the -- the rest of the country.
15 And I wanted to thank the State Board of
16 Administration for hosting us today. I've been
17 a little preoccupied mentally. I apologize for
18 not doing that to begin with.
19 This is a beautiful place, and we -- we
20 thank you for -- for having us here.
21 Siting Board.
22 TREASURER GALLAGHER: Motion on the
23 minutes.
24 COMMISSIONER CRIST: Second.
25 MR. STRUHS: Item --
ACCURATE STENOTYPE REPORTERS, INC.
DEP SITING BOARD 52
September 11, 2001
1 GOVERNOR BUSH: Moved and seconded.
2 Without objection, it's approved.
3 Item 2.
4 MR. STRUHS: We're recommending remand to
5 the ALJ for further work.
6 TREASURER GALLAGHER: Motion.
7 GOVERNOR BUSH: What were you recommending?
8 MR. STRUHS: Remanding the issue back to
9 the ALJ.
10 TREASURER GALLAGHER: Motion.
11 COMMISSIONER BRONSON: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection.
14 MR. STRUHS: Recommend 3, recommend
15 approval.
16 TREASURER GALLAGHER: Motion.
17 COMMISSIONER BRONSON: Second.
18 GOVERNOR BUSH: Moved and seconded.
19 Without objection, it's approved.
20 (The Department of Environmental Protection
21 Siting Board Agenda was concluded.)
22 * * *
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND 53
September 11, 2001
1 MR. STRUHS: Board of Trustees.
2 GOVERNOR BUSH: Thank you.
3 Board of Trustees.
4 (Commissioner Crist exited the room.)
5 MR. STRUHS: Item 1, recommending approval.
6 TREASURER GALLAGHER: Motion.
7 COMPTROLLER MILLIGAN: Second.
8 GOVERNOR BUSH: Moved and seconded.
9 Without objection, it's approved.
10 MR. STRUHS: Item 2, recommend approval.
11 TREASURER GALLAGHER: Motion.
12 COMPTROLLER MILLIGAN: Second.
13 GOVERNOR BUSH: Moved and seconded.
14 Without objection, it's approved.
15 MR. STRUHS: Item 3, recommend approval.
16 TREASURER GALLAGHER: Motion.
17 SECRETARY HARRIS: Second.
18 TREASURER GALLAGHER: Motion.
19 GOVERNOR BUSH: Moved and seconded.
20 Without objection, it's approved.
21 MR. STRUHS: Item 4, recommend approval.
22 TREASURER GALLAGHER: Motion.
23 SECRETARY HARRIS: Second.
24 GOVERNOR BUSH: This will be your --
25 SECRETARY HARRIS: -- fastest.
ACCURATE STENOTYPE REPORTERS, INC.
TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND 54
September 11, 2001
1 GOVERNOR BUSH: -- agenda, David, I think.
2 Moved and seconded.
3 Without objection, it's approved.
4 TREASURER GALLAGHER: Put anything on here
5 you want, David, walk right on through it.
6 MR. STRUHS: I might add a few, sir, if you
7 don't mind.
8 Substitute Item 5, we're going to recommend
9 we defer this item to November 14.
10 TREASURER GALLAGHER: Motion to defer.
11 SECRETARY HARRIS: Second.
12 MR. STRUHS: Thank you.
13 GOVERNOR BUSH: This item is moved and
14 seconded, the item is deferred.
15 SECRETARY HARRIS: Is that it? We're out
16 of here.
17 GOVERNOR BUSH: Thank you very much.
18 (The Board of Trustees of the Internal
19 Improvement Trust Fund Agenda was suspended.)
20 * * *
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 55
September 11, 2001
1 GOVERNOR BUSH: State Board of
2 Administration.
3 TREASURER GALLAGHER: Motion on the
4 minutes.
5 COMPTROLLER MILLIGAN: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 Do we have a --
9 TREASURER GALLAGHER: Governor --
10 (Commissioner Bronson entered the room.)
11 GOVERNOR BUSH: Disappeared on us.
12 I just saw him.
13 TREASURER GALLAGHER: I'll -- I'll take
14 Item 2, move the fiscal sufficiency for
15 23.5 million dollars worth of bonds.
16 COMPTROLLER MILLIGAN: And I'll second
17 that.
18 GOVERNOR BUSH: Item 2 is moved and
19 seconded.
20 Without objection, it's approved.
21 (Commissioner Crist entered the room.)
22 (The State Board of Administration Agenda
23 was suspended.)
24 * * *
25
ACCURATE STENOTYPE REPORTERS, INC.
TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND 56
September 11, 2001
1 GOVERNOR BUSH: David.
2 MR. STRUHS: Governor, I'm sorry to -- to
3 come back to you.
4 Apparently, two of our agenda items
5 actually required five votes, and we only had
6 four members.
7 MS. ARMSTRONG: Three votes.
8 MR. STRUHS: If we could -- if we could
9 revote on Items 1 and Items 4 for the --
10 TREASURER GALLAGHER: Move Items 1 --
11 MR. STRUHS: -- Board of Trustees.
12 TREASURER GALLAGHER: -- and 4.
13 COMMISSIONER CRIST: Second.
14 SECRETARY HARRIS: Second.
15 GOVERNOR BUSH: There's a motion and a
16 second to approve Items 1 and 4 of the Board of
17 Trustees agenda.
18 Without objection, it's approved.
19 MR. STRUHS: Thank you.
20 (The Board of Trustees of the Internal
21 Improvement Trust Fund Agenda was concluded.)
22 * * *
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 57
September 11, 2001
1 GOVERNOR BUSH: State Board of
2 Administration.
3 TREASURER GALLAGHER: On Item 3 I think,
4 Governor.
5 GOVERNOR BUSH: Item 3?
6 TREASURER GALLAGHER: I'll move the fiscal
7 sufficiency for 110 million dollars worth of
8 bonds, full faith and credit on Item 3.
9 COMPTROLLER MILLIGAN: And I will second
10 that.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 Item 4.
14 TREASURER GALLAGHER: I'll move Item 4,
15 which is approval of fiscal sufficiency in the
16 amount not exceeding 190 million dollars, State
17 of Florida, Department of Environmental
18 Protection Preservation 2000 Refunding Bonds,
19 series to be designated.
20 COMPTROLLER MILLIGAN: And move approval,
21 and I second.
22 GOVERNOR BUSH: Moved and seconded.
23 Without objection, it's approved.
24 TREASURER GALLAGHER: I'll move 5, which is
25 the fiscal sufficiency for 100 million dollars
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 58
September 11, 2001
1 worth of State of Florida, Department of
2 Environmental Protection, Florida Forever
3 Revenue Bonds, Series 2001B.
4 COMPTROLLER MILLIGAN: Second.
5 GOVERNOR BUSH: Moved and seconded.
6 Without objection, it's approved.
7 TREASURER GALLAGHER: Move Item 6,
8 preliminary approval for unbundled investment
9 providers, providers 11 through 13.
10 COMPTROLLER MILLIGAN: Well, there's some
11 question on this one. We might want to wait
12 till Tom comes back on it.
13 TREASURER GALLAGHER: I think --
14 GOVERNOR BUSH: Maybe --
15 TREASURER GALLAGHER: -- let's leave --
16 let's leave -- skip that one then, because
17 there is some question on that.
18 And puts us to Item -- Item 7. Proposed
19 legislative initiatives. And I guess we ought
20 to let Tom explain those, unless you want to do
21 something with those, gentlemen.
22 COMPTROLLER MILLIGAN: I -- I'm comfortable
23 with where we are on those, and the change that
24 they're working on. Not -- not -- not all of
25 this is resolved. But they are working on it.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 59
September 11, 2001
1 TREASURER GALLAGHER: We're discussing,
2 so --
3 COMPTROLLER MILLIGAN: Some information and
4 discussion.
5 TREASURER GALLAGHER: All right. So we
6 can --
7 COMPTROLLER MILLIGAN: I am comfortable
8 with it.
9 The question on Item 6 really was the
10 recommendation by the IAC --
11 TREASURER GALLAGHER: On whether to give
12 Barclays all the business.
13 COMPTROLLER MILLIGAN: Yeah. And -- and
14 the problem there is apparently that it isn't
15 big enough to give it two.
16 GOVERNOR BUSH: Here he is.
17 Tom, we're on Item 6.
18 MR. HERNDON: Yes, sir.
19 GOVERNOR BUSH: We approved the rest of
20 the -- your agenda.
21 MR. HERNDON: I apologize.
22 GOVERNOR BUSH: It went very well while
23 you --
24 MR. HERNDON: Not my best performance.
25 TREASURER GALLAGHER: This is -- this is
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 60
September 11, 2001
1 dangerous, you know. We --
2 (Commissioner Bronson, Secretary Harris
3 exited the room.)
4 MR. HERNDON: I -- I understand. That's
5 always --
6 TREASURER GALLAGHER: -- we --
7 MR. HERNDON: -- with some trepidation.
8 Item 6 is the index provider, and the other
9 two final unbundled investment providers. As
10 you'll recall, we had worked through this
11 sequence of events until we got to the last
12 three, which were just -- selected just as a --
13 a matter of -- of convenience.
14 These items were all --
15 (Commissioner Crist exited the room.)
16 MR. HERNDON: -- presented to the joint
17 committee of the Investment Advisory Council
18 and the PEORPAC a week-and-a-half ago or so on
19 August 30th.
20 And the first two were approved
21 unanimously, there was no real discussion or
22 debate on the foreign stock active fund or on
23 the yield plus money market fund.
24 There was a good bit of discussion on the
25 third item, which is the index provider. And
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 61
September 11, 2001
1 it really resolved out to whether the first
2 choice or second choice were the better choice
3 under the circumstances. There was a lot of
4 discussion about the relative costs and merits
5 of the two vendors.
6 The advisory councils ultimately agreed
7 unanimously to go with the second choice, and
8 to make that recommendation to you.
9 We provided your office with some
10 additional information on the choices. They're
11 both fine firms, there's certainly no disputing
12 that. They both have the capability to provide
13 the index product without any real difficulty.
14 We ultimately supported the selection of
15 Barclays because we felt like the scaled
16 economies that were present there through their
17 larger size -- substantially larger size --
18 would ultimately inure to the benefit of the
19 members.
20 Having said that, again, let me just say,
21 Deutsche Bank, the second firm, is a very
22 responsible firm, and would also be able to
23 provide us with, I'm sure, excellent service.
24 Ms. Schueren is here, who is the individual
25 who was in charge of that particular selection,
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 62
September 11, 2001
1 as is Ms. Jarriel.
2 We also have the consultant from Callan,
3 Jeanne Valcik, who is here if you'd like to ask
4 any questions of them, or we can elaborate on
5 the specifics in greater detail if you would --
6 if you would care to --
7 COMPTROLLER MILLIGAN: Is it fair to --
8 fair to say, Tom, that the advantage to
9 Barclays is in the near term, and the advantage
10 to Deutsche is in the long run?
11 MR. HERNDON: Actually, General, I'm not so
12 sure that I would agree with that
13 characterization.
14 I think you have a short-term advantage in
15 the sense that Deutsche Bank's fees are a
16 little bit lower. But our sense is that when
17 you look at securities lending income and other
18 economies of scale, that the overall charges to
19 the Board are roughly the same.
20 In the long run, as transactions costs
21 continue to accumulate, we think the crossing
22 opportunities in Barclays would probably be a
23 little bit more advantageous, simply because
24 they have a -- a much bigger opportunity set
25 within which to cross -- and on a costless
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 63
September 11, 2001
1 basis.
2 But, you know, it -- it -- we're talking
3 very much on the margins here. As I think we
4 indicated, the costs of one over the other is
5 about $50,000. And I realize that's a lot of
6 money to all of us, but in this scheme of
7 things, it's not a great deal of money.
8 The crossings are where the oppor-- the --
9 the big costs are though. It's not the
10 investment management charges, it's not the
11 securities lending income, it's how much of the
12 portfolio you can ultimately cost free that
13 will really generate that --
14 COMPTROLLER MILLIGAN: Which is
15 advantageous to the fund benefit side.
16 MR. HERNDON: That's correct. Well, it --
17 it -- in hope, it's advantageous to all sides,
18 because they can move those --
19 COMPTROLLER MILLIGAN: Yeah.
20 MR. HERNDON: -- stocks into it --
21 COMPTROLLER MILLIGAN: That's right.
22 And it's advantageous to us to --
23 MR. HERNDON: That's correct.
24 COMPTROLLER MILLIGAN: -- to make --
25 MR. HERNDON: That's correct.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 64
September 11, 2001
1 COMPTROLLER MILLIGAN: Well, I -- Governor,
2 I -- I recommend -- or recommend that we
3 approve the staff recommendations on all three
4 products, go with Barclays on that one issue.
5 TREASURER GALLAGHER: I'll second that.
6 GOVERNOR BUSH: Any other -- moved and
7 seconded.
8 Is there any other discussion?
9 Without objection, the item is approved.
10 MR. HERNDON: The last item that we had in
11 front of you today was to discuss the proposed
12 legislative program of the State Board.
13 There are a number of -- of legislative
14 items that are necessary that we address as it
15 relates to PEORP. Those are all identified
16 there.
17 We're in the process of talking with the
18 committee staff. We didn't ask you for a vote
19 here today.
20 But there are two that I want to bring to
21 your attention.
22 One is confidentiality of the employee --
23 employee records. I think that's absolutely
24 vital. Without that --
25 (Commissioner Crist entered the room.)
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 65
September 11, 2001
1 MR. HERNDON: -- protection, I don't know
2 that this program can ultimately succeed. It's
3 a very core kind of issue.
4 And secondly -- and not to minimize some of
5 these other items, but to just stress a
6 couple -- the most recently passed legislation
7 that created the new pension fund litigation --
8 or legislation in Congress authorizing some
9 additional rollovers and trustee-to-trustee
10 transfers and so forth.
11 And so the second bullet brings those
12 elements of PEORP into compliance with the --
13 the Federal legislation.
14 There are others here that are very
15 important to the program. And I don't want to
16 minimize those, but I'm --
17 (Commissioner Crist exited the room.)
18 MR. HERNDON: -- sensitive to your time as
19 well here this morning, and -- and all of the
20 other things that are going on.
21 We did have two items that we were
22 suggesting on the defined benefit plan side of
23 things. We've discussed both of those in the
24 past.
25 I don't know how much you want to -- to get
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 66
September 11, 2001
1 into that this morning.
2 We have some direction from this Board on
3 one of them, and -- and on the other, it was
4 voted on previously, and that's --
5 (Commissioner Crist entered the room.)
6 MR. HERNDON: -- the Northern Ireland
7 restriction.
8 And it would be our intention to go ahead
9 and continue to talk with possible sponsors in
10 the House and Senate leadership, and committee
11 staffs, and come back to you with a report as
12 that -- as that dialogue unfolds.
13 GOVERNOR BUSH: Any discussion?
14 This was just for discussion purposes.
15 MR. HERNDON: Governor, if I might, I --
16 again, I'm very mindful of your time, but I
17 thought it would be worthwhile to try and give
18 you a little update.
19 We do have all the bundler provider
20 materials in. And I apologize. This just came
21 in last night. We haven't had much of an
22 opportunity to get this to you.
23 GOVERNOR BUSH: Thank you.
24 MR. HERNDON: What you have in front of you
25 is just a brief highlight page that Mercer has
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 67
September 11, 2001
1 provided us. And you can see some of the
2 bullets in there.
3 As you'll recall, we -- we re-- resubmitted
4 the responses. We did get a number of
5 respondents who revised their proposals, a
6 number of them that eliminated transfer
7 restrictions and fees, which is a very positive
8 thing, and something Commissioner Gallagher was
9 specifically concerned about.
10 Eight of the respondents increased their
11 reimbursements to the Board -- to the program,
12 they gave us a higher gain sharing, if you
13 will. Several of them changed investment
14 products. A number of them also reduced their
15 expenses.
16 Having said all that, it's still somewhat
17 of a mixed grouping out there. And as you look
18 at the larger legal size chart, you get some
19 sense of what we're looking at here.
20 We still would like to get some
21 clarification from you. This may not be the
22 best time to do that, because all of us are
23 trying to digest this information, and
24 everything else that has happened today.
25 So what we will do is try and get with your
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 68
September 11, 2001
1 offices, and -- and talk through some of the
2 issues that are now surfacing as a -- as a
3 result of this information, and -- and see how
4 we go from there.
5 GOVERNOR BUSH: Thank you very much.
6 MR. HERNDON: Thank you.
7 GOVERNOR BUSH: Again, thank you for
8 hosting us, Tom.
9 MR. HERNDON: Our pleasure.
10 (The State Board of Administration Agenda
11 was concluded.)
12 * * *
13 (The Cabinet meeting was concluded at
14 10:44 a.m.)
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
69
September 11, 2001
1 CERTIFICATE OF REPORTER
2
3
4
5 STATE OF FLORIDA:
6 COUNTY OF LEON:
7 I, LAURIE L. GILBERT, do hereby certify that
8 the foregoing proceedings were taken before me at the
9 time and place therein designated; that my shorthand
10 notes were thereafter translated; and the foregoing
11 pages numbered 1 through 68 are a true and correct
12 record of the aforesaid proceedings.
13 I FURTHER CERTIFY that I am not a relative,
14 employee, attorney or counsel of any of the parties,
15 nor relative or employee of such attorney or counsel,
16 or financially interested in the foregoing action.
17 DATED THIS 19TH day of SEPTEMBER, 2001.
18
19
20
21
22
23
LAURIE L. GILBERT, RPR, CCR, CRR, RMR
24 100 Salem Court
Tallahassee, Florida 32301
25 850/878-2221
ACCURATE STENOTYPE REPORTERS, INC.
|
Cabinet
Affairs
