The Governor and Cabinet - Florida Department of State

THE CABINET

STATE OF FLORIDA

_____________________________________________________

T H E C A B I N E T

S T A T E O F F L O R I D A

_____________________________________________________

Representing:

DIVISION OF BOND FINANCE
FSC, OFFICE OF INSURANCE REGULATION
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 the 3rd day of May, 2005, commencing at approximately
9:30 a.m.

Reported by:

KRISTEN L. BENTLEY
Certified Court Reporter

ACCURATE STENOTYPE REPORTERS, INC.
2894 REMINGTON GREEN LANE
TALLAHASSEE, FL 32308 (850)878-2221

2
APPEARANCES:

Representing the Florida Cabinet:

JEB BUSH
Governor

CHARLES H. BRONSON
Commissioner of Agriculture

CHARLIE CRIST
Attorney General

TOM GALLAGHER
Chief Financial Officer

* * *

ACCURATE STENOTYPE REPORTERS, INC.

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I N D E X

DIVISION OF BOND FINANCE
(Presented by BEN WATKINS)

ITEM ACTION PAGE
1 Approved 4
2 Approved 4

FINANCIAL SERVICES COMMISSION - OFFICE OF INSURANCE REGULATION
(Presented by KEVIN McCARTY)

ITEM ACTION PAGE

1 Approved 17
2 Approved 17
3 Approved 18

BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND
(Presented by COLLEEN CASTILLE)

ITEM ACTION PAGE

1 Approved 7
2 Approved 8
3 Approved 12
4 Approved 16

STATE BOARD OF ADMINISTRATION
(Presented by COLEMAN STIPANOVICH)

ITEM ACTION PAGE

1 Approved 27
2 Approved 27

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DIVISION OF BOND FINANCE - MAY 25, 2004
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1 PROCEEDINGS

2 THE GOVERNOR: The next cabinet meeting will be May

3 17th, 2005.

4 Division of Bond Finance.

5 CFO GALLAGHER: Motion on the minutes.

6 ATTORNEY GENERAL CRIST: Second.

7 THE GOVERNOR: There's a motion and a second on

8 Item 1. Without objection, the item passes.

9 Item 2.

10 MR. WATKINS: Item 2 is a resolution authorizing the

11 issuance of competitive sale of up to $120 million in

12 revenue bonds for the Tampa-Hillsborough County Expressway

13 Authority.

14 CFO GALLAGHER: Motion on 2.

15 COMMISSIONER BRONSON: Second.

16 THE GOVERNOR: There's a motion and a second.

17 Without objection, the motion passes.

18 MR. WATKINS: Thank you, sir.

19 THE GOVERNOR: General? Hang on, Ben.

20 ATTORNEY GENERAL CRIST: Thanks.

21 I was just curious. It's an important project in the

22 hometown area. Have some changes been made? Apparently

23 there is a new executive director; is that correct, Ben?

24 MR. WATKINS: They -- about a year ago, one of the

25 piers on the project sank, causing --

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1 THE GOVERNOR: More than one.

2 MR. WATKINS: Excuse me?

3 THE GOVERNOR: It was more than one.

4 MR. WATKINS: Well, it started out as one and that

5 indicated the problem. And there have been a number of

6 changes that had resulted from that. And basically, the

7 Authority discovered a design defect in the foundation in

8 the piers for the elevated expressway project. So they

9 have engaged an independent design firm to look at the

10 design and have developed a remediation to fix the

11 problem.

12 DOT has reviewed those engineering plans and specs

13 and is in agreement with the expressway authority on the

14 proposed repair for all of the existing pilings on the

15 reversible lanes project as well as the cost of those.

16 One of the consequences of the due diligence in the

17 discovery that took place is the expressway authority

18 changed leadership of the authority. The existing

19 executive director resigned and they have a new executive

20 director who was a former DOT district secretary in that

21 particular region.

22 ATTORNEY GENERAL CRIST: So let me cut to the chase.

23 Do we have a new firm that's doing the work other than the

24 old firm that was doing the work that built the pilings

25 that sank?

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1 MR. WATKINS: They do have a new design firm, an

2 independent design firm that has reviewed that and a

3 project manager specifically for the repair project.

4 ATTORNEY GENERAL CRIST: The new company is who?

5 MR. WATKINS: Ardaman and Associates is the new

6 design firm and the new project manager for the

7 construction of the repair is Jacobs Engineering Group.

8 ATTORNEY GENERAL CRIST: Okay. Thank you, Ben.

9 THE GOVERNOR: They also have a new financial plan to

10 pay for this without coming to us.

11 MR. WATKINS: Correct.

12 CFO GALLAGHER: And I might add that there will be

13 lawsuits on this for many years to come.

14 MR. WATKINS: For decades.

15 THE GOVERNOR: On the design?

16 CFO GALLAGHER: On whose fault it was, design,

17 whether it was the contractors and everything else.

18 Meanwhile, they got to get the transportation up and

19 running. So that's why we're doing these bonds.

20 THE GOVERNOR: Thank you, Ben.

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BOARD OF TRUSTEES - 5/3/05
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1 THE GOVERNOR: Board of Trustees.

2 ATTORNEY GENERAL CRIST: Motion on the minutes.

3 MS. CASTILLE: Good morning, Governor, members of the

4 cabinet.

5 THE GOVERNOR: There's no minutes.

6 Item 1.

7 MS. CASTILLE: Item 1 is the Kappa Alpha Corporation

8 option agreement on behalf of Florida Board of Education

9 for FSU.

10 THE GOVERNOR: Is there a motion?

11 ATTORNEY GENERAL CRIST: Motion.

12 THE GOVERNOR: Is there a second? Is there a second?

13 Did I skip something?

14 CFO GALLAGHER: Motion on 1.

15 THE GOVERNOR: We have a motion. Do we have a

16 second?

17 CFO GALLAGHER: Second.

18 THE GOVERNOR: Did you do both? There is a motion

19 and a second. Without objection, the item passes. I knew

20 we could get through Item 1.

21 MS. CASTILLE: Excellent.

22 Item 2, the Franks option agreement for Florida Keys

23 ecosystem on Grassy Key. Governor, members of the

24 cabinet, this is part of our 93-million-dollar commitment

25 to the Florida Keys for land acquisition. The approval of

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1 this item will bring us to about $10 million of our

2 $93 million commitment.

3 ATTORNEY GENERAL CRIST: Motion on 2.

4 CFO GALLAGHER: Second.

5 THE GOVERNOR: Motion and a second. Without

6 objection, the item passes.

7 Unfortunately, it looks like the Legislature didn't

8 quite step up on the wastewater funding.

9 MS. CASTILLE: They went backwards. We were doing

10 pretty well early last week and they've come to about

11 $7 million.

12 THE GOVERNOR: Okay.

13 CFO GALLAGHER: Governor, I'd like to move to

14 withdraw Item 3 with some comments. I want to support the

15 decision that allows the Florida Wildlife Commission to

16 review and provide comment on the prohibition of fishing

17 in this area. As you know, there is a disagreement with

18 Interior and the State of Florida as to who has control --

19 who owns, basically, the bottom here.

20 And I would also support further negotiations with

21 the Department of Interior to allow catch and release for

22 certain nonreef species, such as permit and bone fish, in

23 that management area and Interior usually likes to have

24 absolutely no fishing whatsoever. But because

25 recreational fishing is a major contributor to the economy

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1 of Florida and it's been allowed there, you know, for

2 quite awhile now because of the disagreement of who owns

3 it, you know, it's a $7.5 billion industry in Florida. So

4 I would like to allow catch and release to at least

5 continue there.

6 Also, there is something else that I think we need to

7 work with Interior in regards to this. As they enter into

8 the 2001 agreement and they did, limiting offshore oil and

9 gas drilling in federal waters off Florida's coastline

10 known as area 181, that agreement expires in 2007. And

11 recent press reports indicate a possible federal

12 government change to allow access to the area.

13 THE GOVERNOR: To which area?

14 CFO GALLAGHER: To 181. And although Interior is

15 looking for us to help with the long-term protection for

16 the Dry Tortugas National Park which I agree with, I think

17 we should in turn seek a long-term permanent protection

18 from oil and gas activities within 100 miles of Florida's

19 beaches. And so I would like that to be involved in our

20 negotiations with -- it's complicated, but I think it's

21 important. And so that's my withdrawal motion.

22 MS. CASTILLE: Treasurer Gallagher, could I ask that

23 you not prejudge the item and the decisions to chose catch

24 and release without hearing the debate from the multiple

25 parties that have been involved in the situation in the

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1 past? It has come to my attention that the Coastal

2 Conservation Association has called your offices and

3 talked about that. It is a different position that they

4 took from four years ago when they supported the no take

5 area for the Tortugas. So I haven't had an opportunity to

6 talk to them so it's news to me that they are taking this

7 position. I think it's more appropriate to have the

8 debate in open public forum before we prejudge the

9 decision and bring it to you for you to be able to make

10 that decision.

11 CFO GALLAGHER: Okay. I just think it should be --

12 we should consider it because it's pretty much allowed

13 now.

14 MS. CASTILLE: It is.

15 CFO GALLAGHER: And that's quite a popular area for,

16 you know, a lot of folks for both visiting the park and

17 fishing.

18 THE GOVERNOR: I would also respectfully ask that we

19 have a chance to visit on the offshore drilling aspect of

20 this. The hundred-mile limit already exists. I think we

21 may want to look at a little stronger position.

22 CFO GALLAGHER: I don't have any problem with

23 stronger but what I'm worried about is that --

24 THE GOVERNOR: I'd like to talk to you about it

25 beforehand.

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1 CFO GALLAGHER: -- the agreement we have expires in

2 2007 and I'd like to see that that gets extended.

3 THE GOVERNOR: The agreement doesn't expire but the

4 tract of water is up for review by law.

5 CFO GALLAGHER: Right. We got this little green

6 place here.

7 THE GOVERNOR: But it also goes all the way down

8 here. And it also goes into this area here. There's an

9 eastern -- what do you call it, the eastern?

10 There is another tract, Treasurer, that goes around

11 to the Atlantic Ocean side. So there is -- if we could

12 just make sure we craft the resolution in a way that is

13 sensitive to the ongoing discussions, I would appreciate

14 it.

15 CFO GALLAGHER: I certainly will accept that.

16 COMMISSIONER BRONSON: I'll second the motion for

17 withdrawal.

18 THE GOVERNOR: There is a motion to withdraw and a

19 second. Are we going to have people come speak?

20 MS. CASTILLE: Yes, sir. Yes, there's a number of

21 people from the Keys, environmental groups --

22 THE GOVERNOR: Well, let's hear them before we pass

23 the --

24 MS. CASTILLE: -- recreational, fishermen.

25 THE GOVERNOR: Okay. Where are they?

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1 MS. CASTILLE: Well, they're not here today because

2 we've withdrawn the item.

3 THE GOVERNOR: There's a motion to withdraw and a

4 second. Without objection, it's withdrawn. I

5 misunderstood, my apologies.

6 CFO GALLAGHER: We've got lots of work to do. They

7 will come when there is something to pass.

8 MS. CASTILLE: Okay. Item 4. Mobro Marine, Inc.,

9 it's a recommended consolidated intent for an application

10 for a five-year sovereignty submerged land lease

11 containing 606,161 square feet for the purpose of

12 constructing a marine railway for an existing commercial

13 barge facility. Our recommendation is for the approval of

14 a one-year term lease subject to the special lease

15 conditions and payment of $120,518 representing lease

16 fees, lease fees in arrears, and administrative fines. At

17 the end of the one-year lease, the applicant will come

18 back to the Board for approval of a five-year lease

19 provided they are in compliance.

20 On this item, Governor and cabinet, we have two

21 issues on this. In this particular item, we have been

22 negotiating back and forth with the applicant in both this

23 forum and a prior corporate forum as well, to get them

24 under compliance. They came very close to getting under

25 compliance about four years ago in the year 2000/2001 and

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1 then manatee issues arose. We have dealt with the manatee

2 issues to the satisfaction of the Fish and Wildlife

3 Conservation Commission.

4 And then the second issue is the matter of TUAs and

5 our tracking of them. We have several temporary use

6 agreements that are under discussion, under negotiation

7 with various leaseholders and we will be bringing more of

8 these to your attention as we track them and finalize

9 them.

10 CFO GALLAGHER: Let me ask you something, Colleen.

11 This is a probably the best example of something that can

12 just get bigger and bigger and bigger and nobody has any

13 control on it. At the same time, I recognize that these

14 guys don't have anywhere else to put their barges. So,

15 you know, we got to balance a little bit. But one of the

16 things I think we ought to be looking at is when we're

17 doing these temporary use agreements and they can't --

18 because we're negotiating permit or whatever we're

19 doing -- I think some of these, how many years have we

20 been doing this?

21 MS. CASTILLE: For this one, we've been working on it

22 for about 15 years.

23 CFO GALLAGHER: Right. That's a little much. So the

24 way you take care of this in my opinion, is we have a

25 rule. And I'm not locking this down. Is that when you do

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1 the first one, you know, they are going to pay ten times

2 what the normal lease fees are. Okay? And then when you

3 do the second year, another add-on lease, it's 20 times,

4 and then it's 30. And pretty soon, they're going to get a

5 permanent one like they should have done in the first

6 place and stop all this continual getting worse and worse

7 and have a real incentive for them to sit down and get the

8 thing worked out. Some kind of deal like that needs to

9 happen because these are proliferating all over the state

10 and this is probably one of the worst examples.

11 MS. CASTILLE: It is.

12 CFO GALLAGHER: But there are others and they get a

13 little lease and the next thing you know, they are taking

14 up half the river.

15 MS. CASTILLE: That was one of the negotiating points

16 on this, that the leaseholder did not feel that there were

17 certain areas of the lease where they were mooring the

18 barges, were allowed -- we were allowed to collect lease

19 fees on them. And they were claiming the navigable waters

20 theory that they have the right to use it. And so there

21 were a number of issues and every single one was a

22 negotiating point. This is one of the worst.

23 We have -- the current law -- the current rules that

24 are in place allow us to do two things. They allow us to

25 apply administrative fines and that's the small one that

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1 you see here, relatively speaking, the 17,500. But it's

2 an either/or situation. The current rules that we have in

3 place, the Board of Trustees' rules, either allow us to do

4 this or to go forward with a notice of violation. On this

5 one, we thought we had an agreement and so we opted not to

6 go forward with the notice of violation.

7 When it came up again, it was one of these temporary

8 use agreements which went by the wayside. We had gotten

9 things, we thought, worked out and then yet again we had

10 their attorney, a new attorney call us and write us and

11 say they're not in agreement. So it was not until last

12 week where we finally got agreement on all the issues and

13 were able to with, I should say, the help of the cabinet

14 aides representing you on this issue.

15 CFO GALLAGHER: Hooray for the cabinet aides. Well,

16 I'm glad but it's just frustrating when you've got

17 something that goes 15 years.

18 MS. CASTILLE: You're absolutely right. And we've

19 asked all of the districts to go through their files,

20 figure out where the temporary use agreements are and

21 figure out what the status is on each of them and we will

22 be bringing more of these finalization and elimination of

23 temporary use agreements and bringing more of these leases

24 under final leases.

25 CFO GALLAGHER: Great. Thank you.

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1 MS. CASTILLE: So we have a motion?

2 CFO GALLAGHER: Motion.

3 MS. CASTILLE: Sorry.

4 (Laughter.)

5 CFO GALLAGHER: Thank you for taking over the

6 meeting, Colleen.

7 (Laughter.)

8 THE GOVERNOR: There's a motion and a second.

9 Without objection, the item passes.

10 MS. CASTILLE: Thank you, Governor and members of the

11 cabinet. That concludes our agenda.

12 THE GOVERNOR: Thank you, Colleen.

13 MS. CASTILLE: Governor and members of the cabinet, I

14 did want to tell you last week we were notified that we

15 are one of the four finalists on the State Park Gold Medal

16 Competition. And so we're very excited about possibly

17 bringing, for a second time, the gold medal to you.

18 THE GOVERNOR: We won it two years ago?

19 MS. CASTILLE: Three -- five years ago.

20 THE GOVERNOR: Five years ago? Boy, time flies when

21 you're having fun. I guess we bragged about it for about

22 three years.

23 MS. CASTILLE: Yes, sir, we did at every opportunity.

24 THE GOVERNOR: So it seems like only two years ago.

25 MS. CASTILLE: Thank you.

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1 THE GOVERNOR: Thank you.

ACCURATE STENOTYPE REPORTERS, INC.

FSC - OFFICE OF INSURANCE REGULATION - 5/3/05
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1 THE GOVERNOR: State Board of Administration.

2 CFO GALLAGHER: Motion on the minutes.

3 ATTORNEY GENERAL CRIST: Second.

4 THE GOVERNOR: There's a -- oh, did I skip somebody?

5 I did. You were right. Coleman, you want to wait just

6 one second?

7 MR. STIPANOVICH: Yes, sir.

8 THE GOVERNOR: Financial Services Commission.

9 Butterbean.

10 MR. McCARTY: Good morning, Governor, members of the

11 cabinet. How are you doing, sir?

12 THE GOVERNOR: I'm doing well.

13 MR. McCARTY: Item No. 1 is adoption of proposed rule

14 Chapter 69O-162 as it relates to adoption of mortality

15 tables.

16 CFO GALLAGHER: Motion.

17 ATTORNEY GENERAL CRIST: Second.

18 THE GOVERNOR: There is a motion and a second.

19 Without objection, the item passes.

20 MR. McCARTY: Item 2 is adoption of amendments to the

21 rule, variation of life policies.

22 CFO GALLAGHER: Motion.

23 ATTORNEY GENERAL CRIST: Second.

24 THE GOVERNOR: There is a motion and a second.

25 Without objection, the item passes.

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1 MR. McCARTY: Item No. 3 is adoption of amendment to

2 Rule 69O-1 regarding refunds. This is a revision to the

3 Premium Finance Rule which has been revised by statute and

4 just removes obsolete language.

5 CFO GALLAGHER: Motion on 3.

6 ATTORNEY GENERAL CRIST: Second.

7 THE GOVERNOR: Motion and a second. Without

8 objection, the item passes.

9 Treasurer, did you have something?

10 CFO GALLAGHER: Well, I'd like Kevin to give us a

11 report. We, as you know, had a final date of April 18th

12 for all companies to pay all claims and report to us any

13 claims that were not paid and why they were not. Those

14 were to go into the Office of Insurance Regulation. My

15 understanding is Commissioner McCarty has received those

16 and I'd like him, if he would, to give us a report.

17 THE GOVERNOR: Absolutely.

18 MR. McCARTY: Yes, that's correct, Treasurer

19 Gallagher. The Financial Services Commission did adopt an

20 emergency rule on St. Patrick's Day, March 17th, requiring

21 all of these to be filed, to be reported by (sic) our

22 office by April 28th which was last Thursday. As of the

23 reporting deadline, we have outstanding 57,830 personal

24 residential and commercial residential claims which would

25 be homeowners and condominium policies as well. Charlie

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1 claims open, there are 17,992; Frances claims are 19,992;

2 Ivan is 8,941; and Jeanne claims are 11,081.

3 Our market investigation unit is currently going

4 through all of the explanations that have been given by

5 the insurers to determine what further action may be

6 required to be taken by our office or by the Financial

7 Services Commission. We are in the very early stages of

8 reviewing the data but preliminarily, the data suggests

9 that a majority of the explanations are the insurers are

10 waiting for additional information or documentation from

11 the insurers to pay for depreciation holdbacks. And that

12 would make some sense if you think about it, giving the

13 difficulties many homeowners have securing contractors to

14 fix their homes. Additionally, there is a number of

15 claims that are still in dispute which was the bulk of the

16 rest of the claims.

17 THE GOVERNOR: What percentage would be -- out of

18 those 57,000, what percentage are where the insured has

19 not provided the adequate paperwork and what percentages

20 are real disputes?

21 MR. McCARTY: Well, we're a little resonate about

22 giving a breakdown on that. Like I said, we have just

23 really gotten in the data on Thursday. The reporting

24 format allows the insurer to give individual explanation.

25 I'm just saying as a cursory preliminary review, we see

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1 that the holdback provision for failure for documentation,

2 the actual cash value. They've paid the actual cash

3 value, they've paid the preliminary amount, waiting for

4 the final. But it's a sizable amount in number in what

5 we're seeing. But I would hesitate to estimate a

6 percentage of what those claims are. But in the next

7 couple of weeks, we should have ferreted through that data

8 and certainly before our next cabinet meeting.

9 CFO GALLAGHER: Well, we also have 3,337 mediations

10 scheduled. So --

11 THE GOVERNOR: Is that what your expectation was?

12 CFO GALLAGHER: Well, we've done a whole bunch.

13 Expectations is we want to get as many through there as

14 possible. We've increased the mediators, increased the

15 offices for mediations. That's a lot of mediations to

16 slide through. We're hoping, as usually happens, a large

17 number of these will be settled prior to an actual

18 mediation and we can usually get 70 percent of them

19 settled prior to the actual mediation meeting which, you

20 know, is a good thing and we're going to keep pressure on

21 them to get that done. The insurers get 21 days to settle

22 prior to the actual date being set for mediation.

23 MR. McCARTY: And there were approximately 120,000

24 outstanding residential claims when you adopted this rule.

25 So it's been a significant modification in the number.

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1 And of the 1.6 million claims that are out there,

2 unfortunately, though, there are still 57,000 claims

3 outstanding. But I do think a lot of that has to do with

4 true disputes as to whether the claim is a covered claim.

5 And the rest of it, I believe, in large part is due to the

6 inability to get their homes fixed, unfortunately.

7 THE GOVERNOR: Well, we've got a hurricane season

8 coming up.

9 MR. McCARTY: In a few weeks.

10 CFO GALLAGHER: Well, there's going to be a lot of

11 people that are not going to be able to get their homes

12 repaired for various reasons. One of them is contractor

13 shortage and there's still a lot of blue roofs out there

14 from the tarps.

15 MR. McCARTY: That concludes my report. Any other

16 questions?

17 THE GOVERNOR: Yes, Treasurer?

18 CFO GALLAGHER: So you're really too early to know if

19 there is a pattern of anything that's happened with

20 insureds.

21 MR. McCARTY: Right, again, the reporting deadline

22 was Thursday. And I can assure you that the bulk of the

23 reporting was done in the last 48 hours of the reporting

24 time. So which, you know, we still really need to vet the

25 data, verify the data, cross-reference against our other

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1 databases. And then, you know, but we should have that

2 completed in the next couple of weeks and we'll give you

3 detailed information as to each insurer and as to the

4 reason for the -- given by the insurer.

5 CFO GALLAGHER: Are we going to work on a process

6 that we can maybe get this a little quicker? You know, we

7 told them have it done by the 18th. They get some time to

8 get it to us, puts it at the 28th. And then we start -- I

9 know your people probably worked all weekend trying to get

10 this data in some kind of shape so you'd at least know the

11 numbers, the preliminary numbers. Is there a way we can

12 get this quicker so we can help people quicker?

13 MR. McCARTY: I think during the entire hurricane

14 season there has been a frustration, I know with Governor

15 Bush, as to the whole transparency of this process. And

16 really the insurance industry is not one that has been

17 subject to a whole lot of reporting requirements in the

18 past. And so we really have tried to put in some

19 parameters for collecting this data, et cetera. With

20 regard to the specifics of this emergency rule, they were

21 allowed ten days to aggregate the data and submit the

22 data. And much of that has -- and has been reported to

23 us, a lot of that has to be hand-pulled. It's not

24 something they can derive easily from their databases, et

25 cetera, in a reporting format.

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1 So we would certainly in the future will be

2 developing electronic filing formats that are compatible

3 with their systems and hopefully develop reason codes that

4 they could use similar to what we're doing right now. So

5 this will serve as a good groundwork for doing that in the

6 future.

7 THE GOVERNOR: I would really encourage that. I

8 mean, I hope that you -- you expressed my frustration. I

9 hope you shared it. For an industry as large as the

10 insurance industry and as regulated, I mean, they've got

11 to fill out reports galore, for us not to be able to

12 create a system that's not a burden to them but gives us

13 access to information far quicker than we could get it

14 would be really helpful as one of the lessons learned in

15 this last summer.

16 MR. McCARTY: Absolutely.

17 THE GOVERNOR: So you think this storm season if

18 there is a hurricane and one of us asks for a report that

19 it will be easier to get it from the guys?

20 MR. McCARTY: Yes, we are -- again, the insurance --

21 we are going to be going forward and providing the

22 infrastructure, framework for them to do the reporting and

23 get them to agree on the various principals, et cetera,

24 for the electric format. And that, I think, is going to

25 be an important part of getting it much quicker in the

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1 future.

2 CFO GALLAGHER: What percentage is not reported yet?

3 MR. McCARTY: Well, that again, the only ones that

4 were required to report it are the ones that had

5 outstanding claims. So we were going to cross-reference

6 that against our monthly report to see the ones that have

7 already closed to see if anyone has failed to report. So

8 that also will be forthcoming in our final report.

9 THE GOVERNOR: General?

10 ATTORNEY GENERAL CRIST: Just a couple questions. I

11 think you answered some of them already, Kevin, I

12 appreciate it. You said the total claims were 1.6 million

13 or so?

14 MR. McCARTY: Yes. That's total claims but that's

15 commercial and residential.

16 ATTORNEY GENERAL CRIST: And 57,000 remain

17 outstanding?

18 MR. McCARTY: Yes, sir.

19 ATTORNEY GENERAL CRIST: I was curious, you know, we

20 passed the emergency rule. What is the consequence for

21 not having the $57,000 done?

22 MR. McCARTY: That would depend for the reason. I

23 mean, some of them could be legitimately in litigation or

24 disputed claims as to whether or not it is a covered

25 claim. We also know a number of cases as a result of the

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1 Mierzwa case, I think some of you may be familiar with,

2 with whether or not it was caused by storm surge on by the

3 hurricane itself. So there are some disputes as to the

4 amounts of the damage regarding that as well. So those

5 claims would be open.

6 And the other would be the companies have paid in

7 part and are waiting to complete or supplement payment of

8 that claim based upon a completion of the work or

9 demonstration of receipt of payment for loss of coverage

10 beat (phonetic) which is the value of their belongings, et

11 cetera.

12 ATTORNEY GENERAL CRIST: Which company has the most

13 outstanding claims of the 57,000?

14 MR. McCARTY: I'm not prepared at this time -- we

15 don't have that information available. And it will be

16 available shortly and I will provide that information to

17 you. We'll provide it by company, by claim. The only

18 information that will not be revealed is the individual

19 policyholder data for obvious reasons.

20 ATTORNEY GENERAL CRIST: Any idea how long that will

21 take?

22 MR. McCARTY: About two and a half weeks.

23 ATTORNEY GENERAL CRIST: Any with Citizens?

24 MR. McCARTY: Beg your pardon?

25 ATTORNEY GENERAL CRIST: Are any with Citizens?

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1 MR. McCARTY: Oh, I'm sure many are with Citizens.

2 ATTORNEY GENERAL CRIST: Thanks, Kevin.

3 THE GOVERNOR: Thank you, Kevin.

4 MR. McCARTY: Thank you.

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STATE BOARD OF ADMINISTRATION - 5/3/05
28
1 THE GOVERNOR: Coleman.

2 CFO GALLAGHER: Motion on the minutes.

3 ATTORNEY GENERAL CRIST: Second.

4 THE GOVERNOR: There's a motion and a second on

5 Item 1. Without objection, the item passes.

6 MR. STIPANOVICH: Item No. 2 is request for approval

7 of fiscal sufficiency of an amount not exceeding

8 120 million, State of Florida Tampa Hillsborough County

9 Expressway Authority revenue bonds.

10 ATTORNEY GENERAL CRIST: Motion.

11 CFO GALLAGHER: Second.

12 THE GOVERNOR: Motion and a second. Without

13 objection, the item passes. Thanks, Coleman.

14 MR. STIPANOVICH: Completes my agenda. Thank you,

15 Governor. Thank you, members.

16 (Thereupon, the proceedings concluded at 9:50 a.m.)

ACCURATE STENOTYPE REPORTERS, INC.

29
1

2 CERTIFICATE OF REPORTER

4 STATE OF FLORIDA )

5 COUNTY OF LEON )

7 I, KRISTEN L. BENTLEY, Court Reporter, certify that

8 the foregoing proceedings were taken before me at the time and

9 place therein designated; that my shorthand notes were

10 thereafter translated under my supervision; and the foregoing

11 pages numbered 1 through 28 are a true and correct record of

12 the aforesaid proceedings.

14 I further certify that I am not a relative, employee,

15 attorney or counsel of any of the parties, nor am I a relative

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

17 connected with the action, nor am I financially interested in

18 the action.

19 DATED this 16th day of May, 2005.

20 ______________________________

21 KRISTEN L. BENTLEY, Court Reporter
Notary Public
22 850-878-2221

ACCURATE STENOTYPE REPORTERS, INC.