Click here to MyFlorida Home Page  
Clear Dot Image Cabinet Affairs








The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding,
in the Cabinet Meeting Room, LL-03, The Capitol,
Tallahassee, Florida, on Tuesday, October 8, 2002
commencing at approximately 9:35 a.m.

Reported by:


Registered Professional Reporter
Registered Merit Reporter
Certified Realtime Reporter

TALLAHASSEE, FL 32301 (850)878-2221


Representing the Florida Cabinet:


Secretary of State


Attorney General

Commissioner of Education

* * *


(Presented by J. Ben Watkins, III)
1 Approved 6
2 Approved 6
3 Approved 6
4 Approved 21
5 Approved 22
6 Approved 22
(Presented by James T. Moore)
1 Approved 25
2 Approved 25

(Presented by Robin Safley)
1 Approved 26
2 Approved 26
3 Approved 26
4 Approved 28
5 Deferred 28

(Presented by David B. Struhs)
1 Approved 30
2 Deferred 30
3 Approved 42
4 Withdrawn 42
5 Approved 46
6 Approved 49
7 Approved 53
8 Approved 84

(Presented by Coleman Stipanovich)
1 Approved 84
2 Approved 85
3 Approved 85
4 Approved 86
5 Approved 85
6 Approved 86
7A/7B Approved 88
8 Approved 89
9 Approved 90
10 Approved 91

1 P R O C E E D I N G S

2 (The agenda items commenced at approximated 9:35 a.m.)

3 GOVERNOR BUSH: In the matter of IMC

4 Phosphate consolidated cases 01-1080, 01-1081,

5 01-1082, it has become necessary to appoint a

6 substitute agency head.

7 I have appointed Steve Seibert and request

8 your concurrence in this matter. General

9 Butterworth?

10 GENERAL BUTTERWORTH: I will do the motion,

11 Governor, just to make it legally correct here.

12 I move to appoint Secretary Seibert of

13 Department of Community Affairs as the agency

14 head to act in the stead of the Secretary of

15 the Department of Environmental Protection for

16 the purpose issuing a final order in these

17 consolidated cases.

18 This motion is to authorize Secretary

19 Seibert to review the recommended order and the

20 record, with the assistance of staff, and

21 render a final order as conclusive and effect

22 as if agency action had been taken by the head

23 of DEP prior to his disqualification.

24 SECRETARY SMITH: Second the motion.

25 GOVERNOR BUSH: There is a motion and a
1 second. Any discussion?

2 All in favor say aye.


4 GOVERNOR BUSH: All opposed?

5 Thank you very much.




















1 GOVERNOR BUSH: Division of Bond Finance.

2 TREASURER GALLAGHER: Motion on the minutes.


4 GOVERNOR BUSH: Item 1 is moved and seconded.

5 Without objection, it passes.

6 Item 2.

7 MR. WATKINS: Item 2 is a resolution

8 authorizing the issuance and competitive sale of

9 up to $195 million in Florida Forever Refunding

10 Bonds.



13 GOVERNOR BUSH: Moved and seconded. Without

14 objection, the item passes.

15 MR. WATKINS: Item number 3 is a resolution

16 authorizing the issuance and competitive sale of

17 up to $80 million in Facilities Pool Refunding

18 Bonds for the Department of Management Services.


20 GOVERNOR BUSH: Is there a second?


22 GOVERNOR BUSH: Moved and seconded. Without

23 objection, the item passes.

24 MR. WATKINS: Item number 4 is a resolution

25 authorizing competitive sale of up to $300 million
1 in Lottery Revenue Bonds.

2 And what I would like to do, Governor, is

3 in many cases in going about doing our day to

4 day business of the state, we fail to pause and

5 reflect on what it is we have accomplished.

6 And in connection with this agenda item,

7 now on the verge of completing -- this would be

8 the last authorization for Lottery Revenue

9 Bonds, to complete the Lottery Revenue Bond

10 Program. And so it's appropriate at this time

11 to take a minute to review what it is we have

12 accomplished and what this means for the state.

13 So with your permission, I would like to

14 take a couple of minutes to run through that

15 with you.


17 MR. WATKINS: The Lottery Revenue Bond

18 Program is a $2.7 billion program that is

19 specifically dedicated to K through 12 capital

20 outlay spending.

21 The 2.7 billion is made up of two separate

22 components. There is two and a half billion

23 dollars of the Lottery Revenue Bond Program and

24 $200 million of general revenue, and the total

25 of those two sources making up the
1 $2.7 billion.

2 It has gone to fund four separate

3 programs. There is the Classrooms First

4 Program, Effort Index Grant Program, School

5 Infrastructure Thrift Program and Small County

6 Assistance Program.

7 Classrooms First was a 2 billion-dollar

8 program. Effort Index Grants, $300 million;

9 School Infrastructure Thrift, $350 million; and

10 Small County Assistance, $50 million.

11 The Lottery Revenue Bond Program, even

12 though it was initially authorized in '97 and

13 the appropriations authority given, the way

14 that the program works is it is implemented

15 incrementally as the cash is needed to pay

16 construction. It's implemented on a cash flow

17 basis, which means simply that bonds are sold

18 when the cash is necessary to pay bills for

19 construction.

20 So the local school districts are

21 responsible for determining what schools get

22 built, where they get built, the architect and

23 engineering and permitting, and the actual

24 management of the construction process.

25 Then they submit the bills, a requisition
1 in effect, for drawing down the monies for the

2 state. So it has taken five years for this

3 $2.7 billion in spending to actually mean

4 bricks and sticks on the ground and for the

5 draw down of those monies to occur.

6 So now we are at the final installment of

7 bonds; we have sold 11 installments of bonds

8 since 1998 totalling $1.8 billion.

9 And where we are right now, of the

10 $2.7 billion in budget authorization that has

11 been given in the commitment to provide the

12 funding, actually $2.3 billion in cash has been

13 distributed to pay bills.

14 So we are $439 million shy of completing

15 the $2.7 billion commitment for school

16 construction purposes.

17 And of the 439 million that we have yet to

18 distribute the cash for, we have

19 $215 million -- excuse me, $224 million in cash

20 in the bank at the Department of Education

21 available to be drawn down on; leaving

22 $215 million of bonds to be sold which, when

23 combined with the cash on deposit at the

24 department, will make up the $439 million in

25 cash needed to complete the funding of this
1 entire program.

2 And it has been represented to me that I

3 can simply take a piece of paper and lay it on

4 this table, and somehow it magically appears.

5 And I smell a setup coming here, Governor. I

6 am going to try it anyway.

7 GOVERNOR BUSH: Wow, magic.

8 MR. WATKINS: That is magic. I was expecting

9 a screen or something, and when they told me to

10 put it on the table, I wasn't quite sure, but here

11 we go.

12 To help put the Lottery Bond Program in

13 perspective and in context, it's important that

14 we look at other sources of funding K through

15 12 school construction.

16 And there are really three fundamental

17 sources of money or programs that provide for K

18 through 12 school construction.

19 It's the Lottery Bond Program, PECO Bonds,

20 which is the mainstay of the state's education

21 funding program, and lastly, a program we call

22 CO and DS which is an acronym that stands for

23 Capital Outlay and Debt Service.

24 What it is is a portion of motor vehicle

25 license tag revenues pledged to repay debt,
1 also secured by the state's full faith and

2 credit. So those are the three programs that

3 provide the funding for K through 12 school

4 construction in the state.

5 We picked a five-year period because

6 that's the period of the Lottery Revenue Bond

7 Program, that's the period we want to look at

8 in evaluating the Lottery Bond Program in the

9 context of other sources that we also use for

10 school construction.

11 And what you can see from this chart is

12 that over the last five years, the combined

13 sources of those three revenue streams provided

14 a total funding of 4.962 billion. So let's

15 just round it off and call it $5 billion.

16 So there had been budgeted and

17 appropriated -- there is two ways to look at

18 this and to evaluate it and measure it.

19 One is the amount we have included in the

20 budget, that's appropriated, that is a

21 commitment for the state to provide the funds.

22 And then a second way to look at it, which

23 is a lower chart, is actually cash out the door

24 to fund -- to pay for the bills for school

25 construction.
1 So we are looking at it in both of these

2 ways; because of the nature in which we

3 implement the programs, PECO is the same way as

4 the Lottery Revenue Bond Program; in other

5 words, the appropriation is included in one

6 year but the cash distributed to the districts

7 occurs in subsequent years as the bills are

8 submitted to the state, and the cash needs to

9 be distributed to the districts in order to pay

10 those.

11 So I am looking at it in two different

12 ways to measure this.

13 And from an appropriations standpoint, on

14 average, we provided $5 billion over five years

15 or a billion dollars a year for K through 12

16 school construction. And when we look at it

17 from a cash flow standpoint and talk about how

18 much money has actually gone out the door, what

19 you can see is that in cash distributed to the

20 districts to fulfill the commitment for the

21 appropriation, we have distributed $3.8 billion

22 over that same five-year period.

23 GOVERNOR BUSH: But if you look at it from

24 the fiscal year, what you project, that number

25 will be higher by 330 million, 340 million for
1 PECO and the Lottery you said there was

2 400 million, so another $700 million; so it's 4.5

3 or 4.6 billion at the end of the fiscal year?

4 MR. WATKINS: Right. The need for the cash

5 is very difficult to project because of the

6 multitude of the mix of projects. But suffice it

7 to say there are projects out there being

8 constructed; and as those are completed and the

9 bills submitted, the money will be drawn down.

10 Your point is well taken, Governor, which

11 is 2002-2003 cash disbursements only reflects

12 two months of the current fiscal year. And

13 there will be substantial distributions beyond

14 that for the remainder of the fiscal years.

15 GOVERNOR BUSH: Two questions; three

16 questions.

17 What about local effort? You didn't --

18 the bond issues, recently where local districts

19 have approved increased funding. PECO is their

20 main source of funding, but they also have

21 additional sources they can go to the voters

22 with?

23 Secondly, how does the state's

24 contribution to capacity building for schools

25 compare to other states, if you know that?
1 And third, is there a limit, is there a --

2 is there a limit to what we could finance, just

3 given that the gestation period of planning,

4 design, permitting, construction, getting ready

5 for school years, is there a limit based on our

6 experience with the Lottery Bonding Program

7 that constrains how much money you would want

8 to bond?

9 MR. WATKINS: I will take them in order,

10 Governor.

11 The first question is local effort. And I

12 did not attempt to assimilate information on

13 all the required local effort.

14 I do know, however, there was a law passed

15 about three years ago, local options, passing

16 local options sales tax where local school

17 districts could, by referendum, approve the

18 imposition of a half-penny sales tax and can

19 leverage that as well. So it gives them the

20 ability to raise money locally and leverage it.

21 And I know, having gathered the

22 information and being involved with the Leon

23 County School District in studying their

24 facilities needs, we looked at -- and I think

25 there are seven different counties. I know
1 Orange County recently passed one, a referendum

2 in the primary, Manatee County has passed one,

3 Pinellas County has passed one.

4 GOVERNOR BUSH: Sarasota, Volusia.

5 MR. WATKINS: That generates substantial

6 dollars for construction.

7 And there are also two-mill money that

8 local school districts can levy specifically

9 for capital outlay purposes, that they do levy

10 and typically do maximize the amount of

11 resources they have available. So that's

12 another source of funding.

13 There are certificates of participation

14 that can be issued without referendum at the

15 local level which is a legal fiction in the

16 sense that it's not considered debt because

17 it's subject to appropriation, which means the

18 school district legally has the option to

19 nonappropriate and walk away from its

20 commitment.

21 But from a practical standpoint, they

22 couldn't do that simply because it would

23 foreclose future access to the credit markets.

24 So as a legal matter, it's not considered a

25 debt. As a practical matter, it is a debt and
1 it's a way, a tool that local school districts

2 use to provide funding.

3 So there are other sources, that if you

4 wanted to see a macro picture of state level

5 funding and local funding combined, that would

6 be necessary to take into account, but we

7 haven't done that for this purposes; I was just

8 focussing on Lottery and State funding.

9 The second question is sort of how does

10 the state stack up against other states in

11 education spending?

12 GOVERNOR BUSH: Capital spending.

13 MR. WATKINS: Capital spending. And that is

14 another issue that I have not quantified and tried

15 to evaluate.

16 GOVERNOR BUSH: I was told we were second

17 last year.

18 MR. WATKINS: I was going to say my instincts

19 tell me we are pretty high. That's simply because

20 anecdotally, the PECO program is our largest bond

21 program. There is over $9 billion in debt. We do

22 more PECO bonds than we have done for any other

23 program that, combined with the Debt Affordability

24 Study we did and where we are in relation to other

25 states, tells me that a vast majority of what we
1 borrow and what we go in debt for as a state is

2 specifically related to school construction.

3 PECO funds K through 12, community

4 colleges and universities, so it goes across

5 all lines. And the legislature makes a

6 decision every year about how much is devoted

7 to each purpose. But on an overall basis, I

8 would think we are pretty high.

9 Last, the last question is sort of what is

10 the outer limit?

11 And I would answer that question by

12 evaluating it in the context of the Debt

13 Affordability Study which we adopted by policy

14 to determine whether or not a particular

15 initiative is above or below the line.

16 We got a target; we got a limit. We can

17 quantify it; we can measure it. We can

18 evaluate the future financial impact; we

19 provide that information to the legislature for

20 them to make a decision about prioritizing

21 capital spending and allocating scarce

22 resources. And that's what this is all -- the

23 whole Florida of the Debt Affordability Study,

24 so that's how I look at that and evaluate that.

25 GOVERNOR BUSH: Do you know what the
1 practicality -- I wasn't really asking about that,

2 but that's certainly true, what you said about the

3 practicality in terms of financial feasibility.

4 But what about the just the practicality

5 of getting money into the ground and building

6 capacity? I don't know, I sometimes wonder how

7 fast -- maybe our schools districts aren't the

8 most efficient in building capacity, but is

9 there a limit as a state -- I mean, based on

10 the experience of the 2.8 billion, I think a

11 lot of people are surprised we are still

12 bonding proceeds of something that was done

13 five years ago.

14 I am just curious if we learned any

15 lessons about the speed by which capacity can

16 be built under our system?

17 MR. WATKINS: Governor, you are exactly

18 right.

19 I would look at our experience in the

20 Lottery Revenue Bond Program to answer that

21 question. And our experience was and the

22 expectation in a lot of legislators' minds is

23 that if we approved $2.7 billion in funding,

24 we'd sell one big bond issue in year one and

25 we'd distribute it to the districts and be done
1 with it.

2 Fortunately, because of the way the

3 program was designed, there were built-in

4 checks and balances to make sure that the

5 funding was efficiently and effectively

6 deployed and distributed to the districts.

7 And so the way that we did that is by

8 saying: Let's design this program exactly the

9 same way PECO works.

10 PECO has served the state very, very well

11 in terms of the way that it's administered and

12 the efficiency of marrying the borrowing of

13 money with the distribution of cash and

14 matching those two things as closely as we can.

15 And so that was what we were looking at

16 when the Lottery Bond Program was designed and

17 a decision made about how it would be

18 implemented.

19 And so what is important to understand is

20 that the funding was made available on day one,

21 in effect, because the money was included in

22 the budget; the appropriation authority was

23 given through encumbrance authorization, which

24 allows the local school districts to legally go

25 out and sign a contract to build a school,
1 which is exactly what they did. And it's taken

2 us five years to effectively absorb the funding

3 that was provided in 1997.

4 GOVERNOR BUSH: So based on that, if the

5 initiative that's on the ballot passes, how -- I

6 just -- are we going to have to use other means to

7 build capacity? Because if the traditional

8 brick-and-mortar approach is limited, there is a

9 lot of money, but there a finite amount of

10 capacity that can be built by doing the

11 traditional way of siting property, going through

12 the development process, designing the building

13 and building it.

14 If the initiative requires a capacity

15 greater than what our capacity to build is, one

16 would have to conclude, would one not, that we

17 would have to find other alternatives to build

18 capacity?

19 MR. WATKINS: Absolutely.

20 GOVERNOR BUSH: Temporary ones, like things

21 in the football fields, with sidewalks to the

22 cafeteria hopefully.

23 MR. WATKINS: Or double sessions or lots of

24 other things that people, the local officials,

25 local school district officials find difficult.
1 But I think that's a fair assessment.

2 GOVERNOR BUSH: Thought provoking. Thank

3 you, Ben.

4 MR. WATKINS: In conclusion, on this

5 particular item, from looking at the numbers, what

6 it tells me is by either measure, whether you are

7 talking about appropriations and budget authority

8 or whether you are talking about cash distributed

9 to the districts, this program, the Lottery Bond

10 Program represents a substantial investment by the

11 state in K through 12 school construction. And

12 that is what I wanted people to understand in

13 considering agenda item number 4, which is the

14 last installment of this program.

15 GOVERNOR BUSH: Is there a motion?



18 GOVERNOR BUSH: Moved and seconded. Without

19 objection, it's approved.

20 Thank you, Ben.

21 MR. WATKINS: Item 5 is a report of award on

22 the competitive sale of 250,955,000 in Department

23 of Transportation Right-of-Way Acquisition and

24 Bridge Construction Bonds.

25 The bonds were awarded to the low bidder
1 at a true interest cost of 4.53 percent. Of

2 the $253,000,000, $250,955,000 is new money for

3 purposes of right-of-way acquisition and

4 6.3 million -- or excuse me, 50,955,000 is for

5 refunding purposes, and 200 million is for new

6 construction; too many numbers, Governor, too

7 many numbers.

8 TREASURER GALLAGHER: You saved 6 million --

9 MR. WATKINS: Thank you very much for

10 completing that thought.

11 Gross debt service savings was 6.2 million

12 and present value savings was 4.2 million.



15 GOVERNOR BUSH: Moved and seconded. Without

16 objection, the item is approved.

17 MR. WATKINS: Item number 6 is a report of

18 award on the competitive sale $326 million of PECO

19 refunding bonds.

20 The bonds were awarded to the low bidder

21 at a true interest cost rate of 4.057 percent,

22 generating gross debt service savings for the

23 state of 38.2 million and on a present value

24 basis, 26.2 million.


2 GOVERNOR BUSH: Moved and seconded. Without

3 objection, the item passes.

4 MR. WATKINS: One other thing of note, just

5 to give you again a broader perspective of

6 refunding activities during the current calendar

7 year.

8 Interest rates have been extraordinarily

9 low from a historical perspective; contrary to

10 sort of conventional wisdom a year ago, we have

11 executed in the current calendar year

12 $1.1 billion in refunding bonds, the majority

13 of which relates to PECO, because it's the

14 largest program we have, generating gross debt

15 service savings to the state of 133 million or

16 $93.4 million on a present value basis. So we

17 have been busy taking advantage of

18 opportunities that presented themselves.

19 The refunding that you all authorized at

20 the last Cabinet meeting in St. Petersburg,

21 which was authorized on Tuesday, was sold on

22 Wednesday and this is the report of award that

23 appears. As you can see from prior -- the

24 agenda item this morning, we have got some

25 other candidates that we are moving to execute
1 on.

2 COMMISSIONER CRIST: My staff informs me that

3 through the efforts of Ben Watkins and his staff,

4 that an estimated 80.2 million has been saved in

5 PECO refunds, which will be reinvested in the

6 Florida education system this year. So thank you.

7 GOVERNOR BUSH: Thank God for the two guys in

8 the Federal Reserve who voted for lower rates,

9 contrary to Greenspan.

10 Thank you, Ben.















1 GOVERNOR BUSH: The Florida Department Of Law

2 Enforcement.

3 TREASURER GALLAGHER: Motion on the minutes.


5 GOVERNOR BUSH: Moved and seconded. Without

6 objection, the item passes.

7 Item 2.

8 MR. McLaughlin: Merely a year ago, the Department

9 began a process of revising our administrative

10 rules to comport with changes in state statute,

11 federal law and regulation, and some policies

12 adopted by commission counsel that are located

13 within the Department of Law Enforcement; we

14 requested in July the authority to move forward

15 with that process. You granted that. We have

16 today before you a request to finalize these rules

17 effective October 31 of this year.


19 GOVERNOR BUSH: There is a motion, is there a

20 second?


22 GOVERNOR BUSH: Any discussion? Motion

23 passes without objection.

24 Thank you very much.

1 GOVERNOR BUSH: The Department of Veterans

2 Affairs Agenda item we deferred until the

3 October 22nd meeting.

4 State Board of Education. Robin, how are

5 you doing?

6 TREASURER GALLAGHER: Motion on the minutes.


8 GOVERNOR BUSH: Moved and seconded. Without

9 objection, the item passes.

10 TREASURER GALLAGHER: That's including

11 August 13, August 27 and September 10 meetings.

12 GOVERNOR BUSH: Thank you, Treasurer.

13 MS. SAFLEY: Item 2 is the approval of a

14 resolution authorizing the issuance and sale of up

15 to 300 million Lottery Revenue Bonds.



18 GOVERNOR BUSH: Moved and seconded. Without

19 objection, the item passes.

20 MS. SAFLEY: Item 3 is proposed High Priority

21 Location Schools for the 2002-2003 school year.



24 GOVERNOR BUSH: Without the objection, item

25 passes.
1 MS. SAFLEY: Item 4 is a request for a

2 five-year renewal of Volusia County's charter

3 district school. We have Dr. Chris Colwell,

4 assistant superintendent for curriculum, to make a

5 brief introduction.

6 GOVERNOR BUSH: Welcome back.

7 MR. CALDWELL: Thank you, Governor, it's good

8 to be back.

9 Governor Bush, Members of the Cabinet, my

10 name is Chris Colwell, I am assistant

11 superintendent for curriculum and school

12 curriculum in Volusia County.

13 On September 24, 2002, I had the honor,

14 along with Tim, the deputy superintendent, and

15 Mr. Bill Hall, superintendent, to address the

16 State Board Of Education in order to provide a

17 progress report on the implementation of the

18 charter district contract between this board

19 and the Volusia County school board.

20 In that presentation it was noted that the

21 Southern Association of Colleges and Schools

22 recommended the charter school district

23 contract to be renewed an additional five

24 years.

25 Also on September 24, the School Board of
1 Volusia County took action to approve a renewal

2 of the charter contract for an additional five

3 years, effective July 1, 2003, and remaining in

4 effect through June 30, 2008.

5 At this time the superintendent and the

6 School Board of Volusia County would request

7 the State Board of Education approve this

8 five-year renewal of their charter contract.

9 GOVERNOR BUSH: Any discussion? I think we

10 had a good discussion last meeting, and we

11 appreciate your work on this. Is there a motion?

12 COMMISSIONER CRIST: I have a motion to

13 approve the five-year renewal of the Volusia

14 Charter District contract effective July 1, 2003

15 through June 30, 2004.


17 GOVERNOR BUSH: There is a motion and a

18 second. Anymore discussion?

19 The item passes without objection. Thank

20 you very much.

21 MS. SAFLEY: Item 5 is Spiral Tech Elementary

22 School versus Miami-Dade County School Board.

23 COMMISSIONER GALLAGHER: Move to defer until

24 October 22nd.

1 GOVERNOR BUSH: There is a motion to defer

2 and a second. Without objection, the item is

3 deferred. Thank you, Robin.

4 MS. SAFLEY: Thank you.





















1 GOVERNOR BUSH: Board of Trustees.

2 TREASURER GALLAGHER: Motion on the minutes.


4 GOVERNOR BUSH: Moved and second. Without

5 objection, the item passes. Item 2.

6 MR. STRUHS: Good morning, Governor.

7 GOVERNOR BUSH: Good morning.

8 MR. STRUHS: Item 2 we would like to defer

9 until November 26.

10 TREASURER GALLAGHER: Motion to defer.


12 GOVERNOR BUSH: There is a motion to defer

13 and a second. Without objection, the item is

14 deferred until November 26.

15 MR. STRUHS: Item 3 is an opportunity to tell

16 what I think is a really positive story about what

17 this Cabinet, the Legislature and Governor have

18 done this last four years.

19 Over the last four years, if you look at

20 the record, we have now acquired, Governor, a

21 quarter of a million acres of conservation land

22 across Florida. That's because of things like

23 Florida Forever and the legislature's

24 generosity and then what this Cabinet does

25 every other week.
1 One of the things that has gotten a lot of

2 attention in the last few years is just not

3 spending money and buying land but are we

4 managing it well? Are we managing it for the

5 intended public purpose?

6 And to that point, we have put every

7 property in the State of Florida on a regular

8 five-year cycle so we can go back and review

9 our plan for managing it and how we are doing

10 against that plan.

11 In the last round of the five-year reviews

12 we looked at a variety of properties, including

13 Troy Springs State Park.

14 And what we discovered at Troy Springs

15 State Park is that there were some problems.

16 There were some issues that were lacking.

17 What I am proud to do today is to report

18 to you how this accountability and management

19 has uncovered these problems and allowed us to

20 repair and address them in a way that was

21 prudent and cost effective.

22 These kinds of investments of about

23 $700,000 in this park has made it far more

24 environmentally sensitive in terms of dealing

25 with erosion, siltation, and it's made it a
1 safer and more publicly-accessible property.

2 We have a very short presentation, but

3 some nice pictures that will demonstrate what

4 this management plan is doing and using Troy

5 Springs as an example of that.

6 I would like to introduce two individuals

7 from our staff, Randy Smith and Al Gregory, who

8 will do the presentation.


10 MR. GREGORY: Thank you, Governor, Members of

11 the Cabinet, I am Albert Gregory with the Division

12 of Recreation and Parks.

13 We have a very brief slide presentation

14 for you today of Troy Springs State Park, we

15 will show you some of the management

16 accomplishments that we have been able to make

17 since we have been managing the property there.

18 This first slide you see is the boundary

19 map of the park. The property contains

20 79 acres, almost all of which is uplands. The

21 large black feature on the north is the

22 Suwannee River itself. The linear feature on

23 the southwest of the image is County Road 425.

24 The access to the property is off of County

25 Road 425 in the small appendage that sticks
1 down there.

2 The park was acquired in 1995 under the

3 Conservation and Recreation Lands Program. The

4 purpose of acquisition, one, was to protect the

5 springs and its associated water resources, and

6 second, to provide compatible outdoor

7 recreation, the kinds of outdoor recreation

8 that are compatible with the primary purpose of

9 springs protection.

10 The land was leased to the Office of

11 Greenways and Trails in DEP for an interim

12 management period, and in 1997 it was leased to

13 the Division of Recreation and Parks for

14 management as part of the state park system.

15 The main natural feature of the park, of

16 course, is Troy Spring. This is a view of the

17 spring bowl on the left, the spring run, you

18 can see the clear water, and indeed the

19 standing waters of the Suwannee River.

20 The park has important cultural features

21 as well. The main one, the one that is most

22 manifest, you can see near the mouth of the

23 spring run there is an oval shaped feature;

24 that's the remains of the CSS Madison.

25 GOVERNOR BUSH: Can you point that out on the
1 picture, please? I don't see the remains.

2 MR. GREGORY: It's the oval shaped feature

3 near the black rocks, near the mouth of the

4 spring. That's the actual remnants of the Madison

5 itself.

6 GOVERNOR BUSH: I can see that.

7 The Madison was one of the steam-powered

8 boats that traveled the Suwannee River during

9 the Civil War. During the Civil War it was

10 left in the spring run, scuttled to stay and

11 over the years it has been dismantled. Indeed

12 what you see now is what is left of the CSS

13 Madison. It's basically the ribs of the boat

14 on the bottom of the river.

15 State parks in Florida have an open land

16 policy. When we are assigned lands to manage

17 as part of the state park system, one of our

18 first jobs is to get public access to the

19 property as soon as possible. We do that

20 normally by way of a basic amenities package

21 which we call a starter kit. Starter kits are

22 composed of a self-composting toilet stabilizig

23 the parking area and picnic shelter and a basic

24 information kiosk so visitors can orient

25 themselves to the property.
1 In the case of Troy Spring we considered

2 doing that, but Troy Springs had several

3 problems which limited our ability to install

4 or normal starter kit package.

5 The first problem is depicted by the

6 slide. The entrance road that had been used

7 for years by people to get to the spring was on

8 state property, then it left state property and

9 crossed private property. So if we were to use

10 that road as the primary access to the park, we

11 would be putting the visitors in the situation

12 of trespassing on the neighbor's land.

13 This slide, you can see the metal post

14 standing on our boundary looking into the

15 joined private property and you can see the

16 road some 50 to 60 feet inside the private

17 property.

18 The second problem that we were dealing

19 with was Troy Springs had no facilities to

20 channel visitor use. The property had not been

21 opened to the public for recreation prior to

22 the state's acquisition and as you can see from

23 the slide of the spring head as it existed just

24 after acquisition, there is no way for the

25 public to get down to the water.
1 So if we were to provide public access

2 without the benefit of the facilities to

3 channel public use and handle the visitors'

4 impact, we would be actually causing

5 destruction to the spring.

6 The third reason was Troy Springs had

7 plenty of public access from the Suwannee River

8 anyway. It had been used by many visitors; in

9 this case in this slide there is a group of

10 cave divers gathering and assembling, ready to

11 go into the springs for a cave dive; you can

12 see the means of access, people pulling pontoon

13 boats up, motor boats, they get out, and you

14 can see the impact that this kind of use has

15 had on the shoreline of this spring run. You

16 can see erosion there clearly.

17 Troy Springs is just about the northern

18 limit that motor boats can go up the Suwannee

19 River without causing damage to the boats.

20 Large shoal areas begin to occur just upstream

21 from here. So for all practical purposes, this

22 is where the boats stop on the river; that's

23 why Troy Springs has been a very popular

24 recreational area in the past in this manner.

25 We finished our land management plan in
1 March 2000. In the 2001-2002 legislative

2 budget request, we asked for and received

3 $500,000 in park development funds. And this

4 is our site plan for the park that has guided

5 our park development efforts. And at this

6 point, Randy Smith will take you through the

7 rest of it.

8 MR. SMITH: Thank you, Governor and Cabinet.

9 The site plan illustrates two categories

10 of features in the park: Existing structures

11 and conditions and new construction

12 improvements.

13 The existing conditions consist of a

14 concrete boat ramp at the eastern edge of the

15 spring; the residence which is a log cabin and

16 currently provides housing for our resident

17 ranger; a caboose which I understand was placed

18 on the property by a previous owner who was a

19 railroad executive; the barn which is being

20 used as a maintenance building, and the

21 Madison.

22 The construction improvements, as

23 illustrated, located on the Suwannee River is a

24 fixed observation platform that supports a

25 gangway to a floating dock where motorized
1 craft can dock and access the springs by way of

2 a existing concrete ramp through a series of

3 ADA-compliant walkways.

4 The flooding barricade indicated at the

5 entrance to the spring is placed there to

6 prevent motor craft from entering the spring

7 and causing continued damage to the Madison and

8 the spring slopes.

9 The entranceway to the park was laid out

10 to preserve trees and natural vegetation. The

11 road is winding and it's two-laned and is

12 divided in several locations to create green

13 islands of separation.

14 The road leads to a 20-unit parking lot

15 that's connected to a series of sidewalks that

16 provides access to the restroom facility and

17 the ramps to the spring access which are

18 constructed in gray.

19 At the edge of the spring is a sizeable

20 dock that has been constructed. The perimeter

21 of the dock was designed to fit in harmony with

22 the natural limerock formations at the edge of

23 the spring. All of these improvements are in

24 place and as of the end of last month, the

25 project was 100 percent complete.
1 GOVERNOR BUSH: Thank you.

2 MR. STRUHS: With that, it's just a good

3 example I think of the fact with the quarter of a

4 million new acres acquired over the last four

5 years, we haven't lost sight of the need to make

6 necessary improvements and investments to manage

7 these properties. I would have to point out one

8 thing on this particular property.

9 About a 700,000-dollar investment to make

10 these improvements; about $500,000 of that,

11 Governor, I think came from your Florida

12 Springs Initiative which is a focussed effort

13 on improving the protection of Florida springs.

14 So we are real pleased with that.

15 The local community is very pleased as

16 well with the progress we have made that.

17 With that, by way of introduction and

18 background, all we need on this item is your

19 acceptance of the overall report which is in

20 your materials.

21 GOVERNOR BUSH: Is there a motion to accept?



24 GOVERNOR BUSH: Any other discussion?

25 GENERAL BUTTERWORTH: I just have one
1 question, Governor.

2 I think this has come up with previous

3 Secretaries and I may have to worry about this

4 or may not have to. But how do we keep funding

5 all this land we manage, not only this

6 wonderful site, but all the others? I know

7 other Secretaries before you always said: Wait

8 a minute, do we have to fund --

9 MR. STRUHS: We do. When the Governor

10 proposed the idea of Florida Forever now three and

11 a half years ago, specifically noted the need to

12 not just take the money to buy the land, but to

13 reserve a portion of it specifically for

14 management. And I think that has made a big

15 difference.

16 Also the legislature, I think, back when

17 Commissioner Bronson was Senator Bronson, he as

18 a sponsor of that bill I think made a specific

19 effort on focussing the department on improving

20 our management.

21 So we have clearly gotten the message from

22 the legislature, from the Governor, as well as

23 from this Cabinet. And we are taking it to

24 heart and we are making the resources

25 available.
1 This springs areas are especially

2 vulnerable, unless they are managed correctly.

3 And the additional resources that came from the

4 Governor's Springs Initiative had been well

5 received and have allowed us to make some very

6 strategic improvements.

7 GOVERNOR BUSH: Florida Forever has a higher

8 percentage of management dollars being spent as a

9 percentage of the overall amount than what we had

10 in Preservation 2000.

11 MR. STRUHS: That's correct.

12 GOVERNOR BUSH: Which was a general

13 reflection of -- is there a confirmation of that?

14 MR. STRUHS: No, we know that's the truth. I

15 was just given the exact figure.

16 GOVERNOR BUSH: The point being that I think

17 with Preservation 2000, which is a great program,

18 I think one of the defects that was clear when

19 there was a chance to review it was that we were

20 not putting enough money into management.

21 And interestingly, I think with Florida

22 Forever, when we get enough experience under

23 our belt, we will find that we are not, by

24 definition, we are not going to buy a billion

25 acres like we did; it would be less, but it
1 will be more strategic as it relates to parcels

2 in the path of development, more focus on

3 public access to these properties as well.

4 So there is still work to do on the

5 management side. I don't think anybody in the

6 department would suggest otherwise. I hope you

7 are not.

8 MR. STRUHS: No, sir.

9 GOVERNOR BUSH: We need to do more.

10 MR. STRUHS: What we are sufficiently proud

11 of with this report is to demonstrate to you and

12 demonstrate to the public that we have

13 accountability, a new heightened sense of

14 accountability, to make sure that these properties

15 are, in fact, being reviewed.

16 GOVERNOR BUSH: Any other discussion? There

17 is a motion to accept this report and a second, I

18 believe.

19 Without objection. The items passes.

20 MR. STRUHS: Item 4, we would like to

21 withdraw this item from the agenda.

22 GOVERNOR BUSH: Motion to withdraw.


24 GOVERNOR BUSH: Motion and a second. Without

25 objection, the item is withdrawn.
1 MR. STRUHS: Item 5 is a consideration to

2 surplus 10 remaining lots in Miami-Dade County and

3 then to accept an offer from General Real Estate

4 Corporation.

5 You have heard items related to this in

6 the past, but I would like to just give you a

7 quick refresher course as to the history as to

8 why we are here.

9 Back in 1989 under a program under Save

10 Our Coasts, the State of Florida bought 22 lots

11 in North Miami Beach. 11 of those lots are

12 contiguous, one to the other, and 11 were

13 noncontiguous.

14 These lots average approximately 50-foot

15 frontage; they are approximately about a

16 quarter acre or less.

17 After it became apparent that these

18 properties were not providing any critical

19 conservation needs for the state, the City of

20 North Miami Beach requested a gift of the 11

21 contiguous lots so that they might build a city

22 waterfront park.

23 Our response to the City of North Miami

24 Beach was that prior to making a gift of the 11

25 contiguous lots, we wanted to see if we could
1 first recover the full investment of the Board

2 of Trustees and the State for the 22 lots that

3 were purchased back in 1989.

4 The purchasing price for the 22 lots in

5 1989 was $6.7 million. That meant that we were

6 going to have to set a goal for ourselves of

7 raising $6.7 million for the 11 noncontiguous

8 lots.

9 We employed a very vigorous professional

10 level international marketing scheme to get rid

11 of the 11 noncontiguous lots. You may recall

12 several weeks ago one of those lots was

13 successfully sold to Mr. Quadros for

14 $1.2 million along with, I would hasten to add,

15 a single-family home deed restriction as part

16 of that transaction.

17 We come before you today with good news

18 and that is the 10 remaining noncontiguous lots

19 have an offer with a binder. The offer comes

20 from the General Real Estate Corporation and it

21 is an offer for $7.55 million. And again, it

22 would be attached or have attached to it the

23 single-family home deed restriction.

24 This represents an offer of $975,000 above

25 the appraised value.
1 If you take the seven and a half million

2 of this offer with the 1.2 million offered by

3 Mr. Quadros, that is total proceeds of

4 $8.75 million. So clearly we have done even

5 better than our very aggressive goal to begin

6 with.

7 This would allow us to then to take the 10

8 contiguous lots, actually make it a gift for a

9 city park in North Miami Beach, and to keep the

10 state whole and indeed to actually make a

11 little profit besides.

12 I do have to bring to your attention one

13 just quick item and that is you should have in

14 your materials a list of all the offers that

15 have been made on these various properties. It

16 is probably only fair to point out there is an

17 offer by Mr. Eric Seger for lot number 5 for

18 $1,250,000.

19 The recommended option that we are

20 bringing to you today is to, in fact, sell off

21 10 of them as a block to the General Real

22 Estate Corporation. We think that the

23 advantages to the state for that strategy are

24 clear.

25 With that, I would recommend approval.
1 TREASURER GALLAGHER: I don't have the plat I

2 had at the last meeting, but if we got an offer

3 for a-million-two on a lot that had not been sold;

4 we got a-million-two on a lot that has been sold;

5 we are selling 10 lots for 7 million, somehow or

6 another I think we ought to be selling 10 lots for

7 10 million.

8 MR. STRUHS: The reason we are offering to

9 bring this to you as a recommendation is because

10 not all these lots are waterfront. Some of these

11 lots are on the other side of the road.

12 So they aren't all of equal value and they

13 all aren't of equal size. But taken as a

14 whole, compared to the appraised value of the

15 properties and the offer we have before you

16 today and the convenience and efficiency of

17 moving all 10 of them, we would recommend

18 approval.

19 GOVERNOR BUSH: I asked the exact same

20 question and got the same answer.

21 TREASURER GALLAGHER: Motion on 5. Then it

22 must be the right answer.

23 GOVERNOR BUSH: Is there a second?


25 GOVERNOR BUSH: Any discussion? Moved and
1 seconded. Without objection, the item passes.

2 David, I would like to make sure that

3 while this is not a Cabinet decision, the

4 legislature has the authority, I guess, of

5 how -- they have three options they can use to

6 expend the surplus funds.

7 They can pay down the debt, they can buy

8 additional land or they can use it for whatever

9 they please, which is what they tried to do on

10 a broader basis with the budget this last year,

11 and I had to exercise my veto powers to stop

12 that; and I am glad I did.

13 I think the Cabinet, I would hope the

14 Cabinet would be supportive of making -- being

15 on record in support of using these proceeds

16 for purchases of additional land.

17 There is a motion.


19 GOVERNOR BUSH: Moved and seconded. Any

20 discussion?

21 MR. STRUHS: I think I forgot one thing,

22 Governor, and that was Art Draper might have

23 wanted to speak to this item as well from the

24 Audubon Society.

25 GOVERNOR BUSH: We moved it. We have moved
1 and seconded it. Without objection, the item

2 passes.

3 Mr. Draper, welcome.

4 MR. DRAPER: Speaking after the fact, but I

5 just want to acknowledge what you just said about

6 using funds, the proceeds from the sale to

7 purchase additional conservation lands. If that

8 did happen, we would be in support of that.

9 We had an issue I was going to raise if I

10 spoke before you made your decision, was to

11 suggest you move to a trade situation on this,

12 but we are very, very pleased to see the money

13 rolled into some other conservation purchase;

14 that would be very good.

15 Thank you very much.

16 GOVERNOR BUSH: Thank you, sir.

17 Item 6.

18 MR. STRUHS: Item 6, we are recommending

19 approval. This is an option agreement to acquire

20 74.6 acres within the Estero Bay Florida Forever

21 Project.

22 It's 98 percent of the appraised value,

23 74.6 acres.

24 Heather Stafford, who is the manager of

25 the Estero Bay Aquatic Preserve, is available
1 here if you have any questions as to the

2 resource values of this property. If not, we

3 recommend approval.



6 GOVERNOR BUSH: Moved and seconded. Without

7 objection, the item passes.

8 MR. STRUHS: Item number 7 is just a

9 remarkable opportunity for the state.

10 Back in 1999, Bald Point became one of our

11 newest state parks. In fact, we are especially

12 proud of the fact in the last four years, as a

13 state we have actually established seven new

14 state parks over the last four years, this

15 being one of them, and in an area that is

16 especially interesting to the north Florida

17 landscape.

18 The opportunity here is for $10,302,000 to

19 purchase these 2,851 acres. It is a remarkable

20 piece of property. I have seen it myself. It

21 is the home of three different bald eagle

22 nests, beautiful waterfront as well as some

23 fresh waterways on the interior.

24 I believe we have a number of speakers on

25 this item, Mr. Charles Patterson from 1,000
1 Friends of Florida, Paul Johnson of the

2 Apalachicola Ecological Conservancy, as well as

3 George Wilson, representing the seller, St. Joe

4 Timberland. So if we invite each one of them

5 up here for a minute at least, that would be

6 fine.


8 Good morning.

9 MR. WILSON: Good morning, I am George Wilson

10 with St. Joe Company.

11 David asked me to briefly describe the

12 tract and the character of the natural area.

13 I think the agenda item really does that

14 eloquently. I won't try to compete with that.

15 All I can say is that this site has long

16 been the dream of our area conservationists,

17 local government officials and conservationists

18 for a long time.

19 The preservation of this watershed on

20 Alligator Harbor, Ochlocknee Bay, is a

21 remarkable accomplishment for this state and

22 adds to an existing 1500 acres that the state

23 now owns, creates a great regional park, and we

24 at the St. Joe Company are very proud to have

25 participated in the preservation of this area
1 both by this sale and our stewardship for the

2 last 50 years of this asset.

3 It is a remarkable natural area, an

4 archaeological site, and out of more than a

5 hundred miles of such similar frontage on

6 rivers and bays in Florida. This is probably

7 one of the nicest natural areas that St. Joe

8 had in our portfolio of sites.

9 We are very proud to turn this over to

10 America's best park system and it will be a

11 great asset for the future of Franklin County

12 and this area. Thank you very much.

13 GOVERNOR BUSH: Thank you. David, could you

14 with this picture, can you describe what we

15 already have, that we purchased?

16 MR. STRUHS: This portion here, Governor, is

17 the existing Bald Point State Park. The

18 acquisition is this portion here within the yellow

19 perimeter, including both sides of State Road 370.

20 It's County Road 370.

21 GOVERNOR BUSH: So we are basically tripling

22 the size of the park?

23 MR. STRUHS: Yes, sir. Yes, sir. As you

24 know, this type of landscape is -- there is not

25 much of it left in north Florida. So a piece this
1 size of conservation, it is truly remarkable.

2 This area here, this creek area here is

3 going to make just a superb destination for

4 those who like to canoe and kayak. This is

5 Tucker Lake here, a fairly large lake; it's

6 largely freshwater; occasionally it does get

7 inundated with saltwater.

8 We also expect we are going to find

9 archaeological resources here in this island,

10 Tucker Lake as well. It's also the home to --

11 I don't know if George mentioned this or not,

12 this is one of the few places left in Florida

13 if you go out on the beach in the morning, you

14 will actually see bear prints in the sand.

15 It's an interesting place from a biological

16 point of view.

17 TREASURER GALLAGHER: Which part are we

18 buying here, the big part?

19 GOVERNOR BUSH: The middle part.

20 TREASURER GALLAGHER: The small part we

21 already own?

22 MR. STRUHS: We own this section here.

23 COMMISSIONER GALLAGHER: We are buying the

24 two in yellow?

25 MR. STRUHS: The acquisition is in the yellow
1 perimeter, from this corner to this corner here to

2 here.

3 GOVERNOR BUSH: All right.

4 MR. STRUHS: Thank you very much for your

5 support on this item.

6 TREASURER GALLAGHER: Motion on item 7.


8 GOVERNOR BUSH: Motion and a second. The

9 item passes without objection.

10 MR. STRUHS: Item number 8, there are a

11 number of speakers who are going to want to

12 address the board, so they would be prepared.

13 I have on my list Sam Ard, representing

14 representing David Chapman, Andrew Frish

15 representing Leon and Carolyn Clark, and Eric

16 Draper from the Audubon of Florida.

17 Let me just give you a quick overview of

18 what this item is.

19 There are essentially two parts to this

20 agenda item. The Board must determine and you

21 must have five votes to determine that this

22 exchange, this value-for-value, one-to-one

23 exchange of property is in the public interest.

24 And then if you determine it's in the public

25 interest, if you approve the terms of this
1 specific exchange agreement.

2 The reason we are recommending approval of

3 this item is there are three basic arguments as

4 to why this is, in fact, in the public

5 interest.

6 The property that is being exchanged is,

7 in fact, filled land, and it's unlikely it

8 would ever be restored back to submerged land.

9 Secondly, the parcel by itself is too

10 small and in a location where it would really

11 not ever be effectively managed by the state.

12 In fact, it's not being managed today.

13 Thirdly, the exchange of land that is

14 available to you on this agenda item would

15 actually provide you an opportunity to acquire

16 land that is far more important and far better

17 to the state's ecological interests and, in

18 fact, is land is already contiguous to other

19 important conservation lands in the

20 Wekiva-Ocala Greenway Area.

21 So with those arguments, before we would

22 recommend approval of this item, the specifics

23 of the exchange I think are in your materials.

24 If you don't have any questions from me, I

25 would invite Sam Ard to speak first, followed
1 by Andrew Frish and then Mr. Draper from

2 Audubon.

3 GOVERNOR BUSH: Very good.

4 MR. ARD: Thank you. Good morning Governor,

5 Members of the Board, I am Sam Ard, I am

6 representing Mr. David Chapman of Lake Worth,

7 Florida, working with the Leasure Heidkamp law

8 firm out of Fort Myers on this exchange.

9 We do understand that this is the first

10 time the one-for-one, new policy one-for-one

11 exchange has come before this board, and we do

12 understand that approval will require five

13 affirmative votes.

14 As you heard, Mr. Chapman has been working

15 with the Division of State Lands for about a

16 year now to acquire this parcel of formerly

17 submerged sovereignty lands, used to be the

18 marsh lands of Lake Okeechobee prior to the

19 building of the Hoover Dike.

20 It's now permanently upland. In fact,

21 there are other properties adjacent to that

22 that were formerly submerged lands that the

23 state has sold in the past.

24 It does contain three lots that were

25 originally above the ordinary high watermark of
1 the lake. You will see those down here in this

2 corner. Those three have two owners. Two are

3 owned by Mr. Robert Bianco and other one by

4 Mr. James Click.

5 It's also boarded on the east side, which

6 will be over here, by the family of Mr. and

7 Ms. Leon Clark. All three of those property

8 owners have expressed an interest in this

9 matter.

10 Mr. Bianco was concerned that his parcel

11 is landlocked, and there is an easement there,

12 but it is not a permanent easement; this

13 easement runs here on this picture, on the

14 aerial photo.

15 We have been able to reach an agreement

16 with Mr. Bianco that if this board approves the

17 exchange, then Mr. Chapman will go ahead and

18 grant a permanent easement at no cost to him as

19 it exists now.

20 We also have talked to -- Mr. Bianco is

21 concerned about a buffer area, and we have also

22 reached agreement with his attorney that if

23 this board approves this exchange, that he

24 would have an option to purchase up to 25 feet

25 of buffer at whatever the per acre basis is
1 that Mr. Chapman has in the exchange.

2 The other one that was of concern,

3 Mr. Andrew Frish is not here today. We have

4 worked out an agreement to take care of their

5 problem. They were concerned with -- maybe

6 it's in your backup. They had made an offer

7 for this parcel some months back and at that

8 point the Water Management District had

9 determined that: Well, we don't know; we may

10 need this parcel in the future.

11 Mr. Chapman came in at a later date and

12 said I would like to exchange lands. You show

13 me what you want me to buy, I will buy it, I

14 will swap it out for this.

15 The Clarks raised a legal point on the

16 procedures that we're using. In the past three

17 or four days, we have been working with his

18 attorney and we have been able to reach

19 agreement that the parcel that the Clarks would

20 really like is this piece right here, this

21 L-shape piece, and this is a paved road that

22 goes from the county road to the canal. And

23 it's roughly 7.3 acres, is what we been told,

24 and that also would go to them in an option at

25 the same per acre price that Mr. Chapman will
1 pay for.

2 GOVERNOR BUSH: Where is Mr. Clark's property

3 right now?

4 MR. ARD: Right here. This land, he is the

5 east border. His property from us is the east

6 border of this property.

7 Just a little bit about Mr. Chapman. I

8 toured this site in August and met Mr. Chapman

9 and looked at his business and what he does.

10 He has an RV park, which is right here, this

11 parcel; it has roughly 200 manufactured homes,

12 RVs in it, in Lake Worth, Florida, which is

13 about as rural are as you are ever going to get

14 in Florida. The closest cities are Moore

15 Haven to the south and Okeechobee to the north.

16 He has about 400 residents there. They

17 are seasonal residents, maybe 20 that live

18 there year round, but the park has paved roads,

19 underground utilities, landscape, fruit trees,

20 community centers where they have weekly dances

21 and cookouts for the residents.

22 And he also has a package plant, a water

23 treatment system that's located here that

24 handles all of the treatment, water treatment

25 for that community.
1 He also built another building where he

2 put in a beauty shop, a library, a workout

3 facility; it's really a neat place to see it

4 firsthand, where retirees can come down and

5 have fun and be able to enjoy being outside in

6 Florida and fish and have access to the lake

7 and that kind of thing.

8 Also, it won't show it on this map, but

9 about right here, which borders this piece, he

10 has built a grocery store and a marina and an

11 RV storage center for those people.

12 Like I said, there are no grocery stories

13 around; they call it the Lake Worth Publix and

14 it has a deli in it and they don't have to

15 drive 30 or 45 minutes to go to a grocery store

16 and come back; they can do it all right there.

17 The other thing that I think is important

18 to mention is Glades County. The taxes that

19 Mr. Chapman pays on this development, just the

20 two RV parks, none of that is homestead

21 exempted. All of it is taxed at full value,

22 and Glades County is at a 10-mill cap. They

23 are on the list of the rural counties of

24 critical economic concern.

25 Mr. Chapman, just with his developments
1 between that and the marina, pays around

2 3 percent of the total ad valorem tax base of

3 Glades County. So I say that to say any

4 impact, any economic development, has a

5 tremendous impact on that county.

6 GOVERNOR BUSH: Mr. Ard, what would be the

7 intention -- what would be the -- Mr. Chapman

8 wants to develop this property?

9 MR. ARD: Mr. Chapman envisions low-impact

10 development; he would like to have a lodge that

11 would attract people to come in, tourists to come

12 in and maybe spend the night there at the lodge,

13 eat, do whatever, and then a small golf course on

14 the parcel.

15 And the property is presently on the

16 future land use map of Glades County as

17 agricultural/residential, which allows for one

18 unit per 5 acres. He does not envision having

19 anything that high intensity.

20 In closing, I would like to just say that

21 it seems like a win/win for all Floridians

22 here. You have a piece of property that has

23 already been permanently impacted; it's not

24 going to be a marsh land ever again.

25 The Audubon Chapter is going to discuss
1 their concerns about water storage. And what I

2 will tell you is it's only 103 acres, and you

3 can't get the perspective by looking at a map

4 that's this detailed. But when you back up and

5 take a bird eye's view, there is plenty of land

6 just west of here that you can use for water

7 storage.

8 If they are looking at ASR wells, an ASR

9 well doesn't take over two or three or four

10 acres at most, and that can be done either on

11 the site -- Mr. Chapman is willing to go along

12 with them there -- but they have already

13 identified another site of state-owned property

14 where they say that will fit.

15 Surface water storage absolutely cannot

16 work here, because the site is so small, it's

17 already got a canal there; and by the time you

18 diked it and took away all the property down

19 here that's privately owned, at the time you

20 put the dirt in, you may have, what, a three or

21 four-story swimming pool because there is just

22 not enough area there to do that.

23 So what I would like to urge this board to

24 do -- and again, I know we need five votes out

25 of it -- is to do something that's a win/win
1 for the entire state. You are going to get a

2 very nice piece of property that you will

3 manage, that is only a management plan and this

4 piece of property has never had a management

5 plan, except for Mr. Click, who I failed to

6 mention, who had a sublease where he was

7 leasing the land to someone else to raise

8 cattle.

9 Mr. Chapman has since come in and found

10 the rancher another place to graze cattle and

11 Mr. Click hasn't been heard from since the

12 division contacted him with that.

13 But that's basically all the management

14 the property has had. And I would just say in

15 your earlier discussions when you were

16 discussing management, this parcel is so small,

17 so remote and unattached, it is not

18 economically wise, in my opinion, for you to

19 try to even attempt to manage that.

20 So I will be glad to answer any questions.

21 I appreciate your time.

22 GOVERNOR BUSH: All right. Let's hear from

23 the rest of the speakers.

24 Wasn't there a --

25 MR. STRUHS: Is Mr. Frish here?
1 MR. ARD: No, I mentioned he's not coming.

2 GOVERNOR BUSH: Okay. Mr. Draper.

3 MR. DRAPER: Eric Draper, Audubon of Florida,

4 objecting to this proposal. And I appreciate

5 Mr. Ard's introducing our concerns.

6 We believe that this land exchange runs

7 counter to the goals of the Comprehensive

8 Everglades Restoration Plan.

9 Our staff, our scientists and attorneys,

10 have paid close attention to CERP

11 implementation, and we question whether or not

12 this parcel of land has been evaluated by the

13 South Florida Water Management District, by

14 DEP's Office of the Everglades policy, or by

15 the Army Corps of Engineers for potential water

16 storage needs in consistency with CERP.

17 We know that at one time the South Florida

18 Water Management District had identified this

19 land as a potential storage site. But the

20 storage plans were unlike Okeechobee which

21 require 300 ASR wells and a huge amount of

22 volume of water had not been completed. In

23 fact, the scientists working for Crochen

24 organization, doing oversight and the water

25 Management District and the Army Corps of
1 Engineers have given themselves as much as

2 seven more years to complete their studies of

3 what the overall storage needs for this area

4 are.

5 Lake Okeechobee at this point is brimming

6 with water. The Water Management District is

7 considering an additional regulatory release

8 from the Caloosahatchee River. If you have

9 read the papers from that part of Florida, you

10 know that residents down there are objecting to

11 the continuing use of Lake Okeechobee as a

12 storage site for water and these pulse releases

13 into the estuary which has damages.

14 The biggest challenge to the requested

15 restoration is storage water, and we need as

16 much area to store it as we possibly can, and

17 we need to study the entire land area around

18 the lake to make sure that we have identified

19 the most appropriate sites.

20 And as I said before, the Corps is not

21 even close to finalizing the exact locations of

22 the wells in question here. And even if we

23 don't go with the ASR wells, if in the event we

24 don't go with the ASR in that system and we

25 don't need the site for ASR, we are going to be
1 scrambling to put together every piece of

2 storage we can in that system because the state

3 really doesn't own that much land near that

4 part of the lake.

5 Now I make the point the state has spent

6 millions of dollars, hundreds of millions

7 dollars, and the legislature has approved

8 almost a billion dollars more to purchase land

9 and to store water and to move water through

10 the system.

11 And we would be troubled in any situation

12 where a decision was made by the Water

13 Management District or by the state to take a

14 piece of land that, even if it could not be

15 used prospectively in Everglades restoration,

16 wouldn't be traded for additional storage

17 capacity right there within the area, where we

18 know we are going to need a lot of storage

19 capacity.

20 I want to point out that we are troubled

21 by a series of agency decisions around CERP

22 projects in which land is given up. We lost a

23 square mile of land along the C-51 Canal just

24 last year that became, because of a slow down,

25 too expensive to buy.
1 We are working against a permit that the

2 Water Management District has ordered in an

3 Everglades project along Biscayne Bay right

4 now, trying to get them to reverse that

5 decision where we are giving up several hundred

6 acres of land that we need for storage and

7 crawlways always.

8 And there is a problem with shrinking

9 projects that has happened also, and this is

10 one of our concerns, is that down in the

11 Hillsborough Canal impoundment where we

12 actually shrunk the thing because there is not

13 enough land to store, so the tendency is to use

14 less storage land and try to store the water

15 more deeply.

16 We have encouraged you before, and we'll

17 encourage you again, to exercise strong

18 oversight with the agencies that are managing

19 the Everglades Restoration Project and the

20 agencies and the local governments in making

21 land use decisions down in south Florida. We

22 simply can't afford to make mistakes on the use

23 of land and then go back afterwards and try to

24 undo those mistakes.

25 Any time the state has let land go and
1 then gone back to try to purchase it again,

2 it's turned out to be much more expensive.

3 And I am suggesting this could be an

4 expensive mistake. Maybe I am wrong. Maybe

5 this land is not necessary for an ASR well,

6 maybe it's not necessary for surface storage,

7 maybe it can be used for some economic

8 development projects sometime off in the

9 future. But let's not make that decision until

10 the Army Corps of Engineers, which has been

11 charged with doing this project, South Florida

12 Water Management District and others have fully

13 evaluated the project.

14 I want to conclude by saying -- before I

15 conclude, I just want to point out that you got

16 a letter from Henry Dean that says the district

17 doesn't need the land. Henry Dean is the chair

18 of -- director of the South Florida Water

19 Management District.

20 I just want to point out to you that the

21 last line on your agenda 8 says the South

22 Florida Water Management District reviewed the

23 parcel information and concluded that their

24 CERP plans were not complete, were not

25 complete, and wished to have this parcel
1 reserved until the necessary planning is

2 finished.

3 Those are the words of the South Florida

4 Water Management District. They run a little

5 inconsistent with the letter that Henry Dean

6 sent on September 27.

7 I want to point out to you that that is

8 the real situation. We really are in the

9 planning process here which will take several

10 years until ASR wells are fully evaluated

11 before we know whether or not we are going to

12 need this land or not.

13 So we support the purchase of the

14 Wekiva-Ocala Greenway project, I think that is

15 very important. There is plenty of money in

16 the Florida Forever Fund available to buy that

17 land, and I think their cash offer should be

18 made to Mr. Chapman for that piece of property.

19 So it will be imprudent to move forward with

20 this trade right now and lose this potential

21 storage capacity in the Everglades system.

22 Thank you very much.

23 GOVERNOR BUSH: Thank you.

24 MS. ARMSTRONG: Eva Armstrong with the

25 Division of State Lands. I am here to answer any
1 specific questions you might have.

2 GOVERNOR BUSH: Can you explain the South

3 Florida Water Management District's position?

4 MS. ARMSTRONG: Yes, sir. In fact, I

5 conferred again with Henry Dean this morning just

6 to make sure.

7 When this came up for us, we sent

8 overhead -- I mean aerial photographs and a

9 description of the site to the Water Management

10 District and said: Is this one that you are

11 interested in, because we count on them to tell

12 us what lands they need. They are the lead

13 agency. The Corps is not involved in

14 acquisitions or retention of land on this size

15 of property. It is solely in the realm of the

16 Water Management District, according to Henry

17 Dean.

18 He had his staff look at it. They

19 originally thought that what they asked for

20 was -- they said as long as you reserve -- you

21 obtain for us an option, if we need it for two

22 or three acres for ASR wells on this site, the

23 one you are looking at today, we would be okay

24 with you disposing of the property.

25 As we started talking about that option
1 with Mr. Chapman, there is additional Board of

2 Trustees owned-land which is to the west, over

3 here, that the Trustees --

4 GOVERNOR BUSH: Where are you pointing?

5 MS. ARMSTRONG: It is to the west of this

6 map. The map is here, it's out here. This is

7 west. This is east.

8 GOVERNOR BUSH: Show your finger on the map.

9 We can't see.

10 MS. ARMSTRONG: This is west.

11 GOVERNOR BUSH: Thank you.

12 MS. ARMSTRONG: Directionally impaired this

13 morning.

14 Anyway, it's to the west and we sent an

15 overhead down and said: If you want, you could

16 also have this property. And Henry replied in

17 a written response you have in the backup after

18 his staff looked at it and said: If we can

19 have that property, we won't need an interest

20 in the one you are considering swapping with

21 Mr. Chapman. That's what he confirmed again

22 this morning.

23 TREASURER GALLAGHER: I think the reason the

24 question is being asked is when the Clarks

25 apparently asked in July of 2002, one of the staff
1 from SWFMD said that it was not available because

2 of potential need. And then now on September 23

3 the executive director said it's not needed. So

4 we are getting sort of two ends --

5 MS. ARMSTRONG: Yes, sir. What happened --

6 this is a rarity, but it does, in fact, sometimes

7 occur.

8 The inquiry from Mr. Clark came in to one

9 land acquisition agent. They did the normal

10 thing; picked up the phone and called; they

11 were told no, we think we need to maintain

12 this. They got a letter confirming that and we

13 rejected the Clarks' interest. At that point

14 it wasn't an offer, it was just an interest.

15 Several months later, Mr. Chapman sent a

16 letter to the bureau chief, who referred it to

17 a different agent, not knowing that the other

18 agent had it, and they went further. They sent

19 the maps down to the Water Management District

20 and got an official response back, in that

21 manner; so it was later.


23 MS. ARMSTRONG: It was eight months later.

24 TREASURER GALLAGHER: What's the difference?

25 You got the Clarks and Chapman, both were
1 interested in the land?


3 TREASURER GALLAGHER: So how come Chapman got

4 it and not the Clarks?

5 MS. ARMSTRONG: We sent the letter, the first

6 agent sent the letter to Clarks saying we are not

7 interested, the Water Management District wants to

8 keep it.

9 Eight months later a different purchaser

10 appears; that agent follows through, and we

11 weren't even aware of the Clarks' request until

12 about eight weeks ago when we had a staff

13 change and all of sudden, as we are shifting

14 work around, it becomes apparent that the

15 Clarks were interested in the same property.

16 TREASURER GALLAGHER: Well, it seems to me we

17 ought to have some kind of bid between the two or

18 something instead of just: You talked to the

19 wrong land agent. That's -- if I happen to call

20 up and get the wrong person on the phone, I don't

21 get a shot at the land and General Butterworth

22 calls the right person and the guy runs it all

23 through and he gets it. I have a hard time with

24 that.

25 MS. ARMSTRONG: Well, the result you have in
1 front of you now is the Clarks are getting the

2 exact land they wanted, which was this piece right

3 here. They have negotiated that with Mr. Chapman.

4 TREASURER GALLAGHER: And what is Mr. Chapman

5 getting?

6 MS. ARMSTRONG: And he is retaining the rest,

7 which is from this canal road over.

8 GOVERNOR BUSH: Plus he provides an easement.

9 MS. ARMSTRONG: Right, and he is providing

10 easements for the other people. They own property

11 here, and they wanted the easement down this area;

12 so he provided the easements for the other

13 neighbors.

14 TREASURER GALLAGHER: Who has got the

15 property a little further west?

16 MS. ARMSTRONG: Off this map?

17 TREASURER GALLAGHER: Well, let's put the

18 easement road.

19 MS. ARMSTRONG: Chapman --

20 GOVERNOR BUSH: You are off the map for me.

21 Chapman goes to the easement road -- slide the map

22 over and show me how far his goes.

23 MS. ARMSTRONG: The map doesn't cover the

24 whole property. It goes overhere further.

25 COMMISSIONER GALLAGHER: That's what we are
1 giving Chapman?

2 MS. ARMSTRONG: Correct, from that, all the

3 way over to where Mr. Ard's hand is. We can't the

4 whole map on here.

5 TREASURER GALLAGHER: He owns across the

6 road?

7 GOVERNOR BUSH: He owns west of the easement.

8 MR. ARD: He owns west of this parcel.

9 TREASURER GALLAGHER: Show me where he owns.

10 Put your hand where he owns. Okay, he owns over

11 there. And there is some kind of a line there.

12 MR. ARD: The highway runs here. The canal

13 runs here. He owns this corridor right here.

14 That's where the marina road is going, marina,

15 grocery store.


17 can't see that on this.

18 GENERAL MILLIGAN: The state owns another

19 piece beyond that.

20 MS. ARMSTRONG: Correct.

21 MR. ARD: It will be off this canal right

22 here.

23 GENERAL MILLIGAN: Let me understand, the

24 state has reached an agreement with the South

25 Water Management District to use that land for
1 wells?

2 MS. ARMSTRONG: If it's needed, yes. They

3 said they could put the wells on that site. I've

4 got another map. Let me -- this is the property

5 that we are talking about swapping today, this

6 large dark area.

7 This is a piece that is privately owned

8 that the Trustees deeded out a number of years

9 ago. Parcel B is the parcel that the Water

10 Management District said if we could give them

11 that parcel to use for ASR wells if they need

12 them, then they don't need an interest in

13 Parcel A.

14 TREASURER GALLAGHER: We own this land

15 because it was submerged?

16 MS. ARMSTRONG: Yes, sir, sovereignty

17 submerged land that has since been filled.

18 TREASURER GALLAGHER: Who filled it?

19 MS. ARMSTRONG: When they created the dike.

20 GOVERNOR BUSH: Army Corps of Engineers.

21 TREASURER GALLAGHER: So what you have here

22 is a canal for the Everglades?

23 MS. ARMSTRONG: The canal that goes around

24 north of the dike. The dike is here.

25 MR. ARD: As an aside, Governor, Members of
1 the Board, this other 25-acre piece is also not

2 managed by the state, but someone has planted it

3 for Hank when I was down there.

4 TREASURER GALLAGHER: Which piece, A or B?

5 MR. ARD: B.

6 MS. ARMSTRONG: That's the Perimeter Canal.

7 GOVERNOR BUSH: We don't manage all our

8 properties to the same intensity.

9 MS. ARMSTRONG: No, we don't.

10 TREASURER GALLAGHER: How did Mr. Chapman get

11 the piece of property that he built the store on?

12 MR. ARD: I want to say that the name of the

13 prior owner was Basso Farms? That was land that

14 was sold by the board; I don't know the year, I

15 want to say it's pre1980. He came in and acquired

16 it from there. And there was -- also the Clarks

17 had acquired -- I do not have a chain of title in

18 front of me, but that was also formerly submerged

19 lands that was sold by the state that the Clarks

20 came in and then bought.

21 TREASURER GALLAGHER: Each time this happens,

22 somebody in the state says: Well, you know, we

23 don't need that; we just need this part here. Now

24 we don't need that part here, we just need this

25 little part over here. The next thing you know is
1 we are going to need this little tiny part over

2 here and then we are going to have to buy it back

3 from them so we can use it for what we have it for

4 now. Is that how it usually works?

5 MS. ARMSTRONG: That's not our intent here.

6 Let me tell you that as we put this item together,

7 I felt it was worth your review because the plus

8 side of making this exchange is we are getting a

9 piece of property we want in the Wekiva-Ocala

10 Greenway that is adjacent to what we already own,

11 great resource value, it's $360,000 that we don't

12 have to write the check for out of Florida

13 Forever.

14 You have a parcel here we are not actively

15 managing; this is one that will never be

16 returned to the submerge land state it was once

17 in. So we felt it was worth the trip here for

18 you to take a look at this and decide is this

19 what you would like to have done with this

20 property or do you want to keep it for

21 Everglades if we need it?

22 TREASURER GALLAGHER: I have another

23 question. The little triangle down at the bottom,

24 how did those people get that?

25 MS. ARMSTRONG: Which triangle, are you
1 talking about Parcel B or something else?

2 TREASURER GALLAGHER: Little triangle A down

3 by the dike.

4 MS. ARMSTRONG: It was deeded out some time

5 ago. I don't know the specifics, but we can find

6 out.

7 MR. ARD: It was preexisting in the lake

8 above the ordinary high watermark. It was private

9 land.

10 GENERAL MILLIGAN: It is a hill.

11 GOVERNOR BUSH: So if we used this for

12 storage, other than aquifer storage recovery, you

13 still have these people, they would be surrounded

14 by water?

15 MS. ARMSTRONG: I am not an engineer. But in

16 my estimate, this is not a great site for stacking

17 of water. It would pose a challenge.

18 GOVERNOR BUSH: They would have an island.

19 Then we would buy it like we did the on in Lake --

20 TREASURER GALLAGHER: Buy it back from them

21 because we already gave it to them or sold it to

22 them or something.

23 GOVERNOR BUSH: Would Mr. Chapman agree to

24 have some kind of -- go into an agreement where

25 they would -- where he would agree to allow for an
1 ASR well if it was defined for 2 acres, or

2 whatever the amount would be, so that we would not

3 encumber any of the planning for the Army Corps?

4 MR. ARD: In fact, I will submit to you that

5 an ASR well is compatible with the type of

6 development he has out there; because what he is

7 looking at is low impact; there is plenty of

8 space, plenty of room.

9 And also, in fact, the packet of

10 information that we gave to the Cabinet aides

11 before the letter of the 27th came in included

12 a contract that I had done for Mr. Chapman that

13 he had signed that gives them an option. So

14 yes, sir, easily.

15 GOVERNOR BUSH: That would be access to an

16 ASR well without a rental?

17 MR. ARD: Yes, sir, I would say Mr. Chapman

18 has given me permission to say if that's what is

19 necessary, then that's not a problem, and we'll

20 put it on the record here today to show his

21 intent.

22 TREASURER GALLAGHER: I missed that.

23 GOVERNOR BUSH: He would agree to commit to,

24 if the Army Corps decided this property was

25 essential for the CERP plan, to give the state --
1 the Army Corps, I don't know who would be the

2 owner of it -- but the ASR well, the footprint,

3 which would be a couple of acres.

4 TREASURER GALLAGHER: You mean donate it

5 wherever we wanted it? Whatever the Corps wanted,

6 or how would we know where it would be?

7 GOVERNOR BUSH: That's part of the challenge.

8 Now we are going to wait six years to determine

9 where -- because the Army Corps hasn't done the --

10 MR. ARD: Mr. Chapman would have a very

11 strong interest in having that found as fast as

12 possible. So he would work with them. We are

13 here to commit, yes, that's okay.

14 GOVERNOR BUSH: Any other discussion? Is

15 there a motion?

16 SECRETARY SMITH: I would move we work with

17 the Corps to provide an ASR site, if necessary.

18 GOVERNOR BUSH: Is there a second?

19 GENERAL MILLIGAN: Let me ask a question. A

20 single ASR site, is that all that would be

21 required or not?

22 GOVERNOR BUSH: I don't know about the

23 engineering.

24 TREASURER GALLAGHER: Absolutely. You got to

25 run something to it to pump it in and out. It's a
1 lot more than just one -- a couple acres, I would

2 think.

3 GENERAL MILLIGAN: What's the magnitude of

4 the terrain that you need around it?

5 GOVERNOR BUSH: They said two or three acres,

6 I was taking them at their word.

7 MS. ARMSTRONG: The surface area we were told

8 was two or three acres.

9 SECRETARY SMITH: My logic is this: First

10 they made at least an initial determination they

11 weren't going to need that. They are willing to

12 say they changed their mind and they do need it,

13 they would make that two or three acres available.

14 I think some consideration is due the

15 economy of the local government there. If this

16 is going to add to the tax base, if there is an

17 investment situation, I think that's some part

18 of governmental responsibility.

19 I don't think we're concerned about

20 (inaudible) helping the landowner out and make

21 them better. But if part of that accommodates

22 that county and improve, I think that's a

23 consideration.

24 GOVERNOR BUSH: There is a motion. Is there

25 a second?

2 GOVERNOR BUSH: We need five votes though.

3 Any other discussion? Mr. Draper, would you like

4 to opine?

5 MR. DRAPER: I just wanted to clarify

6 something, that the statement was made that your

7 footprint for an ASR well is only two or three

8 acres.

9 That's correct for the physical

10 infrastructure of the well perhaps, but many of

11 the ASR wells are actually designed with

12 adjacent surface storage capacity so that they

13 can store some of the water that you are going

14 to actually inject into the system, near the

15 facility to inject. So many of these ASR wells

16 when they are designed have adjacent surface

17 water storage.

18 So it's correct to say the footprint of

19 the ASR well is only two to three acres

20 perhaps, but oftentimes they are designed with

21 additional on-site storage capacity.

22 TREASURER GALLAGHER: Which would be like how

23 big?

24 MR. DRAPER: I am not an engineer and I don't

25 know this well, and I can just tell you that we
1 are struggling for Everglades restoration and we

2 are trying to figure this stuff out right now.

3 There is not enough land left in south Florida to

4 store the water we need to make the Everglades

5 Restoration Project work. That's why we are

6 literally fighting for it acre by acre.

7 GOVERNOR BUSH: That's also why we are

8 embracing the ASR technology, because we don't

9 have enough land mass to store the water in the

10 traditional means.

11 MR. DRAPER: Governor, I wouldn't want to

12 argue that point with you, but there is a National

13 Academy of Sciences review study going on right

14 now about the ASR technology; and the jury is out

15 as to whether or not that will ultimately be used.

16 The state's commitment to it is fairly limited at

17 this point. We just don't know what --

18 GOVERNOR BUSH: Didn't that study just get

19 completed?

20 MR. DRAPER: Well, they just had an initial

21 review of the initial approach to the ASR study,

22 which it said that the study is on the right

23 track, but they did not complete the study yet.

24 GOVERNOR BUSH: Good. Okay, there is a

25 motion and a second. Any other discussion?
1 All in favor say aye.




5 GOVERNOR BUSH: All opposed?




9 GOVERNOR BUSH: The motion does not pass.

10 MR. STRUHS: That concludes the Board of

11 Trustees' agenda. Thank you for your attention.














1 GOVERNOR BUSH: State Board of

2 Administration.

3 TREASURER GALLAGHER: Motion on the minutes.

4 GOVERNOR BUSH: There is a motion on the

5 minutes. A second?

6 SECRETARY SMITH: I will second it.

7 GOVERNOR BUSH: Moved and seconded. Without

8 objection, the item passes.


10 September 24 minutes; that was 10 and 24th.

11 GOVERNOR BUSH: Item 2, there is a motion and

12 a second for approval of the minutes of

13 September 24, 2002.

14 Without objection, the item passes.

15 Item 3.

16 MR. STIPANOVICH: Item 3, Governor, is

17 approval of fiscal sufficiency of an amount not

18 exceeding 80 million, State of Florida, Department

19 of Management Services, Florida Facilities Pool

20 Revenue Funding Bonds. It is recommended the

21 board approve this item.



24 GOVERNOR BUSH: Moved and seconded. Without

25 objection, the item passes.
1 MR. STIPANOVICH: Item 4, approval of fiscal

2 sufficiency of an amount not exceeding

3 125 million, State of Florida, Department of

4 Environment Protection of Florida Forever Revenue

5 Refunding Bonds. It is recommended the Board

6 approve this item.



9 MR. STIPANOVICH: Item 5, a resolution of the

10 State Board of Administration approving the fiscal

11 sufficiency of an amount not exceeding

12 300 million, State of Florida, State Board of

13 Education Lottery Revenue Bonds. It is

14 recommended the Board approve this item.



17 GOVERNOR BUSH: Moved and seconded.

18 Did I do item 4? Colleen was bugging me.

19 Item 4 was a motion and a second. Without

20 objection, the item passes.

21 Item 5, there is a motion and a second.

22 The item passes.

23 MR. STIPANOVICH: Item 6, approval of fiscal

24 determination of one or more series in an

25 aggravate amount not exceeding 100 million,
1 Florida Housing Finance Corporation Homeowner

2 Mortgage Revenue Bonds in an amount not exceeding

3 100 million Federal Home Loan Bank Line Of Credit.

4 Governor, it is recommended the board approve this

5 item.

6 TREASURER GALLAGHER: Motion on 7 (sic).


8 GOVERNOR BUSH: There is motion and a second

9 on Item 6. Without objection, the item passes.

10 MR. STIPANOVICH: Item 7, the staff of the

11 Florida State Board of Administration requests

12 that the Trustees approve filing for adoption

13 three sets of rules pertaining to the Defined

14 Contribution Plan.

15 The Trustees approved filling of notice

16 for these three sets of rules under A, B and C

17 of this item 7 on the agenda at the August 13,

18 2002 Cabinet meeting.

19 Today, Governor, Members, we are simply

20 bringing back the rules for adoption.

21 Under A, the rules are 19-12.001 and

22 19-12.006 and 19-12.007.

23 These rules implement requirements of the

24 Federal Internal Revenue Service regarding

25 implementation of the Defined Contribution
1 Program.



4 GOVERNOR BUSH: There is a motion and a

5 second on 7A. Without objection, the item passes.

6 MR. STIPANOVICH: 7B, under this item, there

7 is only one rule. This rule, 19-11.001,

8 implements new section 121.78 of the Florida

9 Statutes enacted during the 2002 legislative

10 session regarding employer contributions.



13 GOVERNOR BUSH: There is a motion and a

14 second on item 7B. Without objection, the item

15 passes.

16 MR. STIPANOVICH: Item C, under C the rules

17 are 19-10.002 and 19-10.003. These rules relate

18 to asset transfer procedures.



21 GOVERNOR BUSH: There is a motion and a

22 second on item 7C. Without objection, the item

23 passes.

24 MR. STIPANOVICH: This completes number 7.

25 Item 8, the Florida Hurricane Catastrophe
1 Fund requests approval of two rules.

2 The Trustees approved filing notice for

3 these two rules at the August 13, 2002, Cabinet

4 meeting. Today again we are simply bringing

5 the rules back for adoption.

6 The first rule is 19-8.010 relating to

7 reimbursement contracts.

8 The second rule is 19-8.029 relating to

9 insurer reporting requirements.



12 GOVERNOR BUSH: Moved and seconded. Without

13 objection, the item passes.

14 MR. STIPANOVICH: Chairman Members, the items

15 9 and 10 have to do with special corporations.

16 The first item, number 9, has to do with

17 the Florida Water Pollution Control Financing

18 Corporation. The executive director serves as

19 the chief executive officer of the Florida

20 Water Pollution Control Financing Corporation.

21 At this time I would like to recognize the

22 chairman of the board and other members that

23 are present here at the meeting.

24 The board consists of Treasurer Gallagher,

25 General Milligan, Secretary Struhs who is the
1 chair, and the Governor's budget director,

2 Donna Arduin. Our CEO of the Water Pollution

3 Control Financial Corporation asked that the

4 board of directors of the corporation adopt a

5 resolution appointing Barbara Jarriel in her

6 capacity as chief investment officer of the

7 Florida State Board of Administration,

8 treasurer of the corporation and designating

9 the position of chief investment officer of the

10 corporation treasurer in the future.


12 GENERAL MILLIGAN: Moving 9 and 10?


14 GENERAL MILLIGAN: Then I will second 9 and

15 10.

16 MR. STIPANOVICH: Item 10 --

17 GOVERNOR BUSH: I am not on this board.

18 MR. STRUHS: No, you are not.

19 Can we have a vote? All in favor of the

20 motion, please raise your hand.

21 GENERAL MILLIGAN: This is item 9 --

22 GOVERNOR BUSH: State the vote so it can be

23 recorded.

24 MR. STRUHS: The vote was unanimous in favor

25 of the appointment.
1 GOVERNOR BUSH: Well done.

2 MR. STIPANOVICH: Item 10, the Inland

3 Protection Financing Corporation. It's my

4 recommendation the Inland Protection Finance

5 Corporation be approved.


7 GOVERNOR BUSH: Is there a second?


9 GOVERNOR BUSH: Moved and seconded. Without

10 objection, the item passes.

11 Thank you, Coleman.

12 (The proceedings concluded at 11:30 a.m.)




















8 I, SANDRA L. NARGIZ, RMR, CRR, certify that I

9 was authorized to and did stenographically report the

10 proceedings herein, and that the transcript is a true

11 and complete record of my stenographic notes.

12 I further certify that I am not a relative,

13 employee, attorney or counsel of any of the parties,

14 nor am I a relative or employee of any of the parties'

15 attorney or counsel connected with the action, nor am I

16 financially interested in the action.

17 WITNESS my hand and official seal this 14th

18 day of October, 2002.



21 ______________________________