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The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding,
in the Cabinet Meeting Room, LL-03, The Capitol,
Tallahassee, Florida, on Wednesday, November 13, 2002
commencing at approximately 9:48 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


Commissioner of Agriculture

Attorney General

Commissioner of Education


* * *



Department of Highway Safety
(Presented by Fred O. Dickinson)

1 Approved 4
2 Approved 4
3 Approved 5
4 Deferred 7
5 Approved 7
6 Approved 8

State Board of Education
(Presented by Robin Safley)

1 Approved 10
2 Approved 10
3 Deferred 10
4 Approved 45

Siting Board
(Presented by Eva Armstrong)

1 Approved 46
2 Approved 47

Board of Trustees
(Presented by Eva Armstrong)

1 Approved 48
2 Approved 48
3 Approved 49
4 Approved 50
5 Deferred 88
6 Approved 94
7 Approved 99
8 Approved 100
9 Approved 107

State Board Administration
(Presented by Coleman Stipanovich)


1 Approved 108
2 Approved 108



(Agenda items commenced at 9:48 a.m.)

GOVERNOR BUSH: Department Highway Safety and

Motor Vehicles.



GOVERNOR BUSH: Moved and seconded. Without

objection, Item 1 is passed.

MR. DICKINSON: Number 2 is approval of the

annual report for the fiscal year that ended last


TREASURER GALLAGHER: Motion on the minutes.

GOVERNOR BUSH: We already did the minutes.


MR. DICKINSON: I am sorry. Are we back on

the minutes?

GOVERNOR BUSH: We did the minutes.

Item 2, is there a motion?



GOVERNOR BUSH: Moved and seconded. Without

objection, the item passes.

MR. DICKINSON: Governor, among the

highlights in our last annual report, the number

1 of miles in our state has increased. The death

2 rate has been going down and we are below where we

3 have been since, I think World War II is our

4 lowest since today.

5 We served over 6 million customers in our

6 driver's license offices statewide and more

7 than that, another million point two via the

8 Internet telephone and mail, and had a good

9 collection year for revenues.

10 Item 3 is the quarterly report ending

11 September of 2002.



14 GOVERNOR BUSH: Moved and seconded. Without

15 objection, the item passes.

16 MR. DICKINSON: I would like to point out

17 there on the patrol in particular, all of our

18 major enforcement categories are up double digits

19 over the previous quarter except for alcohol or

20 DUI arrests; that's the only thing that seems to

21 be a little bit stagnate.

22 TREASURER GALLAGHER: Fred, if I could ask a

23 question. You suspended 15,400 driver's licenses

24 for people that wouldn't take a breathalyzer?

25 MR. DICKINSON: Yes, sir, that's the

1 administrative suspension law, and that's for all

2 law enforcement, all arrests made for DUIs. And

3 you have generally 60,000 a year, so that's one

4 quarter's representation. Those 15,000 came

5 through the administrative suspension process.

6 TREASURER GALLAGHER: That's all police

7 forces, not just Highway Patrol?

8 MR. DICKINSON: That's correct. I wish I

9 could say those were all Patrol, Treasurer; that

10 would be a good number.

11 COMMISSIONER GALLAGHER: I'd would rather we

12 didn't have that many people on the road, to tell

13 you the truth.

14 MR. DICKINSON: Item 4, we would like to

15 respectfully request that we defer that until the

16 next meeting, Governor.

17 We've got some work to do not only in our

18 budget request, but also there is an item in

19 there with regard to our new driver's license.

20 And I think you will see us come back with a

21 recommendation that we go before the

22 legislature before we come to you for any

23 authority to make sure that the funds are

24 available.


1 GOVERNOR BUSH: There is a motion to defer

2 and second.


4 GOVERNOR BUSH: Without objection, the item

5 is deferred until November 26.

6 MR. DICKINSON: Item 5 is submission of the

7 department's legislative package or substantive

8 package.



11 GOVERNOR BUSH: Moved and seconded. Without

12 objection, the item passes.

13 MR. DICKINSON: Today I am proud to present a

14 Whale of a Tag.

15 This is to Protect the Florida Whales, and

16 we have some gentlemen in the audience. Let me

17 make sure I get my names correct here.

18 Steve McCulloch, Jan Petrie, Stan Smith

19 are here on behalf of Save the Whales. It's

20 your tag if they approve it.

21 MR. McCULLOCH: Thank you. Governor and

22 Cabinet, I would like to thank all of you and

23 congratulate you again.

24 On behalf of Harbor Branch Oceanographic

25 Institution, renowned Marine Life artists of

1 the Sea Wieland, and the Wieland Foundation, we

2 thank you for your leadership, your support and

3 for helping us achieve our goals here for

4 continued education and environmental support

5 of the State of Florida. Thank you very much.

6 We appreciate it.


8 MR. McCULLOCH: And thank you for Fred

9 Dickinson and his support from his office, too.

10 GOVERNOR BUSH: Do we need a motion?

11 COMMISSIONER GALLAGHER: I don't think so.

12 GOVERNOR BUSH: You don't need approval?

13 Let's get approval just in case.

14 I would hate to have unauthorized Whale

15 license plates out there.



18 GOVERNOR BUSH: Moved and seconded. Without

19 objection, the item passes.

20 It's a beautiful plate.

21 MR. McCULLOCH: Thank you, Governor.

22 GOVERNOR BUSH: How many of these do we now

23 have? Are we number 1 in the country?

24 MR. DICKINSON: We are up in the 50s. No,

25 sir, we are about fourth -- 53.

1 COMMISSIONER CRIST: And 50 more in the

2 works.

3 GOVERNOR BUSH: And 50 more in the works?



6 MR. DICKINSON: We've got quite a few more in

7 the works.

8 GOVERNOR BUSH: My goal is to make the

9 regular plate the specialty plate.


11 GOVERNOR BUSH: Thank you, Fred.















1 GOVERNOR BUSH: State Board of Education.

2 Good morning, Robin.


4 minutes.


6 GOVERNOR BUSH: Moved and second.

7 MS. SAFLEY: Item 2 is amended proposal --

8 GOVERNOR BUSH: Hang on a second. The item

9 passes.

10 MS. SAFLEY: -- Proposed Rule 6A-1.09412.


12 GOVERNOR BUSH: Moved and seconded as

13 amended. The item passes.

14 MS. SAFLEY: Item 3 is the Spiral Tech

15 Elementary School versus Miami-Dade County School

16 Board.

17 The parties have agreed to a settlement,

18 but it needs to go before the school board on

19 November 20, so they would like to defer to the

20 December 11 meeting.



23 GOVERNOR BUSH: There is a motion to defer

24 until December 11 and a second. Without

25 objection, the item is deferred.

1 MS. SAFLEY: Item 4 is Cyber High School

2 versus Seminole County School Board.

3 We have the parties here and we are going

4 to give each party 10 minutes to speak. And my

5 understanding is the clock is not working, so I

6 will time it and I will just approach the

7 podium at the end of 10 minutes, if that's

8 okay.

9 GOVERNOR BUSH: Very good.

10 MS. SAFLEY: So I would like to introduce

11 Ms. Leona Rachman, who is the director, and

12 Ms. Joanne Friedland, who is the principal.

13 GOVERNOR BUSH: Good morning.

14 MS. RACHMAN: Good morning, Governor Bush, I

15 am Leona Rachman, director of Cyber High and

16 founder of Cyber High Charter School, and I am

17 happy to be here today, and Cabinet Members.

18 I just want to acknowledge before I start

19 my presentation that we do have several

20 teachers, students, parents and board members

21 here to support Cyber High. Just stand up

22 briefly. There are some in the restroom, but

23 they've come to support.

24 GOVERNOR BUSH: Welcome. I am happy you are

25 here.

1 MS. RACHMAN: We are at an important juncture

2 in educational reform in Florida. And we all know

3 that this will not stand up.

4 The actions against this school will not

5 stand up because we will never cease to pursue

6 this until justice has been achieved.

7 Yesterday Cyber High filed a petition in

8 court that will determine the treatment and

9 immediate termination by the Seminole County

10 School Board is unlawful and unconstitutional.

11 The evidence which has been provided to

12 you shows clearly that this has been an invalid

13 exercise of interference, interrupting the

14 education and denying students their rights to

15 a chance to graduate that was promised to them.

16 It has been anticompetitive and plain

17 wrong. There has been a witch hunt.

18 Mr. Hartley (sic) comes to this and every

19 hearing with the same story: Computers are

20 missing or we are overcharged in Orange County

21 with what we have with the receipts, and he is

22 plain wrong.

23 Yes, many of the people that have been

24 affected are very angry at the entire system.

25 They have driven up here, some for the second

1 time, hoping and praying for your word. Your

2 word means a lot to us, because we have always

3 believed in you.

4 Seminole County attorneys said they didn't

5 care what the state says or does. We have come

6 back to you because we feel horribly let down,

7 but we want to prove to you that we trust in

8 you and that we will exhaust ever possibility

9 because we will never, ever accept this.

10 These young men and women who are here

11 today know the truth, and they will never ever

12 accept any less.

13 When we speak, the news calls the school

14 district. When they speak to the press, they

15 often ignore us yet. We have never wavered in

16 our support for all of you and the needed

17 educational reforms your leadership has

18 created. With every creation there is those

19 who seek to destroy us.

20 No one can possibly deny something out of

21 the ordinary has occurred in this situation.

22 It is serious consequences that will affect

23 thousands of Florida charter school students.

24 They and their schools will come under attack

25 in the threat of attack.

1 Even Cyber High's staunchest critic on the

2 Seminole County Board has said publicly: We

3 like the school, just not the people running

4 it.

5 What they really are saying is: We want

6 to control the school, but we will never let

7 them.

8 Yet it has been sabotaged by a school

9 district fearful of what-if. What if Cyber

10 High had been free to meet its objectives? It

11 would have challenged the district to meet the

12 needs of over half the students who will not be

13 able to graduate? It is the catalyst for

14 change.

15 The school has achieved great things. On

16 the limited charter school budget, we have put

17 a laptop computer into the hands of every child

18 who would never have known how to send an

19 e-mail, make a PowerPoint presentation, and

20 more importantly, lorn using the greatest

21 resource available of our age -- Internet-based

22 instruction.

23 The instruction was never about an on-line

24 service that was given as good cause for

25 closure of this school, but an entire approach

1 to learning. We are not aware of many other

2 charter schools who are been able to make this

3 accomplishment. Yet, they try to tear us down

4 and our students down.

5 Some of our students come to our school

6 from Seminole County unable to read, even

7 multiply. Their failure is a systematic

8 failure of our school system to teach certain

9 classes of students.

10 They want to blame Cyber High Charter

11 School.

12 MS. FRIEDLAND: Good morning Cabinet, aides,

13 Governor Bush.

14 GOVERNOR BUSH: Good morning.

15 MS. FRIEDLAND: I feel privileged and honored

16 to be here on behalf of Cyber High.

17 While preventing the financial failure and

18 thus disruption to student learning of a

19 charter school is a valid goal, the Seminole

20 County Public Schools provides no evidence that

21 the school is failing to deliver all required

22 services to its students.

23 Financial strain on charter schools remain

24 a symptom of a 40 percent reduction in capital

25 outlay funding and an additional 2.5 percent

1 holdback on FEP funding.

2 Cyber High Charter School additionally was

3 going through a period of rapid growth and

4 investment into computers in very beautiful

5 newly-remodeled facilities, thereby increasing

6 its debt.

7 The action they took is also arbitrary

8 because Seminole County Schools failed to

9 meaningfully consider the financial statement

10 relied upon to reach its conclusion was

11 preliminary. The complete audit it should rely

12 upon would not be final for a few weeks.

13 Seminole County Schools was notified the

14 accounts payable were substantially overstated

15 in this preliminary audit and Cyber High would

16 be releasing a final audit shortly showing a

17 significantly more favorable result. Waiting

18 for the audit to be complete allows Seminole

19 County Schools to be successful in

20 accomplishing legitimate goals while preventing

21 the destruction of Cyber High.

22 The Seminole County Schools has statutory

23 authority to give a 90-day notice and a public

24 hearing in order to determine the exact status

25 of all issues. Seminole County failed to

1 conduct any meaningful public hearing or

2 analysis of issues it purports to be as good

3 cause.

4 The school board resolution and its notice

5 is inadequate since Seminole County does not

6 state what immediate termination was required.

7 Additionally, the action hurt the students

8 because it did not ensure that necessary time

9 was given to parents to make choices for their

10 educational options.

11 The students arrived that morning to

12 discover the bad news. Merely posting a board

13 addendum a day prior to a board meeting may be

14 justified when dealing with risk to student

15 health and safety, but it is not justified with

16 regard to nonemergency, unfinished business

17 that is part of the school board recorded

18 minutes.

19 Parents of students are entitled time to

20 figure out what to do, and mere posting of a

21 school board meeting, which may not be seen in

22 the news, is unnecessary, arbitrary and

23 violative of due process protections.

24 Seminole County Schools has materially

25 failed to follow applicable procedures and the

1 requirements for termination of charter schools

2 under Florida Statutes 228. In taking such an

3 emergency action Seminole County Schools was

4 required to assume operation of the school to

5 protect its students from losing credits,

6 grades, from teachers being thrown out of their

7 jobs, and to give parents time to choose other

8 options, and to protect students against a

9 threat.

10 This school system never intended to take

11 operation of the school. They announced at the

12 board meeting the school would be closed on

13 Friday; they were coming in on Thursday to

14 seize assets they believed belonged to them,

15 but they need to read the law that says after

16 all lawful liens and encumbrances, which the

17 school had many of.

18 They were not -- they never intended, as I

19 said, to assume operation and they only put

20 these kids in a crisis situation where

21 25 percent of the students that attended Cyber

22 High dropped out of school. They are now on

23 the streets doing other things because they did

24 not want to return to their school system.

25 Considering the new class size amendment

1 that's been passed and it's going to cost quite

2 a bit of money, the charter school movement is

3 extremely important and we really need to

4 consider that allowing the misuse of the

5 immediate termination procedure will create

6 devastation among Florida's 200 charter

7 schools.

8 It will establish such schools will be

9 under constant threat of being immediately put

10 out of business by adverse public school

11 boards. The result will be damage to

12 enrollment and the ability of schools to attain

13 loans and credits.

14 These schools will lose their

15 independence, which is an integral part of the

16 statute.

17 If you allow a school district to come in

18 in 24 hours and throw kids, students, teachers

19 out, throw creditors without getting their

20 money, in 24 hours, with no due process of law,

21 then the charter school movement is in deep

22 jeopardy.

23 What has happened by what they've done?

24 The results have been devastating. Students

25 were called and told by Friday they had to

1 enroll in another school, students that felt

2 safe at our school and had made a lot of

3 progress. As I said, 25 percent of the

4 students dropped out. Teachers are now out of

5 jobs with their reputation damaged on what they

6 called they weren't qualified, but we've

7 provided documentation to prove, in fact, they

8 were. And that they went through every channel

9 that you were supposed to go through for

10 teacher certification.

11 All the documentation provided to your

12 aides shows clearly there was a clear

13 communication between this school and the

14 school district; e-mails every day, documented

15 board meetings, audits that the superintendent

16 and staff would not give a final copy of.

17 There is only one reason why you wouldn't

18 give a final copy of an audit, and that would

19 be because you are afraid of the results. And

20 the results were too good.

21 Governor Bush, you hold the highest office

22 of this state. The people of Florida depend on

23 you to uphold the law and to protect the rights

24 of schools like ours, of people like ours, of

25 students like ours, people that have no other

1 alternative. We look to you for this. We

2 trust in you for this.

3 And most important of all is due process

4 of law.

5 Maybe Seminole County thinks that a

6 contract -- we all know a contract can be

7 broken at any time, it can be renegotiated.

8 But there is one contract that can't be

9 renegotiated. Not by Mr. Hartley, not by

10 Superintendent Hagerty, not by myself, not by

11 anybody, and that's the constitution of the

12 United States and Amendment One, due process of

13 law. And the whole institution of the United

14 States, that can never be renegotiated.

15 Because if we do that, if we take it upon

16 ourselves to renegotiate the Constitution of

17 the United States, then we go against every

18 principle that this country was built on.

19 Everybody that's ever stood up for justice

20 and stood up for what's right, everybody who

21 fights for freedom every day, this is what we

22 will be going against.

23 This school was entitled to due process of

24 law. There was no emergency situation going

25 on. These students were learning. They will

1 come up and say F-CAT scores show they weren't,

2 that is completely false.

3 There was a newspaper article showing we

4 did better than their schools the first year.

5 They gave us these students who were on second

6 and third grade level; they came from their

7 schools. We did the best job that we could do

8 with them.

9 GOVERNOR BUSH: Can you close it down? We

10 are past the 10 minutes?

11 MS. FRIEDLAND: Yes, I am sorry.

12 GOVERNOR BUSH: That's okay.

13 MS. FRIEDLAND: All I would like to say in

14 summary is like I said before: We do depend on

15 all of you, we trust in all of you, and we hope

16 you will make the right decision in the name of

17 justice, in the name of the people, in the name of

18 the students, in the name of due process of law, I

19 appreciate it. Thank you.

20 GOVERNOR BUSH: Thank you.

21 MS. RACHMAN: I just wanted to let you know

22 that I am available to answer any specific

23 questions.

24 GOVERNOR BUSH: After the presentation, you

25 will be back up.

1 MS. SAFLEY: And on behalf of Seminole County

2 School Board is Paul Hagerty, the superintendent,

3 Jeanne Morris, the school board vice-chairman.

4 MR. HAGERTY: Good morning. I am Paul

5 Hagerty, superintendent of Seminole County, and I

6 am going to review with you the process we went

7 through, coming to the conclusion to terminate the

8 charter of Cyber High School. And then when I

9 review that and the major factors involved, our

10 school board chairman, vice-chairman, Jean Morris,

11 will come up and give you a play with the board's

12 position.

13 In essence, this started last January when

14 we sent in a program audit team into Cyber High

15 to review all that was going on there. That

16 was the end of January, early February.

17 Major concerns surfaced. We summarized

18 those, met with the staff at Cyber through

19 March. In August -- in April, we gave a formal

20 written executive summary of the program audit

21 findings. The major concerns as listed in the

22 record that you have: Low cash balance,

23 teachers were not certificated, teaching out of

24 field, some had not completed the fingerprint

25 process for clearance. There were major

1 concerns about how they were using the National

2 Computer Systems' Nova-Net system, the

3 instructional nucleus there.

4 In a way, if I can just go off on a

5 tangent on that, if you think of instruction,

6 if you put a kid in the Library of Congress and

7 said: Go learn, there are many resources

8 there; just like on the Internet there are many

9 resources. But there is a handful of

10 publishers and vendors that have developed

11 instructional programs tied to the Sunshine

12 State Standards of Florida where students

13 actually go on line, they are presented with

14 materials to learn, they are asked questions;

15 depending on the answers to the questions, they

16 are branched into either remedial approaches or

17 correct continuation; they take tests. There

18 is individual management of what the students

19 have learned so they can come back in the next

20 day and continue where they left off.

21 That was what Cyber had chosen as their

22 instructional approach to the State Sunshine

23 State Standards. That was not in place, not

24 being used.

25 We also had major concerns about the

1 students leaving. Last year they started with

2 187 students; 111 of those 187 left throughout

3 the course of the year. They got new ones in,

4 but it was a constant turn in students.

5 May 28, the end of last year, after doing

6 all these audits and program reviews, our

7 school board was faced with a decision: What

8 should we do?

9 And if you keep in mind on May 28 we had

10 not received their audit yet, and we had not

11 received their F-CAT scores. And our school

12 board has a very strong culture of supporting

13 charter schools. I think throughout the state

14 you will not find another school board and

15 administrative staff that has spent more time

16 working with charter applicants, developing

17 their proposals, helping them implement their

18 charter school.

19 We had five operating, and this was the

20 only one who gave us any degree of concern or

21 problems.

22 So in May, the board was discussing what

23 shall we do? Should we terminate them or not?

24 And that was before we had the audit and the

25 evidence. And with this culture, we wanted to

1 be very supportive, and they made promises that

2 they were in good shape and they would resolve

3 all the problems.

4 And rather than give them the official

5 like 90-day notice to terminate, the board

6 instead said: We will give you 120 days, to

7 October 1st, to shape up and then we'll kind of

8 review it again and see what we need to do.

9 So they were put on notice May 28th, along

10 with a letter of concern which followed that

11 meeting immediately which really was the same

12 letter of concern updated of the April 4th

13 concerns.

14 That all went on. And then when school

15 started in August, we received the preliminary

16 audit report by outside certified CPAs that at

17 the end of their fiscal year, they were over a

18 hundred thousand dollars in the red. And this

19 was then the second month of school.

20 July it started, students came in August

21 and they were already overdrawing their

22 checking account for the month of July, they

23 were short of funds.

24 They were advanced money for July and

25 August based on a projected 170 student

1 enrollment and yet, they only had on the books

2 about 120 students, only about 80 students on

3 the average were showing up. We sent some of

4 our staff members there every day for about 8

5 or 10 days, and the average attendance was

6 about 80. So our board in August when we

7 received the preliminary report said: We've

8 got a major problem. What do we do?

9 And then two days before our board

10 meeting, what happened was the vendor for

11 Nova-Net said they are $48,000 in arrears, and

12 they cut off all the service to Nova-Net.

13 We felt this was a major problem, combined

14 financially where they were just going under.

15 We said we needed to salvage as much of the

16 semester as we can and get these kids back in a

17 quality instructional program.

18 So that led to the recommendation by the

19 superintendent on August 28 to terminate them

20 for good cause immediately.

21 Ironically, August 28 is exactly 90 days

22 from the May 28 meeting when they were put on

23 notice that they had major concerns.

24 And we said: What does immediately mean?

25 So August 28 was Tuesday. We said we'll do

1 this immediately, but we'll give the school

2 until Friday to work with the students and

3 we'll be ready and supportive to get them

4 rescheduled.

5 And so the next morning on Wednesday, we

6 brought the students to Cyber, as we all had

7 been -- they contract with us for

8 transportation. Cyber had effectively been

9 shut down. They abandoned the school. Nobody

10 from the staff at Cyber was there, so we wound

11 up putting all sorts of staff members there,

12 getting these kids over to some high schools,

13 getting counselors in, working with them. We

14 sent letters home that Wednesday to the parents

15 saying: We are ready, able and willing to help

16 you.

17 And with that, I would like to have our

18 school board vice-chairman Jean Morris come up

19 and give you the board's perspective.

20 MS. MORRIS: Good morning.

21 GOVERNOR BUSH: Good morning.

22 MS. MORRIS: I want to reiterate that the

23 Seminole County School Board has been enthusiastic

24 about and very supportive of charter schools.

25 On the May 28 school board agenda there

1 was an action item dealing with these audit

2 issues. The school board felt that with the

3 verbal assurances from Ms. Rachman, that the

4 apparent negative financial balance was being

5 rectified and that student performance was,

6 indeed, improving, it would be unfair to close

7 the charter school at that time.

8 We also noted that the school's F-CAT

9 scores weren't available yet.

10 Ms. Rachman was put on notice that all the

11 problems -- financial, certification, and

12 enrollment, curriculum and student

13 accountability -- had to be resolved by

14 October 1st, and this is a biggy: And that no

15 additional problems would surface for the

16 school to stay open.

17 Despite the assurances of Cyber's

18 administration to the contrary, Cyber's

19 financial situation deteriorated badly. By the

20 opening day of school, as you heard, they had a

21 deficit of over a hundred thousand dollars.

22 Worse, by then we had the F-CAT scores

23 which were dismal. By everyone's analyses

24 including your staff, all of the scores but one

25 had plummeted; they were awful.

1 We also found out that the sole credible

2 source of curriculum, Nova-Net, had been

3 disconnected for lack of payment, leaving no

4 curriculum or tie to the Sunshine State

5 Standards.

6 It's important to note that Cyber High

7 School had no textbooks.

8 All of these factors together resulted in

9 the vote by the school board to close this

10 school as soon as possible to give the students

11 the opportunity to start as quickly as possible

12 at other schools so they would not lose

13 credits.

14 Apparently our decision was a valid one

15 since Cyber filed for bankruptcy the next day.

16 The taxpayer-financed assets are in legal

17 limbo until this hearing is concluded.

18 The Seminole County School Board asks that

19 you validate the decision to terminate the

20 charter for good cause and deny this appeal.

21 Thank you.

22 GOVERNOR BUSH: Thank you. Robin?

23 MS. SAFLEY: We have department staff

24 available if you have any questions. And then I

25 can, the parties can come up if you all have any

1 questions.

2 GOVERNOR BUSH: I would like to have the

3 department staff, if they could, answer the

4 question about due process.

5 MS. SAFLEY: Okay. Mike? This is Mike Kooi,

6 our assistant general counsel.


8 MR. KOOI: I think under the statute there

9 are two provisions for termination of a charter

10 school. And they are subsection (c) and

11 subsection (d), it's 228.056 (11).

12 And the first one allows for the 90-days

13 notice for good cause.

14 The second provision is for immediate

15 termination, and that is for good cause or the

16 health, safety and welfare of the students.

17 And obviously they use the same term "good

18 cause" which is a discretionary standard and

19 the discretion is given to the school board.

20 However, I would submit that for the

21 90-day provision to mean anything, that good

22 cause in the second provision would have to

23 meet something a little higher.

24 So that is probably -- you probably have

25 to ask yourself, number 1, under the

1 circumstances and evidence that was before the

2 school board, did it justify an immediate

3 termination in the best interest of the

4 students and the community?

5 And also, I think the intent of the

6 legislature in this case would be to avoid some

7 kind of eleventh hour situation: Did they have

8 notice of the concerns of the school board, or

9 did the school board just kind of come in out

10 of the blue --

11 GOVERNOR BUSH: What do you think?

12 MR. KOOI: -- and shut them down?

13 What do I think?


15 MR. KOOI: In this case I think they did have

16 notice.

17 GOVERNOR BUSH: You think that they reached

18 the higher standard, higher threshold of good

19 cause that would --

20 MR. KOOI: I think they had evidence,

21 substantial, competent evidence is the threshold.


23 GENERAL DORAN: Mike, in looking at the

24 causes of nonrenewal, the statute lists four. The

25 first is failure to meet the requirements for

1 student performance. The second is failure to

2 meet generally accepted standards of management,

3 fiscal management. The third is violation of law;

4 and fourth is other good cause shown.

5 When I read subsection (d), which is the

6 emergency termination, it suggests immediate

7 termination based on health, safety or welfare

8 and says "or on good cause shown."

9 Do you feel that the record reflects

10 substantial, competent evidence for failure to

11 meet the requirements for student performance

12 or failure to meet generally accepted standards

13 of fiscal management?

14 MR. KOOI: Yes, I think there is substantial,

15 competent evidence before the school board that

16 they could have made that determination.

17 GENERAL DORAN: On both of those points or

18 one or --

19 MR. KOOI: I think it's maybe questionable

20 whether health, safety and welfare, but as you

21 said it's an "or."

22 GENERAL DORAN: Going back to the "or good

23 cause."

24 MR. KOOI: Right, it's got to be an emergency

25 that would involve physical danger, and so forth,

1 or the good cause, which is probably a higher

2 standard of good cause where you would have to

3 basically take a look at the totality of the

4 circumstances in this case.

5 Is there enough evidence that justifies a

6 termination that needs to take place right away

7 in the best interests of the community and the

8 students, and so forth?

9 GENERAL DORAN: Let me try it because I am

10 not communicating clearly.

11 Under A, it gives you four criteria. Good

12 cause is one, but there are three others. And

13 among those other three, what I was hearing

14 today in the presentation from Seminole County,

15 is that they find evidence of failure to

16 improve student performance and failure to

17 manage the school on a fiscally responsible

18 way.

19 What I am asking you is from your review

20 of the record, is there substantial, competent

21 evidence to support either of those two

22 provisions?

23 MR. KOOI: Yes, I believe there is.

24 GENERAL DORAN: Thank you.


1 MS. RACHMAN: She has to tell me to remind

2 you who I was.

3 I am Leona Rachman. I am sure you all

4 know me.

5 GOVERNOR BUSH: Can I ask you a question?

6 The school is open?

7 MS. RACHMAN: A private school --

8 MS. FRIEDLAND: With no funds.

9 MS. RACHMAN: We opened as a private -- what

10 happened is the day -- when they terminated, after

11 they terminated the school and the teachers

12 weren't going to come to work, so we did have D.J.

13 Johnson -- D.J. raise your hand -- he is our PGO

14 president and also in charge of our curriculum,

15 also works as a volunteer at Aviedo High School

16 and their Seminole County schools, very

17 knowledgeable; he was there at the school with

18 Allen Friedman to make sure students -- we got the

19 students home and where they needed to go. So

20 they were at the school. So basically he was

21 there with him.

22 Basically I wanted to say in reference

23 to -- not to get into a lot of detail -- but we

24 do have a contract, and our contract states on

25 student performance -- first of all, our first

1 year, we did meet the state requirements; we

2 met our goals. We actually were higher than

3 the county, Dave Winger -- this is in all the

4 documentation that you have.

5 The second year our scores were lower, but

6 the kids did improve. But in our contract it

7 says: The school expects that the student

8 achievement scores on the Florida Writes and

9 F-CAT will meet or exceed those scores for a

10 comparable student population in the district

11 by the end of the contract period. End of

12 contract period will be June.

13 Year one and two performance standards

14 specified hereon are only goals to achieving an

15 overall three-year performance standard.

16 Failure to meet these goals in any given year

17 shall not necessarily mean the school will not

18 be able to reach its three-year performance

19 standards.

20 So I had meetings with our F-CAT

21 coordinator, Dave Winger, very knowledgeable

22 person; I respect him a great deal. We were in

23 the process of meeting to look at the first

24 year, second year and then third year. At the

25 end of the third year we were supposed to be

1 equal to or greater than.

2 So the first year we met it. The second

3 year they were lower, but we didn't get to the

4 third year because they terminated our school

5 and he cancelled our meeting before that.

6 In reference to -- that was on the F-CAT.

7 In reference to the audit, you have to remember

8 Seminole County did an internal audit.

9 Ms. Friedland was in charge of going through

10 that with their coordinator, Dr. Hortense

11 Evans.

12 We complied with every aspect of the

13 internal audit. We had all the certified

14 teachers that they wanted. We did everything,

15 but we asked -- they wanted like weekly board

16 meetings; they wanted certain things done, so

17 we didn't want to fight with Seminole County.

18 We complied with their certification

19 requirements. We complied with working with

20 them toward getting our finances, we worked

21 with them on every aspect of that internal

22 audit.

23 At the end of the audit we asked them for

24 a copy of it, and they said -- actually

25 Hortense Evans said she couldn't give us a copy

1 because the superintendent wouldn't allow her

2 to. And basically, if we wanted a copy of it,

3 we would have to take them down.

4 So basically it was like: We know you did

5 a good job but I can't give you a copy.

6 In any case --

7 GOVERNOR BUSH: But you apparently know what

8 the audit said, you just repeated it?

9 MS. RACHMAN: I am sorry?

10 GOVERNOR BUSH: You knew --

11 MS. RACHMAN: Basically -- let me let

12 Ms. Friedland answer that.

13 MS. FRIEDLAND: Governor Bush, I spent three

14 months complying with this audit. I had a very

15 good relationship with the charter school

16 director, Hortense Evans, and she was very nice

17 with us. The audit -- we even have an e-mail that

18 went to our attorney about Sandra Pomerantz, their

19 attorney, stated our audit looked fine.

20 There was nothing wrong with our audit.

21 The plain truth of this is every time I asked

22 for a final audit on everything that was

23 complied with, Ms. Evans said the

24 superintendent would not allow us -- her to

25 give us the audit; not because it was bad,

1 because it was good, because I know we complied

2 with everything.

3 We had -- we went through every

4 certification process beyond the charter school

5 law that you would need to. We have teachers

6 here today that can show you, we provided you

7 the evidence of it. Superintendent Hagerty

8 says Nova-Net was our only curriculum.

9 You were invited to our first annual

10 technology show, the only one like it in the

11 state. It did not have just Nova-Net as our

12 curriculum. It had web-based on-line

13 instruction that we had designed.

14 For anyone to get up here and say that we

15 were not teaching these students; and in

16 addition to that, as Ms. Rachman stated, we are

17 held to our contract, not to what they want to

18 get up here and say.

19 They sent us these students. These

20 students improved. The first year there was an

21 article in the paper about how much they

22 improved.

23 And when they say turnover of kids, how

24 would there not be turnover of kids when they

25 are given false information from the newspaper?

1 The Orlando Sentinel is not known for the

2 truth; we all know that.

3 So if the Orlando Sentinel print

4 something --

5 GOVERNOR BUSH: I didn't say that.

6 MS. FRIEDLAND: That doesn't necessarily mean

7 it's true. So they printed a lot of negative

8 articles about us because they are showing us as

9 an example of a failed charter school.

10 We are not a failed charter school. We

11 are a victim of our own success, because we

12 were successful, because kids did learn at our

13 school, because we did have a laptop for every

14 kid.

15 GOVERNOR BUSH: Okay. Got you.

16 MS. RACHMAN: Can I say something?

17 GOVERNOR BUSH: You are really up here to

18 answer questions.

19 MS. FRIEDLAND: There was only one more about

20 the finances that are really extremely important.

21 And that is they supported all the other charter

22 schools. Devin Charter School had $197,000 worth

23 of debt, paid $1.1 million to a management

24 company. And they are going to sit here and say

25 that they took away ours in an emergency meeting

1 because we were in financial debt?

2 We gave them the updated finances and it

3 had increased, and then it had decreased. We

4 know where we stand and all these people know

5 where we stand. And we definitely did not

6 deserve to not have due process of law.

7 MS. RACHMAN: Governor Bush, I just wanted to

8 make one more comment, if I may.


10 MS. RACHMAN: I wanted to say that our first

11 year -- Dr. Hagerty claimed Nova-Net was our main

12 instruction.

13 Our first year we didn't even have

14 Nova-Net; it's not in our contract and it's not

15 in our proposal. That was an added curriculum

16 that we added to what we had.

17 Our teachers wrote curriculum for two

18 years. D.J. Johnson -- I don't know if you

19 want to talk to him, he is here -- he was in

20 charge of our curriculum and getting the

21 teachers to work on that and have on-line

22 resources line to Sunshine State Standards, so

23 that was there, so that particular part --

24 Also, just the part on the preliminary

25 audit. You don't close a school on a

1 preliminary audit; you close a school on a

2 final audit.

3 They want a final audit, remand it back to

4 the district, we'll give them the final audit

5 and you will see we have $60,000 less in our

6 liabilities.

7 Thank you.

8 MS. SAFLEY: We have Tom Fisher here

9 regarding F-CAT scores. We have --

10 GOVERNOR BUSH: Does anybody have any

11 questions or comments? No more questions, no more


13 MS. SAFLEY: One gentleman approached me who

14 was I guess in charge of the parent/teacher

15 association who wanted to make one statement, but

16 I didn't know what the pleasure --

17 GOVERNOR BUSH: That's fine. Come on up.

18 MR. JOHNSON: D.J. or Darwin Johnson from

19 Seminole County.

20 I just want to make one quick point.

21 Obviously, I disagree with a lot of the issues

22 that Seminole County brought up. But the only

23 point I want to make, at the Seminole County

24 school board meeting I specifically asked

25 Dr. Hagerty why didn't he respond to us in

1 terms of telling us what the final audit was?

2 At that time he told me that it was not an

3 audit, it was a preliminary review.

4 So we keep on using the term "audit." But

5 they basically told us that there was not a

6 formal audit done. So everything we are

7 talking about was done supposedly on a

8 preliminary review. Okay.

9 GOVERNOR BUSH: Thank you. Superintendent,

10 tell me about this audit.

11 MR. HAGERTY: In your record, on page 56,

12 R56, you have the April 4th summary of the audit

13 that was given to them representing all the

14 findings that we had in our program review the end

15 of January, February, and as one of the principals

16 just mentioned, we were in three months discussion

17 with them from the very beginning on all these

18 issues, and I can respond point-by-point to many

19 of the inaccuracies raised. But they have it, you

20 have it in your record, page 56, April 4 it was

21 given to you and it's kind a summary of all the

22 concerns.

23 The last point on page R81, when you talk

24 about F-CAT scores, last year in F-CAT, 10

25 students passed in reading and eight passed in

1 math.

2 In the last two years at Cyber, they had

3 500 -- this is also on page R81 -- they had 599

4 students go through Cyber High, in and out. Of

5 those 599 students, there were only 37 students

6 that were there two years.

7 That's a symptom of something churning

8 there that's a concern and that's what raised

9 our level of anxiety.

10 GOVERNOR BUSH: As it relates to the

11 contract, the student performance was not a

12 measurement until the third year, right?

13 MR. HAGERTY: Year-by-year. No,

14 year-by-year.

15 GOVERNOR BUSH: That's what the contract

16 says? What was the benchmark that they had to

17 achieve?

18 MR. HAGERTY: I have to go check the

19 contract. Each year, and then at the end of three

20 years we would review the contract on the overall

21 three-year performance. No one year would be a

22 problem.

23 GOVERNOR BUSH: Okay. So --

24 MS. RACHMAN: That's the contract (handing

25 over document.)

1 GOVERNOR BUSH: All right. Anybody like to

2 make a motion?

3 Commissioner Crist, would you like to make

4 a motion?

5 COMMISSIONER CRIST: I would move we accept

6 the school board decision concerning Cyber High

7 School.


9 GOVERNOR BUSH: Any discussion? There is a

10 motion; the motion again? I am sorry, Charlie.

11 COMMISSIONER CRIST: Accept the school

12 board's decision to terminate Cyber High's

13 charter.

14 GOVERNOR BUSH: There is a motion to accept

15 the school board's termination of Seminole Cyber

16 High School and a second. All in favor say aye.


18 GOVERNOR BUSH: All opposed? No.

19 Thank you all very much. Thanks for

20 coming.






1 MS. ARMSTRONG: Good morning, Governor,

2 Members of the Cabinet. Eva Armstrong,

3 representing the Department of Environmental

4 Protection this morning.

5 COMMISSIONER CRIST: Governor, before we do

6 that, I wanted to, if I may, I wanted to thank Ali

7 Korman; this is her last meeting working for our

8 Cabinet department, I just wanted to thank her for

9 all her help and all her service to the people of

10 Florida. Thank you.

11 GOVERNOR BUSH: Joining the dark side of the

12 legislature.

13 MS. ARMSTRONG: With that, item 1 --

14 COMMISSIONER GALLAGHER: Motion on minutes.


16 GOVERNOR BUSH: Moved and seconded. Without

17 objection, the item is approved.

18 MS. ARMSTRONG: Substitute item 2 is approval

19 of a proposed recommended order finding the site

20 for the Florida Power & Light Company Manatee Unit

21 Three site to be in compliance with the local land

22 use plans and zoning ordinances.



25 GOVERNOR BUSH: Moved and seconded. Without

1 objection, the item is approved.

2 MS. ARMSTRONG: That's it for that one.

3 GOVERNOR BUSH: Thank you.























1 GOVERNOR BUSH: Board of Trustees.

2 MS. ARMSTRONG: Substitute on 1.


4 minutes for August 27, September 10, September 24.


6 GOVERNOR BUSH: Item 1, there is a motion and

7 a second. The item is approved.

8 MS. ARMSTRONG: Item number 2 is a proposed

9 settlement agreement in the case of Donald K.

10 Gagnon versus the Board of Trustees.

11 This is a lawsuit over Butler Act issues

12 and I have Christine Guard here if you have any

13 questions.

14 We recommend approval.


16 GOVERNOR BUSH: Is there a second?


18 GOVERNOR BUSH: Any questions?

19 Moved and seconded. Without objection,

20 the item is approved.

21 MS. ARMSTRONG: Substitute item 3 is an

22 option agreement to acquire 2,118.88 acres within

23 the Pal-Mar Florida Forever Project in Palm Beach

24 County.

25 COMMISSIONER GALLAGHER: Motion on substitute

1 3.


3 GOVERNOR BUSH: Moved and seconded. Without

4 objection, the item is approved.

5 MS. ARMSTRONG: Substitute item 4 is an

6 option agreement to acquire 48.54 acres within the

7 Pineland Site Complex Florida Forever Project from

8 the University of Florida Foundation.

9 We have had some conversations with

10 various Cabinet members. I want to clarify one

11 issue.

12 There was a question about whether or not

13 there was melaleuca on the site that we are

14 buying and there is not.

15 We also have the agent for the owner here

16 if you would like more details. As I

17 understand it, the concern is that there is a

18 mitigation bank on Little Pine Island that was

19 melaleuca, but they scarified that island back

20 before the melaleuca came in. This site we are

21 buying has not been scarified. There are not

22 invasive species that we are aware of.



25 GOVERNOR BUSH: Moved seconded. Without

1 objection, the item is approved.

2 MS. ARMSTRONG: Item number 5 is an option

3 agreement to acquire 60 acres within the Estero

4 Bay Florida Forever Project.

5 We have a number of speakers here this

6 morning on this issue. I thought we would

7 start with the local government

8 representatives. Ms. Terry Caine, who is the

9 vice mayor of Fort Myers Beach; followed by

10 Roger Clark who is with Lee County Recreation

11 and Parks; and I should add Mr. DeSalvo, the

12 owner, is also here. And we have some enviros

13 that I will introduce later.

14 MS. CAIN: Good morning, Governor Bush and

15 Cabinet. My name is Terry Cain, I am the

16 vice-mayor of the beautiful island of Fort Myers

17 Beach and also the president of the Estero Bay

18 Buddies.

19 The Estero Bay Buddies is a

20 citizen-support organization for the Estero Bay

21 Aquatic and State Buffer Preserve.

22 I am here today in support of the

23 acquisition of the DeSalvo property.

24 As you know, in southwest Florida we have

25 a rapid growing rate. We are being developed

1 at a very rapid pace. There is an urgency and

2 high public support for any natural lands that

3 we can acquire.

4 The DeSalvo property is in the Estero Bay

5 Florida Forever Boundary, with a willing seller

6 and below appraised value.

7 The DeSalvo property is very important to

8 us, it's very close to other property you have

9 acquired for us and is heavily used by the

10 population down there.

11 As I look around the room, I see that

12 someone here has a very strong ability to view

13 the wildlife while you are sitting in here, and

14 that's what we are trying to protect.

15 So today, I really appreciate your

16 consideration in this matter. And please help

17 us to protect what we have left of the natural

18 parts of Florida.

19 Thank you very much.

20 GOVERNOR BUSH: Thank you.

21 MR. CLARK: Good morning, Governor Bush,

22 Members of the Cabinet. I am Roger Clark, Plans

23 Stewardship Manager for Lee County Parks and

24 Recreation and representing Lee County.

25 First I would like to read a letter that

1 was sent to you-all, should be all in your

2 packets from our Commission Chairman and our

3 County Commission.

4 Dear Governor Bush and Honorable Cabinet

5 Members. And this is re: the Estero Bay

6 Florida Forever Project.

7 We, County Board of County Commissioners,

8 unanimously support the acquisition of the

9 60-acre DeSalvo project within the Estero Bay

10 Project by the Florida Forever Program. This

11 parcel of land is of particular value as it is

12 contiguous to one of the region's most valuable

13 ecosystems.

14 We are aware that there are many worthy

15 properties that qualify for Florida Forever

16 funding. We would ask for your support in

17 purchasing this integral parcel.

18 We thank you for your continued support

19 and commend the many accomplishments of the

20 Florida Forever Program.

21 And if there are any questions, please do

22 not hesitate to contact us. Thank you, and

23 that's signed by County Commissioner Robert

24 James, chairman.

25 GOVERNOR BUSH: I have a question. This

1 property was zoned for -- in 1998 when the owner

2 purchased it, it was not zoned for what it now

3 is -- now it's zoned for 120 units of residential?

4 MR. CLARK: My understanding, Governor Bush,

5 is that it's going through the rezoning process.

6 The original process started in 1998 which

7 was almost two years before the project was

8 added to the Florida Forever Boundary. The

9 rezoning reflects a rapid development of

10 surrounding properties. And again, I am a

11 biologist, I am in parks preservation.

12 GOVERNOR BUSH: This is hitting the area that

13 gives me concern.

14 MR. CLARK: Yes, sir, it's certainly a valid

15 concern. My only understanding --

16 GOVERNOR BUSH: When counties upgrade, grant

17 development rights, which they have the power to

18 do, and then come to us, or buyers or sellers come

19 to us and we buy property at an appraised value

20 that is higher than -- and caused by the county,

21 I've got a problem with it.

22 This is an important piece of property and

23 it's part of our strategy to preserve. This is

24 an important ecosystem, but I am telling you

25 right now, unless there is some explanation for

1 this, I am going to vote no, just as I did in

2 Pinellas County and several other counties

3 where counties make decisions, then come to us

4 hat-in-hand, asking us to buy property at a

5 higher value.

6 I've got a problem with that. You may not

7 be the right guy. Is there a lawyer or

8 somebody here representing Lee County?

9 MR. CLARK: No, sir, I am not a lawyer.

10 GOVERNOR BUSH: You showed up at the wrong

11 time.

12 MR. CLARK: I appreciate your concern, and

13 it's one that we have as well, Governor Bush, when

14 we acquire property. I think this is just a

15 matter of the timing, was already on --

16 GOVERNOR BUSH: You guys granted -- maybe --

17 I am sorry. I am going to let you up for air

18 here, and there will be someone else that will

19 speak that may be able to answer this; the

20 property owner perhaps.

21 MR. CLARK: The trustee for the property is

22 here, if you would like to ask him that question,

23 Mr. DeSalvo. Maybe he can come up in just a

24 minute. Let me quickly go over the other issues.

25 But I agree you have a valid concern.

1 I think it's a matter of the county

2 commission bringing this property into the same

3 land use as some of the surrounding rapidly

4 developing land, Governor Bush, and it's a

5 matter of the timing relative to that process

6 and to you-all's approving it.

7 That's really all I can offer you, but

8 Mr. DeSalvo may be able to add to that. But

9 just quickly to stress some of the resource

10 values to step aside from that rezoning issue,

11 which I understand your concern --

12 GOVERNOR BUSH: In turn and move on, that's a

13 good strategy.

14 MR. CLARK: It protects the Mullock Creek

15 Slough, so it protects not only the 60 acres

16 itself, but it protects a natural system that

17 flows from the already-owned property owned by the

18 Board of Trustees.

19 It's a key location for protection of a

20 whole area and provides for better management

21 process due to access problems that this

22 property provides into the rest of Estero Bay

23 CAMA property.

24 There is currently off-road vehicle and

25 dumping occurring due to access through this

1 property. It provides for increased diversity

2 of habitats. And I think this is a great

3 investment in protecting the future of

4 southwest Florida.

5 And along the lines of investment, I would

6 just like to give you all a perspective from

7 what the county commission has done hopefully

8 that you will look at as a positive action.

9 Either within or adjacent to the Estero

10 Bay Buffer Project, the county commission has

11 acquired over a thousand acres at a cost of

12 $10 million through our County Land Acquisition

13 Program.

14 So we are certainly supportive of this

15 property. And I will ask Mr. DeSalvo if he can

16 come up and give you a little scenario of the

17 land use and his issues. And he is the trustee

18 for the property. Thank you very much.

19 GOVERNOR BUSH: Thank you.

20 MR. DeSALVO: Governor, my name is Andrew

21 DeSalvo. I am trustee for the property; I am not

22 an attorney and I do not work for the county. I

23 would be happy to answer any questions you have.

24 GOVERNOR BUSH: Explain to me the process

25 that you have gone through. When you purchased

1 the property, what were the development rights?

2 And what just give me the blow-by-blow so I get a

3 better understanding. I want to be helpful, but

4 I --

5 MR. DeSALVO: I want to be helpful as well,

6 so I will try to give you all the information that

7 I know.

8 The property was purchased 1998. There is

9 a misnomer that's been stated. It's not a

10 zoning case. The current land use on the

11 property is rural. The current zoning is

12 agricultural, which allows one unit an acre as

13 it is.

14 GOVERNOR BUSH: One unit?

15 MR. DeSALVO: One unit per acre as it stands.

16 In 1998, on behalf of the beneficiaries of the

17 trust, I submitted a land use change to the

18 comprehensive plan for Lee County, which would

19 change the land use from rural to outlying

20 suburban with a maximum of two units an acre.

21 That was after long discussions with the staff.

22 At that time in the spring of '99, the

23 Governor and Cabinet were -- there was the

24 issue of the Sadhev property which is

25 immediately adjacent to this. At the request

1 of the Lee County planning department, they

2 asked us to table our comprehensive plan

3 amendment until there was a decision, a final

4 decision made on the Sadhev piece as to whether

5 or not it would be developed according to the

6 development order that they had received from

7 the county, or whether it would be condemned or

8 subsequently purchased by the State of Florida.

9 As you know, you purchased that piece, I

10 think it was in the spring of '99.

11 We then resubmitted into the next planning

12 cycle, which was, if I have my dates correctly,

13 the 2000-2001 cycle. We went through that land

14 use process. The local planning agency

15 recommended approval of the request of land use

16 change because it was appropriate in their

17 mind.

18 The board of county commissioners voted

19 unanimously to transmit it to it DCA for their

20 review.

21 We received the objection, recommendation

22 and comment, the ORC report to the county

23 afterwards, and we attended the board of county

24 commissioners' adoption hearing here last

25 January 2002, I believe.

1 We have been in the process for four

2 years, so some of my dates -- I think I am on

3 track so far.

4 GOVERNOR BUSH: So far you haven't gotten

5 your development rights that you were upping the

6 density?

7 MR. DeSALVO: No, the county commission at

8 the adoption hearing in January 2002, part of the

9 ORC report we responded to and we agreed to put in

10 a central sewer system to the property and do a

11 clustered residential planned development.

12 The county commission asked us at that

13 hearing would we please resubmit in the next

14 cycle so that the county staff and the state

15 staff would have an adequate opportunity to

16 review those two concessions that we made on

17 the development. We told them we would.

18 Subsequent to that issue -- and our cycle

19 is annual, so we had to wait until

20 September 30. I am sorry.

21 Subsequent to that, the county

22 commissioner for that district, Ray Juda,

23 called me -- I have known him for several

24 years -- asked me if I would talk to with

25 Heather Stafford to see if the state had an

1 interest in the property. I told him that I

2 would do that, if the state was interested, if

3 they appraised the property and would purchase

4 the property prior to the September 30

5 deadline, because my beneficiaries wanted me to

6 submit the next cycle.

7 So that's why we are in this situation.

8 I would like to not speak on behalf of

9 county commissioners, but several of them are

10 very sensitive to the fact to not rezone

11 property and to not improve the value of

12 property when either the state is purchasing in

13 the Internal Improvement Trust Fund or when

14 they are purchasing for Conservation 2020.

15 This is a case, however, that we have been

16 in the process since '98. I asked the Estero

17 Bay manager, Heather Stafford who is here as

18 well, prior to our resubmitting, or submitting

19 the application, if the state was interested in

20 the property, if they had funds. And, of

21 course, it was just after the Sadhev piece and

22 the answer was: It's on the B list, don't know

23 when, if ever, funds would be available.

24 Because of that we have no interest at this

25 time.

1 And I said: Fine, my beneficiaries wanted

2 me to check with you before we go through this

3 lengthy land use comprehensive plan amendment

4 process, and that's the story.

5 GOVERNOR BUSH: So it is correct to say that

6 while -- you don't even have the development

7 rights yet, but you are a willing seller at a

8 price that assumes that you have doubled the

9 density?

10 MR. DeSALVO: I am a willing seller. The

11 appraisals that were done I think on behalf of the

12 state used a term that -- I am in the real estate

13 business as well -- I think they used "reasonable

14 probable" or "probable reasonable," that the

15 property would change its land use to outlying

16 suburban with a maximum of two units. And I

17 believe they appraised it from what I have seen on

18 the highest and best use which is at the two

19 units.

20 The county commission has not approved

21 this. It's back in the hopper. They have not

22 approved this land use before you. But it is

23 extremely likely and probable due to the -- we

24 have land use on the corner of our property,

25 Governor, that is urban community. And we are

1 surrounded by urban community which allows six

2 units an acre.

3 And the entire project to the west and to

4 the south, there is a mobile home park directly

5 sort of southwest -- east of us, excuse me, at

6 a density of about 10 units an acre.

7 There is a residential community that runs

8 about four units an acre immediately adjacent

9 to us to the west. And so, it's very clear

10 that there is development there.

11 And in our request, quite frankly, we

12 asked for the minimal land use change that

13 would move us from rural, which the property is

14 not adequately -- it's not appropriately typed

15 at this time. Our comp plan went in in '84; it

16 was rural at that time, it's no longer rural.

17 And so I think what everyone is telling

18 you that the board has not approved it. As

19 this board and other boards, they will not tell

20 you they will approve it before it comes back

21 in front of them, but there is a very high

22 probability, because of the land use around it

23 and the case that's been made, that it will be

24 approved, the land use change will take place.

25 And based on that, I think is why your

1 appraisers appraised it at the highest and best

2 use, which was only two units an acre.

3 I hope that helps you. I am a taxpayer,

4 too, and I now it sound facetious for me to

5 stand up here in front of you --

6 GOVERNOR BUSH: It doesn't. I am a former

7 real estate guy; you said it very clearly. I

8 understand exactly what you have done, and I've

9 still got a problem.

10 MR. DeSALVO: I understand that, sir.

11 COMMISSIONER GALLAGHER: I have a question.

12 What's the present value, in your opinion, if it

13 was only one unit per acre?

14 MR. DeSALVO: I believe that the acre price

15 of $35,000 an acre would stand firm,

16 Mr. Gallagher. I think the discrepancy, quite

17 frankly, I think in the appraisers was the per

18 unit price, and they appraised it two ways. They

19 have gave you a per acre price of $35,000 an acre;

20 and then they gave you per unit price.

21 I think what happens if you look at 60

22 units, the per unit price is strange; it's a

23 very high number. But land -- I have been a

24 broker in that community for almost 25 years

25 now. Not only are the land values increasing

1 rapidly, almost daily, but it's generally based

2 on a per acre value. And it's very difficult

3 in that part, Estero or Bonita Springs, to buy

4 land less than 30,000 an acre.

5 GOVERNOR BUSH: How did you guys buy it 9,000

6 an acre just four years ago?

7 MR. DeSALVO: Governor, I have been doing

8 this for 25 years, and I don't mean to say this

9 silly, but the person we bought the property from,

10 I had represented and we were trying to sell the

11 property.

12 GOVERNOR BUSH: 8,500, I am sorry.

13 MR. DeSALVO: Yes, sir. We bought it -- we

14 bought it at that price four years ago. Our plan

15 was to do two things with it -- I am not a

16 developer; I am not a builder -- was to sell it to

17 the Sadhev people. It was my opinion that they

18 needed more land for golf course because they

19 didn't have enough golf courses.

20 After the state purchased the Sadhev

21 piece, then our plan was to change the land use

22 to the least intensive use that made sense, and

23 I think the public and certainly the LPA, local

24 planning agency, agreed with us, that the two

25 units an acre made sense.

1 Since that time, quite frankly, in the

2 last four years, land values have skyrocketed,

3 not four times, but in many cases they have,

4 especially in the high-growth area.

5 GOVERNOR BUSH: Secretary?

6 SECRETARY SMITH: What troubles me is they

7 got 900,170 acres to go in this overall plan, and

8 this kind of action sets a pretty bad precedent.

9 And there is no question it's a good project;

10 there is lots of good projects.

11 It seems to me the state is smarter to

12 take its resources and buy many good projects

13 at really fair prices. At this rate, we may

14 end up trying to buy 9,000 acres to the

15 detriment of everything else in the state.

16 I would say to the department: Why bring

17 us things like this? It sends the wrong

18 signal, I think, to folks out there: Buy

19 cheap, jack up the price and these suckers will

20 buy it. As a business proposition, I have done

21 a lot of real estate; you never do something

22 like this.

23 GOVERNOR BUSH: Mr. Smith, you want to be on

24 your side of this deal.

25 SECRETARY SMITH: I am not critical of you at

1 all. I respect the fact that you asked the

2 department --

3 GOVERNOR BUSH: That's a good question about

4 why wasn't -- Eva, can you explain why this would

5 be -- we have been buying property in this area;

6 this is an important ecosystem we are trying to

7 protect. It's not on the B List from the

8 perspective of the overall area. Why would it be

9 in the B List?

10 MS. ARMSTRONG: At the time that it dropped

11 was early -- in fact, I think it was the first

12 list of Florida Forever. And in allocating

13 resources, the Acquisition/Restoration Council put

14 them on B. They since moved it back up to A.

15 GOVERNOR BUSH: Do you get on A when you have

16 the threat of rezoning, is that --

17 MS. ARMSTRONG: No, sir. No, sir.

18 GOVERNOR BUSH: That sends the wrong signal.

19 That's the point Jim is making.

20 MS. ARMSTRONG: Right. When we set up this

21 new system under Florida Forever, instead of doing

22 a 1 to 99, we set up an A and B. And within A, we

23 allot four times the annual amount of money we

24 would get to spend in the project -- in the

25 program; the theory being we are creating --

1 everybody knows this is how much we get in a year;

2 all the landowners in there are put on notice: If

3 you want to sell to the state, you are competing

4 with each other. The contracts we get in, they

5 are -- the first one in the door gets expedited

6 process.

7 So we were focussed on creating more

8 competition. And as we went through the first

9 two years of Florida Forever, we bought land in

10 the A's. We had one project drop completely

11 out.

12 So as they go through the analysis each

13 six months to look again at the list and decide

14 should we move one of the B's up, should we

15 eliminate several of the A's, Estero Bay was

16 considered very, very important and they moved

17 it up.

18 That was why it went up.

19 If I could also respond to why this one is

20 on here, because, you know, this is a tough

21 one. And in state lands, we are charged with

22 going and negotiating the best deal we can get

23 on these projects.

24 And as Mr. DeSalvo explained, there are

25 things going on at the local level that

1 sometimes we are not even aware of as we are

2 putting a project together and moving forward.

3 The land manager in this case considers it very

4 viable because of the hydrology with that

5 creek, and so we felt it important to bring it

6 to you and say: Hey, this is what it is --

7 GOVERNOR BUSH: Don't you see the conflict of

8 what you just said in what the Lee County

9 Commission is considering doing, which is to allow

10 for -- the picture of this makes it hard for me to

11 envision any kind of housing; it doesn't look like

12 there is a whole lot of uplands. But anyway,

13 there may be, it's hard to tell just from the

14 picture.

15 We are in direct conflict with a local

16 decision that requires us to pay perhaps double

17 the price.

18 GENERAL MILLIGAN: Governor, I am just kind

19 of curious, do we have to do an all-or-nothing on

20 this thing?

21 The real concern with this piece of

22 property appears to be kind of the southern

23 half of it which has the slough and a good deal

24 of the important aspects of the drainage, and

25 so forth.

1 I would like to know what the clustering

2 approach means in terms of two homes per acre;

3 really the clustering is driving you to a

4 higher density, I presume, on certain pieces of

5 that property, probably the northern portion of

6 it.

7 And I guess my question is: Could we ask

8 Mr. DeSalvo if it's possible to not purchase

9 all of it but part of it and purchase it on the

10 basis of the piece that's important to us in

11 terms of environmental issues versus the piece

12 that you find I think probably useful for

13 developmental purposes, and reach a better

14 agreement on the price, that recognizes what we

15 are really after environmentally?

16 And I just throw that out.

17 GOVERNOR BUSH: That's an interesting

18 concept. It does look like just on this aerial

19 picture that the property, the slough consumes

20 about half the property. Your land use plan would

21 not include housing in that area, I assume.

22 MR. DeSALVO: Governor, the picture you have

23 is probably inaccurate.

24 There is 60 acres if I can show you on

25 the -- there is like 7 acres of wetlands and

1 53 acres of uplands. And it's a ridge

2 actually, that it's the highest part in Estero.

3 And the land elevation is about 15 or 16 feet.

4 GOVERNOR BUSH: Put on it on the -- where is

5 your property?

6 MR. DeSALVO: It's this box right here.

7 GOVERNOR BUSH: Can you point to where the

8 property is?

9 MR. DeSALVO: The property, the southern

10 boundary is here, the west boundary is here, the

11 northern boundary. And then we -- no, I am sorry,

12 I went the wrong way.

13 This is the east boundary. This is the

14 south boundary, the east boundary, the north

15 boundary and the east boundary.

16 COMMISSIONER GALLAGHER: You got the south

17 and east and west backwards.

18 MR. DeSALVO: This is north --

19 GOVERNOR BUSH: It's all becoming clearer.

20 MR. DeSALVO: North is now up, Gentlemen.

21 This is the south boundary of the property, the

22 west boundary of the property, the north boundary.

23 And then we come back along here is the east

24 boundary.

25 The slough actually is in this part right

1 here, Governor. And then it runs north, which

2 is then not on my property.

3 This is all Palmetto Pine flatland, runs

4 about a 15, 16-foot elevation. There is an

5 actual ridge that comes up to here a hundred

6 foot FP&L easement. This is the Sadhev piece

7 right adjacent to it; and just south of it is

8 what the state already owns. The state owns on

9 two sides, both south and east of this

10 property.

11 The ridge continues, the FP&L easement

12 runs about 15, 16 feet, and then it starts

13 going down, down, till you hit the sawgrass and

14 Estero Bay.

15 So there is actually high elevation and

16 Palmetto Pines is really is good for

17 development. And you can see also that on the

18 southeastern edge, there is an exiting mobile

19 home park of 10 units an acre, a residential

20 community is just adjacent to it, about six

21 units an acre.

22 So I guess what I am trying to share with

23 you, I understand the position, when you are

24 spending taxpayer dollars. Whatever you decide

25 today is okay with me. I was here actually to

1 watch so I could come back to my beneficiaries

2 and tell them you all accepted it or you

3 didn't, so we could go on one way or the other.

4 But it is extremely reasonable to expect

5 that that's a logical land use to outlying

6 suburban in the Lee County comprehensive plan.

7 That land use allows three units an acre. And

8 in talking with the staff, we limited it to

9 just two units an acre. So we have been

10 working with the county and the staff for a

11 long time.

12 GOVERNOR BUSH: Can you answer General

13 Milligan's, or just comment on his question?

14 GENERAL MILLIGAN: The question really was on

15 the cluster aspect and where you would be driven

16 to build. And clearly I presume you wouldn't be

17 building in the slough area.

18 MR. DeSALVO: That's correct.

19 GENERAL MILLIGAN: Based on that and driven

20 to a cluster approach, would you all consider a

21 partial sale of that?

22 MR. DeSALVO: We had not contemplated that,

23 sir. I don't have an answer for you today. It

24 never had come up.

25 GENERAL MILLIGAN: Key to this, acquiring the

1 slough is acquiring the Smith property which is

2 not -- I think it's Smith property, whoever it is.

3 It's another piece of property that we are going

4 to go after, and to really make this slough a

5 viable aspect of the environmental aspect of

6 things.

7 So I still think there is some logic to

8 trying to split this piece of property and

9 acquire what the state really would find most

10 useful and at the same time not undermine the

11 development as appropriate in that area.

12 MR. DeSALVO: Governor, in response to

13 Mr. Gallagher's question a little earlier, it's my

14 opinion -- and I know you are going think this is

15 a prejudiced opinion coming from me today -- but

16 it's my opinion that when we go through the

17 process, and we will, I think it's an extremely

18 high probability that the land use changes to two

19 units an acre. At that time I think the value of

20 the land will be around $40,000 an acre,

21 conservatively, in about less than the next year.

22 I have -- and I am not saying this

23 facetiously. There are builders -- it's a very

24 hot market; I think the Governor knows that.

25 There are large builders, national builders,

1 small builders, that are looking for 50 or

2 60-acre parcels that they can build a hundred

3 houses on; it's just that type of market right

4 now.

5 So the price very legitimately, if I were

6 to sell it on the open market today, probably

7 about two million-four.

8 But I understand the quandary you are in.

9 The other thing about the county commission,

10 they are very sensitive to approving property

11 so that it raises the prices, Governor Bush, I

12 understand that.

13 I can't speak for them, but I want you to

14 appreciate how sensitive they are. They have

15 not taken an action -- this was really

16 something that -- I know you all believe

17 strongly in private property rights. So we

18 have been in the process.

19 We didn't bring this to the state. It was

20 asked to come through the process. We are

21 willing sellers. The two appraisals were made.

22 We have agreed to sell it at slightly below the

23 appraised value. And that's really where we

24 are today, Governor.

25 GOVERNOR BUSH: Commissioner Bronson.


2 Mr. DeSalvo, this land right now is agriculturally

3 zoned, I would assume because of the pines, and so

4 forth, that are on the property as a potential

5 agricultural commodity base; is that correct?

6 MR. DeSALVO: That is not, sir.

7 In 1962, June 1962, Lee County started

8 their first zoning regulations. When they

9 started their zoning regulations, all land that

10 wasn't rezoned was agricultural.

11 So agricultural was sort of a holdover

12 just as the rural land use is a holdover for

13 the '84 comp plan.

14 The fact is there is testimony,

15 Mr. Bronson, both at the local planning agency

16 level and the county commission that it is not

17 appropriate for rural or agricultural use; it's

18 too small for any bonified agricultural use.

19 And that's why I am sharing with you,

20 gentlemen, the reality that the land use is

21 going to change, is eminent because -- it's not

22 political, it's eminent because all those

23 factors are appropriately in place.

24 COMMISSIONER BRONSON: Governor, I want to

25 bring up a point here, and I am going to disagree

1 with you; it's not too small for an agricultural

2 use.

3 I can put a 3-acre nursery on this place

4 and still use it for agriculture without making

5 major changes to it.

6 However, the point I am going to make to

7 you is a point I have been trying to make to

8 groups, to this Cabinet, to papers all over

9 this state, is when somebody is in an

10 agricultural piece of property -- now let's

11 take, for instance, there was a small nursery

12 on here; this being surrounded by businesses

13 and homes and pressures not to use chemicals

14 and other things because of the area, these

15 people are finally going to say: I can't make

16 a living, and they are going to sell to someone

17 who has another idea for use of this property.

18 Now there are those in the state who would

19 advocate that we ought to tell DCA -- and I had

20 this told to me by one group -- that we ought

21 to tell agriculture people they can't sell

22 their property, that we are not going to allow

23 them to do that, and they've got to hang on it

24 whether they can make a living on it or not.

25 And I suggest to you that's a socialist's

1 approach to private property rights in the

2 state but --

3 GOVERNOR BUSH: He is going to agree with

4 you.

5 MR. DeSALVO: Yes, sir, I have been a realtor

6 for 25 years.

7 COMMISSIONER BRONSON: But here is my point.

8 This is just one parcel. This is happening all

9 over the State of Florida where people are being

10 surrounded; they've got to find a way to use this

11 property or it's of no value to them directly

12 unless they sell it for environmental protection

13 or some other use that it can be used on.

14 This piece of property, by the way, for

15 the same reason that Mr. DeSalvo would like to

16 put homes on that ridge, is a water recharge

17 area. That is -- people get the wrong idea

18 that wetlands are water recharge.

19 Wetlands basically are not water recharge

20 other than surface water. The water recharge

21 to the aquifer system is through these high

22 pieces of ground, the very pieces of ground we

23 put homes on.

24 So I want to make a point here. He is in

25 a predicament right now, whether this Cabinet

1 is going to accept this based on its face

2 value, based on the value that he could go and

3 get two homes per acre instead of one possibly;

4 maybe it's only going to be one, but I believe

5 in what he told us, and that is whether it's

6 one home or two homes, it's still going to be

7 worth 35,000 an acre based on today's market

8 more than likely.

9 So we are in a position of trying to vote

10 to either protect the Estero Bay and Mullock

11 River Estuary Program, or whether we let this

12 play itself out and find out whether it's going

13 to be golf courses and a few homes on here.

14 But this is happening all over the State

15 of Florida, and it's mostly ag-related lands

16 that are being involved in this.

17 So this is kind of the firing shot of

18 what's going to happen even more the next four

19 years. I think we need to take a look at it.

20 We have got to make some decisions here on what

21 we are going to do.


23 SECRETARY SMITH: Based on the comment of

24 General Milligan, how contingent or important is

25 the Smith tract, or whatever it is, in relation to

1 this piece of property?

2 In other words, if we can't get the Smith

3 property, is this as important and should we be

4 looking at some of these things in more kind of

5 a total concept?

6 MS. ARMSTRONG: I am going to ask Heather

7 Stafford who is the manager of the Estero Bay

8 Preserve to respond to that.

9 MS. STAFFORD: The Smith property is

10 important. We need to get -- that has the bulk of

11 the slough in it.

12 GOVERNOR BUSH: Point out where that is. Is

13 it on that map?


15 MR. DeSALVO: It's basically the southeast

16 corner of the property.

17 GOVERNOR BUSH: It's your property that abuts

18 you to the south?

19 MR. DeSALVO: Yes, sir.

20 SECRETARY SMITH: Are we in negotiations on

21 that?

22 MR. DeSALVO: It's a 10-acre piece.

23 MS. STAFFORD: I think we've had it appraised

24 and we are talking to the landowner, State Lands

25 is talking to the landowner.

1 SECRETARY SMITH: Is it like this one; has it

2 been rezoned or anything?

3 MS. STAFFORD: No. I just want to also

4 clarify a little bit about the questionable -- if

5 you are talking about buying a portion of DeSalvo

6 or approving a portion of it.

7 The slough actually does run on the very

8 northeast corner of DeSalvo, too. So it kind

9 of comes along that northeast corner and comes

10 out from the property and comes back in in the

11 southeast corner and into the Buffer Preserve

12 where we are already restoring the slough on

13 the Buffer Preserve. All the exotics are being

14 removed and we are restoring --


16 going to be able to build houses on the slough?

17 MS. STAFFORD: Right, they will be building

18 it on the bulk of the property, which there is

19 only 5 acres of wetlands. The rest of the

20 property is high and dry.

21 GENERAL DORAN: Are there other, within this

22 larger boundary of this project, are there other A

23 List parcels?

24 MS. STAFFORD: The project is an A project.

25 GENERAL DORAN: Are any of these parcels

1 other than this one b list parcels?

2 MS. STAFFORD: No, all the parcels within the

3 project are -- the Florida Forever Project is on

4 the A List. The parcels are not A or B.

5 GENERAL DORAN: It doesn't break out?

6 MS. STAFFORD: No, but this is an essential

7 parcel within the project boundary.


9 MS. STAFFORD: Because of how critical it

10 was, especially with the -- adjacent to the Sadhev

11 parcel and the slough.

12 SECRETARY SMITH: Just kind of

13 philosophically on this, I understand very well

14 what Commissioner Bronson is talking about, and

15 not -- just looking at this whole land buying

16 deal.

17 To me, the people of this state are better

18 served if the amount of money we have, we spend

19 it buying as much environmentally-sensitive

20 land as we can buy at a good price rather than

21 in -- some of these areas that obviously we are

22 rubbing up against urbanization and having to

23 pay a very, very high price.

24 I think a hundred years from now people

25 will look back and say: We ought to do a lot

1 better job, going out and buying land four or

2 five or 6,000 bucks an acre than you were

3 buying pieces at 50 and $60,000 an acre.

4 And we can't buy everything. And the

5 record will reflect my years on this Cabinet, I

6 voted against a lot of land purchases because

7 we don't buy land smart; we never have. In the

8 marketplace, you never buy a piece of land

9 based on the appraised value; you get an

10 appraisal to go get financing.

11 Yet we are cash buyers, and we constantly

12 pay the appraised value of the land. This has

13 always frustrated the heck out of me. We can't

14 buy everything. That's the other side of the

15 deal.

16 COMMISSIONER GALLAGHER: I can tell you this;

17 that the last 10 or 12 years it's gotten much

18 worse than it was way back, Jim. It's just -- the

19 prices keep climbing and we keep paying full deal;

20 doesn't seem like we negotiate anything down or

21 anything else.

22 SECRETARY SMITH: Really on this one, is the

23 staff -- I just would tell the folks: I can't

24 take this to my board, this land somebody bought

25 four years ago for half a million bucks and now we

1 asking them to pay whatever it is, two and a half

2 million; I can't take that to them. If you were a

3 business person and you would say that, the board

4 of directors they would fire you.

5 GOVERNOR BUSH: The challenges, I think the

6 issue --

7 COMMISSIONER GALLAGHER: If you are going to

8 put two houses an acre on it, you can sell it for

9 $60,000 a lot, you would buy it in a second. You

10 got to look at what you are going to do. Your

11 board would say, Hey, great, grab that as fast as

12 you can.

13 GOVERNOR BUSH: Can we get a quick review of

14 the environmental benefits of this property?


16 GOVERNOR BUSH: Talk to us about the

17 importance of this property from an environmental

18 perspective, which does have value. We are

19 putting aside my concerns.

20 MS. STAFFORD: I hope the wetlands aren't the

21 only important thing here. Pine Flatwoods are

22 being lost at a higher rate than wetlands now, and

23 so Pine Flatwoods is where everybody builds. So

24 that's important.

25 We have listed plants and animals, we

1 have --

2 GOVERNOR BUSH: What kind of critters are on

3 there?

4 MS. STAFFORD: We have Gopher Tortoises, they

5 are state-threatened.

6 GOVERNOR BUSH: Gopher Tortoises are still

7 threatened?

8 MS. STAFFORD: Yes, they are.

9 GOVERNOR BUSH: Are they really?

10 MS. STAFFORD: Yes, they are.


12 MS. STAFFORD: This is also, this slough,

13 Mullock Creek Slough runs off of Mullock Creek.

14 Mullock Creek runs right to Estero Bay Aquatic

15 Preserve, and Mullock Creek is where there is a

16 great concentration of manatees.

17 GOVERNOR BUSH: That's what Colleen wanted

18 you to say.

19 MS. STAFFORD: 10-mile Canal, 10-mile Canal

20 comes right into Mullock Creek and then the creek

21 is where there is a major controversial issue

22 right now about the manatee protection there.

23 They congregate there.

24 GOVERNOR BUSH: So that's not on this

25 property?

1 MS. STAFFORD: No, it's not on the property.

2 The slough actually runs to Mullock Creek, and

3 Mullock Creek runs to the bay.

4 GOVERNOR BUSH: Any other questions? That's

5 beautiful property.

6 MS. ARMSTRONG: If I might, Governor, just in

7 response to the Secretary's concerns.

8 We don't take bringing this kind of item

9 to you lightly. This is the first aquatic

10 preserve the state ever created, and this body

11 voted eminent domain on the Sadhev piece

12 because it was so important.

13 And we struggled with bringing this

14 forward. We knew there were going to be

15 concerns. But we felt because of the strength

16 of the desire by the managing agency, which is

17 out there every day, that at least you ought to

18 have the opportunity to look at it.

19 It's absolutely within your purview to

20 say: Hey, it is too expensive.

21 And I would not feel that I was doing my

22 job if I didn't do everything I could to try to

23 secure those lands within this project. So

24 that's why we brought it forward.

25 COMMISSIONER CRIST: Governor, I think the

1 question is would the seller take less?

2 MS. ARMSTRONG: I heard that and perhaps we

3 ought to have a discussion about that after this

4 meeting. We could do that.

5 COMMISSIONER CRIST: That would be a great

6 idea.

7 GOVERNOR BUSH: Well, if there is the

8 possibility of having -- either pursuing -- this

9 is not the proper forum probably for a trustee of

10 a piece of property to negotiate; more than happy

11 to, it puts you in a little bit of a disadvantage

12 perhaps. So you can remain quiet as you are right

13 now.

14 But the other option is to look at -- and

15 maybe the environmental issues would not allow

16 for what General Milligan suggested, which is

17 to take a portion of the property that does

18 have higher value for us and perhaps a lower

19 value for the seller and find a way to reach

20 some consensus; that may be -- may not be

21 appropriate, but if we vote no -- if we vote

22 yes, life is good for some. If we vote, no,

23 does that mean there can't be further

24 discussion?

25 MS. ARMSTRONG: No, sir. It just means no to

1 this contract, as long as he is willing to

2 continue to talk. And there is -- we would

3 certainly pursue that.

4 GOVERNOR BUSH: Deferring sounds a little bit

5 more of a collegial conciliatory approach to this

6 because I don't think anybody wants to --

7 COMMISSIONER CRIST: Governor, I would then,

8 if it's appropriate, move to defer and see if we

9 can work it out.

10 MR. DeSALVO: Governor, I don't want to

11 mislead though, that we have submitted the

12 application --

13 GOVERNOR BUSH: I understand.

14 MR. DeSALVO: -- for land use. And we

15 felt -- and I understand your dilemma, and I can't

16 promise you that if you were to defer it, that

17 anything is going to change.

18 What we will do, if it's all right with

19 you, is continue our process through the comp

20 plan change. And then should the state want to

21 make some other suggestions, I can tell you

22 that we would be open to it.

23 GOVERNOR BUSH: What's that Lee County 2020

24 thing? Maybe they are a source of funding if they

25 are going to give you the zoning that increases

1 the value. And we'll buy our property, continue

2 to buy property in this overall parcel.

3 There are many options in it. This is

4 not -- we are struggling with this because it

5 is clearly an important environmental, from an

6 environmental perspective, important property.

7 COMMISSIONER BRONSON: Clarification. Defer

8 to which meeting?

9 MS. ARMSTRONG: We would rather not have a

10 date. That would give us the leeway to see if we

11 can work it out. And if not, we won't be back.

12 COMMISSIONER CRIST: The motion would be to

13 defer until you are able to negotiate, and the

14 interest that we want to protect is what's

15 environmentally sensitive but at the same time we

16 want to be good stewards for the taxpayers.

17 GOVERNOR BUSH: There is a motion to defer.

18 Is there a second?


20 GOVERNOR BUSH: All in favor? Anymore

21 discussion? All in favor say aye.


23 GOVERNOR BUSH: All opposed?

24 MS. ARMSTRONG: We did have two more

25 speakers.

1 GOVERNOR BUSH: I am sorry.

2 MS. ARMSTRONG: But in the interest of time,

3 I suggest -- we are good, we can go on, sir.

4 GOVERNOR BUSH: Thank you all very much.

5 MS. ARMSTRONG: Item number 6 is an option

6 agreement to acquire 47.7 acres in the South

7 Walton County Ecosystem Florida Forever Project in

8 Walton County.

9 We have Celeste Cobina here today, she is

10 with the Beach-to-Bay Association. She wants

11 to help you see the vision for this entire

12 project and thus understand how the smaller

13 piece fits in.

14 MS. COBINA: Good morning, I am Celeste

15 Cobina with Beach-to-Bay Connection. We are a

16 nonprofit organization that was formed in 1993,

17 and our mission is to preserve and enhance the

18 public lands and waters in South Walton.

19 And our vision since 1993 has been to

20 create a Greenway Network in Walton County

21 connecting up our parks and forests in Walton

22 County. The map illustrates our vision that we

23 have been working on for nearly 10 years now.

24 And in 1996, the State of Florida promised

25 to help us continue fulfilling this vision.

1 And it really hasn't -- we haven't seen a lot

2 of action in moving forward in our vision and

3 this is an opportunity with the Saddlebrook

4 Downs property to acquire some property on

5 Choctawhatchee Bay and get a very important

6 beach-to-bay connector.

7 South Walton is a very unique place. We

8 are sort of a little barrier island there

9 connecting the Gulf of Mexico. We have the --

10 this will also link the Point Washington State

11 Forest with Topsill Hill Preserve.

12 GOVERNOR BUSH: Can you point out where the

13 property is?

14 MS. COBINA: (Indicating )

15 GOVERNOR BUSH: Thank you.

16 MS. COBINA: South Walton is one of the

17 fastest growing areas in the State of Florida.

18 And I know there has been a lot of discussion

19 about the price of property, but you cannot touch

20 a quarter acre lot in South Walton on a dirt road

21 for $31,000.

22 And you know, the opportunities, if we

23 don't take the opportunities in South Walton

24 now, they are going to be lost forever. And I

25 think we are going to look a hundred years down

1 the road, look back and say: What

2 opportunities did we miss?

3 And we are a tourist-based economy over

4 there. The tourists come here to enjoy our

5 beautiful, natural area. We are one of the few

6 places left in the Panhandle where you can

7 enjoy nature as it was along the coast like it

8 was several hundred years ago.

9 And we want to continue this vision and

10 fulfill this vision. The citizens have been

11 working; we have created over 30 miles of

12 trails through our parks and forests, and we

13 want the State of Florida to continue acquiring

14 property and fulfilling the promise that they

15 made to us.

16 GOVERNOR BUSH: Can you tell me what the

17 property is -- back to the question of the last

18 agenda item. Is this -- what is this? Are there

19 development rights on this tract of land we are

20 purchasing?

21 MS. COBINA: I am not very familiar with the

22 development rights. I just know it's an important

23 piece of property on the bay.

24 GOVERNOR BUSH: Maybe Eva can answer that

25 question. Any other --

1 MS. ARMSTRONG: No, sir, that was the only

2 speaker.

3 GOVERNOR BUSH: We appreciate you coming.

4 MS. ARMSTRONG: Tom Porter here is one of our

5 senior appraisers, and he can answer your density

6 questions.

7 MR. PORTER: Good morning, Governor and

8 Cabinet.

9 The property is currently zoned for

10 density of one dwelling unit per two and a half

11 acres of uplands for a portion of the property.

12 The remainder of the property is zoned at two

13 dwelling units per acre.

14 GOVERNOR BUSH: I am sorry?

15 MR. PORTER: The remainder of the property is

16 zoned at two units per acre.

17 GOVERNOR BUSH: How many units --

18 MR. PORTER: Total units that would be

19 developed be between 28 and 29 dealing units on

20 the site.

21 GOVERNOR BUSH: So your appraisal is based on

22 that possible density?

23 MR. PORTER: I am sorry?

24 GOVERNOR BUSH: Your appraisal is based on

25 that density?

1 MR. PORTER: Yes, it is.


3 MS. ARMSTRONG: Give him the range of the

4 comparable sales.

5 MR. PORTER: We've got two appraisals that

6 was done on the property, sale ranges of up to 55,

7 over 55,000 per upland acre, and there is 28.3

8 upland acres on the property. One appraiser had

9 five sales and an upland acre basis they range

10 from $44,400 up to 160,000 per upland acre.

11 GOVERNOR BUSH: Any questions? Thank you.

12 Is there a motion? General?

13 GENERAL MILLIGAN: As you would suspect, I

14 have looked at this pretty close and don't be

15 deceived, first of all, by the 20 here. This

16 piece of property is about a quarter of the right

17 quarter of that piece that borders on the bay.

18 But it is a piece of property that gives them

19 access to the bay, which they don't have

20 otherwise.

21 And so because of that, it really has some

22 merit, I think, and certainly, although the

23 waterfront itself, by the way, is marsh land,

24 basically 200 feet back is all swamp area. But

25 nevertheless, it does give access to the bay,

1 which I think is important to what they are

2 trying to do.

3 So I move the item.

4 GOVERNOR BUSH: Is there a second?


6 GOVERNOR BUSH: Any discussion? Moved and

7 seconded. Without objection, the item passes.

8 MS. ARMSTRONG: Thank you.

9 Item 7 is an option agreement to acquire

10 27.43 acres within the Werner-Boyce Salt

11 Springs State Park Project. Wendy Spencer, the

12 director of Florida's Recreational Parks, is

13 here for a minute.

14 MS. SPENCER: Thank you very much. Good

15 morning, Governor.

16 GOVERNOR BUSH: Show a little enthusiasm,

17 Wendy.

18 MS. SPENCER: All right, I am going to.

19 But I have to say before we talk about

20 Werner-Boyce, on behalf of 17.7 million state

21 park visitors this year, 6,000 dedicated

22 volunteers, and about 1500 full and part-time

23 dedicated state park service employees, yes;

24 and all the critters and wildlife on the

25 600,000 acres, we thank you for your aggressive

1 acquisitions for state park property.

2 Werner-Boyce Salt Springs is a wonderful

3 4,000 acres in Newport Richey. We are looking

4 at 27 very important acres today. This is one

5 of four last small parcels that we desperately

6 need to acquire to complete the optimum

7 boundaries of the state park.

8 It gives us some fantastic uplands.

9 The 4,000 acres, we call it sort of our

10 undisturbed central park of Newport Richey. If

11 you fly over it, it is quite beautiful to see

12 next to massive, massive commercial property

13 and it has been embraced by New Port Richey

14 like none other. Many newspaper articles have

15 been written about this property. And they are

16 very appreciative of your acquisition of it.

17 But there is a lot of wetlands here. It's

18 a wonderful kayak and canoe place, but we need,

19 desperately need more uplands. This parcel is

20 very important to us. And it also provides us

21 access to a future parcel that we would like to

22 buy that has a beautiful spring on it.

23 Albert Gregory, finest planner in state

24 government, has a picture of it. Albert, if

25 you will.

1 GOVERNOR BUSH: Wendy, how is the Parks

2 System doing with its United Way contributions?

3 MS. SPENCER: Excellent. Thank you very

4 much. I am glad you asked.

5 GOVERNOR BUSH: Just checking.

6 MS. SPENCER: By the way, park revenue this

7 past year, numbers just in, up $2 million over

8 last year, so we are excited about the State Park

9 System in Florida.

10 This is the beautiful spring that is not

11 on this property, but this is very important to

12 the acquisition. If we don't buy this

13 property, we can't try to buy the spring.

14 GOVERNOR BUSH: Why not?

15 MS. SPENCER: Well, we can, but we just can't

16 get to it. We could look at it and observe it

17 from above, but we couldn't get to it.

18 So the 27 acres here provides us great

19 uplands we need. We've got a 74-year-old-man

20 cutting, beautiful hand cutting trails through

21 some of our uplands and he can't hardly wait to

22 get to this property we are looking at today.

23 But we have got some great trail systems

24 in here that the citizens are really enjoying;

25 a lot of senior citizens are enjoying this

1 property.

2 GOVERNOR BUSH: Would this be the main park

3 entrance?

4 MS. SPENCER: No, the main park entrance

5 is -- can you point it out on the map? This will

6 be another big parcel.

7 GOVERNOR BUSH: What we bought before was the

8 main park entrance?

9 MS. SPENCER: Yes, that's under development

10 now.

11 GOVERNOR BUSH: Are we finished with this

12 park after the spring?

13 MS. SPENCER: Well, not -- we are in the

14 design phase on everything; kayak and new trails.

15 GOVERNOR BUSH: In terms of the size, this

16 will complete it?

17 MR. GREGORY: There are three or four

18 additional parcels we would like to purchase. One

19 is up in the northeast corner, that big

20 undeveloped area there, a smaller triangular piece

21 right there, the area inside that actual angle

22 there and the very last parcel we intend to buy,

23 are trying to pursue, in that box is 10 to 15

24 single family residences, kind of like a little

25 fish camp; great public access, great access.

1 That's definitely a long shot because of the

2 number of individual ownerships.

3 GOVERNOR BUSH: This property is zoned for --

4 has development rights for what?

5 MR. GREGORY: It's zoned --

6 GOVERNOR BUSH: Kind of the theme of the day.

7 MR. GREGORY: The appraisal, I believe it's

8 zoned for 247 single-family residential units.

9 GOVERNOR BUSH: It has those development

10 rights right now?

11 MR. GREGORY: Yes, sir.

12 MS. SPENCER: The acquisition of this is, the

13 price of this is less than what they paid four

14 years ago. We are not in the same situation that

15 you have been in in a couple other situations

16 today.

17 It's great property, we need it

18 desperately. Thank you.

19 GOVERNOR BUSH: Well, I am surprised you even

20 came here. Are there any other comments.

21 General?

22 GENERAL MILLIGAN: Another one you wrestled

23 with.

24 GOVERNOR BUSH: I remember, I was the grumpy

25 one the last time on this property and you

1 convinced me to go forward.

2 GENERAL MILLIGAN: Well, I won't pressure you

3 that hard this time.

4 I really think the real value in the piece

5 of property is dependent upon the acquisition

6 of that spring, which I think is important to

7 what we are trying to do in the state.

8 And frankly, for that reason and that

9 reason alone, I am willing to go along with it

10 because it is critical, it's kind of a lynch

11 pin for the acquisition of that spring. And

12 that's the only reason why I am willing to go

13 with it.

14 GOVERNOR BUSH: The department building that

15 would be built in lieu of it would have a nice

16 view of the spring, wouldn't it?

17 GENERAL MILLIGAN: Certainly would.

18 MS. SPENCER: And the runoff would devastate

19 the spring.

20 GOVERNOR BUSH: Is there a motion?



23 GOVERNOR BUSH: Any other discussion?

24 Moved and seconded. Without objection,

25 the item passes.

1 MS. SPENCER: Thank you very much.

2 MS. ARMSTRONG: Item number 8 is an option

3 agreement to acquire 86 acres within the South

4 Savannas, Division of Recreation and State Parks

5 Project. I am not aware any outstanding issues on

6 this one.

7 Would you like somebody to walk you

8 through?

9 GOVERNOR BUSH: Is there a motion or


11 GENERAL MILLIGAN: I will move the item.


13 GOVERNOR BUSH: Moved and seconded. Without

14 objection, the item passes.

15 MS. ARMSTRONG: Then Item 9, which is the

16 last one today, is an additional option agreement

17 to acquire 3,866.49 acres within the St. Joe

18 Timberland known as the Wakulla Springs Buffer

19 Project.

20 This is in line with the Governor's

21 Springs Initiative, and we do have a series of

22 speakers.

23 The first one is Sandi Cook who is the

24 manager of the park.

25 GOVERNOR BUSH: Good morning.

1 MS. COOK: Good morning.

2 I am the fortunate person to be the

3 manager/caretaker of World Famous Wakulla

4 Springs. As I told you a couple of years ago,

5 I am still enjoying my job and loving it, and

6 appreciate the past support we had from the

7 Governor and Cabinet in land acquisition.

8 We have acquired a few other parcels, and

9 this piece of property that we are considering

10 today in the protection zone is important for

11 the obvious reasons of protecting the

12 groundwater resources. What we do on the

13 surface continues to impact our underwater

14 reservoir of water that's our drinking water.

15 Wakulla Springs is one of the world's

16 largest springs and is known worldwide for its

17 significant natural resources and, in fact, is

18 a National Natural Landmark.

19 But also significant is its cultural

20 resources. Wakulla Springs is also on the

21 National Register of Historic Places, which

22 makes it really unique in having significant

23 cultural and natural resources.

24 Humans have been inhabiting the areas

25 surrounding Wakulla Springs for thousands of

1 years. When humans first arrived in Florida,

2 the environment was much different than today.

3 In this climate, freshwater was much less

4 abundant, and life centered around these

5 springs and sinkholes.

6 The property being considered for today

7 contains a number of significant sinkholes.

8 These windows into the aquifer served as the

9 life blood for Florida's early inhabitants as

10 they do today.

11 Wakulla Springs is among the largest and

12 most archaeological significant spring sites in

13 the state. The area in and around the spring

14 and along the banks of the river contain a

15 record of some of the earliest evidence of

16 human occupation in Florida.

17 Beginning more than 10,000 years ago, the

18 earliest known culture, the Paleo Indians,

19 inhabited the area. Use of the area continued

20 by other native American groups and later by

21 Spanish and American settlers.

22 Prehistoric camp sites, burial mounds,

23 shell beds, Spanish sites and turpentine camps

24 serve as testimony to the cultural significance

25 of the property around Wakulla Springs.

1 There are a total of 59 archaeological

2 sites present on the current park property that

3 represent every regional culture for the past

4 10,000 years. Other significant sites are

5 likely to be discovered on these new

6 properties.

7 Acquisition and protection of these

8 properties include sinks such as Turner,

9 Emerald and Split and Cheryl Sink will allow us

10 to do a better job of not only protecting and

11 observing the natural resources, but also our

12 cultural resources.

13 We appreciate your support. Thank you.

14 GOVERNOR BUSH: We have other speakers?

15 MS. ARMSTRONG: Two more, please. Eric

16 Draper and Paul Johnson with Apalachee Ecological

17 Conservancy.

18 MR. DRAPER: Governor and Members of the

19 Cabinet, we appreciate your efforts to carefully

20 spend the state's resources. We think this

21 project is a very, very good deal and strongly

22 encourage you to purchase the land around Wakulla

23 Springs State Park, this is environmentally

24 sensitive. And Wakulla, of course, is a

25 fast-growing area. And this land is bound to get

1 much more expensive as we move forward.

2 So we appreciate your favorable

3 consideration of this item.

4 GOVERNOR BUSH: Thank you.

5 MR. JOHNSON: Governor and Cabinet, Paul

6 Johnson. I appreciate the opportunity to speak to

7 you today in support of your purchase of this

8 acreage.

9 I represent a group called the Apalachee

10 Ecological Conservancy, also am very active

11 locally with the citizen support group Friends

12 of Wakulla Springs, which does a great job of

13 supporting this treasure for the state.

14 Wakulla Springs was probably the crown

15 jewel of Ed Ball's land acquisitions. He spent

16 a lot of time in Wakulla Springs and it

17 probably was the hallmark because of its

18 natural resources and a lot of things regarding

19 the unique nature of the springs that St. Joe

20 is very pleased to have that area, and so is

21 everybody in the state.

22 The acquisition of this land is necessary

23 to further protect the water quality and

24 ecological integrity of the subterranean

25 connections to Wakulla Springs and our

1 underground drinking water source in Wakulla

2 County.

3 We support the acquisition of the

4 3,866 acres, and would encourage the state and

5 St. Joe to work together in further

6 acquisitions. These additional sales of lands

7 for conservation will greatly enhance the

8 balance and future development plans in Wakulla

9 County and in the Panhandle.



12 GOVERNOR BUSH: There is a motion and a

13 second.

14 The appraisals here, just on my report,

15 says there is an appraisal for 6.7 million and

16 7.9 million. And 7.9 million is what we are

17 buying it for. What was -- is that common?

18 Seemed like a pretty big margin.

19 MS. ARMSTRONG: I will have Mr. Porter

20 respond to the difference between the two values.

21 It did not reach the 120 percent divergence

22 calculation used under the statute. They are

23 closer than that. But I will have him address

24 that.

25 I will also tell you this was an

1 aggressively-negotiated deal on behalf of St.

2 Joe. They feel they have given the state a

3 bargain at this price, just to let you know.

4 Would you address the divergence?

5 GOVERNOR BUSH: I feel good about that.

6 Represented by Mr. DeSalvo?

7 MR. PORTER: The appraisers, each of the

8 individual six parcels, the values that you see,

9 6.7 million and the 7.9 million, are discounted

10 value; in other words, the retail values that the

11 appraisers came to were in the range from about

12 9,100,000 to 9,145,000.

13 The reason for the divergence between

14 those two values was in their decision on how

15 much discounting was needed. One appraiser --

16 GOVERNOR BUSH: You answered my question.

17 MR. PORTER: -- discounted 15 percent for

18 bulk value for purchase of all this property by a

19 single purchaser, whereas the other appraiser had

20 a lesser discount amount than that and that

21 accounted for that range.

22 GOVERNOR BUSH: Secretary Smith.

23 SECRETARY SMITH: To me, this is -- I guess

24 we can quibble about the difference in appraisals,

25 but I think this is an example of the kind of

1 thing I think we need to be doing when we are

2 buying stuff in the 2- to 3,000-dollar-acre range;

3 and the way Wakulla County is growing, 10 years

4 from now we would be looking at 10 to $12,000 an

5 acre.

6 I would like to see this board really try

7 to concentrate on big chunks of land at a

8 lesser price and protect us all better down the

9 road, I think.

10 GOVERNOR BUSH: Commissioner Gallagher.


12 acre, if you look what you can buy for 2000 an

13 acre in this state, not a bad buy.

14 GOVERNOR BUSH: Any other discussion? There

15 is a motion, isn't there? A second. Without

16 objection, the item passes.

17 MS. ARMSTRONG: Thank you, sir.

18 GOVERNOR BUSH: Thank you.








1 GOVERNOR BUSH: State Board of

2 Administration.


4 minutes.


6 GOVERNOR BUSH: Moved and seconded. Without

7 objection, the minutes have been approved.

8 Item 2.

9 COMMISSIONER GALLAGHER: I move that we hire

10 Curtis A. Wolf at $105,000 a year.



13 GENERAL MILLIGAN: I will second that.

14 GOVERNOR BUSH: Moved and seconded. Without

15 objection, the item passes.

16 Coleman, good seeing you.

17 GENERAL MILLIGAN: One quick comment.

18 We haven't really solved the audit

19 committee situation, and it does need to be

20 addressed in terms of really who does this

21 internal auditor respond to and the policing

22 function that we expect this audit committee to

23 do.

24 So I think we need to come to grips with

25 that.

1 TREASURER GALLAGHER: I will throw out what I

2 personally think on it.

3 I believe that that person should report

4 to the trustees; and if the trustees be

5 comfortable, in my instance it would be through

6 my inspector general, but it could be I

7 think -- in my opinion, it should be reports to

8 us through whoever we want to designate.

9 GENERAL MILLIGAN: I have no problem with

10 that, Tom, except I am not so sure one should say

11 the IG is the right person.

12 COMMISSIONER GALLAGHER: That would be up --

13 GOVERNOR BUSH: Designee, how about that?

14 GENERAL MILLIGAN: I think that would be

15 useful and --

16 COMMISSIONER GALLAGHER: I was just saying

17 who mine would be most likely, but it could be

18 anybody you want.

19 GENERAL MILLIGAN: I think this could be --

20 the committee is really going to be a policing

21 function, I mean to put it in really the kind of

22 the direct approach, they are going to police this

23 operation.

24 And so you have to make sure you got the

25 right kind of people on there to police the

1 operation. And that's the only comment I will

2 make.


4 should have more than one person each on it?

5 That's -- I don't, but I am not against it.



8 too many people trying to suggest --

9 GENERAL MILLIGAN: I would suggest, rather,

10 it's important to have the right mix of people and

11 not the number, and whatever you come up with,

12 because it won't be my call down the pike here.

13 But I am concerned that the audit

14 committee really serves as a policing agent as

15 it should be for the trustees and be consisted

16 of the right people.

17 COMMISSIONER GALLAGHER: Some people might

18 want to put their chief of staff; somebody might

19 want to put an outsider; I think it could be any

20 of the ones. But it really should be us --

21 GENERAL MILLIGAN: I think you have to kind

22 of talk about that to make sure you have the right

23 mix between the new Attorney General and yourself

24 and the Governor.


1 motion that we each appoint one person, so we can

2 at least set the precedent that there be a

3 three --

4 GENERAL MILLIGAN: Let's get on with it then,

5 and I think I would at this point ask the Attorney

6 General to appoint somebody effective 7 of January

7 and at least have in place early on here who the

8 people are going to be and they can start

9 gathering themselves up.


11 serve at the pleasure of the trustees.


13 GOVERNOR BUSH: They should report to the

14 trustees.


16 COMMISSIONER GALLAGHER: What I am wondering,

17 do you think that we should nominate them and have

18 the other two agree with your nomination, or just

19 nominate them?

20 GENERAL MILLIGAN: Again, I think it's

21 important to have the right mix of people that

22 really can serve the trustees in a broad sense

23 functionally.

24 Your IG may have some great skills in

25 dealing with internal audits, in dealing with

1 policy, in terms of investment policy, and so

2 forth, but not all necessarily will.

3 It may be that the Attorney General maybe

4 would appropriately have a lawyer on there that

5 really understands investments and securities

6 law, for example, as opposed to his IG. So my

7 thought is only that we look carefully at the

8 mix of people that you all finally put on

9 there.

10 GOVERNOR BUSH: I think we can figure this

11 out.

12 GENERAL MILLIGAN: I think you can.

13 COMMISSIONER GALLAGHER: I guess the other

14 thing is, we have got an offer out hiring

15 hopefully -- if the offer is still available, some

16 of these processes take a long time -- how soon do

17 we have these people appointed? Should that be

18 done today or should it be done --

19 GOVERNOR BUSH: If we did it today --

20 GENERAL MILLIGAN: If we did it today, I

21 think you'd have an appointment and the Governor

22 would have an appointment. My thought would be

23 that we'll bring on board the internal auditor as

24 soon as practical, assuming he accepts the job,

25 and has time to move his family and do those

1 things. So we are talking about probably even

2 after the holidays. Most people don't like to

3 pick up and move on the 24th of December.


5 don't know when he can start.

6 GENERAL MILLIGAN: My suggestion would be we

7 go ahead and move toward establishing the audit

8 committee effective 7 January. And in the

9 meantime, the trustees serve as the audit

10 committee as required.


12 GOVERNOR BUSH: Sounds like a plan. Thank

13 you all.

14 (The proceedings concluded at 11:45 a.m.)




















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

10 was authorized to and did stenographically report the

11 proceedings herein, and that the transcript is a true

12 and complete record of my stenographic notes.

13 I further certify that I am not a relative,

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

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 November, 2002.



22 ______________________________