The above agencies came to be heard
before
THE FLORIDA CABINET, Honorable Governor Bush
presiding,
in the Cabinet Meeting Room, LL-03, The
Capitol,
Tallahassee, Florida, on Tuesday, October 14,
2003
commencing at approximately 9:40 a.m.
Reported by:
SANDRA L. NARGIZ
Registered Professional
Reporter
Registered Merit
Reporter
Certified Realtime Reporter
ACCURATE STENOTYPE REPORTERS,
INC.
100 SALEM
COURT
TALLAHASSEE, FL 32301
(850)878-2221
.
2
APPEARANCES:
Representing the Florida Cabinet:
JEB
BUSH
Governor
CHARLES H.
BRONSON
Commissioner of Agriculture
CHARLIE
CRIST
Attorney General
TOM
GALLAGHER
Chief Financial Officer
* * *
.
3
I N D E X
DIVISION OF BOND
FINANCE
(Presented by Ben J. Watkins,
III)
ITEM
ACTION
PAGE
1
Approved
6
2
Approved
6
3
Approved
7
4
Approved
7
5
Approved
8
6
Approved
12
7
Approved
13
8
Approved
13
9
Approved
14
FINANCIAL MANAGEMENT INFORMATION
BOARD
(Presented by Martin
Young)
ITEM
ACTION
PAGE
1
Approved
15
2
Information Only 15
FINANCIAL SERVICES
COMMISSION
(Presented by Kevin
McCarty)
ITEM
ACTION
PAGE
1
Approved
15
2
Report
15
DEPARTMENT OF
REVENUE
(Presented by James
Zingale)
ITEM
ACTION
PAGE
1
Approved
16
2
Approved
22
ADMINISTRATION
COMMISSION
(Presented by Teresa
Tinker)
ITEM
ACTION
PAGE
1
Approved
33
2
Approved
35
.
4
BOARD OF
TRUSTEES
(Presented by David Struhs)
1
Approved
37
2
Approved
38
3
Approved
38
4
Deferred
38
5
Approved
39
6
Approved
39
STATE BOARD OF
ADMINISTRATION
(Presented by Coleman
Stipanovich)
ITEM
ACTION
PAGE
1
Approved
42
2
Approved
42
3
Approved
42
4
Approved
43
5
Approved
43
CERTIFICATE OF
REPORTER
44
CERTIFICATE OF REPORTER
.
5
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: Capital For A Day on Tuesday,
4 October, 28, in St.
Augustine.
5
Division of Bond Finance.
6
MR. WATKINS: Just to close the loop on the
7 previous discussion on the
financing of the
8 system, our role, which will
be formally reported
9 as Rebecca indicated in St.
Augustine, was to
10 assist in obtaining the
financing for the project.
11 And it was modeled after
the statutory
12 authorizations under the
Consolidated Equipment
13 Financing Program, so
that's the mechanism that we
14 utilized.
15
We had six different lenders proposing a
16 rate, and it is Wachovia
Bank, was the winning
17 bidder from a lending
standpoint. The rate
18 will flow on a quarterly
basis, and as monies
19 are drawn down to finance
implementation of the
20 project, the rate will be
fixed at that point
21 in time. So we'll do
quarterly draws through
22 the construction and
implementation period to
23 pay for this project.
24
CFO GALLAGHER: What's the basis points?
25
MR. WATKINS: It's a swap rate, it's
a
.
6
1 five-year swap rate less 110
basis points. So we
2 gave vendors three different
indexes that they
3 could propose on, and that
was the winning rate in
4 effect.
5
We compared all three of the spreads to
6 the index on a particular
day to designate who
7 the winner is, and then that
index will be used
8 prospectively in pricing
each quarterly draw
9 that is necessary to pay for
the system, so
10 that's the way it
works.
11
CFO GALLAGHER: Good.
12
GOVERNOR BUSH: Is there a motion on item 1?
13
CFO GALLAGHER: Motion.
14
GENERAL CRIST: Second.
15
GOVERNOR BUSH: Moved and seconded. Without
16 objection --
17
MR. WATKINS: Item number 2 is a resolution
18 authorizing the competitive
sale of up to $200
19 million in PECO bonds.
20
CFO GALLAGHER: Motion on 2.
21
GENERAL CRIST: Second.
22
GOVERNOR BUSH: Moved and seconded. Without
23 objection, the item
passes.
24
MR. WATKINS: Item number 3 is a resolution
25 authorizing the competitive
sale of up
to
.
7
1 $270 million in turnpike
revenue bonds.
2
CFO GALLAGHER: Motion on 3.
3
COMMISSIONER BRONSON: Second.
4
GOVERNOR BUSH: Moved and seconded. Without
5 objection the item
passes.
6
MR. WATKINS: Item number 4 is a resolution
7 authorizing the competitive
sale of up to $200
8 million in lottery revenue
bonds. This is -- the
9 proceeds from this bond
issue are the first
10 installment for providing
funding for the class
11 size reduction.
12
CFO GALLAGHER: Motion on 4.
13
GENERAL CRIST: Second.
14
GOVERNOR BUSH: Moved and seconded. Without
15 objection, the item
passes.
16
MR. WATKINS: Item number 5 is a resolution
17 authorizing the
distribution of an RFP for
18 financial advisors.
19
Just by way of background, we are required
20 by rules to use RFPs when
we engage
21 professionals in connection
with bond
22 transactions.
23
CFO GALLAGHER: Motion on 5.
24
COMMISSIONER BRONSON: Second.
25
GOVERNOR BUSH: Moved and seconded.
Without
.
8
1 objection, the item
passes.
2
Ben, this -- we have done this before. We
3 had a conversation about
this several years
4 ago, about the process by
which you come back
5 to us with your
recommendations.
6
And I would -- it seems to me that rather
7 than rank them and say we'll
take one, two and
8 three, that we should be
given some leeway that
9 there should be a threshold
over which they are
10 qualified, so that we can
then chose who we
11 want.
12
We did that actually de facto I think the
13 last time and picked a
minority enterprise that
14 was not ranked second or
third of one of the
15 three.
16
CFO GALLAGHER: Tenth.
17
GOVERNOR BUSH: Was it tenth?
18
CFO GALLAGHER: I think so.
19
GOVERNOR BUSH: I think that flexibility
20 should be afforded
us. If -- whatever the -- it's
21 your responsibility to
determine who is qualified
22 and who is not, based on
price, based on
23 experience, based on your
professional evaluation.
24
But if they get over the criteria, then it
25 seems to me that the
Governor and Cabinet
ought
.
9
1 to be able to pick with
confidence anybody on
2 that list. Is that
acceptable to you? Is it
3 acceptable to you all?
4
MR. WATKINS: My job is to try to accurately
5 reflect your policies and
the process you all
6 would like to see in
engaging professionals.
7 Unlike normal state
procurement processes where we
8 are bound by statutory
requirements on buying
9 things, we're simply
engaging professionals here.
10
So you all have the latitude to determine
11 what process we use, and
then how you go about
12 engaging firms.
13
With respect to financial advisors what we
14 have done, Governor, is to
-- we had four firms
15 last time and we have a
contract period for
16 some period, and then we
pay them on a hourly
17 basis.
18
So the process that we have utilized to
19 help you all discern which
firms are most
20 qualified is to simply give
you a ranking based
21 on a scoring.
22
But there is no real magic in that
23 methodology, if you
will. It helps you make
24 some qualitative judgments
about who is the
25 most qualified; and if we
want to change
the
.
10
1 way we are doing that, I am
happy to work with
2 your offices to make sure we
do it in a way
3 that is going to be helpful
to you in
4 ultimately reaching the
decision about what
5 professionals to engage.
6
CFO GALLAGHER: It seems to me there are two
7 ways that this can be
done. We can have you and
8 your staff and your
reviewers give us a
9 recommendation, which I
pretty much lean to as
10 opposed to us sitting here
trying to pick them; or
11 you can give us -- say 35
people applied, you can
12 say which ones meet our
minimum qualifications.
13
Well, that could be 20 people, and then we
14 are stuck with trying to
figure out which one
15 of the 20 we want to
choose. And I prefer to
16 have somebody at least cut
it down to a
17 reasonable number rather
than us sitting up
18 here trying to do it.
19
GOVERNOR BUSH: How about both? In other
20 words, how about them
making recommendations, but
21 also saying here are the
ones that are qualified?
22
CFO GALLAGHER: That's fine. I would like at
23 least have a minimum
amount, the most qualified,
24 the top three or something
like that and then --
25 but these all met the
minimum qualifications,
and
.
11
1 then these three are the
best ones in the
2 presentation; or you have a
group that goes
3 through these, right?
4
MR. WATKINS: Yes, sir.
5
CFO GALLAGHER: And they will grade them?
6
MR. WATKINS: Right.
7
CFO GALLAGHER: -- somehow through a process.
8 And the first grade will be
these are all
9 qualified, then you go, then
whoever gets the
10 highest grades is the
second thing.
11
I guess it will be worthwhile knowing what
12 the grades are. That
way that would sort of do
13 it for us, even though they
would all be
14 qualified. Then we
get both.
15
GOVERNOR BUSH: Exactly.
16
CFO GALLAGHER: You want to pick the top 3 to
17 5 or do you want to pick
10, 11, 12 or 1, 2 7?
18
GOVERNOR BUSH: I just don't want to pick
19 someone who is not
qualified. In other words,
20 there has to be some
determination of a threshold
21 over which every one of
these entities is
22 qualified to do business
with the state and under
23 which, without casting
aspersions upon them, we
24 probably would take a
pass.
25
That information to me is as useful as
a
.
12
1 fairly arbitrary ranking,
you know, a point
2 system that's -- you could
tweak the point
3 system and end up with a
different result.
4 Does that make sense?
5
MR. WATKINS: Yes, sir.
6
GOVERNOR BUSH: I think we are on the same --
7
CFO GALLAGHER: Have fun, whatever it is we
8 told you to do.
9
GOVERNOR BUSH: If you need clarification,
10 give me a call.
11
MR. WATKINS: Yes.
12
GOVERNOR BUSH: I think you got it. Okay.
13
COMMISSIONER BRONSON: Did we actually adopt
14 it?
15
GOVERNOR BUSH: Yes, we did.
16
COMMISSIONER BRONSON: Moved to adopt it.
17
GOVERNOR BUSH: Yes, we adopted it before the
18 conversation.
19
Item 6.
20
MR. WATKINS: Item number 6 is report of
21 award on the competitive
sale of $35,285,000 --
22
CFO GALLAGHER: Motion on 6.
23
COMMISSIONER BRONSON: Second.
24
GOVERNOR BUSH: Moved and seconded. Without
25 objection, the item
passes.
.
13
1
MR. WATKINS: Item number 7 is a report of
2 award on the competitive
sale of $200 million in
3 PECO bonds. The bonds
were awarded to the low
4 bidder at a true interest
cost of approximately
5 4.75 percent.
6
CFO GALLAGHER: Motion on 7.
7
COMMISSIONER BRONSON: Second.
8
GOVERNOR BUSH: Moved and seconded. Without
9 objection, the item
passes.
10
MR. WATKINS: Item number 8 is a report of
11 award on the competitive
sale of $142,985,000 of
12 Florida Forever bonds for
the Department of
13 Environmental
Protection. The bonds were awarded
14 to the low bidder at a true
interest cost of
15 approximately 4.18
percent.
16
COMMISSIONER BRONSON: Motion on 8.
17
CFO GALLAGHER: Second.
18
GOVERNOR BUSH: Moved and seconded. Without
19 objection, the item
passes.
20
MR. WATKINS: And item number 9 is a report
21 of award on the competitive
sale of $300 million
22 in right-of-way bonds for
the Department of
23 Transportation. The
bonds were awarded to the low
24 bidder at a true interest
cost of approximately
25 4.67
percent.
.
14
1
GENERAL CRIST: Motion.
2
CFO GALLAGHER: Second.
3
GOVERNOR BUSH: Moved and seconded. Without
4 objection, the item
passes.
5
Thank you, Ben. You wanted to get all
6 this like a billion and a
half dollars worth of
7 debt, you wanted us to do it
here instead of in
8 St. Augustine, didn't
you?
9
MR. WATKINS: That's correct, Governor, but
10 we'll have a few things for
St. Augustine.
11
GOVERNOR BUSH: Smart move.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
15
1
CFO GALLAGHER: Motion on the minutes.
2
GOVERNOR BUSH: Financial Management
3 Information Board.
4
CFO GALLAGHER: Now motion on the minutes.
5
COMMISSIONER BRONSON: Second.
6
GENERAL CRIST: Second.
7
GOVERNOR BUSH: Moved and seconded. Without
8 objection, the item
passes.
9
Item 2.
10
COMMISSIONER BRONSON: Motion on item 2.
11
CFO GALLAGHER: Move.
12
MR. YOUNG: Item 2 is request acceptance of
13 the first report of
Enterprise Resource Planning
14 and Integration Task
Force. We have Don Norton
15 here, the staff director,
to answer any questions.
16
GOVERNOR BUSH: Didn't we just do that?
17
CFO GALLAGHER: It's just a report.
18
MR. YOUNG: It will be the first of a series
19 of reports that will
probably come quarterly.
20
GOVERNOR BUSH: Great. Is there a motion?
21 Oh, this is
information.
22
CFO GALLAGHER: I made the motion anyway.
23 Did you get the name of the
board we just did?
24
25
.
16
1
GOVERNOR BUSH: Department of Financial
2 Services.
3
CFO GALLAGHER: Motion on the minutes.
4
GENERAL CRIST: Second.
5
GOVERNOR BUSH: Moved and seconded. Without
6 objection, the item
passes.
7
Item 2. Good morning, Kevin, how are you
8 doing?
9
MR. McCARTY: Good morning, Governor.
10
GOVERNOR BUSH: Moving a little fast here. I
11 apologize. We will
slow it down.
12
MR. McCARTY: Item 2 is approval of a
13 recommendation for the
appointments for the Board
14 of Governors.
15
The amendments to Senate Bill 58 changed
16 the composition of the
Florida Workers' Comp
17 Joint Underwriting
Association to include three
18 members appointed by the
Financial Services
19 Commission, who will serve
at the pleasure of
20 the Commission. And
the Financial Services
21 Commission will also
designate a member to
22 serve as a chair of the
Joint Underwriting
23 Association. .
24
As you all may know, the Workers Comp
25 Joint Underwriting
Association was
a
.
17
1 statutorily-created
insurance company that
2 serves as a market of last
resort for employers
3 who are unable to secure
insurance in the
4 voluntary markets.
5
COMMISSIONER BRONSON: Motion on item 2.
6
CFO GALLAGHER: Second.
7
GOVERNOR BUSH: There is a motion and a
8 second.
9
GENERAL CRIST: Question. I was curious, do
10 these individuals actually
take part in setting
11 rates?
12
MR. McCARTY: The statute provides for the
13 establishment of
ratemaking, the Workers' Comp
14 Joint Underwriting
Association provides that the
15 Board of Governors shall
approve the rate which
16 shall be in effect unless
it is disapproved by the
17 Office of Insurance
Regulation.
18
So essentially they do have a rate that's
19 different from the
voluntary market rate.
20 Currently that rate is
about two and a half
21 times the voluntary
market.
22
CFO GALLAGHER: Set by statute, if I remember
23 correctly.
24
MR. McCARTY: Yes.
25
CFO GALLAGHER: -- in
50A.
.
18
1
MR. McCARTY: The prior --
2
CFO GALLAGHER: The top is set by statute.
3
MR. McCARTY: Chapter 627.311 provides for
4 the Board of Governors for
the Joint Underwriting
5 Association to establish an
actuarially sound
6 rate. There are four
subplans in the Workers'
7 Comp Joint Underwriting
Association. There is a
8 new subplan that was added
this year in
9 consideration for the small
employers that were
10 being included because of
the elimination of
11 exemptions which put a cap
of 25 percent above the
12 voluntary market.
13
But this is a very -- this is a very
14 challenging Board of
Governors to run, and we
15 believe we that selected
three fine people that
16 have public and private
experience, extensive
17 experience in workers' comp
as well as residual
18 markets.
19
GENERAL CRIST: If you could just share how
20 they were picked.
21
MR. McCARTY: We had -- some of the
22 candidates had solicited
our office as well as we
23 tapped a number of people
who served on the
24 Governor's Task Force and
members of the
25 community, workers comp
community. And from
those
.
19
1 we culled out those that
were currently members of
2 insurance companies, because
we believe the
3 statutory intent was to put
three members on.
4 They took members that were
-- prior affiliation
5 were all members of
insurance companies, so we
6 took three individuals who
had extensive
7 experience that were not
affiliated with insurance
8 companies.
9
CFO GALLAGHER: I would like to just point
10 out that I believe that the
small businesses that
11 are being put into JUA have
a maximum 125 percent
12 rate, also have the
ability, unfortunately, to be
13 assessed for any shortage
that exists in that
14 account.
15
And there is no way that more than about a
16 year will pass before those
companies start
17 getting assessed, and it is
not going to be
18 pretty.
19
This is called a JUA, and that means joint
20 underwriting association,
which means
21 underwriters which are
risktakers jointly take
22 on the risk.
23
This JUA is set up where no underwriters
24 take any risk, only the
policyholders. And it
25 is a disaster waiting to
happen. That's
just
.
20
1 a --
2
MR. McCARTY: It is essentially set up as a
3 self-insurance fund where
each of the members are
4 jointly and severally liable
for the losses of the
5 association.
6
CFO GALLAGHER: So it ought to be called a
7 self-insurance fund instead
of a JUA because it is
8 not a JUA.
9
GOVERNOR BUSH: Is there is a minimum,
10 there's a cap; is there is
a minimum as to have
11 the private insurance
consistently be lower
12 than --
13
MR. McCARTY: Yeah, the market has worked
14 very will. The
residual market has really been
15 less than a thousand
policyholders. It has
16 recently increased in
population, but the market
17 has -- the differential has
been at least
18 200 percent since its
inception.
19
So there is a strong incentive for people
20 to take whatever necessary
steps they can to
21 get out of the residual
market and go to the
22 private sector.
23
GOVERNOR BUSH: Do you anticipate that there
24 will be a larger number of
policies issued?
25
MR. McCARTY: With the changes in the
statute
.
21
1 eliminating prior
exemptions, there certainly is
2 going to be an increased
demand for insurance
3 services that prior these
folks were able to --
4
GOVERNOR BUSH: That's in general. What
5 about specifically?
6
MR. McCARTY: This particular group is not --
7 does not look like it's
going to be able to find
8 coverage in the voluntary
market. So I do
9 anticipate increases in the
population of the
10 Joint Underwriting
Association.
11
GOVERNOR BUSH: When will you know that?
12 Shouldn't we already --
since it started
13 October 1st?
14
CFO GALLAGHER: No, the exemptions expire at
15 the end of the year.
And so January 1st, all of
16 those -- and we are talking
about thousands of
17 people that have had an
exemption -- that expires,
18 and the only way they can
have an exemption is if
19 they own 10 percent -- one,
they have to be a
20 corporation, they have to
own 10 percent of that
21 corporation, and only three
people can own
22 10 percent of the
corporation and have an
23 exemption, so that's going
to cut back, although I
24 would expect to see a lot
of corporations file
25
hopefully.
.
22
1
MR. McCARTY: Indeed.
2
CFO GALLAGHER: Because I know there is some
3 services out there sending
out notices that they
4 will set up a corporation,
et cetera, but I think
5 there is probably going to
have to be some rules
6 made that says it has to be
a real functioning
7 corporation and you get your
payroll from it and
8 you are paying taxes from
it, and all these other
9 things as opposed to some
shell sitting there and
10 you are getting an
exemption.
11
GOVERNOR BUSH: You responsible for rule
12 making, Kevin?
13
MR. McCARTY: With respect to 50A?
14
GOVERNOR BUSH: Yeah, with respect to the
15 comment that Treasurer
Gallagher just made.
16
MR. McCARTY: No, that would be the Division
17 of Worker's
Compensation.
18
GOVERNOR BUSH: Okay. Any other questions?
19 There is a motion and
second. Without objection.
20 The item passes.
21
MR. McCARTY: Thank you, Governor.
22
CFO GALLAGHER: By the way, Kevin, did you --
23 do you have a
recommendation on this? I believe
24 the statute calls there
must be a chairman named.
25
MR. McCARTY: Yes, that was included in
the
.
23
1 packet, would be Mr. Frank
White, we recommend be
2 designated chair.
3
CFO GALLAGHER: That was part of that? Okay.
4 We don't need to do
it. Sorry.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
24
1
GOVERNOR BUSH: Department of Revenue.
2
Dr. Z.
3
MR. ZINGALE: Good morning.
4
GOVERNOR BUSH: Good morning.
5
MR. ZINGALE: Request approval of the
6 minutes, please.
7
GOVERNOR BUSH: Is there a motion?
8
CFO GALLAGHER: Motion.
9
GENERAL CRIST: Second.
10
GOVERNOR BUSH: Moved and seconded. Without
11 objection, the item
passes.
12
MR. ZINGALE: The second item on the agenda
13 is the Deloitte consulting
contract.
14
This is a three-year contract to
15 reengineer the Child
Support Enforcement
16 Business Process. The
contract in front of you
17 is for $227.6 million.
18
There was another piece of the contract
19 about two weeks ago when we
last met. SAP was
20 a subcontractor. We,
at your permission went
21 out, and with some
extraordinary help from
22 Mr. Simons, Department of
Management Services
23 and our staff and the
federal government, we
24 succeeded in about 10
remarkable hours to
25 purchase that SAP component
off the
state
.
25
1 contract, with everybody
approving.
2
GOVERNOR BUSH: It's a great country.
3
MR. ZINGALE: At a savings of $710,000 for
4 the citizens of the
world.
5
GOVERNOR BUSH: Let the record show the
6 federal government allows us
to save the
7 taxpayers' money; was
somewhat in doubt at the
8 time.
9
MR. ZINGALE: It was. Which will raise the
10 total cost of this new
system to $32.1 million.
11 Child support is
predominantly a federal funded
12 program. And,
therefore, this system will be
13 funded two-thirds from
federal dollars and
14 one-third from federal
incentive dollars that have
15 to be replowed back in the
Child Support
16 Enforcement Program.
Incentive dollars are
17 dollars that we generated
because of our
18 performance. So there
is no general revenue at
19 this point in time
committed to this system.
20
As a federal program, though, the
21 department went through
three very intense
22 years with the federal
government. They
23 approved the plan; they
approved the system
24 development; they approved
the procurement
25 process, the funding, and
last
week
.
26
1 unconditionally they
approved the contract.
2
Deloitte signed the contract and that
3 brings us in front of the
Cabinet.
4
The problem that we were trying to fix is,
5 this is a child support
enforcement module. In
6 the last four years we have
gone, in terms of
7 collections, from 656.6
million to a little
8 short of a billion dollars
-- 964.8 million.
9 That's a 46.9 percent
increase in child support
10 in four years.
11
Unfortunately, that raised our percentage
12 of collections from the low
40s to
13 56.9 percent, with a long
ways to go.
14
If you want to know what a benchmark state
15 would be, the top five
states -- Pennsylvania,
16 seventy-one five; North
Dakota, not a big
17 state, sixty-nine one;
Ohio, a universal state,
18 68; Minnesota, 67 and
Vermont 67. That's about
19 the top five in the country
in terms of
20 enforced collections.
21
We have a hope of getting there quite
22 quickly with this new
computer system. So the
23 problem is to try to
increase --
24
GOVERNOR BUSH: When are we going to be ahead
25 of -- we are shocked that
we are below
Vermont.
.
27
1 When do we get above
them? I am shocked too, I
2 can't believe that Vermont
would be a standard
3 bearer.
4
MR. ZINGALE: Think how big those are. Count
5 those on a couple of
hands. In terms of the
6 benefits, though, this is a
quite remarkable
7 program to invest in a new
computer system because
8 there are a lot of revenue
benefits to the State
9 of Florida to have this not
only in terms of
10 benefits to children, and
we'll talk about Vermont
11 in a quick second.
12
First, because there are federal
13 incentives and these are
financials that the
14 Feds have gone over and
reviewed. We expect in
15 the first year of
implementation a $5.1 million
16 increased in incentives,
51.7 million over the
17 planning period; public
assistance
18 reimbursement, every dollar
we collect where a
19 custodial parent is on
public assistance the
20 state and federal
government retain that.
21
Our share of savings, $6.4 million a year,
22 64.5 over the 10-year
planning horizon.
23
Cost avoidance: And this is the big one.
24 If we can get dad to pay
Medicaid, then the
25 state doesn't have to pay
Medicaid,
medical
.
28
1 support. Cost
avoidance to Children and Family
2 for medical assistance and
food stamps
3 $190 million, $19 million a
year over 10 years.
4
And finally, the portion that deals with
5 running an ERP. SAP
and Oracle are the two
6 software providers.
7
SAP is the same ERP that we use in HR
8 outsourcing. It is
similar to the one that was
9 just presented in the FLAIR
Alternative -- I
10 think they were calling
that Aspire. This is
11 the first, according to
Gartner, an ERP in a
12 child support enforcement
program in the world.
13
The cost avoidance, the cost savings of
14 the data center is 21.7
million, bringing the
15 total revenue enhancements
to the State of
16 Florida and savings of
$327.9 million over a 10
17 year period; meaning after
development, two
18 years, first full year of
implementation should
19 pay off the entire cost of
the
20 32 million-dollar
system.
21
For the 901,000 children, the estimates
22 are almost as
dramatic. Three years we expect
23 to bring in an extra $196
million; five years,
24 758. And we'll not
only overtake Vermont to be
25 the number 1 in the country
in terms of
those
.
29
1 collections. These
numbers are not something
2 that we generated for this
meeting.
3
GOVERNOR BUSH: This is a pretty bold
4 statement, going to be
number 1 in five years?
5
MR. ZINGALE: Five years, after full
6 implementation, seven years
down the road.
7
GENERAL CRIST: How many children did you
8 say?
9
MR. ZINGALE: We have in the program right
10 now 901,974 kids looking to
us for child support.
11
If I could remind us, though, on the tax
12 side, four years to develop
with SAP Deloitte
13 Suntax paid for the full
cost of the system
14 while we were developing it
in the four years
15 to develop it, not even
after. We'll pay the
16 50 million bucks off at the
end of this year.
17
GOVERNOR BUSH: That's great.
18
CFO GALLAGHER: Let me let you know the
19 Aspire system is
Peoplesoft.
20
MR. ZINGALE: Similar ERP.
21
CFO GALLAGHER: They will talk to each other.
22
MR. ZINGALE: I think that's the first ERP in
23 the nation for putting in a
general ledger
24 accounting system.
This one will be the first in
25 the world to be put in a
child support
system
.
30
1 according to --
2
CFO GALLAGHER: There are other states that
3 have ERPs.
4
MR. ZINGALE: Not in child support.
5
GENERAL CRIST: How does Michigan rank?
6
MR. ZINGALE: Michigan is what they call a
7 universal state; we are
not. They are pretty
8 high; they are higher than
us, but I don't know
9 exactly what Michigan's
exact ranking is.
10 Michigan doesn't have a
full computer system at
11 this point in time that's
approved. They have
12 some federal penalties they
have been paying.
13
COMMISSIONER BRONSON: Governor, I wanted to
14 find out too, I remember
when I was in the Senate
15 Criminal Justice Committee,
we passed a bill that
16 locked in driver's licenses
for helping the
17 collection of back fees for
child support, and so
18 forth. Is there a
coordination between --
19
MR. ZINGALE: Excellent coordination.
20
COMMISSIONER BRONSON: That's still in effect
21 and it's working but we are
still behind that far?
22
MR. ZINGALE: Well, remember, those kind of
23 things that were passed,
what we called
24 administrative enforcement
tools, are one of the
25 drivers behind us growing
by a 46.9
percentage
.
31
1 increase in collections in
the last four years.
2 That's a substantial
increase.
3
To give you an example what this kind of
4 system will do, take
driver's licenses.
5 Unfortunately right now a
driver's license
6 match is pretty easy to
find. The actual
7 execution of the driver's
license suspension is
8 all manual. It's a
human being down there
9 doing paper shuffling to get
that driver's
10 license suspended.
11
This system, it will be all electronic,
12 very few human beings
touching it; it will be
13 state of the art. Any
questions?
14
CFO GALLAGHER: Motion on 2.
15
COMMISSIONER BRONSON: Second.
16
GOVERNOR BUSH: Moved and seconded. Without
17 objection, the item
passes.
18
Thank you, good work.
19
MR. ZINGALE: Thank you. Could I have one
20 potential favor. We
are trying to draft a letter
21 to Secretary Heller
thanking her for her support.
22
With your permission, we would like to
23 show you that letter and if
you would like to
24 sign it, I think coming
from you all would mean
25 a lot more to her than
coming from
me.
.
32
1
GOVERNOR BUSH: Sure.
2
MR. ZINGALE: We'll draft the letter up and
3 let you see it.
4
GOVERNOR BUSH: Absolutely. Thank you, Jim.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
33
1
GOVERNOR BUSH: Administration Commission.
2
CFO GALLAGHER: Motion on the minutes of
3 August 12.
4
GOVERNOR BUSH: Is there a second?
5
COMMISSIONER BRONSON: Second.
6
GOVERNOR BUSH: Moved and seconded. Without
7 objection, the item
passes.
8
MS. TINKER: Item 2 is selection of the
9 executive director and chief
administrative law
10 judge for the Division of
Administrative Hearings.
11
Florida law authorizes the Administration
12 Commission to appoint the
executive director
13 with confirmation from the
Senate.
14
In June, you all appointed a four-member
15 selection committee.
That committee has gone
16 through the process of
receiving applications,
17 interviewing applicants,
and have made a
18 recommendation to you of
five members to select
19 from, or five people.
20
Those five people include Robert Saul
21 Cohen, Colonial Charles
William Dorman,
22 Virlindia Albritton Doss,
William Ralph Pfeifer
23 and Steven Scott
Stephens. Kent has ballots
24 for you all to make your
selection. We are
25 ready to do that when you
are.
.
34
1
GOVERNOR BUSH: Thank you, Teresa. First of
2 all, I would like to thank
the members of the
3 selection team for all the
time that they took to
4 interview the
candidates. There were, at least
5 from my opinion, we had five
excellent candidates
6 from which to make a
choice. And I appreciate
7 Scott Stephen's work as the
Interim Chief Judge as
8 well.
9
And as I understand it, the Administration
10 Commission will -- the vote
will require the
11 Governor in the affirmative
and two Members of
12 the Cabinet. We got
our ballots here and we'll
13 do this until we get it
done.
14
You already voted?
15
CFO GALLAGHER: Yes.
16
GOVERNOR BUSH: Who is the supervisor of
17 elections here? Don't
blow it.
18
(Voting takes place.)
19
GOVERNOR BUSH: We have to vote again. There
20 were two votes for Robert
Cohen, one vote for
21 Virlindia Doss and one vote
for William Pfeifer.
22 Try this again.
23
(Voting takes place.)
24
GOVERNOR BUSH: We have three votes for
25 Robert Cohen with the
Governor in the
affirmative.
.
35
1 He's here.
Congratulations.
2
MR. COHEN: Thank you.
3
GOVERNOR BUSH: Treasurer, do you have a
4 suggestion?
5
CFO GALLAGHER: I do. Governor, I would
6 recommend that two things
happen.
7
One, that we accept the salary to begin at
8 $118,000 and we would
request Mr. Cohen to work
9 with our staff on a
performance contract which
10 we have for our other
Cabinet officers. That's
11 something that hasn't
happened in the past, but
12 I do think it's important
that we work with him
13 and I think that he may
want to do that with
14 his judges.
15
And that's sort of up him to do that part,
16 but I think it's important
for us to work out a
17 performance contract with
him. Would that be
18 all right with you, Mr.
Cohen?
19
MR. COHEN: Absolutely, Mr. Treasurer.
20
CFO GALLAGHER: That's a motion.
21
COMMISSIONER BRONSON: Second.
22
GOVERNOR BUSH: There's a motion and a
23 second. Without
objection, the motion passes for
24 a 118,000-dollar salary and
a performance
25 contract, that would also
include an annual
report
.
36
1 I assume, both performance
contract for yourself
2 personally as well as an
annual report. And I
3 would encourage you to
--
4
CFO GALLAGHER: Annual review.
5
GOVERNOR BUSH: -- do an annual review.
6 Thank you.
7
MS. TINKER: Thank you.
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
37
1
GOVERNOR BUSH: Board of Trustees of the
2 Internal Improvement Trust
Fund.
3
CFO GALLAGHER: Motion on the minutes.
4
COMMISSIONER BRONSON: Second.
5
GOVERNOR BUSH: There is a motion and a
6 second. Without
objection, the item passes.
7
MR. STRUHS: Item 2, we would like for you to
8 do three things:
Approve a three-year sublease
9 agreement between the
Department of Children and
10 Families and the National
Mentor Health Care
11 Incorporated Company.
12
Secondly, determine that the proposed use
13 of this property is not
contrary to the public
14 interests.
15
And third, determine that doing this
16 without a competitive bid
is in the public
17 interest.
18
We recommend approval of this item. We do
19 have Terry Nipper and Carl
Littlefield here
20 from the Department of
Children and Families to
21 answer any questions.
22
Your briefing materials do explain the
23 rationale for both of those
determinations as
24 it relates to both being in
the public interest
25 and not contrary to the
public
interest.
.
38
1
GOVERNOR BUSH: Is there a motion?
2
CFO GALLAGHER: Motion on 2.
3
COMMISSIONER BRONSON: Second.
4
GOVERNOR BUSH: Moved and seconded. Any
5 discussion? Without
objection, the item passes.
6
MR. STRUHS: Thank you. Item 3 is
7 consideration of an option
agreement to acquire a
8 perpetual conservation
easement in the Green Swamp
9 Florida Forever Project.
10
CFO GALLAGHER: Motion on 3.
11
COMMISSIONER BRONSON: Second.
12
GOVERNOR BUSH: Moved and seconded. Without
13 objection, the item
passes.
14
MR. STRUHS: Item 4, we would like to defer
15 until the November 12th
Cabinet meeting.
16
CFO GALLAGHER: Motion to defer to
17 November 12, item 4.
18
COMMISSIONER BRONSON: Second.
19
GOVERNOR BUSH: There is a motion to defer
20 until November 12 and a
second. Without
21 objection, the item is
deferred.
22
MR. STRUHS: We are recommending approval of
23 item 5, which is an
acquisition of 269 acres in
24 Wekiva Ocala Greenway in
Lake County
25
CFO GALLAGHER: Motion on
5.
.
39
1
COMMISSIONER BRONSON: Second.
2
GOVERNOR BUSH: Moved and seconded. Without
3 objection, the item
passes.
4
MR. STRUHS: Item 6, option agreement to
5 acquire a 20-acre parcel
with the Save Our
6 Everglades Florida Forever
Project from Mr. George
7 Harry Miller.
8
CFO GALLAGHER: Motion on 6.
9
GENERAL CRIST: Second.
10
GOVERNOR BUSH: Moved and seconded. Without
11 objection, the item
passes.
12
You don't even want to talk about it?
13
MR. STRUHS: I am prepared to speak to it.
14
GOVERNOR BUSH: No, that's fine.
15
MR. STRUHS: As you know --
16
GOVERNOR BUSH: It passed.
17
CFO GALLAGHER: We are finished.
18
MR. STRUHS: I am trying to be efficient with
19 your time.
20
GOVERNOR BUSH: That's the policy.
21
Why don't you say what we are going to be
22 doing, unless you don't
want to.
23
MR. STRUHS: I will like to very much.
24 Thanks to the great support
of the Florida
25 Legislature in terms of
appropriations and
this
.
40
1 Cabinet, and the Governor
particular, we have made
2 great strides in acquiring
the land necessary to
3 begin restoring the sheet
flow in the western
4 Everglades.
5
We'll be having a major groundbreaking on
6 Thursday, you are all
invited. In fact, I
7 think, Commissioner Bronson,
you are actually
8 scheduled to speak and we
are looking forward
9 to seeing you there.
10
This project is seven years, seven years
11 ahead of schedule with a
cost savings of about
12 $50 million, because we are
able, through your
13 good efforts, to accelerate
the progress on
14 this and begin the
groundbreaking well ahead of
15 what was originally
scheduled.
16
So it's a cost savings, it's restoration
17 faster, better and
cheaper. And it really is
18 something that's going to
be welcomed in that
19 community.
20
Not only does it restore the natural
21 habitat there in the
western Everglades, but
22 this, in fact, will provide
the future water
23 supply for continued growth
in southwest
24 Florida.
25
So we are very pleased for your
support.
.
41
1
GOVERNOR BUSH: Thank you. Look forward to
2 being there.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
42
1
GOVERNOR BUSH: State Board of
2 Administration.
3
CFO GALLAGHER: Motion on the minutes,
4 September 30.
5
GENERAL CRIST: Second.
6
GOVERNOR BUSH: Moved and seconded. Without
7 objection, the item
passes.
8
MR. STAPANOVICH: The second item on the
9 agenda is request for
approval of fiscal
10 sufficiency of an amount
not exceeding
11 200 million, State of
Florida, State Board of
12 Education Lottery Revenue
Bonds.
13
CFO GALLAGHER: Motion on 2.
14
GENERAL CRIST: Second.
15
GOVERNOR BUSH: Moved and seconded. Without
16 objection, the item
passes.
17
MR. STAPANOVICH: Third item is a request of
18 approval of fiscal
sufficiency of an amount not
19 exceeding $200 million,
State of Florida, Full
20 Faith and Credit, State
Board of Education, Public
21 Education Capital Outlay
Bonds.
22
GENERAL CRIST: Motion on 3.
23
CFO GALLAGHER: Second.
24
GOVERNOR BUSH: Moved and seconded. Without
25 objection, the item
passes.
.
43
1
MR. STAPANOVICH: Fourth item is a request
2 for approval of fiscal
sufficiency of an amount
3 not exceeding 270 million,
State of Florida,
4 Department of Transportation
Turnpike Revenue
5 Bonds.
6
GENERAL CRIST: Motion on 4.
7
CFO GALLAGHER: Second.
8
GOVERNOR BUSH: Moved and seconded. Without
9 objection, the item
passes.
10
MR. STAPANOVICH: Final item, item number 5,
11 is a request for approval
of a fiscal
12 determination of an amount
not exceeding
13 75 million, Florida Housing
Finance Corporation
14 Homeowner Mortgage Revenue
Bonds.
15
CFO GALLAGHER: Motion.
16
GENERAL CRIST: Second.
17
GOVERNOR BUSH: Moved and seconded. Without
18 objection, the item
passes.
19
Thank you Coleman.
20
(The proceedings concluded at 10:16 a.m.)
21
22
23
24
25
.
44
1
2
CERTIFICATE OF REPORTER
3
4
5
6 STATE OF
FLORIDA )
7 COUNTY OF
LEON )
8
9
I, SANDRA L. NARGIZ, RMR, CRR, certify that I
10
was authorized to and did stenographically report the
11
proceedings herein, and that the transcript is a true
12
and complete record of my stenographic notes.
13
I further certify that I am not a relative,
14
employee, attorney or counsel of any of the parties,
15
nor am I a relative or employee of any of the parties'
16
attorney or counsel connected with the action, nor am I
17
financially interested in the action.
18
WITNESS my hand and official seal this 20th
19
day of October, 2003.
20
21
22
______________________________
23
SANDRA L. NARGIZ, RMR,
CRR
2894 REMINGTON GREEN
LANE
24
TALLAHASSEE, FL
32308
850-878-2221
25
.
Cabinet
Affairs
