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                                T H E   C A B I N E T

                          S T A T E   O F    F L O R I D A



                              DIVISION OF BOND FINANCE
                                  BOARD OF TRUSTEES
                            STATE BOARD OF ADMINISTRATION

                         The above agencies came to be heard before
               THE FLORIDA CABINET, Honorable Governor Bush presiding,
               in the Cabinet Meeting Room, LL-03, The Capitol,
               Tallahassee, Florida, on Thursday, March 13, 2003
               commencing at approximately 9:35 a.m.

                                    Reported by:

                                  SANDRA L. NARGIZ

                          Registered Professional Reporter
                              Registered Merit Reporter
                             Certified Realtime Reporter

                         ACCURATE STENOTYPE REPORTERS, INC.
                                   100 SALEM COURT
                       TALLAHASSEE, FL  32301   (850)878-2221



                         Representing the Florida Cabinet:

                         JEB BUSH

                         CHARLES H. BRONSON
                         Commissioner of Agriculture

                         CHARLIE CRIST
                         Attorney General

                         TOM GALLAGHER
                         Chief Financial Officer

                                       * * *


                                      I N D E X

               (presented by Ben Watkins, Jr.)

               ITEM                  ACTION                 PAGE

               1                     Approved                 4
               2                     Approved                 4

               (presented by Teresa Tinker )
               ITEM                  ACTION                 PAGE

               1                     Approved                 5
               2                     Approved                 5

               BOARD OF TRUSTEES
               (Presented by David Struhs)
               ITEM                  ACTION                 PAGE

               1                     Approved                12
               2                     Approved                15
               3                     Approved                28
               4                     Approved                33
               5                     Deferred                45
               6                     Withdrawn               78
               7                     Withdrawn               78
               8                     Deferred                78
               9                     Withdrawn               78

               (Presented by Coleman Stipanovich)

               ITEM                  ACTION                 PAGE

               1                     Approved                79
               2                     Discussion only         79
               3                     Approved                79
               4                     Approved                80

               CERTIFICATE OF REPORTER                       81


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

           2          (The agenda items commenced at 9:40 a.m.)

           3             GOVERNOR BUSH:  Division of Bond Finance.

           4        The next Cabinet meeting is March 25, 2003, by the

           5        way, here in the Cabinet room.

           6             CFO GALLAGHER:  Motion on the minutes.

           7             GOVERNOR BUSH:  Moved and seconded.  Without

           8        objection, the item passes.

           9             Item 2.

          10             MR. WATKINS:  Item 2 is a resolution

          11        authorizing the issuance and competitive sale of

          12        up to $455 million in PECO refunding bonds.

          13             CFO GALLAGHER:  Motion.

          14             COMMISSIONER BRONSON:  Second.

          15             GOVERNOR BUSH:  Moved and seconded.  Without

          16        objection, the item passes.










           1             GOVERNOR BUSH:  Florida Land and Water

           2        Adjudicatory Commission, commonly known as FLAWAC.

           3             MS. TINKER:  Item number 1, recommend

           4        approval of the minutes of the October 22, 2002,

           5        meeting.

           6             GOVERNOR BUSH:  Is there a motion on item 1?

           7             COMMISSIONER BRONSON:  Motion.

           8             CFO GALLAGHER:  Second.

           9             GOVERNOR BUSH:  Moved and seconded.  Without

          10        objection, the item passes.

          11             Item 2.

          12             MS. TINKER:  Item 2, recommend approval of

          13        the minutes of the November 26, 2002, meeting.

          14             CFO GALLAGHER:  Motion on 2.

          15             COMMISSIONER BRONSON:  Second.

          16             GOVERNOR BUSH:  Moved and seconded.  Without

          17        objection, the item passes.

          18             MS. TINKER:  Item 3, recommend approval of

          19        the draft final order denying petitioner's

          20        application for a notice of proposed change.

          21             We have two speakers here on this issue,

          22        Governor and Cabinet.  The first speaker is

          23        Andrew Byrne, representing the petitioner, Bay

          24        Point Club, Incorporated.

          25             MR. BYRNE:  Thank you.  Members of the

           1        Commission, my name Andrew Byrne, I represent the

           2        Bay Point Club, Inc.  I am here to urge you to

           3        reject the proposed recommended order.

           4             We have filed exceptions in the case and,

           5        of course, I am relying on every one of them;

           6        but the most important one is the existence of

           7        the Edgewater Beach case which is now the law

           8        in Florida.

           9             That law is controlling authority in the

          10        State of Florida and it's based on sound legal

          11        principles.

          12             Edgewater stands for the proposition that

          13        once a developer goes through the onerous

          14        process of getting a DRI development order,

          15        that he is vested.  And as long as any change

          16        he makes to his DRI does not substantially

          17        deviate from the DRI development order, he can

          18        build his project.

          19             Well, that law is based on sound legal

          20        principles and it's good for Florida.

          21             I submit to you that if Edgewater is not

          22        the law, then we are going to have a real risk

          23        that any developer, any investor, any lender is

          24        not going to want to finance a project that the

          25        rules could change midstream on.

           1             GOVERNOR BUSH:  Can I ask you a question?

           2             MR. BYRNE:  Yes, sir.

           3             GOVERNOR BUSH:  Standard deviation, didn't

           4        you all have a height limit that you're deviating

           5        from by five stories or six stories?  I am trying

           6        to remember, I think that was -- so doesn't --

           7        isn't that beyond the standard?  Isn't that what

           8        the Administrative Law Judge suggested?

           9             MR. BYRNE:  Governor, the Administrative Law

          10        Judge found that we did not substantially deviate,

          11        that our height increase -- and yes, sir, we are

          12        increasing the height -- did not substantially

          13        deviate.

          14             Because what the law provides, sir, is

          15        that as long as any change you make doesn't

          16        constitute a substantial deviation under the

          17        law, because there are lots of changes that go

          18        on with developments.  That's exactly what

          19        happened in Edgewater, the developer increased

          20        the height requirement, but it wasn't a

          21        substantial deviation.  Just like in our case.

          22             And the first DCA said, look, it's not

          23        fair to change the rules in midstream or after

          24        the fact.  As long as he doesn't legally

          25        substantially deviate, then he doesn't have to

           1        go through any more review, including any

           2        changes from the comp plan.

           3             That's exactly what we have.  I submit to

           4        the members that it is the law in Florida and

           5        it's fair.  And the proposed recommended order

           6        is in direct conflict with that.  It will not

           7        withstand First DCA review, and I urge the

           8        Commission to reject the recommended order.

           9        Thank you, sir.

          10             GOVERNOR BUSH:  Thank you.

          11             MS. TINKER:  The next speaker is Mr. Bob

          12        Apgar.

          13             Mr. Apgar is representing today Bay Point

          14        Community Association and several other

          15        intervenors that are property owners within the

          16        development.

          17             MR. APGAR:  Good morning, Governor, Members

          18        of the Cabinet.  I am Bob Apgar.  I represent, as

          19        Teresa said, several of the intervenors.  Mr.

          20        Richard Moore is here, he represents the

          21        association and my co-council is Ms. Sherry

          22        Spires.

          23             We are here, Governor, to ask you and

          24        Members of the Cabinet to approve the final

          25        order prepared by your staff which adopts the

           1        recommended order reached by the administrative

           2        law judge.  We think the records speaks for

           3        itself in this case, and we think your draft

           4        final order reaches the correct conclusion

           5        about the Edgewater case.

           6             The draft order says, The Edgewater court

           7        determined that only the original development

           8        rights approved under a 1982 DRI were vested

           9        from the requirements of the comprehensive

          10        plan.

          11             In this case, Governor, the original

          12        approved development on this property was 70

          13        units.  My clients have never quarreled with

          14        the developer's right to develop what was

          15        originally vested, 70 units and buildings up to

          16        five stories.

          17             Where we differ with Mr. Byrne is that we

          18        say the people who are trying to change the

          19        rules in this case is the developer, because

          20        they are trying to come in and get buildings

          21        approved up to 12 stories for 136 units.  And

          22        that's far beyond what was vested in the

          23        original development order.  So your draft

          24        order reaches the correct result.

          25             Edgewater doesn't apply here because the

           1        developer is seeking to exceed the original

           2        development rights by almost double.

           3             I will be happy to answer any questions

           4        about any other aspect of the case.

           5             CFO GALLAGHER:  The opposing counsel said

           6        that the District Court of Appeals, you are going

           7        to lose.  What's your counter to that?

           8             MR. APGAR:  Mr. Gallagher, we believe that

           9        the distinction that your final order makes is the

          10        correct distinction, and we believe the First

          11        District Court of Appeal will recognize that.

          12             The Edgewater was a vested rights case.

          13        This case isn't about vested rights.  This case

          14        is about exceeding the original development

          15        approval.

          16             The Edgewater case allowed the developer

          17        to return to what was originally approved.

          18        That's the big difference between these two

          19        cases.

          20             We believe the First District will

          21        recognize that distinction and that we will

          22        prevail.

          23             CFO GALLAGHER:  I move approval.

          24             COMMISSIONER BRONSON:  Second.

          25             GOVERNOR BUSH:  General?

           1             GENERAL CRIST:  Our office has looked at this

           2        a little bit and Jon Glogau is with us.  I think

           3        we are good shape, though, if you have any

           4        questions.

           5             GOVERNOR BUSH:  Is there any other

           6        discussion?  There is a motion to approve the

           7        FLAWAC recommendation and a second.

           8             All in favor say aye.

           9             THE CABINET:  Aye.

          10             GOVERNOR BUSH:  All opposed?  The motion

          11        passes.

          12             MS. TINKER:  Thank you, sir.














           1             GOVERNOR BUSH:  Board of Trustees.

           2             CFO GALLAGHER:  Motion on the minutes.

           3             COMMISSIONER BRONSON:  Second.

           4             CFO GALLAGHER:  November 26 and December 11.

           5             GOVERNOR BUSH:  There are motions on items 1

           6        and 2?  No?

           7             CFO GALLAGHER:  Item 1 is November 22 and

           8        December 11.

           9             GOVERNOR BUSH:  There is a motion on item 1

          10        to approve the minutes for November 26 and

          11        December 11 of last year, and a second.  The item

          12        passes without objection.

          13             Item 2.

          14             MR. STRUHS:  Governor, if I might, before we

          15        get into the published agenda here, share with you

          16        some of the results from the roundtable that you

          17        all participated in just last week.

          18             And, first of all, I wanted to publicly

          19        thank you on the record because it was a great

          20        opportunity for us and we appreciate the fact

          21        that Mr. Crist had the idea and that you all

          22        participated.

          23             CFO GALLAGHER:  Would you put mike more

          24        towards your mouth?

          25             MR. STRUHS:  One of the things I promised to

           1        you at the end of the roundtable discussion is

           2        that we would try to summarize all the new ideas

           3        that were surfaced during that meeting.

           4             We have done that.  We have done that in a

           5        draft format.  What I would like to be able to

           6        do is offer this to you and to all the Cabinet

           7        aides, ask for you to review this, compare it

           8        to your own recollections of the ideas that

           9        were surfaced during that roundtable and -- can

          10        you hear me or not?

          11             GOVERNOR BUSH:  Yes, we can hear you.  We are

          12        just talking.

          13             (Short pause.)

          14             We were just talking about the lights and

          15        they just went on.

          16             CFO GALLAGHER:  We were happy they weren't

          17        on.

          18             GENERAL CRIST:  I would like to thank

          19        Secretary Struhs and his staff for helping us out

          20        last week and presenting these suggestions to us.

          21        I know it's a lot of work, we really appreciate

          22        it.

          23             MR. STRUHS:  It was very worthwhile, though,

          24        and what I ask all you to do, both the principals

          25        and the Cabinet aides, is to review the list.  If

           1        you think we missed anything, get back to us and

           2        let us know.  We are going to make a concerted

           3        effort to try to develop and pursue some of these

           4        ideas.

           5             One of the ideas that came out of that

           6        discussion that I think everybody warmed up to

           7        was the idea of creating more private/public

           8        partnerships.  And to that end, what I would

           9        like to do, with your permission, is to take

          10        our director of the Division of State Lands,

          11        Eva Armstrong, put her on a short-term

          12        executive loan program where she will actually

          13        spend several weeks working with the Trust for

          14        Public Lands in their office learning some of

          15        the techniques that they use on the private

          16        sector side to make these things go more

          17        efficiently and some of the strategies they

          18        use.

          19             Is Eva here?  Because Eva works not only

          20        for me, but because she works also for you, I

          21        would like to get your okay to work out these

          22        arrangements for that kind of executive

          23        exchange program, because I think it will

          24        really build on the momentum coming out of the

          25        discussion to forge these stronger

           1        private/public partnerships.

           2             GOVERNOR BUSH:  Anybody have any objection to

           3        that?

           4             MR. STRUHS:  Thank you.

           5             Item 2 is an option agreement for the

           6        Rieli property in the Florida Keys Ecosystem,

           7        Florida Forever Project.  Recommend approval of

           8        the item.

           9             CFO GALLAGHER:  Motion on 2.

          10             COMMISSIONER BRONSON:  Second.

          11             GOVERNOR BUSH:  Moved and seconded.  Without

          12        objection, the item passes.

          13             MR. STRUHS:  Item 3 is the Nature

          14        Conservancy's charitable trust assignment of an

          15        option agreement for Lake Wales Ridge Ecosystem

          16        Project.  This is known as Mountain Lake Cutoff

          17        Property.  Recommend approval of this.

          18             And there are a number of individuals who

          19        I think would like to speak to this item.  We

          20        might actually have I believe -- is this the

          21        one we have the video presentation on?

          22             We have a short video presentation, so if

          23        you would turn your attention to the screen,

          24        please.

          25             (Playing video.)

           1             COMMISSIONER BRONSON:  Governor, I think that

           2        this is the piece that the Game Commission will be

           3        in charge of managing; is that correct?

           4             GOVERNOR BUSH:  Downtown Lake Wales, why

           5        would the Game Commission --

           6             COMMISSIONER BRONSON:  Unless I am mistaken,

           7        I think they are supposed to be the managing

           8        agency, and I am trying to figure out why maybe it

           9        wasn't delegated to Parks and Recreations or

          10        something where it might be used in such a way in

          11        a more populated area.

          12             GOVERNOR BUSH:  I hope there is no hunting

          13        going on in this thing.

          14             CFO GALLAGHER:  Forestry could do it except

          15        there is no forest, right?

          16             COMMISSIONER BRONSON:  If there is, I am sure

          17        the group that you just saw would be wanting to

          18        change your mind.

          19             GOVERNOR BUSH:  Where did the presenter go?

          20             CFO GALLAGHER:  He is passing out papers.

          21             MR. STRUHS:  I am making the coffee, I'm

          22        pouring the coffee.

          23             CFO GALLAGHER:  Are you little short of

          24        personnel over at that place?

          25             MR. STRUHS:  Trying to do more with less,

           1        sir.

           2             CFO GALLAGHER:  Maybe privatized the paper

           3        passing and the guy didn't show up?

           4             GOVERNOR BUSH:  Yes, sir, Secretary Struhs,

           5        can you answer the question of Commissioner

           6        Bronson?

           7             MR. STRUHS:  Yes, sir, the question was, I am

           8        sorry?

           9             COMMISSIONER BRONSON:  If I am not mistaken,

          10        isn't this the piece that was going to be managed

          11        by the Game and Fish Commission?

          12             MR. STRUHS:  Yes, sir.

          13             COMMISSIONER BRONSON:  And I was tying to

          14        figure out, since it's in a fairly populated area,

          15        why maybe Parks and Recreation or someone isn't

          16        doing the program so people are going to have a

          17        chance to go through this area and use it as

          18        teaching and other issues.

          19             MS. ARMSTRONG:  Good morning, Eva Armstrong

          20        with State Lands.

          21             Fish and Wildlife is going to manage it

          22        because of the resources on the property, it

          23        won't be actively managed as a park by

          24        Recreation and Parks.

          25             MR. STRUHS:  He is asking why not?

           1             GOVERNOR BUSH:  These are wardens, aren't

           2        they?  These are people that are after poachers.

           3             MS. ARMSTRONG:  You have threatened and

           4        endangered species, and Fish and Wildlife manage

           5        for the wildlife attributes at the site.  That's

           6        why.

           7             CFO GALLAGHER:  Let me ask you a question.

           8        We have got Florida bonamia, britton's beargrass,

           9        scrub bay, hairy jointweed, paper-like nailwart,

          10        three variations of scrub oak and a Florida scrub

          11        lizard.

          12             GOVERNOR BUSH:  One?

          13             CFO GALLAGHER:  There is probably more than

          14        one.  I hope there is at least two, or there won't

          15        be any.  Are these endangered?

          16             MS. ARMSTRONG:  Some of those are, or

          17        threatened.

          18             CFO GALLAGHER:  How do you -- I thought we

          19        don't let people build on areas where you got

          20        these endangered creatures.  So how is somebody

          21        going to do all this stuff that they are planning

          22        to do if we don't buy it?

          23             MS. ARMSTRONG:  It's called mitigation.  All

          24        they have to do is mitigate enough, and they can

          25        destroy wetlands.  Think of all the gopher

           1        tortoises that are moved.

           2             CFO GALLAGHER:  So the blue area, the

           3        conservation area, is the mitigation for this?

           4             MS. ARMSTRONG:  No, sir.  They are just -- we

           5        are buying the property so they won't have to

           6        move.  You see what I am saying?

           7             CFO GALLAGHER:  I am saying if we don't buy

           8        the property, my question is how do they build all

           9        this stuff they got it zoned for if we don't buy

          10        the property and you got all these things there

          11        that are protected?

          12             MS. ARMSTRONG:  They would have to mitigate

          13        for it, and I don't know what the mitigation plan

          14        would be.

          15             CFO GALLAGHER:  It would cost money.

          16             MS. ARMSTRONG:  Yes.

          17             CFO GALLAGHER:  Is that figured in the price

          18        here?

          19             MS. ARMSTRONG:  No -- it is figured in the

          20        price -- mitigation for the development, yes --

          21        because it would be reduced from the developed --

          22        added to the cost of the development of the site.

          23             GOVERNOR BUSH:  Why isn't this a community

          24        trust property, out of curiosity?  It's in the

          25        middle of downtown.  It would be a smaller

           1        community.

           2             MS. ARMSTRONG:  Yes, sir.  I think it's

           3        because if you remember the Lake Wales Ridge

           4        Project, it covers a large area, but it's small

           5        parcels within those areas.  It's because of the

           6        resources that are on it.  It could certainly be

           7        valued as a Florida Communities Trust Project, but

           8        it was on our list, so we negotiated it.

           9             GOVERNOR BUSH:  When was the property

          10        rezoned?

          11             MS. ARMSTRONG:  It has had a development plan

          12        on it for --

          13             MR. FOUNTAIN:  Part of the property has

          14        been --

          15             MS. ARMSTRONG:  This is Keith Fountain with

          16        Nature Conservancy.

          17             GOVERNOR BUSH:  Welcome.  This is a

          18        continuation of our workshop.

          19             MR. FOUNTAIN:  Yes, it is.  Okay.  Good

          20        morning, Governor, Cabinet members.  I would like

          21        to try to touch on all the questions that have

          22        been raised so far, if I can remember them.

          23             The Lake Wales Ecosystem Project, as to

          24        management, Fish and Wildlife Commission is the

          25        primary manager.  There is one site that is

           1        managed by Rec and Parks in the project.  It's

           2        down in Highlands County, and the Division of

           3        Forestry manages several other sites.

           4             On Commissioner Gallagher's question to do

           5        with the set aside.  The future land use

           6        designation that this property had a couple of

           7        years ago of conservation required that

           8        specifically two natural communities be

           9        protected, scrub and wetlands.  But the other

          10        communities and other communities that are

          11        valuable to you were opened for development

          12        such as Sand Hill and other communities.

          13             So what the landowner did is they went

          14        through a -- and I believe, Governor, this will

          15        address your question -- this property in 19 --

          16        excuse me, 2001, the east side of the property,

          17        east of U.S. 27, was zoned for planned

          18        development and the uses that you see there in

          19        front of East Bay.

          20             GOVERNOR BUSH:  Where most of the land is?

          21             MR. FOUNTAIN:  Right, the bulk of the

          22        property, 165 acres was already zoned for

          23        commercial/residential mixed residential uses.

          24             The west side of 27, 15 acres, was zoned

          25        rural residential and it was in Polk County, it

           1        was not annexed into the city.  What happened

           2        in 2001 is two things.

           3             The property east of the road had its

           4        future land use changed as was dictated by that

           5        conservation label, so that the future land

           6        uses matched the underlying zoning.  In other

           7        words, what they did, the landowner came in

           8        with a develop plan, protected the scrub and

           9        wetlands, but not other communities such as

          10        Sand Hill and targeted those for development.

          11             West of the road you did have three things

          12        happen.  The property was annexed into the

          13        city, the property was zoned planned

          14        development like the portion east of the road,

          15        and the comprehensive plan was changed

          16        accordingly.

          17             GOVERNOR BUSH:  For my -- back to the

          18        question of this issue of counties or

          19        municipalities rezoning up, increasing development

          20        rights, and then coming -- and the owner coming or

          21        the property owner coming to us seeking our

          22        purchase of the property, that's not the case in

          23        this property because it already had embedded

          24        development rights, those were modified when it

          25        came for its development, came and submitted his

           1        development plan.

           2             MR. FOUNTAIN:  That's exactly the case.  This

           3        property, the part east of U.S. 27, 10 years ago

           4        when we first started working with this landowner,

           5        had a zoning that permitted the use you see before

           6        you today and had a future land use label that

           7        literally said when you looked at it, go get your

           8        future land use changed and protect the areas we

           9        are saying protect, which I believe is the light

          10        blue on your drawing, and change your future land

          11        use so it matches your zoning on the remainder.

          12             GOVERNOR BUSH:  Treasurer?

          13             CFO GALLAGHER:  What does the City of Lake

          14        Wales -- what city is this?

          15             MR. FOUNTAIN:  Lake Wales.

          16             CFO GALLAGHER:  What is the City of Lake

          17        Wales Commission, are they in favor of this?

          18             MR. FOUNTAIN:  Yes, I believe you got a

          19        letter of support or DEP got a letter of support

          20        from the city manager of the City of Lake Wales.

          21             CFO GALLAGHER:  This property is going to

          22        come off their tax roll?

          23             MR. FOUNTAIN:  Yes, but they are very

          24        supportive of this project.  It fits into a

          25        Greenway network that they have -- that the local

           1        community has been working on for probably 15 to

           2        20 years.

           3             GOVERNOR BUSH:  How?  Where does it connect?

           4             MR. FOUNTAIN:  It connects with -- on the

           5        eastern side of this site, you have an abandoned

           6        CSX right-of-way that goes down alternate U.S. 27

           7        and down through the City of Lake Wales.

           8             Years ago they secured the donation of

           9        actually I guess what was the old train station

          10        in Lake Wales, CSX donated that.  It's now the

          11        Depot Museum.  So they have done quite a bit of

          12        work.

          13             GOVERNOR BUSH:  Is this like a bike trail

          14        now?

          15             MR. FOUNTAIN:  I don't know if it's complete,

          16        I think it's mostly foot path.

          17             GOVERNOR BUSH:  Why would this not be a

          18        community trust, whatever it's called now?

          19             MR. FOUNTAIN:  We addressed that.  About five

          20        or six years ago we took a hard look at whether

          21        Florida Communities Trust was available as the

          22        funding mechanism for this site and ran into

          23        basically two issues.

          24             One, the City of Lake Wales was over the

          25        10,000 population threshold that allowed them

           1        to get a 100 percent grant, and they didn't

           2        have money to contribute to the purchase of the

           3        property.

           4             CFO GALLAGHER:  Are we allowed to do that?

           5        Can we contribute?  In other words, our part would

           6        be the city's percentage and let the money come

           7        from --

           8             MR. FOUNTAIN:  My understanding is that

           9        Florida Communities Trust cannot use as matching

          10        funds other bond derived dollars.

          11             CFO GALLAGHER:  Okay.

          12             MR. STRUHS:  Keith is absolutely right, but I

          13        think there is another reason.

          14             The Lake Wales Ridge project is actually a

          15        collection of a lot of different parcels, it's

          16        not just this one parcel.

          17             The word that the experts use is mosaic,

          18        mosaic meaning that there are pieces of this

          19        remaining ecosystem that they are trying to

          20        preserve.  They can't get the large swat that

          21        we would see in other areas, so they have this

          22        mosaic approach.  That's why it fell under this

          23        project rather than Florida Communities Trust.

          24             And I would also point out that this

          25        project was approved and put on that plan

           1        before the formula was changed and more of the

           2        resources were channelled into the Florida

           3        Communities Trust Program.

           4             It's a close call, but we are comfortable

           5        with this approach.

           6             GOVERNOR BUSH:  Can we talk about valuation?

           7        Can you talk about valuation?

           8             MR. FOUNTAIN:  Yes.  What the appraisers did,

           9        just in a nutshell, is they looked at the

          10        different uses that you see before you in the

          11        development plan and they valued those uses.  West

          12        of U.S. 27 the appraiser, both appraisers decided

          13        that -- and you can see it and you can see it from

          14        the aerial photo, this is a very commercial area.

          15        The property with U.S. 27 would sell immediately.

          16        So the retail value of those parcels on the west

          17        side -- or excuse me, it's just one parcel, the

          18        one parcel west of 27 was valued accordingly.

          19             East of U.S. 27 you had assemblage of

          20        uses, some on U.S. 27, some with frontage not

          21        on U.S. 27.  And the appraiser came up with

          22        retail value of those, discounted that value,

          23        added it to the property west of 27.

          24             GOVERNOR BUSH:  Discounted it for?

          25             MR. FOUNTAIN:  Discounted for time, that it

           1        would take a period of years to sell out and

           2        develop all of the property west of U.S. 27.

           3             Your purchase price that you got today is

           4        82 percent of the appraised value on the

           5        property east of 27 and it's 42 percent of the

           6        value on the property west of 27.  Excuse me,

           7        the first number 85 percent.

           8             CFO GALLAGHER:  When you say 80 percent of

           9        value, you are saying the reason for that is

          10        because of the time to develop it?

          11             MR. FOUNTAIN:  No, that's just your purchase

          12        price that's been negotiated.  This is a bargain

          13        negotiated purchase for the Trustees.

          14             East of the 27, the appraisers, the value

          15        you see before you is not a retail value.  It

          16        is a discounted value, acknowledging the fact

          17        that to develop every portion of this site

          18        would take a period of years.

          19             GOVERNOR BUSH:  What kind of absorption rate

          20        for all this stuff going on in Lake Wales?  I

          21        haven't been there in a while.

          22             MR. FOUNTAIN:  I would have to pull the

          23        appraisal.  I think it was five-plus years.

          24             GOVERNOR BUSH:  Any other discussion?

          25             MR. FOUNTAIN:  Six years is what I am

           1        hearing.

           2             CFO GALLAGHER:  Six plus?

           3             GOVERNOR BUSH:  Six?

           4             CFO GALLAGHER:  There is no way somebody is

           5        going to build this out and get it --

           6             MR. FOUNTAIN:  Well, a couple of things just

           7        happened recently.  Two years ago you now have a

           8        signalized intersection right there on the north

           9        side of the site.

          10             CFO GALLAGHER:  That will make a difference.

          11             MR. FOUNTAIN:  The development in this area,

          12        the north side of the site are car dealerships

          13        that have been expanding; you see the Eagle Ridge

          14        Mall the last five or six years; you now have Home

          15        Depot that has come in; Wendy's, Denny's, they are

          16        all piling in now.  And this is the remaining

          17        large piece within this very urban core.

          18             GOVERNOR BUSH:  Not very urban.

          19             MR. FOUNTAIN:  This is U.S. 27.

          20             CFO GALLAGHER:  For Lake Wales it's pretty

          21        urban.  For Polk it's urban.

          22             I will move the issue, item 3.

          23             COMMISSIONER BRONSON:  Second.

          24             GOVERNOR BUSH:  Moved and seconded.  Any

          25        other discussion?  The item passes without

           1        objection.  Thank you.

           2             MR. STRUHS:  Item 4, we recommend approval.

           3        This is acquisition of property from St. Joe

           4        Timberland along the Wacissa River, and we

           5        recommend approval and can answer any questions

           6        you might have.

           7             CFO GALLAGHER:  Now you read the Auditor

           8        General's report?

           9             MR. STRUHS:  I read it carefully, sir.

          10             CFO GALLAGHER:  And we have taken this into

          11        account here, and we are not going to get spanked

          12        again for overpaying?

          13             MR. STRUHS:  I think the Auditor General's

          14        conclusions in the first instance were inaccurate

          15        and our response to that report, which published

          16        part of it I think explains why.  But we are very

          17        confident that these are appropriate values.  It

          18        does include appropriately the value of the timber

          19        on the land because it is, after all, timberland.

          20        So we are confident of that.

          21             If you would like more detail, we actually

          22        prepared something we can --

          23             CFO GALLAGHER:  I wanted to make sure you are

          24        aware and took that and considered the report into

          25        consideration when you --

           1             GOVERNOR BUSH:  General Crist.

           2             GENERAL CRIST:  The Treasurer brings up a

           3        good point regarding the Auditor General.  And it

           4        sounds like you have a difference of opinion.  Who

           5        audits the Auditor General, if anyone?

           6             GOVERNOR BUSH:  Nobody.

           7             GENERAL CRIST:  Probably not.

           8             GOVERNOR BUSH:  What happens is they make

           9        their report.  This is a monitored Auditor

          10        General?

          11             MR. STRUHS:  Auditor General.

          12             GOVERNOR BUSH:  And then the entity that

          13        looked at it answers it and the legislature then

          14        either can change -- get involved, I guess, or

          15        they don't.

          16             GENERAL CRIST:  Just so long as there is a

          17        check and balance there.

          18             CFO GALLAGHER:  The idea is that the agency

          19        that the Auditor General gives an answer to gives

          20        a heads up that there may be something that you

          21        are doing that is incorrect, and you get to look

          22        at it.  If you go through it and you say our side

          23        thinks it's correct and we did these things we

          24        make it that way, lawful, et cetera, that's what

          25        your answer is and the legislature can make a

           1        change to tell you to do that other way or change

           2        to tell you to do it that way or they leave it the

           3        way it is.

           4             GOVERNOR BUSH:  I think the issue here is

           5        that the Auditor General used a concept called net

           6        acreage, basically, usable acreage; they didn't

           7        include the forced revalue of the property which

           8        is foreign to -- I don't know who is telling the

           9        Auditor General that timber doesn't count.  Counts

          10        all the time.  Am I right, Commissioner?

          11             COMMISSIONER BRONSON:  Trying to determine

          12        who is right and who is wrong on these issues is a

          13        little like -- that's why I was taken back as to

          14        why this thing on the Lake Wales Ridge was going

          15        to be by Game and Fish.

          16             GOVERNOR BUSH:  Because it's part of a

          17        mosaic.  I am sure the Game and Fish boys and

          18        girls appreciate that.

          19             COMMISSIONER BRONSON:  It's hard sometimes to

          20        make a determination when you are hearing

          21        conflicting issues, but I guess that's why we are

          22        here, we are elected to make -- be the referees of

          23        this whole thing.  So that's why I am trying to

          24        take in as much and follow the right path here.

          25             GOVERNOR BUSH:  One of the questions, a

           1        broader question concerns -- Treasurer Gallagher

           2        asked about Lake Wales, whether they were

           3        supportive of this.

           4             Is Jefferson County supportive of this?

           5        Are there other strategies that we can use to

           6        keep some of this property on the tax rolls?

           7             I don't know what Jefferson County's tax

           8        rolls are.  Do we have other options to keep

           9        control over the property forever but allow

          10        some, because of the ownership question, allow

          11        some taxation to take place?

          12             COMMISSIONER BRONSON:  Governor, if I could,

          13        from the pieces that the Department of

          14        Agriculture, Division of Forestry manage, where

          15        there is state lands and there has to be timber

          16        taken out for whatever reason -- disease

          17        potential -- planted pines where they are so thick

          18        they have to be thinned for the health of the rest

          19        of the trees, and so forth; when that happens, on

          20        those pieces, the counties get I think 15 percent

          21        of the monies that are taken off of that property

          22        that's been managed by the Division, goes back to

          23        the counties to be used for their issues.

          24             GOVERNOR BUSH:  That's good.

          25             MR. STRUHS:  Governor, on this particular

           1        item, early on in the negotiations with St. Joe

           2        Timber, the department had proposed the idea of a

           3        conservation easement which would have allowed the

           4        property to stay on the tax rolls in Jefferson

           5        County, essentially buying up just some of the

           6        development rights, but allowing it to continue to

           7        be used as timberland.

           8             And in this instance, the seller was not

           9        interested in pursuing that option.  They

          10        wanted to have a fee simple transaction, but we

          11        did propose a conservation easement.

          12             GOVERNOR BUSH:  Any other discussion?  The

          13        item is --

          14             CFO GALLAGHER:  Motion on 4.

          15             COMMISSIONER BRONSON:  Second.

          16             GOVERNOR BUSH:  -- moved and seconded without

          17        objection.  Item passes.

          18             MR. STRUHS:  Item 5, this item relates to

          19        Southern Golden Gate Estates.  It continues a

          20        pattern of authorizing the department to take some

          21        extraordinary measures to try to acquire these

          22        parcels.

          23             Item 5 is dealing only with undeveloped

          24        parcels.  These parcels range in acreage

          25        between one and two and a half acres.  They are

           1        all in the Southern Golden Gate Estates

           2        subdivision.

           3             We recommend approval of this.  It's

           4        consistent with some of the items you approved

           5        before.

           6             Distinguishing it, I will point out, from

           7        item 6 and 7, which are homesteaded properties

           8        and obviously we would like to deal with

           9        individually.

          10             GOVERNOR BUSH:  Is this the one where people

          11        are buying tax deeds?

          12             MR. STRUHS:  I don't think so.  It was?  Yes,

          13        it is.  I am sorry.

          14             GOVERNOR BUSH:  Is this the property where

          15        the county agreed to subdivide the properties?

          16             MR. STRUHS:  Yes.

          17             GOVERNOR BUSH:  So these are properties that

          18        had been on our list to purchase for the last

          19        umpteen years, a speculator comes in and buys on

          20        the courthouse step properties, goes to Collier

          21        County to get it subdivided and then we are now

          22        going to purchase these properties at a higher

          23        value because of that action; through eminent

          24        domain?  That was a rhetorical question.  Maybe I

          25        am wrong, but --

           1             MR. STRUHS:  No, I think you are correct.

           2             GOVERNOR BUSH:  So theoretically, if we are

           3        buying property based on potential development

           4        rights or the rights inherent on the property,

           5        maybe I am misunderstanding it, but we have gone

           6        from whatever it was per acre to four times more

           7        per acre.  Why doesn't Collier County pay for

           8        three of those four?

           9             MS. ARMSTRONG:  We are offering 125 percent.

          10             MR. STRUHS:  In the past in Southern Golden

          11        Gate Estates you have authorized us to offer in

          12        excess of the 100 percent appraised value as a

          13        means of clearing these things out.

          14             GOVERNOR BUSH:  I understand.  That's not my

          15        question.

          16             My question is that we have an area of the

          17        state that we believe is important to preserve,

          18        it's actually tied to the largest, most

          19        important restoration project in the country.

          20        So no one is suggesting otherwise, that this is

          21        not an important thing to do.

          22             But that in anticipation of the eventual

          23        purchase of this, some wildly entrepreneur has

          24        gone and gotten these properties.  Why didn't

          25        we buy the tax liens?

           1             MS. ARMSTRONG:  Because tax deeds were not

           2        the -- the price was higher than your delegation

           3        does.  When we did the emergency procedures

           4        policy, we specifically --

           5             GOVERNOR BUSH:  The tax deeds were higher?

           6             MS. ARMSTRONG:  Higher than your delegation

           7        to us.

           8             GOVERNOR BUSH:  Than 125 percent of the

           9        appraised value?

          10             MS. ARMSTRONG:  Yes.

          11             GOVERNOR BUSH:  No, try that again.

          12             CFO GALLAGHER:  How long --

          13             GOVERNOR BUSH:  Why would someone do that?

          14             MS. ARMSTRONG:  This is the Judy Warwick, she

          15        has managed the bulk of these acquisitions.

          16             GOVERNOR BUSH:  Come explain this to us.

          17        It's a new concept.

          18             MS. WARWICK:  I know it is.  I am just as

          19        frustrated in understanding this.

          20             Basically what -- we have been given the

          21        authority to buy at 100 percent of the DSL

          22        approved value.

          23             GOVERNOR BUSH:  English, what's DSL?

          24             MS. WARWICK:  Division of State Land value,

          25        the approved value.  When we go to the tax deed

           1        sales, we have used the delegated authority that

           2        you gave us to offer 5,000 or 125 percent above

           3        that, just like we were treating any of the other

           4        landowners.

           5             So when we go to these tax deed sales,

           6        then the maximum bid that we can offer would be

           7        what has been delegated to us which is the

           8        approved value plus the incentive.  And what

           9        has happened is we had people who have come and

          10        outbid us because we don't have any additional

          11        authority.

          12             And then they would take their tax deed

          13        that they receive at the sale.  And we have

          14        inquired to the property appraiser's office why

          15        they are allowing this, and they said it's

          16        because it's privately owned and, according to

          17        their rules and regulations, anyone can

          18        subdivide their 5-acre, whatever the property

          19        is, based upon their rules that they have for

          20        the county.

          21             And then they took this 5 acres, and they

          22        split it up into the 1.14, 1.25 parcels; so

          23        what was once one parcel, now we have four.

          24             COMMISSIONER BRONSON:  Governor, can I ask

          25        this question then?

           1             As I remember, and I think I saw quite a

           2        bit of this while I was in the Senate, I think

           3        over and over and over again, we saw some of

           4        this, how long has the initial characterization

           5        of the properties been in place?  It's been

           6        there a number of years.  In other words, these

           7        parcels have been out there for a number of

           8        years and the authority to subdivide has been

           9        there with it for a number of years; is that

          10        correct?

          11             MS. WARWICK:  That's my understanding, yes,

          12        sir.

          13             COMMISSIONER BRONSON:  That's why they were

          14        come in and outbidding the state on this.  Because

          15        all those issues were already taken care of, all

          16        they had to do was outbid the state.

          17             GOVERNOR BUSH:  From a marketplace point of

          18        view, it sounds like they were buying based on the

          19        automatic ability to subdivide.  You were trying

          20        to buy based on the appraisal as if it wasn't

          21        subdivided.

          22             MS. WARWICK:  It's my understanding that as

          23        they looked at it, they said this would be an

          24        opportunity for me to get two or three times

          25        because I --

           1             GOVERNOR BUSH:  Because they automatically

           2        could subdivide it whereas you were trying to buy

           3        it based on --

           4             MS. WARWICK:  -- current status.  We were not

           5        anticipating this.  This is something that's come

           6        up.

           7             CFO GALLAGHER:  Let me ask this.  This would

           8        be an obvious place for the Nature Conservancy to

           9        come in and be able to bid.  You got limited to

          10        what you can bid, what is it 25,000 or something?

          11             MR. STRUHS:  125 percent.

          12             MS. WARWICK:  We have 5,000 or 125 percent

          13        above the value, is what our maximum bid.

          14             CFO GALLAGHER:  The value is based upon?

          15             MS. WARWICK:  The value is based upon per

          16        acre value, depending on where it's located in the

          17        project.

          18             CFO GALLAGHER:  Recognizing that we are a

          19        buyer in this, why wouldn't the Nature Conservancy

          20        come in and buy something like this, realizing it

          21        can be subdivided, and run the guy off, so at

          22        least we are paying ourselves instead of giving

          23        somebody a bunch of property?

          24             MS. WARWICK:  Number one, I have not

          25        anticipated this to be a problem.  It's just

           1        basically come up.

           2             We have a representative from the

           3        conservancy of Southwest Florida that does

           4        attend the tax deeds for us, the sales for us,

           5        and that would be something I could approach

           6        them as an alternative.

           7             CFO GALLAGHER:  I would rather pay the Nature

           8        Conservancy to do this than pay basically a

           9        speculator; because these people are buying this

          10        knowing they don't have to sell it to four

          11        homeowners; they can dump it on us with nobody

          12        building anything.

          13             And the reason that the county is doing

          14        the subdivision and approving them all is

          15        because they are hoping somebody will build a

          16        house there and pay taxes, I would guess.

          17             MS. WARWICK:  We can't second guess.

          18             GOVERNOR BUSH:  We need to start second

          19        guessing Collier County.  We are -- this is

          20        incredible.  We are taking action to purchase

          21        under a power that makes me just get queazy,

          22        property where the local government is -- I am not

          23        sure -- if they are subdividing, I assume they do

          24        want people to buy homes.  Doesn't anybody see the

          25        bizarre nature of this?

           1             If Washington came down, parachuted down

           2        here and sat in on these Cabinet meetings and

           3        said, What is going on?  Local government,

           4        state government, all the rules, I mean

           5        everybody can explain it, but it makes no

           6        sense.  In terms of real world common sense to

           7        have our partner in this, a county government

           8        going on one way, we are going on another, and

           9        then we are using eminent domain powers which

          10        is the part that just -- I don't know.

          11             The only good news about this is it's not

          12        a lot of money.  If you added three zeros to

          13        this, I can assure you that I would not be -- I

          14        wouldn't be supporting this.  I don't support

          15        it now.

          16             Can't we talk to the county, David, about

          17        this?

          18             MR. STRUHS:  Yes, sir.

          19             GOVERNOR BUSH:  Is there someone from the

          20        county here?

          21             MR. STRUHS:  No, I don't believe so.

          22             GOVERNOR BUSH:  You were smart to leave

          23        because it was not your fault and --

          24             CFO GALLAGHER:  You are catching the heat,

          25        it's not your fault.

           1             GOVERNOR BUSH:  Very good instincts.  Get

           2        Struhs back up there.

           3             CFO GALLAGHER:  That's the man that takes the

           4        heat.

           5             MR. STRUHS:  I think you hear in our own

           6        voices that frustration that --

           7             GOVERNOR BUSH:  I did, I heard it.  It

           8        mirrors mine.

           9             MR. STRUHS:  I think had we done a better job

          10        of anticipating this phenomenon, we would have

          11        done something differently.

          12             GOVERNOR BUSH:  How many properties are there

          13        in this universe that --

          14             MR. STRUHS:  I can't remember, many.

          15             GOVERNOR BUSH:  600s?

          16             MR. STRUHS:  I mean, in the entire Southern

          17        Golden Gate Estates district --

          18             GOVERNOR BUSH:  That we have committed to

          19        purchase over a period of time, how many are left?

          20             MS. WARWICK:  342 left.

          21             GOVERNOR BUSH:  Oh, God.

          22             MS. ARMSTRONG:  19,000 lots.

          23             MR. STRUHS:  19,000 lots, approximately 340

          24        more to go.

          25             GOVERNOR BUSH:  340 what?

           1             MR. STRUHS:  340 lots to go, starting with

           2        the universe of 19,000 approximately.

           3             GOVERNOR BUSH:  Treasurer?

           4             CFO GALLAGHER:  This drives me just as crazy

           5        as it does you.

           6             We need to have a Capital For Day down

           7        there in Collier County.

           8             GOVERNOR BUSH:  I am not sure you want to be

           9        with all the property rights people down there.

          10        We are not the most popular people in the world in

          11        Golden Glades except the people that voluntarily

          12        sold their lots.  The ones that would come would

          13        be the ones that didn't.

          14             CFO GALLAGHER:  I am sure they would.

          15             MR. STRUHS:  I will make a point of

          16        communicating to the county commissioners.

          17             GOVERNOR BUSH:  Collier County has got a

          18        Preservation Conservation Program, don't they have

          19        local funds to purchase property?

          20             MR. STRUHS:  They do.

          21             GOVERNOR BUSH:  They have got a pretty good

          22        record on this stuff; we worked with them on

          23        growth management issues related to eastern

          24        Collier County about trying to create a better

          25        plan of action.  This is all in this area, and yet

           1        they just -- everybody just -- you know, we have

           2        been doing it this way, so we'll just keeping

           3        doing it.

           4             MR. STRUHS:  It's not one of the stronger

           5        counties.  There are other counties that have

           6        better, deeper programs than Collier.

           7             GOVERNOR BUSH:  Anyway --

           8             CFO GALLAGHER:  For a little history, this

           9        item has been deferred January 28, was deferred on

          10        February 11.

          11             GOVERNOR BUSH:  At least we are expanding

          12        cercarian costs for this.

          13             CFO GALLAGHER:  -- March 13.

          14             GOVERNOR BUSH:  Making less money when each

          15        month passes by.

          16             CFO GALLAGHER:  Pay his share of the taxes,

          17        right?

          18             MR. STRUHS:  We can defer it again if you

          19        want to send a message.

          20             CFO GALLAGHER:  Third message, more to come.

          21             MR. STRUHS:  Sure.

          22             GOVERNOR BUSH:  Is there a motion?

          23             CFO GALLAGHER:  It may get deferred by no

          24        motion.

          25             GOVERNOR BUSH:  Does that mean it can come

           1        back?

           2             MR. STRUHS:  Yes.

           3             CFO GALLAGHER:  Move item 7.

           4             MR. STRUHS:  Item 6.

           5             GOVERNOR BUSH:  There is no motion.

           6             No motion.  David, when it comes back, if

           7        you could at least discuss with the county, try

           8        to get them to understand the dilemma.  This is

           9        not lot of money.  We are committed to this.

          10        It cries out for a different way of doing

          11        things.

          12             MR. STRUHS:  I understand.  Perhaps what we

          13        might do is have some private communications with

          14        the commissioners and we may even attend one of

          15        the commission meetings in Collier County.

          16             GOVERNOR BUSH:  Sure.

          17             CFO GALLAGHER:  If I could revert back to 5.

          18        No motion is denial, so I will defer it.

          19             GOVERNOR BUSH:  Deferred.

          20             CFO GALLAGHER:  Defer the item, until the

          21        staff wants to bring it up again.

          22             GOVERNOR BUSH:  There is a motion to defer

          23        until staff wants to bring it up again.

          24             CFO GALLAGHER:  That's sometime.

          25             COMMISSIONER BRONSON:  Second.

           1             GOVERNOR BUSH:  And a second.  Any other

           2        discussion?  Without objection, the item is

           3        deferred.  Thank you.

           4             MR. STRUHS:  Thank you for your understanding

           5        on this.  We'll communicate with the county.

           6             I would like, if I might, gentlemen, speak

           7        globally about item 6 and 7 because they are

           8        related.  They are similar.

           9             I would suggest that these two items, 6

          10        and 7, are probably among the most difficult

          11        items that we have ever brought to you for your

          12        consideration.  And the reason they are

          13        difficult is because we have two unwilling

          14        property owners that are in the pathway of a

          15        major public infrastructure project.

          16             I want to let you know we do this very

          17        reluctantly and we do this obviously as a last

          18        resort.

          19             My job, for better or worse, is to lay out

          20        the argument as to why we have reached that

          21        point of last resort.  So if you could just

          22        give me a couple of minutes, I will lay out

          23        what I believe are the best arguments as to why

          24        we reached that point, recognizing that in the

          25        end, you face a very difficult choice.

           1             These two items, number 6 and 7, are not

           2        about making a park bigger.  These items are

           3        not about simply moving people to create more

           4        habitat for wildlife.  These items are not

           5        about wetlands mitigation for development

           6        because if that was the sole purpose for these

           7        projects, we wouldn't be here before you today,

           8        it just wouldn't be worth it.

           9             The reason we are here is because this

          10        project is about providing flood control and

          11        additional water supply needed for the

          12        southwest Florida economy.

          13             In fact, this is a critical element of

          14        what will be the largest single contribution to

          15        new water supply for what is probably the

          16        nation's fastest growing metropolitan region

          17        and that is, in fact, Collier County.

          18             Clearly these projects offer some

          19        important environmental benefits along the way,

          20        but apart from the environmental benefits, this

          21        really is the only way we know how to

          22        recapture, hold, and move billions of gallons

          23        of water.

          24             I would ask if you would just for a moment

          25        imagine this project is probably more like a

           1        large highway infrastructure project than it is

           2        an environmental project; that the corridor has

           3        been selected, the money has been appropriated,

           4        99 percent of the needed land has been

           5        acquired.  So we are ready to proceed.

           6             But I would suggest that there are three

           7        important differences that make this project

           8        different than a highway infrastructure

           9        project.

          10             The first is this project is actually

          11        harder.  With the highway project, we often

          12        find that the public interest is best served

          13        when we can build expressways as straight as

          14        possible.

          15             We don't want the complications of having

          16        to jog millions of vehicles around a single

          17        parcel of land because it's challenging to

          18        build curves and bridges into a project.

          19             And yet nonetheless, we do that.  We do

          20        that on occasion.  It is significantly harder,

          21        indeed it's in many cases probably impossible

          22        to actually take billions or trillions of

          23        gallons of water and make them go around

          24        anything.

          25             If they are in that flow way, you can't

           1        maneuver the water around a parcel.

           2             In the event that you could do that

           3        effectively, what you have effectively done is

           4        you have created an inaccessible island.

           5             The second difference I think is one of

           6        context.  I think this is an important

           7        conversation to have.

           8             We called the Department of Transportation

           9        and asked them how many homesteaded parcels

          10        have you taken by eminent domain over the last

          11        couple of years?  And the answer was several

          12        thousand.

          13             And the response was several thousand, you

          14        can be more specific?  And the answer that we

          15        got back was, well, there are so many, we never

          16        actually counted them before.

          17             So one of the things we have to do here

          18        today is to remind ourselves that we have

          19        already spent $92 million to lock in on this

          20        particular water conveyance corridor.  And we

          21        have done that by and large through artful

          22        negotiations, turning hundreds of landowners,

          23        in fact, thousands of landowners into willing

          24        sellers.  What we now face are two homesteaded

          25        parcels remaining.

           1             It's not the Department of Transportation

           2        where they do two a day.  In our case we are

           3        doing two in four years.

           4             And the third difference, which is obvious

           5        to all of us, is because of the unique

           6        characteristics of the Cabinet, these decisions

           7        have to be made by elected officials, and they

           8        have to be made in public; whereas the

           9        thousands of similar decisions that are made by

          10        the Department of Transportation for similar

          11        infrastructure projects are done by appointed

          12        officials and they are not done in a public

          13        meeting like this.

          14             Now there is probably one critical

          15        argument, one compelling argument perhaps as to

          16        why we don't have to do this now.

          17             And that is that this project has not yet

          18        been authorized by the Congress.  And that is

          19        true.

          20             I believe there are two answers to that

          21        observation.

          22             The first one is if you want Congress to

          23        authorize the project, do you believe it will

          24        be easier or harder to make the case in

          25        Washington for that authorization if the needed

           1        property is already in public ownership?

           2             I believe that the case is easier made in

           3        Washington if it's already in public ownership.

           4        If you want that authorization, this advances

           5        that cause.

           6             More important, though, more important is

           7        that even if this project were to never be

           8        authorized by Congress, are we not going to

           9        move forward with this project anyway?

          10             The reason we are looking for the federal

          11        authorization is because it allows us to lay

          12        claim to federal dollars because the project

          13        has benefits to the environment, benefits to

          14        the birds and the bunnies.  That's why there is

          15        a federal contribution to it.

          16             But even without that federal support, we,

          17        as a state, are still going to have to manage

          18        south Florida's future water supply.  And

          19        indeed, contingency planning is already

          20        underway to make sure that we are already

          21        coordinated with the Corps of Engineers so that

          22        in the event this project is never authorized

          23        by the Congress, the state is prepared to move

          24        forward without them.

          25             Another argument that you will hear as to

           1        why we should act now is the cost will only go

           2        up.  And that's sort of a weak argument because

           3        that's a truism.  Everything always goes up if

           4        you wait long enough.

           5             But this case is really different.  It's

           6        different specifically in the case of

           7        Mr. Hardy's property because the increase in

           8        cost to the taxpayers would be more immediate

           9        and more measurable than average.

          10             If we acquire the land now, we can

          11        purchase it as a residential homestead.  If we

          12        wait nine more months, given the federal rules,

          13        Mr. Hardy will make the legal claim that his is

          14        a commercial property under the federal rules,

          15        so his compensation should be substantially

          16        higher.

          17             And in this example, the taxpayers will

          18        actually be able to see the effect of the

          19        increased costs of even a very short delay.

          20             And part of our frustration on this one is

          21        that people say they want their government to

          22        run more like a business.  In this case, we are

          23        trying to operate more like a business and we

          24        recognize that by moving now we can avoid that

          25        increased cost.

           1             Clearly that does not mean that we have to

           2        move Mr. Hardy and Mr. Miller off of these

           3        parcels prematurely, because under the federal

           4        rules we can, and with your permission

           5        obviously would, offer post-acquisition use

           6        agreements to these two gentlemen, allowing

           7        them to stay on these parcels up until the

           8        point that rising water levels would either

           9        make the land uninhabitable or inaccessible,

          10        whichever comes first.

          11             The expectations are that water elevations

          12        in this area could rise by at least 2 feet and

          13        perhaps more.

          14             In closing, I need to remind you as to

          15        where we actually are right now.  We have

          16        offered both of these gentleman 150 percent of

          17        their property's appraised value, plus

          18        100 percent of their relocation costs.  And

          19        they have chosen to decline that offer.

          20             What we are actually proposing with these

          21        two agenda items I believe is fair and simple.

          22        And that is that we allow their peers, we allow

          23        a jury of their peers -- not government

          24        bureaucrats, not private sector appraisers --

          25        but allow their peers to determine what is

           1        ultimately fair.

           2             It's hard to imagine any other alternative

           3        that is fairer to Mr. Miller and Mr. Hardy than

           4        allowing their peers to determine what's fair.

           5        And I think it's also the fairest thing to do

           6        for the Florida residents, farmers, businesses

           7        who invested now over $90 million in this

           8        project, to move the thing forward.

           9             What these two agenda items do, number 6

          10        and number 7, is really attempts to create the

          11        fairest pathway to determine how best to

          12        balance the interests of two private landowners

          13        with the interests of millions of Floridians

          14        who are depending on this as their future water

          15        supply.

          16             CFO GALLAGHER:  May I ask you a question?

          17             MR. STRUHS:  Yes, sir.

          18             CFO GALLAGHER:  There is another alternative.

          19        It's probably not good one, but they don't sell,

          20        we don't use eminent domain; they are still

          21        sitting there and the water rises.  We gave them

          22        an offer, we said, look, the water is going to

          23        rise, you want to sell it or not?  I don't know

          24        what it's worth after you flood it.  And I don't

          25        know what -- I don't know where they stand on

           1        stopping it from flooding or what.

           2             COMMISSIONER BRONSON:  That would be a little

           3        bit like a taking, I think.

           4             CFO GALLAGHER:  They want to keep it, they

           5        keep it.  But they got to know there is going to

           6        be 2 feet of water on it.

           7             COMMISSIONER BRONSON:  I got a question too,

           8        Governor, if I may.

           9             Now, David, I think I heard you say

          10        something about if we wait, then Mr. Hardy will

          11        be able to claim a commercial status.  But

          12        isn't Mr. Hardy already raising catfish as a

          13        commercial agriculture endeavor on that

          14        property?

          15             MR. STRUHS:  The way the federal rules work

          16        is you fall into the commercial status if you can

          17        demonstrate that it has been an ongoing concern

          18        for three years or more.

          19             That's why I referenced, I believe it's

          20        probably nine or ten months.  That operation

          21        has been in existence for a little over two

          22        years.  So in nine or ten months time, indeed

          23        Mr. Hardy would make the claim that he's got a

          24        commercial operation.

          25              GOVERNOR BUSH:  Do you have to get a permit

           1        to have a catfish farm?  Where do you get your

           2        permit for a catfish farm?

           3             MR. STRUHS:  It would be the same county we

           4        discussed earlier.

           5             GOVERNOR BUSH:  And the right to mine as they

           6        also gave Mr. Hardy?

           7             MR. STRUHS:  Yes.

           8             GOVERNOR BUSH:  There is three topics of

           9        conversation.

          10             COMMISSIONER BRONSON:  Governor, there is

          11        also, since we are joining 6 and 7 together --

          12             MR. STRUHS:  I am sorry, Commissioner, but I

          13        tried to do this for purposes of efficiency.  You

          14        clearly have two votes here.  They have to be

          15        dealt with separately.

          16             COMMISSIONER BRONSON:  I understand.  They

          17        both, except for, I don't think Mr. Miller has a

          18        catfish farm, but he does have a house there.

          19             The point here is, and my understanding is

          20        you do not have to have all of the properties

          21        bought, even though we may have 99 percent of

          22        them bought, for authorization.  But before the

          23        project gets started, which means you are going

          24        to start moving water, then you need to buy all

          25        of the properties.  And it's my understanding

           1        that this has been delayed until 2006.

           2             Now according to what I have seen,

           3        Mr. Miller has got some serious health

           4        problems, and I am not sure whether Mr. Miller

           5        will be living there in 2006.  But Mr. Hardy

           6        will have to be dealt in one way or another.  I

           7        don't think his catfish farm is going to change

           8        between now and 2006.  And we may have to buy

           9        his catfish farm.

          10             GOVERNOR BUSH:  If we can get to it.

          11             COMMISSIONER BRONSON:  I don't believe there

          12        is going to be any water moved through there,

          13        Governor, until this project gets underway.

          14        That's what I am saying, it's 2006 before the

          15        project gets started; so there won't really be any

          16        water moved through there in this project in that

          17        period of time.  We have a little time, and this

          18        is only two parcels that actually have homes on

          19        them, is that correct, the rest of them are not

          20        developed; is that correct?

          21             MR. STRUHS:  These are the two parcels that

          22        are homesteaded, yes.

          23             COMMISSIONER BRONSON:  Right.  So to do this

          24        now, I understand where you are coming from, but

          25        you see, I have a difference of opinion just

           1        because the guy hasn't met the three years yet,

           2        doesn't mean he doesn't have a catfish farm, it

           3        doesn't mean he is not selling catfish in a

           4        commercial business out there.

           5             I think that's a technicality to say

           6        whether or not the man can claim -- I see where

           7        you are coming from, you are trying to save

           8        money.  I guess maybe my heart is a little bit

           9        bigger on this issue to say the man is already

          10        in business, it's not like he can put catfish

          11        there, he already has them there.  I want to do

          12        the right and fair thing if we have to acquire

          13        this property --

          14             MR. STRUHS:  Commissioner, if I can respond

          15        to that.  There is no doubt your heart is bigger

          16        than mine.  One of the -- and I appreciate that,

          17        sir.

          18             I am just trying to do the best job we can

          19        as staff in terms of trying to let you know

          20        what the rules are and how they would be

          21        applied in a straightforward way.

          22             One of the things we could possibly

          23        consider, sir, is if you would like, if it's

          24        the sentiment of the entire board that you

          25        don't want to rest on the technicality that it

           1        doesn't become commercial until after three

           2        years, and you would like to recognize that it

           3        has that value in effect for Mr. Hardy today,

           4        we could defer this item, and we can go back to

           5        Mr. Hardy and we can figure out what the delta

           6        is between the existing offer and what the

           7        offer might be as a commercial property and try

           8        it again.

           9             If that's something that the board like us

          10        to do.

          11             COMMISSIONER BRONSON:  Also there is a

          12        homestead there, Governor.  It's not like he

          13        doesn't live there and it's just some catfish

          14        farms.  We are talking about two homesteads here

          15        where there are substantial houses there.

          16             These people moved there for a reason to

          17        start with, that was to get out of the town,

          18        out in the woods, and it's a little tough on

          19        them.  I know we are going to have to do this

          20        to move this project, and I believe that can be

          21        accomplished.

          22             It may cost us a little bit more money

          23        than we thought to do this with these two

          24        homesteads, but I think we need to be as fair

          25        about it, acquire all the other properties that

           1        we can acquire that aren't developed, but deal

           2        with these two gentlemen fairly on this issue.

           3             MR. STRUHS:  Yes, sir, I would just point out

           4        I mean, the activities on Mr. Hardy's property now

           5        are essentially rock mining, providing rock

           6        products.  There are no fish farming operations

           7        there currently.  Mr. Hardy's plan would be to use

           8        the pits that were created as a result of the

           9        mining as future fish farming or agricultural

          10        operation.

          11             GOVERNOR BUSH:  He doesn't have a catfish

          12        farm right now?

          13             MR. STRUHS:  We have holes in the ground

          14        because of the rock mining.

          15             GOVERNOR BUSH:  That Collier County granted.

          16             MR. STRUHS:  Yes, sir, and Mr. Hardy

          17        represented that he will use --

          18             COMMISSIONER BRONSON:  Governor, I am

          19        confused.  I am almost sure that I was told the

          20        man does have catfish already in those original

          21        holes that he had rock mined out.  I would like to

          22        move to deny this until further word comes in.

          23             GOVERNOR BUSH:  Deny it or defer it?

          24             MR. STRUHS:  Gentlemen, if I might, before

          25        you take --

           1             COMMISSIONER BRONSON:  I say deny and then

           2        defer --

           3             MR. STRUHS:  Before you take final action on

           4        this item, I would ask that we recognize Mr. Ricks

           5        who is here representing Mr. Hardy so you can hear

           6        from him directly.

           7             GOVERNOR BUSH:  Before we do that, General

           8        Crist had a question.

           9             First of all, where are these young people

          10        from that came in?

          11             A VOICE FROM AUDIENCE:  Cornerstone Learning

          12        Community here in Tallahassee.

          13             GOVERNOR BUSH:  Welcome.  We are happy you

          14        are here.  General.

          15             GENERAL CRIST:  I was just curious, is the

          16        federal government even ready at this point in

          17        time to move on this project, this property?

          18             MR. STRUHS:  That's sort of the $64,000

          19        question, or more.  I am dating myself.

          20             The question is what's the likelihood of

          21        Congress passing a Water Resource Development

          22        Act in the year 2003.  And the answer is nobody

          23        really knows.

          24             My best professional judgment is probably

          25        20, maybe 25 percent likelihood that there will

           1        be a water bill.

           2             GOVERNOR BUSH:  They generally do this during

           3        election years. Good deed.

           4             MR. STRUHS:  So given everything else going

           5        on in the country, given the election cycle, there

           6        is probably a 20, 25 percent chance there will be

           7        a water bill.

           8             The question is if there is going to be a

           9        water bill, are you in a stronger or weaker

          10        position if you can demonstrate the land is

          11        already acquired?

          12             GOVERNOR BUSH:  On that point, which is a

          13        good point, whether or not we have shown good

          14        faith as it relates to this project, this map that

          15        I have, the green part is the part that we have

          16        already purchased.

          17             MR. STRUHS:  That's correct.

          18             GOVERNOR BUSH:  The red part, there is a

          19        purple part which is Miccosukee, and then the blue

          20        is what is yet to be done.  The great majority of

          21        this property has been purchased.  We have shown

          22        good faith.

          23             This is a question of two -- of all of

          24        these thousands of lots, two people that have

          25        homestead rights, which is a distinguishing

           1        feature in my opinion, particularly since one

           2        of them is ill, has cancer, and the other

           3        guy -- some people just don't like living with

           4        the rest of us.  And I think that's okay,

           5        nothing wrong with that.  I am about ready to

           6        get that way.  Ask me two months after the

           7        budget is done.

           8             CFO GALLAGHER:  We didn't think you liked

           9        living with us now.  David, let me ask you a

          10        question.

          11             How about if we go along and defer this,

          12        and we talk to these gentlemen about the best

          13        deal in the world for them because you see, we

          14        are not going to back off on this, it's pretty

          15        obvious; you look at the green and blue, we are

          16        going to move forward.

          17             But how about throwing into the mix that

          18        they get to stay there, and they don't have to

          19        pay any taxes on it, until a short period of

          20        time before it gets flooded.  That's the best

          21        thing you can do short or eminent domain,

          22        that's a heck of a deal.

          23             I would like to authorize you to put that

          24        on the table, if my colleagues agree, so what

          25        you are saying to these guys is, look, one, we

           1        buy it, we don't eminent domain it; we are

           2        already offering you 100 percent above what we

           3        are appraising it at; we are still going to pay

           4        for you to move down the road when you have to

           5        move, and you can stay there until it gets

           6        flooded.

           7             This might be a great deal because they

           8        may be staying there until 2006, who knows,

           9        2010, the way things go.  It might be the best

          10        deal in the world because they got paid for the

          11        property, they get to live in it and they don't

          12        pay taxes.

          13             MR. STRUHS:  Commissioner, that's a very good

          14        idea.  And if those are our instructions --

          15             GOVERNOR BUSH:  Why don't we ask the property

          16        owners what their thoughts are.

          17             MR. STRUHS:  What I would like to do to

          18        respond to Treasurer Gallagher.  It's a very

          19        attractive idea.  There is one element to it that

          20        we should share with you that might be

          21        problematic.

          22             And that is if we were to offer those

          23        considerations to these two property owners,

          24        there are probably as many as 60 other property

          25        owners in Southern Golden Gate Estates who

           1        might then seek the same benefits for

           2        nonhomesteaded properties.

           3             COMMISSIONER BRONSON:  No, if they are not

           4        living there, forget it, that's not part of the

           5        deal.  We can make that motion here.  We are not

           6        doing it for people who don't live there.

           7             This is for people, all of us up here I

           8        feel, having been here with this group for

           9        quite a while, are very uncomfortable using

          10        eminent domain to take a person's homestead.

          11        When it's somebody's property sitting out

          12        there, we need to put a road through, I don't

          13        have a problem with that, but somebody's

          14        homestead is a different deal, and I look at it

          15        as different property rights.

          16             I am very uncomfortable taking it.  We

          17        know we are going to flood the thing, we need

          18        to take it.  But I think that's the kind of

          19        deal that I would like to offer and if at this

          20        point let's -- if anybody has a complaint with

          21        that, let's talk.

          22             I would like to do this, to withdraw this

          23        at this time to give you time to do what you

          24        want to do which means you can bring it back

          25        when you need.  So I move to withdraw.

           1             MR. STRUHS:  Before you vote on that motion,

           2        would you like to hear from --

           3             CFO GALLAGHER:  It's coming back, but sure,

           4        if he wants to speak, he can.

           5             GOVERNOR BUSH:  There are two.

           6             MR. STRUHS:  There are two speakers on item

           7        6.

           8             GOVERNOR BUSH:  Before that, homesteads are

           9        created when people have their -- their property

          10        is their primary residence, correct?

          11             MR. STRUHS:  That's correct.

          12             GOVERNOR BUSH:  I am curious.  You have

          13        hundreds of other people who have properties out

          14        there that go out on the weekends, they go around

          15        in their four-wheel drive, whatever those are.

          16             MR. STRUHS:  ATVs.

          17             GOVERNOR BUSH:  Can you create a homestead?

          18        Can someone, looking forward --

          19             CFO GALLAGHER:  Yes, you could.  Let me say

          20        this. I guess it depends on Collier County.

          21             But this motion here is you've got to have

          22        homestead exemption on your property now.

          23             GOVERNOR BUSH:  That's why I brought it up.

          24             CFO GALLAGHER:  Thank you for bringing it up

          25        because they can say, you know, this might be a

           1        good deal.

           2             GOVERNOR BUSH:  How people game the system

           3        down in Collier County.  Have you heard about

           4        Collier County?

           5             CFO GALLAGHER:  To game in Collier County.

           6             GOVERNOR BUSH:  All right.

           7             MR. STRUHS:  Let me introduce to you

           8        Mr. Ricks, who is representing Mr. Hardy, and Eric

           9        Draper from the Florida Audubon Society.

          10             GOVERNOR BUSH:  There is a motion.

          11             GENERAL CRIST:  I second.

          12             COMMISSIONER BRONSON:  I need to withdraw my

          13        motion to defer.

          14             GOVERNOR BUSH:  There is a motion, express

          15        the motion one more time.

          16             CFO GALLAGHER:  A motion to withdraw this

          17        item at this time.

          18             GENERAL CRIST:  Second.

          19             GOVERNOR BUSH:  Motion to withdraw and

          20        second.

          21             MR. STRUHS:  Given the nature of the motion,

          22        I would suggest that our speakers would be very

          23        brief because obviously a decision on this is not

          24        going to be made today.

          25             GOVERNOR BUSH:  Welcome.

           1             MR. RICKS:  I am Greg Ricks, I am here on

           2        behalf of Jesse Hardy and I will be brief.  Just

           3        to point out as a point of reference --

           4             GOVERNOR BUSH:  Is that our map?

           5             MR. RICKS:  I think it's the same map you are

           6        looking at.  What I will do is circle Mr. Hardy's

           7        property.

           8             GOVERNOR BUSH:  It's red.

           9             MR. RICKS:  It's the big red one.  That's the

          10        reason they are here and why we are here.  They do

          11        want to stay.  It's not a matter of the valuation

          12        or compensation issue.

          13             I think Commissioner Bronson mentioned

          14        that right now the commercial potential is

          15        recognized, or should be recognized in the

          16        valuation.  But the main point is it's their

          17        homestead, that's where they would like to stay

          18        and we appreciate the Cabinet's additional

          19        consideration.

          20             COMMISSIONER BRONSON:  Could I make mention,

          21        Governor, that if this gets down to the final cuts

          22        here and something is going to have to happen, I

          23        would like to recommend to you and to the Hardys,

          24        if it comes down to that, that state eminent

          25        domain is a whole lot more friendly than federal

           1        eminent domain, should the federal government

           2        decide they are going to go through eminent

           3        domain.

           4             And I would like for you to keep that in

           5        mind because in federal eminent domain, you are

           6        not going to get near the personalized effects

           7        of what the state can do in eminent domain.

           8        It's very harsh when it comes to federal

           9        eminent domain.

          10             MR. RICKS:  That's recognized, thank you.

          11             CFO GALLAGHER:  Let me ask you a question, if

          12        I could.  Is your client totally aware of why we

          13        need to buy this property and what is planned for

          14        it?

          15             MR. RICKS:  I don't think the state is

          16        totally aware, to be quite frank.  If you recall

          17        the earlier presentation, this property, this

          18        project was described as flood control and

          19        additional water supply.

          20             If I can move to the drawing, this is

          21        titled Save Our Everglades and Florida Forever

          22        2000.  The current plan that's gone to

          23        Washington by the Corps of Engineers shows the

          24        first flood control device, flood spreader

          25        device south of the Hardy property.  This is

           1        all flowing north to south.  So if this is to

           2        provide better water supply south, conceivably

           3        the water is moving faster away, perhaps not

           4        even ever flooding the Hardy property.  But

           5        this plan has been changed.

           6             The new plan before the Corps of Engineers

           7        in Washington hasn't been released to the

           8        public and access to it has been specifically

           9        denied.  We tried to find out exactly what's

          10        happening to fully inform Mr. Hardy, but that

          11        information is really not available.

          12             He understands the overall potential,

          13        what's being designed or what's being planned,

          14        but specifics aren't available.

          15             CFO GALLAGHER:  I think you have an

          16        open-ended opportunity to get the best of all

          17        worlds that's ever going to happen from the State

          18        of Florida.  I would -- if I can get that on my

          19        house, I would probably do it; live in it until

          20        whenever, if they figure out to flood it, then you

          21        watched it hold off as much as I have, and it's

          22        about the best deal that's going to come down

          23        besides the Feds eminent domain it and that's not

          24        going to be pretty.

          25             MR. RICKS:  Given the property owner's goal

           1        of staying there, we are certainly appreciative of

           2        this creative thinking.

           3             CFO GALLAGHER:  Thank you.

           4             GOVERNOR BUSH:  Thank you.  Any other

           5        speakers?  Mr. Draper.

           6             MR. DRAPER:  Thank you.  Eric Draper, Audubon

           7        of Florida.

           8             I just wanted to make or reconfirm a

           9        couple of points here.

          10             First of all, I think the agency has done

          11        a great job of moving this project forward.

          12        This acquisition has been going on for as long

          13        as I can remember, maybe 15 years the project

          14        has been coming to you.  It's remarkable that

          15        of 19,000 projects, you are down to such a few

          16        number.

          17             The thing that we have been encouraging

          18        you on this is just give the agencies the tools

          19        that they need to finish the job.  And I want

          20        to make one point on the money, and on

          21        Congress.

          22             I have a slightly higher optimism about

          23        WRDA being done this year in Washington.  We

          24        are working on it, lots of local governments

          25        endorsed it down there.  I think there is a

           1        chance that Congress may pick it up.

           2             There is pent-up projects that need to get

           3        done over country.  We may see federal action

           4        this year.  We want to get this project tee'd

           5        up.

           6             Another point is that you don't

           7        necessarily just have to do this restoration

           8        through the federal government, you can do it

           9        as a state project also.  You would probably

          10        ending up saving some state money doing it as a

          11        state project.

          12             We should be in a position to move this as

          13        quickly as we can, recognizing that $92 million

          14        in the ground -- compare this to a commercial

          15        project; it is a construction project --

          16        compare this to a construction with $92 million

          17        in the grounds and just being on halt, think

          18        about that in terms of interest payments on the

          19        bonds that bought this land, think about that

          20        as being four and a half million dollars a

          21        year, a third of a million dollars a month,

          22        $10,000 a day of land that's just sitting there

          23        waiting for the benefits to accrue.

          24             So I would encourage you to give direction

          25        to the agency, to move forward with all speed,

           1        get this things resolved and get the project

           2        underway.  Thank you very much.

           3             GOVERNOR BUSH:  Thank you, Eric.

           4             CFO GALLAGHER:  Let my motion reflect that,

           5        and if Charlie agrees to second, this is for

           6        item 6 and 7.

           7             GENERAL CRIST:  Sure.

           8             MR. STRUHS:  Thank for you that

           9        clarification.

          10             GOVERNOR BUSH:  Would you like to speak?

          11             MR. STRUHS:  On Item 7 we have, Governor, Bob

          12        Brantley.

          13             MR. BRANTLEY:  Governor, Cabinet, I am Bobby

          14        Brantley, this is Eric Thorn who works with me.

          15        We are representing Mr. George Miller.

          16             And I am really pleased to hear the

          17        comments that are coming out of this body, and

          18        I believe that based on the information that we

          19        are receiving, I have to talk with our client,

          20        but I believe Mr. Miller would probably gladly

          21        accept your offer, Mr. Gallagher.

          22             One of the things that I would like to

          23        show on the overhead here, if we can.

          24             GOVERNOR BUSH:  You got to turn on the TV, I

          25        think.

           1             MR. BRANTLEY:  I would like to show where

           2        Mr. Miller's property is and it's the small

           3        slender red area right at the southern end of the

           4        property.  Just below that, there is a penciled-in

           5        white area that is a sewer treatment plant that

           6        has -- that originally was part of this

           7        reclamation also, but has been cut out of the

           8        project and will be burned in to protect it.

           9             One of the things that we have been trying

          10        to pursue, because I understood several weeks

          11        ago the charge from you gentlemen to all of us

          12        were to look at all alternatives to

          13        condemnation of homestead.

          14             And so we have been trying to look at that

          15        and have had talks with water management and

          16        DEP and others pursuing that route, that is

          17        there something else that can be done in lieu

          18        of this outright condemnation of this property?

          19        I would submit to you that, in my opinion,

          20        there is.

          21             This property could be bermed exactly the

          22        same as they are berming the water treatment

          23        plant that they already, for many obvious

          24        reasons, had decided that they would exclude

          25        from the project because it services a lot of

           1        homeowners around there plus environmental

           2        concerns of flooding an area that is a water

           3        treatment plant.

           4             But also, if you look at the maps that we

           5        have been provided from the state about the

           6        amount of water that is actually going to be

           7        present near this property.  Using the scale

           8        that they have, it's plus or minus 3 inches of

           9        water.

          10             Originally when I got involved in this, I

          11        heard many of the same things you are hearing.

          12        I envisioned like a tidal wave of water coming

          13        towards Mr. Miller's property, and that is not

          14        the case.  Literally I think he can buy a new

          15        pair of duck shoes, and it would be fine on

          16        this property.

          17             I don't believe that his homestead will

          18        ever be torn down, just as we have been told by

          19        water management and by others with the state,

          20        many of the homesteads that the state is taking

          21        right now within the Everglades project are

          22        going to remain intact and will be used by the

          23        state, so I don't believe that this property is

          24        ever going to be torn down.

          25             So we would like to have further

           1        clarification, and I think that we pretty much

           2        heard it this morning, that you are interested

           3        in pursuing other things other than essentially

           4        condemning the homestead.

           5             And if that is the case, I would submit to

           6        you that if we were to take a hard look at

           7        berming this property, and since it is so far

           8        to the southern end, and since just below this

           9        property there is already going to be berming

          10        on the water treatment or sewage treatment

          11        plant, that it would not be a major thing to

          12        berm this.

          13             By the way, using the flow maps that the

          14        state has, this property, the flow that is

          15        going to come through there splits just above

          16        his property and does not go directly at him.

          17        And Mr. Miller would be willing to negotiate

          18        with the state to give up a portion of his land

          19        if he could keep his homestead.

          20             So if there were a need for that, then

          21        that could be worked out.

          22             CFO GALLAGHER:  Let me just -- the estimate I

          23        have seen for the berm is $2,491,000.

          24             MR. BRANTLEY:  I saw that. For 3-inches of

          25        water, Treasurer Gallagher --

           1             CFO GALLAGHER:  I'll tell you what, I

           2        wouldn't be living in my house with 3 inches of

           3        water around it.  It's not too convenient.  I can

           4        just can tell you from my point of view, I am not

           5        voting for $2,491,000 to build a berm around

           6        somebody's house.  I am just not going to do it.

           7        I will do eminent domain before I do that.  That

           8        would make no sense to me whatsoever.

           9             MR. BRANTLEY:  I agree with you.  And

          10        Mr. Gallagher, they are talking about a berm that

          11        is 6 feet high, 16 feet wide to hold back a

          12        maximum of 3 inches of water.  Now I would

          13        submit -- and keep in mind --

          14             GOVERNOR BUSH:  It's not going to happen.

          15             MR. BRANTLEY:  -- it's plus or minus 3 inches

          16        of water.  So in all likelihood the way his

          17        property is situated, it would not be any wetter

          18        than it is today.

          19             CFO GALLAGHER:  Luckily you have got another

          20        opportunity to come back, so let's move on.

          21             MR. BRANTLEY:  We thank you.

          22             GOVERNOR BUSH:  Thank you.  Any other

          23        discussion?

          24             There is a motion to withdraw and a

          25        second.  Without objection, the item passes.

           1             CFO GALLAGHER:  I would like to move to defer

           2        item 8.

           3             GENERAL CRIST:  Second.

           4             GOVERNOR BUSH:  There is a motion a defer and

           5        a second on item 8.  The item passes.

           6             CFO GALLAGHER:  And I move to withdraw

           7        item 9.

           8             GOVERNOR BUSH:  There is a motion to withdraw

           9        item 9 and a second.  Without objection.

          10             (Commission Bronson leaves.)
















           1             GOVERNOR BUSH:  Item 1.

           2             CFO GALLAGHER:  Motion on the minutes.

           3             GOVERNOR BUSH:  There is a motion.

           4             GENERAL CRIST:  Second.

           5             GOVERNOR BUSH:  Moved and seconded.  Without

           6        objection, item 1 passes.

           7             MR. STAPANOVICH:  Item 2, Florida Retirement

           8        System's Actuary Report, it's a July 2002 actuary

           9        report that's been reviewed by SBA staff.  It's an

          10        annual procedure.  We have no recommendations or

          11        comments.  It's information only.

          12             GOVERNOR BUSH:  A motion?

          13             CFO GALLAGHER:  It's for discussion only.

          14             GOVERNOR BUSH:  We don't need to pass

          15        anything.  Item 3.

          16             MR. STAPANOVICH:  Item 3, appointment of two

          17        members to the Investment Advisory Council by the

          18        board.  Governor, these are two of your

          19        appointments that need to be approved by the

          20        entire board, that will go to the Senate for

          21        confirmation.

          22             GOVERNOR BUSH:  There is a motion and a

          23        second.  Without objection, the item passes.

          24             MR. STAPANOVICH:  Item number 4, approval of

          25        fiscal sufficiency of an amount not exceeding

           1        455 million, State of Florida bonds.

           2             CFO GALLAGHER:  Motion on 4.

           3             GENERAL CRIST:  Second.

           4             GOVERNOR BUSH:  Moved and seconded.  Without

           5        objection, the item passes.

           6             CFO GALLAGHER:  Thank you.

           7             (The proceedings concluded at 10:56 a.m.)




















           2                 CERTIFICATE OF REPORTER




           6   STATE OF FLORIDA         )

           7   COUNTY OF LEON           )


           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 March, 2003.



          22                       ______________________________

          23                       SANDRA L. NARGIZ, RMR, CRR
                                   100 SALEM COURT
          24                       TALLAHASSEE, FL  32301