THE
CABINET
STATE OF FLORIDA
_____________________________________________________
Representing:
DIVISION OF BOND FINANCE
FLORIDA DEPARTMENT OF LAW ENFORCEMENT
DEPARTMENT OF VETERANS' AFFAIRS
FLORIDA LAND AND WATER ADJUDICATORY COMMISSION
DEPARTMENT OF EDUCATION
BOARD OF TRUSTSEES
DEPARTMENT OF ADMINISTRATION
The
above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding,
in the Cabinet Meeting Room, LL-03, The Capitol,
Tallahassee, Florida, on Wednesday,June 12, 2002
commencing at approximately 10:30 a.m.
Reported
by:
SANDRA
L. NARGIZ
Registered
Professional Reporter
Registered Merit Reporter
Certified Realtime Reporter
ACCURATE STENOTYPE REPORTERS, INC.
100 SALEM COURT
TALLAHASSEE, FL 32301 (850)878-2221
2
APPEARANCES:
Representing
the Florida Cabinet:
JEB
BUSH
Governor
KATHERINE
HARRIS
Secretary of State
ROBERT
F. MILLIGAN
Comptroller
BOB BUTTERWORTH
Attorney General
CHARLIE
CRIST
Commissioner of Education
TOM
GALLAGHER
Treasurer
* * *
3
I N D E X
ITEM
ACTION PAGE
DIVISION
OF BOND FINANCE
(Presented by J. Ben Watkins)
1 Approved
5
2 Approved 5
3 Approved 5
4 Approved 6
FLORIDA
DEPARTMENT OF LAW ENFORCEMENT
(Presented by Daryl McLaughlin )
1 Approved
7
2 Approved 13
3 Approved 25
DEPARTMENT
OF VETERANS' AFFAIRS
(Presented by Jennifer Carroll, Executive Director)
1 Approved
29
2 Approved 29
FLORIDA
LAND AND WATER ADJUDICATORY COMMISSION
(Presented by Teresa Tinker )
1 Approved
37
2 Approved 37
STATE
BOARD OF EDUCATION
(Presented by Wayne Pierson )
1 Approved
38
2 Approved 41
3 Approved 47
4 Approved 48
5-18 Approved 48
19 Approved 60
4
BOARD
OF TRUSTEES
(Presented by David Struhs)
ITEM
ACTION PAGE
1 Approved
61
2 Approved 61
3 Approved 62
4 Approved 62
5 Approved 64
6 Approved 72
7 Approved 84
8 Approved 84
9 Deferred 85
STATE
BOARD OF ADMINISTRATION
(Presented by Tom Herndon, Executive Director)
1 Approved
86
2 Approved 86
3 Report 86
4 Approved 110
5 Accepted 110
6 Approved 111
7 Approved 111
8 Approved 117
9 Report 117
CERTIFICATED OF REPORTER 118
5
1 P R O C E E D I N G S
2 GOVERNOR
BUSH: Division of Bond Finance.
3 TREASURER
GALLAGHER: Motion on the minutes.
4 ATTORNEY
GENERAL BUTTERWORTH: Second.
5 GOVERNOR
BUSH: Moved and seconded. Without
6 objection.
7 MR.
WATKINS: Item number 2 is a resolution
8 authorizing
the issuance of up to $10 million in
9 parking
facility revenue bonds for Florida
10 Atlantic
University.
11 TREASURER
GALLAGHER: Motion.
12 SECRETARY
HARRIS: Second.
13 GOVERNOR
BUSH: Moved and seconded. Without
14 objection,
it's approved.
15 MR.
WATKINS: Item number 3 is a resolution
16 authorizing
issuance of up to $26,905,000 in
17 parking
facility revenue bonds for Florida
18 International
University.
19 TREASURER
GALLAGHER: Moved.
20 SECRETARY
HARRIS: Second.
21 GOVERNOR
BUSH: Moved and seconded. Without
22 objection,
it's approved.
23 MR.
WATKINS: Item 4 is a resolution
24 authorizing
the issuance of up to $13,700,000 in
25 parking
facility revenue bonds for the University
6
1 of South Florida.
2 TREASURER
GALLAGHER: Motion on 4.
3 SECRETARY
HARRIS: Second.
4 GOVERNOR
BUSH: Moved and seconded. Without
5 objection,
it's approved.
6 Thank
you, Ben.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
7
1 GOVERNOR BUSH: Florida Department of Law
2 Enforcement.
3 MR.
McLAUGHLIN: Good morning, I am Darly
4 McLaughlin,
FDLE. Commissioner Moore is in
5 Washington
today.
6 GOVERNOR
BUSH: Why is he there today?
7 MR.
McLAUGHLIN: He is -- Governor, I have a
8 feeling
you know.
9 He
has been appointed by the President to
10 serve
on the Homeland Security Advisory Council
11 for
the nation. He is the only law enforcement
12 representative
on that group, the last time I
13 looked
at the list. We are highly honored at
14 FDLE
that he was recognized and we feel that's
15 good
for Florida.
16 GOVERNOR
BUSH: It's great for Florida.
17 MR.
McLAUGHLIN: So he asked me to fill in
18 for
him today.
19 TREASURER
GALLAGHER: Move the minutes.
20 SECRETARY
HARRIS: Second.
21 GOVERNOR
BUSH: Moved and seconded. Without
22 objection,
it's approved.
23 Item
2.
24 MR.
McLAUGHLIN: Item 2 is the quarterly
25 report,
the third quarter. With your indulgence,
8
1 I want to comment just on a few things with
2 respect
to that report to bring you up to date on
3 some
things I have been talking to the Cabinet
4 aides
about for sometime now.
5 The
good news, Governor and Members of the
6 Cabinet,
is that we are making great progress
7 in
our crime laboratories. We have had a
8 concerted
effort for some time now to bring our
9 laboratories
up to a level of funding, a level
10 of
staffing that would allow us to provide the
11 kind
of service to the criminal justice
12 community
that you all would expect and our
13 citizens
of the state would expect. We are
14 making
progress.
15 The
good news is the third quarter, seven
16 of
the nine disciplines have met their
17 turnaround
times. That's a significant issue
18 for
us.
19 But
the better news is that this last
20 month,
the eighth discipline, computer evidence
21 recovery,
was able to meet their turnaround
22 time
and also to eliminate their backlog.
23 We
have one discipline remaining, that's
24 our
DNA serology discipline. I just want to
25 comment
a second or two on that with your
9
1 permission.
2 We
have in Florida a pretty extensive DNA
3 operation.
Our DNA database is the largest in
4 the
country. We have more hits against that
5 database
than any other state. We are
6 providing
consultation to other states and the
7 federal
government on the DNA database on some
8 of
the DNA issues even as we speak.
9 We
have had a problem turning that around,
10 but
with your recommendation and the
11 legislature's
approval, the calvary is on the
12 way.
13 We've
got 26 new personnel that will show
14 up
July 1. They will actually begin work that
15 day.
Within 90 days after their report, we
16 believe
they will become productive in the
17 crime
laboratory system.
18 And
the good news is when we lose
19 experienced
scientists, these forensic
20 technologists,
who are not yet testifying
21 analysts,
will have the opportunity then to be
22 trained
to move right into their positions.
23 That
has been a real problem in our
24 laboratory
and been a real problem with DNA
25 some
time now.
10
1 So we are very encouraged by that. We
2 project
that with an additional million dollar
3 federal
grant that we just received notice of,
4 we'll
be purchasing some robotic equipment;
5 we'll
be outsourcing some of our nonsuspect DNA
6 cases.
We expect that turnaround time to be
7 achieved
certainly by the end of the first
8 quarter
of the next fiscal year and no later
9 than
the second quarter, but I have been
10 assured
the first quarter, we should see
11 dramatic,
dramatic improvement.
12 We
have actually eliminated some part of
13 our
backlog; that's been an on-going issue. We
14 had
2700 cases last month pending and in a
15 month's
time we were able to cut into the
16 backlog
by nearly 400 cases, and that's
17 significant.
18 We
are encouraged, our laboratory people
19 are
hard at it. They are doing what I think
20 the
people of Florida expect them to do. They
21 are
working extra hard. They are working
22 smart,
and we are trying to use resources at
23 our
disposal to bring this issue to some
24 fruition
very shortly.
25 With
respect to other issues in our report
11
1 there, Governor and Members of the Cabinet,
2 there
is some excellent news that we don't talk
3 much
about, but I just want to bring to your
4 attention
very briefly.
5 In
the information area, this is an area
6 that
our chiefs and sheriffs across the state
7 are
very concerned about. We now have 39,000
8 workstations
tied into our FCIC system, the hot
9 files.
10 For
those who have been out there and seen
11 this,
you know that our requirement is 24 hours
12 a
day, seven days a week that we give two to
13 five-second
response to police officers on the
14 street.
99.9 percent of the time we are able
15 to
do that. We ought to be doing it a hundred
16 percent
of the time, but the significance of
17 that
is that's 80 million transactions a month
18 coming
across that system; 39,000 terminals
19 hooked
up.
20 So
we are very pleased with that. We are
21 meeting
our standard and making progress there.
22 And
finally, with respect to that report,
23 nearly
80 percent of our fingerprint
24 submissions
from across the state now are
25 coming
to us electronically. We never touch a
12
1 paper fingerprint card in 80 percent of the
2 cases.
That's been a goal of ours for the last
3 five
years.
4 Actually
when Commissioner Crist was
5 Senator
Crist, he was chairman of our
6 appropriations
committee, he helped fund that
7 issue
so that we could actually get that in
8 place.
9 So
that is coming to fruition. We are
10 very
pleased with that, and I will be happy to
11 try
to answer any questions with respect to the
12 report.
13 SECRETARY
HARRIS: Governor?
14 GOVERNOR
BUSH: Yes.
15 SECRETARY
HARRIS: I just wanted to say how
16 much
we appreciate the partnership with FDLE for
17 the
Live Scan opportunities, the instantaneous
18 fingerprinting
that will be in the 67 sheriff
19 offices
around the state so that whenever we have
20 private
security officers or concealed weapons
21 permit
licensing issues, that's an instantaneous
22 criminal
background check. And we are really
23 grateful
to the legislature for funding it as
24 well;
appreciate the partnership.
25 MR.
McLAUGHLIN: That was an excellent -- I
13
1 am glad you brought that up because that's two
2 million
dollars added to the FDLE budget for the
3 purposes
of purchasing cross match equipment and
4 putting
it out in the field.
5 That's
going to be such a convenience for
6 Florida
citizens, without having to wander
7 around
and try to get a fingerprint card; they
8 can
actually live scan their print, we can do
9 an
instantaneous check and that's a great
10 opportunity
for all of us, certainly a great
11 benefit
to the citizens of our state.
12 GOVERNOR
BUSH: Any other discussion on
13 item
2? Is there a motion?
14 SECRETARY
HARRIS: Move.
15 TREASURER
GALLAGHER: Second.
16 GOVERNOR
BUSH: Moved and seconded. Without
17 objection,
it's approved.
18 Item
3.
19 MR.
McLAUGHLIN: Item 3 is the performance
20 contract
between Commissioner Moore and you.
21 We
request your approval of that. I would
22 like
to comment on just one issue with respect
23 to
the Capitol Police, with your permission.
24 GOVERNOR
BUSH: Sure.
25 MR.
McLAUGHLIN: On April 11, Governor, you
14
1 signed the bill that transferred Capitol Police to
2 FDLE.
With that, there was a change in the
3 jurisdiction
of Capitol Police.
4 In
the past, every state building that was
5 in
Leon County and in each of the regional
6 service
centers across the state, the Capitol
7 Police
were responsible for providing security
8 in
those buildings.
9 The
legislature studied this thing through
10 three
sessions, two special sessions and a
11 regular
session, and finally concluded that
12 what
they really wanted was a high-level police
13 service
that was specializing in providing
14 security
for the people who work and visit the
15 Capitol
Complex.
16 They
defined that as the area between
17 Jefferson
and Duval, Gaines and Monroe Street,
18 the
Capitol buildings here, the Old Capitol,
19 the
New Capitol, Holland Building, Pepper
20 Building,
and the areas that immediately
21 surround
that area.
22 In
addition to that, they also define that
23 jurisdiction
as being out of the Satellite
24 Office
Complex. What that means to us here in
25 Tallahassee
is that those other state buildings
15
1 in Leon County that aren't particularly in that
2 jurisdiction
as defined by law will be the
3 responsibility
now of DMS to provide a security
4 plan
working with local -- our agency heads, a
5 security
plan to make sure that those buildings
6 receive
the same level of security as they have
7 in
the past.
8 We
are working with DMS, we are consulting
9 with
them. We are trying to assist them in any
10 way
we can to move that along.
11 We
have had several meetings, I believe
12 each
of the Cabinet aides have been met with at
13 least
once, the chief Cabinet aides. We also
14 had
meetings with individuals, you at your
15 request,
to discuss some of these issues in
16 greater
detail.
17 We
are optimistic that the level of
18 security
that you enjoyed over the past will
19 not
only continue but we believe we will be
20 able
to improve that with the cooperation and
21 assistance
of DMS, Department of Management
22 Services.
23 That
actually, while the law went into
24 effect
April 11, the bill actually goes into
25 effect
July 1 and the money transfers then. We
16
1 expect by the first of July we'll have a plan
2 in
place for every agency to understand exactly
3 how
that is dealt with in terms of security in
4 their
respective areas.
5 ATTORNEY
GENERAL BUTTERWORTH: One thing,
6 Governor.
Right now, are -- the Capitol Police,
7 are
they certified law enforcement?
8 MR.
McLAUGHLIN: Yes, 87 Capitol Police
9 officers
are certified.
10 ATTORNEY
GENERAL BUTTERWORTH: They are
11 certified
in law enforcement?
12 MR.
McLAUGHLIN: Right.
13 GOVERNOR
BUSH: Not all Capitol Police --
14 MR.
McLAUGHLIN: Yes, I am sorry, there are
15 certified
police officers; those that are part of
16 the
Capitol Police force, 60 of the 87 are
17 certified.
18 ATTORNEY
GENERAL BUTTERWORTH: There are a
19 number
that are certified?
20 MR.
McLAUGHLIN: Right.
21
22 ATTORNEY
GENERAL BUTTERWORTH: And they will
23 have
jurisdiction only within a few block range?
24 They
would not have jurisdiction, let's say in my
25 situation
of the Collins Building, which is two
17
1 blocks away; they would not have jurisdiction in
2 the
Pepper Building which is just literally a
3 matter
of feet from where we are standing right
4 now.
5 GOVERNOR
BUSH: They do have the Pepper
6 Building.
7 MR.
McLAUGHLIN: Actually the Pepper Building
8 is
included.
9 ATTORNEY
GENERAL BUTTERWORTH: Okay.
10 If,
in fact, they are certified, could
11 they
enter into some interlocal agreement with
12 the
City of Tallahassee in order to be able to
13 receive
some authority there in order to be
14 able
to respond?
15 MR.
McLAUGHLIN: General, they are certified.
16 They
have the authority of a peace officer for the
17 State
of Florida. They are limited by their
18 jurisdiction
as to where they can actually provide
19 police
service.
20 Yes,
in fact, we would enter into a mutual
21 aide
agreement. However, what we elected to do
22 is
work with the City of Tallahassee police
23 department
and Leon County sheriff's office to
24 arrange
for, in the instance of an event in one
25 of
those buildings, one of those outlying
18
1 areas, the 911 call would be routed directly to
2 them.
3 Chief
McNeill and Sheriff Campbell have
4 agreed
that they would be able to handle those
5 calls
and we would be, Capitol Police, would be
6 apprised
of that at a later date so we could
7 follow
up, if any follow up is needed.
8 ATTORNEY
GENERAL BUTTERWORTH: My question
9 would
be that we have a number of Capitol Police
10 that
are here 24 hours, seven days a week that are
11 a
matter of feet away from where there could be a
12 problem.
13 We
are going to get somebody -- the last
14 time
I checked, the sheriff did not do too many
15 patrols
within the City of Tallahassee. And
16 also,
I am sure there is not a local city
17 police
car always within the range whereas
18 there
is always a Capitol Police car, always
19 sitting
right out front here a matter of
20 literally
seconds away from what could be a
21 problem
any day of the week, besides to come in
22 later
and investigate. But prevention
23 obviously
is going to be a real problem here.
24 Are
any -- if you were to cross designate
25 some
of the 60 that are certified law
19
1 enforcement also as FDLE agents, could you give
2 them
the authority then to have jurisdiction to
3 be
able to go into these buildings, if even
4 only
one on duty at any given time?
5 MR.
McLAUGHLIN: Actually, FDLE, the
6 Commissioner
does have the authority to authorize
7 additional
police officer certifications for other
8 than
special agent positions within FDLE; he could
9 do
that.
10 That's
an issue that is under discussion
11 in
our agency right now, as to how to deal with
12 some
of the issues that have been raised in
13 some
of these meetings. We have not concluded
14 yet
how to proceed with that.
15 But
certainly mutual aide with the local
16 police
chief or local sheriff is an option. We
17 have
some unique authority -- the legislature
18 was
quite clear when passing -- in passing this
19 bill
to indicate to us the Capitol Police
20 service
was uniquely set up to provide the
21 security
for the Capitol Complex. And they did
22 not
want FDLE to be able to use the Capitol
23 Police
for anything other than just that. So
24 we
would have to obviously do that in concert
25 with
them.
20
1 GOVERNOR BUSH: This is why we went through
2 about
five special sessions and a regular session
3 and
didn't get this done until the very end. To
4 reach
a consensus between the House and the Senate
5 was
quite difficult about this for whatever
6 reason,
it was not an easy thing to do.
7 ATTORNEY
GENERAL BUTTERWORTH: Governor, I
8 don't
disagree with that. I know you tried hard
9 and
both you and General Milligan have done a lot
10 I
think to enhance security in the Capitol
11 Complex.
And I am personally very pleased as to
12 how
the Capitol Police have changed from something
13 when
I first started here 16 years ago with
14 polyester
jackets and cigars to now uniform and
15 guns.
16 It's
really an entirely different agency
17 than
it was before. And I would say years ago
18 I
would probably say I would rather not have
19 them
show up at the Collins Building, but I
20 have
full confidence in them now. I hope it
21 can
be worked out; really, we are concerned
22 about
the safety of not only this tall
23 building,
but we have a lot of buildings here
24 that
deal with people who are in an emotional
25 state,
that you might want somebody there at
21
1 the Department of Corrections; you have
2 Children
and Family, you have other targets
3 that
really may be really more of a target than
4 right
here.
5 GOVERNOR
BUSH: Is it possible for
6 Commissioner
Moore to come back with, or Scotty
7 Sanderson
to come back with a plan of action to
8 deal
with how we are going to implement the
9 legislation
in dealing with these issues,
10 particularly
-- it's that way, I guess. There is
11 four
or five people at any given time out there,
12 and
if they can't cross the street to deal with
13 potential
crime issues, that makes no sense.
14 MR.
McLAUGHLIN: We would be happy to do
15 this.
16 TREASURER
GALLAGHER: On this issue, if I
17 may.
When does this bill become effective?
18 GOVERNOR
BUSH: July 1.
19 MR.
McLAUGHLIN: July 1 is when the actual
20 transfer
of the money --
21 TREASURER
GALLAGHER: That's the transfer of
22 the
money, but you know, the Capitol Police quit
23 doing
the other buildings already.
24 MR.
McLAUGHLIN: Actually the law became
25 effective
when the Governor signed it I believe on
22
1 April 11.
2 TREASURER
GALLAGHER: Well, since April 11th,
3 we
had a fire alarm go off in the Larson Building
4 and
nobody answers it because it's nobody's
5 responsibility
any more. Everybody just sort of
6 has
their own thing to do.
7 That's
pretty daggone irresponsible of
8 somebody.
Now I don't know who I blame it on,
9 but
I sure don't have a budget for security but
10 I
have got to go spend money that I don't have
11 to
secure a building because it needs securing.
12 Here
we are all worried about security in
13 this
state and somebody needs to realize you
14 left
a void. And if you have a fire alarm or
15 intrusion,
there is nobody around.
16 MR.
McLAUGHLIN: Those are the very --
17 TREASURER
GALLAGHER: The local guys aren't
18 doing
it, the state is not doing it, Capitol
19 Police
aren't doing it. What are we supposed to
20 be
doing?
21 MR.
McLAUGHLIN: Those are the very issues I
22 think
we are trying to work out in concert with
23 DMS
now.
24 TREASURER
GALLAGHER: We need something done,
25 I
mean, we need it done now, not when we get a
23
1 meeting and get it done. Somebody has got to
2 carry
the responsibility and I don't know whether
3 it's
FDLE. I can tell you that I am not going to
4 call
the local city and expect them to go do it.
5 GENERAL
MILLIGAN: I want to really thank
6 FDLE
for jumping on this thing, because there was
7 a
void and they have jumped on it and DMS has
8 jumped
on it.
9 I
became aware of it because of the actual
10 fire
alarm and nobody came. That's how we
11 found
out about it.
12 But
they have been working hard to fix it,
13 and
I think they are trying to fix it. And I
14 am
supportive of what the Governor says. We
15 need
to have DMS come back here and tell us,
16 not
FDLE.
17 TREASURER
GALLAGHER: I am not picking on you
18 specifically.
Who needs to do it?
19 GENERAL
MILLIGAN: Department of Management
20 Services,
they have picked up the responsibility
21 for
this and they need to come back to us and tell
22 us
how it's been fixed.
23 GOVERNOR
BUSH: We'll get it done.
24 TREASURER
GALLAGHER: While we are here, this
25 is
probably as good a place as any.
24
1 GOVERNOR BUSH: Is this -- are we finished
2 with
the --
3 SECRETARY
HARRIS: I have a question on
4 item
3.
5 My
question on item 3 is, this is just my
6 concern.
When you see the number of missing
7 children
cases that FDLE, from 640, now looking
8 at
760, is there a breakdown of these
9 noncustodial
parent issues; are these run
10 aways?
11 MR.
McLAUGHLIN: We can provide a breakdown
12 to
you.
13 SECRETARY
HARRIS: Would you do that? I
14 would
appreciate that.
15 Is
that a high number, low number,
16 national
average?
17 MR.
McLAUGHLIN: I don't know the answer to
18 that
question.
19 GOVERNOR
BUSH: On runaways?
20 SECRETARY
HARRIS: No, on the number of
21 missing
children; I don't know how it breaks down
22 in
terms of runaways, noncustodial --
23 GOVERNOR
BUSH: I am becoming a semi-expert
24 on
runaways that are in the custody of the state.
25 And
we actually have about 1 percent of our
25
1 children that are in custody of the state that are
2 running
away, which is about half the national
3 average.
But as it relates to the larger missing
4 persons,
I don't know.
5 SECRETARY
HARRIS: With regard to FDLE, that
6 doesn't
include those that are in the custody of
7 the
state, does it? Are these separate?
8 MR.
McLAUGHLIN: It does include that. If
9 they
are entered in our system, they will be
10 there,
yes.
11 GOVERNOR
BUSH: Which they are now
12 automatically.
FDLE gets an immediate call. At
13 least
that's the theory.
14 TREASURER
GALLAGHER: Can we --
15 GOVERNOR
BUSH: Is there a motion?
16 TREASURER
GALLAGHER: Move it.
17 ATTORNEY
GENERAL BUTTERWORTH: Second.
18 GOVERNOR
BUSH: Moved and seconded. Without
19 objection,
it's approved. Commissioner Gallagher.
20 TREASURER
GALLAGHER: This is probably a good
21 thing
maybe Tim isn't here.
22 Last
September, we had a discussion about
23 some
raises for Cabinet officers and especially
24 for
Tim, and bonus. And we basically agreed to
25 do
that; and then we got into our budget
26
1 problems and everything got held and anybody
2 that
was making more than 80,000 got frozen,
3 and
so nothing happened for any of our Cabinet
4 agency
heads, some of which haven't had a raise
5 since
they were hired; because of the events
6 that
came down, not because of anything they
7 did.
8 I
would like us to bring up at the next
9 Cabinet,
let our aides work on it, to look at
10 increases
for them in regards to similar to
11 what
the state employees have had and maybe a
12 bonus
program for them in regards to the way
13 state
employees can get under the new personnel
14 actions.
So if we could get our aides to work
15 on
that for the next meeting, I would like to
16 propose
that we do that.
17 GOVERNOR
BUSH: Any objections to that? I
18 think
that's a great idea and this is the proper
19 time
since we are about ready to start the fiscal
20 year.
21 TREASURER
GALLAGHER: Exactly.
22 GOVERNOR
BUSH: I am sure Commissioner Moore
23 will
fully endorse that.
24 TREASURER
GALLAGHER: He is the one that got
25 the
shortest end of it. He actually sort of got a
27
1 vote on it and didn't get it.
2 MR.
McLAUGHLIN: I will make a report on that
3 immediately.
4 TREASURER
GALLAGHER: Also, when you look at
5 what
they done in the lab in regards to what you
6 guys
have done has been great to speed up the
7 process.
8 GOVERNOR
BUSH: I am proud of all the
9 departments
that report to the Cabinet. I think
10 we
have a great group of leaders.
11 TREASURER
GALLAGHER: Yes, we do.
12 GOVERNOR
BUSH: And Tim Moore, the fact he is
13 in
Washington, that's a bigger deal than what's
14 been
-- than what's been covered.
15 He
is on -- September 11, it was a test of
16 leadership
for all our people. And
17 Commissioner
Moore passed with flying colors.
18 And
now it's being recognized nationally.
19 Literally,
I have been told by soon-to-be
20 Secretary
Ridge, if he gets appointed or
21 whoever
it is, that he sends people down to
22 Florida,
other states, that are looking about
23 how
to structure their homeland security
24 operations.
25 And
so not only is it traditional crime
28
1 fighting elements; the fact we have the largest
2 DNA
database and dealt with the backlog and
3 hiring
scientists and cooperating with local
4 law
enforcement and all that, we now have this
5 new
responsibility and Tim has just done an
6 extraordinary
job.
7 ATTORNEY
GENERAL BUTTERWORTH: You may lose
8 him,
Governor.
9 GOVERNOR
BUSH: If I brag too much? Then I
10 will
keep my mouth shut. Thank you.
11 MR.
McLAUGHLIN: Thank you.
12 GOVERNOR
BUSH: So we'll do -- you want to do
13 that
in Miami?
14 TREASURER
GALLAGHER: We can do it in Miami.
15 That's
the last real meeting before the new fiscal
16 year
starts, and I would like to get these started
17 the
new fiscal year. Among our Cabinet aides they
18 can
come up with a recommendation that everybody
19 might
find comfortable.
20 GOVERNOR
BUSH: You bet.
21
22
23
24
25
29
1 GOVERNOR BUSH: Department of Veterans
2 Affairs.
3 TREASURER
GALLAGHER: Motion on the minutes.
4 ATTORNEY
GENERAL BUTTERWORTH: Second.
5 GOVERNOR
BUSH: Moved and seconded. Without
6 objection,
it's approved.
7 Item
2.
8 MS.
CARROLL: Item 2, I would like to
9 recommend
acceptance our of our third quarterly
10 report
for fiscal year 2001-2002.
11 TREASURER
GALLAGHER: Move.
12 ATTORNEY
GENERAL BUTTERWORTH: Second.
13 GOVERNOR
BUSH: Motion approved.
14 SECRETARY
HARRIS: I have a question.
15 On
the fiscal report, when I am looking at
16 the
breakdowns, do you have a better breakdown
17 in
terms of the -- in terms of the spending in
18 the
trust funds, which are actually state
19 employees
and which aren't, in terms of
20 salaries,
those kinds of things?
21 MS.
CARROLL: With our trust fund, the
22 dollars
are paying our state nursing home
23 employees,
and many of them are under the contract
24 for
CNAs and some of them are state employees. I
25 don't
have that on this report, but I can get
30
1 that.
2 GOVERNOR
BUSH: Can you get a breakdown which
3 are
actually state employees and which are
4 privatized?
5 I
think that's relevant. And also, just
6 the
activities in personnel that are being paid
7 out
of that trust fund that could possibly be
8 paid
from other sources?
9 MS.
CARROLL: Our trust funds are
10 self-generating
with the money that we receive by
11 the
residents that are residing in the home. Plus
12 the
dollars that comes in from our license tags,
13 our
veterans license tags. So it's no money
14 that's
coming in from the state that goes into our
15 trust
fund.
16 And
the employees only that are working at
17 our
state veterans' nursing homes are paid out
18 of
that trust fund. So the trust fund dollars
19 that
are going in paid for the staff and their
20 salaries
and maintenance of the homes.
21 SECRETARY
HARRIS: If we can get a little
22 more
thorough breakdown. I am concerned just
23 about
the accountability on how those trust funds
24 are
being used; that would be great.
25 MS.
CARROLL: Sure.
31
1 GENERAL MILLIGAN: A quick question or update
2 on
the World War II Memorial?
3 MS.
CARROLL: The World War II Memorial, we
4 raised
$175,000 and received $150,000 of in-kind
5 donations.
6 We
are continuing to raise money. We need
7 to
raise an additional $200,000 just to make
8 sure
we pay all of our debts and have our
9 monument
in the state.
10 And
I am constantly contacting
11 corporations
as well as other organizations to
12 assist
us with our fund raising efforts.
13 The
VFWs in the state have committed to
14 raising
$100,000, of which since January they
15 raised
$30,000. And they are continuing to
16 send
checks in weekly.
17 So
continuously we are beating the
18 pavement,
raising the dollars and making sure
19 that
we get information out. We have a public
20 service
announcement radio ad that is
21 throughout
the state as well as the American
22 Legion
will be printing a poster so we can
23 disseminate
the information more so to
24 additional
people to get interest to get the
25 dollars
in.
32
1 GENERAL MILLIGAN: Where are we in
2 relationship
to the goal then or the requirement
3 really
for the --
4 MS.
CARROLL: The requirement is 2005 for us
5 to
have the dollars and get a plan in place.
6 We
have opened up the museum. December 7
7 was
our opening ceremony for the museum. The
8 State
Department is in control of our
9 travelling
exhibit that will go on the road,
10 proposed
plan, next month; with three museum
11 sites
that will have some of the travelling
12 exhibit
items.
13 And
then our Heritage Trail magazine --
14 well,
the Department of State again, Heritage
15 Trail,
most of the research and information has
16 been
done by -- I forgot the doctor's name, but
17 we
need about 20,000, 20 or $30,000 to print
18 and
publish that as well as $75,000 for our
19 monument
with shipment and placement here.
20 GENERAL
MILLIGAN: Weren't there some funds
21 to
be raised to sustain the Memorial?
22 MS.
CARROLL: It wouldn't take much to do so.
23 What
we have projected initially was a higher
24 cost,
because it wasn't fully planned as to what
25 would
be. But we have had an endowment of over
33
1 $600,000, and we would not need $600,000 for the
2 endowment.
3 GENERAL
MILLIGAN: I think maybe I would like
4 to
know a little bit better where we are, what the
5 long-term
implications are and where we are in
6 terms
of -- so rather than wait, why don't we wait
7 until
the next meeting or perhaps even the one in
8 August,
if it's not appropriate or necessary to go
9 down
to Miami with it. Miami might not be a bad
10 place
to start with it if we need money.
11 GOVERNOR
BUSH: Exactly. Jennifer, you may
12 want
to comment on this, but the plan has been
13 scaled
back from the time 600,000-dollar
14 endowment.
15 GENERAL
MILLIGAN: I know that.
16 GOVERNOR
BUSH: But perhaps you could bring
17 the
story boards and talk about the design of the
18 monument.
And the Department of State has done an
19 extraordinary
job with the museum. I don't know
20 if
you all have seen it. The exhibit is really
21 nice.
22 SECRETARY
HARRIS: Thank you. Thank you very
23 much.
We are also working with you on the website
24 development
and things.
25 I
am sorry, I always ask you this, I
34
1 apologize, but we are just trying to -- we are
2 so
happy to partner with Veterans' Affairs on
3 anything
we can do. And the Division of
4 Historical
Resources is really passionate about
5 this
area of history.
6 And
so it was unprecedented, I know, for
7 us
to front the money, but we were really happy
8 to
do it. And we always find out the check is
9 in
the mail every time. But I just want to go
10 back,
how much have we raised?
11 MS.
CARROLL: We raised $175,000.
12 SECRETARY
HARRIS: The exhibit was 116.
13 MS.
CARROLL: Was 130.
14 SECRETARY
HARRIS: Well, we scaled back on
15 $6,800
anyway. The balance due is still 39,000.
16 MS.
CARROLL: 39-6.
17 SECRETARY
HARRIS: Yes. Thank you. We had
18 additional
expenses, too.
19 MS.
CARROLL: As a matter of fact, we are
20 going
to cut you another check for $10,000 here
21 this
week. We sent a check two weeks ago for
22 $20,000.
As the dollars come in, we'll pay our
23 debt.
24 GENERAL
MILLIGAN: I would just like to know
25 in
the long-term implications here to make sure we
35
1 got the program in place to sustain whatever it is
2 we
are going to have, including a monument of some
3 sort.
And I think Miami might be a good place to
4 talk
about it.
5 GOVERNOR
BUSH: Okay. Road trip.
6 MS.
CARROLL: Governor, I have two other
7 things
I wanted to mention. That we were funded
8 for
the initial staffing of our two new nursing
9 homes
and we'll have a groundbreaking for our
10 Charlotte
County nursing home on the 17th of June
11 at
10 o'clock. And hopefully many of you will be
12 able
to attend.
13 GOVERNOR
BUSH: I will. I hope you all can
14 make
it.
15 MS.
CARROLL: Thank you, Governor.
16 SECRETARY
HARRIS: And Governor, I won't be
17 here
at the next meeting; I planned the fourth
18 Tuesday
to be away, and so it's the fifth Tuesday,
19 I
got confused on the calendar. But if I have any
20 other
questions on the breakout on some of these
21 expenditures
or specifically the funds, I will
22 forward
them to you. Thank you.
23 GENERAL
MILLIGAN: We can certainly wait
24 until
August if it's more appropriate, wait until
25 the
Secretary is here.
36
1 GOVERNOR BUSH: Okay. We'll wait until
2 August.
3 MS.
CARROLL: Thank you, Governor.
4 GOVERNOR
BUSH: Thank you.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
37
1 GOVERNOR BUSH: Florida Land and Water
2 Adjudicatory
Commission.
3 There
she is. It's a big podium; I didn't see you the
4 you
there, T.
5 TREASURER
GALLAGHER: Motion on the minutes.
6 ATTORNEY
GENERAL BUTTERWORTH: Second.
7 GOVERNOR
BUSH: Moved and seconded. Without
8 objection,
it's approved.
9 MS.
TINKER: Item 2, recommend approval of
10 the
proposed final rule establishing the Double
11 Branch
Community Development District in Clay
12 County.
13 TREASURER
GALLAGHER: Motion on 2.
14 ATTORNEY
GENERAL BUTTERWORTH: Second.
15 GOVERNOR
BUSH: Moved and seconded. Without
16 objection,
it's approved.
17 MS.
TINKER: Thank you.
18 GOVERNOR
BUSH: Thank you, Teresa.
19
20
21
22
23
24
25
38
1 GOVERNOR BUSH: Department of Education.
2 MR.
PIERSON: Item 1, minutes from April 23
3 and
May 7 Cabinet meetings.
4 TREASURER
GALLAGHER: Move.
5 ATTORNEY
GENERAL BUTTERWORTH: Second.
6 GOVERNOR
BUSH: Moved and seconded. Without
7 objection,
it's approved.
8 MR.
PIERSON: Item 2 is the presentation to
9 the
Manatee County school board for the seal of
10 Best
Financial Management. And I think
11 Commissioner
Crist has some remarks.
12 COMMISSIONER
CRIST: Thank you very much.
13 Governor
and Members of the Cabinet, in
14 1997
the legislature directed the Office of
15 Program
Policy Analysis and Government
16 Accountability
as well as the Auditor General
17 to
develop a system for reviewing the financial
18 management
practices of Florida school
19 districts.
This resulted in the development of
20 the
Best Financial Management Practices which
21 were
adopted in 1997 and expanded in 2000.
22 In
2001, with the leadership of then
23 Senator
Horne, the legislature passed the
24 Sharpening
the Pencil Act which made
25 substantial
revisions to review process for
39
1 these practices.
2 Best
Financial Management Practice reviews
3 are
designed to encourage school districts to
4 use
performance and cost efficiency measures to
5 evaluate
programs, use appropriate benchmarks
6 based
on comparable school districts,
7 governmental
agencies and industry standards to
8 assess
their operations and performance,
9 identify
potential cost savings through
10 privatization
and alternative service delivery
11 and
link financial planning and budgeting to
12 district
priorities, including student
13 performance.
14 Since
'97, Best Financial Management
15 Practice
reviews have been completed in
16 Brevard,
Lake, Manatee, Martin, Miami-Dade, and
17 Polk
counties. Of these, only Manatee has
18 elected
to pursue the Seal of Best Financial
19 Management
designation.
20 As
of March 2002, Manatee County school
21 district
had implemented 68 of the 69 action
22 plans
and was in substantial compliance with
23 the
Best Practices.
24 They
have also made significant
25 improvements,
Governor, in management,
40
1 increased efficiency and effectiveness, and
2 reduced
operating costs.
3 The
district estimates that they have
4 saved
$14.7 million by implementing these
5 action
plans.
6 The
OPAGA Progress Report dated May 2002
7 recommends
that the State Board of Education,
8 us,
award the Seal of Best Financial Management
9 to
the Manatee County school district.
10 Governor,
Members of the Cabinet, it's my
11 pleasure
to recognize the Manatee County School
12 District
for receiving the seal of Best
13 Financial
Management.
14 And
with us in the audience today are --
15 and
please come forward when I call your name,
16 Dr.
Dan Noland, superintendent of Manatee
17 County
Schools; Bill Horton, assistant
18 superintendent
of school support; Harry Kinan,
19 chairman
of the Manatee County school board.
20 Mr.
Chairman, Barbara Harvey, vice
21 chairman
of the Manatee County School Board;
22 school
board members: Frank Bruner, Walter
23 Miller
and Larry Simmons; Jim Buckley, Manatee
24 County
School district comptroller, Dr. Brenda
25 Bailey,
director of planning, accountability
41
1 and evaluation; and Maryanne Lorensen, director
2 of
community relations, as well as David
3 Summers
from OPAGA. I am very please to
4 present
this seal to Dr. Dan Nolan,
5 superintendent
of Manatee County, and commend
6 the
district on their diligence in implementing
7 these
practices. Their pursuit of excellence
8 and
their achievement of receiving this
9 designation,
Governor, is one that we should be
10 most
proud of. I move the resolution.
11 TREASURER
GALLAGHER: Second.
12 GOVERNOR
BUSH: Moved and seconded. Without
13 objection,
it's approved congratulations.
14 DR.
NOLAN: Thank you, Governor, Members of
15 the
Cabinet. And I accept this with pleasure on
16 behalf
of all those employees who decided three
17 and
a half years ago, if there was a seal, we
18 would
get it. We worked very hard for this.
19 GOVERNOR
BUSH: Can we use this as a moment
20 to
just kind of learn about what is the
21 distinguishing
feature now in Manatee County
22 school
system that may not have existed before
23 this
process started?
24 DR.
NOLAN: I think we have benchmarks within
25 each
division to measure our success, and we also
42
1 have financially, we've done strategic planning
2 and
tied all of that in our budgeting process.
3 And
that's a much higher degree of sophistication
4 than
there has ever been before.
5 GOVERNOR
BUSH: Can you measure the cost per
6 square
foot to operate a school building?
7 DR.
NOLAN: Yes, sir, we can.
8 GOVERNOR
BUSH: What is it?
9 DR.
NOLAN: I will ask Bill Horton to do
10 that.
His division does that.
11 GOVERNOR
BUSH: It's not a trick question.
12 MR.
HORTON: Thank you, Dr. Nolan. I can
13 actually
tell you how much it might cost to build
14 the
school, but the actual operation I am not
15 familiar
with. Christine Station maintains --
16 GOVERNOR
BUSH: I will give you an example.
17 The
reason I know this is that the legislature
18 created
a commission, a group in Dade County to
19 supervise
the operations of the schools, not
20 getting
involved in classroom instruction and all
21 that,
but focussing on what it costs to maintain a
22 school.
23 And
this group came up with an estimate of
24 about
$8 per foot. And my guess is, I have a
25 little
bit of experience in this, that it's
43
1 probably -- it could be half that in Manatee
2 County.
3 I
am curious, if you have that number, I
4 would
love to have it because in the case of
5 Miami-Dade,
the number of square feet you can
6 imagine
is in the 30-plus million square foot
7 range.
So if you save two bucks, that's
8 $60
million of operating expense that could go
9 to
teacher pay or reading instructors, all
10 sorts
of other things.
11 I
bring this up because you have gone
12 through
a rigorous process. If there are
13 specific
Best Practices that you have
14 identified
-- believe it or not, not every
15 OPAGA
report is read by the citizens of the
16 state.
17 Somehow
we need to get Best Practices out
18 amongst
a lot of people. That's why we do
19 this.
20 Commissioner
Crist deserves high praise
21 for
making this a high priority, and now we
22 need
to get -- see the benefits -- so the good
23 things
that you done can be stolen by other
24 places.
25 MR.
KINAN: With your pleasure, Mr. Governor,
44
1 as chairman of the board, I would just like to say
2 that
when this first came out, Manatee County
3 welcomed
the opportunity for an OPAGA report. I
4 think
that's a significant thing.
5 But
we wanted to be able to go to our
6 community
and give them the confidence that we
7 indeed
were using the best practices and most
8 efficient.
So we think that's very important
9 for
our community to understand that; as well
10 as
working that we have embraced an A-Plus plan
11 and
all educational reforms that have been
12 enacted,
so we think that Manatee County, both
13 financially
and educationally, are doing the
14 things
in terms of education reform that have
15 been
prescribed and wished by the Governor, the
16 Secretary
and other people. Thank you.
17 SECRETARY
HARRIS: I just had a question.
18 Notwithstanding
the fact that you are the first
19 and
only, and the apparently you can commend
20 yourselves
back to the community, what kind of
21 advisory
-- what sort of benefits have you enjoyed
22 or
do you think you will enjoy from this that
23 would
encourage other school districts to do the
24 same
to follow your footsteps? What could we use
25 from
your experience to encourage others to do
45
1 this?
2 MS.
LORENSEN: I think probably the most
3 important
thing and that we have achieved is that
4 all
of our division heads and our department heads
5 have
had to come together and work cooperatively.
6 There
is a tendency within school
7 districts
for the various divisions to drift
8 off
like different ships in the night in
9 different
directions, and our instructional
10 division
has been just as deeply involved in
11 this
process as every other one. So we have
12 all
had to work together. And it's been a very
13 important
common goal for all of us.
14 SECRETARY
HARRIS: From your experience, that
15 should
be enough in itself, but is there any
16 type
-- any other type of encouragement you think
17 we
could offer other districts that would
18 encourage
them to do the same process that you
19 done?
20 MR.
BUCKLEY: Yes, ma'am, I can answer that
21 question
very easily for you.
22 When
you can demonstrate credibility in
23 front
of your district, you are able to very
24 shortly
thereafter, as we are pleased to
25 present
or announce, is that it helped us get
46
1 62/38 passage of a half penny sales tax for 15
2 years.
3 SECRETARY
HARRIS: That's what I wanted to
4 hear.
Thank you.
5 GOVERNOR
BUSH: That was a leading question.
6 MR.
BUCKLEY: When the people know that it's
7 going
to be spent right and accountable, people
8 are
willing to do what education asks for.
9 GOVERNOR
BUSH: If you all can give us -- my
10 email
address is Jeb@jeb.org; and if you have that
11 dollar
per foot operating cost, I would love to
12 see
it.
13 DR.
NOLAN: We'll make sure you have that.
14 GOVERNOR
BUSH: Do we have a picture? We
15 have
a resolution.
16 (Picture
taking.)
17 MR.
PIERSON: Item 3 is an amended rule
18 6A-4.0021,
Florida Teacher Certification
19 Examination.
Deputy Commissioner Betty Cox is
20 here,
if you have questions.
21 GOVERNOR
BUSH: Any questions on item 3?
22 TREASURER
GALLAGHER: I got a question.
23 GOVERNOR
BUSH: Betty, get on up here.
24 TREASURER
GALLAGHER: Can I ask a question on
25 Item
2, not 3.
47
1 Do you guys think you can come up with
2 something
a little more exciting for this, for
3 these
people to put on the letterhead? It's
4 says
what it is but --
5 MR.
PIERSON: It looks better in gold.
6 GOVERNOR
BUSH: They always do.
7 TREASURER
GALLAGHER: At least if it comes in
8 gold,
that's a major improvement compared to what
9 I
see here.
10 GOVERNOR
BUSH: Thank you. Any discussion on
11 item
3?
12 COMMISSIONER
CRIST: Move item 3.
13 TREASURER
GALLAGHER: Second.
14 GOVERNOR
BUSH: Moved and seconded. Without
15 objection,
it's approved.
16 Item
4.
17 MR.
PIERSON: Item 4, a rule repeal, Chapter
18 6A-15,
all rules. These rules are related to HRS
19 programs
for the handicapped.
20 The
programs have transferred from the
21 department
to the Department of Health and we
22 no
longer have authority for these rules. They
23 did
not need the rules.
24 COMMISSIONER
CRIST: Motion.
25 TREASURER
GALLAGHER: Second.
48
1 GOVERNOR BUSH: Moved and seconded. Without
2 objection,
it's approved.
3 MR.
PIERSON: Items 5 through 18 are
4 Governor's
appointments to Community College
5 Boards
of Trustees. We would like to move them as
6 a
block.
7 COMMISSIONER
CRIST: Move.
8 ATTORNEY
GENERAL BUTTERWORTH: Second.
9 GOVERNOR
BUSH: Moved and seconded. Without
10 objection,
it's approved.
11 MR.
PIERSON: Item 19 is an administrative
12 item,
as amended, discussion and adoption of the
13 process
for the State Board of Education to Act it
14 Relates
to School Grades. And Secretary Horne is
15 here.
16 GOVERNOR
BUSH: Secretary Horne.
17 SECRETARY
HORNE: Governor, Cabinet, it's
18 indeed
a pleasure to be here in front of you.
19 Today
is an exciting today. Today we released
20 school
grades, and I think it's an extremely
21 positive
message today, because we have seen a lot
22 of
schools improve. And we knew going in as we
23 raised
the bar that we would have some schools
24 that
would not meet it or cross that bar.
25 One
thing is clear to me and to, I think
49
1 there is really no debate, is that the state
2 adopted
high standards as a regular testing
3 mechanism
and strong accountability are the
4 only
states that are showing academic
5 achievement.
And we all support rising student
6 achievement.
We all support soaring school
7 improvement.
And part of that requires to have
8 a
very strong accountability system. And we
9 have
that in Florida.
10 Quite
honestly, I think Florida standards
11 are
the highest in the nation. I believe we
12 have
the best, most vibrant testing structure
13 in
the country.
14 And
yes, we have strong accountability and
15 with
that comes some consequences.
16 One
of the things that I learned, Governor
17 and
Cabinet, is that we do a lot of things
18 right.
But the real question: Are we doing
19 the
right things?
20 And
that question is a question I posed to
21 the
Department of Education on many occasions.
22 And
the response is that we must make some
23 changes.
24 And
as part of making changes requires a
25 new
and improved way of reaching the schools
50
1 who miss the mark, whose students do not
2 perform
at the level we set as our
3 expectations.
4 And
today I want to present to you a time
5 line,
a plan, that we call Assistance Plus that
6 will
be a much improved version of our school
7 improvement
efforts.
8 We
can even argue the school improvement
9 efforts
of the last few years have been very
10 successful.
We have seen schools, 78 failing
11 schools
move from four to zero; and now we have
12 done
like we have done historically throughout
13 our
rich history in the state: We raised the
14 bar
again, and with that comes more schools
15 that
missed the mark.
16 And
once again, we've got to put forth
17 that
really hard effort, that immediate
18 attention,
the sense of urgency to go in and
19 help
rescue the schools that don't perform at
20 the
level that we know they are capable of.
21 So
we are now today unveiling what we call
22 Assistance
Plus, a new and improved version,
23 that
doesn't just take the resources of the
24 Department
of Education and deploy them to help
25 schools,
but assesses the entire talent in this
51
1 state, inventories that pull and connects that
2 talent
with the schools that need the help.
3 And
so today we are presenting that plan.
4 That
plan has got many phases on it. It
5 includes
today we begin that process of
6 connecting
with the principals of these
7 schools,
these schools that are low performing.
8 It
begins tomorrow, beginning to provide a deep
9 analysis
of the numbers, getting inside the
10 numbers,
beginning to recognize the strengths
11 and
the weaknesses of these schools, the
12 deficiencies
that they have.
13 Beginning
next week we will begin to make
14 personal
site visits. The department will send
15 our
leaders. Commissioner Crist and I have
16 both
personally pledged we are going to visit
17 the
schools that have twice made a failing
18 grade
in the last four years.
19 We
are going to make a personal visit. We
20 are
going to meet with those principals and
21 those
superintendents. We are personally going
22 to
invest our time and attention to their needs
23 at
that school.
24 And
next month, beginning on July 11 and
25 12,
it's going to be mandatory, by they way.
52
1 We are going to have a summit. We are going to
2 bring
the best talent we have -- experts in
3 reading,
experts in math, experts in writing,
4 those
that are involved in intervention
5 programs
and school improvement, the best this
6 country
has, and particularly the best talent
7 in
this state. We are going to provide that
8 for
all of the failing and low-performing
9 schools.
We are going to assure that they have
10 a
buffet line of opportunities, where they can
11 pick
and choose those pieces.
12 And
then the succeeding month, we are
13 going
to begin to customize assistance teams
14 for
those schools so that we can send in teams
15 of
four or five experts in their fields that
16 can
work with those schools.
17 We
are also going to provide some of the
18 Reading
First money to acquire reading coaches
19 for
all failing schools to make sure they have
20 the
kinds of talents that they need.
21 So
we have a much vibrant, more improved,
22 much
more urgent, much more special operations
23 like
general kind of approach to it. We are
24 going
to move in and we are going to help. We
25 are
going to provide -- I am going to unleash
53
1 everything I have in the K-20 system. We are
2 going
to bring universities, the colleges; we
3 are
going to bring the National Board of
4 Teachers
who are reading specialists in one
5 district,
and we are going to mentor and
6 partner
them with the schools that need that
7 help.
8 We
are going to connect everything that we
9 have.
We are going to make it work. We will
10 succeed
at this mission. We will not fail,
11 because
this is all about our students learning
12 and
our schools improving.
13 We
can't fail at that. That is the most
14 fundamental
priority that the department has.
15 Everything
else is secondary. And so that is
16 going
to be our single focus for the next
17 month.
18 Here
is the time line, which is what
19 really
is of most interest to you at the
20 moment.
And since you are not having a July
21 Cabinet
meeting, the ultimate decision would
22 fall
in August, so this is the time line that I
23 think
is very important for you to focus on.
24 I
believe you have the time line up there.
25 If
not, I will kind of walk through it very
54
1 quickly.
2 Today,
as you know, we released the
3 grades.
Today we begin the process. We have
4 statutorily
30 days for the districts to go
5 through
the process of creating school
6 improvement
plans, those that have gotten a
7 grade
of F, and includes a district plan for
8 improvement
as well.
9 They
have to have that back to the
10 Commissioner
within 30 days. So by July 12th
11 they
must submit those plans to the
12 Commissioner.
13 On,
as I mentioned July -- but we are not
14 waiting
until then. Like I say, we started the
15 process
today by contacting principals and
16 superintendents,
and we start the process of
17 doing
-- going inside the numbers beginning
18 tomorrow,
and I am going to complete that
19 process
within one week.
20 The
following two weeks, we will begin the
21 process
of site visits led by the Office of
22 School
Improvement. With my partner here, the
23 Commissioner,
we'll make those visits, we'll
24 conclude
those visits before July 11.
25 July
11 and 12 we'll hold the summit, as I
55
1 mentioned. I think these going to be the most
2 incredible
opportunity we've ever seen in our
3 state.
We are going to bring the best that we
4 can.
5 After
July 11 and 12, we are going to
6 begin
to customize assistance teams. We are
7 not
going to take a chance. And if your
8 problems
are in reading, you are not going to
9 simply
be availed to pick just math experts.
10 We
are going to make sure that you get the
11 right
kind of medicine for the right kind of
12 problem.
And so we are going to make sure
13 that's
done and that those assistance teams are
14 in
place.
15 And
from the period of time of July 11 and
16 12
to your next Cabinet meeting, which is
17 August
13th, at that Cabinet meeting you will
18 actually
see the school improvement plans.
19 Now
that's not the end of the road either.
20 This
is going to be an on-going, continuous
21 effort.
And you will get, beginning after that
22 point
in time of August 13 and going forward,
23 you
will get monthly progress reports on those
24 double
F schools, monthly progress reports on
25 double
F schools.
56
1 GOVERNOR BUSH: Can we -- on August 13, will
2 the
schools themselves be here or will this be a
3 report
by the department?
4 SECRETARY
HORNE: We going either way,
5 Governor,
but since there are 68 of them, I would
6 suggest
that we have -- unless you want to have a
7 Marathon
Cabinet meeting -- that we would present
8 the
plans.
9 What
we may have do is have the double F
10 schools
represented here because of the
11 consequences
of the double F. Not that I am
12 trying
to put any more priority on double F
13 than
F, but our first priority is going to be
14 double
F. We are going to make sure we get the
15 effort
in there.
16 With
68 failing schools, I think that, I
17 would
suggest that we not have representatives
18 of
all 68 schools here, but have the double
19 F's,
maybe have the superintendents on call and
20 ready,
depending upon the circumstances.
21 But
the succeeding months you will get
22 progress
reports on all double F schools. We
23 are
also going to have quarterly reports on all
24 F
schools, so you will get up-to-date
25 information.
57
1 We are going to have biweekly phone calls
2 with
all of these schools from the Office of
3 School
Improvement. We will be there on site.
4 Like
I said, we are going to be placing reading
5 specialists
in all the schools and this will be
6 an
on-going, continuous effort, and we will
7 make
sure that there is strong monitoring and
8 compliance
mechanisms in place.
9 GOVERNOR
BUSH: I know we had conversations
10 about
this. I am -- I don't know if there was a
11 specific
course of action established yet.
12 But
reading is clearly the number 1 factor
13 in
the schools that are underperforming, since
14 most
schools have shown dramatic improvements
15 in
writing and significant improvements in
16 math.
17 Are
we going to do any -- require or
18 encourage
politely or somewhere inbetween
19 assessments
of where kids start the school
20 year;
and then as part of the monthly report
21 have
some monitoring of progress so that we can
22 see
if learning is being accelerated?
23 SECRETARY
HORNE: As part of the summit, we
24 are
going to showcase some diagnostic assessment
25 tools
that will give the principals, the leaders
58
1 of their schools, the superintendents the tools;
2 we'll
make tools available where they can access
3 where
students are.
4 GOVERNOR
BUSH: You will pay for that?
5
6 SECRETARY
HORNE: We are going to pay for
7 that.
We are going to provide that. We are going
8 to
make sure -- there will be no more excuses.
9 There
is no more excuses. We do a lot of very
10 good
things. The question is are we doing the
11 right
things? And now we know what the right
12 things
are.
13 You
know, there has been a lot of debate
14 about
reading and probably about 30 years of
15 research,
but there is no more debate about the
16 ways
to teach reading. We know the right way
17 to
teach reading, and now it's a matter of
18 execution,
it's a matter of implementing the
19 right
scientifically-based programs.
20 We
have the opportunity to do that; they
21 exist;
they have been validated, and now we
22 need
to move forward, bring all the talent and
23 bring
all the help and push forward and make
24 these
students rise to the occasion.
25 I
know they are capable of it. We seen
59
1 schools with similar demographic backgrounds
2 succeeding
at very high levels. Schools in
3 some
cases are barely across town or in the
4 next
neighborhood that sort of get a grade of
5 A,
and yet we often say that sometimes these
6 conditions
are systemic and we can't change
7 them.
8 We
can, and we will, and we got the tools,
9 we
got the talent, and it's a matter of now
10 logistically
connecting the pieces and making
11 it
happen. And I think we have got the right
12 kind
of plan, Governor, and we are ready to go,
13 and
we are starting today.
14 GOVERNOR
BUSH: Is the State Board of
15 Education
comfortable with this course of
16 objection
to comply with the law in terms of the
17 information?
18 COMMISSIONER
CRIST: Yes, sir.
19 GOVERNOR
BUSH: Okay. Any questions or
20 comments?
21 COMMISSIONER
CRIST: I have a comment.
22 I
want to thank Secretary Horne for his
23 presentation,
and for a very well, thought-out
24 plan.
The Assistance Plus is a wonderful
25 concept;
it's a great idea; it's the right
60
1 thing to do. And as a result, I would move it
2 for
the Cabinet's approval.
3 GOVERNOR
BUSH: Does it require -- I guess
4 you
could, just to put us on record. There is a
5 motion.
6 SECRETARY
HARRIS: Second.
7 GOVERNOR
BUSH: Moved and seconded. Anymore
8 discussion?
9 Without
objection the item is approved.
10 Thank
you.
11 COMMISSIONER
CRIST: We have just a little
12 logistic
item. I think E.T. is here. We would
13 like
to do a photograph of the Manatee --
14 GOVERNOR
BUSH: Let's bring the manatee
15 people
back.
16 (picture
taking)
17
18
19
20
21
22
23
24
25
61
1 GOVERNOR BUSH: Board of Trustees. Is there
2 a
motion on the floor?
3 MR.
STRUHS: We are recommending approval
4 item
1. It's an easement in the Blackwater River
5 State
Forest. It's a nonexclusive easement.
6 TREASURER
GALLAGHER: Move.
7 GENERAL
MILLIGAN: Second.
8 GOVERNOR
BUSH: Moved and seconded. Without
9 objection,
it's approved.
10 MR.
STRUHS: Item 2, recommending approval.
11 This
is a project in the Brevard Coastal Scrub
12 Ecosystem
project.
13 TREASURER
GALLAGHER: Motion on item 2.
14 SECRETARY
HARRIS: Second.
15 GOVERNOR
BUSH: Moved and seconded. Without
16 objection,
it's approved.
17 MR.
STRUHS: The next two items are in the
18 category
of greenways and trails.
19 Item
3, recommending approval with the
20 consideration
of $150,000. This will be a good
21 example
of where we are leveraging the state's
22 dollars
with the 50/50 cost share with the
23 local
government. The title will be held by
24 the
state through the Board of Trustees.
25 This
project does provide not just a
62
1 greenway, but it also provides a canoe access
2 point
on Turkey Creek which makes a real nice
3 3-mile
run on that waterway.
4 TREASURER
GALLAGHER: Motion on item 3.
5 COMMISSIONER
CRIST: Second.
6 GOVERNOR
BUSH: Moved and seconded. Without
7 objection,
it's approved.
8 MR.
STRUHS: Item 4, recommending approval of
9 this
item.
10 This
is a very, very popular trail,
11 Governor,
Members of the Cabinet. We are
12 actually
measuring use on this trail at 20,000
13 per
month and growing. So this is going to be
14 a
nice addition to that greenway project in
15 Tampa.
16 And
it's consistent, Governor, with your
17 directions
to us a few years ago, which was to
18 make
sure we are spending these resources in
19 neighborhoods
where people actually live and
20 can
take advantage of them.
21 TREASURER
GALLAGHER: Move.
22 GENERAL
MILLIGAN: Second.
23 GOVERNOR
BUSH: Moved and seconded. Without
24 objection,
it's approved.
25 MR.
STRUHS: Five is a proposal to expand a
63
1 commercial marina.
2 It's
a public marina, provides
3 first-come/first-serve
access. It will include
4 108
dry storage facilities and 16 wet slips.
5 We
are pretty enthusiastic about this and
6 are
recommending approval because among other
7 things,
it will repair a poorly designed,
8 poorly
functioning seawall with a more
9 environmentally
sensitive riprap.
10 For
the first time it will provide pump
11 off
facilities for the boats. We will require
12 them
to build again for the first time a
13 contingency
fuel containment plan, and perhaps
14 most
important, installing stormwater
15 collection
and maintenance, which is not
16 currently
on site.
17 Both
the Florida Fish and Wildlife
18 Conservation
Commission and the U.S. Fish and
19 Wildlife
Service agree that this poses no
20 significant
risk to manatees.
21 And
as you probably remember, Pasco County
22 is
not one of the counties that is required to
23 have
a Manatee Protection Plan. Nonetheless,
24 as
a part of this agreement, the slip lessees
25 will
agree upfront to abide by slow speeds as
64
1 they enter and exit this marina facility.
2 Recommending
approval.
3 TREASURER
GALLAGHER: Motion.
4 GENERAL
MILLIGAN: Second.
5 GOVERNOR
BUSH: Moved and seconded. Without
6 objection,
the item passes.
7 MR.
STRUHS: Item 6, frankly, was just too
8 complicated,
so we brought in the experts.
9 Delighted
Deborah Getzoff is here, who is our
10 district
director out of Tampa. If you could bear
11 with
her for a few minutes, she will give you the
12 chronology
as to how we got to where we are on
13 this
item.
14 GOVERNOR
BUSH: Deborah.
15 MS.
GETZOFF: Good morning, Governor, Members
16 of
the Cabinet, I like to ask for your indulgence
17 for
a few minutes to go through a chronology on
18 this
so that you understand why there might be
19 special
circumstances attached to this request.
20 This
is a request on behalf of Mr. Kendall
21 R.
Jones for consideration to reinstate a camp
22 site
lease for a term of 20 years, and to
23 rebuild
a stilt house which was partially
24 destroyed
by the no-name storm of 1993.
25 There
were 13 camp site stilt houses at
65
1 this location when the storm hit in 1993.
2 These
camp sites were built in the early part
3 of
the 20th century and, along with the other
4 stilt
house owners, Mr. Jones was granted a
5 camp
site lease by the Board of Trustees in
6 1971.
7 This
was renewed in 1976. And based on
8 that
renewal in '76, was scheduled to terminate
9 in
1999 with no right of renewal.
10 When
the storm came in in 1993, six of the
11 13
camp site lessees had only piling remaining,
12 super
structures were destroyed. And at that
13 time
there was a policy in place, which is
14 reflected
in those leases, that states that if
15 more
than 50 percent of the value of the
16 structure
was destroyed, the lessee would not
17 be
allowed to rebuild.
18 Since
it appeared to the staff at the time
19 in
1994 that greater than 50 percent of the
20 value
of those six camp sites had been
21 destroyed,
those six stilt house owners were
22 ordered
to remove their piling and were
23 instructed
that their leases were being
24 cancelled.
25 Of
the six who were notified in 1994 to
66
1 remove their piling at their own expense, only
2 Mr.
Jones came forward voluntarily and removed
3 his
piling in compliance with the order at that
4 time.
5 In
1997, the legislature amended section
6 253.03
of the Florida Statutes providing that
7 owners
of stilt houses had the right to apply
8 for
a lease extension if the structure was
9 listed
with the state or federal Historic Site
10 Registry
and if the owner had a lease or
11 grandfather
status.
12 Based
upon that 1997 change in the
13 statute,
the Division of State Lands notified
14 each
of the six camp site lessees who had had
15 their
structures partially destroyed that they
16 had
an opportunity to come forward and apply
17 for
renewal and reinstatement of their leases.
18 All
six were listed with the state's Inventory
19 for
Historic Sites.
20 Based
upon that notification, four of the
21 six
came forward and requested reinstatement.
22 A
second notice was sent out in 1998 to
23 again
all six of the camp site lessees
24 informing
them of the fact that this matter
25 would
go before the Governor and Cabinet and
67
1 that they had an opportunity for point of entry
2 to
request a hearing if they disagreed with the
3 action.
4 The
recommended action at that time was
5 that
two of the four making the request be
6 allowed
to rebuild based upon the fact that
7 those
two camp site lessees had submitted
8 certified
appraisals which were accepted by the
9 state
showing that greater than 50 percent of
10 the
value of their structure remained after the
11 no-name
storm in 1993.
12 The
value of the structures appear to be
13 greatly
in the piling as opposed to the super
14 structure.
The appraisals have demonstrated
15 and
the state has accepted that up to
16 73
percent of the value of the structure is
17 actually
in the piling placement itself and not
18 in
the house that sits on top of the piling.
19 GOVERNOR
BUSH: Wouldn't by definition all
20 the
stilt houses comply?
21 MS.
GETZOFF: It would depend -- no,
22 Governor,
actually not, because at that time four
23 made
the request and two had submitted appraisals
24 based
upon the piling that remained, but they
25 didn't
have a sufficient amount of piling to meet
68
1 the 50 percent test. So it did require a
2 certified
appraisal.
3 GOVERNOR
BUSH: The storm actually destroyed
4 the
pilings as well?
5 MS.
GETZOFF: Yes, it did it.
6 So
it did require that a certified
7 appraiser
actually examine the amount of piling
8 left
in each individual circumstance.
9 At
the September 9, 1998, Board of
10 Trustees
meeting the Board approved the two
11 leases
for renewal and rebuilding that were
12 recommended
by the staff and required that
13 these
leases terminate in a period of 20 years,
14 and
that no right of renewal would attach after
15 that
20-year time frame.
16 Subsequently,
in 1999, in response to the
17 Cabinet's
action in 1998, the legislature again
18 amended
section 253.03 (7)(c) to give stilt
19 house
owners the right to continue a camp site
20 lease
if the house is kept in good repair
21 consistent
with its conditions for listing and
22 if
no greater than 50 percent of the
23 structure's
value is impacted or damaged in the
24 future,
and if the camp site lessee does not
25 increase
the square footage of the structure
69
1 upon any rebuilding.
2 Subsequent
to that 1999 law change, the
3 two
lessees who were approved in '98 were given
4 leases
from the state consistent with the
5 Board's
action in '98 and with the statutory
6 changes
in '99.
7 Subsequent
to that time, in 2001,
8 Mr.
Kendall Jones, who is the applicant today,
9 came
forward and asserted that he had never
10 received
the two notices sent by the staff to
11 the
six camp site lessees in 1998 advising of
12 the
opportunity to come forward for
13 reinstatement
and further advising of the
14 Cabinet
meeting date and a point of entry.
15 We
researched the file which was found in
16 Tallahassee
and discovered that of the six
17 notices
sent out, Mr. Jones was the only lessee
18 whose
notices were returned as undeliverable
19 because
the wrong address had been placed on
20 the
envelopes. It was not the same address
21 that
was contained in his lease.
22 So
indeed we verified that Mr. Jones did
23 not
receive those notices in 1998.
24 Mr.
Jones has provided our staff with an
25 appraisal
which was performed by the same
70
1 appraiser who did the two appraisals accepted
2 by
the board in 1998, certifying that
3 subsequent
to the no-name storm in 1993,
4 greater
than 50 percent of the value of his
5 structure
remained at that time based upon the
6 piling
that were there, which he later removed.
7 The
staff believes that but for Mr. Jones'
8 voluntary
compliance with the order of 1994
9 requiring
removal of his piling, and but for
10 the
misaddressing of the two envelopes for the
11 notices
in 1998, Mr. Jones would have been
12 successful
had he requested reinstatement of
13 his
lease in 1998 from the Board based upon his
14 appraisal.
15 And
based upon the specific facts and
16 circumstances
of this particular request, the
17 staff
believes that there are equities present
18 which
would entitle Mr. Jones to consideration
19 for
reinstatement of his lease; and
20 specifically
the staff is aware that we don't
21 believe
it would be a good precedent to punish
22 him
essentially for having removed his piling
23 in
1994 in compliance with the state's request
24 when
those owners that did not remove their
25 piling
were essentially rewarded with the
71
1 opportunity based upon the law change in '97 to
2 come
forward and have their leases reinstated.
3 We
have not discovered any other lessee
4 who
is similarly situated to Mr. Jones who
5 could
take advantage of these types of
6 equities.
7 GOVERNOR
BUSH: Is Mr. Jones here?
8 MS.
GETZOFF: No, he is not. An associate of
9 his,
Mr. Lake, is here. Mr. Jones is elderly; he
10 did
not come up today. Mr. David Lake is here if
11 there
are any questions of the applicant.
12 GOVERNOR
BUSH: Does anybody have any
13 questions?
14 That
was a very thorough explanation.
15 ATTORNEY
GENERAL BUTTERWORTH: I have a
16 comment.
17 This
obviously is a unique situation.
18 David
couldn't understand it enough to explain
19 it,
and it took you eight minutes to explain
20 it.
And I don't think any of us here would --
21 we
would agree with David.
22 So,
therefore, is it safe to assume that
23 this
item reflects a very unique set of
24 circumstances
and facts that would not be
25 replicated
anywhere else since this would not
72
1 be a precedent set for anyone else?
2 On
the record not, just a nod; it has to
3 be
a verbal.
4 MS.
GETZOFF: That's correct, General.
5 ATTORNEY
GENERAL BUTTERWORTH: Thank you.
6 I
go ahead and move the item then.
7 TREASURER
GALLAGHER: Second.
8 GOVERNOR
BUSH: Moved and seconded. Any
9 other
discussion? Without objection, the item
10 passes.
11 Congratulations.
When do you start
12 construction?
I want to come out. I have a
13 picture
of the pilings, it looks like it's a
14 good
location. Where is this? How far out?
15 MR.
LAKE: We are about two and a half miles
16 out
in the Gulf of Mexico. Good fishing.
17 GOVERNOR
BUSH: I bet. I am jealous.
18 MR.
STRUHS: Thank you, Deborah. Item
19 number
-- has the vote been cast on 6? Item
20 number
7.
21 GOVERNOR
BUSH: Would you like to explain it
22 a
little more?
23 MR.
STRUHS: No, other than I know my own
24 limitations,
and I am grateful that Deborah could
25 join
us today.
73
1 Item number 7, I would like, if I could,
2 take
just a minute and remind you that this is
3 a
continuation of a discussion that occurred at
4 the
last Cabinet meeting, and suggested there
5 are
three basic alternatives that face you and
6 also
alert you to the importance of the vote
7 count.
8 Three
options are either to sell the state
9 lands
to Mr. Blackburn. Option two would be to
10 require
Mr. Blackburn to remove the fill and
11 restore
the land and have it remain in state
12 ownership
in a restored fashion. Option three
13 would
be to direct that the fill remain, but
14 this
newly-filled area is determined to be
15 state
owned.
16 Under
option one, should you choose to
17 sell
the land to Mr. Blackburn, it becomes an
18 issue
of price and there are three options
19 there.
20 Either
to sell it to him for the court
21 recommended
amount of $15,000; to sell it to
22 him
for $52,800, which would be the figure that
23 would
result from the application of the Board
24 of
Trustees' rules; or option C, of course, is
25 any
other amount the Board of Trustees would
74
1 deem appropriate.
2 And
in terms of the vote, Governor and
3 Members
of the Cabinet, the proposal before you
4 is
to approve this item.
5 Should
you choose to deny this staff
6 recommendation,
you simply need a simple
7 majority
to deny our recommendation. However,
8 should
you chose to sell the land to
9 Mr.
Blackburn, you need to have five votes.
10 GOVERNOR
BUSH: Should we not, as I
11 understand
it, should nothing happen, should no
12 action
be taken as was the case last time because
13 we
couldn't get the five votes, he has to remove
14 the
seawall, doesn't he?
15 MR.
STRUHS: Yes.
16 ATTORNEY
GENERAL BUTTERWORTH: It's in court.
17 A
judge will determine that, Your Honor.
18 GOVERNOR
BUSH: (Laughter) Excuse me. I
19 shouldn't
laugh when you call me Your Honor like
20 that.
21 Is
that accurate?
22 ATTORNEY
GENERAL BUTTERWORTH: It is in the
23 court
now.
24 GOVERNOR
BUSH: The question is if we take no
25 action,
what is the consequence of that?
75
1 MS. VIELHAUER: Then if the board does not
2 approve
the 15,000-dollar sale, the judgment --
3 there
is a motion pending in court right now that
4 he
is trying not to remove the seawall. We would
5 take
the position that, yes, he has have to remove
6 it.
7 GOVERNOR
BUSH: It's going to be determined.
8 Our
position would be he would have to remove the
9 seawall,
which is somewhat self-defeating, if
10 that's
the end result.
11 TREASURER
GALLAGHER: This issue wouldn't be
12 in
front of the court it's in? If we say remove
13 it,
then we have a whole new issue and a whole new
14 court?
15 MS.
VIELHAUER: It's still part of our court
16 case.
He has filed a motion for relief from this
17 judgment
that we are talking about. And that's
18 still
an issue before the court.
19 TREASURER
GALLAGHER: He's filing a relief
20 for
the $15,000?
21 MS.
VIELHAUER: He is filing a relief saying
22 if
the board makes him remove it, that it's
23 inequitable
and he should no longer be bound by
24 the
judgment.
25 GOVERNOR
BUSH: Let's see if we can find
76
1 common sense, the depth of common sense is not --
2 hopefully
not in this particular case. This is,
3 for
a small deal in the life of the department and
4 the
Board of Trustees, this is taking up a lot of
5 energy
and time and lawyers and other things; so
6 maybe
we can come to a solution we can get five
7 votes
on.
8 Unfortunately
Commissioner Bronson, whose
9 lack
of presence here makes that a little
10 difficult,
since we had the same problem last
11 time.
Does anybody have anything they want to
12 add?
13 ATTORNEY
GENERAL BUTTERWORTH: I have a
14 question.
Maybe you can answer or maybe somebody
15 in
the audience can.
16 David,
am I correct that this gentleman
17 sued
the former department lawyer handling this
18 case
and also director of the southeast
19 district
office personally, personally in a
20 SLAPP
suit; is that correct?
21 MR.
STRUHS: Yes, sir, it is.
22 ATTORNEY
GENERAL BUTTERWORTH: How many other
23 SLAPP
suits have been filed against your lawyers
24 and
your administrators in your turn term of
25 office?
77
1 MR. STRUHS: Since I have been here in
2 Florida,
I don't believe there have been any.
3 There
were some prior to my arrival, but I don't
4 think
there have been any in the last three years.
5 ATTORNEY
GENERAL BUTTERWORTH: In my 16 years
6 as
Attorney General, I have only had one SLAPP
7 suit
filed against me in the thousands upon
8 thousands
of cases. It's very rare, very rare for
9 a
person to do this type of -- to file a SLAPP
10 suit
against a governmental entity, especially
11 when
that person did wrong.
12 TREASURER
GALLAGHER: What's a SLAPP suit?
13 GOVERNOR
BUSH: Isn't that an acronym?
14 ATTORNEY
GENERAL BUTTERWORTH: It's an
15 acronym.
16 GOVERNOR
BUSH: S-L-A-P-P or something.
17 ATTORNEY
GENERAL BUTTERWORTH: SLAPP suit.
18 Basically
this usually happens with many residents
19 of
communities when somebody might want to put in
20 a
cement plant or something, whether it be a
21 community
group or whether it be an entity, they
22 will
then find themselves sued for libel and
23 slander,
personally for libel and slander. And
24 then,
of course, they end up getting intimidated
25 and
many times they drop the suits.
78
1 Of course, anybody that files -- it means
2 Strategic
Lawsuit Against Public Participation.
3 That's
what that means. I did not know this
4 myself,
which I should have.
5 MR.
STRUHS: We were working on that as well.
6 ATTORNEY
GENERAL BUTTERWORTH: I don't think
7 anybody
should be rewarded, Governor, for having
8 taken
this type of action. I personally think the
9 court
gave him two options, as I understand it:
10 Take
it down or buy it, make application to buy
11 it.
12 The
department agreed: Well, we'll
13 recommend
to the board $15,000. That does not
14 obligate
this board to accept 15,000, it only
15 obligates
David to say 15,000.
16 So
this gentleman has two alternatives, as
17 I
see it, and that is apply to us to buy it.
18 David
said he's done that. David's
19 recommending
15. And I don't think that's
20 going
to happen up here, at least this week.
21 And
then --
22 GOVERNOR
BUSH: Who knows? Let's see.
23 ATTORNEY
GENERAL BUTTERWORTH: Some of us
24 last
week believe: Well, we have a rule in place
25 here
and rules should be followed. Therefore, it
79
1 should be three times the appraised value.
2 And
I personally believe, because of the
3 action
and way this guy has handled this case,
4 I
think he deserves to be treated equally like
5 everybody
else, and that is we should follow
6 the
rule.
7 GOVERNOR
BUSH: We'll take that tree down for
8 free
for him.
9 SECRETARY
HARRIS: Governor, I just want to
10 go
on the record and concur with General
11 Butterworth
concerning the rule the board has,
12 three
times the appraised value.
13 TREASURER
GALLAGHER: Let me sort of break
14 this
thing a little lose.
15 I
happen to agree with the General myself,
16 but
in order to get this to move on, I am
17 willing
to split the difference between the 15
18 and
52.
19 GOVERNOR
BUSH: We tried that one the last
20 time,
too.
21 TREASURER
GALLAGHER: I am trying again.
22 33-9.
And I will -- my motion is 33-9 and see if
23 we
can get five votes.
24 GOVERNOR
BUSH: Is there a second?
25 COMMISSIONER
CRIST: Second.
80
1 GOVERNOR BUSH: Oh, please, don't. Thank
2 you.
Appreciate that, Commissioner Crist.
3 GENERAL
MILLIGAN: What's the significance of
4 the
S-L-A-P, other than somebody had a bad
5 attitude;
somebody exercising his right?
6 TREASURER
GALLAGHER: Made the General mad.
7 GENERAL
MILLIGAN: I know it did.
8 ATTORNEY
GENERAL BUTTERWORTH: If I may
9 respond;
is that when you have employees working
10 for
the Department of Environmental Protection --
11 or
even let's just use citrus canker, as an
12 example
now, which is a real big problem.
13 You
could have somebody out there file an
14 action
against any one of the inspectors, any
15 person
who wants to chop down a tree or
16 anything
else and just say you are violating my
17 rights.
18 Not
that they can -- they can always sue
19 us
as an entity as the state; we accept that.
20 People
do it everyday, they get their $75 and
21 they
file an action against us.
22 But
here they are filing an action
23 personally
against some of our employees. And
24 in
many cases, Risk Management will not pick up
25 if,
in fact, they lose. So in many cases they
81
1 have to hire a private lawyer if Risk
2 Management
does not approve of one; if, in
3 fact,
there is a judgment against them, the
4 state
doesn't pay it, unless Risk Management
5 approves
it and they don't have to.
6 So
you are really putting other -- you are
7 basically
having your employees now saying:
8 Wait
a minute. Should I take action or not, if
9 I
am going to have a suit filed personally
10 against
me? And I don't think we want to --
11 GENERAL
MILLIGAN: So it's the intimation
12 that
goes along with this. And you, in your
13 judgment
of this individual, is that he is trying
14 to
intimidate those people?
15 ATTORNEY
GENERAL BUTTERWORTH: That is a --
16 TREASURER
GALLAGHER: That's the only reason
17 for
SLAPP suits.
18 GOVERNOR
BUSH: He's just got a bad attitude
19 and
he is not -- clearly this has gone on how
20 long;
how many years has this been going on?
21 MR.
STRUHS: Oh, I think 10 years anyway.
22 GOVERNOR
BUSH: This is just one of the
23 people
we serve with a bad attitude. That's not
24 strange;
it happens all the time. You ought to
25 see
my e-mails.
82
1 GENERAL MILLIGAN: Per the discussion a
2 couple
weeks ago, the fact that he built it the
3 way
he built it, frankly made good sense and it
4 probably
should have been built that way or
5 designed
that way right from the get-go. Of
6 course,
that was the issue that didn't make a
7 whole
lot of sense to me, why we were making such
8 a
big deal out of this.
9 I
will said this, I think we are being
10 frivolous
if we just cut it in half. Either we
11 have
a rule or don't have a rule, and either we
12 apply
the rule or we don't apply the rule. And
13 the
decision should be either to apply the rule
14 or
not apply it. And so cutting it into half,
15 I
don't think is --
16 TREASURER
GALLAGHER: If you go for a
17 substitute
for mine, I will sure back you, as
18 always
is the rule.
19 GOVERNOR
BUSH: Any other discussion on
20 Commission
Gallagher's amendment? All in favor
21 say
aye.
22 TREASURER
GALLAGHER: Aye.
23 GOVERNOR
BUSH: Aye.
24 ATTORNEY
GENERAL BUTTERWORTH: No.
25 GOVERNOR
BUSH: All opposed?
26 GENERAL
MILLIGAN: No.
83
1 SECRETARY HARRIS: No.
2 COMMISSIONER
CRIST: No.
3 GOVERNOR
BUSH: It's dead.
4 ATTORNEY
GENERAL BUTTERWORTH: I move that we
5 follow
the rule.
6 GOVERNOR
BUSH: Which is?
7 ATTORNEY
GENERAL BUTTERWORTH: 53-2.
8 GOVERNOR
BUSH: Three times the appraised
9 value.
10 ATTORNEY
GENERAL BUTTERWORTH: The motion is
11 really
to apply the rule; they can do the math.
12 MR.
STRUHS: Yes.
13 SECRETARY
HARRIS: Second.
14 GOVERNOR
BUSH: That's above my pay grade,
15 but
I am sure there is a reason for that.
16 ATTORNEY
GENERAL BUTTERWORTH: That's what
17 the
General says, we are here to follow the rule.
18 SECRETARY
HARRIS: Follow the law.
19 ATTORNEY
GENERAL BUTTERWORTH: That's right.
20 GOVERNOR
BUSH: There is a motion and a
21 second
to -- say it again.
22 ATTORNEY
GENERAL BUTTERWORTH: Follow the
23 law,
follow the rule.
24 GENERAL
MILLIGAN: Which would mean approve
25 it
with 52-8. $52,800.
84
1 MR. STRUHS: $52,800 would be three times the
2 appraised
value.
3 ATTORNEY
GENERAL BUTTERWORTH: I didn't do
4 the
math.
5 GOVERNOR
BUSH: Okay. There is a motion and
6 a
second. All in favor say aye.
7 GENERAL
MILLIGAN: Aye.
8 SECRETARY
HARRIS: Aye.
9 ATTORNEY
GENERAL BUTTERWORTH: Aye.
10 TREASURER
GALLAGHER: Aye.
11 COMMISSIONER
CRIST: Aye.
12 GOVERNOR
BUSH: Aye.
13 GOVERNOR
BUSH: All opposed?
14 MR.
STRUHS: Thank you.
15 GOVERNOR
BUSH: Did you vote, General?
16 GENERAL
MILLIGAN: Yes, I did.
17 GOVERNOR
BUSH: Okay. I wanted to make sure.
18 It's
a unanimous vote; six/nothing.
19 MR.
STRUHS: Item number 8, we are
20 recommending
approval of a settlement agreement.
21 GOVERNOR
BUSH: I voted yes. I am tired of
22 it.
23 TREASURER
GALLAGHER: Amen.
24 GOVERNOR
BUSH: My staff is happy, too.
25 Item
8?
85
1 MR. STRUHS: We are recommending approval of
2 a
settlement approval.
3 TREASURER
GALLAGHER: Motion.
4 ATTORNEY
GENERAL BUTTERWORTH: Second.
5 GOVERNOR
BUSH: Moved and seconded. Without
6 objection,
the item is approved.
7 MR.
STRUHS: We would like to defer item 9 to
8 the
meeting of August 27.
9 TREASURER
GALLAGHER: Motion.
10 ATTORNEY
GENERAL BUTTERWORTH: Second.
11 GOVERNOR
BUSH: Motion to defer and a second.
12 The
item is deferred.
13
14
15
16
17
18
19
20
21
22
23
24
25
86
1 GOVERNOR BUSH: State Board of
2 Administration.
3 MR.
HERNDON: Item number 1 is approval of
4 the
minutes of the meeting --
5 GENERAL
MILLIGAN: I will move the minutes.
6 Is
this going to be a fairly long meeting? I
7 think
it could be.
8 MR.
HERNDON: Not necessarily. Can I make
9 one
comment?
10 I
should say the minutes as corrected from
11 meeting
of May 21, and I will move the minutes.
12 TREASURER
GALLAGHER: Second.
13 GOVERNOR
BUSH: Item 1 is approved as
14 amended.
15 MR.
HERNDON: Item 2, approval of fiscal
16 determination
for an increase of an amount not
17 exceeding
$25 million in the Florida Housing
18 Finance
Corporation's federal home loan bank
19 liquidity
advance line.
20 TREASURER
GALLAGHER: Motion.
21 GENERAL
MILLIGAN: Second.
22 GOVERNOR
BUSH: Moved and seconded. Without
23 objection,
it's approved.
24 MR.
HERNDON: Item number 3 is a submission
25 of
the statistical report for the defined
87
1 contribution program as of May 31.
2 And
if I might take advantage of this
3 opportunity
to also just bring the Trustees up
4 to
speed on a couple of other items related to
5 the
implementation of PEORP.
6 Number
one, you may have seen in the
7 newspaper
this morning that Alliance Capital
8 filed
their reply brief on Monday. It's not
9 directly
a PEORP matter, but their position
10 basically
was as outlined in the newspaper.
11 We
are providing your offices with a copy
12 of
the reply brief and we'll respond to their
13 reply
brief and hopefully set a date for a
14 hearing.
15 Secondly,
as it relates to the bundled
16 provider
contracts that we discussed at the
17 last
couple of meetings, I am pleased to say we
18 have
signed all five of the bundled provider
19 contracts,
including the last one which was the
20 most
difficult to negotiate. And so those five
21 providers
are all signed and 12 of the 17
22 unbundled
provider contracts have been signed;
23 so
other than a few minor items there, we are
24 in
good shape.
25 As
it relates to the statistical report
88
1 itself, what you have in front of you today is
2 the
report as of May 31, which shows that we
3 have
mailed out 441,000 kits. Altogether now
4 we
have almost 18,000 people who have made
5 selections,
but that's still less than
6 4
percent of the total.
7 And
of those 18,000 or 17,582, the vast
8 majority
are still selecting the pension plan.
9 As
we indicated, our expectation is that those
10 are
by in large people for whom that's a
11 clear-cut
decision, and they know just exactly
12 where
they need to be.
13 Again,
enrollment started for the first
14 group
on June 1. So we will see enrollment
15 numbers
begin to climb over the course of the
16 next
two and a half months.
17 Remember,
that first group, which is state
18 employees,
has open enrollment June, July and
19 August
and our expectation is that we will see,
20 as
you might expect, the enrollment figures
21 will
spike up in August.
22 That's
been the expectation and experience
23 of
all of the vendors that we have contracts
24 with
that serves these kinds of programs in
25 other
states and jurisdictions.
89
1 We also provided to your staff -- and I
2 didn't
intend to go into it here today -- but
3 some
of the results of the surveys that we
4 conduct
at the workshops, we do pre and post
5 workshop
surveys to try and get a sense of how
6 the
employees are learning in those workshops,
7 what
resources are they making, taking
8 advantage
of, and so on, and so forth.
9 We
provided that information to your
10 staff.
It's going well from that standpoint.
11 The
employees are finding the employee
12 workshops
to be very beneficial and are
13 recommending
them to their colleagues.
14 The
unfortunate part is that they are not
15 taking
advantage of the workshops in the first
16 place.
We are still having a concern in that
17 respect.
We only have 30,000 or so out of the
18 440,000
that have actually scheduled themselves
19 for
workshops.
20 In
response to that, we are planning two
21 more
mailings to the employees in the first
22 group,
that's the state employees, one in July
23 and
one in August to try to push them into the
24 workshops,
encourage them to recognize the
25 significance
of this decision and provide them
90
1 with additional information on risks, on the
2 market
volatility, and the importance of making
3 an
affirmative choice, an informed, affirmative
4 choice.
5 So
we should have another mailing in July
6 and
another one in August. And hopefully that
7 will
result in higher numbers, taking advantage
8 of
these workshops.
9 Once
they are there, they like them and
10 they
find them to be quite informative, and
11 it's
clear when you look at the survey data
12 that
their knowledge level is going up
13 significantly,
but we have just got to get them
14 to
the trough so that they can drink.
15 GOVERNOR
BUSH: General?
16 GENERAL
MILLIGAN: Are you still meeting
17 resistance
in the group two?
18 MR.
HERNDON: The primary resistor has been
19 one
school board. And I don't want to
20 mischaracterize
it. I don't think it's militant
21 by
any means, but it is just trying to have the
22 school
board free up their employees to attend
23 some
of the workshop sessions and those kinds of
24 things.
25 Now
that school is out, we are hoping that
91
1 that problem won't be quite as severe as it
2 once
was. But it is a significant school board
3 employer
with a lot of employees, and we hope
4 that's
not a problem, but that is really the
5 only
place we really had a problem.
6 GOVERNOR
BUSH: Where?
7 MR.
HERNDON: Dade County.
8 GOVERNOR
BUSH: It's always my hometown.
9 TREASURER
GALLAGHER: Dade is not
10 participating?
11 MR.
HERNDON: It's not so much that they are
12 not
participating; it is that they are not being
13 gracious
about allowing their employees to attend.
14 They
are not encouraging them to attend their --
15 it's
not so much that they are discouraging them
16 as
they are just not encouraging them, they are
17 not
giving them the time to go to the workshops on
18 the
school day and those kinds of things.
19 We
appreciate that this is a problem. We
20 talked
with the legislative staff for two years
21 about
the possibility of changing the dates for
22 the
school teachers, because we knew that
23 summer
was going to be a problem, end of the
24 school
was going to be a problem, but the
25 legislature
wasn't prepared to do that and so
92
1 we have to live with this awkward time.
2 GOVERNOR
BUSH: The irony of this is that the
3 teachers'
groups and the unions and the people
4 that
represent the teachers were the strongest
5 advocates
for this; seems like they would be a
6 means
to make sure that the message gets out.
7 And
the critical part is as these big
8 school
districts start hiring new teachers,
9 that
the information is in place, because in
10 Miami-Dade
County, they have a tremendous
11 number
of veteran teachers that probably will
12 not
opt out. They may, but chances are the
13 computer
run will say stay in.
14 But
there are thousands of new teachers
15 that
will be coming on line next month, and I
16 hope
at least for, as part of the employee
17 assistance
efforts, that new hires are done,
18 that
the school districts will make sure that
19 this
is part what they do. I assume they are
20 doing
that.
21 MR.
HERNDON: Yes, sir. And one of the
22 pluses,
so to speak, is that the enrollment window
23 for
teachers doesn't actually open until
24 September,
so we are hopeful that we still got
25 time.
93
1 We had this 90-day preenrollment period,
2 it's
the education cycle. I think the
3 legislature
-- and we kind of saw these as two
4 distinct
periods of time. And now it's clear
5 we
need to combine them more aggressively. But
6 if
we still have a problem come the fall, we'll
7 be
back with you to try and resort that.
8 GENERAL
MILLIGAN: This is kind of a
9 technical
question on DC. I have been asked a
10 couple
of times, and I am not sure I have given
11 exactly
the right answer.
12 When
are those that opt for the DC plan,
13 when
in each of the phases is the money
14 actually
transferred out of the defined benefit
15 program
and into the defined contribution
16 program?
17 MR.
HERNDON: What we are trying to do is to
18 stage
this in three steps, so that initially we
19 thought
we would transfer money -- let me back up.
20 Are
you talking about into the DB plan to
21 the
DC plan and then into all the employees
22 accounts?
23 GENERAL
MILLIGAN: I guess I am really
24 talking
about both.
25 MR.
HERNDON: Our initial thought was that we
94
1 would do it monthly. We thought there would be
2 such
a large volume that it would necessitate a
3 monthly
transfer, and we didn't want to try and
4 transfer
three months for all the state employees
5 early,
and then lose whatever investment
6 benefit
-- these days it seems like it's an
7 investment
loss -- but investment benefit that
8 might
accrue in the two months that we predicted
9 might
occur.
10 It
appears now that a three-stage process
11 makes
more sense. So we are anticipating a
12 transfer
this month for the first employee
13 group,
and then it would be disbursed into
14 their
accounts in July for the first -- the
15 group,
the employees who make the decision in
16 this
month would actually get the money in
17 July,
will transfer all three months, June,
18 July
and August, this month is the last
19 discussion
that I had -- I really hadn't
20 confirmed
that.
21 GENERAL
MILLIGAN: So those that had made a
22 selection
now or make a selection prior to the end
23 of
June would have it effected 1 July?
24 MR.
HERNDON: Is it the first of July or end
25 of
July? July 31.
95
1 GENERAL MILLIGAN: July 31st.
2 MR.
HERNDON: Then the ones who make --
3 GENERAL
MILLIGAN: If that works all right --
4 I
see Doug Darling back there, I hope that works
5 all
right.
6 MR.
DARLING: Yes.
7 MR.
HERNDON: For those who are making
8 election
in July, it would be August 31, and so
9 on.
But all of the money we will set up in a
10 transition
account will start to liquidate the
11 assets
this month for the three months, set it up
12 in
the transition account and start moving it
13 over.
14 GENERAL
MILLIGAN: So it would be basically
15 on
a monthly basis and at the end of the full
16 month
basis?
17 MR.
HERNDON: That's right.
18 That
statistical report is for your
19 information
only.
20 Item
number 4 is approval of the State
21 Board
of Administration's budget for the fiscal
22 year
2002-2003.
23 And
Governor, you will recall at the last
24 meeting
when we brought this before you, you
25 had
requested some information regarding the
96
1 outyear forecast for the various programs.
2 We
can go through this at your
3 convenience.
Just for the sake of information,
4 let
me just simply say that the budget for the
5 Board
for the current year contemplates
6 something
less than a 1 percent increase. And
7 that's
largely a function of the pay increase.
8 Were
it not for the cola, there would be a
9 slight
decrease.
10 We
have transferred, begun to transfer
11 some
positions from the DB ledger over to the
12 DC
ledger to go with the original ones that we
13 established.
14 But
other than that, there is not a great
15 deal
in the operating budget of any
16 significance.
17 Now
if you want to talk about the outyear
18 forecasts
for the DC program, which I think was
19 your
particular interest, we can do that.
20 GOVERNOR
BUSH: Here's what -- this is a new
21 venture,
a big new venture in terms of costs. We
22 have
these contracts with vendors that are, given
23 the
volume, particularly at the beginning, are
24 significant.
And we don't know what the end
25 result
will be in terms of who is going to opt out
97
1 of the defined benefit into defined contribution.
2 It
seems to me, and it's -- I appreciate
3 the
fact that it's hard for you to project how
4 that's
going to work and what the run rate
5 should
be on expenditures at this point.
6 But
there is some -- there's got to be
7 some
point where we can pause and evaluate the
8 cost
structure for the defined contribution and
9 defined
benefit plans based on who is in each.
10 That's
kind of what I am asking, is a time
11 certain
when that review would begin and be
12 done,
so that we don't just kind of spend and
13 spend
and grow or do things without having any
14 kind
of a static environment, because it's
15 already
different right now than what we
16 anticipated
and it may change.
17 MR.
HERNDON: Yes, sir. It would be
18 worthwhile.
I would just call to your attention
19 what
we provided you is essentially three
20 different
scenarios: A low, middle and high
21 scenario.
22 That
they are intended to reflect likely
23 transfer
amounts and numbers of participants.
24 The
ones we now think are the most likely case
25 are
the base cases, the middle scenario which
98
1 is a four and half billion dollar transfer and
2 roughly
150,000, 144,000 participant accounts.
3 And
you will see there, the beginning of
4 changes
in the way the budget is structured as
5 you
look out over the next couple of years.
6 Obviously,
as you say, the reality will be
7 the
ultimate test of this. And I think the
8 budget
that you see next June, which will show
9 all
of the state employees and all of the
10 education
category and many of the county
11 employees
having made their choices, we will
12 then
know with a great deal more precision.
13 But
here, for example, we are not
14 projecting
a dramatic change in the DC costs
15 for
two reasons.
16 Number
1, because we have a number of
17 front-end
costs for education programs and
18 development
of software and everything else
19 that
are falling away, but the execution costs
20 are
now going up because, for example, if we
21 set
up 144,000 accounts, there is a cost
22 associated
with each one of those accounts that
23 we
are paying to the vendor.
24 So
we are replacing implementation or
25 preimplementation
costs with some execution
99
1 costs.
2 Now
the significant savings in this whole
3 equation
is frankly not staff at the Board,
4 although
that's certainly possible. But in
5 time,
you should see the costs of managing the
6 DB
assets, the money we pay the money managers,
7 start
to fall; and the costs associated with
8 the
DC program stay relatively stable because
9 some
of those costs are being shifted out to
10 the
employees who are picking up the manager
11 costs.
12 And
we have forecasted for you here --
13 looking
at this middle scenario, for example,
14 in
the first year, that our management fees on
15 the
DB side -- and this is footnote number 2 on
16 that
middle scenario -- should drop about six
17 and
a half million dollars.
18 Now
that's based on this estimate of --
19 what
we did is we went to our three asset
20 classes
that are footing the lion's share --
21 U.S.
equities, international and fixed income
22 and
said: Using this scenario, how would you
23 adjust
your manager lineup? Which ones would
24 you
eliminate, which ones would you defund, and
25 so
forth? And what does that produce in the
100
1 way of savings? And this is the estimate that
2 we
got back.
3 And
it will obviously rise and fall a
4 little
bit as experience dictates. But over
5 time,
that's the pattern that you will see; is
6 our
manager costs will drop on the DB side and
7 the
staff will as well because we'll be
8 reducing
the need for some of those, but
9 ultimately
that's not the major driver. The
10 staff
on the Board is not the major cost
11 driver;
it's the managers' fees that we pay.
12 And
you don't see those in the budget
13 because
they are netted against the returns.
14 GOVERNOR
BUSH: All right.
15 MR.
HERNDON: The other point I would like to
16 make
with respect to the budget, and it's not here
17 so
much because it's a significant budget issue,
18 but
just to call it to your attention, is we are
19 contemplating
strengthening of our compliance
20 office,
our internal audit, compliance function.
21 One
of the side elements of that is that
22 we
had proposed to your offices that we have
23 the
internal auditor or our chief compliance
24 officer
report directly to you. They would
25 also
serve us obviously in an administrative
101
1 capacity, but they report directly to you.
2 We
recognize your time is too valuable to
3 sit
down and start doing work plans and all the
4 rest
of the things.
5 So
what we suggested as an alternative is
6 that
your individual inspector generals
7 function
as kind of the working arm for you,
8 and
our inspector general would work with them
9 to
develop a work plan, a charter for the
10 office
and some of those kinds of functions;
11 and
then periodically during the course of the
12 year,
probably quarterly once it's up and
13 running,
meet with your inspector generals to
14 make
sure they are on track, give you the
15 reports.
16 And
then if you wanted to meet with them
17 individually,
of course, that would be
18 appropriate.
But that was the mechanism we
19 were
suggesting. It seems to fit, given the
20 unique
structure, and make sense. So that's
21 part
and parcel of this budget that is before
22 you.
23 TREASURER
GALLAGHER: If I may.
24 I
am very interested in having that work
25 out
that way, and I think having our inspector
102
1 generals work with the chosen inspector
2 general.
And I would guess that the inspector
3 general
that's going to be out there -- and we
4 had
different names, but I sort of liked the --
5 what
did we call our -- inspector generals in
6 our
agencies--
7 GENERAL
MILLIGAN: Yes.
8 TREASURER
GALLAGHER: We would obviously
9 choose
the person that's going to be doing that
10 function.
11 MR.
HERNDON: Yes, what we would anticipate
12 is
we would advertise it, screen down the
13 applicants,
probably give your inspector generals
14 and
you three or five or some smaller number, and
15 you
would choose that person. And they would
16 report
to you and you would have the hire and fire
17 decision.
18 We
would hope that the executive director
19 would
be involved in that discussion, but that
20 would
be your decision.
21 TREASURER
GALLAGHER: I think it might be
22 good
if you are going to do the advertising, that
23 you
would have our inspector generals involved in
24 it,
in the breakdown and final recommendation to
25 us.
103
1 MR. HERNDON: Right.
2 TREASURER
GALLAGHER: I really think that
3 makes
me feel a lot better about my and my
4 colleagues'
fiduciary responsibility in this
5 agency
because inspector generals report to the
6 agency
head.
7 GENERAL
MILLIGAN: I have thought about this
8 quite
a bit already, and we are not making a
9 decision
on this, I hope, today because I think we
10 need
to think through clearly what we are asking
11 our
IGs to do and what the role of the IG is in
12 terms
of his relationship with you as the head of
13 the
agency.
14 And
so before we go too far down that
15 track,
I think we need to really think through
16 the
IG function and the responsibilities they
17 already
have, and exactly what this means in
18 terms
of their very carefully defined, I think,
19 responsibilities
as an IG within an agency.
20 So
I just think we need to think through
21 if
that's the right --
22 COMMISSIONER
GALLAGHER: It could be another
23 person
within our agency.
24 GENERAL
MILLIGAN: I don't know. We need to
25 think
about it. There is a pretty good little
104
1 report here, and I think it's -- this happens to
2 be
from Coleman, and it's a pretty good summary
3 and
it's a pretty good report from the people that
4 looked
into this whole setup. And I think they
5 need
to be looked at carefully and then make a
6 decision.
7 MR.
HERNDON: If it's beneficial, perhaps to
8 just
keep moving forward, one thing we could do is
9 work
with your IGs for the time being.
10 GENERAL
MILLIGAN: I have no problem with
11 that
in the interim while we really consider this
12 thing.
13 MR.
HERNDON: Just to come up with the
14 charter,
something that's written and laid out
15 clearly;
and then that would be the document that
16 would
be before you to in effect vote on.
17 GENERAL
MILLIGAN: I, for one, come from a
18 long
background of dealing with inspector generals
19 and
you have to be careful that you don't dilute
20 the
responsibility of the inspector general.
21 And
so I am always concerned when anything
22 is
put on to an inspector general that takes
23 away
from the very important function they
24 perform
for you.
25 TREASURER
GALLAGHER: I fully understand what
105
1 you are saying and agree with you.
2 I
look at this responsibility that we are
3 putting
on as really an oversight
4 responsibility;
first of all, importance of who
5 we
hire, that's the number 1 thing. And
6 number
2 it's an oversight and our inspector
7 generals
can be sort of a guidance to whoever
8 that
person is and that type of thing as
9 opposed
to our people, as they can be spending
10 a
lot of personal time over in that agency,
11 which
I don't think any of us really want to
12 see
happen.
13 GENERAL
MILLIGAN: I just, before we jump to
14 this
thing one way or the other, I think we need
15 to
look at all work that's gone into it already.
16 And
I have no problem on an interim basis to allow
17 you
time, Tom, to move forward, allowing IGs to
18 serve
as kind of the focal point within certainly
19 my
agency.
20 MR.
HERNDON: I would like to start the
21 advertising
process with your IGs.
22 TREASURER
GALLAGHER: We can do that.
23 GENERAL
MILLIGAN: I have no problem with
24 that.
I think we need to think carefully about
25 diluting
IG functions.
106
1 TREASURER GALLAGHER: You mean ours?
2 GENERAL
MILLIGAN: Yes, ours.
3 TREASURER
GALLAGHER: If not them, who?
4 GENERAL
MILLIGAN: I don't know. There is
5 some
suggestions. There is some good
6 recommendations.
7 TREASURER
GALLAGHER: I am willing to listen.
8 Then
the next thing is it's going to be us
9 ourselves.
10 GENERAL
MILLIGAN: There is some good
11 thoughts
in here and some good thoughts in the
12 report
that was put together, and I think it needs
13 to
be reviewed and then we can talk about it.
14 GOVERNOR
BUSH: Very good.
15 MR.
HERNDON: I need a motion on the budget.
16 GOVERNOR
BUSH: Is there a motion?
17 TREASURER
GALLAGHER: Governor, I have got a
18 quick
question.
19 GENERAL
MILLIGAN: The education component of
20 this
thing, of course, is very large.
21 TREASURER
GALLAGHER: I guess, judging from
22 the
projections that I see in the next several
23 years,
that you don't see a great decline in the
24 education
--
25 MR.
HERNDON: No, we don't. The statute is
107
1 fairly clear that education about retirement in
2 the
broad sense is now part of the Florida
3 Retirement
System and not that the division hasn't
4 always
tried to do that, but they didn't have the
5 resources
to do it.
6 GENERAL
MILLIGAN: The education is about the
7 defined
benefit and PEORP, and it's not all about
8 the
defined contribution.
9 MR.
HERNDON: That's exactly right.
10 GENERAL
MILLIGAN: So this really education
11 piece
reflects a growth in education on the
12 defined
benefits side, too.
13 MR.
HERNDON: That's correct.
14 GENERAL
MILLIGAN: So you don't see it
15 falling
off particularly?
16 MR.
HERNDON: We don't. We are doing some
17 projections
in here for a lower number of
18 workshops,
based on the pull that the workshops
19 have,
we can scale them back, but we looked at
20 other
topics, and there is some information in the
21 packet
that we are giving to your staff that look
22 at
some of the topics that employees have an
23 interest
in.
24 Retirement
plan in the broad sense is one
25 of
the things they have a strong interest in.
108
1 And that's the kind of thing that the
2 legislature
really was interested in over and
3 above
PEORP per se.
4 GOVERNOR
BUSH: I was just going to say that
5 again,
I am going to vote for the budget, of
6 course,
but I do think we need a thorough review
7 of
all the things, going forward, and because the
8 legislature
passed a law to allow us to do this.
9 This
is a great innovation, kind of one of a kind
10 opportunity.
11 The
legislature comes every year back into
12 session,
and should there need to be some
13 changes
based on our experience, we can go back
14 and
ask them to make modifications as well.
15 We
don't need to be spending,
16 overspending,
that's all I am saying. If it
17 makes
sense to do it, it helps employees make
18 the
decisions, we provide them the right
19 services
for them to do what is best for their
20 retirement
needs, that's great.
21 But
we'll have a lot more experience and
22 information
a year from now for next year's
23 budget.
Some of us, I am not sure I'll be
24 here.
25 TREASURER
GALLAGHER: Me either. I mean me.
109
1 GENERAL MILLIGAN: I will not be here, but I
2 will
be worried about it, and I will be watching
3 it.
4 TREASURER
GALLAGHER: Right now, it's a
5 pretty
hard decision to make to move out of a
6 defined
benefit plan, if you look at what's
7 happening
in the stock market in the last year.
8 This
is not the greatest time for anybody wanting
9 to
--
10 GOVERNOR
BUSH: Thank God we didn't do this
11 five
years ago, for the same reason. In other
12 words,
if people were making decisions because the
13 stock
market was going like gang busters and they
14 started
thinking short-term, we would have had --
15 TREASURER
GALLAGHER: Then we would have had
16 other
problems.
17 GENERAL
MILLIGAN: That underscores the
18 importance
of the education, so that money is well
19 spent.
20 I
still have a little problem, and I just
21 only
mention in passing; it's still the State
22 Board
of Administration, whether you are in the
23 defined
contribution or defined benefit. And
24 so
I think we need to -- while we separate the
25 two
for clarity, I just have a problem
110
1 referring to SBA, DB and PEORP, DC. It is the
2 State
Board of Administration.
3 MR.
HERNDON: Yes, sir.
4 GOVERNOR
BUSH: Is there a motion?
5 TREASURER
GALLAGHER: I will move the budget.
6 GENERAL
MILLIGAN: And I will second.
7 GOVERNOR
BUSH: It's moved and seconded.
8 Without
objection, the budge is approved. Item 5.
9 MR.
HERNDON: Item 5 is report of the
10 Executive
Director of the fund activity analysis
11 for
the month of March, 2002.
12 GENERAL
MILLIGAN: We accept the report.
13 GOVERNOR
BUSH: Good. It's accepted.
14 MR.
HERNDON: Item number 6 is requesting
15 approval
of the following rules for adoption.
16 We
have several here. The first is the
17 investment
policy statement which was approved
18 at
your meeting on January 29, 2002 and rule
19 19-9.001.
20 There
was no changes proposed. The Joint
21 Administrative
Procedures Committee had no
22 comments
or suggestions, so we would recommend
23 that
this be adopted and filed in July.
24 6.2
is also a rule that implements the
25 initial
asset transfers, General, that we were
111
1 talking about earlier, that would occur between
2 July
of '02 and March of '03 for the defined
3 contribution
program. We didn't hold a
4 workshop;
there was no request to do so. There
5 were
no changes made to this rule as a
6 consequence.
7 GOVERNOR
BUSH: Is there a motion?
8 GENERAL
MILLIGAN: Motion.
9 TREASURER
GALLAGHER: Second.
10 GOVERNOR
BUSH: Moved and seconded. Without
11 objection,
it's approved.
12 MR.
HERNDON: Item number 7 for the Florida
13 Commission
on Hurricane Loss Projection
14 Methodology,
we are requesting reappointment of
15 the
statistics expert, Scott Gulati, to chair the
16 council
or the commission, excuse me.
17 TREASURER
GALLAGHER: Motion.
18 GENERAL
MILLIGAN: Second.
19 GOVERNOR
BUSH: Moved and seconded. Without
20 objection,
it's approved.
21 MR.
HERNDON: Item number 8 has two parts.
22 8.1,
which is the premium formula proposed for the
23 Florida
Hurricane Catastrophe Fund and the
24 emergency
rule-making authority to allow the forms
25 and
rules, and so forth, to be amended as part of
112
1 that procedure.
2 And
as you know, what we had provided you
3 before
was some different scenarios based on
4 what
was likely to be passed by the legislature
5 and
addressed by the Governor.
6 In
the veto process, the Governor did veto
7 a
small amount of the mitigation dollars that
8 were
appropriated by the legislature. That had
9 the
effect of causing the proposed decrease to
10 decrease
slightly less. So if that sentence
11 makes
sense, it went down --
12 GOVERNOR
BUSH: Was that a good point?
13 MR.
HERNDON: -- some minute --
14 TREASURER
GALLAGHER: The less, the better
15 would
be -- the more you detail, the better, the
16 less
mitigation the better.
17 MR.
HERNDON: The premium decrease is now
18 10.75
percent as opposed to 10.93 percent, it's
19 very
negligible. It is a significant decrease in
20 the
premiums.
21 GOVERNOR
BUSH: These are special projects.
22 ATTORNEY
GENERAL BUTTERWORTH: This is the
23 pot
they reached into.
24 COMMISSIONER
GALLAGHER: Tom, the legislature
25 included
a proposal that would encourage us to
113
1 enhance collections for the CAT Fund in order to
2 reach
our maximum first storm and allow us to
3 build
for the second one.
4 And
I see that this is an opportune time
5 to
do that when you are facing a decrease
6 instead
of an increase, and we can end up next
7 year
with an increase and it be a very tough
8 time
to do that.
9 You
want to give us sort of a layout why
10 we
didn't recommend doing it this year when it
11 would
be an opportune time?
12 MS.
ALLEN: My name is Tracy Allen, I work
13 for
the Catastrophe Fund.
14 GOVERNOR
BUSH: Hi, Tracy, how are you doing?
15 MS.
ALLEN: Doing great.
16 This
was brought up with our advisory
17 council,
and they chose this year to not act on
18 it.
And they gave four specific reasons.
19 These
reasons were under the economic
20 environment,
there are already cost pressures
21 on
the insurers due to private reinsurance
22 market
situations. And they felt it would not
23 be
productive to exacerbate these problems by
24 increasing
rates at this time.
25 Number
2, that the fund is well into its
114
1 rate-making cycle for this season and thus
2 changes
calling for a rapid cash flow factor
3 would
be disruptive; to be participating
4 insurers,
they got their reinsurance in place.
5 And
number 3, the staff and the advisory
6 council
have not had the opportunity to
7 adequately
study the effect of utilizing a
8 rapid
cash buildup factor and its impact on the
9 fund
and the insurers.
10 And
number 4, that any realistic factor
11 would
not contribute significantly to the fund
12 capacity
in the short-term.
13 And
they gave an example that even at a
14 25
percent surcharge, raising a hundred million
15 would
only increase the second season capacity
16 by
1 percent. And they felt it was wiser to
17 defer
it to the next contract year so that they
18 could
study it and act on it.
19 Obviously
the Trustees can order that they
20 have
total control over the rates and can
21 change
the advisory council.
22 TREASURER
GALLAGHER: If you put a 25 percent
23 surcharge
on it, how much -- how would that be
24 relative
to the 10 percent decrease we just are
25 about
to do?
115
1 MS. ALLEN: I don't know. I can find that
2 out
from our actuaries. It's never a percentage
3 to
percentage. There is always all these factors
4 that
go in.
5 TREASURER
GALLAGHER: That's why I asked the
6 question,
because I don't have a clue as to the
7 math.
8 GOVERNOR
BUSH: All the issues the advisory
9 group
gave, but for maybe the timing one, are all
10 going
to be applying next year as well.
11 TREASURER
GALLAGHER: Yes. The worst one is
12 that
this year when you have a decrease -- by the
13 way,
as the Governor said, all the formulas and
14 everything
have to be redone anyway. But if you
15 got
a hundred million dollars more this year,
16 that's
a hundred more million plus interest you
17 would
have in the pot next year. We wait until
18 next
year, we are a hundred million plus interest
19 behind.
20 GOVERNOR
BUSH: It's a trade off. Because by
21 doing
what Commissioner Gallagher is suggesting, I
22 am
assuming there would be stabilizing, a greater
23 chance
of stabilizing rates long-term. Do you
24 think?
25 MS.
ALLEN: I don't know.
116
1 TREASURER GALLAGHER: You are getting into
2 actuarial
questions there.
3 GENERAL
MILLIGAN: You don't really know?
4 MS.
ALLEN: I don't know.
5 GENERAL
MILLIGAN: They have looked at it,
6 the
board has looked at it fairly closely, and I
7 respect
their consideration on this thing. And it
8 would
take considerable effort to go back and we
9 don't
-- we are guessing at this stage.
10 TREASURER
GALLAGHER: One of the problems we
11 have
is that we are supposed to be -- what we are
12 doing
right now should -- there's notice out and
13 everything
else on June 1st to all the insurance
14 companies
so that they can get their rates in and
15 paid.
16 And
so we are really behind the eight ball
17 anyway;
so trying to muck it up with something
18 else
is probably not --
19 GENERAL
MILLIGAN: We are at that point. We
20 are
already behind the eight ball.
21 GOVERNOR
BUSH: All right.
22 GENERAL
MILLIGAN: Move.
23 TREASURER
GALLAGHER: Second.
24 GOVERNOR
BUSH: Moved and seconded. Without
25 objection,
it's approved.
117
1 MR. HERNDON: I misspoke, just for the
2 record,
Governor and Members.
3 On
item 6.2, there was a notice of change
4 that
was published to address a few comments
5 from
the Department of Community --
6 GENERAL
MILLIGAN: That's been taken care of
7 and
I have no problem with that.
8 MR.
HERNDON: I misspoke and I wanted to just
9 correct
that.
10 Item
number 9, which is the bundled
11 provider
report, I already mentioned, we signed
12 virtually
all the contracts, so we don't need
13 to
go into that. That completes the agenda.
14 GOVERNOR
BUSH: Thank you.
15 (The
proceedings concluded at 12:37 p.m..)
16
17
18
19
20
21
22
23
24
25
118
1
2 CERTIFICATE
OF REPORTER
3
4
5
6 STATE
OF FLORIDA )
7 COUNTY
OF LEON )
8
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,
15 nor
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 18th
19 day
of June, 2002.
20
21
22 ______________________________
23 SANDRA
L. NARGIZ, RMR, CRR
100 SALEM COURT
24 TALLAHASSEE, FL 32301
850-878-2221
25
Cabinet
Affairs
