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The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding,
in the Cabinet Meeting Room, LL-03, The Capitol,
Tallahassee, Florida, on Tuesday, March 12, 2002
commencing at approximately 9:10 a.m.

Reported by:
Registered Professional Reporter
Registered Merit Reporter
Certified Realtime Reporter

TALLAHASSEE, FL 32301 (850)878-2221

Representing the Florida Cabinet:




Commissioner of Agriculture

Attorney General

Commissioner of Education

* * *


(Presented by Jennifer Carroll)


1 Approved 5
2 Approved 7
3 Report 7

(Presented by BeBe Blount)

1 Approved 20
2 Approved 21

(Presented by David Struhs)

1 Approved 22
2 Approved 24
3 Withdrawn 24

(Presented by David Struhs)

1 Approved 25
2 Deferred 26
3 Approved 26
4 Withdrawn 27
5 Approved 33

(Presented by Wayne Pierson)

1 Approved 34
2 Denied 52
3 Withdrawn 53
4 Withdrawn 53
5 Approved 64
6 Approved 64
7 Approved 64


(Presented by Tom Herndon)

1 Report on status 65


1 P R O C E E D I N G S
2 (The agenda items commenced at 10:00 a.m.)
3 GOVERNOR BUSH: The Department of Veterans
4 Affairs.
6 minutes.
8 GOVERNOR BUSH: Moved and seconded. Without
9 objection.
10 Item number 2.
11 MS. CARROLL: Good morning, Governor and
12 Cabinet.
13 Item number 1, I would like to recommend
14 acceptance of the minutes of November 27 --
15 GOVERNOR BUSH: We just did that. Item 2.
16 MS. CARROLL: Item number 2, recommend
17 acceptance of quarterly report for the second
18 quarterly report for 2001-2002.
21 SECRETARY HARRIS: Can I make a couple of
22 comments on the quarterly motion.
23 I wanted to complement the Honored Vet
24 Program that's going on, the Supervisors of
25 Elections statewide adopted; it's actually a
1 program that started nationally and today it is
2 the -- it is President's Bush American Liberty
3 Initiative.
4 And what the supervisor have done, they
5 created shirts like this that say Honor of
6 Vets.
7 They have done other programs. What it's
8 trying to do is trying to link the sacrifices
9 our men and women in uniform make so we can
10 vote.
11 Bay County Supervisor of Elections, Mark
12 Anderson, created this poster that links us
13 with voting, which is important. And Susan
14 Gill has an extraordinary program she takes
15 into schools that teaches students who are
16 preparing to vote, how important it is; and
17 there are a few slides I don't know if she is
18 going to show them or not.
19 You actually -- it shows the young men who
20 have gone off to war, who weren't even of age
21 to vote, yet they are fighting, shows the
22 sacrifices many people made, whether it was
23 tires or nylons, what have you, that Americans
24 did. And also just how proudly it shows
25 several of the biographies of the World War
1 Korean Veterans or Vietnam.
2 Some of these they are able to take
3 through all the schools to really encourage
4 people to vote, particularly based on all the
5 facts, it sounds a powerful message. I wanted
6 to thank the Veterans Affairs for including
7 that program among their initiatives. Thank
8 you.
9 MS. CARROLL: Thank you. Item number 3.
10 GOVERNOR BUSH: We got we had a motion and
11 second. Without objection, it's approved.
12 Item 3.
13 MS. CARROLL: Item number 3, FDVA is directed
14 by the legislature to report on outsourcing tests
15 this month, and I would like to give you a brief
16 update on our State Veterans Nursing Home program,
17 outsourcing program, that we are currently
18 conducting at Pembroke Pines Nursing Home.
19 This program is also reviewed by APAGA as
20 well as AHCA, so that we can make sure that we
21 are having accurate numbers and figures that we
22 are representing.
23 The mission of the State Veterans Nursing
24 Home is to provide comprehensive, high-quality
25 health care service on a cost-effective basis
1 to eligible Florida veterans who are in need of
2 long-term nursing home care.
3 The program provides full service
4 long-term residential care for Florida veterans
5 supervised 24 hours daily by registered and
6 licensed nurses.
7 The nursing home staff prepares a care
8 plan for reach resident, which includes
9 medical, social, dietary service and
10 therapeutic and recreational programs.
11 APAGA recently reported that the nursing
12 homes provides substantial benefits to the
13 state and to its veterans.
14 The evaluation period covers services
15 provided from April 1, 2001, through
16 October 31, 2001. This report is an overview
17 of the program.
18 An outsource service evaluation and
19 recommendation regarding the Pembroke Pines
20 outsourcing pilot program at the Outsource
21 Center under which we have contracted are lawns
22 and grounds maintenance, laundry and
23 housekeeping, health care services, principally
24 CNAs, administrative services and food
25 services.
1 The residents rated the CNA services, on a
2 scale of 5.0, a 4.2 for the services provided.
3 Overall, the outsourcing is proven to be cost
4 effective, and our service is still top notch.
5 The exception is to the social worker,
6 recreation therapist and administrative
7 services because the contractor will have a
8 higher cost than if these individuals were to
9 be state employees.
10 Under the outsourcing test concept, we
11 reduced the number of full-time equivalent FTE
12 state positions of the nursing homes by 87 FTEs
13 from the original 129 FTEs.
14 Based on the information received at the
15 time of the bid, anticipated overall savings
16 were 534,000 over a three-year period or
17 11 percent of total contract.
18 Due primarily to the increased cost
19 savings associated with the food service
20 contracts, the actual results are different.
21 Our revised estimate shows a combined savings
22 over three years as of $787,486,000 savings.
23 These savings include a 25 percent savings
24 on lawns and grounds maintenance, 12 percent
25 savings on laundry and housekeeping, a
1 4 percent savings in health services, and an
2 estimated 34 percent savings in food service.
3 The social worker and recreational
4 therapist is separate from the health service
5 contract and we are recommending for those to
6 be restored to state employees, saving over
7 $59,563 over three years.
8 And I believe you should have a chart
9 giving the cost savings across the board for
10 lawns and grounds keeping savings over a
11 three-year period of the $23,679,000; laundry
12 and housekeeping, $131,297; health services,
13 continued CNA services of $90,186 for a
14 three-year savings.
15 And we would recommend to maintain the
16 social worker, restore therapists to state FTEs
17 and restore the administrative service that's
18 given seven total FTEs.
19 We recommend also that upon their
20 recommendation as well as AHCA indicates that
21 we should continue this program, this pilot
22 program, for a full 15-year study at Pembroke
23 Pines and for our two new nursing homes we are
24 constructing to use the model at Pembroke Pines
25 to man our other two nursing homes.
1 Today I have with me Disabled American
2 Representatives from the Disabled American
3 Veterans, Veterans of Foreign War, the Retired
4 Officers Association, the Reserve Officer
5 Association, the Military Order of World Wars,
6 the US Navy CBs, American Legion, all
7 organizations, veterans' organizations were
8 contacted with our results and you fully have
9 their support to continue the recommendations
10 that I have suggested.
11 I have a letter from the adjutant, the
12 Department Adjutant of the Florida American
13 Legion who could not be with us here today; he
14 is in Washington, DC, doing his Legislative
15 Days with the American Legion, but we do have a
16 representative with us that I would like to
17 read Doug Shannon's. It states:
18 On behalf of the 123 members of the
19 Florida American Legion, I wish to thank you
20 for sharing the data from the Outsource Pilot
21 Program and the Office of Joint evaluation
22 Data.
23 I apologize that I cannot personally be in
24 attendance when your report is made. However,
25 I will be in Washington, DC, attending the
1 American Legion Legislative meetings.
2 During our meeting with the Governor a
3 little over a year ago, the American Legion
4 opposed the outsourcing of personnel who
5 directly cared for American Veterans in a
6 Florida State Nursing Home. We received the
7 Governor's personal assurance that if this
8 pilot program was not successful, that he would
9 seek to have the FTEs restored.
10 The statistics shows that there is savings
11 to the State of Florida in the area of lawns
12 and grounds keeping, laundry and housekeeping
13 health care services and food services.
14 We would support the continuation of this
15 pilot program of outsourcing for the
16 above-mentioned categories of personnel for
17 Florida Veterans' nursing homes.
18 It would also appear that this model could
19 be used for the two new nursing homes coming on
20 line in the near future. As to whether the
21 system as a whole should be revamped, I feel
22 far more data and experience must be gained.
23 I also feel the American Legion and other
24 Veterans' organizations will be very opposed to
25 expansion of the outsourcing of the nursing
1 home if we were to include RNs, medical
2 specialists and the administrators as I
3 mentioned before.
4 Those ultimately responsible for major
5 medical decisions of veterans' lives must be
6 accountable and must be state employees.
7 I feel Pembroke Pines' facility will have
8 a higher labor cost across the board than
9 possibly some of the new nursing homes coming
10 on line.
11 I would hope that this matter would be
12 revisited when we have sufficient data to have
13 a clear picture as to the actual savings of tax
14 dollars.
15 I commend you and your staff on this model
16 program, and I am sure that it has been an
17 added workload to oversee.
18 I again regret for not being here today.
19 And as I mentioned, the Veterans' organizations
20 are fully supportive of us continuing this
21 pilot program at Pembroke Pines to have a
22 full-year study as well as to use this is model
23 in our two new nursing homes because, number 1,
24 our services have not deteriorated; as a matter
25 of fact, our residents have graded, on a 5.0
1 scale, a 4.2 approval rating for their
2 services, and we have definitely shown cost
3 savings for the areas in which we have
4 contracted.
5 That ends my --
6 GOVERNOR BUSH: Any questions? Comments?
7 I think the one thing we need to be
8 careful going forward on is just to review the
9 and be sure that the CNA portion of this is --
10 that we maintain quality.
11 These are people that have contact with
12 patients. This is a common practice, but it's
13 an area, whether they are state employees or
14 not, that the management of these nursing homes
15 need to be very careful about, in their
16 day-to-day business.
17 And the cost savings, they are less from
18 what you said than some of the other, the lawn
19 maintenance and food service. So that's my
20 only advice, would be just to be vigilant in
21 that particular area.
22 MS. CARROLL: Yes, sir.
23 GOVERNOR BUSH: Labor shortages, we are
24 having problems with CNAs in south Florida because
25 of just upward pressures, people can get work --
1 these are not the best jobs in the world and they
2 can, with a little bit of skills, they can get
3 higher wages.
4 So that changing dynamic also may have an
5 impact on this. And the objective here is to
6 save money but not at the expense of the
7 quality for our Veterans.
8 That's been my commitment. And I
9 appreciate the Veterans' groups giving us a
10 chance to show how this works and saving a
11 little bit of money for the state. It's nice
12 occasionally to have a win win.
13 MS. CARROLL: Thank you. That ends my
14 report.
15 SECRETARY HARRIS: I have one question.
16 I was looking through the report, and we
17 certainly enjoyed Partnering Around the World
18 War II Museum with the Veterans' Affairs. This
19 is the first time the Department of State ever
20 went out, built everything.
21 And at our November meeting you said you
22 raised about $135,000. The good news is
23 instead of costing that much, we came in at
24 116. So we -- but we still -- you said the
25 check is in the mail.
1 MS. CARROLL: We --
2 SECRETARY HARRIS: We still have more than
3 half to go. We need to --
5 not opposed to outsourcing. Let me give a little
6 bit of background as to why I am going to vote no
7 on this issue.
8 Having been sheriff for Broward County,
9 and I think I was the first sheriff in this
10 state to outsource a number of things,
11 including food and medical. But I found that
12 outsourcing your core mission could be a
13 mistake.
14 And I understand your comments before.
15 And to outsource the CNAs, I personally believe
16 for this little bit of money that we are going
17 to save, if any at all, could be a mistake.
18 And to outsource -- I would never
19 outsource my correctional deputy, but I would
20 outsource, like I said, food, medical and other
21 type of specialties which we should not really
22 be responsible for.
23 But if we are going to operate the nursing
24 home, I think CNAs are a mistake to outsource.
25 If we are going to outsource the entire, like
1 we do in South Florida State Hospital, that's
2 one thing. But to outsource CNAs, I just think
3 from my own experience is a mistake. And
4 that's why I will vote no on this.
5 GOVERNOR BUSH: Any other comments?
6 MS. CARROLL: One thing I wanted to mention
7 with the CNA's, the reason we had such great cost
8 savings with other areas -- for example, food
9 service -- is that we had a larger contract
10 partnering with DMS.
11 And we have been looking for other CNA
12 areas, whether it's local government, that we
13 can join on to their contract because the
14 larger the contract, the bigger the savings.
15 And since we are in this alone, our cost
16 savings is not as high as we could realize if
17 we were to partner with some other entity.
19 that reason, I don't understand why, because you
20 already outsourced all the medical for the prisons
21 in that particular region of the state, not --
22 even though that particular company may not have a
23 great track record right now, but you already have
24 a company that has many, many employees, that have
25 medical backgrounds already dealing with the
1 reception centers in south Florida, dealing with
2 the Broward County sheriff's office, dealing with
3 the Palm Beach County sheriff's office; you have
4 so many entities out there that are already doing
5 this, far more than you have here.
6 This is almost no personnel at all -- not
7 to deal with those companies together, why not
8 deal with the Department of Corrections or
9 sheriff's offices in order to get what you are
10 talking about? I don't disagree with that you
11 are saying.
12 MS. CARROLL: We have looked at that, but
13 CNA's is the problem.
14 GOVERNOR BUSH: Yeah. General, I understand
15 your point of view, because this is the area where
16 I think we need to just be watching.
17 This is a pilot, the commitment still
18 stands; if the savings aren't there or if the
19 quality diminishes because of turn over or
20 whatever reason, I would recommend that we
21 not -- that we start hiring people up again for
22 the CNAs.
23 The people that make the medical decisions
24 will be state employees, and I think there has
25 not been any thought, at least from my
1 perspective, of having RNs or the medical
2 director be from a private company.
3 I think they need to be -- those folks and
4 obviously the management need to be state
5 employees.
6 MS. CARROLL: Yes, and they are.
7 TREASURER GALLAGHER: Are we voting on
8 something here? Are they just reporting?
9 MS. CARROLL: Just reporting.
10 GOVERNOR BUSH: It's a report, but somehow in
11 the minutes if you could lodge the concerns
12 expressed by General Butterworth, I would
13 appreciate it.
14 COMMISSIONER CRIST: Maybe, too, for the
15 benefit of the audience, CNA is a certified
16 nursing assistant.
17 MS. CARROLL: Correct.
18 GOVERNOR BUSH: Thank you very much.
1 GOVERNOR BUSH: Department of Revenue.
2 You don't look like Jim Zingale.
3 MS. BLOUNT: I am not Jim Zingale.
4 I am BeBe Blount standing in for
5 Dr. Zingale this morning.
6 GOVERNOR BUSH: Is there a motion on the
7 minutes?
8 TREASURER GALLAGHER: Move to approve the
9 minutes.
11 GOVERNOR BUSH: Moved and seconded. Without
12 objection, it's approved.
13 Item 2.
14 MS. BLOUNT: Item 2 is to request approval of
15 and authority to file with the Secretary of State
16 amendments to Rule Chapter 12-24, Florida
17 Administrative Code.
18 These amendments revise and update our
19 procedures for taxpayers to use to remit tax
20 payments by electronic funds transfer and to
21 submit their returns using electronic data
22 interchange.
23 The revisions also clarify that dealers of
24 communication services tax, who are required to
25 remit taxes and submit returns pursuant to that
1 new law that passed last year, Chapter 202,
2 Florida Statutes, are also subject to EFT and
3 EDI procedures.
4 TREASURER GALLAGHER: Motion on item 2.
5 GOVERNOR BUSH: Is there a second?
7 GOVERNOR BUSH: Moved and second. Without
8 objection, it's approved.
9 Thank you.
1 GOVERNOR BUSH: The Siting Board.
2 TREASURER GALLAGHER: Motion on the minutes.
3 GOVERNOR BUSH: Is there a second?
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, it's approved.
7 Item 2. Secretary Struhs.
8 MR. STRUHS: Good morning.
9 Recommending approval of item 2, which is
10 to accept the ALJ's order to issue the full and
11 final certification to the Jacksonville
12 Electric Authority.
13 If it's convenient for the board, I will
14 just describe very briefly what this project
15 is.
16 At an existing power plant siting, you've
17 got three single cycle, or some call of them
18 simple turbines where they generate
19 electricity.
20 What JEA proposes to do is really a great
21 thing both for the economy and environment
22 there because they will install heat recovery
23 systems which allows them to generate steam off
24 the existing BTUs and then power a new steam
25 turbine which will increase the output by
1 200 megawatts.
2 So this existing power facility goes from
3 510 megawatts to 812 megawatts without creating
4 another pound of pollution or burning another
5 pound of fuel.
6 This is exactly what we, as a state, I
7 think should be doing to improve the efficiency
8 of existing sites, just making them run that
9 much more efficiently.
10 We are very enthusiastic about this at the
11 department. There are some allowances, in dire
12 straights where they can burn number 1 low
13 sulfur oil, in an emergency situation, but that
14 is time limited, the number of hours they can
15 burn that fuel are limited.
16 We are recommending approval of the item.
17 I would point out just as an interesting
18 footnote that this type of capital investment,
19 which squeezes more power out of an existing
20 site with no more pollution and no more fuel
21 consumption, is something that under Florida
22 law is a benefit that is only allowed to your
23 monopoly utilities.
24 This is a benefit that still does not
25 apply to your independent power producers,
1 which is one thing that we probably need to
2 spend some more time thinking about in years
3 ahead.
4 But with that as just a footnote, I would
5 recommend approval of this item.
8 GOVERNOR BUSH: Moved and seconded. Without
9 objection, it's approved.
10 MR. STRUHS: On item 3, we are going to
11 withdraw that item or recommend it be withdrawn
12 and so we can spend more time with working on item
13 3.
14 TREASURER GALLAGHER: Motion to withdraw item
15 3.
16 GOVERNOR BUSH: Motion to withdraw.
18 GOVERNOR BUSH: And a seconded. Without
19 objection, the item is withdrawn.
20 Thank you, David.
1 GOVERNOR BUSH: Board of Trustees.
2 MR. STRUHS: Do you know if the camera is
3 working yet? I brought some photographs of this
4 site; and if it's useful, I can hand them out. I
5 thought we could project them on the screen.
6 This is an application to modify an
7 existing 10-year sovereign submerged land
8 lease, allowing the expansion of a marina from
9 21 slips to 51 slips.
10 It is the only full service marina in the
11 area. It is open to the public. It is
12 consistent with their Manatee Protection Plans.
13 And the department recommends approval of the
14 item, subject to the special lease conditions
15 and payment of $11,201.93.
16 TREASURER GALLAGHER: Motion on item 1.
17 GOVERNOR BUSH: Is there a second?
19 GOVERNOR BUSH: Moved and seconded. Without
20 objection, it's approved.
21 MR. STRUHS: Item 2, we are seeking to defer
22 this item until 5-7.
23 TREASURER GALLAGHER: Motion to defer to May
24 7, 2002.
25 GOVERNOR BUSH: Is there a second?
2 GOVERNOR BUSH: There is a motion and second
3 to defer. The item is deferred until May 7, 2002.
4 MR. STRUHS: Item 3, we are recommending
5 approval of an option agreement to acquire a
6 perpetual conservation easement on 215 acres in
7 the Green Swamp Area of Critical State Concern.
8 Once again, this proves the wisdom of
9 using conservation easements. We are able to
10 preserve the interests that are important to
11 the state for 56 percent of the appraised fee
12 simple value of the land.
13 GOVERNOR BUSH: 56 percent?
14 MR. STRUHS: 56 percent, yes.
15 TREASURER GALLAGHER: Motion to approve
16 item 3.
19 GOVERNOR BUSH: Moved and seconded. Without
20 objection, it's approved.
21 Item 4.
22 MR. STRUHS: Item 4, we are withdrawing that
23 item.
24 TREASURER GALLAGHER: Motion to withdraw.
1 GOVERNOR BUSH: Moved and seconded, there is
2 a motion to withdraw and seconded. Without
3 objection, the item is withdrawn.
4 MR. STRUHS: Item 5 is the Hunt Camp proposed
5 standard lease.
6 Perhaps a little history as to how we got
7 here.
8 Formerly this state and the Water
9 Management District had the authority but for
10 some reason prior to all of us getting here
11 chose not to exercise the option to remove
12 squatters from land owned by the Board of
13 Trustees and the Water Management District.
14 The legislature on two different
15 occasions, in 1999 and again in 2000, amended
16 the Florida Forever Act to basically direct the
17 Board of Trustees to issue leases for existing
18 hunt camps.
19 There are 27 such camps on Board of
20 Trustees Land. There are 17 of them on land
21 that is owned and operated by the South Florida
22 Water Management District.
23 In every one of these cases, 44 cases in
24 total, single claims were made as to the
25 ownership of the facilities built on the public
1 land. So in other words, none of them are
2 contested. A single person came forward
3 seeking a lease in every instance.
4 The Board of Trustees and the Water
5 Management District are directed now in statute
6 to establish reasonable fees and to impose
7 reasonable conditions as part of these leases.
8 The law does allow the Water Management
9 District to revoke the lease if for some reason
10 during the course of the 20 years it should
11 impede every Glades restoration.
12 The Board of Trustees is indemnified for
13 any damage that might occur in terms of making
14 these existing facilities inaccessible or
15 unusable because of change in water levels or
16 fire, what have you.
17 The lease payments we established in the
18 proposed lease are $1,041.33 per year. That
19 number came from the closest thing we had by
20 way of comparison which are some stilt houses
21 on the west coast of Florida.
22 We are proposing in the lease that we are
23 proposing, given the directions from the
24 legislature to make it a reasonable lease, that
25 the leaseholder should be allowed to transfer
1 or reassign the lease to another owner. We are
2 as a part of the lease condition seeking that
3 those transfers meet the approval of DEP for
4 the Board of Trustees or for the Water
5 Management District, simply to make sure that
6 the transfers are staying within the family and
7 not being transferred for some kind of
8 commercial purpose.
9 The lease renewals, that is a government
10 option. At the end of the 20-year term, the
11 leases could be renewed at the government's
12 option. That authority is delegated in the
13 statute to the DEP and to the Water Management
14 District.
15 GOVERNOR BUSH: Does the statute allow for a
16 renewal?
17 MR. STRUHS: Yes, but the option for the
18 renewal is either up to the Water Management
19 District or to the department.
20 And it also requires the leaseholders to
21 hold liability insurance at $100,000 per person
22 or $200,000 per incident.
23 We do have a speaker here who wishes to
24 speak to this, Nancy Brown from the Friends of
25 the Everglades.
1 We are recommending approval of this item.
2 What it does is it basically would get the
3 Board of Trustees to approve the standard lease
4 terms we developed, and further to delegate to
5 the department the authority to negotiate final
6 lease terms and conditions unique to each one
7 of these parcels.
8 We think that as long as we have that
9 authority and abide by the spirit of the law,
10 which is to make it reasonable, that that is
11 something that would actually benefit both the
12 government and the future leaseholders.
13 I would be happy to answer any questions
14 or to invite Nancy Brown to speak, whatever
15 your preference is.
16 GOVERNOR BUSH: Why don't we let Nancy come
17 speak?
18 TREASURER GALLAGHER: I have a quick
19 question.
20 MR. STRUHS: Apparently she is not here.
21 TREASURER GALLAGHER: If I run out and put a
22 house up, can I get a lease?
23 MR. STRUHS: No, it's time-limited and these
24 are properties that had to have been existing
25 prior to a date certain.
1 COMMISSIONER BRONSON: I have an amendment.
2 TREASURER GALLAGHER: I guess I've got to buy
3 one.
4 GOVERNOR BUSH: You can't. You can't
5 transfer the lease unless you ever you are a
6 family member.
7 MR. STRUHS: The leases we would -- under our
8 interpretation of reasonable, we would allow the
9 transfer of a lease, not necessarily limited to a
10 family member, although that's probably the most
11 likely scenario.
12 The reason we want the check-back
13 provision prior to the transfer is simply to
14 make sure that they are not being transferred
15 for some kind of commercial purpose.
16 GOVERNOR BUSH: Commissioner Bronson.
17 COMMISSIONER BRONSON: Thank you, Governor.
18 Members, I have a motion to amend the proposed
19 lease agreement for habitable structures.
20 The terms and conditions under number 4
21 titled terms I move to strike "with no option
22 for renewal" and include replacement language
23 that more closely approximates the statutes and
24 will read "at the expiration of this 20-year
25 lease, the Department of the Environmental
1 Protection shall have the right to require that
2 the leaseholder remove the structures if the
3 South Florida Water Management District
4 determines that the structures or their use are
5 causing harm to the water or land resources of
6 the district or renew the lease subject to the
7 Board of Trustees' approval." Which more
8 mirrors what's in the statutes now under the
9 Florida Forever Act.
10 GOVERNOR BUSH: Is there a second?
12 GOVERNOR BUSH: So there is a -- does
13 everybody understand the amendment? There is an
14 amendment and a second. Any discussion on the
15 amendment?
16 No, discussion all? In favor say aye.
18 GOVERNOR BUSH: All opposed?
19 Very good.
20 Now we are back to the item. Any other
21 discussion?
22 TREASURER GALLAGHER: Motion on the item.
23 GOVERNOR BUSH: Is there a second?
25 GOVERNOR BUSH: There is a motion and second
1 on the amended item. All in favor sigh aye.
3 GOVERNOR BUSH: All opposed?
4 Motion passes.
5 I thought there was going to be a big
6 fight.
8 fight?
9 GOVERNOR BUSH: No, I don't want a fight. I
10 was ready to see Commissioner Bronson going here.
11 TREASURER GALLAGHER: He brought his gloves.
12 GOVERNOR BUSH: I thought we were going to
13 get into lease terms and prices and all sorts of
14 things.
1 GOVERNOR BUSH: State Board of Education.
2 MR. PIERSON: Good morning.
3 GOVERNOR BUSH: Good morning.
4 MR. PIERSON: Item 1 is Hillsborough
5 Community College's request for a New South
6 Center. President Gwen Stephenson is in the
7 audience and Ron Faus is here if you have
8 questions.
11 GOVERNOR BUSH: Moved and seconded. Without
12 objection, it's approved. That was easy.
13 Item 2.
14 MR. PIERSON: Item 2 is Academic Charter
15 School of Boca Raton West versus Palm Beach County
16 School Boards, a charter school appeal.
17 The board may accept the appeal and remand
18 it back to the school board or deny the appeal
19 and accept the school board's action.
20 Representing the school board we have
21 Sheldon Klasfeld and Bernard Shulman will be
22 representing the Palm Beach County School
23 District.
24 GOVERNOR BUSH: Who is speaking?
25 MR. PIERSON: Sheldon Klasfeld.
1 MR. KLASFELD: Good morning, sir.
2 If you will give me a minute, I am
3 regathering from a cold I just caught, from one
4 of those sunny Florida days.
5 Good morning, Honorable Governor Jeb Bush,
6 Robert Milligan, Katherine Harris, Charles
7 Bronson, Bob Butterworth, Tom Gallagher and
8 Charlie Crist.
9 I am honored to stand before Florida's
10 fine Department of Education, and to represent
11 the best welfare and best interests of students
12 in Palm Beach County within the wonderful State
13 of Florida.
14 My name is Sheldon Klasfeld. I am 49
15 years old and a single custodial parent for 16
16 years, proudly raising a 19 year-old daughter
17 attending Florida Atlantic University and
18 having attended Florida State University, and a
19 son 17 years of age college-bound to either FAU
20 or the University of Central Florida this
21 coming summer.
22 I am a dedicated individual committed to
23 better education for all students, and I have
24 driven from Palm Beach County to Tallahassee
25 and back last week to meet before your aides
1 and have driven here again today to appeal Palm
2 Beach County's denial for Academic Charter
3 School of Boca Raton West.
4 I applied for charter school status this
5 past October 1st 2001, in an effort to upgrade
6 the educational process within Palm Beach
7 County, regardless of sex, race, creed or
8 color.
9 I have a program that works. It follows
10 the Florida State sunshine standards and is in
11 existence for two years in the private sector,
12 employing four teachers, one African-American
13 two Hispanic Americans, and one Caucasian
14 American, and myself.
15 We, as a team, have helped students go to
16 college who normally would have dropped out of
17 high school in Boca Raton.
18 I graduated the University of Pittsburgh
19 with a degree in secondary school education,
20 English grade 6 through 12. I privately taught
21 art for 23 years. I have substituted in three
22 Boca Raton middle and three Boca Raton high
23 schools and taught in Palm Beach County over a
24 period of four years. This included a wide
25 range of high school subjects including
1 Baccalaureate, TESE and I solely prepared
2 curriculum according to the Florida State
3 Sunshine Standards teaching in English, public
4 speaking, debate and TV production at Atlantic
5 high school in Delray Beach, Florida.
6 I pride myself in teaching lessons for
7 life time to students, some that still thank me
8 today as I remain a pillar in the community
9 that I have taught.
10 One student for a project that I offered
11 as an English assignment a few years back wrote
12 to then a candidate for Governor. The creative
13 writing assignment was a project about people
14 that students admired and to invite them to our
15 school based upon a well-written, persuasive
16 letter.
17 Photos are still hanging in school offices
18 and rooms of those memorable moments in the
19 students' lives. That 34 cents, then 32 cents,
20 a pen, a paper, time, energy and the desire
21 that your questions will be answered and if
22 not, well, you are no worse off.
23 Students' dreams and answers has been
24 filled from my projects in many ways.
25 Personally again, I thank you, Governor Bush,
1 for being the candidate that chose to come to
2 Atlantic High School in Delray Beach to the
3 response of the student's letter. Your
4 presence inspired the lives of students who
5 will not forget that day.
6 I also involve students in economics and
7 the stock market through the Florida Economic
8 Council of Education.
10 MR. KLASFELD: Absolutely.
11 TREASURER GALLAGHER: We are here on the
12 charter school application that was denied by the
13 school board.
14 And so all these things are real important
15 and nice, but if you would, please, give the
16 reasons why you think we should overrule what
17 the school board did. And just sort of stay
18 right on that, and let us sort of move on with
19 our agenda.
20 MR. KLASFELD: I do understand that. I
21 appreciate that.
22 I think again part of it was based upon
23 against my own character reference which was
24 not totally understood.
25 I had received an award from Lieutenant
1 Governor Frank Brogan for my success in
2 teaching economics.
3 All right.
4 The application process for charter school
5 acceptance began a highly -- began with a
6 highly motivated workshop setting. I did
7 attend workshops provided by the county.
8 I also set up individual meetings to work
9 on the application with my staff and committee
10 of dedicated educators and professionals. We
11 were assured by the charter school committee
12 that a lottery would be held if applicants met
13 at least the minimum standards.
14 GOVERNOR BUSH: Lottery for what?
15 MR. KLASFELD: Lottery because if there were
16 only three slots and there were 12 people
17 applying --
18 GOVERNOR BUSH: I don't think there is any
19 requirement of limiting. The school board had a
20 policy we are only going to approve three --
21 MR. KLASFELD: There would be a lottery,
22 correct, it was a break from the procedure. This
23 was on a calendar that they provided. One
24 scheduled workshop was cancelled and never
25 rescheduled.
1 At the end of this whole program that they
2 provided September 24th through 26th was
3 scheduled as days set aside for open
4 appointments with any of the departments.
5 I called the Palm Beach County charter
6 school staff and asked for appointments with
7 every department to make sure we had fully
8 provided the right information. The staff
9 member told me that this was impossible because
10 of time restraints, although this was the time
11 in writing on the calendar set aside for these
12 meetings.
13 I was denied proper procedure as outlined
14 in the calendar, to finalize what I had worked
15 on with other so hard for days and nights. I
16 even met with the State Regional Charter School
17 Resource Office. She was very personal and
18 helpful. Some information that she provided us
19 with was even denied as incorrect.
20 I was called in and told my applications
21 were not accepted. I was told that I should
22 withdraw my four applications and reapply next
23 year.
24 GOVERNOR BUSH: Your four applications?
25 MR. KLASFELD: I had originally applied for
1 four, correct.
2 GOVERNOR BUSH: For four schools?
3 MR. KLASFELD: For four schools, yes,
4 absolutely.
6 MR. KLASFELD: I felt confident, I felt there
7 was a need in Palm Beach and --
8 GOVERNOR BUSH: Four different areas?
9 MR. KLASFELD: Four different areas. Yes.
10 I inquired about who did get the schools;
11 they said no one had qualified. I inquired
12 what was to happen; I was told that some would
13 be given extra time to clean up and that was
14 not enough time for me, they said. This
15 extension, again, was not on the calendar.
16 To cut to the chase, to help the
17 situation, I have appealed one of those charter
18 schools to prove my point to each and everyone
19 of you that sits before me.
20 I requested equal treatment, and I did
21 prepare an addendum to the original
22 application.
23 The response that the Palm Beach County
24 gave me to those was a simple addendum
25 response, did not successfully address the
1 deficiencies. They did not itemize everything
2 that was on there.
3 And again, that was a little bit of
4 breaking from procedure that I could not rebut
5 what they might have specifically said.
6 I thought it was a little too generic.
7 And to help the effort of moving this along, I
8 can talk as a gentleman straight to you.
9 I have a lease for 10 years for a school,
10 a charter school. It's in my hands. This is
11 why most of the charter schools have failed or
12 not progressed. Unfortunately, in Palm Beach
13 County at least eight of the slots from last
14 year were withheld because people could not
15 find locations, and they asked for extensions.
16 GOVERNOR BUSH: Is there someone from Palm
17 Beach County here?
18 I thought so. If you could, can we allow
19 the school district representative to come and
20 maybe we'll have some questions for you?
21 MR. KLASFELD: In final, I would like the
22 opportunity, though, to open at least one charter
23 school to prove myself to each and everyone of you
24 here, because I have a program that works and
25 there are over a thousand students in Palm Beach
1 County that have left the high schools, the public
2 high schools. And I believe I can save them.
3 GOVERNOR BUSH: Thank you for being here.
4 Stand by.
5 MR. SHULMAN: Governor and Cabinet, my name
6 is Bernard H. Shulman, I am the senior associate
7 counsel for the School Board of Palm Beach County.
8 And before you is an application that has
9 been rightfully denied. We favor the charter
10 school movement in Palm Beach County as
11 demonstrated by the fact that we have 15 very
12 active charter schools in progress now.
13 We have nine that have been approved
14 during the course of this year that are waiting
15 for charter negotiations. And we have three
16 others that are looking for sites.
17 We supply adequate and appropriate
18 counselling and in-service workshops as is
19 demonstrated in the brief which you each have.
20 There are two pages of calendar of events
21 where we have invited the public to come hear
22 about charter schools, ask questions, have
23 those questions answered, and give them all of
24 the technical assistance that is needed.
25 Unfortunately, Mr. Klasfeld attended them,
1 did not leave appropriately with the materials
2 that were needed to fulfill the requirements of
3 an appropriate application.
4 I don't think the charter school mission
5 will be served by approving applications that
6 are not appropriate and in good order.
7 GOVERNOR BUSH: Can you describe
8 specifically -- was this a T's-not-crossed,
9 I's-not-dotted situation, or was there something
10 fundamentally flawed with the concept? Or was
11 there lack of working capital? What were the
12 concerns?
13 MR. SHULMAN: The concerns were
14 nonresponsiveness.
15 GOVERNOR BUSH: What's that mean?
16 MR. SHULMAN: There were questions asked him
17 for him to detail us or supply us with information
18 that were not just lock-key terms of self-serving
19 hopes and aspirations.
20 His answers were all "we hope to do this,"
21 "we expect to do this."
22 When we tried to find and cull from there
23 exactly how he was going to implement these
24 lock-key terms, they just were not there; it
25 was nonresponsive.
1 Those things which he did mention caused
2 some real concern. For example, he talked
3 about a principal being appointed and then the
4 board and governor and stepping aside and
5 stepping away and letting the principal run the
6 entire school.
7 As we understand it, one of the things we
8 are trying very hard to do in Palm Beach County
9 is to organize and to strengthen the governance
10 of each school.
11 By law they are responsible, they hire the
12 principal and they cannot shy away from their
13 obligation to adopt the budget.
14 And we want that very much to be in place.
15 And when he tells us that a principal is going
16 to run the show and the board of governors is
17 going to step aside, that causes concern.
18 Another thing that caused concern is that
19 when he submitted the budget, we didn't know
20 where the decimal point was. And I am not
21 trying to be acute or facetious.
22 If you look in the materials that were
23 given to you, I am not so sure that the budget
24 even added up.
25 Another thing that he talked about, the
1 decimal point was in the wrong place. These
2 are things which indicated to us that if the
3 responsibility is going to be assumed in
4 running a school, it just wasn't there.
5 He asked for an initial enterprise of a
6 10-year charter. Most of our schools come to
7 us and work with us, take on a two-year
8 responsibility. If they are exemplary as the
9 law says, they can then apply for up to 15
10 years.
11 Here is an unknown coming to us asking for
12 10 years. That caused concern.
13 Another concern is he runs --
14 COMMISSIONER CRIST: I just have a question,
15 to get back to the decimal point issue for a
16 second and capitalization is really kind of the
17 point I wanted to ask you about.
18 Once you cleared up where the point was
19 supposed to be, were you satisfied that it was
20 properly capitalized?
22 MR. SHULMAN: No, we didn't think the budget
23 was appropriate at all. Let me give you an
24 example.
25 He had contained in the budget a
1 principal's salary, an administrator's salary,
2 then a position called director of charter.
3 We had a right to know what that position
4 was. That was a $60,000 position paying more
5 than the principal's position.
6 He had an assistant principal. We were
7 worried that for starting up a charter school,
8 this was an overload in administration and that
9 more money should be directed into the
10 classroom.
11 I can go on with a whole litany of
12 concrete examples that really bothered us.
13 GOVERNOR BUSH: What is the policy of the
14 school board when applications come in and they
15 either have technical flaws like a decimal point
16 or serious areas where you are concerned; do you
17 engage with the applicants to say if you do this,
18 this and this, your application would be more
19 favorably viewed?
20 MR. SHULMAN: Yes, when the application came
21 in, we had a committee of people review the
22 application; it was not done unilaterally. We had
23 a facilities person look at his facility proposal.
24 We had a budget person look at his budget proposal
25 and all of those people put their heads together
1 with the recommendations that finally came out
2 with an unacceptable application.
3 GOVERNOR BUSH: That's not my question. My
4 question is: Do you engage with the applicant?
5 MR. SHULMAN: Yes, we responded to all of the
6 points from this committee and relayed them to the
7 applicant so that he knew exactly what troubled us
8 and what kinds of things needed modification or
9 even correction.
10 That was given to him the first time.
11 He responded a second time in almost the
12 same way. Our second response to him almost
13 delineated that he did not respond properly to
14 the first set of problems.
15 And so we were left with again and again
16 going back to him and getting letters, getting
17 kind of a narrative response without
18 delineating or helping us pinpoint exactly what
19 he was going to do.
20 GOVERNOR BUSH: Okay. Any other questions?
21 I had one question for the applicant, which is you
22 are mentioning you have a private school? I
23 assume it's private.
25 MR. KLASFELD: Correct.
1 GOVERNOR BUSH: How many students are in
2 there?
3 MR. KLASFELD: I have 35 students that are
4 there during the day. I offer two sessions. I
5 have about 15 students that are there in the
6 afternoon.
7 GOVERNOR BUSH: And the lease that you are
8 referring to would be the same premises that the
9 private schools are located in right now?
10 MR. KLASFELD: And the private school would
11 move, yes.
12 GOVERNOR BUSH: Private school would move?
13 MR. KLASFELD: Would move, yes.
14 This particular location is acceptable, as
15 charter school standards. I would be more
16 flexible to move the private school. So, yes.
17 And that's why I have a negotiated lease here
18 as a not for profit corporation.
19 GOVERNOR BUSH: Would you keep -- so you
20 would keep running the private school and running
21 a charter school?
22 MR. KLASFELD: I would find -- I have some
23 good staff; would probably keep them both in
24 operation, but they would be two separate entities
25 serving two separate types of students.
1 SECRETARY HARRIS: I have a question.
2 I was just trying to clarify, I am looking
3 at your board of directors. And you stated you
4 will be paying your board of directors, is that
5 correct?
6 MR. KLASFELD: The way it was clarified in
7 there, that some of the board of directors, the
8 people that believed in the program, would be
9 teachers.
11 MR. KLASFELD: They would be teachers also.
12 So there was more to it. This is a group of
13 people that are highly involved and interested in
14 helping all the children.
15 SECRETARY HARRIS: So you are going to have a
16 board that's going to be making the decisions
17 that's also going to be watching themselves as
18 teachers, too. But those positions, they are not
19 going to be the assistant principal, support,
20 director, coordinator of the charter, they are
21 they won't have those positions?
22 MR. KLASFELD: No, definitely not the
23 principal. The principal's only role is on hiring
24 those under the principal.
25 SECRETARY HARRIS: I don't understand -- I
1 guess I am looking at the finances; the principal
2 is going to make 50,000 and you have an assistant
3 principal at 45; you also have a director at 60,
4 and a coordinator of charter at 60.
5 I am not well versed in those, but I would
6 have thought that that's what the principal was
7 doing; that's another 120,000, which teachers
8 are making about 30; that would be four more
9 teacher. I didn't really understand those two
10 positions. Can you explain those?
11 MR. KLASFELD: Yes. Again, when we had
12 discussed this with John Goodman, who was the
13 financial director for Palm Beach County, he
14 assured us in many ways that a lot of this is
15 speculative since everything is under the final
16 jurisdiction of the Palm Beach County.
17 SECRETARY HARRIS: Finally, I am looking at
18 your board of directors, they have the same last
19 name as you. One is --
20 MR. KLASFELD: Correct.
21 GOVERNOR BUSH: You have your board as your
22 father and they are going to work too as teachers?
23 MR. KLASFELD: No, absolutely not. It will
24 be just myself. No, they would not. They would
25 be would be on the board of directors.
1 TREASURER GALLAGHER: If I could, Governor.
2 Governor, based on the technical assistance paper
3 that was done for the Department of Education by
4 Dr. William -- Dr. Alex Ben Williams, I am going
5 to move we deny the appeal and move on.
7 GOVERNOR BUSH: There is a motion to deny the
8 appeal and a second. Any discussion? Any other
9 questions?
10 All in favor say aye.
12 GOVERNOR BUSH: All opposed.
13 Thank you very much for coming.
14 I think if you are interested in doing
15 this, you probably need to get more details in
16 front of the school board for next year's
17 application.
18 MR. KLASFELD: I was denied the opportunity
19 to meet on those days that I clarified. I can
20 only tell you that.
21 And they know that, and they never
22 rescheduled the day that was missed. If that's
23 that's your decision, I can only tell you that
24 they denied me the procedure.
25 So thank you.
1 GOVERNOR BUSH: Thank you.
2 MR. KLASFELD: It was pleasure seeing
3 everybody here. And I will share this lesson with
4 my students, because that's what it's all about --
5 best interest of the students.
6 GOVERNOR BUSH: Thank you very much.
7 TREASURER GALLAGHER: Would like to move to
8 withdraw number 3 and 4.
9 GOVERNOR BUSH: There is a motion to withdraw
10 items 3 and 4. Is there a second?
12 GOVERNOR BUSH: Moved and seconded. Without
13 objection, the item is withdrawn.
14 Item 5.
15 MR. PIERSON: Item 5 and 6, if we could take
16 them together, they are rule amendments on
17 specialization requirements for certification.
18 We have a parent who would like to speak
19 on the rules, Rosemary Palmer, and Shan Goff
20 and Beth Gregory from ESE and certification are
21 here if you have any questions.
22 GOVERNOR BUSH: Welcome.
23 MS. PALMER: Good morning. Thank you for
24 letting me speak with you. I think that you may
25 have --
1 GOVERNOR BUSH: Could you state who you are
2 for the record.
3 MS. PALMER: Rosemary Palmer.
4 I think may you have in your hands the
5 written testimony that I provided yesterday to
6 Commissioner Crist's office. I wanted --
7 because you have that, I wanted to read a
8 little bit from that and address these
9 particular issues.
10 I know that you have passed a rule that
11 says that teachers will have to demonstrate
12 competence by passing a test.
13 I am here because there are 327,000
14 disabled students in Florida. They are not
15 being appropriately educated. They are
16 disproportionately represented on our welfare
17 roles. They are disproportionately represented
18 in our jails. And they are disproportionately
19 represented in our homeless shelters.
20 This is a continuing problem that has
21 existed for a number of years.
22 Now I think that what the Department of
23 Education will tell you as soon as I sit down
24 is wait a minute, all of your concerns are
25 addressed in other rules; so you can go ahead
1 and pass this rule just fine without doing
2 that.
3 The problem is this: Teacher
4 certification is the fundamental issue. We
5 have wonderful, caring people who go into this
6 profession. But we set them up for failure.
7 We set them up for failure by allowing them to
8 get the certification, the little document that
9 says I can do this, when they do not have the
10 skills to do it.
11 Because I have represented my own kids on
12 these issues, I have also come in contact with
13 a large number of both parents and teachers
14 throughout Florida.
15 You probably know that there are only
16 about seven attorneys who handle cases for
17 parents who are privately, and I do virtually
18 all of my work pro bono because nobody can
19 afford to pay on these issues.
20 I can tell you that the wonderful caring
21 teachers who want to do right by our kids are
22 completely stymied because they come out of
23 college, they get the piece of paper, and they
24 have not learned the research proven
25 methodologies.
1 Now you can say: Well, wait a minute,
2 this rule is just a little tiny part of the
3 picture. After all, they are going to have to
4 pass a test.
5 All of us are college graduates here. We
6 all know it's perfectly possible to know all
7 about something and not be able to do anything.
8 GOVERNOR BUSH: I feel that way all the time.
9 MS. PALMER: For disabled kids, it matters.
10 It matters because if you do not -- if you do not
11 have an instructor who knows how to teach you
12 using direct instruction, using the recent proven
13 methodologies that we know and have known for 40
14 years in some cases that work, and you reach third
15 grade, and you haven't learned to read, the
16 chances are you will never learn to read.
17 If we pass this rule as it sits, what we
18 do is ratify the status quo for the last 25
19 years.
20 Now the Department of Education will say,
21 yes, this is teacher preparation college issue;
22 we need to address it in that setting.
23 But if you don't tell the teacher
24 preparation colleges that we are no longer
25 going to certify people who have not
1 demonstrated competence, then they will never
2 change.
3 The teacher preparation colleges, the
4 teacher retention issue is a big issue. We all
5 know it's hard to find ESE teachers, and it's
6 hard to keep them.
7 Part of the reason for that is because we
8 put them in a classroom, we gave them a piece
9 of paper, we said you are qualified because of
10 the piece of paper. But they don't know how to
11 teach the students, and so the students fail.
12 And the teacher has two choices: Either I
13 am not cut out for teaching, or the students
14 are too stupid to learn this stuff, neither
15 which is true.
16 The real problem is they simply have been
17 given the piece of paper that is meaningless
18 because they do not know the research proven
19 methodologies. They don't know how to write an
20 IEP that has measurable and objective goals.
21 They don't know how to manage a behavioral
22 problem in the classroom.
23 Some of the Department of Education will
24 probably tell you that: Well, they have an
25 internship. And that is true, they do.
1 They serve certain student teaching
2 positions. Unfortunately the teachers who are
3 supervising those internships don't know the
4 research proven methodologies either. So how
5 do they know?
6 I did a public hearing, I mean a due
7 process hearing not too long ago when I asked
8 the special ed director of the county: Well
9 so, how many of your teachers know how to do
10 methodologies that work? I don't know.
11 Why don't you know? Well, the principals
12 are responsible for deciding whether the ESE
13 teachers are competent.
14 Well, how did the teach -- how do the
15 principals know? Well, some of them have been
16 special ed teachers.
17 Okay. What about the schools that have
18 not; where that isn't the case? He said: Well
19 the state gives them a certification. It says
20 they are competent to teach ESE, and that's all
21 I am here for.
22 Please make that certification count.
23 Make it a requirement that people prove that
24 they can do what research says they have to to
25 educate our children. Thank you.
1 GOVERNOR BUSH: Thank you very much.
2 MS. GREGORY: Good morning, I am Beverly
3 Gregory, Department of Education. And we, like
4 Ms. Palmer, all had teacher quality and high
5 performing teachers as our number one imperative.
6 As a matter of fact, in our strategic planning
7 process with the Florida Board of Education,
8 teacher quality is number one.
9 We also very much support demonstration of
10 competence and skill and evaluation of
11 performance of all our teachers. But I do want
12 to talk briefly about the testing process that
13 the legislature has put in place.
14 The rules that are before you this morning
15 are foundation. They are entry level, the
16 first demonstration of subject area knowledge
17 that we evaluate for issuance of a certificate.
18 But moving up from that, there is a
19 subject area test required for every subject to
20 be shown on a professional certificate. Those
21 competencies and skills for those subject
22 areas, you sitting as the Board approved.
23 With two of the areas you have this
24 morning, exceptional student education and the
25 new K-6 certification, those competencies and
1 skills were approved here at board in January.
2 They are research based; they are based on
3 national standards, and they are derived and
4 brought to you with input of high-performing
5 practitioners in the field, the teachers who
6 are really teaching.
7 Side stepping just the ESE issues with the
8 K-6 elementary rule that you have here and
9 those competencies that were approved in
10 January, Florida we are leading the nation. We
11 are one of the states out front.
12 If you've had a chance to look at our new
13 Federal Education Bill, No Child Left Behind, a
14 measure of high quality elementary teachers
15 will be a subject area test based on competency
16 and skill that says the elementary teacher will
17 know the content, will know the math, the
18 science, the social studies, as well as how to
19 teach that.
20 So what you have in this package is a K-6
21 elementary rule combined with the subject area
22 testing that is required in Florida that is
23 going to put us down the road with compliance
24 with our federal requirement.
25 GOVERNOR BUSH: Can you deal with
1 Ms. Palmer's concerns about ESE certification
2 issue?
3 I assume you are not opposed to the other
4 rule, are you?
5 MS. PALMER: Yes, actually I read all of the
6 rules.
7 They, for instance, in the foreign
8 language area, they will certify a teacher who
9 has 30 course work hours, but they will not
10 certify a native speaking teacher unless they
11 studied their own language.
12 It's based on course work. It's not based
13 on competence. And we have a shortage, and we
14 can't afford to cut off people who know how to
15 do it because they don't have course work.
16 MS. GREGORY: But there is a new provision
17 beginning July 1, 2002, that addresses this issue.
18 We are fully in agreement.
19 We will have native speakers who can pass
20 the subject area test in foreign language, to
21 be certified in that subject area test for
22 foreign language is demonstration. You speak
23 the language, it is recorded, there is a tape
24 that is assessed as well as standard reading
25 and writing components of that.
1 SECRETARY HARRIS: I just had a question. If
2 we are planning on doing that in 2002, July, and
3 we are passing new rules now, why aren't we doing
4 it now?
5 MS. GREGORY: We only have authority through
6 the legislature, through the statute governing
7 certification, to put this particular option in
8 place beginning July 1, 2002. It's all based on
9 statutory authority.
10 But Governor, the ESE issues probably Shan
11 Goff can better address those. I just wanted
12 some general background.
13 GOVERNOR BUSH: Thank you. Shan.
14 MS. GOFF: Just to remind you that the
15 certification requirements are based upon the
16 brand new ESE grades K through 12 competencies
17 that you approved as the State Board of Education
18 in January.
19 And those competencies were developed
20 through a subcontract with the University of
21 South Florida which included the dissemination
22 of draft competencies to over a thousand folks
23 in the state.
24 The department also reviewed them, and we
25 based a lot of what's in those competencies
1 based on nationally accepted standards for
2 special education teachers, specifically those
3 adopted by CEC or the Council for Exceptional
4 Children.
5 What you have now is the process whereby
6 as the test is actually being developed as we
7 speak, it will include almost 120 items or so,
8 so that teachers, as Ms. Palmer has
9 recommended, have to demonstrate competency.
10 Is it performance-based in that I see you
11 observationally? No, that's not a hoop under
12 this particular requirement at the moment.
13 But I also do think to maybe address her
14 concern, you will approve and set that passing
15 score for that teacher, how well do teachers
16 have to perform on that paper-and-pencil test
17 in order to grant that certification coverage
18 area.
19 I don't think any of us disagree
20 philosophically with what she expects out of
21 classroom teachers. And I think we expect that
22 for all kids, but specifically for kids with
23 disabilities.
24 GOVERNOR BUSH: Any questions?
25 Is there a motion in front of us? We have
1 two items, I believe. Items -- what do we have
2 here? We have item 5.
3 TREASURER GALLAGHER: Motion to approve.
5 GOVERNOR BUSH: There is a motion and a
6 second. Any other discussion?
7 Without objection, the item is approved.
8 Item 6.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 MR. PIERSON: Item 7, there are three
14 additional specialization requirement rules which
15 were amended after publication and need to be
16 approved as amended.
17 TREASURER GALLAGHER: Motion on 7 to approved
18 as amended.
20 GOVERNOR BUSH: There is a motion to approve
21 as amended and seconded.
22 Without objection, it's approved.
23 Commissioner Crist, do you have an item?
24 COMMISSIONER CRIST: Yes, I do, Governor.
25 For clarification purposes, the record
1 contains an explanation of the withdrawal of
2 items 3 and 4.
3 GOVERNOR BUSH: Thank you, sir.
1 GOVERNOR BUSH: State Board of
2 Administration.
3 MR. HERNDON: Good morning, Governor,
4 Members, we have a good cause item for you this
5 morning to discuss possible litigation issues
6 regarding Alliance Capital Management Investment
7 losses on Enron stock.
8 I thought, Governor and Trustees, it would
9 be worthwhile to just kind of bring you up to
10 date what has happened in the last couple of
11 weeks since we last met and discussed this
12 subject.
13 Really there is litigation activity on two
14 different fronts; and not addressing the
15 activities of the Attorney General's office at
16 all, but on the Enron/Andersen side of things
17 which as you will recall was initially the
18 thrust of an awful lot of folks' attention.
19 As you know, we did not prevail on
20 becoming lead plaintiff in that lawsuit.
21 However, we are currently a member of the class
22 as it relates to both Enron and Arthur
23 Andersen, although we are seriously
24 contemplating opting out of that class and
25 pursuing our own separate litigation against
1 Enron and Arthur Andersen.
2 One of the key dates and it's somewhat
3 prothetic is on April 1st the pleadings from
4 the lead plaintiff's lawyer will be due in the
5 Houston court putting future their arguments on
6 behalf of the class.
7 And it's our thinking frankly that we
8 would like to see those pleadings, understand
9 exactly what the lead plaintiff law firm is
10 representing to the court in Texas and then
11 discuss with the AG's office and your office as
12 to whether or not an opt-out strategy is a
13 better choice for us on that particular issue.
14 GOVERNOR BUSH: What do you mean by opt out?
15 MR. HERNDON: Opt out essentially means to
16 take ourselves out of the class of plaintiffs and
17 go our own way.
18 We have employed this strategy on a number
19 of occasions in the past and find that, as a
20 general comment, I certainly don't want to
21 represent this is always the case, but as a
22 general comment that strategy often times
23 produces a higher settlement offer from the
24 defendants than the members of the class get.
25 And I don't know what General
1 Butterworth's experience has been in this
2 regard, but we have been pretty pleased with
3 that strategy over time.
4 Nevertheless, I think it's incumbent on us
5 to wait and see what the pleadings are on the
6 first, understand exactly what the law firm is
7 asking for in the way of damages, what their
8 arguments are, and so forth, and we would
9 discuss that with you further.
10 In the interim, we are still active as it
11 relates to both Enron and Arthur Andersen. As
12 you know, the bankruptcy court in New York is
13 still holding a number of hearings, and at last
14 count there were something on the order of 2000
15 active motions pending before that bankruptcy
16 court.
17 And we have, of course, the two firms that
18 we had previously engaged to represent us on
19 the Andersen/Enron matter are still involved
20 with us to make sure that our interests are
21 protected.
22 For example, Arthur Andersen has created a
23 document center, for example, in Texas where
24 they have put all of their financial
25 statements, partnership, financial interests,
1 and so forth, up to be available for
2 examination by the parties at interest.
3 And we have asked the lawyers that we had
4 working with us to look those over because
5 Arthur Andersen has made a settlement offer.
6 We want to determine whether or not from our
7 point of view it's a reasonable settlement
8 offer or not.
9 We have also been active in front of the
10 bankruptcy court judge in New York with respect
11 to the compensation packages being proposed to
12 the CEO who is in charge of working out Enron
13 out of bankruptcy.
14 They are proposing to pay him a million
15 and a half dollar salary, a 5 million-dollar
16 bonus and a hundred million dollars to the
17 firm. We think that may be a little excessive
18 for 18 people to get a hundred million dollar
19 compensation package.
20 So we have been active on that front as
21 well, along with a number of other parties.
22 Again, I don't want to represent to you
23 that we are trying to be kind of a lead
24 plaintiff in absentia by any stretch of the
25 imagination, but we do believe we have got an
1 interest at stake here and we should protect it
2 at the maximum degree possible.
3 So we are still pursuing both the Enron
4 and Arthur Andersen side of things.
5 With respect to Alliance, as you know, the
6 Attorney General's office had subpoenas issued,
7 and I know they did get some documentation back
8 by the deadline of the 28th.
9 I don't have any particular insight into
10 that information. I know the Attorney
11 General's office has indicated in the past that
12 is confidential.
13 Nevertheless, we had a meeting ourselves
14 with the legal representatives from Alliance on
15 the 7th of this month, last Thursday. We met
16 with a lawyer from corporate Alliance
17 headquarters in New York and their outside
18 litigation counsel who I think is also based in
19 New York, but it's a worldwide firm.
20 And we had a very good meeting. It was
21 very candid. It was very pointed at times. It
22 was very exasperating at times. There were an
23 awful lot of "I can't believe that you would
24 make that representation" kinds of statements
25 from us and from them throughout the course of
1 the meeting.
2 But it was worthwhile from the standpoint
3 of giving us a good perspective on their
4 viewpoint on this whole matter.
5 They did represent to us that they had
6 every intention of cooperating fully with us,
7 that they had demonstrated good faith by
8 cooperating with the Attorney General's office.
9 And we asked them to provide us with some
10 additional information in writing which they
11 also committed to do.
12 They indicated they would need to go back
13 and get some specific insight into just exactly
14 what was available in response to our questions
15 we are still waiting to hear from them.
16 GOVERNOR BUSH: Did they give you a
17 timetable?
18 MR. HERNDON: No, they didn't and that's an
19 issue we need to address. I don't know whether
20 you have an interest in addressing that here this
21 morning; perhaps so. But it's certainly something
22 that I think is appropriate to put on the table.
23 When we talked with them on it was on the
24 7th, and it certainly seems a couple weeks is a
25 reasonable amount of time to provide us with
1 information.
2 GOVERNOR BUSH: General Butterworth, can you
3 give us, without -- recognizing that your criminal
4 proceeding is confidential, as it should be; is
5 there any advice that you can give us.
7 standpoint of, as Tom stated, right now the
8 lawyers are saying they are cooperating.
9 Hopefully that will stay that way.
10 Right now we received virtually all the
11 documents we asked for and we are going through
12 them. We should be finished with that later on
13 this week. As a normal course we will ask them
14 for more documents based on that.
15 And then we will take some statements. I
16 guess we are probably a couple months away
17 from -- which with this type of case is really
18 a short time -- a couple months away from being
19 able to determine whether or not we can go
20 forward with the racketeering or whether we
21 cannot.
22 But we are -- we have assigned right to
23 date seven of our top AV rated lawyers who are
24 very experienced in this later, spending full
25 time, seven days a week on this particular
1 matter.
2 So we are probably a few weeks away from
3 being able to determine whether we can go
4 forward or not on our racketeering case.
5 GOVERNOR BUSH: My concern is that the
6 information that we need to be able to assess
7 whether or not a legal option is the best option
8 for us, a civil, not the criminal side but the
9 civil side; if we don't get the information, we
10 can't make that assessment.
11 And I think the folks at Alliance need to
12 know all the options are on the table both,
13 from the perspective of the state being
14 represented by the Attorney General for
15 possible criminal violations, but also
16 questions that are not criminal, that are
17 civil.
18 And I would like to send that signal so
19 that responsiveness that we seek and assurances
20 that they are going to be responsive are
21 meaningful; because if not, we can just sit
22 around here -- and I am more patient than I was
23 when I started as Governor, but I still I think
24 there is needs to be a sense of urgency about
25 this.
1 There are press reports about certain
2 actions and I just -- I think these are
3 complicated matters that need to be dealt with
4 in a businesslike way. But we need somehow to
5 send a signal to Alliance they need to be
6 forthcoming with the information -- weekly
7 meetings, the minutes of their weekly meetings,
8 questions about buying and selling stocks
9 during the course of the -- when they were
10 buying, going down, were other like kind
11 investments in Alliance doing something
12 different? Issues of due diligence.
13 I think that my perspective on this is the
14 best way to get that done is hire some lawyers
15 that understand how to ask these questions and
16 start moving to a position where
17 recommendations are made about how to proceed.
18 General.
19 COMPTROLLER MILLIGAN: If I understood what
20 the Attorney General was about, a good deal of
21 that information is being acquired by him.
22 GOVERNOR BUSH: Apparently not the first
23 round completely.
24 COMPTROLLER MILLIGAN: He is going back for
25 more information as necessary and hasn't analyzed
1 all that he has now.
2 I guess we talked about this at fairly
3 good length at our last meeting and kind of
4 adopted the strategy that seemed to make sense,
5 and I think still does make sense, to give the
6 Attorney General the opportunity to pursue his
7 activities; and at the same time certainly
8 continue to send a strong signal of our
9 concerns, including the option to go civil.
10 And I think the meeting that Tom had this
11 past week is certainly sending the right kind
12 of signal from that aspect. Whether we want to
13 put some sort of pressure of give us a time
14 line when you are going to provide answers to
15 the questions raised, I think that's probably a
16 good idea; we certainly would expect those to
17 be done within the next couple of weeks.
18 GOVERNOR BUSH: I am not suggesting a change
19 in strategy. I am suggesting being prepared to
20 add to the strategy, not to change.
21 I have never quite understood, and I am
22 handicapped by the fact I am not a lawyer, but
23 I don't quite understand why you can't pursue
24 both a criminal and civil strategy together.
25 We waited until February 28th, I think or
1 26th, which was the date that Alliance was to
2 provide information to the Attorney General and
3 they have, and you all are looking at it.
4 I just think that going forward, we ought
5 to have a conversation based on the staff's
6 interviewing of -- you interviewed law firms; I
7 would like to know who you are recommending we
8 consider hiring and that we are, you know,
9 ready to change or to modify our strategy at
10 the appropriate time and not have to wait every
11 two weeks, if necessary.
12 MR. HERNDON: Governor, if you recall back in
13 the early part of February, as the Attorney
14 General's subpoenas were being issued, and so
15 forth, we had interviewed several firms.
16 We are essentially prepared to make a
17 recommendation to you as to engaging a firm and
18 starting negotiating contract and fees, and so
19 forth, but we essentially put a hold on that
20 activity.
21 And if I understand you this morning, we
22 could reinitialize that and get a
23 recommendation back to you, and so forth, in
24 the interim to start that proceeding and start
25 asking some of the questions that you have
1 alluded to.
2 TREASURER GALLAGHER: Let me -- what is the
3 statute of limitations on this type of civil suit;
4 do we know?
5 MR. HERNDON: It's in years.
6 TREASURER GALLAGHER: We are sitting in I
7 guess not a year yet.
8 MR. HERNDON: No, that's correct.
9 TREASURER GALLAGHER: But the actions took
10 place like August, September, October.
11 I agree with the Governor. I think we
12 should move forward and be prepared. At the
13 same time, I think our original strategy which
14 was not to pay a bunch of legal fees on
15 something we may be able to have a bar set by
16 the Attorney General's actions, but I also
17 think the Governor is right, we need to be
18 prepared to have a law firm standing by and
19 ready and willing to jump in when we feel that
20 we are not going to get a settlement through
21 the Attorney General or it isn't enough.
22 So I guess if, Governor, your main
23 strategy here is to let them move forward on
24 knowing who our counsel is going to be and
25 being ready to go --
1 GOVERNOR BUSH: I would say, first of all,
2 it's just a general feeling. We have a fiduciary
3 responsibility to represent the people in the
4 retirement system, and I think they are counting
5 on us to be focussed on this.
6 And so one, maybe the next meeting we can
7 have a conversation about law firms.
8 Two, I would extract a time commitment
9 based on your meeting with Alliance about when
10 they will provide this information, and it
11 should be sooner rather than later.
12 It's hard for me to imagine Alliance
13 hasn't been thinking maybe someone is going to
14 ask for information that has been written about
15 extensively in the newspapers. Very hard for
16 me think that they haven't started to gather
17 this information up. And if they haven't,
18 that's bad, that shows bad faith, I think.
19 So a time line would be appropriate; and
20 then if necessary, we can have a separate
21 meeting. Maybe we don't have to do this every
22 two weeks, we can meet when appropriate to
23 prepare to take action, so that Alliance knows
24 we are serious about looking at every option
25 that we might have.
1 TREASURER GALLAGHER: I will be willing to
2 move that we have a meeting at your call; when and
3 if you feel we need a special meeting, I think we
4 should be prepared to do it not in two weeks or
5 maybe longer than two weeks, whatever you feel is
6 necessary, to move ahead on this.
7 COMMISSIONER BRONSON: I think that's most
8 appropriate. I don't think we should be keyed to
9 when we are going to have a regular Cabinet
10 meeting.
11 This is far more critical than some set
12 schedule. Let's do it when we need to do it, I
13 think at your call would be most appropriate or
14 any of our calls, for that matter.
15 GOVERNOR BUSH: Absolutely.
17 Governor's.
18 GOVERNOR BUSH: The next step is to get a
19 time line from Alliance, and then a time line from
20 you, Tom, on when you would be prepared to visit
21 with us regarding your recommendation for a law
22 firm.
23 COMMISSIONER BRONSON: I would like to
24 suggest that the Attorney General's staff,
25 Attorney General and his appropriate members of
1 the staff, not necessarily those are involved in
2 the activity that he has going on right now, work
3 with Tom on looking at this law firm and/or law
4 firms and any contracts that may be evolving.
5 GOVERNOR BUSH: Can you do that?
7 that, Governor. As the Commissioner stated last
8 time, the last thing you want to do is pay a law
9 firm money for what the Attorney General office
10 has done.
11 COMMISSIONER BRONSON: That's exactly my
12 point.
13 TREASURER GALLAGHER: I want to emphasize
14 that. We are not paying twice.
16 paying Attorney General's office anything.
17 TREASURER GALLAGHER: I promise you, you
18 don't do it free. There is an expense.
20 General's staff with his guidance is involved in
21 any contract activities with law firms, I think I
22 will feel a lot more comfortable.
23 TREASURER GALLAGHER: Make sure we are not
24 going to pay for things twice.
25 GOVERNOR BUSH: And if -- there is this issue
1 of, while we can't coordinate, as I understand,
2 the criminal and civil actions, to be able to
3 provide some guidance about where those cross
4 occasionally and what -- how we protect the
5 criminal action, I think is appropriate for the
6 Attorney General to be involved, his office.
7 Well, I think we have enough guidance.
8 MR. HERNDON: That sounds fine.
9 GOVERNOR BUSH: Can you get back to us?
10 MR. HERNDON: We will be back in touch with
11 you within 24 hours.
12 If it's possible, if I can take one more
13 minute of your time. I thought you would be
14 interested.
15 There is a little handout that we have got
16 for you that gives you a little update on where
17 the PR program is.
18 This is our first kind of summary report,
19 and I know that there is a lot of information
20 that we all want as we get a little bit further
21 along. But this just gives you some sense of
22 where we are.
23 As you will recall, we have the first
24 group of employees to be signing up, the state
25 employees, 160,000 approximately. We now
1 mailed 102,000 kits as of Friday, close of
2 business, about 65 percent.
3 We are actually getting people who are
4 making choices based on essentially just
5 receiving the kit; you will see it's only
6 288 -- very, very small number of the total.
7 But you will also get some sense of the
8 people who are deciding to stay and the people
9 who are deciding to go over to the other plan.
10 And furthermore, it just gives you some
11 little of sense how they are coming in
12 electronically versus paper, how many calls we
13 are getting, the workshops being scheduled for
14 employees, that's a very low number and it's
15 concerning us.
16 But a lot of these are just hitting the
17 streets, so we thought you would be interested
18 in this.
19 We would love to put other information on
20 here that you would find of interest, so as you
21 look at this and think about it, if there are
22 other things that would be helpful to you to
23 understand where the program is, please let us
24 know.
25 TREASURER GALLAGHER: I think that this is
1 real good, and I guess I would like to know -- and
2 I think when you are dealing with .88 percent,
3 it's a little earlier percentagewise. But I think
4 it would be worthwhile for us to know which plans
5 people seem to be pulled toward. This is a little
6 early for that, I am sure.
7 MR. HERNDON: They will not know that and we
8 won't know that until actual enrollment start.
9 But people can make a choice and say I am going to
10 stay or I am going to go and then they can change
11 their mind over the course of the 90 days, but
12 they can't actually start selecting options until
13 the enrollment window opens.
14 TREASURER GALLAGHER: I figured that. If you
15 are looking for input of what would be good for us
16 to have, I think that would be something.
17 MR. HERNDON: Well, we will definitely
18 provide you with that information.
19 COMMISSIONER BRONSON: A quick question.
20 The people who have indicated what their
21 option, tentative option is, do they have to
22 revisit that option?
23 As I read the documents, I got the
24 impression that even if you indicate now what
25 you are going to do, you still must make a
1 positive statement between 1 July and 31 August
2 in the case of state employees.
3 MR. HERNDON: I don't recall the answer to
4 that specifically, General. My recollection was
5 that if you make the choice now and don't change
6 it, it becomes live, so to speak, on June 1st.
7 But let me double check that.
8 COMMISSIONER BRONSON: It's not really clear
9 in reading the information.
10 MR. HERNDON: I will double check that.
11 GOVERNOR BUSH: Thank you, Tom.
12 (The proceedings concluded at 11:30 a.m.)
9 I, SANDRA L. NARGIZ, RMR, CRR, certify that I
10 was authorized to and did stenographically report the
11 proceedings herein, and that the transcript is a true
12 and complete record of my stenographic notes.
13 I further certify that I am not a relative,
14 employee, attorney or counsel of any of the parties, nor
15 am I a relative or employee of any of the parties'
16 attorney or counsel connected with the action, nor am I
17 financially interested in the action.
18 WITNESS my hand and official seal this 19th
19 day of March, 2002.
22 ______________________________
24 850-878-2221