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
DEPARTMENT OF REVENUE
DEPARTMENT OF VETERANS' AFFAIRS
BOARD OF TRUSTEES - SWFWMD
POWER PLANT CITING BOARD
BOARD OF TRUSTEES
STATE BOARD OF ADMINISTRATION

The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding, in the
Cabinet Meeting Room, LL-03, The Capitol, Tallahassee, Florida,
on the 17th 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

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.

I N D E X

DIVISION OF BOND FINANCE
(Presented by BEN WATKINS)

ITEM ACTION PAGE
1 Approved 7
2 Approved 7
3 Approved 8
4 Approved 8
5 Approved 9

DEPARTMENT OF REVENUE
(Presented by JAMES ZINGALE)

ITEM ACTION PAGE

1 Approved 10
2 Approved 10

DEPARTMENT OF VETERANS' AFFAIRS
(Presented by ROCKY McPHERSON)

ITEM ACTION PAGE

1 Approved 14
2 Approved 14
3 Update

BOARD OF TRUSTEES - SWFWMD
(Presented by COLLEEN CASTILLE)

ITEM ACTION PAGE

1 Deferred 18

POWER PLANT SITING BOARD
(Presented by COLLEEN CASTILLE)

ITEM ACTION PAGE

1 Approved 19
2 Approved 20
3 Approved 21

ACCURATE STENOTYPE REPORTERS, INC.

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

ITEM ACTION PAGE

1 Approved 22
2 Deferred 22
3 Approved 27
4 Approved 28
5 Approved 30
6 Withdrawn 31
7 Approved 31
8 Approved 42

STATE BOARD OF ADMINISTRATION
(Presented by COLEMAN STIPANOVICH)

ITEM ACTION PAGE

1 Approved 43
2 Approved 43
3 Approved 43
4 Approved 44

ACCURATE STENOTYPE REPORTERS, INC.

1 PROCEEDINGS

2 GOVERNOR BUSH: We have a need for a vote for the

3 parole commission appointment and approval of former

4 commissioners for temporary duty. In May of 2003, we

5 appointed a new parole qualifications committee to provide

6 three names needed to fill the vacancy created by

7 Commissioner Henry. We selected Commissioner Tina Pate.

8 But, unfortunately, given the absence of completed

9 confirmations this session, it is now necessary to address

10 the vacancy that will occur on June 20th.

11 Prior to its expiration this month, the Parole

12 Qualifications Committee was able to convene in an

13 emergency meeting, just in the nick of time, I might add.

14 The committee elected to submit the same three names for

15 our consideration as provided by statute. Mr. Patrick

16 Donaldson, Ms. Tina Pate, and Mr. Robert Woody. Our vote

17 today will appoint a commissioner to fill the vacancy for

18 the remainder of the six-year term that began in July 2004

19 and reauthorize the list of retired commissioners

20 previously provided to us for temporary duty as required

21 by statute.

22 CFO GALLAGHER: Governor, I move that we appoint

23 Ms. Tina Pate and the former commissioners who have

24 previously been approved to be called upon for temporary

25 duty.
ACCURATE STENOTYPE REPORTERS, INC.

1 COMMISSIONER BRONSON: Second.

2 GOVERNOR BUSH: Is there any discussion?

3 (No response.)

4 All in favor say aye.

5 (Aye.)

6 All opposed.

7 (No response.)

8 The motion passes. Thank you very much.

25
ACCURATE STENOTYPE REPORTERS, INC.

DIVISION OF BOND FINANCE 5-17-05
7

1 GOVERNOR BUSH: The next cabinet meeting will be

2 Wednesday, June 1st, 2005.

3 Division of Bond Finance.

4 CFO GALLAGHER: Motion on the minutes.

5 GENERAL CRIST: Second.

6 GOVERNOR BUSH: There's a motion and a second.

7 Without objection, Item 1 passes.

8 MR. WATKINS: Item No. 2 is a resolution authorizing

9 the issuance of up to $400 million in PECO refunding

10 bonds.

11 CFO GALLAGHER: Motion.

12 GENERAL CRIST: Second.

13 GOVERNOR BUSH: There's a motion and a second.

14 Without objection, the item passes.

15 That seems like a lot.

16 MR. WATKINS: The long-term interest rates have

17 remained extraordinarily low. And beyond my expectations,

18 we continue, as opportunities present themselves, to

19 refinance our existing outstanding indebtedness. So this

20 is another $400 million in PECO. Next cabinet meeting,

21 I'll have the numbers in my head. I'll give you a summary

22 of what we've done so far this calendar year. But it's

23 extraordinary.

24 GOVERNOR BUSH: You're saving a lot of money there.

25 CFO GALLAGHER: What's the difference in interest
ACCURATE STENOTYPE REPORTERS, INC.

DIVISION OF BOND FINANCE 5-17-05
8

1 rate on the new compared to the old?

2 MR. WATKINS: Usually a spread of about 1 percent to

3 make it economically feasible. So 30-year money, we're

4 borrowing slightly over 5 percent.

5 Item No. 3 is a resolution authorizing the

6 competitive sale of up to 163.4 million in PECO new money

7 bonds. This will complete the legislative authorization

8 enacted in 2002, funding that.

9 GENERAL CRIST: Motion.

10 CFO GALLAGHER: Second.

11 GOVERNOR BUSH: There's a motion and a second.

12 Without objection, the item passes.

13 MR. WATKINS: Item No. 4 is a resolution authorizing

14 the issuance of up to $2 billion in turnpike bonds. We're

15 not going to have a 2-billion-dollar bond issue. This is,

16 in effect, funding turnpike's five-year program. In other

17 words, it initiates the validation proceeding so we can go

18 ahead and get that out of the way. And then you will see

19 this again as this authorization gets implemented. As we

20 sell bonds, you will see the -- authorize the individual

21 sales as are necessary to fund turnpike projects.

22 CFO GALLAGHER: Motion on 4.

23 GENERAL CRIST: Second.

24 GOVERNOR BUSH: There's a motion and a second.

25 Without objection, the item passes.
ACCURATE STENOTYPE REPORTERS, INC.

DIVISION OF BOND FINANCE 5-17-05
9

1 MR. WATKINS: And Item No. 5 is a report of award on

2 the competitive sale of $93,560,000 in turnpike refunding

3 bonds. The bonds were awarded to the low bidder at a true

4 interest cost of approximately 4.35 percent, generating

5 debt service savings of $13.7 million.

6 CFO GALLAGHER: Motion on 5.

7 GENERAL CRIST: Second.

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

9 Without objection, the item passes.

10 Thank you, Ben.

11 MR. WATKINS: Thank you, sir.

25
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF REVENUE - 5/17/05
10

1 GOVERNOR BUSH: Department of Revenue.

2 CFO GALLAGHER: Motion on the minutes.

3 GENERAL CRIST: Second.

4 GOVERNOR BUSH: There's a motion and a second.

5 Without objection, Item 1 passes.

6 Jim, how are you doing?

7 DR. ZINGALE: Great. Absolutely great. The first --

8 second item on the agenda is the annual cleanup of forms.

9 Every single tax form requires a rule, some date changes,

10 some implementation changes. Basically, noncontroversial.

11 Request approval.

12 GENERAL CRIST: Motion on 2.

13 COMMISSIONER BRONSON: Second.

14 GOVERNOR BUSH: There's a motion and a second.

15 Without objection, the item passes.

16 Can you tell me what perchloroethylene is?

17 DR. ZINGALE: It's a chemical that's taxable.

18 (Laughter.)

19 CFO GALLAGHER: Used to use it in dry-cleaning.

20 GOVERNOR BUSH: You thought that was a trick

21 question. It's on your little thing here.

22 DR. ZINGALE: That was a tricky answer. Not a clue.

23 It's used in dry-cleaning, I think. Yeah, I think it's a

24 chemical used in dry-cleaning.

25 GOVERNOR BUSH: Commissioner Gallagher knew that.
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF REVENUE - 5/17/05
11

1 DR. ZINGALE: I have an item that's not on the

2 agenda.

3 GOVERNOR BUSH: You won the jeopardy question.

4 Congratulations.

5 DR. ZINGALE: With your permission, I'd like to give

6 you a quick update of the hurricane disaster relief

7 payment program. This legislation passed last December,

8 had basically two pieces to it. The first dealt with

9 homestead related property that had been uninhabited for

10 60 days or longer. The legislation provided for a

11 proration of the vacancies against the property tax, had a

12 cap on it of $1,500. The checks are going to hit the mail

13 this Friday, is our expectation. About 19,000

14 homesteaders are going to get relief, about $9.5 million.

15 The average payment is going to be slightly less than

16 $500. Any concerns or questions is appealable to the VAB.

17 So that's going to happen this week.

18 The second piece had to do with mobile homes that had

19 been destroyed and were replaced. The relief is going to

20 be on the value of the sales tax up to $1500 that was

21 incurred on the replacement. This had a delay in

22 implementation in the bill. We expect this to be

23 implemented by mid July. Our estimates to date are

24 somewhere in the range of 2- to 3,000 mobile home owners

25 will be using this program and we expect those checks to
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF REVENUE - 5/17/05
12

1 go out sometime mid July. So everything is working well

2 right now. We've had substantial help from the chief

3 financial officers who's going to help us get those checks

4 out timely. So a very successful program.

5 GOVERNOR BUSH: Thank you, Jim and Treasurer. I know

6 a lot of people are going to be pleased to see the check.

7 CFO GALLAGHER: While we're talking about things to

8 do with hurricanes, Governor, I thought it might be a good

9 time to give you and the other cabinet members an update

10 on the multiple deductible numbers.

11 There were 31,000 total applications received with

12 about 61 million requested. About 1573 were not eligible.

13 775 applications were received late. 1600 applications

14 are in the verifications in process. We had different

15 priorities. 23,500 were Priority 1 and 3500 Priority 2.

16 25,500 have been approved for payment. $41.2 million has

17 been approved for payment. About $1600 is the average

18 individual amount approved for payment.

19 GOVERNOR BUSH: That's good.

20 CFO GALLAGHER: We've issued 35 -- $38.5 million

21 worth of warrants and that's for 24,900 issued. The

22 individuals' check cut was about $1545. And there's 117

23 condo applications that have been verified. 4.5 million

24 has been approved for payments for condos and they're

25 still being processed. And we've -- you know, that's
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF REVENUE - 5/17/05
13

1 pretty much where it stands.

2 GOVERNOR BUSH: Treasurer, is this the money -- the

3 $150 million from the Cat Fund, does it automatically,

4 what's not used, automatically go back to the Cat Fund or

5 there has to be some action that the Legislature --

6 CFO GALLAGHER: No, it will automatically refer --

7 once we're finished with this whole program, it

8 automatically will go back to the Cat Fund.

9 GOVERNOR BUSH: Good. Thank you.

25
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF VETERANS' AFFAIRS - 5/17/05
14

1 GOVERNOR BUSH: Department of Veterans' Affairs. Is

2 there a motion on Item 1, the minutes?

3 GENERAL CRIST: Motion.

4 CFO GALLAGHER: Second.

5 GOVERNOR BUSH: There's a motion and a second.

6 Without objection, Item 1 passes.

7 MR. McPHERSON: Good morning, sir. Item 2 is our

8 quarterly report for the second quarter of this fiscal

9 year. Again, recommended for acceptance. No questions

10 that I know of.

11 CFO GALLAGHER: Motion.

12 GENERAL CRIST: Second.

13 GOVERNOR BUSH: There's a motion and a second to

14 approve the quarterly report. Without objection, the

15 motion passes.

16 MR. McPHERSON: Item 3, sir, we'd like to provide, as

17 we're getting very, very close to the 6th of June, the

18 61st anniversary of D-day. And in Florida, that's going

19 to be a day in which we dedicate Florida's World War II

20 memorial. I would like very much to give you just some

21 graphic and visual overviews of where we are on this. And

22 I'd like to start with the PSA that we have made and

23 distributed that we're using to advertise this event

24 throughout the state.

25 (Thereupon, the presentation was played.)
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF VETERANS' AFFAIRS - 5/17/05
15

1 MR. McPHERSON: This has been distributed widely and

2 we're looking for it to be used more and more as we

3 approach the 6th of June. I'd like to now move into some

4 slides to bring you abreast of the history and progress of

5 how this project is actually developing.

6 First slide, of course, is the construction site down

7 at the RA Gray Building. The first slide here shows some

8 of the initial layout of the work, some of the initial

9 foundation for the walls. You can see it's quite

10 expansive. We did retain the heritage oaks in the

11 background. The second slide here shows some of the

12 forming for the stairwell that is going to connect us to

13 the Gray Building.

14 The third slide here shows the actual pouring of the

15 initial base foundation of the monument. And I think if

16 you look at the depth and the size of the folks, the

17 project is a lot larger than anybody envisioned. Here, we

18 show the circular area in the center is cut out with the

19 foundation for a wall all the way around that you'll see

20 is developing quite nicely. This particular view is from

21 the sidewalk where you enter the Gray Building and it

22 shows the initial construction effort for the county

23 markers walk. The county markers were poured off site

24 separately from the wall which you can still see in the

25 formative stages in the background.
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF VETERANS' AFFAIRS - 5/17/05
16

1 On Monday, yesterday, the pillar, which is an exact

2 replica of the Florida pillar in the World War II monument

3 in Washington, DC, arrived. There are seven pieces of

4 that. You can see we started to place it and assemble it

5 yesterday. And you'll note at the forefront of this that

6 the foundation has all been laid around it and that the

7 county marker plaques are installed on the county markers

8 as that walkway is now very close to completion.

9 GOVERNOR BUSH: Rocky, is that -- the flooring,

10 that's what's going to be all the way through --

11 MR. McPHERSON: The flooring there is cardboard

12 around there to protect the concrete that's been poured

13 underneath it. It's plywood.

14 GOVERNOR BUSH: That's cardboard? It looked like it

15 was stone. I'm sorry.

16 MR. McPHERSON: Yes, sir. That will all be very much

17 what it looks like at the very front of that. And then

18 this final slide is a view from the entranceway that shows

19 the progress to date down the marker, the county walks,

20 that's centered on where the actual monument is being

21 erected.

22 This project is moving along on schedule. We are

23 looking to complete it towards the end of May. A little

24 bit of time for additional landscaping, lighting and all

25 the polishing things that we'll need to do to be ready for
ACCURATE STENOTYPE REPORTERS, INC.

DEPARTMENT OF VETERANS' AFFAIRS - 5/17/05
17

1 the 6th of June. Sir, we're on time and under budget.

2 CFO GALLAGHER: That's pretty exciting.

3 GOVERNOR BUSH: Excellent.

4 MR. McPHERSON: Thank you very much, sir.

5 GOVERNOR BUSH: Thank you, Rocky.

6 We don't need a resolution, I don't think, on that,

7 do we?

8 CFO GALLAGHER: No.

25
ACCURATE STENOTYPE REPORTERS, INC.

SWFWMD - 5-17-05
18

1 GOVERNOR BUSH: Southwest Florida Water Management

2 District.

3 CFO GALLAGHER: I move to defer Item 1.

4 GOVERNOR BUSH: There's a motion to defer.

5 COMMISSIONER BRONSON: Second.

6 GOVERNOR BUSH: And a second. Without objection, the

7 item is deferred.

25
ACCURATE STENOTYPE REPORTERS, INC.

POWER PLANT SITING BOARD - 5-17-05
19

1 GOVERNOR BUSH: Siting Board.

2 MS. CASTILLE: Item 1, minutes.

3 CFO GALLAGHER: Motion to approve the minutes,

4 Item 1.

5 MS. CASTILLE: Item 2 --

6 GOVERNOR BUSH: Hang on a second.

7 MS. CASTILLE: Sorry, Governor.

8 GOVERNOR BUSH: There is a motion and a second.

9 Without objection, the item passes.

10 Item 2. Secretary, how are you doing?

11 MS. CASTILLE: Good morning, sir, and members of the

12 cabinet. I am doing great. Thank you.

13 GOVERNOR BUSH: Take a deep breath.

14 MS. CASTILLE: We had a very successful legislative

15 session thanks to you all.

16 GOVERNOR BUSH: You did?

17 MS. CASTILLE: Yes, sir, we did. We got water -- we

18 got the Growth Management Bill along with the Water Bill

19 as well. And that is one of the most significant

20 protections that we've gotten for the environment in many

21 years.

22 GOVERNOR BUSH: How about the Alternative Energy

23 Bill?

24 MS. CASTILLE: The Alternative Energy Bill is a good

25 bill as well.
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POWER PLANT SITING BOARD - 5-17-05
20

1 GOVERNOR BUSH: It didn't pass.

2 MS. CASTILLE: Oh, that one. I'm sorry. I thought

3 you were talking about renewable energy.

4 GOVERNOR BUSH: Never mind, we'll talk about it

5 later.

6 MS. CASTILLE: Okay.

7 CFO GALLAGHER: Well, everything didn't pass; it

8 never does.

9 GOVERNOR BUSH: I have high expectations of my

10 Legislature.

11 CFO GALLAGHER: Yes, you do.

12 GOVERNOR BUSH: Item 2.

13 MS. CASTILLE: Item 2, New Hope Power partnership

14 land use order for the Okeelanta cogeneration facility in

15 Palm Beach County.

16 CFO GALLAGHER: Motion on 2.

17 GENERAL CRIST: Second.

18 GOVERNOR BUSH: There's a motion and a second.

19 Without objection, the item passes.

20 MS. CASTILLE: Item 3.

21 GOVERNOR BUSH: Please.

22 MS. CASTILLE: Is New Hope partnership final order

23 for the certification of the Okeelanta cogeneration

24 facilities expansion project.

25 CFO GALLAGHER: Motion on 3.
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POWER PLANT SITING BOARD - 5-17-05
21

1 COMMISSIONER BRONSON: Second.

2 GOVERNOR BUSH: There's a motion and a second.

3 Without objection, the item passes.

25
ACCURATE STENOTYPE REPORTERS, INC.

BOARD OF TRUSTEES - 5-17-05
22

1 GOVERNOR BUSH: Board of Trustees.

2 CFO GALLAGHER: Motion on the minutes for

3 February 16th and March 1st.

4 GENERAL CRIST: Second.

5 GOVERNOR BUSH: There is a motion on Item 1 and a

6 second. Without objection, the item passes.

7 CFO GALLAGHER: Move to defer Item 2.

8 GENERAL CRIST: Second.

9 GOVERNOR BUSH: There is a motion to defer Item 2 and

10 a second. Without objection, the item is deferred.

11 MS. CASTILLE: Item 3. This is the Korman-Seldin

12 Silver River CARL project option agreement for the Florida

13 First Magnitude Spring adjacent to Silver Springs in

14 Ocala. This is an option agreement for 330 acres for the

15 purchase price of $7.8 million and change. It's at

16 95 percent of appraised value which comes to $23,750 per

17 acre.

18 GOVERNOR BUSH: Show us where the spring is there,

19 Colleen.

20 MS. CASTILLE: It's -- turn. (Pause.) The spring is

21 right here. This is the property that we're acquiring.

22 This is where our Silver River State Park is. It's the

23 whole area here. But this area here is where we have

24 camping and other activities for the park. We also

25 have -- we haven't documented this as well as we've
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BOARD OF TRUSTEES - 5-17-05
23

1 documented the Wakulla Springs but we anticipate that the

2 caverns at this spring may possibly go under to these

3 areas over here. So we tried to protect the spring area

4 through acquisition. And with the support of the City

5 commission and the County commission, we have been

6 successful at this acquisition. Six months ago, Governor,

7 you may remember, you were getting E-mails from the

8 community where they were fearful that the Seldin property

9 would go under development, pretty intense development.

10 And the City commission and County commission were very

11 helpful in supporting the acquisition of this property as

12 we were negotiating it. And --

13 GOVERNOR BUSH: Tell me about the Bert Harris claim.

14 MS. CASTILLE: Well, there was a Bert Harris. If you

15 recall Bert Harris, what it does is, it gives a property

16 owner due process for claiming that there is possibly a

17 taking in the value of land for -- if densities are not

18 approved. And in this case, the County commission

19 disapproved the density increases for this property.

20 Mostly what they were concerned about was the commercial

21 property, the commercial designation that the property

22 owner was seeking. The property owner then attempted to

23 get annexed into the City in order to get those densities.

24 The City commission approved the commercial density

25 with the increase in residential density as well and the
ACCURATE STENOTYPE REPORTERS, INC.

BOARD OF TRUSTEES - 5-17-05
24

1 mayor vetoed that action on the Commission's part.

2 GOVERNOR BUSH: So what happened to the Bert Harris?

3 MS. CASTILLE: Well, the Bert Harris -- if action

4 isn't taken, then the Bert Harris claim expires. And

5 because we were able to successfully negotiate an

6 acquisition here with the property owner, it has expired.

7 GOVERNOR BUSH: I'm just curious. How can -- did we

8 buy this at the prospective density or did we buy it at

9 the existing density?

10 MS. CASTILLE: We bought it at the residential lower

11 density. And we have Zach Ryan here to talk about the

12 densities.

13 MR. RYAN: Good morning. How are you?

14 GOVERNOR BUSH: I'm doing all right.

15 MR. RYAN: Good. Zach Ryan, real estate appraiser.

16 One of the two appraisers on this project.

17 GOVERNOR BUSH: Welcome back.

18 MR. RYAN: Thank you very much. It's good to be

19 here. Good to see all of you. The appraisal was

20 completed on an as-is basis under the current zoning. The

21 property owner had actually applied for high intensity

22 commercial on the north end and residential density up to

23 five units per acre across the tract. We did not appraise

24 it under those terms and conditions. We appraised it

25 under an as-is condition.
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BOARD OF TRUSTEES - 5-17-05
25

1 GOVERNOR BUSH: And just -- I'm -- my question about

2 Bert Harris is one that since we're not going to know, I

3 guess, since we're not going forward, which is great and

4 the Bert Harris process actually works in a sense, if it

5 brings everybody together, to -- with some degree of

6 civility to reach a commitment. But the Bert Harris

7 concept, it seems, wouldn't have applied if you're trying

8 to apply for higher density and you don't get it, it's not

9 a taking, is it? If we were -- if they were downzoned

10 then it would apply, wouldn't it?

11 MR. RYAN: Well, ma'am, if I may make one more

12 comment. I don't know if it will answer that question

13 directly. But if they were successful at getting

14 increased zoning and density on this property, it would

15 probably be easily worth three to four times what we're

16 currently doing right now.

17 GOVERNOR BUSH: I understand. But that's why -- I'm

18 pausing here because I normally pause with a grumpy

19 attitude when we don't stop this development and then

20 we're asked to buy the land at higher valuation. This is

21 great success story. In fact, I think you may have been

22 here on occasion in the past when we've done something

23 different.

24 CFO GALLAGHER: He's been hiding in the back.

25 MR. RYAN: I think I have been witness to that.
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BOARD OF TRUSTEES - 5-17-05
26

1 GOVERNOR BUSH: And the goatee is different, isn't

2 it? Is that a new thing?

3 MR. RYAN: No, sir, it sprang up just this morning

4 just thinking about coming here.

5 (Laughter.)

6 GOVERNOR BUSH: But this is a case where the County

7 and the City -- well, thanks to the mayor -- the County

8 and the City working with the State didn't raise densities

9 and then asked the State to come bail them out of their

10 land use decision-making process --

11 MS. CASTILLE: That's correct.

12 GOVERNOR BUSH: -- for which we are really grateful.

13 MS. CASTILLE: Yes, we are.

14 CFO GALLAGHER: Motion on 3.

15 MS. CASTILLE: Commissioner Harris, Randy Harris from

16 Marion County is here to speak in support of the

17 acquisition.

18 COMMISSIONER BRONSON: Second.

19 GOVERNOR BUSH: There is a motion and a second.

20 GOVERNOR BUSH: You don't need --

21 CFO GALLAGHER: You can still come talk.

22 MR. HARRIS: Sometimes I'm better off staying away.

23 GOVERNOR BUSH: But if you came all the way up and

24 you want to say something, good, go ahead.

25 CFO GALLAGHER: We haven't voted yet.
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BOARD OF TRUSTEES - 5-17-05
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1 GOVERNOR BUSH: Take the risk.

2 MR. HARRIS: It's a pleasure to be here and I'm

3 thrilled that there is a motion on the floor.

4 GOVERNOR BUSH: And a second.

5 MR. HARRIS: Yes, and a second. Yes, that's great

6 news. The County commission did everything we could to

7 ensure that this property was not developed. In the

8 previous meeting, there was a question about a dye study

9 concerning connectivity to the spring. This is a high

10 recharge area as is the Avatar property to the north.

11 Moves counterclockwise, the water flow does, back to the

12 spring. There is some indication that perhaps there are

13 karst areas going back under this property from the

14 headwaters but we're thrilled there's been such an

15 interest in this property. Thank you.

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

17 Without objection, the item passes. Thank you,

18 Commissioner, for coming. Good work, Colleen.

19 MS. CASTILLE: Thank you, sir. It's good work on

20 behalf of the Division of State Lands.

21 Item 4 is the sale of state-owned land for Levy

22 County with Mr. Hoctel. This is the consideration of a

23 request to sell approximately 9.5 acres of Murphy Act

24 lands in Levy County.

25 CFO GALLAGHER: Colleen, let me ask you a question.
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BOARD OF TRUSTEES - 5-17-05
28

1 Isn't this the -- this isn't the -- I'm on the wrong one,

2 I think.

3 GOVERNOR BUSH: Item 4?

4 CFO GALLAGHER: This isn't South Bay, right?

5 MS. CASTILLE: No, sir, that's the next one.

6 CFO GALLAGHER: Okay. Good. I'll move Item 4.

7 COMMISSIONER BRONSON: Second.

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

9 Without objection, the item passes.

10 Item 5.

11 MS. CASTILLE: Item 5, the City of South Bay

12 mortgage. This is a request -- this is a consideration of

13 a request for, A, a determination that the restructuring

14 of this mortgage held by the Board of Trustees on RICO,

15 No. 44 property, is not contrary to the public interest

16 and that the approval of the mortgage to reflect a

17 reduction of principal, elimination of interest obligation

18 and extension of the term from -- of the mortgage term

19 from the year 2017 to the year 2020.

20 CFO GALLAGHER: I have a little bit of discussion.

21 GOVERNOR BUSH: Treasurer, yes.

22 CFO GALLAGHER: I'm a little concerned about a

23 precedent we might established by doing what they're

24 asking. And although I don't have a problem giving up the

25 interest because we basically got the property at no cost
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1 and have RICO, but I do believe we should at least get a

2 share of the sale of these properties. And so I would

3 lean to a thing where we don't charge interest, we let

4 them sell it as they choose, but we continue to get

5 50 percent of what the sale would generate. And that way,

6 it's a winner for everybody. I think we don't set a

7 precedent that says we just give the land away because

8 most of this is going to be done to, you know, drive the

9 market to if, in fact, they can get somebody to buy it for

10 a, you know, hopefully a profit-making operation that

11 would exist in that area. I don't think it hurts South

12 Bay and it certainly sets a precedent that we share with

13 the local government as opposed to give it away.

14 MS. CASTILLE: Well, in this recommendation, we're

15 proposing to get 100 percent of the value of the property.

16 I mean, the value of the property back.

17 GOVERNOR BUSH: She's tougher than you.

18 CFO GALLAGHER: So you're --

19 MS. CASTILLE: All we're doing is forgiving the

20 interest, not the principal.

21 CFO GALLAGHER: Okay. We're going to still hold them

22 on the principal.

23 MS. CASTILLE: Yes, sir.

24 CFO GALLAGHER: What if they -- well, they shouldn't

25 have a problem selling it for more than the principal
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1 because the value is way up --

2 MS. CASTILLE: Especially because the principal is

3 1994 values.

4 CFO GALLAGHER: Okay. That's good. We'd probably

5 end up in the same place.

6 MS. CASTILLE: Probably.

7 CFO GALLAGHER: Your idea is much better than mine.

8 MS. CASTILLE: Thank you, sir.

9 CFO GALLAGHER: That's why you're the secretary and

10 I'm not.

11 GOVERNOR BUSH: If you're worried about precedent, I

12 think we can probably say South Bay is probably in the top

13 two or three communities in terms of poverty and problems.

14 So if Melbourne came and asked us to do that, for example,

15 we might have a harder time. Know what I mean?

16 CFO GALLAGHER: I'll move Item 4 (sic).

17 COMMISSIONER BRONSON: Second.

18 GOVERNOR BUSH: There's a motion and a second.

19 Without objection, the item passes.

20 MS. CASTILLE: Item 6 is a conveyance --

21 GOVERNOR BUSH: I'm sorry, Item 5 is next?

22 MS. CASTILLE: We just did 5.

23 CFO GALLAGHER: We did 4. That was 5 I moved.

24 GOVERNOR BUSH: Yeah, we're on 6.

25 CFO GALLAGHER: Item 6, I move to withdraw.
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1 MS. CASTILLE: Just to let you know, this is -- what

2 we'll be doing is a flowage easement on this piece of

3 property for modified water delivery project that the

4 federal government and the South Florida Water Management

5 District --

6 GOVERNOR BUSH: There is a motion to withdraw.

7 COMMISSIONER BRONSON: Second.

8 GOVERNOR BUSH: And a second. Without objection, the

9 item is withdrawn.

10 MS. CASTILLE: Item 7 is a similar item. What we're

11 doing is we gave this land to the National Park Service to

12 implement the modified water delivery project of the

13 Everglades Restoration Plan. And what we're doing is

14 modifying the deed restriction to allow for this property

15 to be used for Everglades restoration rather than for park

16 purposes.

17 CFO GALLAGHER: Motion on 7.

18 COMMISSIONER BRONSON: Second.

19 GOVERNOR BUSH: There's a motion and a second.

20 Without objection, the item passes.

21 MS. CASTILLE: Item 8 is the Board of Trustees of the

22 Internal Improvement Trust Fund. Hold on one second,

23 please. (Pause.) Item 8 is the Board of Trustees of the

24 Internal Improvement Trust Fund rule amendment. This

25 is -- on October 28th, 2003, the Board gave us the
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1 direction to move forward with amending the lease to

2 ensure that the State receives 6 percent of the income

3 from subsequent subleases for marinas. What we have

4 before us is also a change to the application fee which is

5 a processing fee from 200 to $500. We brought this item

6 up before and Commissioner Crist and you-all had a couple

7 of questions about what we're doing with the money and

8 what the reason is for the application increase.

9 The statute that directs us to do application fee --

10 or application fee setting, sets the application --

11 requires us to set the application fee commensurate with

12 the cost for processing fees. It is similar across all of

13 our permit requirements throughout the statute as well as

14 for the Board of Trustees leasing. However, it has been

15 the case across the board on all processing fees that we

16 typically do not get the 100 percent of costs recouped.

17 In the case of processing fees for leases, we have

18 evaluated the cost and it's approximately $900 for a

19 medium complexity lease per lease for the cost of

20 processing that lease. That does not include the leases

21 that come to cabinet which would be a more complicated

22 lease.

23 GOVERNOR BUSH: We're more expensive?

24 MS. CASTILLE: Yes, sir.

25 GOVERNOR BUSH: Look at everybody nodding their head
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1 back there.

2 (Laughter.)

3 MS. CASTILLE: We didn't think it was fair to talk

4 about everybody sitting back here and the costs of that.

5 However, what we have proposed is to increase the fee from

6 200 to $500 which would -- which covers about half of it.

7 And General Crist asked the question what we planned on

8 doing with the money. What we had found while we were

9 going through this process is that there are -- that when

10 we had the additional leases in place, we were not getting

11 the amount of money that is contracted for in the lease.

12 We found it simply by doing what your cabinet aides do

13 quite frequently. They search the Internet for lease fees

14 and find that typically we are not getting what's

15 contracted for. For instance --

16 CFO GALLAGHER: What happens to folks that don't pay

17 us? I mean, do they get fined for that or something or do

18 we cancel their lease?

19 MS. CASTILLE: We can fine them but we don't fine

20 them. Right now we're just trying to get the amount of

21 money that is due us.

22 CFO GALLAGHER: How about interest on it?

23 MS. CASTILLE: Pardon me, sir?

24 CFO GALLAGHER: Do we get interest on it?

25 MS. CASTILLE: We can get interest but we don't have
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1 interest -- we're just trying to get collections for the

2 fees that we're owed.

3 CFO GALLAGHER: All right. But what I'm looking at

4 here is a marina, which all of them have, raises their

5 fees for dockage and forgets to tell us they are getting a

6 higher fee and so they don't pay their 6 percent to us and

7 we don't give them any punishment for that? Why would

8 anybody tell us?

9 MS. CASTILLE: Well, what we're proposing to do is to

10 put in an audit program where typically if you're doing a

11 collection and enforcement which is on the same line that

12 the Department of Revenue would do, we have a collection

13 and enforcement effort that we're proposing. We did it a

14 pilot project where we started with nine marinas. Six

15 marinas have been looked at. Three marinas, the

16 documentation we've gotten from them, has indicated to us

17 that we are not getting the 6 percent that is typically

18 owed to us.

19 So in order to get an enforcement program or to

20 utilize -- to get a collection program that works, we're

21 proposing to put in this audit program. We have one OPS

22 person -- one FTE that the Division of State Lands can

23 utilize for this. We have five auditors for the whole

24 Department of -- for the whole Department of Environmental

25 Protection. And so we think that as we institute this
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1 audit program we will be getting the fees that are due us,

2 have an education program with the marine industries that

3 would clarify how people are supposed to be paying their

4 fees so we increase compliance.

5 And what we're looking at here, I have in front of

6 you, is only one of the slips that had not given us --

7 that had given us the base rate of $15,000 for the marina.

8 If we collected the 6 percent on the one slip that is for

9 sale here, we would have collected $75,000. So this is

10 one slip, one marina. We have over 2300 marinas that we

11 are looking to increase compliance and enforcement in this

12 program.

13 CFO GALLAGHER: Let me ask you a question.

14 MS. CASTILLE: Yes, sir.

15 CFO GALLAGHER: Why wouldn't you contract out to have

16 these audited?

17 MS. CASTILLE: Well, we believe that we can do this

18 one less expensively with one --

19 CFO GALLAGHER: 2300 marinas?

20 MS. CASTILLE: -- FTE.

21 CFO GALLAGHER: You could do --

22 MS. CASTILLE: Typically, you don't do 2300 marinas.

23 With an enforcement and compliance program, you do 2 to

24 3 percent of the marinas that you have or the universe of

25 your --
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1 CFO GALLAGHER: And everybody else volunteers to send

2 in their money.

3 MS. CASTILLE: And that's what happens. And as we

4 did these six marinas, it's starting to get the word out

5 that --

6 CFO GALLAGHER: Oh, I'm sure it got out real fast.

7 MS. CASTILLE: Well, it helps that John Sprague is

8 here.

9 CFO GALLAGHER: Okay.

10 MS. CASTILLE: So we have two amendments for this

11 rule. One is to increase the lease application fee from

12 200 to 500. And then to clarify that the 6 percent of the

13 lease fees are due to sublessees and to subsequent leases.

14 GOVERNOR BUSH: Where does this money go?

15 MS. CASTILLE: It goes into the Board of Trustees of

16 the Internal Improvement Trust Fund trust fund which

17 operates the Division of State Lands for all programs

18 except the invasive species program. And it's about a

19 $12-million-a-year operation. And we do have multiple

20 speakers here as well, John Sprague from the marine

21 industries. And we have Representative Mitch Needelman.

22 GOVERNOR BUSH: Come on up, John and Mitch.

23 COMMISSIONER BRONSON: You said it goes in to help in

24 everything but the invasive species program. Why aren't

25 you, since there are aquatic plant species that we're
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1 worried about, why are you not putting some of the money

2 toward that concern?

3 MS. CASTILLE: Because the statute is written that we

4 utilize the other monies that are utilized for invasive

5 species. I mean, if we started using this money

6 for invasive species, we'd quickly be out of money --

7 GOVERNOR BUSH: They have another source of money I

8 assume.

9 MS. CASTILLE: They do.

10 GOVERNOR BUSH: Some senator probably passed a bill

11 that separated them.

12 (Laughter.)

13 MS. CASTILLE: We got an increase of, I think,

14 $9 million this year for invasive species.

15 COMMISSIONER BRONSON: My point being, and 9 million

16 does sound like a lot of money, but it's really,

17 considering our problem in the state, it's not much money.

18 My whole point all along has been, you can talk about

19 putting money into those programs. We're so far behind

20 and invasive species are actually gaining on us, we're not

21 gaining on them. DEP has a little bit better position to

22 use those monies under certain circumstances for those

23 state lands. But there are other groups like for state

24 forests and other things where we just do not have the

25 money, never have been given the money to utilize for
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1 these programs and it is a big problem for us.

2 As a matter of fact, I'll stand by what I just told

3 you, they're actually gaining on us. We're not gaining on

4 them. Invasive species are causing us a lot of problems.

5 And any time we get a chance to move money for those

6 programs, we need to do it because quite frankly, we're

7 tens if not hundreds of millions of dollars behind trying

8 to get ahead of these invasive species problems. So I

9 just want to make sure that we're using the money

10 correctly for the things that are really causing us

11 damage. We worry about somebody's propeller knocking up

12 seagrass out of the bed of the rivers and all and yet we

13 have invasive species that are a much bigger problem than

14 that. And we just don't seem to have our focus on some of

15 the issues that we need to be addressing.

16 MS. CASTILLE: Commissioner, Herky Huffman, who is a

17 Fish and Wildlife Conservation commissioner, your staff,

18 my staff, actually me and South Florida Water Management

19 District and the federal agencies have a meeting coming up

20 in the next month to talk about coordinating, which we

21 already do pretty heavily, coordinating invasive species

22 eradication. But we've got that meeting coming up. We'll

23 be able to show you quite a few of the successes that

24 we've had with some of the invasive species. But it's not

25 something that you can just stop dealing with because they
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1 continually come back. So you have to have a maintenance

2 program for elimination. And there are several like

3 Lygodium, some of those aquatic species that we have a

4 difficult time managing. But with this additional

5 9 million, we will be able to deal with some of those more

6 critical issues that your staff and Fish and Wildlife

7 Conservation Commission bring up.

8 (Off-the-record comment.)

9 GOVERNOR BUSH: That was good. I'd be disappointed

10 if you didn't.

11 MS. CASTILLE: Governor, would you like to hear from

12 the speakers?

13 GOVERNOR BUSH: I would love to.

14 MS. CASTILLE: Representative Mitch Needelman, would

15 you like to come first?

16 GOVERNOR BUSH: Representative, welcome back to

17 Tallahassee, we've missed you.

18 REPRESENTATIVE NEEDELMAN: I'm sure you have,

19 Governor, thank you very much. It's a privilege to be

20 here and wish to represent in favor of the Department's

21 move on a couple issues that pertain with this rule

22 they're looking at. Although I do have some reservations

23 on the fee because of the expenditures side, Commissioner

24 Bronson, I do believe that we need to look at how those

25 dollars are going to be spent wisely and how we go about
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1 doing the things that we've been charged with doing with

2 it too. But I think there's other things in this proposal

3 that needs to be looked at because, as you know, in

4 Brevard County one of the things that we're extremely

5 concerned with is public access. And this proposal has

6 some elements involved with that that does move forward in

7 making sure we define what public access is, how we go

8 about maintaining that public access, and how we encourage

9 those to be involved with public access when they're

10 boating.

11 As you know, the populations, you just had earlier

12 today a presentation on boating safety, you saw how much

13 the numbers have increased dramatically in the state of

14 Florida. And being a former marine patrol officer, I'm

15 very much aware of the boating activity out there and the

16 amount of time and energy that's being spent for public

17 access needs to be increased so that we can have those out

18 there for our public. This rule process addresses some of

19 those issues. And that's why I flew all the way up here

20 from Melbourne to be in support of DEP's position.

21 GOVERNOR BUSH: Thank you, Representative. Thank you

22 for coming. Looking forward to seeing you after the

23 meeting, by the way.

24 MR. SPRAGUE: Governor, members of the cabinet, we

25 worked quite a bit of the time with DEP on this rule. As
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1 we all know, rules, depending upon your point of view, are

2 difficult because there's all sides to an issue. But

3 staff worked very closely with us. We believe that this

4 is a good step forward. We greatly appreciate the

5 incentives wrapped in the Clean Marina Program. I believe

6 that will help preserve some of our marinas not

7 converting. And at the same time, they work to clean up

8 the environment and we thank you very much for that.

9 That's about all I've got to say. Thank you.

10 GOVERNOR BUSH: Thank you.

11 Anybody else who'd like to speak?

12 (No response.)

13 You want to close it out here?

14 MS. CASTILLE: And to conclude our recommendation, we

15 have -- we have this rule which is the 6 percent for

16 subsequent leases and subleases. And that's another one

17 of the issues that we're having is we're finding marinas

18 that don't have subleases in place for the folks who are

19 marketing and selling the leases. So that's another

20 element of education that we hope to provide to the

21 industry. In addition, the application fee amendment.

22 GOVERNOR BUSH: Okay. Any other discussion? Is

23 there a motion? (No response.) Is there a motion?

24 CFO GALLAGHER: I'll move.

25 COMMISSIONER BRONSON: I'll second.
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1 GOVERNOR BUSH: There's a motion and a second. All

2 in favor say aye.

3 (Aye.)

4 All opposed.

5 GENERAL CRIST: No.

6 GOVERNOR BUSH: Motion passes.

7 MS. CASTILLE: Thank you, Governor, members of the

8 cabinet.

9 GOVERNOR BUSH: Thank you.

10 MS. CASTILLE: That concludes our agenda.

25
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1 GOVERNOR BUSH: State Board of Administration.

2 CFO GALLAGHER: Motion on the minutes.

3 GENERAL CRIST: Second.

4 GOVERNOR BUSH: There's a motion and a second.

5 Without objection, the minutes pass.

6 Item 2.

7 MR. STIPANOVICH: Item 2 is a request for approval of

8 fiscal sufficiency of an amount not exceeding 400,000,000

9 State of Florida, full faith and credit, State Board of

10 Education public education capital outlay refunding bonds.

11 GENERAL CRIST: Motion.

12 CFO GALLAGHER: Second.

13 GOVERNOR BUSH: There's a motion and a second.

14 Without objection, the item passes.

15 MR. STIPANOVICH: Item 3 is a request for approval of

16 fiscal determination of amount not exceeding 21,965,000

17 tax exempt Florida Housing Finance Corporation multifamily

18 mortgage revenue refunding bonds.

19 CFO GALLAGHER: Motion.

20 GENERAL CRIST: Second.

21 GOVERNOR BUSH: There's a motion and a second.

22 Without objection, the item passes.

23 MR. STIPANOVICH: Final item, 4, is appointment of

24 advisory council member, Leslie Chapman-Henderson, as the

25 consumer representative to the Florida Hurricane Advisory
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1 Council.

2 CFO GALLAGHER: Motion.

3 GENERAL CRIST: Second.

4 GOVERNOR BUSH: There's a motion and a second.

5 Without objection, the item passes.

6 Thank you, Coleman.

7 MR. STIPANOVICH: Thank you, Governor and members.

8 (Thereupon, the proceedings adjourned at 9:55 a.m.)

25
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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 44 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 27th day of May, 2005.

20 ______________________________

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

25
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