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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:
STATE BOARD OF ADMINISTRATION
FLORIDA DEPARTMENT OF LAW ENFORCEMENT
STATE BOARD OF EDUCATION
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
DEPARTMENT OF AGRICULTURE
AND CONSUMER SERVICES
DEPARTMENT OF COMMUNITY AFFAIRS
VOLUME I
Pages 1-86
The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush
presiding, in the County Commission Chambers,
Second Floor, County Center, 601 East Kennedy
Boulevard, Tampa, Florida, on Tuesday, February 27,
2001, commencing at approximately 9:08 a.m.
Reported by:
LAURIE L. GILBERT COX
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
BOB MILLIGAN
Comptroller
KATHERINE HARRIS
Secretary of State
BOB BUTTERWORTH
Attorney General
TOM GALLAGHER
Treasurer
CHARLIE CRIST
Commissioner of Education
* * *
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February 27, 2001
I N D E X
ITEM ACTION PAGE
STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
Executive Director)
1 Approved 7
2 Discussion 7
3 Approved 69
4 Approved 71
5 and 6 Approved 72
7 For Information Only 72
8 Approved 74
DEPARTMENT OF LAW ENFORCEMENT:
(Presented by James T. Moore,
Executive Director)
1 Approved 78
2 Approved 79
3 Presentation 84
CERTIFICATE OF REPORTER 86
* * *
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February 27, 2001
1 P R O C E E D I N G S
2 (The agenda items commenced at 9:25 a.m.)
3 GOVERNOR BUSH: Now we'll begin the -- the
4 principal part of our Cabinet meeting. And --
5 and the first item is the State Board of
6 Administration.
7 Tom, if you could briefly describe what the
8 State Board of Administration is, I think
9 people might be surprised at the size and scope
10 of -- of the amount of money you deal with.
11 MR. HERNDON: Yes, sir, Governor.
12 Thank you.
13 I'd be happy to.
14 (Secretary Harris exited the room.)
15 MR. HERNDON: The State Board of
16 Administration is a constitutionally created
17 agency that reports to a three-member Board of
18 Trustees. Those three members are, of course,
19 yourself; the Treasurer, Mr. Gallagher; and the
20 Comptroller, Mr. Milligan. And those three act
21 as a subset of the Cabinet for ordinary
22 business activities.
23 The -- the State Board of Administration is
24 the principal agency of Florida government that
25 manages and invests money on behalf of various
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February 27, 2001
1 agencies.
2 The largest client is the Florida
3 Retirement System, although we have about
4 25 clients in total, including Local Government
5 Investment Pool, which Hillsborough County and
6 a number of the jurisdictions in
7 Hillsborough County also participate in.
8 The -- the total amount of money that
9 the Board currently invests is around
10 125 billion dollars.
11 As I indicated, the largest client is the
12 Florida --
13 GOVERNOR BUSH: Did you say billion or
14 million?
15 MR. HERNDON: Billion with --
16 GOVERNOR BUSH: Oh.
17 MR. HERNDON: -- with a B.
18 The market has been pretty depressed here
19 of late, but not -- not that depressed,
20 fortunately.
21 The Florida Retirement System is the
22 largest client. And in the Retirement System
23 is about 102 billion dollars as of yesterday
24 afternoon's market close.
25 We service about 650,000 public employees
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1 throughout the state of Florida, all State
2 employees, all county employees, all
3 School Board employees, special districts,
4 university system, and so forth.
5 And in addition to that, of course, we also
6 service about 150,000 retired employees of
7 public employers throughout the
8 state of Florida.
9 The -- the Board also invests money -- just
10 to give you some sense of the diversity of our
11 clientele -- not only on behalf of the Florida
12 Retirement System, but as I mentioned, the
13 large Local Government Investment Pool, which
14 on any given day has 11 or 12 billion dollars
15 in it.
16 We also invest money for the Lottery, we
17 invest money for the Florida Hurricane
18 Catastrophe Fund, we invest money for debt
19 service on State bonds. And those three
20 clients alone approximate about 12 billion
21 dollars.
22 So that gets you very quickly to the
23 roughly 125 billion dollar total that I
24 mentioned earlier.
25 And with that, Governor, I'll move into
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1 the -- the business agenda.
2 The first item of business is approval of
3 the minutes as amended for the meeting of
4 February 6th, 2001.
5 COMPTROLLER MILLIGAN: I move the minutes.
6 TREASURER GALLAGHER: Second.
7 GOVERNOR BUSH: Moved and seconded.
8 Without objection, it's approved.
9 MR. HERNDON: Item Number 2 is bringing
10 back to you for your consideration the
11 Investment Policy Statement for the Public
12 Employee Optional Retirement Program.
13 I know you all are familiar with this in
14 great detail. But for the members of the
15 audience, let me just quickly say that the
16 Public Employee Optional Retirement Program is
17 the new pension option that the Florida
18 Retirement System will offer beginning in June
19 of next year, in June of 2002.
20 And what we have been working on, with your
21 grace, over the last several months --
22 that's right -- is --
23 GOVERNOR BUSH: This is the clemency
24 process up here.
25 MR. HERNDON: -- good -- good graces of --
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1 of dealing with all of this over the last
2 several months, is the process of trying to
3 adopt the Investment Policy Statement.
4 This will be the basic building block
5 document of which most of the program will
6 derive its authority and its -- its scope and
7 its scale.
8 And as a consequence, as you know full
9 well, we've gone through quite a number of
10 iterations and meetings and so forth.
11 GOVERNOR BUSH: Tom, can I just interject
12 just --
13 MR. HERNDON: Yes, sir.
14 GOVERNOR BUSH: -- just for a brief second
15 for people that might not know what PEORP
16 means, which would be about 99.99 percent of
17 the population on the planet.
18 This is a -- the Legislature last year
19 passed a law that I signed into law that allows
20 for a defined contribution component -- element
21 of our retirement system.
22 We are the largest pension fund I think to
23 undertake this effort. This is a big deal,
24 in essence. And -- and we are allowing for --
25 defined contribution simply means that
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1 people -- the -- the -- the people in the
2 pension system, they can either opt for the
3 benefit plan, where they get a fixed benefit at
4 the end of their tenure and service; or they
5 can opt into the defined contribution, which is
6 the equivalent of a 401-K plan, the equivalent
7 of that. And that allows the people to make
8 investment choices for themselves, and perhaps
9 gives them more portability.
10 And so this is a -- a massive undertaking
11 if you --
12 How many people do we have in our pension
13 system, seven hundred --
14 MR. HERNDON: About 650,000.
15 GOVERNOR BUSH: -- 650,000 to give them in
16 a phased basis from June 30th of next year for
17 the next year, I guess, the chance to opt into
18 this.
19 This is a major undertaking.
20 And just about every meeting, we have one
21 element of the plan that is -- is being
22 finalized. And I thought it might be
23 appropriate to kind of set the stage for what
24 we're doing. Because if not, people will say,
25 what the heck is going on?
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1 MR. HERNDON: Yes, sir.
2 Thank you, Governor. You're absolutely
3 right.
4 And the document that we bring to you this
5 morning is coming back to you after we have
6 gone through quite a bit of discussion and
7 involvement by industry and the Legislature,
8 and various interest groups and so forth.
9 And there are some folks who -- here who
10 would like to speak at the appropriate time to
11 the Investment Policy Statement.
12 But perhaps to get us in the right posture,
13 let me just simply say that, at the last
14 meeting, as you'll recall, we withdrew the
15 Investment Policy Statement.
16 That put an end to the litigation that we
17 were involved with over the various provisions
18 of the Investment Policy Statement, kind of
19 bringing back to you now a revised Investment
20 Policy Statement that we think addresses many
21 of the concerns that have been raised by
22 various parties over the course of the last
23 several months.
24 There are a number of changes to this
25 Investment Policy Statement. You have those in
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1 front of you in the legislative format,
2 strike-through and underlining.
3 But just to touch on a couple of those
4 without belaboring this too much, we did put in
5 an expanded definition of bundled providers.
6 We've also addressed the question of
7 bundled providers being able to offer multiple
8 products.
9 We've also addressed the question of the
10 status of annuities as potential products under
11 the PEORP plan.
12 We've also addressed the question of how
13 we're going to begin the process of determining
14 value-added, and the various product guidelines
15 and so forth that are being proposed.
16 After we published this document in the
17 normal Cabinet pre-publication stage, we did
18 receive a number of suggested amendments.
19 Those are also proposed for your
20 consideration, along with staff recommendations
21 on those various amendments, and that's the
22 memorandum dated February 23rd.
23 And, Governor, I think it might be best to
24 get us in the right posture to take those
25 amendments and get a clean document in front of
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1 you that then you could hear some testimony on.
2 And I have unfortunately violated one of
3 the most fundamental tenets of continued
4 employment, and that is, I messed with the
5 amendments of one of my bosses. And not only
6 did I mess with them, but I messed them up.
7 And as a consequence, I have an obligation
8 this morning to try and clarify a couple of the
9 amendments in -- in Amendment Number 1 on that
10 list.
11 And I don't know whether -- if you would
12 like, Governor, to go through these
13 individually, or you would like to address them
14 in total, or how -- whatever's your pleasure.
15 GOVERNOR BUSH: Do y'all -- which way do
16 you -- would you like to go?
17 TREASURER GALLAGHER: I don't care.
18 COMPTROLLER MILLIGAN: I -- I'm -- I don't
19 need to go into a long discussion. I think
20 he's accommodated -- or will accommodate --
21 GOVERNOR BUSH: Why don't you just deal
22 with them all at once --
23 MR. HERNDON: Okay.
24 GOVERNOR BUSH: -- and then -- there may be
25 people that have specific concerns about each
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1 one which we'll hear from.
2 MR. HERNDON: Right.
3 Well, we've tried to address all of the
4 various concerns.
5 As I did indicate, I did take the liberty
6 of trying to rewrite the language that the
7 Comptroller's office had offered and,
8 unfortunately, didn't do a very good --
9 (Attorney General Butterworth exited the
10 room.)
11 MR. HERNDON: -- job with that.
12 And as a consequence, there are some
13 technical revisions that we propose to make
14 with respect to Amendment Number 1 on the IRC
15 limit monitoring language, and also some
16 language with respect to clarifying the role of
17 the third party administrator, and the
18 education and bundled provider relative to one
19 another.
20 And I don't have those amendments
21 preprinted for you, but they essentially
22 accomplish the same purpose as currently
23 proposed in suggested Amendment Number 1. But
24 there's some revisions that, with your
25 permission, we will work out with the
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1 Comptroller's office to make sure that we are
2 keeping the spirit of -- of those -- those
3 changes.
4 We certainly support those changes. Those
5 are all very appropriate, and -- and don't
6 raise any concern as far as we are concerned.
7 A number of the other amendments proposed
8 here recommend either adding a tenth option --
9 (Attorney General Butterworth entered the
10 room.)
11 MR. HERNDON: -- to a list of nine, or
12 adding three additional options, or specifying
13 that annuities are an authorized option,
14 authorizing a self-directed brokerage window,
15 and so forth.
16 We have taken the position that we think
17 the line-up as is proposed is sufficient. Most
18 of those additional products are contemplated
19 in the eligibility requirements that the
20 Investment Policy Statement outlines.
21 But there's certainly no guarantees that
22 are implicit there as to whether or not any
23 particular product will be ultimately selected.
24 And -- and so those changes are also
25 proposed, but in most cases, we recommend
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February 27, 2001
1 against those.
2 There are some additional amendments that
3 the Treasurer's office proposed that we think
4 are -- are quite good. And we've indicated our
5 support for those.
6 I resisted the temptation to not mess with
7 those, and as a consequence, they're still --
8 still viable.
9 But other than that, the other amendments
10 that are there, eleven in total, are there for
11 you to -- to review and examine, and -- and I'd
12 be happy to answer any questions about them
13 without going through them individually --
14 GOVERNOR BUSH: Well, let's -- can we --
15 can we identify the ones where there is --
16 where the staff is recommending that we not --
17 MR. HERNDON: Yes, sir.
18 GOVERNOR BUSH: -- make the accommodation.
19 Maybe we could talk about those, and allow
20 people that have a -- a point of view on that,
21 a difference, to come and speak.
22 MR. HERNDON: Yes, sir.
23 Starting with the second amendment, which
24 proposes that a guaranteed account be
25 authorized as one of the nine options.
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1 We believe that the Investment Policy
2 Statement already does authorize consideration
3 of a guaranteed product, which meets certain
4 conditions. And it's enumerated in
5 Roman Numeral XI, Part (A).
6 And I believe the party who proposed that
7 suggestion was not planning on attending this
8 morning. I'm not positive. It was Safeco, and
9 I don't see their representatives here this
10 morning.
11 So --
12 GOVERNOR BUSH: Are you saying that
13 they're -- they will be able to -- based on
14 your interpretation of these rules, they'll be
15 able to offer that in the competitive process
16 that we're --
17 MR. HERNDON: They'll be able to propose a
18 guaranteed product, yes, sir. That's correct.
19 TREASURER GALLAGHER: What you're saying is
20 that -- it doesn't have to be, or could be, or
21 couldn't be one of the nine options.
22 MR. HERNDON: That's correct.
23 TREASURER GALLAGHER: I mean, either way.
24 MR. HERNDON: It -- it's --
25 GOVERNOR BUSH: But it could --
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1 TREASURER GALLAGHER: This way, you're
2 certain -- what they're asking is that we sort
3 of mandate it be one of the nine, as opposed to
4 it could be or not be.
5 MR. HERNDON: My understanding, what they
6 wanted was they wanted an explicit statement
7 that the nine could include a guaranteed
8 annuity -- a guaranteed product, and we've
9 simply said that the language --
10 TREASURER GALLAGHER: Will --
11 MR. HERNDON: -- we believe will let them
12 do that already. And I'm -- my -- as I said,
13 my -- my understanding is that they were
14 satisfied with that.
15 And that same discussion, quite frankly,
16 applies to Number 3. There they were
17 recommending that a self-directed brokerage
18 window be, in this case, a tenth option.
19 We respond by saying essentially that the
20 selection evaluation criteria in the Investment
21 Policy Statement, we believe, already
22 authorizes the parties to propose a brokerage
23 window, if they would like. There's no need
24 for a -- a tenth option.
25 The next one is proposed by another
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1 industry organization. And I believe this is
2 one that Representative Fasano may wish to
3 speak to as well.
4 And it might be worthwhile to skip over
5 that and come back when there are a couple of
6 those that he may wish to speak to, I'm not
7 sure. And I -- I knew that he was coming in.
8 The next two, 5 and 6, are by the
9 Treasurer's office, and those were both very
10 good amendments, and -- and the staff supports
11 those.
12 Representative Fasano and the industry also
13 suggested Number 7. And, as I said, Governor,
14 it may be worthwhile just to take 5 and 7
15 together.
16 GOVERNOR BUSH: Sure.
17 MR. HERNDON: Eight is also proposed by the
18 Treasurer's office, which we endorse.
19 And then 9 is also an amendment by
20 Representative Fasano, and -- as is 10.
21 And then Number 11 is also proposed by the
22 Treasurer's office, and we would endorse that.
23 So basically I think what you have is
24 Number 4, Number 7, Number 9, and Number 10 as
25 amendments by Representative Fasano --
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1 GOVERNOR BUSH: Okay.
2 MR. HERNDON: -- with which we respectfully
3 disagree.
4 And if you would like, we can ask
5 Representative Fasano to come up and speak to
6 these, and then --
7 GOVERNOR BUSH: Welcome.
8 MR. FASANO: Good morning, Governor, Board
9 members.
10 On Amendment Number 4, I have a -- I guess
11 what we would call substitute amendments that
12 we would offer in the Legislature.
13 And I would be glad to share that with
14 Mr. Herndon afterwards, and -- and -- and see
15 if he might be able to -- to accept that.
16 On Amendment Number 5, I also have a
17 substitute amendment on that.
18 GOVERNOR BUSH: Number 5?
19 MR. FASANO: Number 5.
20 GOVERNOR BUSH: What about Number 7?
21 MR. FASANO: Well, Number -- Number 7 I'm
22 going to withdraw.
23 TREASURER GALLAGHER: Well, 5 is one that
24 changed --
25 GOVERNOR BUSH: You mean support.
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1 TREASURER GALLAGHER: -- the word to to an
2 a. Is that the -- are you talking about the
3 right 5?
4 GOVERNOR BUSH: Do you want to see what we
5 have in terms of the numbers?
6 MR. HERNDON: Number -- I think the
7 Number 5 that he has is going to the same
8 section, but it's -- it's proposing a little
9 different direction.
10 It's just -- it happens to be the same
11 section of the Investment Policy Statement, but
12 it's a little different language. That may be
13 part of the confusion.
14 MR. FASANO: I would be glad to read it, if
15 you'd like.
16 TREASURER GALLAGHER: All right. Well,
17 you're going -- you're going to -- if I may --
18 You're going to the -- 11 -- 11)(b), is
19 that correct? Or is it 11 -- 11 somewhere
20 else?
21 MR. FASANO: 11)(b).
22 But what we want to do -- actually I feel
23 must call it a technical amendment. We want
24 to --
25 Would you mind if we were to give you
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1 copies of the two amendments?
2 TREASURER GALLAGHER: Would probably help.
3 MR. FASANO: Thank you.
4 And I'll be glad to -- what it says in the
5 Investment Policy Statement, 11)(g), delete
6 Investment Policy Section 11)(d) through (f) on
7 lines 2 and 7. And insert in lieu thereof,
8 Investment --
9 (Attorney General Butterworth exited the
10 room.)
11 MR. FASANO: -- Policy Statement,
12 Section 11)(b), (d) through (f).
13 And the rationale, members, is that the
14 staff states that the Investment Policy
15 Statement 11)(g) is intended to provide an
16 exception process for bundled providers to
17 utilize the offer guaranteed annuities or other
18 options with offer incre-- offer incremental
19 retirement benefits.
20 By their very nature, certain of these
21 investments options, such as a guaranteed
22 annuity, or a real estate equity option, may
23 require limitations on transfers to other
24 investment options during the person's active
25 services.
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1 These liquidity management features are
2 similar to the limitations an individual
3 accepts when investing in a bank's five-year
4 certificate of deposit to seek greater yields
5 than the available -- than are available
6 through the bank's passbook savings account.
7 Thus, the amendment is needed to -- in order to
8 allow bundled providers to offer such
9 value-added investments.
10 In that regard, it is consistent with the
11 exceptions provided for paragraphs (d), (e),
12 and (f).
13 And -- and as I say, I will be glad to work
14 with Mr. Herndon on this if -- if he's not able
15 to accept it at this time.
16 MR. HERNDON: One point, Governor, and
17 members, worth noting here is that we are
18 moving -- your action this morning authorizes
19 us to begin the rulemaking process.
20 So we will have a rule hearing. And it may
21 be that you wish to initially endorse, or -- or
22 reluctantly endorse, or whatever the case may
23 be, so that these amendments -- and we'll pick
24 them up in the rulemaking process when we have
25 an opportunity to look at them more fully,
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1 because you're seeing them this morning I know
2 for the first time, as are we. So --
3 GOVERNOR BUSH: If -- if we're going to --
4 the first question ought to be, are we offering
5 guaranteed annuities?
6 And if we do that, then there needs to be
7 some recognition that there -- they have --
8 it's a different instrument than -- than more
9 liquid investments.
10 And so how do we deal with the -- what's
11 the big fancy term -- dis-- disintermediation.
12 MR. HERNDON: Disintermediation fee?
13 Well, what -- what our position is here
14 this morning is that the Investment Policy
15 Statement does permit annuity products,
16 guaranteed products, to be proposed.
17 GOVERNOR BUSH: Right.
18 MR. HERNDON: Not necessarily to be
19 selected, but to be proposed. And so it very
20 well may be that this amendment is -- is
21 appropriate. I haven't had a chance to look at
22 it, so at this stage of the game, the only
23 thing I --
24 GOVERNOR BUSH: But the --
25 MR. HERNDON: -- can suggest --
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1 GOVERNOR BUSH: -- you would agree with the
2 principal, wouldn't you, Tom, that if -- and
3 you are to allow -- we're going to -- we -- we
4 now allow them to be proposed.
5 If we allow them to be part of the
6 investment portfolio or the menu that the
7 people in the retirement system choose from,
8 then you -- you can't offer it, unless there is
9 some prepayment penalty of some kind, because
10 the whole basis of the investment is for a
11 long-term investment.
12 MR. HERNDON: Right.
13 Yes, sir. Governor, I -- I do agree
14 with --
15 GOVERNOR BUSH: So --
16 MR. HERNDON: -- you.
17 GOVERNOR BUSH: -- if that's the case, then
18 this is a technical -- I mean, it's kind of --
19 we have to have a -- we have to have -- we have
20 to deal with this in advance, but we don't know
21 if we're going to have this as part of the
22 offer.
23 MR. HERNDON: That's right.
24 And I'm not trying to be argumentative
25 here. I just -- what this does is it picks up
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February 27, 2001
1 parens (b), and puts it in the language that
2 creates the exception.
3 I think it's consistent.
4 My only reservation, Governor, with -- with
5 any of these amendments, is because we're
6 seeing them right now, I just don't have an
7 opportunity to obviously give it great thought,
8 and I would want that caveat on the record.
9 But that's all I'm really saying.
10 GOVERNOR BUSH: Well, my -- excuse me,
11 Representative Fasano. You can -- can you work
12 with the SBA --
13 MR. FASANO: Absol-- we have been working,
14 as you know, Governor, and members, for several
15 months. And I'll be glad to --
16 And as you noted, Governor, it is just a
17 technical, and it's -- it's consistent with --
18 with the IPS language.
19 So I would ask that, you know, we accept it
20 and then work it out maybe later on if
21 possible.
22 GOVERNOR BUSH: Well, if we want to take an
23 up or down vote on that, we can do it right
24 now.
25 Is there a --
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1 COMPTROLLER MILLIGAN: Well, is there any
2 value really in accepting it right now? Do we
3 need to accept it right now?
4 I mean, if I understood what Tom is saying,
5 we're really looking to rulemaking on this
6 thing. Very clearly and the purpose of -- of
7 the Investment Policy Statement, it is subject
8 to revision, or it's being supplemented as
9 policy, or -- or change when developed.
10 So I -- I don't think we have to -- Tom
11 hasn't had a chance to really look at it, I
12 gather, and not ready to make a recommendation.
13 So I think we could serve, I think very
14 well, to just postponing it, and let it be part
15 of the process.
16 GOVERNOR BUSH: Commissioner Gallagher?
17 TREASURER GALLAGHER: If -- I guess the
18 issue is, is it technical or not? And I don't
19 know personally whether it is or not.
20 And if -- if you find it to be technical,
21 you should put it in.
22 MR. HERNDON: Well, and that -- and that
23 would be my caveat, too, if I might.
24 We're not obligated to take these
25 amendments this morning, because we are heading
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February 27, 2001
1 into the rulemaking process, and we can take
2 them.
3 However, my sense is, on looking at this
4 very quickly, is that these two amendments are
5 consistent.
6 But having said that, if -- if you're
7 willing to authorize their inclusion, subject
8 to some examination; and then as we move into
9 the rulemaking process, we'll try and -- and be
10 more clear about that, then that would be fine
11 with us.
12 GOVERNOR BUSH: I think what we're saying
13 is the opposite. I think at least -- I'd --
14 I'd be happy to -- with that. But as long as
15 you -- the -- put aside the amendment process
16 and all this, you've -- you've been on record
17 as stating that you're --
18 MR. HERNDON: Yes, sir.
19 GOVERNOR BUSH: -- in good faith going to
20 work with people who are interested in this.
21 And that if it is technical, that we will --
22 MR. HERNDON: Yes, sir.
23 GOVERNOR BUSH: -- we'll work -- that's --
24 that's going to be enough. That's fine.
25 MR. HERNDON: That's fine. Yes, sir.
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1 MR. FASANO: That's fine.
2 MR. HERNDON: We -- we are -- we agree, and
3 we understand, Governor --
4 GOVERNOR BUSH: So let's talk about the
5 next couple of issues.
6 I think we also have some people here that
7 might want to speak about the larger issues as
8 well. I -- I met the nice lady that wanted
9 to --
10 MR. HERNDON: There are.
11 I know Representative Fasano has a couple
12 of other amendments with respect to some of the
13 other items on our list of eleven.
14 Do you want to -- those are the ones with
15 which we specifically disagree. I don't know
16 whether you want to address those here that
17 are -- that are not, I don't think, substitutes
18 in some cases for those.
19 MR. FASANO: Governor, and members, we -- I
20 did offer, as Mr. Herndon notes, in your -- the
21 amendment packet that you have, four
22 amendments.
23 And I am willing to withdraw all four of
24 those that you have in front of you.
25 However, would very much like to continue
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1 to work on the two amendments that I have
2 brought before you today.
3 And as we call them, techn-- the one is
4 technical, and the other being a -- a fairness
5 issue, that we can get that back into the --
6 the Investment Policy Statement --
7 MR. FASANO: -- somewhere down the road.
8 GOVERNOR BUSH: Did you describe the -- the
9 amendment -- the second amendment?
10 MR. FASANO: This -- this deals with --
11 let's see.
12 The Investment Policy Statement X.,
13 Table 1, Part 2, Tier IV after the word
14 fashion, and/or in some combination.
15 Members, the amendment would allow a
16 bundled provider to offer an investment option
17 that contains both fixed income and equities in
18 combination. The Investment Policy Statement
19 in --
20 (Attorney General Butterworth entered the
21 room.)
22 MR. FASANO: -- X.B. provides for a
23 balanced fund that is weighted average of
24 Tier I options.
25 The bundled providers ought to be allowed
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1 to offer combinations of options as well. This
2 is consistent with the following language, the
3 definition of bundled provider.
4 A bundled provider may offer investment
5 options that are an aggregate of one or more
6 investment options. And that is in the
7 Investment Policy Statement II.E.
8 And -- and as I say, I'll be glad to work
9 with Mr. Herndon to see if we can put this
10 language in somewhere along the road.
11 GOVERNOR BUSH: Okay.
12 MR. FASANO: Is that okay, Mr. Herndon?
13 MR. HERNDON: Yes.
14 And -- and, again, I -- we agree that --
15 that it appears consistent on its face. I
16 don't have any reason to object to it.
17 My only hesitation, as I indicated earlier,
18 but we'll certainly work with
19 Representative Fasano to try and incorporate
20 that.
21 I believe that's all of the amendments that
22 are debated at this point.
23 There are, as I -- as you indicated,
24 Governor, a number of people who wish to speak
25 this morning. And I don't know that there's
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1 any particular order. I understand that there
2 are several folks here from the School Board.
3 Ms. Jane Gallucci with Pinellas County,
4 President of the Florida School Boards
5 Association --
6 TREASURER GALLAGHER: Tom, could I ask one
7 question?
8 MR. HERNDON: Yes, sir.
9 I'm sorry.
10 TREASURER GALLAGHER: One of the issues
11 here is highest ratings --
12 MR. HERNDON: Yes, sir.
13 TREASURER GALLAGHER: -- per the statute
14 language, high independent.
15 And could you sort of tell me what the
16 difference is, because I can't quite figure
17 that out.
18 MR. HERNDON: Yes, sir.
19 The suggestion has been made that the
20 statute uses the words highest ratings for
21 insurance and financial stability, and those
22 are ratings that I know you're familiar with in
23 the insurance industry.
24 And there, as you know, several levels of
25 ratings, depending on the financial strength
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1 and so on of the -- of the company.
2 We have proposed the language as high
3 rating to give us a little bit more
4 flexibility, and to be more inclusive of
5 potential companies, because as you use the
6 word highest, that means that there isn't any
7 other level that's acceptable, and that will
8 limit the number of organizations who can
9 apply.
10 So we have argued against the use of that
11 term, and in favor of a little broader wording
12 to allow some other companies to come in.
13 For example, some of the companies that are
14 in Category 2 that would not be authorized, but
15 are well-known insurance and -- and other
16 organizations like Connecticut General,
17 Equitable Life, Fidelity Investments,
18 General Electric, Capital, Hartford, Kemper,
19 Merrill Lynch, Mutual of America, Transmit,
20 Travelers, these are all companies that would
21 not be authorized if you used the word
22 highest --
23 TREASURER GALLAGHER: Would that be -- are
24 we using a Best rating there?
25 MR. HERNDON: This is a combination of
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1 A.M. Best, S&P, Moody's, and so forth to put
2 them in the various highest category.
3 TREASURER GALLAGHER: Well, one -- would --
4 would this highest then eliminate -- it would
5 eliminate --
6 MR. HERNDON: Yes, sir.
7 TREASURER GALLAGHER: -- that group. Would
8 it eliminate everybody but one? I mean,
9 because would highest mean --
10 MR. HERNDON: No.
11 TREASURER GALLAGHER: -- whatever bidder
12 had the highest, you'd have to take type thing?
13 MR. HERNDON: No. I don't think it would
14 eliminate all but one, but it would narrow the
15 field of parties who can submit bids.
16 TREASURER GALLAGHER: But if -- one could
17 contest this if they said, well, you got these
18 two bids, they're both in that highest
19 category, and you've got to give us the bid
20 because we're the highest of that.
21 That wouldn't do that?
22 MR. HERNDON: That's a possibility.
23 And I think you can obviously always
24 contest something. And that very well may be a
25 contestable issue.
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1 But I'm not trying to prejudge that. I
2 simply was trying to be more inclusive in terms
3 of who could bid.
4 We may very well find that neither of the
5 finalists, or none of the finalists are in that
6 highest category under the rating, but they
7 still are -- there's one that's higher than the
8 others. It may not be the highest rated.
9 So --
10 TREASURER GALLAGHER: Or they could all be
11 in that highest --
12 MR. HERNDON: They could all be in that
13 highest. That's right.
14 TREASURER GALLAGHER: Okay. I just was
15 trying to figure that out.
16 MR. HERNDON: Yes, sir.
17 Anyway, to go back to the -- the folks who
18 are here from the School Board.
19 Ms. Gallucci?
20 GOVERNOR BUSH: Welcome.
21 MS. GALLUCCI: Good morning, Governor.
22 Good morning, Governor Bush and Cabinet
23 members, and welcome to Tampa Bay. Because I
24 need to put my plug in for Clearwater, since I
25 live across the bay and share it with Tampa.
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1 And thank you for the opportunity for
2 speaking to you this morning.
3 My name's Jane Gallucci. And I'm a
4 School Board member in Pinellas County; and I'm
5 also President of Florida School Boards
6 Association; and Chairman of the Independent
7 Retirement Commission.
8 As you're aware, out of the
9 650,000 employees in the state of Florida, the
10 Independent Retirement Commission represents
11 more than 240,000 education employees, and we
12 have closely watched the development of the
13 Public Employees Optional Retirement Program --
14 that's a mouthful -- for quite some time.
15 The Governor and the 2000 Legislature
16 should be applauded for their efforts to
17 provide for public employees for choice.
18 Their intent to provide the best
19 possible --
20 (Secretary Harris entered the room.)
21 MS. GALLUCCI: -- financial opportunities
22 for employees is commendable.
23 I have written expressing my concerns, and
24 I appreciate Mr. Herndon's sincere responses.
25 We are encouraged by the progress made in the
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1 proposed rule.
2 However, we are still not convinced that
3 there will be at least five bundled providers.
4 Also, we are not convinced that they will
5 offer the same kinds of services offered to
6 higher education. We are hoping that you will
7 receive those assurances soon.
8 The PEORP can be a very good program if the
9 people's needs are heard and addressed, and
10 choices are given.
11 I have spoken with large numbers of
12 employees, and their message is the same. They
13 would like to have the same opportunities that
14 higher education has enjoyed for the past
15 15 years. They want to choose from a minimum
16 of five nationally-known companies. They want
17 to talk to people from established financial
18 firms, and they understand if you choose higher
19 quality service, you have to pay for it.
20 Let the firms compete for our business,
21 but -- by providing quality service. We
22 believe the State should be the watchdog, not a
23 mutual fund provider.
24 If the State runs the fund, who is the
25 watchdog?
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1 Higher education used the Optional
2 Retirement Program as a recruitment tool to
3 attract individuals to college and university
4 levels. I would like for the K through 12
5 school districts to have the same leverage.
6 As we recruit talented and qualified
7 teachers from wherever across this great land,
8 including some career changes -- any of you
9 interested in teaching in Pinellas County --
10 from the private sector, we need to have
11 attractive, very attractive financial packages.
12 The opportunity to select and work with
13 nationally-known financial companies would be
14 enticing to most individuals.
15 I am asking you to listen to your
16 employees. It is their money. If they want to
17 pay for a higher level of service, they should
18 be allowed to.
19 Thank you for your time and your commitment
20 to the State employees of the state of Florida,
21 and thank you on the -- behalf of education.
22 GOVERNOR BUSH: Thank you.
23 MR. HERNDON: The next speaker that I have
24 is Mr. Ashley Smith, President of Florida
25 Association of School Administrators.
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1 MR. SMITH: Good morning.
2 GOVERNOR BUSH: Mr. Smith, how are you
3 doing?
4 MR. SMITH: Good morning, Governor, Cabinet
5 members.
6 I have a long speech to read, just like
7 Jane did, but I don't think I need to do that.
8 I can --
9 GOVERNOR BUSH: It wasn't that long. It
10 was pretty good.
11 MS. GALLUCCI: Thank you.
12 MR. SMITH: Yes. She was very good, and
13 very quick with that speech. But to save time,
14 I will not go over the same topic or the same
15 points of interest.
16 I do represent a large group of individuals
17 in the state who do concur. I think you are
18 very familiar with the concept of choice in --
19 in the State when it's relevant to education
20 issues. And we feel like choice is an issue
21 with us, too.
22 We would like to see a minimum of at least
23 five vendors provided. We understand the
24 State's concerns with having multiple
25 providers, and we understand the -- if we have
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1 more than --
2 (Commissioner Crist exited the room.)
3 MR. SMITH: -- 15, 20, or 30 of -- or
4 whoever wants to come on -- on board, that
5 could be an issue itself in trying to -- trying
6 to monitor what's going to happen, because we
7 care about our employees here.
8 We would like to see the State to be the --
9 the watchdog over five vendors, give us the
10 opportunity to -- to choose. Instead of the
11 State choosing one vendor for us, and them to
12 become a mutual fund vendor then themselves.
13 Let us have that choice.
14 As administrators in the State today, we
15 all -- we are already investing a lot of our
16 money outside of the retirement system into
17 other types of IRAs and so forth now.
18 And we have the capability of continuing to
19 do that in making choices. When these -- when
20 these vendors are selected, regardless of
21 the -- of the numbers, it would be paramount
22 that the State does provide the proper
23 education to all the employees so we will fully
24 have an understanding of what we're getting
25 into.
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1 But we would appreciate you considering up
2 to five vendors for us.
3 (Secretary Harris exited the room.)
4 GOVERNOR BUSH: Can I ask you a question?
5 MR. SMITH: Yes, sir.
6 GOVERNOR BUSH: Just out of curiosity, are
7 you -- are you saying that you're opposed to
8 the inverse, which is to allow employees to
9 pick nonbundled providers?
10 MR. SMITH: No, sir.
11 GOVERNOR BUSH: Good.
12 MR. SMITH: No, sir.
13 No, sir.
14 GOVERNOR BUSH: Okay.
15 MR. SMITH: Choice in the broadest way you
16 can think about choice.
17 Yes.
18 GOVERNOR BUSH: You're right about that.
19 I'm for that.
20 MR. SMITH: Yes.
21 And welcome to Hillsborough County, and I
22 welcome you to the most progressive
23 school district in the state.
24 Thank you.
25 GOVERNOR BUSH: Thank you for being here.
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1 Thank you for coming.
2 MR. HERNDON: The next speaker I have is
3 Elaine Fess with Hillsborough County Teachers.
4 GOVERNOR BUSH: Good morning.
5 MS. FESS: Good morning.
6 Good morning, and welcome to Tampa.
7 And thank you for allowing me these few
8 moments.
9 My name is Elaine Fess, and I'm a veteran
10 teacher in Hillsborough County. First of all,
11 I want to commend you for making possible the
12 Public Employee Optional Retirement Plan.
13 If done correctly, this Optional Retirement
14 Plan can be a great recruitment tool for
15 recruiting qualified teachers, support
16 personnel, and administration for the state of
17 Florida.
18 I know you're aware that we're experiencing
19 a shortage now. And we're not prepared at all
20 for the future shortage, which is critical, and
21 that concerns me.
22 We have here an opportunity to develop the
23 Optional Retirement Plan into something
24 desirable, not only for new teachers, but for
25 the teachers who are considering teaching as a
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1 second career.
2 The second career individuals in the
3 classroom is exciting. I find having those
4 people to be exciting, I think it will enhance
5 our schools.
6 The second career individuals need
7 incentives, not only to make the decision to
8 enter the classroom, but to stay in the
9 classroom.
10 In this situation, the best incentive will
11 be one of financial gain and employee choices.
12 Most people who are choosing teaching as a
13 second career will never retire in the State
14 system in the traditional manner.
15 They would love the opportunity to make
16 wise investments with the money, while they are
17 State employees.
18 I feel that, if we can offer individuals a
19 minimum of five nationally-known companies to
20 choose from, we are offering choices and
21 options.
22 We're offering them an opportunity to
23 invest retirement money as they wish. It's
24 very common in other professions, so let's
25 allow them to talk with established financial
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1 firms.
2 Let's allow the firms to compete with our
3 business. Let's allow our employees some
4 choices in their financial and retirement
5 future.
6 I have spoken with a lot of teachers,
7 administration, and support personnel at all
8 various stages of employment.
9 Very simply stated, the veteran teachers
10 and employees love the idea of options. The
11 newer teachers, seven years or less, are
12 excited about the option, the fact that they
13 may be able to make some choices.
14 Teachers that are new to the system working
15 their way into teaching as a second career
16 understand retirement investment options and
17 they find this whole idea enticing.
18 State employees have waited a long time for
19 this. The Retirement Optional Plan can be
20 great for education employees. We're asking
21 that you don't limit our options. We need at
22 least five nationally financial known companies
23 to choose from.
24 I want to thank you for your time.
25 I want to thank you for considering the
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1 future of those who serve the great state of
2 Florida.
3 GOVERNOR BUSH: Thank you very much.
4 MR. HERNDON: The next speaker that I have
5 is Mr. Kiser. Is that --
6 GOVERNOR BUSH: Senator Kiser doesn't --
7 didn't ever speak in Tallahassee. He comes
8 back home, and he's got to -- got to talk.
9 MR. KISER: We've come a long way from our
10 previous meeting in Panama City when we had our
11 meeting there over the first adoption of the
12 rule -- the rule for this very, very important
13 program.
14 I want to say that, since that time, we've
15 made a lot of progress, there's been a lot of
16 improvements to the rule. We've had a lot more
17 clarification.
18 We're still a little nervous about a few
19 things. Obviously, there's probably going to
20 be nervousness until people are picked and
21 actual vendors are selected. As -- nothing we
22 can do to help that, I would suppose.
23 The only thing I want to leave with you
24 today is, Governor, your appointee to the
25 Investment Advisory Council, Russell Bjorkman,
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1 sent you all some comments. And I wanted to
2 highlight two of the -- the statements he made,
3 because he fully endorsed them, we think he's
4 right on target, and we would offer them up for
5 your consideration here today.
6 In the memorandum that he sent to you just
7 recently, he said, I see potential problems
8 with picking one or two funds from several
9 different bundled providers.
10 Three to five bundled providers, with each
11 provider offering nine top-shelf, quote, best
12 of class choices, as long as the previously
13 mentioned full disclosure and comparisons are
14 in place is a workable plan.
15 Secondly, I suggest having each bundled
16 provider include in their proposal, multiple
17 funds for each of the nine categories.
18 We again think this follows the theme that
19 everyone has spoke here this morning about
20 maximum amount of choices.
21 And so we would think that, again, we would
22 like to echo support for the five bundled
23 provider concept, with each of the providers
24 being able to bid multiple funds and
25 multiple --
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1 GOVERNOR BUSH: I thought there was support
2 for the -- the more standardized approach.
3 That's not true?
4 MR. KISER: Well, we're talking about
5 within each of those categories, you'd be able
6 to offer, say, more than one, it would only
7 be -- they would only pick one in your bid for
8 you, but you'd be able to offer several within
9 that, and --
10 GOVERNOR BUSH: So what's --
11 MR. KISER: -- get the maximum.
12 GOVERNOR BUSH: -- the --
13 Okay. We would pick one from each to -- to
14 be -- if we were to do --
15 MR. KISER: Right.
16 Of each of the nine categories. But -- but
17 in their bid, they would be able to put in more
18 than one in each one of those categories of --
19 again, to maximize the total amount of choices
20 the -- that you would be in a position to pick
21 from.
22 But, again, we thank you; we thank
23 Mr. Herndon; the State Board. We've worked
24 very diligently with them back and forth, and
25 we think this is a greatly improved proposed
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1 rule than the one we had before.
2 We -- we think it was a lot more to present
3 than the original intent of -- for the program.
4 So we -- we're here to help support you.
5 Thank you.
6 GOVERNOR BUSH: Thank you, Senator.
7 MR. HERNDON: The next speaker is
8 Mr. Campbell with TIAA-CREF.
9 MR. CAMPBELL: Governor.
10 GOVERNOR BUSH: How are you doing?
11 MR. CAMPBELL: Very good, sir.
12 I'm reminded that your comment that you
13 were hoping in this Capital for the Day in
14 Tampa, we would do the same thing we did up in
15 Panama City, and -- and show up and support the
16 local economy.
17 And behind you is the SunTrust Building,
18 which is a 101 million dollar investment of
19 TIAA, a --
20 GOVERNOR BUSH: Nice touch.
21 MR. CAMPBELL: -- building.
22 GOVERNOR BUSH: Nice touch.
23 MR. CAMPBELL: We did not spend that much
24 last night.
25 TREASURER GALLAGHER: The teachers' money.
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1 MR. CAMPBELL: Thank you.
2 And, indeed, that -- that -- that money is
3 in our general account, and supports the
4 guaranteed annuity, which we are very pleased
5 to see is now possible as an option under the
6 revised Investment Policy Statement, and we
7 commend the staff for the changes that they've
8 made to the IPS to allow that to occur.
9 I just happen to have a couple of handouts
10 I wanted to give you, including a chart on this
11 subject, if I may approach and provide that.
12 Or --
13 Thank you.
14 And, Tom, here's --
15 And -- and, indeed, I believe that this
16 is -- this is consistent with what we brought
17 to your attention last time about the advantage
18 that's available through a -- and I don't know
19 whether that can go up on the screen or not --
20 for -- just -- I don't want to belabor the
21 point, but just want to --
22 GOVERNOR BUSH: Oh.
23 While you're -- while you're doing that, I
24 want to recognize -- are the students from
25 Plant Ci-- Plant High School here?
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1 Will y'all please stand?
2 We're delighted that you're here.
3 Welcome.
4 (Applause.)
5 GOVERNOR BUSH: I see two or three
6 statewide --
7 (Commissioner Crist and Secretary Harris
8 entered the room.)
9 GOVERNOR BUSH: -- elected officials among
10 that group. And you'll get to come here and do
11 this someday.
12 Welcome.
13 Have patience when you do.
14 MR. CAMPBELL: In -- and I don't want -- do
15 not want to belabor the points that are in
16 there. They're for your reading.
17 I did -- and for your staff's reading.
18 The chart is an attempt to show what $100
19 invested monthly for the past ten years in TIAA
20 Traditional Annuity, our guaranteed annuity,
21 would have produced at one-, three-, and five-,
22 and seven-, and ten-year durations.
23 And compared that with what would have been
24 available during that ten-year -- same ten-year
25 period for a money market investment, which is
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1 the comparable kind of investment.
2 And as you can see that the excess value
3 provided by TIAA through our guaranteed
4 annuity -- annuity approach, which is available
5 now in the higher education environment on
6 college campuses, and -- which could be
7 available under the revised IPS -- no
8 promises -- you can see that in the -- in the
9 last column.
10 GOVERNOR BUSH: Tell me how you handle
11 the -- the -- the consumer side of explaining
12 the fact that, if someone buys an annuity, that
13 there is a prepayment feature if you cash out
14 early, there's a -- or a penalty --
15 MR. CAMPBELL: Sure.
16 GOVERNOR BUSH: Is that like a big bowl --
17 MR. CAMPBELL: Oh, very definitely.
18 Indeed, if you go on to our website right now,
19 and if you're a participant at Florida State
20 University, and you have funds with TIAA-CREF,
21 and, say --
22 (Commissioner Crist exited the room.)
23 MR. CAMPBELL: -- 20 percent of your money
24 is in TIAA, and 80 percent is in the various
25 equity accounts in CREF, and you decide to get
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1 on the website and change your allocation and,
2 in -- in fact, move money from CREF to TIAA, a
3 screen'll pop up and say, gee, do you really
4 want to do that?
5 If you move it from CREF, which is cashable
6 at any time, and you can transfer it, you move
7 it into TIAA, there are these restrictions.
8 So you -- you really do it -- are -- are
9 forced to make some informed decisions. And
10 our materials -- our disclosure materials
11 are -- are very, very consistent with that
12 message.
13 It is not the right vehicle for everyone.
14 But it is, as the previous speakers have
15 mentioned, an option that ought to be available
16 for those who want to take advantage of it.
17 GOVERNOR BUSH: I think that's the concern
18 that we might have is just how we disclose this
19 in a way that avoids disappointment halfway
20 through the end of the annuity.
21 MR. CAMPBELL: Absolutely.
22 And -- and Commissioner Gallagher spoke
23 eloquently of that problem in the past in some
24 of the deferred comp arrangements.
25 And I think in his prior life as
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1 Commissioner, worked to try to fix some of
2 those things, and disclosure is obviously one
3 of the key elements.
4 GOVERNOR BUSH: Thank you.
5 MR. CAMPBELL: Thank you.
6 And I don't want to steal your notes, Tom.
7 MR. HERNDON: The next speaker that I have
8 is Angie Parrish.
9 GOVERNOR BUSH: Welcome.
10 MS. PARRISH: Good morning. Thank you.
11 I'm a little bit of an oddball here. I am
12 here to give you some private sector input.
13 I live here in Tampa, I'm a CPA, I'm a
14 chartered financial analyst, and I'm the
15 National Practice Leader for the investment
16 consulting division of a large employee
17 benefits firm.
18 My job is defining defined contribution
19 programs, and it's also designing and
20 conducting investment education workshops.
21 So I spent a lot of time talking to
22 employees, looking at the struggles they make
23 as they make investment decisions.
24 Over the past ten years, I've conducted
25 workshops for thousands of employees in a wide
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1 variety of organizations, including
2 Price Waterhouse Coopers; Jim Henson
3 Productions, the Muppet people; AAA Auto Club;
4 Hillsborough County; and Huntington Bank.
5 Like the employees of these organizations,
6 the employees in the Florida Retirement System
7 are quite diverse. But these employees are
8 similar in a number of respects.
9 Most of them, like my sister, Terri, who's
10 a teacher in the Palm Beach County school
11 system, and a 20-year veteran of FRS, are
12 dedicated to their jobs and their families.
13 And most of them have little knowledge of
14 investments, nor do they have the spare time to
15 become investment experts.
16 They're counting on their employers and the
17 State to provide a high quality retirement
18 program at a competitive cost, and make it
19 easy. It's got to be easy for them to
20 implement. And this is the biggest complaint I
21 hear when I do education.
22 One investment program with a fixed income
23 fund, a bond fund, four to six soft funds, and
24 a balanced fund is ideal for most employees.
25 Select the best investment firms available
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1 to manage these funds at low institutional
2 rates, educate your employees about
3 investments, and you've got an excellent
4 program.
5 Offer a supplemental mutual fund window
6 with maybe 20 more well-known funds for those
7 who want more choices -- and there generally
8 are very few in that category -- and you're
9 going to have a program that'll satisfy both
10 the novice investor and a more experienced
11 investor.
12 This is my understanding of how the
13 State Board of Administration is approaching
14 the administration of this program.
15 Here's what Terri, my sister, and many of
16 your employees, don't want or need, and that's
17 the burden of selecting one out of five or more
18 investment providers, and then the job of
19 selecting the right funds from a line-up of 30
20 to 50 funds, many of which will be virtually
21 indistinguishable for the average participant.
22 Even if you have a number of funds in one
23 category, most of them are going to have very
24 similar performance over time.
25 So you're really adding to confusion by
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1 offering additional choices.
2 From the private sector, just a few facts,
3 because the private sector's been offering
4 defined contribution plans since the early
5 1980s. And these plans have evolved
6 significantly, and there's a lot to be learned
7 because employees in the private sector deal
8 with exactly the same challenges of making
9 investment decisions that your employees will
10 deal with.
11 There's over 1.8 trillion dollars in 401-K
12 plans, and the vast majority of these plans
13 offer one investment provider. And the average
14 number of investment funds within that program
15 is eleven.
16 As the number of options increases,
17 employers have found that employees are
18 frustrated over the number of choices. They
19 can't distinguish among the different funds.
20 Secondly, Fidelity, T. Rowe Price, and
21 others tell me that more and more of their
22 clients are limiting the number of core funds,
23 and, instead, offering a mutual fund window
24 with additional choices for people seeking
25 choice.
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1 Again, I urge you to keep it simple. I'm
2 here with no interest financially in anything
3 that you're doing, but just as a citizen who,
4 this is my business, I work with employees.
5 Choice sounds good. But you've got choice,
6 because you've got the best investment
7 providers in the country that are going to be
8 bidding to manage your funds.
9 Keep it simple, educate your employees, and
10 I think you'll end up with a fine program.
11 Thank you for the opportunity to express
12 these views.
13 GOVERNOR BUSH: Thank you very much.
14 MR. HERNDON: The last speaker that I have
15 is Representative Fasano.
16 MR. FASANO: Thank you, Mr. Herndon,
17 Governor, members.
18 We've come a long way. And I remember when
19 I was appointed to PEORP, and showed up that
20 one time, and -- one day and found out shortly
21 that there was going to be some difficulty in
22 creating this.
23 But I want to commend Tom Herndon and his
24 staff for working with not only the
25 Legislature, but with all of the parties
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1 involved to come up with, I believe, is about
2 95 percent the way we need to be.
3 A couple of concerns I still have as
4 regards to the best of class. I have great
5 concerns about the best of class in choosing
6 only one product, one fund that are many --
7 that are going to be offered by many companies
8 out there.
9 I also have concerns with -- with the
10 in-house mutual fund. And I know that many of
11 you don't want to call it a mutual fund, but it
12 is. It's a State-run government mutual fund.
13 And -- and I have great concerns about that.
14 We're -- we're going to have a mutual fund,
15 a government mutual fund that has no past
16 performance, yet we are telling the outside
17 vendors that they have to show us -- or show
18 the SBA -- the best of class, when we're going
19 to be offering a product to State employees
20 that hasn't even been on the market. And yet
21 what is their best of class. And I think we
22 need to be greatly concerned about that.
23 As I say, we've come a long way. And I
24 never thought that I would stand before the
25 Cabinet and be in agreement with so many
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1 teachers and School Board administrators about
2 choice.
3 But this is one subject that I agree with
4 them wholeheartedly, that it concerns me also
5 that we have State employees, or people within
6 the SBA, that believe that our State employees
7 are not sophisticated enough to be able to
8 invest their own money and be able to choose
9 where they want those dollars to be invested.
10 We have many sophisticated investors. Yes,
11 and they work for the State and they work for
12 State government, and they work for all of you
13 and work for the Legislature.
14 We -- they -- they'll reap -- they're
15 responsible citizens. And we should be able to
16 provide choice to them as -- as so many other
17 investors out-- outside in the -- in the public
18 sector offer.
19 So if you will consider that as we move
20 along. And as I say, we're about 95 percent
21 there, and hopefully that will get some
22 legislation passed this year that will take
23 care of the glitches.
24 Thank you.
25 GOVERNOR BUSH: Thank you, Representative.
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1 MR. HERNDON: I believe that's all the
2 speakers.
3 GOVERNOR BUSH: Tom, can I -- can we --
4 MR. HERNDON: Yes, sir.
5 GOVERNOR BUSH: -- talk about one element
6 of this that I'm still a little confused about.
7 And that is -- how are we going to measure --
8 how are we going to analyze these investment
9 options? And -- and how -- what kind of
10 competitive marketplace are you creating to get
11 the best possible value at the lowest possible
12 cost for the people that are in the pension
13 system?
14 Are we going to evaluate all these
15 altogether, or are we going to separate them
16 up? I mean, most of our conversations have
17 been about bundled providers.
18 But the -- as you clearly know, there's all
19 sorts of other options for the -- the members
20 of the retirement system as well.
21 MR. HERNDON: Basically the process is
22 going to unfold as follows, Governor, and it's
23 outlined to a degree in the accompanying
24 documents that are on the agenda this morning
25 for your review. We're not asking that you
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1 approve those.
2 Basically, based on your authorization at a
3 prior meeting for the unbundled selection and
4 evaluation criteria, we have begun the process
5 of soliciting -- pardon me -- soliciting
6 proposals from the unbundled vendors.
7 As you'll recall, we have 12 different
8 products that are proposed in the unbundled
9 side. And simply because of workload, we're
10 suggesting that those be staged over the next
11 several months.
12 So we began a week ago by soliciting
13 proposals from established industry
14 organizations, the same organizations that will
15 probably bid in many respects on the bundled
16 products, will also bid on the unbundled
17 products. And we've begun that solicitation
18 process.
19 We will go through a very rigorous
20 evaluation process that is based -- very
21 heavily focused on performance statistics,
22 costs, net performance after you review the
23 costs, and all of the other factors that we've
24 outlined in these various selection evaluation
25 criteria. We'll eventually bring to you some
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1 recommendations.
2 For example, one of the products that we
3 went out for bid on was a high yield bond fund.
4 That would be one of the unbundled investment
5 options.
6 I don't know, frankly, Governor, whether
7 we'll get one bid or 500 bids at this stage of
8 the game. We'll know much more precisely over
9 the course of the next couple of weeks.
10 And then we'll go through a very rigorous
11 side-by-side comparison, and come back to
12 you --
13 GOVERNOR BUSH: So we're going to do it by
14 category.
15 MR. HERNDON: Yes, sir.
16 GOVERNOR BUSH: The four categories or the
17 five -- whatever the categories are, not
18 looking at it from a global perspective.
19 MR. HERNDON: In -- in the -- in the
20 context of the unbundled products, we're
21 suggesting that you look at them by -- by
22 category, in effect.
23 Because those are being bid as a category,
24 as -- since those are without service or
25 education or anything like that. That's just
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1 one product.
2 And we'll come back to you with
3 recommendations that say, based on our
4 analysis, it appears that company X offers the
5 best high yield bond product, do you agree or
6 disagree, and we'll obviously show you all the
7 analytics that support that decision.
8 We -- we are proposing in this selection
9 evaluation criteria that are -- the next couple
10 of agenda items this morning, that you embark
11 on a similar process for the bundled providers.
12 Pardon me.
13 That process essentially we're proposing to
14 take place in two stages. We will approve --
15 you will approve the selection evaluation
16 criteria at your March 13th meeting.
17 We will then issue essentially an RFI to
18 the industry at large saying, propose to us the
19 combination of nine investment products that
20 you think you --
21 (Commissioner Crist entered the room.)
22 MR. HERNDON: -- you want to advocate as
23 being the best line-up that you can propose,
24 that fit into the -- the categories that the
25 Board is looking for, the broad categories that
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1 we're looking for.
2 And then we go through a two-stage process.
3 The first stage is, we're going to look at the
4 performance statistics of those products,
5 because, frankly, and I've said this, and I
6 don't mean this in any flippant sense.
7 But if you have the best education and
8 services wrapped around poor investment
9 products, you're not doing much. I mean,
10 it's -- it's the investment products that
11 matter here, because that's what is going to
12 produce retirement benefits at the end.
13 So we've proposed to look at the investment
14 products that are being proposed by those
15 bundled providers. Certain of those investment
16 products will pass through the screens that are
17 selected and approved by -- by you all.
18 And then you look at the services and
19 education, you put it altogether, and you come
20 back to the Trustees. And we're currently
21 projecting, come back to the Trustees on
22 September 11th, at which point you will have an
23 opportunity to see, okay, here's all the
24 unbundled products that we've been looking at
25 over the course of the last several months;
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1 here's all the bundled products that we've been
2 looking at over the last several months; here's
3 our general sentiment, our consensus on what
4 should be in the program, and what shouldn't.
5 Because the only thing that'll be left
6 standing at that point is theoretically, the
7 best in class on the unbundled side, the best
8 in class on the bundled side, and you all can
9 at that point mix and match, so to speak, if --
10 if you will.
11 And that's -- it's -- it's not going to
12 necessarily be a precise fit, but you'll have
13 that --
14 GOVERNOR BUSH: So at --
15 MR. HERNDON: -- that discretion --
16 GOVERNOR BUSH: -- at some point, we look
17 at the global final --
18 MR. HERNDON: Yes, sir.
19 GOVERNOR BUSH: -- and -- and as I
20 understand it, this goes through the
21 Advisory Board, it also goes through the --
22 the -- I forgot the name of the thing --
23 MR. HERNDON: The PEORP Advisory Council?
24 Yes, sir.
25 GOVERNOR BUSH: It goes through that.
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1 MR. HERNDON: Yes, sir.
2 GOVERNOR BUSH: And is this -- is this a --
3 and y'all are going to -- I mean --
4 MR. HERNDON: Yes, sir.
5 GOVERNOR BUSH: -- are these vetted down to
6 where we are looking at a final product, or are
7 we looking at a broader set of options?
8 MR. HERNDON: It's difficult to say at this
9 point. What we're proposing to do is through
10 the use of the consultant firms that are on --
11 under contract to the Board,
12 Callan & Associates, Mercer, EK&A, to do the
13 vetting -- the analytical vetting of these
14 products on performance across, and so forth.
15 And then bring those to the
16 advisory councils. And it may very well be
17 that -- that more than one product in a high
18 yield bond category surfaces. It's not
19 unlikely that you could have two or three very,
20 very good high yield bond products that
21 surface.
22 Someone will eventually have to make a
23 decision, do we want two or three in that --
24 GOVERNOR BUSH: Right.
25 MR. HERNDON: -- category or not?
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1 And ultimately that someone is the three of
2 you. We'll make you a recommendation, and at
3 that point you can -- you can act on it as you
4 see fit.
5 GOVERNOR BUSH: Are you all -- General and
6 Treasurer, are you all --
7 (Commissioner Crist exited the room.)
8 GOVERNOR BUSH: -- comfortable with the --
9 a plan of that process?
10 TREASURER GALLAGHER: Well, I -- I'm
11 sitting here listening to what he's saying, and
12 I don't know of a better way to do it.
13 I mean, I think that we obviously have the
14 consultants to -- to run through analytics, and
15 that's good; and it goes through PEORP, and
16 that's good.
17 And by the time it goes through the staff,
18 the consultants, and PEORP, and it comes to us,
19 we should have a pretty good idea of what -- at
20 least what's recommended, and we get to approve
21 it or change it if we see good reason.
22 COMPTROLLER MILLIGAN: The only concern I
23 had was the consultants really doing the
24 vetting.
25 But that is not really the way it's going
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1 to happen, as I understand Tom's comment, that
2 that will be reviewed by the IAC and by the
3 PEORP Advisory Council.
4 So I'm -- I'm satisfied with the process,
5 and the only way we can get at it with the
6 resources that we have.
7 GOVERNOR BUSH: I hope --
8 COMPTROLLER MILLIGAN: I think it's --
9 GOVERNOR BUSH: -- I would only --
10 COMPTROLLER MILLIGAN: -- only
11 appropriate --
12 GOVERNOR BUSH: -- I would only add that
13 it -- from my perspective, it would be -- I
14 don't think you're going to have a unanimous
15 opinion about something as subjective as this.
16 And so the -- the vetting and the -- the
17 two groups that will look at this before we do,
18 may have different opinions, and we ought to be
19 aware of both --
20 TREASURER GALLAGHER: Absolutely.
21 GOVERNOR BUSH: -- rather than vet it out
22 to the point where we have one -- you know,
23 here's the -- here's the nine funds, or
24 whatever it is. Here it is, this is the way
25 it's going to be, do you want to change it.
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1 I mean, to me, it -- it would be a better
2 process to give us more -- a little bit more
3 flexibility, unless there is complete,
4 unanimous support for --
5 (Commissioner Crist entered the room.)
6 GOVERNOR BUSH: -- this process, which I
7 can't imagine. I mean, it --
8 TREASURER GALLAGHER: My understanding is
9 that, as it goes through, if there is
10 consultants or one of the advisory groups sees
11 it differently, or the staff sees it
12 differently, we will get those -- those
13 conflicting ideas to -- to make a -- I mean,
14 we've got to make a final decision.
15 MR. HERNDON: Yes, sir.
16 TREASURER GALLAGHER: We want to know -- I
17 do, at least, want to know if there's conflicts
18 out there, and what those are and why they have
19 the difference, because obviously we have to
20 make a final determination.
21 We don't want -- I don't -- I don't think
22 any of us want it clean. We want to, you know,
23 lay it out the way it is.
24 MR. HERNDON: And that -- that is exactly
25 our intent, Governor. I think your -- your
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1 characterization of it being highly unlikely
2 that you have perfect unanimity is -- is
3 absolutely right.
4 We certainly don't expect that, and we will
5 bring you --
6 GOVERNOR BUSH: Thank you.
7 MR. HERNDON: -- quite a bit of information
8 on this.
9 GOVERNOR BUSH: Thank you.
10 MR. HERNDON: That concludes the
11 discussion, Item Number 2.
12 Item Number 3 is for you to authorize us to
13 move forward to initiate rulemaking on Item 2.
14 TREASURER GALLAGHER: Move -- move Item 3.
15 COMPTROLLER MILLIGAN: I second it.
16 GOVERNOR BUSH: Moved and seconded.
17 Without objection, it's approved.
18 MR. HERNDON: Item Number 4 is requesting
19 your approval to affirm that a rule workshop is
20 not necessary for this particular iteration of
21 the Investment Policy Statement.
22 As we outline here, we've gone through over
23 ten public hearings and meetings, I don't know
24 how many hundreds of hours of discussion on
25 this subject. We will have the rule hearing.
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1 What we're simply saying is do away with
2 just the workshop portion, because we believe
3 this has been workshopped more than adequately.
4 GOVERNOR BUSH: But you're -- you're -- you
5 are going to work with the affected parties --
6 MR. HERNDON: Absolutely.
7 TREASURER GALLAGHER: At the hearing.
8 MR. HERNDON: Yes, sir.
9 Absolutely.
10 At the hearing itself we will -- we will do
11 that, and we will do that prior to that time.
12 But --
13 TREASURER GALLAGHER: I don't think anybody
14 has a problem with that.
15 MR. HERNDON: No, sir. No. I'm not --
16 COMPTROLLER MILLIGAN: No, I -- I move that
17 we --
18 TREASURER GALLAGHER: Second.
19 COMPTROLLER MILLIGAN: -- ban the --
20 GOVERNOR BUSH: Moved and --
21 COMPTROLLER MILLIGAN: -- another workshop.
22 GOVERNOR BUSH: -- seconded.
23 Moved and seconded.
24 Without objection, it's approved.
25 MR. HERNDON: Item Number 5, Governor,
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1 and -- and both Items 5 and 6 are on here for
2 your information. And, frankly, to also serve
3 notice to all the parties.
4 This is the proposed process that we intend
5 to follow in Item Number 5 for the selection of
6 bundled providers.
7 And in Item Number 6, this is the proposed
8 selection evaluation criteria that we intend to
9 use to select those bundled providers with.
10 So this is where the rubber meets the road.
11 This is how we're going to do it, and this is
12 what we're proposing to -- to -- to measure and
13 to assess.
14 All the parties have seen these that have
15 been through the Advisory Council.
16 We're not proposing that you act on these
17 this morning, but rather that you be aware of
18 them, we'll bring them back to you on the 13th
19 after they have another review by the
20 Advisory Council on March 8th.
21 TREASURER GALLAGHER: Move acceptance of
22 the information.
23 COMPTROLLER MILLIGAN: Second.
24 GOVERNOR BUSH: Moved and seconded.
25 Without objection, it's approved.
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1 MR. HERNDON: Item Number 7 is our seventh
2 installment in the defined contribution
3 implementation status report.
4 I want to just mention, as you recall,
5 we've -- we've hired the third party
6 administrator. We now have the bids in for the
7 transition broker. We got nine very responsive
8 bids.
9 We also now have in the bids for the
10 education vendor. We got ten very good bids
11 there. That's been screened down to a short
12 list.
13 The interviews, the oral interviews, were
14 held last week -- the week before last and last
15 week, and the site visits are taking place this
16 week.
17 So we're very encouraged by the progress
18 we're making there with the Investment Policy
19 Statement that'll allow us to move forward.
20 We do have, as I mentioned earlier, the
21 first phase of the unbundled products out on
22 the street now, and we should get some -- some
23 good responses back.
24 So that status report is just for your
25 information, Governor, and --
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1 TREASURER GALLAGHER: Tom, how many --
2 MR. HERNDON: Yes, sir.
3 TREASURER GALLAGHER: -- how many finalists
4 are there in the educational area that you're
5 going to --
6 MR. HERNDON: There were -- there were
7 ten bids, we screened those down to three --
8 TREASURER GALLAGHER: Search --
9 MR. HERNDON: -- finalists. And there --
10 and two of those are combos/, the
11 Price Waterhouse, Watson Wyatt,
12 Financial Engines combination. So two of those
13 are -- are multi-national combination firms.
14 TREASURER GALLAGHER: But those are the
15 three you're going to visit.
16 MR. HERNDON: Those are the three we are in
17 the process of visiting now. That's correct.
18 Finally, Item Number 8 is a report by the
19 Executive Director for the month of
20 December 2000.
21 TREASURER GALLAGHER: Motion, approval.
22 GOVERNOR BUSH: Is there any second?
23 COMPTROLLER MILLIGAN: Yes. Second the
24 information item.
25 GOVERNOR BUSH: Moved and seconded.
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1 Without objection, it's approved.
2 MR. HERNDON: Thank you very much.
3 GOVERNOR BUSH: Thank you, Tom.
4 (The State Board of Administration Agenda
5 was concluded.)
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February 27, 2001
1 GOVERNOR BUSH: Department of
2 Law Enforcement.
3 MR. MOORE: Good morning, Governor.
4 GOVERNOR BUSH: Good morning.
5 MR. MOORE: Members of the Cabinet.
6 GOVERNOR BUSH: Are you opposed to the
7 Department of Law Enforcement, or are you just
8 expressing your opinion about --
9 MEMBER OF THE AUDIENCE: We love the
10 Department of Law Enforcement.
11 GOVERNOR BUSH: Okay.
12 MEMBER OF THE AUDIENCE: We love --
13 GOVERNOR BUSH: Excellent.
14 Thank you.
15 MR. MOORE: That will become clear in a
16 moment, I believe, Governor.
17 In keeping with the -- with the direction
18 you gave Tom to make some comments about the
19 agency briefly, let me begin by saying, as --
20 as you may want to know, the -- most
21 law enforcement in Florida is local, as it
22 should be.
23 The job we play in the Department of
24 Law Enforcement is helping augment and add
25 value to the good job that people like
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February 27, 2001
1 Chief Betty Holder here in Tampa,
2 Sheriff Cal Henderson here in
3 Hillsborough County do; and the -- the 45,000
4 plus local law enforcement officers around the
5 state in Florida who do a good job day in and
6 day out.
7 And our role in supporting that effort, we
8 do that in 23 offices around the state. And we
9 do it with more than 1800 men and women.
10 We -- we operate with a budget of some
11 245 --45 billion dollars, 93 percent of which
12 go back directly to support local
13 law enforcement.
14 And, Governor, as you know, we add that
15 value to not only 2800 criminal investigations
16 we'll do in -- each year day in and day out
17 where jurisdiction matters become important.
18 But we'll also augment that effort through
19 one of the best forensic laboratory systems in
20 the country. We'll handle over 100,000 pieces
21 of evidence this year in -- in criminal
22 proceedings, 98 percent of which come from
23 local law enforcement around the state of
24 Florida.
25 We'll add value to the good job local
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FLORIDA DEPARTMENT OF LAW ENFORCEMENT 77
February 27, 2001
1 police do as well in providing a -- an
2 information system that's second to none in the
3 country. A network of some 26,000
4 telecommunication devices, and 450-plus
5 agencies that'll handle 100 million
6 transactions in any given month, on everything
7 from wanted people, to criminal histories, to
8 stolen property.
9 And increasingly, we're making that
10 information consistent with the direction
11 you've given us, with the direction the
12 Legislature's given us, available to the
13 public.
14 We do that in a variety of ways, perhaps
15 most notably in -- in terms of identifying
16 sexual predators, and sexual offenders on the
17 Internet free of charge to men and women and
18 moms and dads across our state who can find out
19 who is in their neighborhoods and at their
20 bus stops.
21 We also make sure that Florida's
22 70,000-plus law enforcement officers and
23 correctional officers are certified and meet
24 the minimum standards that are established in
25 Florida law.
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1 And on occasion, in the -- in the few
2 instances when we have to, we also decertify
3 police officers and correctional officers who
4 fail to uphold that trust that's been bestowed
5 in them.
6 With that, Governor, I would move into the
7 regular agenda, and move Item 1, which are the
8 minutes from the November 16 Cabinet meeting.
9 ATTORNEY GENERAL BUTTERWORTH: Motion.
10 GOVERNOR BUSH: Is there a second?
11 COMPTROLLER MILLIGAN: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection, it's approved.
14 MR. MOORE: Governor, Item 2 is our
15 progress report -- performance progress report
16 for the second quarter of the fiscal year,
17 highlighting those accomplishments that are in
18 my performance contract with you and members of
19 the Cabinet.
20 GOVERNOR BUSH: Any comments on the
21 performance contract?
22 MR. MOORE: We continue to make good
23 progress, Governor. I'm very proud of the men
24 and women in the agency. We opened some
25 588 criminal investigations in this quarter.
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1 We added an additional 9,000 samples to our
2 DNA database, on the road to adding
3 24,000 samples, as required from last year's
4 legislation, authorizing the addition of
5 burglary into our database.
6 We also handled thousands of forensic exams
7 that are well within -- on the way to being
8 well within the turnaround time that you have
9 put in the law for us. And we continue to pick
10 up THUGS, hoodlums who are using guns
11 statewide, at a very acceptable rate, people
12 who, in a lot of ways, represent crime waves in
13 our communities across the state.
14 So we're making progress consistent with
15 the direction that you have given us in the
16 agency.
17 GOVERNOR BUSH: Is there a motion?
18 ATTORNEY GENERAL BUTTERWORTH: Motion.
19 TREASURER GALLAGHER: Motion.
20 Second.
21 GOVERNOR BUSH: Moved and seconded.
22 Without objection, it's approved.
23 MR. MOORE: Governor, the third item is --
24 is why there's a representative sample of our
25 forensic scientists here in the room out of our
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1 Tampa laboratory here today --
2 GOVERNOR BUSH: Tim, could we get the --
3 could we either get the door shut back there,
4 or -- I think it's back in the back, isn't it,
5 the -- the noise?
6 If we could have that shut, it'd be great.
7 MR. MOORE: These men and women that are
8 here represent the 250-plus scientists in the
9 Department of Law Enforcement, and -- and seven
10 of our regional crime labs around the state,
11 who as I mentioned previously, handled over
12 100,000 pieces of evidence in criminal
13 proceedings last year.
14 They're a key cog, and a lot of times an
15 unsung hero, in solving crime and in dispensing
16 justice in our state.
17 I'm proud of the fact that Florida is the
18 largest statewide laboratory system in America
19 to be accredited by the American Society of
20 Criminal Laboratory Directors.
21 And we're up for our -- our second
22 reaccreditation effort by that group. We were
23 originally accredited in 1990.
24 That speaks volumes, Governor, about these
25 men and women and the job they do.
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1 It also speaks volumes about the support
2 that you and the Cabinet and the Legislature
3 has given us in our statewide crime lab system
4 in the state of Florida.
5 Commissioner Crist, you'll recall when in
6 an earlier life as Senator Crist, you chaired
7 our appropriation subcommittee in the Senate
8 when you helped us add the scientists we needed
9 to help us with our pay package we needed, you
10 helped us with the technology and the equipment
11 that we needed.
12 These men and women have taken that good
13 investment, and are giving you, and the
14 citizens of our state, tremendous returns.
15 It's my pleasure, Governor, to ask
16 Major Bob Conley, who is the Chairman of the --
17 of the Board of ASCLAD, the American Society
18 for Crime Laboratory Directors --
19 GOVERNOR BUSH: Thank you.
20 MR. MOORE: -- to come up and present the
21 certification to you and the Cabinet on this
22 reaccreditation as the head of the Department
23 of Law Enforcement.
24 And as he's doing that, let me ask
25 Miss Sue Livingston, who serves as our
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1 Chief Forensic Scientist, to come up as well.
2 And then at the conclusion of that, with
3 your blessing, I'd like to invite these nine
4 men and women, who are scientists from
5 everything from DNA scientists to serologists
6 to microbiologists to firearms examiners, and
7 latent print experts, to join us for the
8 presentation and the photo.
9 TREASURER GALLAGHER: Could --
10 MR. MOORE: With that, Major Conley.
11 TREASURER GALLAGHER: -- could I ask you a
12 question before that?
13 Is every lab, crime lab in Florida
14 certified, is that what this ties into; or is
15 it just yours?
16 MR. MOORE: This certification is to the
17 Department of Law Enforcement's seven regional
18 crime laboratories, and the two satellite labs
19 that we have.
20 It's a certification for the --
21 TREASURER GALLAGHER: Those --
22 MR. MOORE: -- Department of
23 Law Enforcement. But, however --
24 TREASURER GALLAGHER: So all of your labs
25 are --
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1 MR. MOORE: They are.
2 This is a -- this is a system-wide,
3 statewide accreditation. And that again, is --
4 is no small feat. And that is without peer in
5 the country. And I --
6 TREASURER GALLAGHER: So that's your
7 system, but --
8 MR. MOORE: That is --
9 TREASURER GALLAGHER: -- but the -- some of
10 the local law enforcement also have crime labs
11 that are certified.
12 MR. MOORE: They are, and they're
13 accredited in the state of Florida. And we
14 ought to be proud of that as well. There's
15 four local labs as well that are run locally by
16 county governments that are, indeed, accredited
17 by ASCLAD.
18 Major Conley.
19 GOVERNOR BUSH: Welcome, Major.
20 MR. CONLEY: Thank you.
21 Governor, Cabinet members, distinguished
22 members of the public.
23 I'm privileged to represent the American
24 Society of Crime Lab Directors Laboratory
25 Accreditation Board, and the directors of the
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1 other 205 accredited laboratories in presenting
2 a laboratory system accreditation certificate
3 to the Florida Department of Law Enforcement.
4 These system certificates are only awarded
5 when all the laboratories in a state's lab
6 system are accredited.
7 We're embarking on the second great century
8 of science and technology, and the public's
9 investment in criminal justice is at risk
10 without the timely provision of quality
11 forensic science support.
12 And I applaud you, and the
13 State of Florida, for reducing that risk.
14 The FDLE's accreditations were renewed on
15 the basis of a stringent external review of
16 over 140 specific criteria. This review is
17 conducted by forensic science management
18 professionals from across the country.
19 The accreditation process provides
20 assurance to society, and to selected
21 officials, that the public funds have been
22 wisely invested in the FDLE's forensic science
23 laboratories.
24 Commissioner Moore, to you and all those
25 responsible for this achievement, my sincere
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1 congratulations.
2 MR. MOORE: Thank you, Major.
3 GOVERNOR BUSH: Congratulations.
4 (Applause.)
5 (Discussion off the record.)
6 (The Florida Department of Law Enforcement
7 Agenda was concluded.)
8 * * *
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1 CERTIFICATE OF REPORTER
2
3
4
5 STATE OF FLORIDA:
6 COUNTY OF LEON:
7 I, LAURIE L. GILBERT COX, do hereby certify
8 that the foregoing proceedings were taken before me
9 at the time and place therein designated; that my
10 shorthand notes were thereafter translated; and the
11 foregoing pages numbered 1 through 85 are a true and
12 correct 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 9TH day of MARCH, 2001.
18
19
20
21
22
23
LAURIE L. GILBERT COX, RPR, CCR, CRR, RMR
24 100 Salem Court
Tallahassee, Florida 32301
25 850/878-2221.
ACCURATE STENOTYPE REPORTERS, INC.
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:
STATE BOARD OF ADMINISTRATION
FLORIDA DEPARTMENT OF LAW ENFORCEMENT
STATE BOARD OF EDUCATION
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
DEPARTMENT OF AGRICULTURE
AND CONSUMER SERVICES
DEPARTMENT OF COMMUNITY AFFAIRS
VOLUME II
Pages 87-229
The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush
presiding, in the County Commission Chambers,
Second Floor, County Center, 601 East Kennedy
Boulevard, Tampa, Florida, on Tuesday, February 27,
2001, commencing at approximately 9:08 a.m.
Reported by:
LAURIE L. GILBERT COX
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
88
APPEARANCES:
Representing the Florida Cabinet:
JEB BUSH
Governor
BOB MILLIGAN
Comptroller
KATHERINE HARRIS
Secretary of State
BOB BUTTERWORTH
Attorney General
TOM GALLAGHER
Treasurer
CHARLIE CRIST
Commissioner of Education
* * *
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I N D E X
ITEM ACTION PAGE
STATE BOARD OF EDUCATION:
(Presented by Wayne V. Pierson,
Deputy Commissioner)
1 Approved 96
2 Deferred 97
3 Approved 133
4 Denied 155
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT
TRUST FUND:
(Presented by Kirby B. Green, III,
Deputy Secretary)
Substitute 1 Approved 169
2 Withdrawn 169
3 Approved 170
Substitute 4 Approved 170
5 Approved 170
6 Approved 170
7 Approved 171
DEPARTMENT OF AGRICULTURE
AND CONSUMER SERVICES:
(Presented by R. Sherman Wilhelm, III,
Division Director)
1 Deferred 173
2 Approved 174
3 Approved 176
4 Approved 180
DEPARTMENT OF AGRICULTURE
AND CONSUMER SERVICES:
(Presented by Steve Seibert,
Secretary
Presentation 181
CERTIFICATE OF REPORTER 229
* * *
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1 P R O C E E D I N G S
2 GOVERNOR BUSH: State Board of Education.
3 MR. PIERSON: Item 1 is South Florida
4 Community College request for establishment of
5 special purpose centers in Arcadia and
6 Wauchula.
7 And in the audience, we have
8 Dr. Cathy Cornelius, the President of the
9 Community College; and Dr. William Shaffer,
10 Executive Assistant.
11 GOVERNOR BUSH: Hello, Doctor. How are you
12 doing?
13 Do you want to come tell us what this is
14 about, or you just want us to approve it?
15 DR. CORNELIUS: In the interest of time,
16 I'd love for you just to approve it.
17 I want to thank you for coming to Avon Park
18 last Monday. And you were very, very
19 welcome --
20 GOVERNOR BUSH: That was very cool. That
21 was fun.
22 Thank you.
23 DR. CORNELIUS: South Florida Community
24 College is the area comprehensive -- it's a
25 very comprehensive institution, taking care of
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1 three counties: Highlands, Hardee, and
2 DeSoto Counties, 2400 square miles.
3 The Governor has just declared this an area
4 of critical and economic concern, if you'll
5 remember. And it is.
6 We have the dubious honor of having either
7 the highest or second highest unemployment
8 rates in the state almost all the time,
9 raising -- rising from 10 percent, to up to
10 18 percent.
11 We have the highest or second highest teen
12 pregnancy rate; we have the highest illiteracy
13 rate, 38 percent of the people not even having
14 a high school diploma.
15 Very high unemployment, very high levels of
16 underemployment, very high levels of
17 underskilled people. High minority and high
18 migrant populations.
19 Our college is -- is charged to resolve
20 those problems for -- for our area, and we are
21 the area vocational school; the area community
22 college; and, in some instances, the area adult
23 high school as well.
24 Our main campus in Highlands County has
25 resolved those economic problems for
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1 Highlands County, and we're now doing extremely
2 well economically.
3 What we need you to do today is to help us
4 resolve the problems in the remaining two
5 counties of Hardee and DeSoto Counties.
6 We are recommending that we build two
7 30,000 square feet centers, one in Arcadia, and
8 one in Wauchula -- near Wauchula.
9 We've done so well in Hardee -- in
10 Highlands County, but we know we can do just as
11 well over there.
12 We have small rental facilities. They are
13 filled to the brim. We even have classes at
14 7:00 o'clock in the morning full. People are
15 very, very happy. We don't have any room for
16 lab expansion in the vocational training, as
17 well as the college training.
18 We need your help to solve that problem.
19 GOVERNOR BUSH: Do you plan to do similar
20 kind of ventures as you do in -- in -- in the
21 Highlands --
22 DR. CORNELIUS: Uh-hum.
23 GOVERNOR BUSH: -- County campus, the
24 Avon Park campus with other universities?
25 DR. CORNELIUS: Absolutely. We have a
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1 very, very successful, I think, university
2 center; and we now have 11 baccalaureate
3 programs available --
4 GOVERNOR BUSH: I wanted to give you a --
5 DR. CORNELIUS: -- in an area --
6 GOVERNOR BUSH: -- chance to brag a little.
7 DR. CORNELIUS: Thank you.
8 -- in an area in which we have no local
9 transportation, except for the private car, and
10 we're two-and-a-half to 3 hours away from the
11 nearest four-year degrees.
12 We now have three cohorts running in
13 elementary ed, in the BSN in nursing, computer
14 science, information technology,
15 human resources, engineering technology.
16 University of South Florida is going to raise
17 industrial engineering as well.
18 GOVERNOR BUSH: Tell us about the --
19 DR. CORNELIUS: I'm sure I'm forgetting a
20 few.
21 GOVERNOR BUSH: Tell us about the program
22 that y'all established for utility companies.
23 Because that's an -- it's an interesting --
24 DR. CORNELIUS: That's an exciting program,
25 the electrical transmission program. You know,
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1 none of these computers work without any
2 electricity. And we're --
3 GOVERNOR BUSH: Yeah. Ask -- ask --
4 DR. CORNELIUS: -- now started a --
5 GOVERNOR BUSH: -- Governor Davis in
6 California.
7 DR. CORNELIUS: We've started a
8 wonderful -- be the third program in the
9 country to train electrical linemen to do the
10 high tech transmission line program.
11 Starting in Hardee County, we're -- we've
12 already got the first class full. We'll be
13 bringing people from all over the world to
14 teach them all of the high power, high grids.
15 You know, it used to be a man got in a bucket,
16 got up the -- got up the pole, and hooked
17 things together carefully, and everything was
18 cool.
19 It's not that anymore. That's just the
20 first step.
21 Now it's a lot of computer. It's almost
22 like sysco-networking with all of these grids.
23 And we're going to be training that. And we
24 have a PRECO -- Peace River Electric gave us a
25 $500,000 grant and has provided areas and
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1 classrooms and -- and students; and the State
2 matched that with a $500 Fast Start Grant.
3 We're thrilled with it.
4 So thank you.
5 GOVERNOR BUSH: Well, every utility company
6 in the state has a shortage of linem-- linemen.
7 And it's an incredibly dangerous job. It
8 requires very sophisticated training.
9 And the wages that they make, once they get
10 out of -- they get their certificate is, what,
11 do you remember?
12 DR. CORNELIUS: Thirty-five thousand up.
13 It's beginning about thirty-five --
14 GOVERNOR BUSH: Yeah. I think it's even
15 higher. I think it's -- it's -- it's closer to
16 forty-five --
17 DR. CORNELIUS: I think they work their way
18 up.
19 GOVERNOR BUSH: So it's a -- it's just an
20 example -- I wanted to bring it up, because
21 it's a great example of how responsive
22 community colleges are to meeting real needs in
23 communities, and doing it in a very
24 cost-effective way.
25 DR. CORNELIUS: And because of that
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1 program, other electrical companies are
2 choosing to train in that area, because they
3 know the trained work force is there.
4 COMMISSIONER CRIST: Governor?
5 GOVERNOR BUSH: Yes.
6 COMMISSIONER CRIST: I -- I just wanted to
7 compliment Dr. Cornelius, too. She is a -- a
8 great leader at South Florida Community
9 College.
10 I've been on campus several times, and
11 always have been impressed with what she's done
12 there, her innovative approach. And she's just
13 great.
14 And so I would -- I don't know if it's time
15 to move this. But if it is, I -- I'd -- I'd
16 move it.
17 GOVERNOR BUSH: Very good.
18 TREASURER GALLAGHER: Second.
19 GOVERNOR BUSH: Moved and seconded.
20 Without any dis--
21 Well, any more discussion? I've been
22 hogging the whole discussion.
23 Without discussion -- without any more --
24 without any dissent, it's approved.
25 DR. CORNELIUS: Thank you so much.
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1 GOVERNOR BUSH: Appreciate what you do.
2 DR. CORNELIUS: Thank you for your plug on
3 community colleges. We find the problems, and
4 we resolve them.
5 Thank you.
6 GOVERNOR BUSH: You go, girl.
7 It's a technical term.
8 MR. PIERSON: Item 2, we request deferral
9 to the April 24th Cabinet meeting.
10 TREASURER GALLAGHER: Motion.
11 COMMISSIONER CRIST: Second.
12 GOVERNOR BUSH: There's a motion to defer
13 and a second.
14 Without objection, it's approved.
15 MR. PIERSON: Item 3 is a charter school
16 appeal, Archer Learning Academy, versus
17 Duval County School Board.
18 The State Board of Education considers
19 appeals of denials of charter school
20 applications pursuant to 96-186, Laws of
21 Florida.
22 (Attorney General Butterworth exited the
23 room.)
24 MR. PIERSON: Florida law authorizes
25 school boards to grant approval to applicants
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1 who wish to operate charter schools within
2 their district.
3 The law allows an applicant who has denied
4 a -- been denied a charter, the right to appeal
5 the school board's decision to the State Board
6 of Education.
7 Based on the written record and the oral
8 argument presented, the State Board must vote
9 to recommend acceptance or rejection of the
10 appeal to the school board.
11 The vote requires a simple majority of
12 members, and by law is not subject to
13 provisions of the Administrative Procedures
14 Act.
15 The following requirements apply to the
16 applicant, the District School Board, and their
17 representatives.
18 The appeal must be based on errors the
19 applicant charges the school board made in its
20 decision to deny the charter. The written
21 arguments submitted by the applicant to the
22 state board is limited to discussion of those
23 errors.
24 The record of this proceedings is limited
25 to the written arguments, the charter school
ACCURATE STENOTYPE REPORTERS, INC.
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1 application itself, and the transcripts of
2 meetings before the District School Board.
3 At this hearing, a representative of each
4 party may give oral argument limited to a
5 summary of the written arguments previously
6 submitted to the school board.
7 The statute allows 30 minutes for the
8 applicants. However, we request that they
9 limit their appeal to 10 minutes.
10 After the summaries are presented, a vote
11 will be taken and written recommendations of
12 the vote will be returned to the District
13 School Board.
14 Representing the Archer Learning Academy,
15 we have Dr. Marbury.
16 GOVERNOR BUSH: Welcome, Dr. Marbury.
17 DR. MARBURY: Thank you.
18 Good morning, Governor Bush, and
19 distinguished members of the Cabinet.
20 My name is Kevin Marbury. I'm the founder
21 of the Archer Learning Academy, and I thank you
22 for the opportunity to speak today regarding
23 the Archer Learning Academy's application.
24 I'm joined today by my wife, Barbara, who
25 is the co-founder of the school. And as I
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February 27, 2001
1 mentioned in the previous meeting with your
2 Cabinet Aides, my twenty-plus years of
3 experience in various educational settings,
4 eight of which have been in Jacksonville, have
5 formed my vision of what is needed to provide
6 children a strong educational foundation so
7 they do -- they do not arrive at the
8 high school, and even the college level,
9 unprepared to compete and succeed.
10 After much discussion and research of other
11 successful charter school programs, we put
12 forth a strong proposal to open a charter
13 elementary school that would provide a
14 nationally-acclaimed curriculum, low student to
15 teacher ratios, a strict discipline policy,
16 mandatory parental participation, and a
17 supportive environment for teachers and staff.
18 These combined ingredients have long been
19 cited as a perfect recipe for students'
20 achievement.
21 We presented a strong and viable plan to
22 accomplish our goals.
23 Our primary issue has been with the
24 process, one that has changed midstream and
25 does not allow a true defense of the
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1 application. We're not complaining about the
2 quality of the help sessions, or are we saying
3 that we didn't have time to present a strong
4 application.
5 The majority of the reasons cited by the
6 review committee for denial of the application
7 have been proven to be with our foundation.
8 A few legitimate areas of concern could
9 have been addressed and clarified, had any
10 opportunity been given to do so.
11 The Board has stated that the reason they
12 did -- cut out the second help session --
13 actually the first help session at the last
14 minute was due to the demands placed on their
15 staff.
16 While this may be a legitimate concern, why
17 not just provide a written critique, such as
18 the one provided in the denial process? Why
19 not provide an opportunity to speak directly to
20 these issues before the School Board?
21 Two questions put forth by the School Board
22 members at that meeting were glossed over with
23 no discussion whatsoever.
24 The application process, in my mind, is
25 supposed to lead to conditional approval with
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February 27, 2001
1 the opportunity to refine certain areas once
2 the applicant is able to make more concrete
3 negotiations towards opening the school.
4 Just as the Duval County School Board --
5 just as the Duval County School Board and
6 individual schools must make adjustments based
7 on budgets and student enrollments, charter
8 school applicants should also be given that
9 same consideration.
10 You cannot expect to have the answer to
11 every single question before you know all of
12 the factors.
13 Even though the staff members who provided
14 the help sessions were very helpful, and -- and
15 informative, the process, in my mind, breaks
16 down after that.
17 There is no one to represent the applicant
18 at the School Board meeting, any applicant is
19 given no opportunity to represent himself.
20 I do not consider this to be due process.
21 As an example, the two major issues that
22 the District had with our application concern
23 budget and governance.
24 The issue of budget focused mainly on a
25 mistake we made in the application of capital
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1 outlay funds. We were made aware that we were
2 eligible for this funding source during our
3 budget help session.
4 We were excited that we had added these
5 funds to our revenue side, and mistakenly
6 applied a portion to pay for operating
7 expenses, resulting in the deficits that the
8 Duval County School Board refer to in their
9 denial of our application.
10 Had we been given the opportunity to
11 address this with the District, we could have
12 presented a revision that, by reducing the
13 starting salaries by 3 percent, and adding in
14 the surplus that was identified by the
15 School District, the -- the budget actually
16 creates a surplus of $6,000 in the first year.
17 By reducing the percentage of raises in the
18 second and third year from 10 percent, as we
19 wanted to, to approximately 5 percent, we
20 can -- and an annual reduction of the expenses
21 with some -- some of the computers that we
22 wanted to buy, for example, we can further
23 reduce deficits that second year to a total of
24 $3,000, and approximately $19,000 in the
25 third year.
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1 With regard to governance, there appear to
2 be two issues: First, the perception that my
3 wife and I are in -- in this alone.
4 As I alluded to earlier, my experience in
5 Jacksonville has brought me in contact with
6 financial, business, educational, cultural, and
7 social -- social service leaders, in addition
8 to parents and community leaders who are ready
9 and willing to support and work with us to
10 bring the vision to a reality. We have
11 resources.
12 The second issue has to do with my
13 experience at Horizon Limited Academy, a
14 charter school I helped to co-found, and served
15 as the opening principal.
16 I was relieved of my position there in a
17 conflict of personalities, not due to any
18 financial improprieties.
19 As I have indicated when I gave
20 documentation to the Cabinet Aides last week, I
21 was authorized to purchase items as per the
22 June 10th Board meeting minutes, new salaries
23 for teachers were approved at the
24 September 30th Board meeting.
25 I was asked to cease using my credit card
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1 to buy things, even though I had been doing it
2 from the first day I was hired at the
3 November 4th meeting.
4 And I was offered a job back with the
5 school in July of last year.
6 Excuse me for a second.
7 Excuse me.
8 Because of these reasons, this
9 time-consuming appeal process could have been
10 avoided in my mind. Even though these actions
11 have delayed the -- the process, I assure you
12 that we have a strong plan, and we can make it
13 work, even with the time left, if given the
14 proper assistance and support.
15 My experiences in Jacksonville again have
16 provided me with a strong contingent of experts
17 in the fields that I mentioned earlier.
18 We can do what is necessary to get the
19 Archer Learning Academy open, and to make it
20 successful.
21 I have no delusions about doing all of this
22 on my own. Jacksonville children and parents
23 are looking for alternatives to help them
24 succeed.
25 I know that we can provide an exemplary
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1 alternative if --
2 (Attorney General Butterworth entered the
3 room.)
4 DR. MARBURY: -- given a fair chance to do
5 so.
6 Again, I thank you for the opportunity, and
7 I welcome any questions that you might have.
8 Thank you.
9 GOVERNOR BUSH: Thank you very much.
10 Perhaps we should hear from the
11 Duval County representative, and then we'll
12 open it up for questions. That make sense?
13 MR. PIERSON: Ernst Mueller is the attorney
14 representing Duval County School Board.
15 GOVERNOR BUSH: Welcome, Mr. Mueller.
16 MR. MUELLER: Yes. Thank you.
17 Nice to be here.
18 I appreciate the opportunity to speak.
19 First, let me discuss the process that was
20 used very briefly. It's outlined on the
21 time line that was attached to a -- a notice to
22 our --
23 (Commissioner Crist exited the room.)
24 MR. MUELLER: -- appeal response. And it
25 stretched from July 25th through October the --
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1 the 2nd.
2 Dr. Marbury did not join the process until
3 later on after mid-August.
4 And we think that that put him behind it
5 again which really resulted in -- in most of
6 his problems.
7 But the way the process was laid out, at
8 the initial meeting when the applicants showed
9 up, they were furnished a list of 17 members of
10 the staff of the School Board, along with their
11 area of expertise. And they were told they
12 should be -- feel free to contact anyone --
13 (Commissioner Crist entered the room.)
14 MR. MUELLER: -- of those at any point in
15 their initial drafts and their initial efforts
16 to contact -- to construct their applications.
17 Following that -- and there was available
18 to each of these applicants a review session in
19 each of the four major areas of the
20 application: Governance, finance, academics,
21 and -- and -- and the -- the -- the last area
22 also.
23 And the procedure was that -- that they
24 were asked to submit a draft of -- of their
25 application in these areas, schedule an
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1 appointment, and the staff would convene to
2 meet with them and review the process in
3 detail.
4 This is the process that was utilized by
5 each of the applicants, and also by
6 Dr. Marbury, although as we indicated in our
7 response, Dr. Marbury was -- was late in making
8 the appointments for review; late in submitting
9 the materials to re-- to be reviewed; and
10 basically just -- just behind the whole
11 process, sort of consistent with his late
12 start.
13 I want to mention, this was not an
14 adversary process. This was a process that was
15 designed to help provide what assistance was
16 needed, and -- and then once there had been a
17 review, corrections had been shown,
18 demonstrated, a final product was submitted,
19 and that was evaluated by the District.
20 And in this process, Dr. Marbury and Archer
21 were given every leeway that could have
22 conceivably existed. As schedules change on
23 short -- changed on short notice by -- by the
24 staff to accommodate his -- his getting his
25 work done and in.
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1 The resulting product was evaluated by the
2 staff. There's a staff report which is
3 attached to our appeal, our response. And --
4 which lays out the -- the main areas in which
5 the application was defective.
6 I'd just like to touch on a couple of the
7 highlights. First the -- let me address the
8 academic design area.
9 In the area of instructional methods, the
10 application reflected a lack of understanding
11 of basic educational techniques.
12 For example, if the -- indicated that
13 direct learning and -- and cooperative learning
14 were going to be used in -- in the school at
15 the same time. And even by teachers, perhaps
16 teachers at the same time -- same teacher at
17 the same time.
18 And being a little vague in that area --
19 and these are two techniques that are almost
20 directly in -- in conflict.
21 -- it indicated that the methodology would
22 be determined on the basis of the teacher --
23 teacher hiring. And this demonstrated that
24 there was not really a preconceived or a
25 predesigned plan, but rather that was based on
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1 student needs, or anything else, but was very,
2 very much ad hoc.
3 So it -- it left -- it left the impression
4 that -- that really there was a total absence
5 of certainty on the -- on what was going to be
6 happening at this school.
7 It certainly didn't tell the District.
8 In the area of testing, which -- which is
9 a -- a second area, I want to address simply
10 because the accountability and the ability to
11 measure what's happening has been so important
12 in this -- this whole setting up of these
13 schools, the application was -- was defective.
14 It listed a number of tests, for example.
15 It didn't indicate which would be used.
16 It didn't demonstrate how progress was
17 going to be measured, which tests were going to
18 be used for that.
19 And -- and thus left a -- a gaping hole in
20 that very important area.
21 In the budget area, the -- there was
22 this -- this -- there were a number of smaller
23 mistakes. But there were two -- two key errors
24 that -- that did not seem as if they could be
25 corrected simply by amending the application.
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1 The first was, of course, the one that
2 Dr. Marbury alluded to, which was in the area
3 of -- of -- of the -- taking the capital area
4 of the budget and applying it to -- to other
5 areas, which law prohibits, which resulted in
6 very significant deficits -- would have
7 resulted in significant deficits for each year.
8 The -- the second thing was a lack of
9 working capital. There was no demonstrated
10 ability to -- to secure a line of credit,
11 and -- and that was not a -- again, a major
12 issue to -- to demonstrate just basic capacity
13 to operate.
14 The budget, as it was, even allowing for
15 some of the items that -- that Dr. Marbury
16 addresses in the light most favorable to him,
17 would have resulted in deficits of about
18 102,000 the first year, 117,000 the second, and
19 a hundred and ninety-five the third, which --
20 which are all pretty significant in -- in light
21 of the overall budget.
22 And -- and finally, the District found
23 the -- the application lacking in the area
24 of -- of governance. Regrettably -- and I hate
25 to mention this -- Dr. Marbury was -- had been
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1 associated with one of our other operating
2 charter schools.
3 As he mentioned, he had been released by
4 that school. The release really related to
5 financial mismanagement to -- to construe it,
6 I think, appropriately, charitably.
7 And -- and -- and this is an area in which
8 the application was also weak. There was no --
9 and in the budget and finance area also, one of
10 the problems that was -- was discerned was an
11 absence of -- of internal controls or
12 methodology demonstrated to show internal
13 budgetary controls.
14 And the two combined with bad prior
15 experience with the same group of people,
16 and -- and, you know, Dr. Marbury was a
17 dominant person in this application. There
18 were four people on this Board, and -- his
19 spouse and -- and two others, was just in
20 combination with the -- the other failures I've
21 indicated, sort of too much to be immediately
22 correctable.
23 For those reasons, the application was --
24 was rejected. Dr. Marbury was invited to apply
25 again in the following year. That -- that
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1 invitation, of course, does stand open.
2 I have with me today two other members
3 of -- from the District, Ms. Vicki Reynolds,
4 who is on the -- a lawyer with the
5 School Board; and also Karen Chastain, who was
6 involved in the process.
7 We'd be happy to answer any questions that
8 you have.
9 GOVERNOR BUSH: Thank you --
10 MR. MUELLER: Thank you.
11 GOVERNOR BUSH: -- Counselor.
12 COMMISSIONER CRIST: Governor?
13 GOVERNOR BUSH: Yes.
14 COMMISSIONER CRIST: Thank you.
15 Mr. Mueller --
16 MR. MUELLER: Yes.
17 COMMISSIONER CRIST: -- I'm curious. How
18 many -- how long have you been with
19 Duval County --
20 MR. MUELLER: Me?
21 COMMISSIONER CRIST: Yes, sir.
22 MR. MUELLER: Well, I -- I am not employed
23 by Duval County. I work for the Office of
24 General Counsel for the City of Jacksonville.
25 Been there about five-and-a-half years.
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1 Was a Federal prosecutor for many years before
2 that. And recognize some of the FDLE people
3 you have here today.
4 COMMISSIONER CRIST: Would -- would you be
5 a person who would have knowledge as to how
6 many people have applied for charters in
7 Duval County, or would somebody else be
8 better --
9 MR. MUELLER: Well, I --
10 COMMISSIONER CRIST: -- answer that?
11 MR. MUELLER: -- have that knowledge.
12 But also these ladies do.
13 Yes, I have that knowledge.
14 COMMISSIONER CRIST: Okay.
15 How many have applied for charter schools
16 in Duval County, and how many have been
17 granted?
18 MR. MUELLER: Well, let me talk briefly
19 about --
20 COMMISSIONER CRIST: Totally.
21 MR. MUELLER: May I talk year-by-year?
22 COMMISSIONER CRIST: You may.
23 MR. MUELLER: Okay. This particular year,
24 we had five apply, and -- and -- and they were
25 all turned down.
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1 Now, those --
2 COMMISSIONER CRIST: All of them were
3 turned down.
4 MR. MUELLER: Yes.
5 COMMISSIONER CRIST: It wasn't seven?
6 MR. MUELLER: No. Only five applied.
7 Now -- now then --
8 COMMISSIONER CRIST: I was informed that
9 November 21st, 2000, which is in the past year,
10 seven applied; and seven were denied.
11 Is that inaccurate information?
12 MR. MUELLER: That -- that is not correct.
13 COMMISSIONER CRIST: That is not correct.
14 MR. MUELLER: Only -- only five
15 applications were turned in.
16 Of those five, two are continuing the
17 process and correcting them and intend to apply
18 next year.
19 Those are S.O.S., which wants to expand to
20 a high school; and L.E.A.D. Academy, which will
21 still continue to work.
22 We have eight charter schools on-line
23 presently. We have two scheduled to come
24 on-line this fall. One of them is the
25 Jax Learning Institute, which had an appeal
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1 last year; and -- and came back, made -- making
2 provisions, and -- and asked to be able to
3 defer until this year.
4 And also another school called Cornerstone,
5 which -- which was scheduled to open last year,
6 and asked to be deferred one year.
7 Now, going back beyond this particular
8 year, I'm going to have to get some help.
9 COMMISSIONER CRIST: Sure.
10 MR. MUELLER: We do not have statistics for
11 every year.
12 But I know last year, we had a number
13 apply. And we had --
14 COMMISSIONER CRIST: Twenty, ten?
15 MR. MUELLER: No, no.
16 COMMISSIONER CRIST: I'm just trying to get
17 a flavor of -- of what's going on there.
18 MR. MUELLER: Yeah.
19 Last -- last year, seven applied, and --
20 and two were approved, and -- and four
21 appealed.
22 And of the four that appealed, the Cabinet
23 recommended that two appeals be denied and two
24 be granted. And the two that were denied --
25 pardon me -- the two that were granted -- the
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1 two appeals that were granted, one was
2 Jax Learning Institute, which came back and --
3 and as I indicated, asked to have one more year
4 to get ready. They didn't have to reapply, one
5 more year to get ready, which they're doing.
6 They'll come on-line.
7 The other one was a school named
8 Love for Learning which -- and wrote us in
9 January -- in July 14th withdrawing their
10 application. And I heard -- I heard the -- at
11 the Aides meeting that -- that they were
12 operating a private school.
13 Indeed, I think the -- one of our
14 objections was that it -- it really was
15 controlled directly by a church hierarchy in --
16 in various respects, and just didn't meet
17 constitutional muster. So they went out and
18 became a -- a private school.
19 So those are the two years that I can
20 specifically tell you about.
21 Going back a little bit further, last year
22 was the first year there were any appeals,
23 except for the first year. The first year,
24 there was one school that appealed, which was
25 Rader Academy, Inc., it was called at the time.
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1 And when that appeal was granted, they came
2 back and -- and started to operate.
3 So --
4 COMMISSIONER CRIST: Do you know how many
5 applied totally that year that you just
6 referenced?
7 MR. MUELLER: In the first year with Rader?
8 Well, I know that there were a number of
9 applied -- a number applied, and a number were
10 granted. That's where the -- the eight come
11 from that we have.
12 COMMISSIONER CRIST: Yes, sir.
13 MR. MUELLER: So -- so basically every
14 year, we have had some schools come on-line.
15 COMMISSIONER CRIST: Unless I'm mistaken,
16 now, the past two years, the record's been 12
17 and 2, 12 applied, 2 granted, from what you've
18 told me; five and oh this year -- this past
19 year; and seven -- seven and two the year
20 before?
21 MR. MUELLER: That would be correct.
22 TREASURER GALLAGHER: That would be --
23 COMMISSIONER CRIST: Yeah, I know. I'm
24 just trying to get the recent trend.
25 MR. MUELLER: Well, you know, these things
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1 are evaluated individually on their merits.
2 You know, we have, for whatever the reason,
3 a number -- I mean, a lot of what -- what could
4 be described, for -- for lack of a better word,
5 is mom and pop type applications that may --
6 that -- that sort of lack the corporate
7 sophistication that some of these things need
8 to have.
9 But just in the accounting area in -- in
10 terms of the -- the basic fundamentals of
11 getting incorporated. And that's the area
12 where there have been problems.
13 GOVERNOR BUSH: Katherine?
14 SECRETARY HARRIS: I just have a question.
15 As -- I just wanted to clarify one issue.
16 I have two memorandums here from Ms. --
17 Ms. Karen Smiley, because you had expressed
18 that Dr. Marbury was -- had left his position
19 due to financial mismanagement. And both
20 memorandums are asking him to come back.
21 I just -- I wanted that in the record that
22 that's correct?
23 MR. MUELLER: Well, it's probably correct
24 that you have the two memorandums.
25 Now -- now the first memoranda says it's
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1 going to be taken up by the Board on the night
2 of July the 20th.
3 And then the second one says that the Board
4 decided to offer him a position.
5 However, we have the Board minutes from
6 that date, we've got copies here if you want
7 them. And -- and there was no decision to
8 offer him a position.
9 And Ms. Vicki Reynolds, who's here with us,
10 talked with -- with that -- that lady,
11 Ms. Smiley, as late as yesterday. And -- and
12 she confirmed that -- that a majority of
13 the Board did not want to offer him a job
14 again, and that her statement that -- that
15 the Board offered Dr. Marbury a job again is --
16 is simply incorrect.
17 Now, why she sent him an incorrect letter
18 was not clear, but -- but she acknowledged it
19 was incorrect.
20 SECRETARY HARRIS: Thank you.
21 MR. MUELLER: So --
22 SECRETARY HARRIS: Appreciate the
23 clarification.
24 GOVERNOR BUSH: Any other questions?
25 MR. MUELLER: I -- I did want to add: We
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1 didn't think that was the point. I mean, we're
2 not saying Dr. Marbury can't do anything, can't
3 be a good guy.
4 It -- it didn't really -- the fact that
5 they would have rehired him for a different
6 position did not go to the initial point, which
7 was the financial concern.
8 SECRETARY HARRIS: Thank you.
9 GOVERNOR BUSH: General?
10 COMPTROLLER MILLIGAN: Just a quick
11 question on the deficit aspect of their budget.
12 Right here.
13 MR. MUELLER: Thank you.
14 COMPTROLLER MILLIGAN: You clearly indicate
15 that there's significant deficits first,
16 second, and third year.
17 MR. MUELLER: Yes.
18 COMPTROLLER MILLIGAN: And you have a hard
19 and fast rule that, if there is a deficit
20 situation, you will not approve that particular
21 charter?
22 MR. MUELLER: Absence of -- yes. Yes.
23 That is sort of a hard and fast rule --
24 COMPTROLLER MILLIGAN: And there's been
25 no --
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1 MR. MUELLER: -- if it's a significant
2 deficit.
3 COMPTROLLER MILLIGAN: -- demonstration on
4 the part of Dr. Marbury to indicate that they
5 can, in fact, operate in the black, or very
6 close to the black?
7 MR. MUELLER: Not that we have seen yet.
8 COMPTROLLER MILLIGAN: Not that you have
9 seen yet.
10 Okay. Thank you.
11 GOVERNOR BUSH: Dr. Marbury, can you come
12 up? Maybe we can -- you've been nodding your
13 head in the negative here the whole while --
14 last 15 minutes.
15 Perhaps you could talk to us about the
16 financial side of this --
17 DR. MARBURY: Thank you.
18 GOVERNOR BUSH: -- if you could. I think
19 that might be a -- a place to start, if -- if
20 you have projected deficits in the school --
21 DR. MARBURY: Yeah.
22 GOVERNOR BUSH: -- that's a bad thing.
23 I mean --
24 DR. MARBURY: Without a doubt.
25 GOVERNOR BUSH: -- can't open a -- can't
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1 continue a school for the whole year. Can't --
2 it doesn't make sense to -- to start.
3 DR. MARBURY: As we -- as we noted in
4 our -- in our -- in our appeal, many of the
5 items cited as deficit in our application in
6 their report were items that were added to our
7 budget by them.
8 For example, teacher aides for ESE classes,
9 or assessment -- additional assessment tools.
10 Now, I went with Psychological Corporation
11 out of San Antonio, Texas, to get my quotes on
12 how much it would cost me to do assessments
13 using C-SED (phonetic), SAT, and the
14 Metropolitan 8, for example. Those are the
15 tests that we cited that we were going to be
16 using for accountability.
17 I got prices for -- from them in terms of
18 purchasing tests, scoring, and reports. That's
19 the figure I included in my -- in my budget.
20 They're coming back and telling me after
21 the fact that I need $10,000 more.
22 GOVERNOR BUSH: Did they give you a -- if
23 you -- if there was assumption of ESE kids, was
24 there also assumption that the revenue -- that
25 you would receive --
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1 There was.
2 DR. MARBURY: Right.
3 But during our meetings with the academic
4 design folks, and ESE folks, there was no
5 mention of the need for ESE teacher aides.
6 My whole contention with most of what we're
7 talking about today is that, when we turned
8 that application in on October the 2nd, 2000,
9 we had no opportunity from that point on to
10 address any concerns.
11 Many of these concerns we have since
12 addressed, and can modify and make the --
13 the -- the necessary corrections. We're not
14 asking for you to say, get -- write him a
15 contract today.
16 We're asking you to allow us to -- to
17 continue to make the necessary changes so that
18 when we have to submit our final budget in
19 July, it's a solid budget that'll -- will allow
20 us to proceed in contract negotiations.
21 We have made modifications. For example,
22 in our start-up budget, they cited that we
23 needed another $27,000. Well, 10,000 -- we
24 saved $10,000, simply because we haven't been
25 able to open on our facility rentals.
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1 We've saved 2,000 -- excuse me -- another
2 thirteen -- $3400 on salaries because we had
3 anticipated starting our -- our school -- our
4 start-up stuff in February.
5 We won't be able to start obviously until
6 April. So we -- we've identified cost savings
7 that would allow us to take care of these
8 deficits as they speak of.
9 In the annual budgets, as we speak, again,
10 $15,000 for teacher aides, $10,000 for
11 assessments, $40,000 for bus transportation.
12 We -- we got a quote from a local bus
13 company that's giving -- there's a number that
14 we use in our budget. They're saying that we
15 need $40,000 more.
16 So you add these numbers up, and it sounds
17 like, yeah, we've got a tremendous deficit
18 going on in our budget.
19 You eliminate those numbers, the first year
20 budget's about $38,000. We've been -- we're
21 able to address that by reducing our starting
22 salaries by about 3 percent, and create a
23 surplus.
24 The second and third year, we realize
25 that --
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1 GOVERNOR BUSH: What are the starting
2 salaries?
3 DR. MARBURY: We -- we were originally
4 going to start our teachers at $32,000. We're
5 going to reduce that to about thirty-one.
6 GOVERNOR BUSH: What's the beginning pay
7 for Duval County schools?
8 DR. MARBURY: I believe it's around
9 twenty-seven?
10 Twenty-four.
11 And the reason that we're so much higher is
12 that we realize that it's difficult to attract
13 teachers into charter school environments, and
14 we want to get the best of the best.
15 So we -- we provided an environment that
16 would make it good for teachers, smaller class
17 sizes, good pay. Focusing on teachers and not
18 in administration.
19 GOVERNOR BUSH: What's the average pay for
20 Duval County's teachers?
21 MR. MUELLER: I'm out of my league.
22 GOVERNOR BUSH: I am, too. I -- it's not a
23 trick question, I promise.
24 Now, we're getting a little harder.
25 But it's probably about that, isn't it,
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1 about thirty-one?
2 DR. MARBURY: Okay.
3 GOVERNOR BUSH: Maybe a little bit higher.
4 DR. MARBURY: But, again, we have a plan on
5 how to reduce these deficits. We've just never
6 been given an opportunity to address them --
7 GOVERNOR BUSH: Have you raised any money?
8 DR. MARBURY: I'm sorry?
9 GOVERNOR BUSH: Have you raised any money?
10 Have you gotten --
11 DR. MARBURY: It's -- there -- quite
12 frankly, it's quite difficult for us to do
13 anything without the conditional approval.
14 That's the bottom line.
15 I've got folks who are saying to me, get
16 the conditional -- for example, my facility.
17 I've got a facility that I may lose if I don't
18 get this conditional approval so that we can
19 tie it up.
20 GOVERNOR BUSH: Right.
21 DR. MARBURY: And I'm -- I'm in a Catch 22.
22 I need conditional approval to move on, but I
23 need to have things happen to get conditional
24 approval, according to the District.
25 So -- but it's -- my whole point is that
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1 it's a workable situation, and I believe that
2 we can work these issues out, given the
3 opportunity.
4 GOVERNOR BUSH: Can you address the
5 question of a -- what appeared to be a -- a
6 mixed teaching instructional --
7 DR. MARBURY: I --
8 GOVERNOR BUSH: -- strategy?
9 DR. MARBURY: Yes, sir.
10 I think what the District wants us to do is
11 adopt a methodology, and go direct instruction,
12 go whatever.
13 What we're saying is, children differ,
14 grade level to grade level, classroom to
15 classroom. If a teacher is -- is -- is able to
16 use direct instruction when teaching art,
17 great.
18 If they're going to use cooperative
19 learning when they're teaching music, or
20 something else, fine. We're allowing our
21 teachers to use whatever methodology best suits
22 the curricu-- getting the curriculum across
23 our -- our students.
24 We're not saying that in the same
25 classroom, you're going to use direct
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1 instruction, and cooperative learning. We
2 realize that those are -- those are conflicts
3 in terms of the way they're applied.
4 We're simply saying that we -- at this
5 point, we're not limiting our teachers to any
6 particular methodology. We're trying to
7 provide the most flexibility for our teachers
8 to get the job done.
9 GOVERNOR BUSH: I've got a problem with
10 that, just -- just -- I mean, charter schools
11 should be laboratories of innovation.
12 And there are many different techniques to
13 teach kids, and your -- your focus is an
14 admiral one on at-risk children, and there
15 should be a strategy in place that makes --
16 makes it different than a traditional public
17 school, or -- or it really misses the point and
18 the intent of -- of the charter school
19 movement.
20 So I would -- irrespective of how I vote, I
21 would urge you to --
22 DR. MARBURY: Revisit.
23 GOVERNOR BUSH: -- well, just focus --
24 I mean, if -- if -- there ought to be a
25 strategy underlying what you're trying to do,
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1 and there should be meaning -- I don't know --
2 if we never get to these charter -- we never
3 get to the performance part of this, which is,
4 give us the freedom, and here's what we'll do
5 for these kids that haven't -- that hasn't been
6 done before. Things like a year's worth of
7 knowledge acquired in a year's time.
8 I mean, that would be a worthy objective
9 for kids that traditionally don't get it.
10 DR. MARBURY: Right.
11 GOVERNOR BUSH: And that -- to do that, you
12 have to have a focused, disciplined intense
13 strategy to make it work.
14 And so to say that you're going to do one
15 thing for one child, one thing for another, I
16 don't know. I don't -- that's a little
17 troubling.
18 DR. MARBURY: And -- and let me -- let me
19 add -- address one other issue with that.
20 Had that come up during our help session,
21 we could have addressed that in our
22 application. It did not. It came up in the
23 denial. And we had no opportunity since then
24 to address it.
25 GOVERNOR BUSH: Anybody else have any
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1 questions?
2 Can I ask, just as a -- a technical
3 question here about if we are to remand this
4 back for further discussion, what is your
5 time frame as -- from the District's point of
6 view?
7 MR. MUELLER: Well -- well, the -- we -- it
8 goes to the Board within 30 days, and they make
9 a decision --
10 GOVERNOR BUSH: It would be in Mar-- late
11 March -- we're getting near the --
12 TREASURER GALLAGHER: Near the end.
13 GOVERNOR BUSH: -- we're getting near the
14 end.
15 I mean, I -- can you recruit 200-plus kids
16 and get your building and have your --
17 DR. MARBURY: We believe --
18 GOVERNOR BUSH: -- seats and have your --
19 DR. MARBURY: -- it's -- it's going to be
20 challenging. But we believe we can do it.
21 We -- when I opened the Horizons, we didn't
22 get approved from the School Board until the
23 26th of March. And at the time, we didn't have
24 a building. We opened up on August 17th of
25 that year.
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1 So I'm -- I'm familiar with the process.
2 We have not stopped working towards getting the
3 school open. We've just been limited as to
4 what we can do to finalize some things.
5 So, yeah. Given 30 days or however long
6 it's going to take, I would -- I would hope
7 that they wouldn't take the full 30 days to --
8 to -- to -- to move forward on this.
9 But giving whatever amount of time they
10 need, yes, I believe -- strongly in my belief
11 that the resources we have would allow us to --
12 GOVERNOR BUSH: You -- you understand the
13 process is that if we remand this back, that
14 does not mean that they have to approve it.
15 DR. MARBURY: I am fully aware of that.
16 And I'm simply asking for an opportunity to
17 continue.
18 GOVERNOR BUSH: All right, sir.
19 Any other discussion?
20 We have an item in front of us to remand to
21 the Duval County School District for approval,
22 the Archer Learning Center -- Archer Learning
23 Academy's appeal.
24 Is there -- is there a motion?
25 COMMISSIONER CRIST: Move.
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1 ATTORNEY GENERAL BUTTERWORTH: Second.
2 GOVERNOR BUSH: Moved and seconded.
3 All in favor, say aye.
4 THE CABINET: Aye.
5 GOVERNOR BUSH: All opposed?
6 Thank you very much.
7 Good luck.
8 Appreciate y'all coming.
9 Thank you, Duval County, for coming.
10 MR. MUELLER: Thank you.
11 GOVERNOR BUSH: Thank you.
12 MR. PIERSON: Item 4, another charter
13 school appeal, MESTA Charter School, versus the
14 School Board of Orange County.
15 For MESTA Charter School --
16 (Attorney General Butterworth exited the
17 room.)
18 MR. PIERSON: -- we have Dr. Linton Morris.
19 GOVERNOR BUSH: Who's this Mike Olenick guy
20 here?
21 TREASURER GALLAGHER: Has -- he's arisen,
22 has he?
23 GOVERNOR BUSH: Yeah, he has.
24 TREASURER GALLAGHER: He's private sector.
25 Private sector.
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1 GOVERNOR BUSH: Welcome, sir.
2 DR. MORRIS: Thank you.
3 Should I begin?
4 GOVERNOR BUSH: Yes, please.
5 DR. MORRIS: Good morning, Governor Bush,
6 Honorable Members of the Cabinet.
7 My name is Linton Morris, and I am here to
8 represent MESTA Charter School.
9 MESTA -- the name MESTA, M-E-S-T-A, stands
10 for math, English, science, and technology
11 achievement.
12 MESTA submitted an application for the
13 operation of a charter school for the school
14 year 2001-2002 to the Orange County Public
15 School District in -- on October 1st of 2000.
16 At that time, when we submitted our
17 application, we believed that our application
18 was consistent with the Florida Statute
19 228.056. We still believe that today.
20 Our purpose for operating this school
21 coincide with the Florida Statute and purpose
22 in terms of its mission, academic design,
23 educational program, student assessment, school
24 governance and management, school operation,
25 admission, registration, and finances.
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1 Our plan is to start out with a very small
2 number of students, 152, and expand about
3 50 students each year for -- for five years.
4 (Treasurer Gallagher exited the room.)
5 DR. MORRIS: We would start -- we propose
6 to start at the middle school level, grades 6
7 through 8 at first because, according to
8 research literature on why we need middle --
9 (Attorney General Butterworth entered the
10 room.)
11 DR. MORRIS: -- school reform, writers and
12 researchers stated that many students make it
13 or break it in the middle grades, and because
14 they acquire the academic knowledge and skill
15 they need to achieve in high school and life.
16 Or they fall so far behind and drop out, or
17 drift through high school with little hope of
18 successful future.
19 The results of the third international
20 mathematics and science study tells us that
21 while fourth graders in the U.S. rank among the
22 top five nations in math and science skills, by
23 the end of the eighth grade, the performance of
24 American middle school ran below many
25 third world countries.
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1 This achievement depth is most acute among
2 the nation's poorest students who attend rural
3 and inner city schools.
4 Due to the -- this research is why MESTA
5 believe that we can help to rescue some of
6 these students whose academic performance rank
7 below many third world countries.
8 We will place students in smaller groups
9 while they would be given individual attention.
10 These students will be provided with
11 meaningful individualized challenging content,
12 rich learning activities. These activities
13 will be conducted in a safe, nurturing
14 environment.
15 Students will be taught by well-trained
16 professional and credentialed staff.
17 GOVERNOR BUSH: Sir, can you -- I'm sorry
18 to -- to butt in here.
19 But could you give us a sense of where
20 the -- where you think that you were -- in the
21 process, it didn't work the way you thought it
22 should, and where -- what the -- the criticisms
23 of your application were so that we can get a
24 better sense of where the possible conflicts
25 might be?
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1 DR. MORRIS: Yes.
2 We do not agree with the denial that was
3 granted by the Orange County Public School.
4 MESTA Board believed that Orange County
5 Public School made some errors in their
6 decisions, and, indeed, in the interpretation
7 of the Florida Statute 228.056 in denying
8 MESTA's application, because, one, the specific
9 reason given for denial in their proposed -- in
10 their response were not based on elements of
11 the statute purpose set forth in the statute
12 28-- I'm sorry -- 228.056.
13 The second one is that the -- the Florida
14 Statute 228.056, Section (9)(a), which provides
15 the criteria for approval of charter school,
16 was not used, in our belief, but was
17 disregarded as a standard for approval.
18 The denial letter from the superintendent
19 we got -- which are copies in your packet -- we
20 believe it was in conflict with the reason
21 given by the School Board on December 4th.
22 So here the -- the superintendent is
23 sending us a letter of denial which was in
24 conflict with what we believe the School Board
25 was saying. So we were really confused on that
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1 issue.
2 The -- the fourth one is that the
3 Orange County Public School Board and
4 MESTA School -- Charter School, on
5 November 21st, I went there, and they agreed
6 for an abatement until January 9th of 2001.
7 However, in their Board meeting on
8 December 4th, they went ahead and denied
9 MESTA Charter School, not giving us an
10 opportunity to be at the meeting, or even to
11 contact us.
12 And the fifth reason we believe they're in
13 error, MESTA believed that Orange County Public
14 School used a different standard in evaluating
15 the applications based upon the community that
16 sub-- submitted it.
17 GOVERNOR BUSH: What -- what do you mean by
18 that?
19 What do you mean by that? Could you be
20 more specific?
21 DR. MORRIS: Some communities were given an
22 opportunity to meet and discuss the proposal
23 and their application, while we were not given
24 the same opportunity.
25 GOVERNOR BUSH: Are we to -- what -- what's
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1 "community" mean?
2 Help me out. Don't -- don't be vague. If
3 you're -- you have a concern, express it.
4 That's why we have these meetings.
5 DR. MORRIS: Well, we just believe that
6 when you look at the record for -- there
7 were -- there were eleven charter school
8 proposals submitted --
9 GOVERNOR BUSH: Yes, sir.
10 DR. MORRIS: -- to the Orange County School
11 District in -- in the last --
12 (Treasurer Gallagher entered the room.)
13 DR. MORRIS: -- application process, and
14 some of the -- some of these schools were
15 denied originally, but then they were given a
16 chance to go back and modify and submit their
17 proposal. And we believe it was because of the
18 type of community.
19 GOVERNOR BUSH: All right. You're not
20 going to say it.
21 Go ahead. Keep going.
22 DR. MORRIS: And the final one is by
23 denying MESTA's application, we believe that
24 the educational choice for the ages -- or the
25 grades 6 through 8 was in -- was in -- was --
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1 was in violation of the -- of the spirit of the
2 statute.
3 Yeah. I mean by that is there is a gap --
4 there's a whole lot of approval for maybe
5 grades 1 through 5. And if you had a child who
6 wanted to be in charter school in the
7 Orange County School District in grades 6
8 through 8, there's not as much choice there
9 available for them.
10 So they were denied the process to
11 continue. So they would have to go back into
12 the public school, and then -- but here we're
13 providing an alternative for them.
14 GOVERNOR BUSH: Thank you very much.
15 We'll hear now from the Orange County
16 School representatives.
17 MR. OLENICK: Good morning, Governor.
18 My name is Michael Olenick. I'm with
19 the --
20 TREASURER GALLAGHER: Yeah --
21 MR. OLENICK: -- Carlton, Fields law firm.
22 GOVERNOR BUSH: Oh, yeah. I remember him.
23 MR. OLENICK: I'll be quick. I hear the
24 music. I'm hungry, I want a Cuban sandwich.
25 So I will be as quick as I can responding to
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1 the -- the points raised by the applicant.
2 Let me just indicate that Orange County
3 has -- scrutinizes their -- their applications
4 they have from the beginning.
5 Commissioner Crist asked the question of the
6 last applicant, and I quickly jotted down an
7 answer, anticipating his question.
8 In year one -- this is the third year -- in
9 year one, Orange County approved four, with one
10 denial. Interesting enough, that denial came
11 back the next year, and reapplied and got
12 approved.
13 In year two, there were two approvals and
14 no denials.
15 And this year, of the eleven, five were
16 approved, five were abated, and they're in --
17 they're in discussion now. The only denial is
18 the one before you.
19 Briefly, the time line, because I think
20 this is -- this is -- this is the -- the crux
21 of -- of his argument, part of the crux.
22 Our time line requires that the
23 applications are submitted by October 1. In
24 that application when they pick up an
25 application, it has time lines, and also has
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1 contact lists.
2 And that is important so that the applicant
3 knows that they can contact staff within the
4 Orange County School Board.
5 On October 17th, there was an interview
6 process. They have a rating system. This
7 applicant received a 2.5 in the application
8 interview, with a 2.7 out of the 5.
9 That interview list -- or the interviews
10 are made up of teachers, administrators, and
11 budget analysts.
12 October 31st, there was a work session with
13 the Board, the applicant was present, and
14 listened to the Board comments.
15 On November 3rd, they had a summary review
16 with Dr. Gledich, who's here, the Associate
17 Superintendent, with the applicant. They
18 generated -- the applicant was given a list of
19 42 concerns with strengths and weaknesses and
20 questions to respond to.
21 On November 6th, the -- the applicant
22 submitted a list of 22 clarification items, and
23 he was called to pick up a resolution that was
24 going to the Board. He did not pick it up.
25 On November 21st, there was a Board
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1 meeting. That was the Board meeting where he
2 came up and asked for an abatement. His
3 abatement was not time certain. And I gave the
4 tape to all of the Cabinet Aides, showing there
5 was no specific request for time certain.
6 On December 4th, there was a Board meeting.
7 The applicant was called twice, there is a
8 notice -- or there's notification in the file
9 or -- or memos to the file, they left voice
10 mail messages.
11 And all I can tell you, Governor, and
12 members of the State Board, is that, of all of
13 the series, they've always done this by phone.
14 Admittedly, I told the applicant -- or
15 the -- or the -- the School Board, from now on,
16 start doing it in writing.
17 But the interesting note is, of all of the
18 applicants, going back from year one under the
19 same process, no one has failed to show, ever,
20 except this applicant.
21 He did not show December 4th, it was
22 denied.
23 The reasons for denial are consistent with
24 the State law. And they're very quickly: Lack
25 of community support, problems with a budget,
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1 accountability was not -- did not appear to be
2 present, and there was overall negative rating
3 with admission, the accountability community
4 support facilities and finance.
5 In -- in about 8 minutes, I'm just going to
6 give you a sense of what they dealt with with
7 the October 1st application and the
8 November 6th clarification.
9 The original application required --
10 actually asked for waivers of
11 corporal punishment, substance abuse, fiscal
12 management, and background checks.
13 Obviously that was problematic. That --
14 GOVERNOR BUSH: Substance abuse, what do
15 you mean, waiver meaning --
16 MR. OLENICK: Meaning waive -- meaning
17 grant a waiver of the law for substance abuse
18 and background checks.
19 Obviously --
20 TREASURER GALLAGHER: For teachers?
21 MR. OLENICK: -- it would not --
22 Yes.
23 The point I'm making, Governor -- and this
24 is one example -- it was not well thought-out.
25 They came back on the -- November 6th, and
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1 they asked for a waiver of everything that
2 Orange County School Board would allow that was
3 not violative of law.
4 But the first request was exactly as I told
5 you.
6 On October 1st, they required -- they being
7 the applicant -- required $102,000 loan from
8 the Orange County School Board. That was never
9 discussed with Orange County School Board.
10 When they submitted the second
11 clarification, that was removed. How they got
12 rid of the $102,000 was, they had a
13 5,000 square foot rental space, and they just
14 started cutting utilities.
15 So if you look at the budget from October 1
16 to November 6, the -- your electric and water
17 is cut in half, and that's how they -- they
18 developed their -- their budget.
19 Legal fees went from $4600 in year one, to
20 $16,000 in year three.
21 The location was unknown; and then suddenly
22 in the second application, they had a temporary
23 spot.
24 The demonstration of funding, which is
25 required, in -- in October 1st, there was
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1 nothing; November 6th, they said that was in
2 discussion, with no specifics.
3 The high school program. They had no
4 graduation requirements. They had tuition for
5 non-residents, and then they withdrew it.
6 They limited the ESE children to eight, and
7 then they -- then they made it an open
8 enrollment.
9 The rationale for waivers, as I indicated,
10 was that they wanted the Orange County School
11 Board to grant all waivers per law.
12 Their accountability, Orange County
13 requires a 1.1 year of growth in a year. This
14 applicant, there was no -- no increased
15 learning outcomes whatsoever.
16 GOVERNOR BUSH: Does Orange County require
17 that in their traditional public schools, I
18 hope?
19 How are you doing?
20 DR. GLEDICH: We're fine.
21 We're doing our best.
22 MR. OLENICK: They're -- they're trying,
23 Governor.
24 GOVERNOR BUSH: If you do that, let me
25 know, okay, because we'll hold you up high for
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1 everybody to see.
2 MR. OLENICK: They have had success though
3 in their charter schools, and they can,
4 I think, proudly indicate that other charter
5 schools, there are some of the original
6 approvals that are meeting that criteria
7 quickly.
8 And the curriculum was not unique. It
9 merely adopted the Orange County School Board
10 curriculum. The teacher termination, in -- in
11 the same application, they said teachers will
12 be at will.
13 In the same application, they talked about
14 one-year annual contracts.
15 Community support. They had letters and
16 forms. But there's no specific documentation
17 of community support.
18 They need 150 to 155 students to make this
19 budget work. And without the specifics of
20 community support, and knowing that these
21 children would be there, it was an
22 impossibility.
23 Governor, in -- in closing --
24 Oh, the other thing was that in their
25 January 3rd letter, they indicated they would
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1 raise money by a benefit concert, and they were
2 in discussion with various companies to try to
3 raise money, but there's nothing specific.
4 We would request, Governor, that like the
5 first year where the applicant was denied, they
6 came back the second year, and they got -- they
7 got it together, they worked with the staff.
8 We -- we, being the Orange County School
9 Board, sees great merit in what they're trying
10 to do, the applicant. We have no problems with
11 the -- with the concepts. They need more time.
12 And I would ask, respectfully, Governor,
13 that the State Board agree with the
14 School Board and let the applicant work with
15 the School Board so next year they can come
16 back with a new application.
17 Thank you. And we're here for questions.
18 GOVERNOR BUSH: Commissioner?
19 COMMISSIONER CRIST: I had a question for
20 the applicant, if I could.
21 He just described the request, I presume,
22 by you for a waiver in the area of substance
23 abuse?
24 Could you elaborate on that for us?
25 DR. MORRIS: Yes. It's all in your
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1 packets.
2 COMMISSIONER CRIST: Could you elaborate on
3 that --
4 DR. MORRIS: Yes.
5 COMMISSIONER CRIST: -- for us?
6 DR. MORRIS: I will.
7 COMMISSIONER CRIST: If you don't want to,
8 that's fine.
9 DR. MORRIS: Yeah, I will.
10 COMMISSIONER CRIST: I'll reach a
11 conclusion.
12 DR. MORRIS: I'm a little bit disappointed
13 with what he -- what he just said, because it's
14 very far from the truth.
15 COMMISSIONER CRIST: Please tell us the
16 truth.
17 DR. MORRIS: The -- the application that
18 was submitted was taken, in part, from charter
19 schools that were already approved in the
20 state -- or -- or county, and several from
21 Orange County School District.
22 And what we put in -- in the lists of
23 waivers was not for teachers, it was for staff.
24 And we said, what we're asking the
25 Orange County School District to do is to look
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1 at those lists of waivers, and tell us which
2 one we could use or not.
3 But it was not a conclusive list. It's
4 just a list of just about every waiver that we
5 could ask for.
6 And our intention was to sit and discuss
7 with the School District how we should approach
8 this.
9 But that -- that request was a typo. And
10 we already discussed it with the School Board,
11 that it was a typo. It wasn't supposed to be
12 there.
13 COMMISSIONER CRIST: So you -- I guess what
14 you're telling us is you really don't want a
15 waiver for any substance abuse --
16 DR. MORRIS: Oh --
17 COMMISSIONER CRIST: -- or --
18 DR. MORRIS: -- definitely not.
19 COMMISSIONER CRIST: -- or any --
20 DR. MORRIS: No. Because the -- no.
21 Because MESTA Charter School is the brainchild
22 of four faith-based organization. And it could
23 never happen.
24 GOVERNOR BUSH: Have you raised money?
25 DR. MORRIS: We've raised some. We
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1 currently have some of the software for grade 6
2 sitting down waiting, because the application
3 was not approved.
4 GOVERNOR BUSH: How much money do you have
5 in the bank to -- to provide --
6 DR. MORRIS: We don't have cash in the
7 bank, but we do have support from various
8 companies, and -- State Farm, for example, is
9 the one that provided us software that we
10 needed, which we have stated that we are -- we
11 have accepted like kind to reduce our budget.
12 And we have started, and we expect to get
13 computer services from networking company. And
14 the churches is helping us, and that's why our
15 budget was reduced, because they have decided
16 to support us in some of the areas of --
17 instead of charging us a full amount of rent
18 and utility, they defray part of the costs so
19 that they can help this charter school to get
20 started on -- on its right footing without a
21 heavy budget.
22 COMMISSIONER CRIST: One other area.
23 Mr. Olenick, if you could come back to the
24 mic, I'd appreciate it.
25 Mr. Morris has represented that there's
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1 been a discussion of some kind that there was
2 an understanding that the request for a waiver
3 as it relates to substance abuse was discussed,
4 and it was a typo.
5 Were you aware of that?
6 MR. OLENICK: There is a note here.
7 What -- what they did subsequently,
8 Commissioner, as I indicated, was, it just had
9 a blank, and they said, well, we won't waive
10 anything --
11 COMMISSIONER CRIST: My only question,
12 Mike --
13 MR. OLENICK: Yes, sir.
14 COMMISSIONER CRIST: -- is pretty
15 straightforward.
16 MR. OLENICK: Yes.
17 COMMISSIONER CRIST: He indicated that it
18 was a typo, and that that was discussed, and
19 you represented to us that they asked for a
20 waiver for substance abuse. And those are
21 miles apart.
22 MR. OLENICK: No, sir.
23 COMMISSIONER CRIST: I'm just trying to --
24 MR. OLENICK: The waiver -- I think what
25 they did was they may have made some
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1 mistakes --
2 And Dr. Gledich, if you want to discuss
3 this.
4 The applicant -- there was a number of
5 things, including budget. There's a list of
6 things, which they specifically said they
7 wanted waived.
8 After the meeting, I think then they
9 realized, they didn't want them -- or didn't
10 want the --
11 DR. GLEDICH: At the time of the meeting,
12 we requested there's four to -- about four or
13 five pages worth of waivers.
14 At the time of the meeting, the only thing
15 the District requested was a rationale for the
16 waivers, because they did state they were
17 seeking. They could not provide us a rationale
18 for the waivers.
19 Came back and took the waivers out, and
20 pretty much said that the District would
21 decide.
22 The question is, we needed a rationale.
23 There was a lack of attention, lack of detail
24 there. We needed some time for them to work
25 with us and to plan.
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1 That's what we were asking for.
2 GOVERNOR BUSH: Any other questions?
3 There is a motion in front of us to -- I
4 assume to remand this back to the --
5 Is it -- what is the --
6 SECRETARY HARRIS: It's a denial.
7 GOVERNOR BUSH: -- is it a motion to deny,
8 or --
9 TREASURER GALLAGHER: Who's -- who made a
10 motion?
11 COMPTROLLER MILLIGAN: There is no --
12 GOVERNOR BUSH: No recommendation?
13 Well, does anybody want to make a motion
14 one way or the other?
15 COMPTROLLER MILLIGAN: I'll make a motion,
16 sir.
17 I recommend that we support the
18 School Board, and deny the appeal.
19 Thank you.
20 ATTORNEY GENERAL BUTTERWORTH: Second.
21 GOVERNOR BUSH: There's a second.
22 Any discussion?
23 All in favor, say to -- to -- to deny the
24 appeal of the applicant, say aye.
25 THE CABINET: Aye.
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1 GOVERNOR BUSH: All opposed?
2 Very good.
3 Sir, I would urge you to get back with the
4 School District for next -- continue to work on
5 this, if -- if you'd like.
6 You've -- you've heard an expression of a
7 willingness to do so, and I would take full
8 advantage of it.
9 MR. OLENICK: Thank you.
10 GOVERNOR BUSH: Thank you very much.
11 (The State Board of Education Agenda was
12 concluded.)
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1 GOVERNOR BUSH: Board of Trustees.
2 MR. GREEN: Item 1 is minutes of the --
3 TREASURER GALLAGHER: Motion on the
4 minutes.
5 MR. GREEN: Governor, we have a speaker on
6 this item.
7 GOVERNOR BUSH: On the minutes?
8 MR. GREEN: On the minutes. Yes, sir.
9 GOVERNOR BUSH: That's a first.
10 MR. GREEN: It is. It is a first.
11 On Item 9 of the 23rd agenda, we had an
12 agenda item that exchanged lands with the
13 Future Farmers of America with the Board. An
14 adjacent property owner, and an owner who
15 deeded -- who donated the lands to the State,
16 Dr. Broussard, in the name of his son,
17 Allen Davis (sic) Broussard, would like to
18 speak to that issue very briefly.
19 GOVERNOR BUSH: Very good.
20 MR. GREEN: Doctor.
21 GOVERNOR BUSH: I was wondering what
22 that -- y'all have been sitting so patiently
23 the whole time. And I --
24 Now we can see it. Okay.
25 You had my curiosity, believe me, with what
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1 was on the other side of that poster.
2 MRS. BROUSSARD: Good.
3 GOVERNOR BUSH: Welcome.
4 DR. BROUSSARD: Thank you.
5 Governor, members of the Cabinet, I very
6 much appreciate the opportunity to speak before
7 you today.
8 My name is William Broussard. I'm
9 accompanied by my wife, Margaret, right behind
10 me.
11 DR. BROUSSARD: I'm first of all a
12 cattleman, with cattle interests in Florida,
13 Louisiana, and Texas. I was born into a -- the
14 tenth generation of -- of cattlemen in a
15 Louisiana family.
16 My father, wisely predicting the cattle
17 business would become more difficult in the
18 future, convinced me that I should go to
19 medical school to support the ranch.
20 I now practice ophthalmology in Melbourne.
21 Margaret and I had a son named Allen, that
22 was all for the love of --
23 (Commissioner Crist exited the room.)
24 DR. BROUSSARD: -- nature at our ranch in
25 Osceola County. He followed his love to pursue
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1 a Ph.D. in ecology and wildlife biology.
2 He had developed Hodgkin's disease at age
3 eighteen, and eventually died at age
4 twenty-nine of the complications of treatment.
5 When he died, we set up a memorial fund in
6 his name with The Nature Conservancy.
7 The idea was to carry it out -- carry out
8 the conservation project in his name.
9 We looked at several projects with TNC, and
10 settled on a crisis scrub project in
11 Polk County.
12 The essential core piece of 1100 acres
13 belonged to a cattleman who was frustrated in
14 dealing with the State, and had begun to clear
15 the land. TNC successfully begged him to stop,
16 and give them six weeks to find money to make
17 the deal.
18 Allen's memorial fund was used to finance
19 the purchase of ranch land elsewhere to make a
20 swap for what is now the Allen David Broussard
21 Catfish Creek State Preserve. We call it
22 Allen's Scrub.
23 That brings us to the point.
24 I found out about 12 days ago that in your
25 January 23rd meeting, a swap of 12 acres of
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1 scrub from the 6,000 acre tract -- and these
2 12 acres, to make it clear, is not part of the
3 1100 acre core piece that we had to do it. But
4 it has to do with the 6,000 acre tract.
5 This swap for 24 acres of wetlands had been
6 approved.
7 In addition to the 12 acres of scrub, the
8 wetland owner is to receive $27,500.
9 In the approval process, the 12 acres of
10 high grade scrub was labeled as no longer
11 necessary for conservation.
12 This is a little hard to accept for a
13 couple of reasons. Scrub is the most
14 endangered ecosystem in Florida. As we speak,
15 the State is -- is buying small parcels, like
16 two-and-a-half acre lots of scrub to assemble
17 together to make a viable preserve.
18 And the -- the scrub is much more rare than
19 the wetlands, and it contains the largest
20 number of globally endangered plant species in
21 Florida.
22 The scrub is not protected by regulation,
23 and the wetlands are protected by regulations.
24 So it is hard to imagine that this -- this is
25 really an even swap.
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1 The transitional wetlands in the trade were
2 pictured as valuable. And there's one
3 photograph on that board in front of you that
4 shows the transitional zone in that area.
5 And the transitional zone at the present
6 time is about 12 feet wide, but that's because
7 the water level is very low from the drought.
8 In normal water level, the transitional
9 zone can't be more than a yard wide. And while
10 transitional zones, I have no dispute, are very
11 valuable, and have a lot of species very -- of
12 variance, I do believe this particular
13 transition zone is not a great one.
14 So I beg you to reconsider the decision for
15 the following reasons: We partnered with the
16 State and The Nature Conservancy to create this
17 preserve, which was supposed to be protected
18 forever.
19 We feel that this trade is a violation of
20 our trust, and -- and our partnership in good
21 faith in creating the preserve.
22 The trade of high grade scrub for wetlands
23 protected by regulation makes no sense on its
24 face.
25 Three, a very bad precedent has been set
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1 for this preserve, which could allow further
2 trade-offs of land in the future, and we would
3 have never have entered into this in the first
4 place if we had been aware of that possibility.
5 Three, I believe the trade as presented to
6 you contains some statements that were not
7 necessarily true, and perhaps give you basis
8 for reconsideration.
9 The deal is not yet closed, but without
10 action, will close soon.
11 Any questions I can handle?
12 TREASURER GALLAGHER: I have -- have a
13 question.
14 GOVERNOR BUSH: Yeah.
15 TREASURER GALLAGHER: If this was your
16 desire, why -- why wouldn't you have put a deed
17 restriction on it when you gave it to the
18 State? Or is that something that we don't
19 allow when we receive properties?
20 DR. BROUSSARD: Let me explain a little
21 more how it happened. The way we had to do it,
22 we gave the money to The Nature Conservancy, on
23 the condition that they use that money for this
24 trade.
25 The Nature Conservancy acquired the ranch
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1 land to be used in swap. The
2 Nature Conservancy became the owners of the
3 land, and later transferred it to the State.
4 So it's a fairly complicated deal.
5 Now, frankly, it never occurred to me that
6 this would be a problem. It didn't occur to me
7 at the time that more protection was necessary.
8 It was being purchased with CARL money,
9 which I understood meant it was to be protected
10 forever. And that's -- it just never occurred
11 to me.
12 TREASURER GALLAGHER: Let me -- I
13 understand where you're coming from, and I
14 would like to figure out what we could do about
15 it.
16 Is it possible that we would find -- that
17 we could find another piece of property that
18 would be similar that we are saving, and put
19 that in -- in the memory of your son, as
20 opposed to this one.
21 Would that be something that would work for
22 you and your family?
23 MR. GREEN: Let me --
24 Treasurer Gallagher, before we go there,
25 this is -- this is the first we've heard about
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1 this this morning.
2 We think we need to go back and look at it.
3 The -- the piece of property doesn't close
4 until the latter part of June, so we have some
5 time.
6 I would propose that we -- we put together
7 a report, show you what we've done, how these
8 parcels fit together, and -- and bring that
9 back at -- at a later Cabinet meeting.
10 And -- and the Doctor will -- will get
11 notice of that so that we can all come together
12 and -- and work through that instead of --
13 TREASURER GALLAGHER: Okay. Let me --
14 MR. GREEN: -- trying to react --
15 TREASURER GALLAGHER: -- let me do this at
16 this time.
17 I'd like to request, without objection,
18 that we reconsider this item for -- leave it
19 open for the next Cabinet meeting.
20 And I'd ask for without objection, have it
21 unanimous, because although the minutes have
22 not been yet approved, this is not the -- the
23 following meeting.
24 And so --
25 (Commissioner Crist entered the room.)
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1 TREASURER GALLAGHER: -- if I think we
2 unanimously do it, it would allow us to have
3 this item rebrought, they could continue to
4 work on it, and we'll see if we can come to
5 some conclusion on this.
6 Because I do think it's unfortunate that
7 this gentleman put up the money to buy a piece
8 of property in his son's name, and something
9 happened that he didn't expect. And maybe
10 there is a way we can resolve it, and I think
11 we should look into doing that.
12 So I -- my motion is that we do --
13 GOVERNOR BUSH: Anybody going to --
14 TREASURER GALLAGHER: -- reconsider this
15 item --
16 GOVERNOR BUSH: -- call the 4H, and let
17 them know? I mean --
18 TREASURER GALLAGHER: They'll get to know,
19 too. But --
20 GOVERNOR BUSH: Yeah, they will.
21 TREASURER GALLAGHER: This -- this
22 doesn't --
23 GOVERNOR BUSH: They'll be a little
24 surprised.
25 TREASURER GALLAGHER: -- this doesn't stop
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1 that. This lets us bring this item up. It's
2 not going to close yet, so --
3 GOVERNOR BUSH: What I'm surprised about is
4 how you didn't know about this.
5 DR. BROUSSARD: I'm surprised, too.
6 MR. GREEN: Governor, to try to explain
7 some of that, and -- and we'll get in more
8 detail.
9 But the piece of property that was
10 exchanged was -- was not a piece -- the same
11 piece of property which was donated through
12 The Nature Conservancy. It was an adjacent
13 piece of property.
14 So the actual tracts that were exchanged
15 were not. But his points are -- are -- are --
16 GOVERNOR BUSH: So this is not --
17 MR. GREEN: -- a burden to --
18 GOVERNOR BUSH: -- your property that's
19 been exchanged.
20 DR. BROUSSARD: No. And I --
21 GOVERNOR BUSH: That explains why you
22 weren't advised.
23 DR. BROUSSARD: -- and I said that. I
24 said, this was not part of the original
25 property.
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1 But the point where we -- the reason why we
2 got involved in this is this was going to be a
3 large, good, valuable preserve.
4 We weren't in for it just for the part we
5 donated. We were in for it -- because this was
6 the core parcel.
7 Otherwise the whole preserve would
8 collapse, it wouldn't work without this core
9 parcel.
10 But we understood that it --
11 GOVERNOR BUSH: I understand.
12 DR. BROUSSARD: -- if we --
13 GOVERNOR BUSH: I understand. But that
14 explains why you weren't advised. It --
15 it's -- it makes sense.
16 SECRETARY HARRIS: Kirby --
17 GOVERNOR BUSH: Katherine.
18 SECRETARY HARRIS: -- I -- I have a
19 question.
20 If this is the core parcel for this scrub
21 land, which is so important, why would we --
22 you know, in essence, sort of be compromising
23 that land if -- if it is so crucial?
24 MR. GREEN: Well, staff went through an
25 evaluation of -- of the -- of the two parcels
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1 that were being exchanged. Both of them -- one
2 of them was on the lake, one of them was
3 adjacent to the lake, but not -- not contiguous
4 with it.
5 They thought there were more resource
6 values in -- in the -- the parcel that the --
7 the Future Farmers of America owned in terms of
8 lakefront access, in terms of transitional zone
9 back to the scrub lands, than in the piece
10 that -- that we currently had ownership in that
11 area.
12 That's why I would like to bring you back a
13 report where we can lay all of that out and you
14 can see the analysis. But -- but we don't
15 think it was.
16 GOVERNOR BUSH: So in order to do that, do
17 we need to unanimously --
18 No?
19 MR. GREEN: I just need to bring an item
20 back to -- to the agenda that -- that lays out
21 those issues for you.
22 So I can do that --
23 GOVERNOR BUSH: And we're not going to buy
24 the property --
25 MR. GREEN: The closing is not until the
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1 end of June.
2 GOVERNOR BUSH: So we can still come -- we
3 can put it on the agenda, and -- based on the
4 information you provide, this -- the Board of
5 Trustees can vote to overturn our decision of a
6 previous meeting.
7 MR. GREEN: Yes, sir.
8 GOVERNOR BUSH: Okay.
9 SECRETARY HARRIS: And at that time, will
10 you go through just what it means in terms of
11 the scrub land, it shows the diagrams, and --
12 and why you chose that parcel in the first
13 place for the Future Farmers.
14 MR. GREEN: We will. And we'll notify the
15 Doctor, too --
16 GOVERNOR BUSH: Doctor, thank you for
17 coming and bringing this to our attention.
18 DR. BROUSSARD: Thank you.
19 And I very much appreciate being involved
20 in the planning -- in this process from now on,
21 so I know exactly what's happening, how to
22 evaluate it, and what -- what --
23 GOVERNOR BUSH: Very good.
24 Thank you.
25 DR. BROUSSARD: Thank you very much.
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1 GOVERNOR BUSH: And thank your wife.
2 And can someone take this thing down?
3 TREASURER GALLAGHER: The -- the minutes --
4 the minutes still stand as went, so we're on
5 that motion.
6 GOVERNOR BUSH: Is there a second?
7 TREASURER GALLAGHER: It's been made and
8 seconded.
9 GOVERNOR BUSH: Moved and seconded.
10 Without objection now at least, they're
11 approved.
12 MR. GREEN: Item 2, with-- we recommend
13 withdrawal.
14 TREASURER GALLAGHER: Motion to withdraw.
15 COMMISSIONER CRIST: Second.
16 GOVERNOR BUSH: Motion to withdraw, and
17 second.
18 Without objection, it's approved.
19 MR. GREEN: Item 3 is request by the Board
20 of Regents to sell 4.816 acres.
21 TREASURER GALLAGHER: Motion.
22 SECRETARY HARRIS: Second.
23 GOVERNOR BUSH: 4.856?
24 MR. GREEN: --856, yes, sir.
25 GOVERNOR BUSH: Moved and seconded.
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1 Without objection, it's approved.
2 MR. GREEN: Item 4 is an option agreement
3 to acquire 1.84 acres in Cayo Costa.
4 SECRETARY HARRIS: Motion.
5 TREASURER GALLAGHER: Motion.
6 SECRETARY HARRIS: Second.
7 GOVERNOR BUSH: Moved and seconded.
8 Without objection, it's approved.
9 MR. GREEN: Item 5 is an option agreement
10 to acquire 429.70 acres in the Charlotte Harbor
11 Flatwood CARL Project.
12 TREASURER GALLAGHER: Motion.
13 SECRETARY HARRIS: Second.
14 GOVERNOR BUSH: Moved and seconded.
15 Without objection, it's approved.
16 MR. GREEN: Item 6 is acceptance of an
17 assignment of an option agreement to acquire
18 1,857.06 acres in the Annutteliga Hammock CARL
19 Project.
20 TREASURER GALLAGHER: Motion.
21 SECRETARY HARRIS: Second.
22 GOVERNOR BUSH: Moved and seconded.
23 Without objection, it's approved.
24 MR. GREEN: Item 7 is acceptance of a
25 report on operational efficiencies and
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1 effectiveness of Chapter 259.
2 TREASURER GALLAGHER: Motion, accept the
3 report.
4 SECRETARY HARRIS: Second.
5 GOVERNOR BUSH: Motion to accept the report
6 and a second.
7 Without objection, it's approved.
8 (The Board of Trustees of the Internal
9 Improvement Trust Fund Agenda was concluded.)
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1 MR. GREEN: Governor, the Department of
2 Agriculture has an agenda.
3 This last legislative session, the
4 Legislature delegated to the Department of
5 Agriculture and Consumer Services, actions for
6 the Trustees in terms of aquaculture
7 activities.
8 Sherman Wilhelm is here to make that
9 presentation.
10 TREASURER GALLAGHER: Are we on the
11 Agriculture agenda?
12 GOVERNOR BUSH: Yes, we are now.
13 MR. WILHELM: Yes.
14 COMPTROLLER MILLIGAN: We just approved
15 about 12 million dollars.
16 GOVERNOR BUSH: I know.
17 I was counting on you to say something.
18 I wasn't going to --
19 Just for the people that were in the
20 audience, we just spent 12 million dollars of
21 your taxpayers money to protect natural systems
22 all across the state.
23 And it's a lot of money, but I think we can
24 be proud of the fact that Florida leads the
25 nation in -- in our commitment to preserving
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1 wild Florida.
2 And we just did it, literally, 12 million
3 dollars in about 30 seconds, just --
4 (Applause.)
5 TREASURER GALLAGHER: We have to -- you --
6 you have to let everybody know --
7 GOVERNOR BUSH: -- the taxpayers will be
8 clapping that way.
9 TREASURER GALLAGHER: It didn't just happen
10 like that. It's -- there's -- it goes through
11 a lot of the processes before it gets here.
12 GOVERNOR BUSH: Yes, it does.
13 Absolutely.
14 Thank you.
15 MR. WILHELM: Yes, sir.
16 Item Number 1, we are requesting a
17 deferral.
18 TREASURER GALLAGHER: Motion to defer.
19 MR. WILHELM: Item Number 2 --
20 GOVERNOR BUSH: Wait, wait. Let's
21 finish -- we'll get the --
22 COMPTROLLER MILLIGAN: And a second.
23 GOVERNOR BUSH: Let me -- there's a second.
24 There's a motion to defer and a second.
25 Without objection, it's approved.
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1 Item 2.
2 MR. WILHELM: Yes, sir.
3 Item 2, and -- there are two applicants who
4 are seeking a ten-year aquaculture lease of
5 three-quarters of an acre and its associated
6 water column for the purpose of raising
7 live rock.
8 TREASURER GALLAGHER: Motion.
9 COMPTROLLER MILLIGAN: Second.
10 GOVERNOR BUSH: Moved and seconded.
11 Without any discussion.
12 Without objection, it's approved.
13 MR. WILHELM: Item --
14 GOVERNOR BUSH: How much money do we get on
15 that lease?
16 MR. WILHELM: We will get $31.90 an acre.
17 ATTORNEY GENERAL BUTTERWORTH: And how many
18 acres for 12 million dollars?
19 MR. WILHELM: Per year.
20 GOVERNOR BUSH: What's the legal fee for
21 leasing -- what's the legal fee for negotiating
22 the lease?
23 MR. WILHELM: Because of the creation of
24 the Aq-- Division of Aquaculture, there isn't
25 any negotiation. They work straight with the
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1 State, and we streamline the whole process.
2 GOVERNOR BUSH: Wow.
3 ATTORNEY GENERAL BUTTERWORTH: No
4 lawyers --
5 GOVERNOR BUSH: So we get net that --
6 MR. WILHELM: Yes, sir. No lawyers.
7 GOVERNOR BUSH: So you told me, we get net
8 thirty-one ninety. That's pretty good.
9 MR. WILHELM: Yes, sir.
10 COMPTROLLER MILLIGAN: It's a small piece
11 of land.
12 GOVERNOR BUSH: Very small.
13 ATTORNEY GENERAL BUTTERWORTH: That will
14 pay for the hot dogs this afternoon at the
15 park.
16 MR. WILHELM: Item Number 3 --
17 TREASURER GALLAGHER: For an example, we're
18 going to get thirty-one ninety, we're going to
19 get, like, $25.
20 GOVERNOR BUSH: Item 3.
21 MR. WILHELM: Item 3 --
22 GOVERNOR BUSH: Don't listen to them.
23 MR. WILHELM: -- is a pharmaceutical
24 company that's requesting a ten-year lease for
25 2 acres in the water column for the purpose of
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1 growing marine worms that they will use for
2 anticancer research.
3 TREASURER GALLAGHER: Motion, 3.
4 COMPTROLLER MILLIGAN: Second.
5 Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 TREASURER GALLAGHER: Marine worms.
9 MR. WILHELM: Item Number 4 -- and the
10 applicant is here for Item Number 4.
11 Item Number 4, the first part is the Board
12 of County Commissioners for Franklin County has
13 requested the State to open a 100-acre
14 aquaculture use area in Franklin County for the
15 purpose of raising clams.
16 We're recommending approval.
17 But County Commissioner Cheryl Saunders
18 (sic) is here to speak on behalf of
19 Franklin County, if you'd like.
20 GOVERNOR BUSH: Commissioner?
21 Would you like to speak?
22 MS. SANDERS: Well --
23 GOVERNOR BUSH: We've been known to turn
24 down things after people get up and speak.
25 MS. SANDERS: I've come all the way from
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1 Franklin County, Governor --
2 GOVERNOR BUSH: Quite a trip. Go ahead.
3 MS. SANDERS: -- Cabinet members, how are
4 y'all doing today?
5 GOVERNOR BUSH: Pretty good.
6 MS. SANDERS: We look forward to looking at
7 the future. As I gave it to the Aides the
8 other day, not only is Franklin County an area
9 of State critical concern, but also the
10 Governor designated us as one of eight counties
11 last year, economic concern.
12 So this is a way for the State of Florida
13 to help Franklin County.
14 We think -- we're real proud of this
15 project. We -- we think it's going to be on a
16 go, as long as y'all vote for it.
17 So anything -- you know, any questions
18 y'all might have?
19 COMMISSIONER CRIST: I'd move it, Governor.
20 TREASURER GALLAGHER: I do have a
21 suggestion that I'd like to make.
22 GOVERNOR BUSH: Yes.
23 TREASURER GALLAGHER: And that is that I'd
24 like to recommend to -- to the
25 Department of Agriculture that before you
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1 return to the Cabinet March 29th with an
2 application process for these individual
3 leases, that they consider giving a -- local
4 citizens a priority over out-of-towners,
5 because this is a -- a rural economic
6 development initiative area, and -- and I think
7 that we should give those from that area an
8 advantage in -- and just let it be known that
9 that's something that -- that I personally
10 think, and I hope that the rest of the Board
11 agrees, that I think that would help your
12 economic development, help local folks.
13 GOVERNOR BUSH: Commissioner, you happy
14 with that?
15 Is that --
16 MS. SANDERS: I -- I'm very happy with
17 that.
18 You know, we were approached by the local
19 citizenry down there to -- to basically ask
20 that we specify Franklin County people would
21 get the leases.
22 I said, you know, that's -- I'm going to
23 throw that monkey on the State's back and let
24 them make that recommendation. So --
25 GOVERNOR BUSH: That's why we're here.
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1 MS. SANDERS: That's right.
2 So anyway, I -- I've come a long way, I
3 thank y'all for your time. You have exc-- I
4 have to say, Governor, I -- I had the
5 experience of meeting your Cabinet staff last
6 week.
7 They -- you have an excellent group of
8 people working for you. So --
9 GOVERNOR BUSH: Thank you, Commissioner.
10 MS. SANDERS: -- we'll see you at the
11 Legislature.
12 TREASURER GALLAGHER: And the other thing
13 I'd like to recommend is that these leases,
14 that when you put these out to bid for -- given
15 a priority for local citizens, that the
16 contract is not one that can be resold, that
17 the person that gets that contract would be
18 carrying out the -- the running of the
19 facility.
20 MR. WILHELM: Okay.
21 And the Department --
22 TREASURER GALLAGHER: So we keep it to the
23 local --
24 GOVERNOR BUSH: No sublease. No flipping.
25 TREASURER GALLAGHER: No flipping.
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1 There's a motion and a second.
2 Without objection, it's approved.
3 MR. WILHELM: Thank you very much.
4 GOVERNOR BUSH: Thank you very much.
5 (The Department of Agriculture and Consumer
6 Services Agenda was concluded.)
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1 GOVERNOR BUSH: We now have an -- an item
2 that is of utmost importance, which relates to
3 the drought.
4 And we're here in the Tampa Bay area, a
5 place that has dealt with droughts probably in
6 the most progressive way of any -- any part of
7 the state.
8 And this afternoon, we're having a summit
9 with Water Management District officials,
10 agriculture interests, City officials all
11 across the state to discuss means by which we
12 can unite behind a strategy to deal with a
13 100-year drought condition, which is affecting
14 our economy, affecting the natural environment,
15 affecting people's ability to pursue happiness
16 in many ways.
17 So -- and the -- and the drought's not
18 going away. We know this for a fact.
19 And so I thought it was appropriate that we
20 would have -- and we're going to try to make
21 this as -- as fast as we can,
22 Secretary Seibert, a -- a briefing on where we
23 stand with the drought, what our -- what --
24 what the thought process is up till -- up till
25 now to the Cabinet, because this is a critical
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1 part of -- the panel will play a critical role
2 in all this in the next -- in the next few
3 months.
4 Secretary Seibert.
5 MR. SEIBERT: Governor, members of the
6 Cabinet. Good morning
7 Oh, thank you. We --
8 It is afternoon. I'm sorry.
9 GOVERNOR BUSH: Very good.
10 MR. SEIBERT: We will make this very brief,
11 but it is very, very important.
12 You're going to hear from several agencies
13 here lickety-split about what we're facing
14 right now.
15 As you know, Florida is dry, and we are
16 early in the dry season. Drought affects us in
17 a variety of ways.
18 When you talk about drought in Tallahassee,
19 you talk about wildfires. When you talk about
20 drought here in Tampa Bay, you talk about
21 public water supply. When you talk about it in
22 rural Florida, you're talking about crop
23 devastation. Those folks on I-4 trying to get
24 to Orlando are talking about smoke.
25 If Commissioner Rhodes were here, she'd be
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1 talking about, you know, citrus impacts and --
2 and -- and wildfire fighting.
3 Commissioner Gallagher, it's the insurance
4 claims, fire college issues;
5 General Butterworth, it's arson prosecution.
6 Secretary Harris, it's clearly our -- our
7 ability even to -- to deal with the global
8 economy. You know, as we -- as having goods
9 happen and actually getting them to market is
10 so difficult.
11 So each of us is affected, and our task
12 today, very briefly, is to explain this crisis,
13 the status we're at right now in the State of
14 Florida, and to suggest some plans of action to
15 address it.
16 I will start with Craig Fugate. Mr. Fugate
17 is a senior manager at -- in our team here
18 at -- at DCA, you may know him. He's the
19 person most in charge of the Emergency
20 Operation Center during times of -- of -- of
21 wildfires or hurricanes or whatever disaster.
22 He is the master of disaster for us.
23 And, Craig, if you'll take us -- get us
24 started.
25 GOVERNOR BUSH: Thank you, Craig.
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1 MR. FUGATE: To answer your favorite
2 question of me, Governor, what's wrong? It's
3 dry.
4 I have a short power point that I would
5 like to bring up, if I can find the
6 power point.
7 And I'm going to basically set the stage.
8 I want to look at what's happened as far as our
9 current drought, and what has occurred in our
10 history of drought, and kind of put this in
11 perspective.
12 We often talk about drought from -- it's a
13 100-year drought, or it's the worst drought
14 we've ever seen.
15 But this presentation --
16 If we can have the power point on-line.
17 The current image that --
18 Are you receiving an image, Governor?
19 GOVERNOR BUSH: Yes, we are.
20 MR. FUGATE: Okay. That is -- if you are
21 familiar with north Florida, that is the
22 Santa Fe River between U.S. 441 and
23 State Road -- and U.S. 27.
24 GOVERNOR BUSH: Wow.
25 MR. FUGATE: I've paddled that river since
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1 I was a child. I'm currently -- the last time
2 I paddled, ended up hiking more than I was
3 paddling. That river is no longer flowing.
4 Now, this is in north Florida, which is
5 actually not as bad of a drought as what we're
6 seeing in central Florida.
7 And I wanted to illustrate this, because
8 I think the last couple of years we've been
9 talking about drought from the standpoint of
10 wildfires.
11 Now we're looking at serious impacts.
12 We've heard about the rest of the time that
13 there are lakes going down. Now we're talking
14 about our rivers not flowing, and the
15 associated impacts.
16 So what's our history with this drought?
17 You're most familiar with this particular
18 product. Drought's a relative term, and I'm
19 going to use several different products to show
20 you drought.
21 The -- the question is this: If there's no
22 rain in the desert, is it a drought?
23 And if you only get 30 inches of rain in
24 Tampa, is it a drought?
25 And the answer is, 30 inches of rain in
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1 Tampa is a drought. It's relative.
2 The Keetch-Byram Drought Index, which is a
3 very good indicator of immediate drought due to
4 rainfall, shows us wildfire potential.
5 And if this looks familiar to you,
6 Governor, this is normally what we show you in
7 the summertime when we're at the peak of our
8 fire season, not when we're starting out our
9 fire season.
10 TREASURER GALLAGHER: Not good.
11 MR. FUGATE: So we're already seeing
12 conditions that are starting to rival what we
13 saw in 1998.
14 GOVERNOR BUSH: Basically what you're
15 saying here is that northwest Florida is the
16 only place that has monitor -- or close to
17 normal --
18 MR. FUGATE: Well --
19 GOVERNOR BUSH: -- situations on that
20 index.
21 MR. FUGATE: -- drought's relative.
22 That's an -- that particular drought index
23 is a very good indicator of fire conditions.
24 The next one, which is the U.S. Drought
25 Monitor, tends to show deeper and longer term
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February 27, 2001
1 drought effects, including surface and
2 subsurface waters.
3 And what you'll find is, the entire state
4 is under drought impacts. Although west
5 Florida and the panhandle is right now a little
6 bit better off as far as moisture conditions --
7 GOVERNOR BUSH: Craig, we lost that -- we
8 lost that visual --
9 MR. FUGATE: Okay.
10 GOVERNOR BUSH: Thank you. It just came
11 back.
12 MR. FUGATE: All right. But what this
13 should show is that the entire state is under
14 drought. This is a long-term drought. And
15 that when we look at different drought indexes,
16 we're now dealing in the issues well beyond
17 just looking at wildfire and potential
18 agriculture impacts.
19 How much rain would it take to get out of
20 trouble?
21 This is again based upon the
22 Palmer Drought -- Drought Index. About 12 to
23 15 inches of rain, not all at one time,
24 otherwise it'd run-off in the Gulf into the
25 Atlantic. But over about a 30-day period,
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1 above average. Above our normal rainfall. We
2 need normal rainfall, plus 12 to 15.
3 Wildfires are an obvious concern that we're
4 seeing in Polk County. Unfortunately, that
5 looks to be the rest of the season.
6 Drought outlook through May, short-term is
7 it's going to persist.
8 Longer term, persisting into May, now
9 there's some indicators that the drought --
10 below average rainfall conditions will persist
11 now through August. Literally we're not going
12 to see relief any time soon.
13 Where have we been? If you remember back
14 in February of 1998, most of the state was
15 flooded. And this was the Palmer Drought
16 Index, which I'm going to use in the remaining
17 of these presentations to give you some
18 indication of what's been happening.
19 This is where we were in May, generally
20 when our thunderstorms start. And this is
21 where we were in July of 1998.
22 In just a short period of time, we went to
23 an excruciatingly dry period, major wildfires,
24 evacuated Flagler County, salt fires in all
25 over -- over 50 of the counties.
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1 The 1999 fire season was also severe. We
2 started out that winter dry, and ended up drier
3 in the summertime.
4 2000, which was our deadliest fire season,
5 we lost one of our Division of Forestry
6 helicopter pilots, we had numerous people
7 killed on highways, we had serious injury with
8 a National Guardsman that was crippled working
9 wildfires.
10 We again started out in a drought, ended up
11 even drier.
12 Now, the colors will change on you, because
13 they changed the color codes. But this is
14 where we're at in February. Our drought index
15 is as bad starting out going into the dry
16 season as we were in 1998 at the peak of the
17 fire season.
18 GOVERNOR BUSH: Repeat that one time, just
19 so people -- because '98 was the visual that
20 people remember --
21 MR. FUGATE: Okay.
22 GOVERNOR BUSH: -- about the fires in
23 Daytona and --
24 MR. FUGATE: Yes, sir.
25 GOVERNOR BUSH: So say it again so people
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1 can understand.
2 MR. FUGATE: 1998 -- we are currently in
3 February of 2001, entering into a -- our
4 average rainfall, we're into a dry season.
5 We are drier now, and our drought index is
6 as high as they were at the peak of the fire
7 season in 1998 when we evacuated
8 Flagler County, shut down the Daytona Raceway,
9 and had smoke over almost all of central
10 Florida for extended periods of time.
11 That's what we're going into the
12 fire season with, not at the termination of the
13 fire season.
14 The other issue agriculturally is it is
15 getting so dry now that in order to even get
16 crops to grow, we'll probably have to see a lot
17 of people irrigating, not just to get crops to
18 maturity, but to even germinate the crops.
19 And as we go into our planting season,
20 we're going to have additional demands on
21 agricultural uses as we go into our planting
22 season.
23 A real quick history of drought. 1954,
24 through '56 was a period of a multi-year
25 drought which saw conditions similar to what we
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1 saw then in the population of a little over
2 3 million.
3 We've entered this drought, and most people
4 will agree, the drought started about 1998.
5 We now have a population that is five times
6 greater than that putting demands on the
7 system.
8 (Secretary Harris exited the room.)
9 MR. FUGATE: And we know that this drought
10 is not an exceptional drought from the
11 standpoint of a reoccurring event. This is --
12 many people say, well, this is just a once in a
13 lifetime event.
14 Actually what we probably saw in the
15 '50s -- or towards the end of the '50s, '60s,
16 and '70s, was actually a period of very little
17 drought. And then getting back into a cycle
18 that maybe looks like from about 1895 through
19 the early '30s of more frequent drought cycles.
20 And that's causing a lot of concerns in
21 impact long-term, that even if we receive
22 normal rainfall, this will not end the drought.
23 It will take above average rainfall to end the
24 drought, and we'll have a slower recovery time,
25 because we have much greater demands on the
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1 systems that are there.
2 Sort of like at the end of the month when
3 you're running out with less and less money,
4 eventually the checks you're writing are going
5 to start bouncing.
6 GOVERNOR BUSH: Let's -- I -- I think the
7 population side of this is important to note in
8 that 3 million people over the peninsula, and
9 it rains, the water does not go out to tide to
10 the same extent that 16 million people with
11 these very large urban areas now when we
12 organize ourselves as we have with this many
13 people, we have a much different situation of
14 what happens when God allows water to come
15 down.
16 And the recharging of our aquifers,
17 everything has been dramatically changed, and
18 it's -- it's -- it relates to a subject that is
19 very important that is a side bar story to this
20 which relates to growth management.
21 And not that I want to make a political
22 point about this, but I do think it's time for
23 us to totally reevaluate how we organize
24 ourselves and deal with infrastructure, because
25 we are now in a different world than we were in
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1 1985 when the Growth Management Act was passed,
2 and certainly the 1950s or '60s when these
3 droughts took place.
4 MR. FUGATE: Yes, sir.
5 My final comment is, and I'll end this to
6 be -- to expedite the process.
7 The St. Johns Water Management District is
8 basically looking at an overall drying trend
9 since the '70s, which would pretty much
10 indicate what we're seeing here with these
11 drought bars.
12 That may be returning back to normal.
13 I think most of our growth land use policies
14 and water use policies in the '70 -- '60s and
15 '70s, and even in the '80s, were based upon
16 rainfall that may not have been indicative of
17 what is normal in Florida. We may have been in
18 a rainy period.
19 And now you're faced with the task of how
20 do we balance what may be a more natural
21 process of a reoccurring drought cycle with our
22 resources.
23 Thank you, sir.
24 GOVERNOR BUSH: Thank you, Craig.
25 MR. SEIBERT: Where's Earl?
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1 Where's Earl?
2 MR. PETERSON: Right here.
3 MR. SEIBERT: There he is.
4 I couldn't find him.
5 Earl Peterson's going to bring us up to
6 date on what's happening with the fire fighting
7 activities.
8 Earl.
9 MR. PETERSON: Thank you, Governor, members
10 of the Cabinet.
11 Appreciate the opportunity and I'll real --
12 I'll be real brief. Mr. Fugate has done an
13 excellent job in telling is where we are with
14 respect to the drought.
15 The prolonged drought that he indicated is
16 a problem of culturally wide area of our
17 society. But it also is getting back to the
18 swamps significantly.
19 That, as you know, having been there with
20 us last week, is a major problem for wildfires.
21 Because the muck, the vegetative material, the
22 organic material burns forever, so to speak,
23 until you flood it.
24 So with the additional freeze line that we
25 had moved further south this year, the
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1 dead vegetation, the muck fires, the prolonged
2 drought is -- does not bode well for the future
3 of Florida. We're doing --
4 GOVERNOR BUSH: Explain what --
5 MR. PETERSON: -- the best we can --
6 GOVERNOR BUSH: -- since people might be
7 watching this beyond this room.
8 If you could just describe what -- when you
9 say the swamp, how many feet of combustible
10 fuel would be, for example, the Green Swamp,
11 where the Polk County fires are --
12 MR. PETERSON: Governor, I was told that
13 that muck in the median that they had to -- the
14 problem was 80 feet deep. Now, that -- that's
15 extraordinary. But I would say --
16 GOVERNOR BUSH: That's a little deep.
17 MR. PETERSON: Yes. But --
18 GOVERNOR BUSH: But on average --
19 MR. PETERSON: Ten feet is good.
20 GOVERNOR BUSH: Ten feet --
21 MR. PETERSON: It's bad. But that's not
22 what we're dealing with here.
23 GOVERNOR BUSH: So envision a fire that has
24 to go -- it has to --
25 MR. PETERSON: It smolders --
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1 GOVERNOR BUSH: -- consumes fuel for
2 10 feet down over -- over 10,000 acres.
3 MR. PETERSON: And throughout history, that
4 happened, as -- as you know. But we have
5 altered the -- the regime, and it doesn't
6 happen now.
7 TREASURER GALLAGHER: Well --
8 MR. PETERSON: So when that happened --
9 GOVERNOR BUSH: Commissioner --
10 TREASURER GALLAGHER: Just -- just --
11 MR. PETERSON: Sure.
12 TREASURER GALLAGHER: -- if when we looked
13 in Ireland, that is what they traditionally use
14 as fuel is those bogs that they cut --
15 MR. PETERSON: Yes. Right.
16 TREASURER GALLAGHER: -- burn it directly
17 after it dries, or actually they -- they sell
18 bricks of bog that have been compressed for
19 fuel to burn in their homes.
20 So this is a -- a real fuel. It's just
21 like as if you had oil sitting there --
22 GOVERNOR BUSH: Yeah.
23 TREASURER GALLAGHER: -- it'll burn just as
24 good.
25 GOVERNOR BUSH: That's why they call them
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1 Gallaghers.
2 TREASURER GALLAGHER: I saw that when I was
3 back in the old country.
4 MR. PETERSON: I -- I don't suggest that
5 swamp fires are our only problem. But I bring
6 them up for -- for that reason, because they do
7 impact our highways, they affect our
8 communities, they impact growth, and the rest
9 of our problems. And it takes an -- an
10 enormous amount of water and effort to deal
11 with them.
12 Also as that material burns out from under
13 the roots of the trees, the trees became a risk
14 to our employees who go in there to try to
15 fight those things.
16 But all in all, I think with your help with
17 the two Executive Orders, Commissioner Rhodes
18 yesterday issued a severe drought proclamation
19 that declared 39 counties in that order, which
20 gives us --
21 GOVERNOR BUSH: No burn.
22 MR. PETERSON: -- no burn, except by
23 special permit from the Division.
24 (Secretary Harris entered the room.)
25 MR. PETERSON: So with your help and the
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1 Cabinet and the Legislature, we're staying on
2 top of this.
3 I would be remiss if I did not say that our
4 cooperators, the National Guard, the Division
5 of Emergency Management, the Water Management
6 Districts, and other State agencies, are doing
7 an extraordinary job. They're all out there
8 with us.
9 And the -- the public has a role to play in
10 this. Awareness of the importance of careful
11 burning, if at all, we will have more and more
12 burn bans.
13 But fire prevention is the key. That fire
14 that never happens is the one that we don't
15 overemphasize on and won't spend millions on.
16 If there are any questions, I'll be glad to
17 help you.
18 GOVERNOR BUSH: Yeah. Charlie.
19 COMMISSIONER CRIST: Thank you.
20 Just a brief comment, Mr. Peterson. I want
21 to thank you for what you're doing.
22 I was in Melbourne yesterday and had to
23 drive home -- usually would go on I-4, but had
24 to divert around it last night. I understand
25 it's open today --
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1 MR. PETERSON: It is open today. Yes, sir.
2 COMMISSIONER CRIST: Thank you for your
3 efforts. I wish it were open last night, but
4 that's okay.
5 And thanks for your good work though.
6 MR. PETERSON: Well, thank you, sir. And
7 it's -- it's going to depend, as you well know,
8 on -- on weather here with fog and -- and
9 humidity as to whether it stays open
10 indefinitely or not.
11 COMMISSIONER CRIST: Yes, sir.
12 MR. PETERSON: You have in your packet, or
13 will have, some information there, including
14 graphs that alludes to what Mr. Fugate was
15 talking about, to compare to this year's
16 graph -- graph on the KBDI, as opposed to the
17 previous three years.
18 GOVERNOR BUSH: I want to also mention that
19 we received an emergency declaration from FEMA
20 in a very quick fashion on the -- on the fire
21 that took place in Polk County, as well as the
22 Department of Agriculture, we received a
23 declaration to provide some support for the
24 freeze which is a by-product of this --
25 MR. PETERSON: Yes.
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February 27, 2001
1 GOVERNOR BUSH: -- as well.
2 And last week, a group of people
3 representing many of the people that are here
4 giving us this briefing, went to Washington,
5 and had a multiagency briefing with Washington
6 agencies that directly relate to all this, to
7 talk about -- we know this is going to happen.
8 This is not something like a hurricane
9 where you don't know if you're going to get hit
10 or not, you don't know -- or an earthquake
11 where you -- you have to react to it.
12 We can plan for this with our partners in
13 Washington, and we're doing that. They've been
14 very cooperative, and -- and it'll make it a
15 little bit easier to try to build the financial
16 support that we're going to need to deal with
17 this.
18 MR. PETERSON: Governor, that was an
19 excellent meeting, and I think they're planning
20 another one in Florida next month.
21 GOVERNOR BUSH: That's right.
22 MR. PETERSON: Thank you very much.
23 MR. SEIBERT: Governor, usually droughts
24 hit one specific area. That is not the case
25 with this one. It is statewide.
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1 We've asked three Water Management District
2 representatives to come and briefly tell you
3 what's happening in their part of the state.
4 We'll start with Henry Dean from the
5 St. Johns River Water Management District;
6 Sonny Vergara from here, Southwest Florida
7 Water Management District; and Frank Frinch --
8 Finch from the South Florida Water Management
9 District.
10 They'll be brief, but it's important to
11 hear what's happening across the state.
12 And, Henry, let's start with you.
13 MR. DEAN: Good day.
14 GOVERNOR BUSH: Hello, Henry.
15 MR. DEAN: I have eight issues I'd --
16 Governor, I'd like to highlight. And I will be
17 as succinct as possible. I know time is
18 running short.
19 Is my power point going to be functioning?
20 I'm going to go -- because of time. We'll
21 work on that while I start, because I know
22 y'all are running late.
23 GOVERNOR BUSH: Thank you.
24 MR. DEAN: The drought in some parts of our
25 district is extremely severe, particularly
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February 27, 2001
1 Marion, Lake, Orange, Seminole, and
2 Volusia Counties. It's sort of central
3 Florida.
4 The point was made earlier that the drought
5 is it's most severe really -- from really north
6 Lake Okeechobee, up to just south of Ocala.
7 And the three large Water Management
8 Districts sort of share the pain, because that
9 covers parts of our three districts.
10 Okay. We need to go back to the first one,
11 if we can. That's near the last.
12 But I'll keep going.
13 Got to be flexible here.
14 Water levels in many surface water bodies
15 are at record lows in our district. Water
16 levels -- groundwater levels in many of our
17 water bodies are at record lows. We're seeing
18 a drought that in pockets of that six-county
19 area I named only comes along in 100, and in
20 some cases, 200 years.
21 That -- now you see on the -- are you
22 seeing the display?
23 GOVERNOR BUSH: Yes, sir.
24 MR. DEAN: It's on my screen. But --
25 GOVERNOR BUSH: Yeah, we've got it.
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February 27, 2001
1 MR. DEAN: -- the -- but the -- the area
2 highlighted in the central part of my district
3 is what I'm referring to.
4 Now, let me mention about the health of the
5 lakes and wetlands during this extreme drought.
6 The -- the ecosystems that I mentioned, the
7 wetlands and the rivers and streams actually
8 need fluctuation. It's healthy for them to
9 fluctuate.
10 So we don't see any direct harm to those
11 systems with the fluctuation.
12 (Commissioner Crist exited the room.)
13 MR. DEAN: It's actually in many cases
14 good. The problems are more associated with
15 water supply and recreational uses of lakes and
16 rivers.
17 For example, many docks are out of the
18 water, homes with -- that were waterfront can
19 be several hundred feet from the water's edge
20 now. Particularly some of you are familiar
21 with the Keystone Heights area, Orange Lake is
22 having severe problems.
23 For example -- let me touch on water supply
24 problems.
25 This spring, we do anticipate some loss of
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February 27, 2001
1 water supply to individual 2-inch domestic
2 private wells. They're just going to have to
3 be drought-proof, they're going to have to be
4 sunk lower into the ground.
5 Many of these wells were drilled at a time
6 during normal rainfall cycles, and they're just
7 not deep enough for this kind of drought.
8 Also we -- we probably are going to have
9 inadequate surface water for some agricultural
10 uses, particularly in the Indian River County
11 area, the Indian River Citrus League. They use
12 a lot of water from our upper basin project,
13 which is at record low levels now.
14 We probably will have some reduced water
15 quality in the vicinity of some public water
16 supply wells, primarily some increases in
17 chlorides due to saltwater intrusion.
18 Let me touch on our current restrictions.
19 We at the St. Johns District have a water
20 shortage rule which sets forth four phases that
21 the governing board can -- can order.
22 We are now in the second phase of that
23 order, which the Board adopted last month at
24 our January Board meeting.
25 We're seeking this spring, with the help of
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February 27, 2001
1 our local utilities and -- and individuals
2 users, a 15 percent reduction this spring in
3 water use from last year when we had a dry
4 season last season.
5 Restrictions apply to all uses, and sources
6 of water, with the singular exception being
7 that of the use of reclaimed water.
8 We've also adopted specific restrictions
9 for certain agricultural, nursery, and
10 golf course uses. Landscape irrigation
11 throughout this several county area is
12 restricted to two days per week. And
13 year-round we adopted nine years ago, Governor,
14 a -- a year-round conservation rule in our
15 District, no watering from 10:00 a.m. to
16 4:00 p.m. daily, because watering at midday is
17 just not good sense. You lose over half of
18 that to evaporation when you water at midday.
19 But we are now in the two day a week
20 watering mode.
21 Let me briefly touch on our interdistrict
22 cooperation.
23 Many people ask me, with different water
24 management districts that cut across county
25 lines, and in some cases, there are several
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1 districts. For example, in Polk County and
2 Orange County. We're cooperating in southwest
3 Florida to have the same water shortage
4 restrictions in our portion of Polk County that
5 is in SWFWMD's portion so the people in
6 Polk County have one set to deal with.
7 The same is true in Orange County where
8 South Florida has adopted basically our
9 restrictions for the balance of Orange County.
10 So if you're in Orange County, you only have to
11 follow one set of restrictions, even though you
12 have multiple districts.
13 Now, our efforts during this -- this --
14 this time for drought management. Permanently
15 we always require, when we work with
16 applicants, water conservation and reuse,
17 wherever practical, on any consumptive use
18 permit application.
19 We're also seeking partnerships with local
20 governments. And we currently have four local
21 governments in this critical area that have
22 agreed to put up financial assistance with us
23 in a partnership to work on outreach and
24 public education this spring.
25 We're going to be doing some extensive --
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1 (Commissioner Crist entered the room.)
2 MR. DEAN: -- work with mass media,
3 door hangers, fact sheets. We're going to
4 explain the water shortage restrictions, we're
5 going to encourage those homeowners on
6 individual wells to drought-proof their wells.
7 And we also need to really touch, too, on
8 the benefits of lake fluctuation, because
9 people need to understand, it's not all bad
10 when -- when the lakes fluctuate. That's the
11 way they really cleanse themselves over time.
12 GOVERNOR BUSH: Henry, can you -- can you
13 move to summarize so we can get to --
14 MR. DEAN: Yeah.
15 GOVERNOR BUSH: -- the other District?
16 MR. DEAN: Yes.
17 Let me just say that we are working on
18 long-term solutions. And I'm -- I don't have
19 time today to go into that. You're aware of
20 one, Governor, the I-4 corridor surface water
21 facility that we're looking at for long-term
22 solution to address this.
23 And because of time, I'll close and allow
24 the other Districts --
25 GOVERNOR BUSH: Thank you.
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1 I appreciate you coming over for the
2 drought discussion we're going to have this
3 afternoon --
4 MR. DEAN: Yes, sir.
5 GOVERNOR BUSH: -- to try to begin to
6 develop a statewide strategy.
7 MR. DEAN: Yes, sir.
8 MR. VERGARA: Good afternoon, Governor --
9 GOVERNOR BUSH: Thank you, Sonny.
10 MR. VERGARA: -- and members of the
11 Cabinet.
12 We appreciate you coming to the City of
13 Tampa, and to the Southwest Florida Water
14 Management District, where we feel like we're
15 ground zero of this drought.
16 Very quickly, let me just ask five of my
17 governing Board members that are your
18 appointees to stand up, just say hello to you.
19 They're sitting back here in the -- and
20 I'll very briefly mention to you, they're
21 Janet Kovack, Heidi McCree, Ronnie Duncan,
22 Watson Haynes, and Tom Dabney.
23 Earlier when I heard Commissioner Crist
24 mention that Tampa means sticks of flame, I
25 thought to myself, oh, I hope not. I --
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1 GOVERNOR BUSH: I was thinking the exact
2 same thing.
3 MR. VERGARA: We've got enough problems
4 around here.
5 COMMISSIONER CRIST: I didn't coin that,
6 you know.
7 MR. VERGARA: I know. I realize that.
8 But, anyway, I have three -- really three
9 areas that I need to mention to you in terms of
10 significance of problems in our
11 Water Management District. And I'll mention
12 them in -- in what I consider in the order of
13 significance.
14 The first is the south of us, on the
15 Peace River is the Peace River Manasota
16 Regional Water Supply Authority. Serves about
17 100,000 people, gets its water from the
18 Peace River to an off-line reservoir, and using
19 aquifer storage and recovery.
20 Just to make a long story short, their
21 reserves are becoming depleted. They're having
22 to depend on water that's rapidly becoming
23 lower in quality. And we're going to have to
24 find some alternative sources for them, and
25 we're working with them to do that.
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1 One other area, which is also to the south
2 of us, right down in Port Charlotte area is the
3 City of Punta Gorda. Serves 26,000 people.
4 They get their water from a small water body
5 known as Shell Creek, a sheet pile dam across
6 that.
7 They have water, but the water's coming
8 from agriculture run-off. It's high in TDS and
9 sulfates. And they're going to have some
10 problems with -- discussing with them bringing
11 in skid mounted reverse osmosis facilities and
12 whatever it's going to take to make sure that
13 they -- they have a water supply.
14 Yes, sir.
15 TREASURER GALLAGHER: What kind of volume
16 can these reverse osmosis units do? Isn't
17 that -- isn't that sort of a problem on volume?
18 MR. VERGARA: Well, if -- if you have a --
19 a source that you can mix with and blend with,
20 and if you have a water quality you're dealing
21 with that isn't bad, too bad, but it's bad --
22 it's too bad for people to drink, then you can
23 mix a low volume amount of desalinated water
24 with that to bring it down within drinking
25 water standards.
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1 TREASURER GALLAGHER: So you can get
2 some --
3 MR. VERGARA: Yes.
4 TREASURER GALLAGHER: -- volume.
5 MR. VERGARA: That's correct.
6 The last area I'd like to mention to you,
7 Governor, and it's -- and it is right here
8 literally where you are sitting, that's in this
9 great City of Tampa.
10 We are in a situation where the
11 City of Tampa is having to get its water supply
12 presently from sinkholes, from the bypass
13 canal, and -- and from diversion -- additional
14 diversions from a central well field system
15 that we have identified as causing significant
16 environmental problems.
17 And the problem is -- is -- is becoming
18 exacerbated. Very quickly, we've listed the
19 City of Tampa third because it gets that water
20 from Tampa Bay water, which is a regional
21 utility here, and they have assured us that
22 they will do whatever it takes to make sure the
23 City gets ample amounts of water, which may
24 include piping -- additional piping, which
25 gives us -- does not exist today from their
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1 groundwater systems.
2 Yes, sir.
3 TREASURER GALLAGHER: One of the problems
4 we have when we get low groundwater, and we go
5 even deeper, is that we end up with some
6 surface tensions that cause homes to crack,
7 start falling in, those kinds of things.
8 So have we seen an increase in that? I
9 know we'll end up seeing it in insurance claims
10 is what sometimes comes about.
11 Have we run into that around this --
12 MR. VERGARA: We --
13 TREASURER GALLAGHER: -- area?
14 MR. VERGARA: -- we have run into that.
15 But it is something that has occurred over the
16 years, that these people there that are in the
17 northwest Hillsborough, and central
18 Pasco County area, where this central well
19 field system's located, have complained of
20 that.
21 And they are in the process of trying to
22 work with Tampa Bay Water and -- and their
23 insurance companies and through lawsuits,
24 trying to resolve the difficulties.
25 GOVERNOR BUSH: Sonny, could I just pause
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1 for a second?
2 We have -- we might have someone here that
3 said he might be here, named Ron Anderson.
4 Is he here?
5 TREASURER GALLAGHER: There he is.
6 GOVERNOR BUSH: Mr. Anderson, can we
7 just -- if you could just -- 2 minutes just to
8 put a human face on this very issue. I didn't
9 know the Commissioner was going to bring it up.
10 If you could describe your situation real
11 quick, because we've all got to get outside
12 with the people out there.
13 But I appreciate you coming, taking a day
14 off to -- to describe your situation, because
15 it's something that -- that you believe in this
16 area, there's going to be a lot more of these
17 kind of experiences.
18 And I'm glad you asked the question, Tom.
19 MR. ANDERSON: Very quickly, back in 1997,
20 I developed hairline cracks in the walls of my
21 home. Today I have 4-inch gaps. I think it's
22 going to be condemned. I have no place to
23 live.
24 Insurance companies will not pay for this
25 type of damage. And there's been no assistance
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1 made available in the state.
2 Excuse me.
3 That -- that's why --
4 GOVERNOR BUSH: And your neighborhood --
5 your neighborhood -- you -- you live in
6 Polk County, don't you?
7 MR. ANDERSON: Yes.
8 I'm representing 26 homes in my
9 neighborhood.
10 GOVERNOR BUSH: So this -- this could --
11 may be an isolated issue. I don't know --
12 TREASURER GALLAGHER: Well, it -- it --
13 GOVERNOR BUSH: But I doubt that it is.
14 TREASURER GALLAGHER: -- it's isolated
15 there. But there's been some very serious
16 problems in Largo in the past that's very
17 similar.
18 It does happen when, in fact, tables go low
19 and we're pumping the water out. And -- and
20 many times in this -- the aquifer, of course,
21 the water is supportive of -- of the -- of the
22 lime rock.
23 And when, in fact, you pump the water out,
24 the lime rock doesn't have the ability to hold,
25 and it starts to -- to cave in a little. And
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1 it causes some of these homes to have serious
2 problems.
3 MR. ANDERSON: Within Polk County, there
4 are four subdivisions being affected. I can
5 almost count up to eighty-something homes with
6 fifteen, twenty thousand dollars damage, or
7 more, without assistance from the State and/or
8 from our insurance companies, because we have
9 nowhere else to turn.
10 GOVERNOR BUSH: I also want to mention that
11 Mr. Anderson is a -- one of our colleagues.
12 He's a State employee, he works for the
13 Department of Transportation, and does a good
14 job.
15 But I thought it was appropriate -- I
16 didn't know you were here still. So I wanted
17 to make sure you had a chance to express your
18 opinion, because these are the -- kind of the
19 side effects that people don't realize. We
20 think about the fires, most of which are
21 created by human, either arson or by just
22 stupidity.
23 And we -- we can understand the droughts,
24 because we have to not -- we can't water our
25 lawns. But this has had -- this has a much
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February 27, 2001
1 broader impact on our economy, and on hardships
2 on a lot of people, and it's -- it's -- it's
3 something that we need to consider to be
4 I think higher up our list of things to be
5 concerned about over the next four or
6 five months.
7 MR. ANDERSON: I was asked by a member of
8 your staff to be available for this round table
9 discussion to answer any questions that occur.
10 There's a lot of issues that -- that you
11 may not be aware of, like, the -- the reselling
12 of these homes at -- at very high dollar --
13 GOVERNOR BUSH: Without notification of
14 their problems?
15 MR. ANDERSON: That's all happening.
16 GOVERNOR BUSH: Well, are you going to come
17 this afternoon?
18 MR. ANDERSON: Like for me to be there --
19 GOVERNOR BUSH: I'll tell Colleen, and
20 we'll -- we'll make sure you're there.
21 We appreciate you coming.
22 I'm sorry, Sonny.
23 MR. VERGARA: Thank you, Governor.
24 One quick comment on that particular
25 situation is that we've had our regulatory
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February 27, 2001
1 staff out visiting with the folks, and we think
2 we have an understanding of what's -- what's
3 happening out there. We can talk about them
4 this afternoon, if you wish.
5 But anyway, we -- we appreciate your focus,
6 your comments on this particularly bad
7 situation in -- in our area. And in hope that
8 as a result of your being here, there will be
9 a -- an increased round of governmental
10 cooperation and collaboration, which is so
11 necessary to resolve these problems because
12 it's not going to be solved by any one
13 government. It's going to take a -- a
14 collaboration of multigovernance.
15 Thank you, sir.
16 COMMISSIONER CRIST: I just have a simple
17 question.
18 And maybe you can answer it.
19 Are we losing freshwater leaving through,
20 like, through Crystal River going out into the
21 Gulf of Mexico? And if we are, do you have any
22 idea how many millions of gallons a day --
23 MR. VERGARA: Through spring flow?
24 Yes. Of course.
25 Those springs are flowing as Rainbow,
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February 27, 2001
1 Crystal, Weeki Wachee, all of those are
2 freshwater flow. Crystal, not so much. It's
3 probably lower quality.
4 Rainbow Springs flows about 500 million
5 gallons per day, Weeki Wachee flows on an
6 average of about a hundred and -- I think
7 160 CFS, which is about 100 MGD -- million
8 gallons per day, something like that.
9 So there are lots of water -- there is a
10 lot of water flowing to the coast, but you have
11 to ask a lot of other questions to relate to
12 whether or not that's a good or bad thing.
13 COMMISSIONER CRIST: Has it ever been
14 explored as a management tool to try to harvest
15 some of that for human usage?
16 MR. VERGARA: Well, yes. As a matter of
17 fact, City of St. Petersburg owns Weeki Wachee
18 Springs. They purchased it decades ago, just
19 for that purpose.
20 It's just that there has always been other
21 alternatives available to them at a cheaper
22 price than transporting it from Weeki Wachee.
23 And today, there's a whole new host of problems
24 associated with developing springs for public
25 water supply reuse.
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February 27, 2001
1 COMMISSIONER CRIST: It may be cheaper than
2 some other alternatives being explored though.
3 MR. VERGARA: Perhaps.
4 COMMISSIONER CRIST: Perhaps.
5 GOVERNOR BUSH: Don't forget our estuaries
6 and natural systems, too.
7 TREASURER GALLAGHER: Oh, yes.
8 GOVERNOR BUSH: The water provides a
9 pretty --
10 TREASURER GALLAGHER: It flows down there,
11 and we don't have that. But it's a mess.
12 MR. VERGARA: Thank you.
13 GOVERNOR BUSH: Thank you, Sonny.
14 We're also happy to be I think in the
15 District -- while other districts have done a
16 great job working on conservation, the
17 Southwest Florida Water Management District
18 counties and municipalities have been at it a
19 little bit longer, and probably have the best
20 conservation record of the -- in the urban
21 areas at least of any -- any part of the state.
22 And that's a tribute to the citizens of
23 Hillsborough and Pinellas and the other
24 counties that have made the sacrifice, and we
25 appreciate it.
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1 Frank.
2 MR. FINCH: Good morning, Governor and
3 members of the Cabinet. I'm Frank Finch from
4 the South Florida Water Management District.
5 And I'll try to be very brief, not repeat
6 what's already been said.
7 Getting right to the point in south
8 Florida, we have a very grim drought situation.
9 The driest year on record was 1938. The second
10 driest year was the year 2000, and only by a
11 whisker.
12 And the population growth from 1938 to
13 year 2000 was enormous. So we have much
14 greater demands on the system, and the second
15 worst drought in history.
16 The climate prediction center shows us no
17 reason for hope. We've got a big brown circle
18 that engulfs most of central Florida, and this
19 is considered exceptional drought, the worst
20 category they've got.
21 This area also contains the headwaters of
22 the system that feeds south water -- south
23 Florida.
24 So the source of water, rainwater in the
25 headwaters, has dried up, and we're living off
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February 27, 2001
1 our reserves. The reserves are the groundwater
2 system and our lake system.
3 But what are we doing about this? Very
4 briefly, we've taken actions -- our governing
5 Board has taken actions to reduce consumption.
6 In the agricultural areas around
7 Lake Okeechobee, we've reduced farmers to
8 50 percent allocation of normal. And this is
9 now starting to show some economic losses.
10 In the urbanized areas in utilities, we've
11 reduced water pressures, we've also asked them
12 to curtail back to 30 percent of usage.
13 And quite frankly, those -- those
14 restrictions have not been fully successful.
15 We have not obtained our goals. We need to
16 keep pressing.
17 We have had our emergency operation center,
18 which is managing our drought activities,
19 operational since November. And doing a lot of
20 things to include public outreach and public
21 service announcements.
22 We have stressed water conservation in a
23 whole range of issues, including the schools.
24 We have engaged the school systems, the
25 children -- we think sometimes the most
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February 27, 2001
1 effective way is get the parents to do the
2 right thing.
3 So we have created some contests, some
4 awareness campaigns, to use the school system.
5 Compliance with water restrictions still
6 has a ways to go. We have conducted workshops
7 with law enforcement officials, impressing upon
8 them the public need that this represents.
9 This is not just ratting on your neighbor
10 because they're watering their lawns. This is
11 preservation of the public's drinking water
12 supply.
13 I wish there was some good news I could end
14 up with. But in -- in the short run, and in
15 the long run, we do not see any relief, and we
16 really have to start cutting back.
17 Conservation is the key at this point in time.
18 In the long run, we do have the Everglades
19 restoration program, but those projects will
20 not be on line in time to help us in this
21 drought.
22 Thank you.
23 GOVERNOR BUSH: Thank you very much.
24 MR. SEIBERT: Governor, we'll close with
25 Janet Llewellyn from DEP. She is the Director
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February 27, 2001
1 of -- Director of the Division of Water
2 Resource Management.
3 But before Janet comes up, I want to
4 thank you for your attention. I know we're --
5 you know, tight time frame.
6 What you were seeing is the initiation of
7 probably the most collaborative State agency
8 approach on an issue that you may have ever
9 seen. And certainly added to that is
10 Department of Agriculture. They've been a
11 major player in all of this.
12 So with that, Janet, take us home.
13 Janet.
14 GOVERNOR BUSH: The closer.
15 MS. LLEWELLYN: Good afternoon.
16 In an interest of time, we'll skip the
17 power point presentation, and -- and go right
18 to the nut.
19 All of you should have just received a copy
20 of a Proposed Drought Action Plan that the
21 Governor has asked DEP and DCA to put together
22 for consideration.
23 As you could see from the Water Management
24 Districts and DCA, we're lucky in that we have
25 a good framework in Florida to deal with the
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February 27, 2001
1 drought. We have institutions in place, the
2 Water Management Districts have water shortage
3 orders. Those have been working for the last
4 one to two years.
5 This action plan is to suggest things we
6 can do on top of that, actions that we can do
7 to make us more successful. We've laid out in
8 this plans, proposed short-term, midterm, and
9 long-term actions.
10 In the short term, the key is conservation.
11 The key is public education and awareness, and
12 enforcing the current water restrictions that
13 are in place at -- from the Water Management
14 Districts, and some more stringent at the
15 local level.
16 Let me very briefly talk about some other
17 very short-term actions.
18 Regulatory relief. The agencies can use
19 their emergency powers to authorize immediate
20 actions taken to address the drought.
21 Some examples would be in drinking water
22 systems that are starting to salt up, they need
23 to bring in -- borrow treatment facilities that
24 have a brine discharge. DEP can issue
25 emergency permits for that discharge to make
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DEPARTMENT OF COMMUNITY AFFAIRS 225
February 27, 2001
1 sure our drinking water stays secure.
2 Budgetary flexibility at the agency is to
3 allow us to move around our budget to address
4 urgent drought needs, take a look at our
5 consumptive use permitting practices during the
6 drought to make sure we're adequately
7 protecting existing legal users, and the public
8 interest.
9 And encourage local governments to do more
10 enforcement of the water shortage orders.
11 Also in the short-term action, we've laid
12 out a series of agency coordinations, starting
13 with this briefing.
14 We also will be meeting this afternoon --
15 the Governor, along with Commissioner Rhodes,
16 meeting with the agencies, as well as local
17 governments, and representatives of various
18 interest groups to talk about a coordinated
19 strategy for the drought.
20 You heard a little bit about briefing the
21 Federal government and the needed Federal funds
22 that we may be requesting, and that's well
23 underway.
24 Public service announcements. I understand
25 the Governor's got some that will be released
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DEPARTMENT OF COMMUNITY AFFAIRS 226
February 27, 2001
1 today that help encourage the public to
2 conserve water, and --
3 GOVERNOR BUSH: Can I just --
4 MS. LLEWELLYN: -- the water --
5 GOVERNOR BUSH: -- can I tell an anecdotal
6 story about that?
7 We were going to Lake Jackson, which as --
8 for people up in Tallahassee know is -- is
9 totally dry. And we were going to go to the
10 bed of Lake Jackson to do this public service
11 ad, and it rained.
12 First and only time it's rained like in
13 60 days that I've been in Tallahassee. So
14 we -- we did it inside of the State Capitol.
15 But sometimes you can't -- can't win.
16 TREASURER GALLAGHER: Could you move around
17 and bring that rain dance to -- to --
18 GOVERNOR BUSH: Yeah. I've tried.
19 TREASURER GALLAGHER: -- all the state.
20 GOVERNOR BUSH: It hasn't worked.
21 I'm sorry.
22 MS. LLEWELLYN: To some examples of the
23 midterm measures, more ways to focus on
24 conservation.
25 A conservation committee to help identify
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DEPARTMENT OF COMMUNITY AFFAIRS 227
February 27, 2001
1 and promote conservation measures statewide.
2 And also accelerating our development of
3 alternative drought resistant water supplies,
4 such as RO, such as aquifer storage and
5 recovery.
6 In the long-term, we have some good
7 long-range plans in place for water supply.
8 The Water Management Districts have developed
9 20-year water supply plans to meet our
10 projected needs.
11 And we also have the Comprehensive
12 Everglade Restoration Plan, which, in addition
13 to restoring our Everglades, should also
14 address water supply needs for the next
15 50 years.
16 Now, it should be said that these long-term
17 plans are based on meeting our needs during a
18 one in ten year drought event. And we're in a
19 much more extreme drought event than that.
20 So water restrictions will always be a part
21 of the scene to meet these unusual rare drought
22 restrictions.
23 But the more we can develop these
24 alternative supplies that are more drought
25 resistant, the better off we'll be.
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DEPARTMENT OF COMMUNITY AFFAIRS 228
February 27, 2001
1 So in a nutshell, that's the plan. We're
2 going to be getting input from everyone on it
3 this afternoon.
4 GOVERNOR BUSH: Thank you very much.
5 Steve, is that it?
6 MR. SEIBERT: That's it, sir.
7 GOVERNOR BUSH: We appreciate y'all coming.
8 And thank you very much for hosting us,
9 Tampa.
10 (The Department of Community Affairs Agenda
11 was concluded.)
12 * * *
13 (The Cabinet meeting was concluded at
14 12:45 p.m.)
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229
February 27, 2001
1 CERTIFICATE OF REPORTER
2
3
4
5 STATE OF FLORIDA:
6 COUNTY OF LEON:
7 I, LAURIE L. GILBERT COX, do hereby certify
8 that the foregoing proceedings were taken before me
9 at the time and place therein designated; that my
10 shorthand notes were thereafter translated; and the
11 foregoing pages numbered 87 through 228 are a true
12 and correct 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 9TH day of MARCH, 2001.
18
19
20
21
22
23
LAURIE L. GILBERT COX, RPR, CCR, CRR, RMR
24 100 Salem Court
Tallahassee, Florida 32301
25 850/878-2221
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