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                         The above agencies came to be heard before
               THE FLORIDA CABINET, Honorable Governor Bush presiding, in the
               Cabinet Meeting Room, LL-03, The Capitol, Tallahassee, Florida,
               on the 9th day of March, 2004 commencing at approximately 10:00


                                        Reported by:

                                     KRISTEN L. BENTLEY
                                  Certified Court Reporter


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                                  2894 REMINGTON GREEN LANE
                           TALLAHASSEE, FL  32308   (850)878-2221





                         Representing the Florida Cabinet:

                         JEB BUSH

                         CHARLES H. BRONSON
                         Commissioner of Agriculture

                         CHARLIE CRIST
                         Attorney General

                         TOM GALLAGHER
                         Chief Financial Officer

                                           * * *

















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                                          I N D E X

               (Presented by BEN WATKINS)

               ITEM                  ACTION                 PAGE
               1                     Approved               5
               2                     Approved               5

               (Presented by FRED DICKINSON AND ROCKY McPHERSON)

               ITEM                  ACTION                 PAGE
               1                     Approved               10

               (Presented by GUY TUNNELL)

               ITEM                  ACTION                 PAGE
               1                     Approved               11
               2                     Approved               12

               (Presented by TERESA TINKER AND COLLEEN CASTILLE)

               ITEM                  ACTION                 PAGE
               1                     Approved               13
               2                     Approved               31
               3                     Approved               55

               (Presented by TERESA TINKER)

               ITEM                  ACTION                 PAGE
               1                     Approved               56
               2                     Approved               56

               (Presented by COLLEEN CASTILLE)
               1                     Approved               60
               2                     Approved               61
               3                     Approved               62
               4                     Approved               67
               5                     Approved               68
               6                     Approved               95

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               (Presented by COLEMAN STIPANOVICH)

               1                     Approved               98
               2                     Approved               98
               3                     Approved               98

               (Presented by COLLEEN CASTILLE)

               1                     Deferred               170
               2                     Deferred               170




               CERTIFICATE OF REPORTER                       171














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                     DIVISION OF BOND FINANCE - MARCH 9, 2004
          1                              PROCEEDINGS

          2              THE GOVERNOR:  The next cabinet meeting will be

          3         Tuesday, March 30th, 2004 at the Leesburg Opera House,

          4         that's on West Main Street in Leesburg, Florida.  We hope

          5         everybody -- we should have asked all of our friends from

          6         Ocala to -- we could have deferred this to Leesburg, it

          7         would have been easier for you-all.  But come on back --

          8         after this meeting, come on down to see us in Leesburg.

          9         And I also wanted to mention that we've got two or three

         10         items on the agenda that are probably pretty long agenda

         11         items.  They're going to require a lot of people that have

         12         come from other parts of the state to comment on them.

         13         And we're planning for a lunch break which we don't

         14         normally do.  But at 11:45, around then, we're going to

         15         close it down for about an hour and then we'll come back

         16         and start up again at 12:45.  So for the folks that are

         17         here, as you watch your watch, you may want to, if you

         18         think you're going to be on after the 12:45 agenda, you

         19         can go out and see the beautiful parts of our capitol.  Go

         20         up to the 22nd floor, go see the, in the old capitol,

         21         there is a museum of political history.  The museum of

         22         history, the Gray building down the hill, is also a nice

         23         place to visit.  So you-all make your own plans

         24         accordingly.


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                     DIVISION OF BOND FINANCE - MARCH 9, 2004
          1              THE GOVERNOR:  Division of Bond Finance.

          2              MR. WATKINS:  Good morning.

          3              THE GOVERNOR:  Good morning.

          4              MR. WATKINS:  Item No. 1 is approval of the minutes

          5         of the February 26th meeting.

          6              GENERAL CRIST:  Motion.

          7              COMMISSIONER BRONSON:  Second.

          8              THE GOVERNOR:  Moved and seconded.  Without

          9         objection, the item passes.  Item 2?

         10              MR. WATKINS:  And Item 2 is a resolution authorizing

         11         the competitive sale of up to $8 million in revenue bonds

         12         for a University of Central Florida health facility.

         13              COMMISSIONER BRONSON:  Move Item 2.

         14              GENERAL CRIST:  Second.

         15              THE GOVERNOR:  Moved and seconded.  Without

         16         objection, the item passes.  Thank you, Ben.

         17              MR. WATKINS:  Thank you.









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                     DIVISION OF BOND FINANCE - MARCH 9, 2004
          1              THE GOVERNOR:  Department of Highway Safety and Motor

          2         Vehicles.

          3              MR. DICKINSON:  Governor, this is an item that was

          4         deferred from the previous cabinet meeting and these are

          5         five new tags that we have for your approval.  The first

          6         one is the Florida Salutes Firefighters tag.  And I think

          7         Bob Carver is here.  This tag actually was approved right

          8         after -- I think several years ago right after 9/11.  The

          9         proceeds will go to help firefighters involved in

         10         organizations such as Here's Help, Burn Centers, MDA, and

         11         Ronald McDonald Children's Charities.

         12              THE GOVERNOR:  I don't see Bob.  Is he here?

         13              MR. DICKINSON:  He's here.

         14              THE GOVERNOR:  Hiding behind the plates.  There he

         15         is.

         16              MR. CARVER:  Thank you, Governor, and cabinet.  We

         17         appreciate it.  The Florida Firefighter's charities is our

         18         statewide charity.  And the 67 counties that the proceeds

         19         of this tag sale comes from, those local charities, we're

         20         going to see that those funds are dispersed back to the

         21         local level.  But, again, thank you for Florida saluting

         22         firefighters and the work and the dedication that the

         23         25,000 men and women of this state do.  And we want to see

         24         the citizens of Florida proudly display that tag.  Thank

         25         you for your support.

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                     DIVISION OF BOND FINANCE - MARCH 9, 2004
          1              THE GOVERNOR:  Thank you, Bob.

          2              MR. DICKINSON:  Governor, the other four tags are the

          3         Air Force, Army, Coast Guard and Navy tags.  And we have a

          4         group here.  I think the colonel has got some people also

          5         to introduce as well as the sponsors of the legislation,

          6         Senator Fasano and Representative Jordan, if they'd come

          7         forward.

          8              THE GOVERNOR:  Welcome, gentlemen.

          9              SENATOR FASANO:  Good morning.  Governor, members of

         10         the cabinet, thank you very much.  The plates that we were

         11         able to pass through a piece of legislation signed by you,

         12         Governor, honors all of our men and women who served in

         13         our military, our heroes here in the state of Florida.  As

         14         you know, we have a veterans license plate.  We also have

         15         a Marine Corps license plate.  Now we will include a Navy,

         16         Army, Air Force and Coast Guard.

         17              As, like the veterans license plate and the Marine

         18         Corps license plate, the dollars that we will receive from

         19         these specialty license plates will go to continue to

         20         serve our veterans in the veterans nursing homes in

         21         providing dollars to those veterans in services and along

         22         with continuing the building of veterans nursing homes

         23         throughout the state of Florida.  And I thank you very

         24         much.

         25              THE GOVERNOR:  Thank you, Mike.  Thanks for your hard

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                     DIVISION OF BOND FINANCE - MARCH 9, 2004
          1         work on behalf of the enlisted men and the vets and the

          2         national guard, reservists.  You're doing great work in

          3         terms of legislation.

          4              How are you, Stan?  Good morning.

          5              REPRESENTATIVE JORDAN:  Thank you, Governor and

          6         cabinet.  The plates that Senator Fasano mentioned, these

          7         are plates of pride.  These are pride for service, for the

          8         respect, by family members, by participants and also,

          9         Governor, it's a symbol of opportunity.  We must keep in

         10         mind that the largest educational institution in America

         11         under one organization is the United States military.

         12         From that, our young people, since we're committed to

         13         education, a lot of them who do not have a chance to go to

         14         college and even those who go to college can continue

         15         their educational expansion through the wonderful

         16         opportunities in the United States military.

         17              And, Governor, members of the cabinet, I stand before

         18         you today as a living symbol of this opportunity.  48

         19         years ago this month I wore the Army uniform for the first

         20         time and came from a family, my mother was one of 18

         21         children.  My daddy raised seven children before he got to

         22         me.  I was the first one to get a high school education

         23         and I went on to become an officer and a pilot in the

         24         United States military.  For that, I am grateful to this

         25         country.  And I hope you will wear this tag and display

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                   DEPARTMENT OF HIGHWAY SAFETY - March 9, 2004
          1    this tag with great pride.  Thank you.

          2              THE GOVERNOR:  Thank you, Stan.

          3              Thank you for last Tuesday, by the way, as well.

          4         That was a beautiful ceremony you put together.

          5              Yes, Rocky.

          6              MR. McPHERSON:  Governor, just some final comments to

          7         thank, first, our legislative sponsors.  Both Senator

          8         Fasano and Representative Jordan are truly Legislators

          9         with veterans in their heart.  And having the funds from

         10         these plates, all four of them, go to our nursing home

         11         program, that will be a valuable asset.  They have a

         12         potential to raise about a million dollars a year that we

         13         use for upkeep in keeping these facilities first class.

         14              Secondly, Director Dickinson and his staff, Paula

         15         Stanfield, have worked through the design process with us,

         16         superb cooperation, and we got it done in a pretty short

         17         period of time.  And finally we have a couple of service

         18         reps here -- Captain Royal Logan.  Royal, if you would

         19         stand, United States Navy.  Colonel Charley Price, United

         20         States Army -- are here to represent their services.  And

         21         I'd like to thank the governor and the cabinet for their

         22         action today and for your support for our department and

         23         our veterans.

         24              THE GOVERNOR:  Thank you, Rocky.  I've been told, I

         25         can't see, but Senator Atwater and Senator Klein are here

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                   DEPARTMENT OF HIGHWAY SAFETY - March 9, 2004
          1         who were supportive of the firefighters plate.  Thank you

          2         so much for being here.  In fact, why don't you bring your

          3         plates up and we'll get a picture, all of our guests.

          4              Department of -- you got more?

          5              MR. DICKINSON:  No, sir.  Did you move the item?

          6              THE GOVERNOR:  No, we didn't.  Thank you for bringing

          7         that up.

          8              CFO GALLAGHER:  Motion.

          9              GENERAL CRIST:  Second.

         10              THE GOVERNOR:  Moved and seconded.  Without

         11         objection, the item passes.

         12              MR. DICKINSON:  Thank you, Governor.

         13              THE GOVERNOR:  Thank you.













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                  DEPARTMENT OF LAW ENFORCEMENT - MARCH 9, 2004
          1              THE GOVERNOR:  FDLE.  Motion on Item 1.

          2              COMMISSIONER BRONSON:  Second.

          3              GENERAL CRIST:  Second.

          4              THE GOVERNOR:  Moved and seconded.  Without

          5         objection, Item 1 passes.  Guy, how are you doing?

          6              MR. TUNNELL:  Thank you, Governor.  Good morning,

          7         cabinet members.  Can I sit back down?

          8              THE GOVERNOR:  Item 2.

          9              MR. TUNNELL:  Item 2.  I'd like to respectfully

         10         submit three rules for adoption in Title 11 of the Florida

         11         Administrative Code.  These rules revise, amend and

         12         clarify officer discipline standards and procedures within

         13         the Criminal Justice Standards and Training Commission.

         14         The rule changes continue to maintain the highest level of

         15         professionalism expected of our officers.  I should note

         16         that the development of these rules was a collaborative

         17         effort between both the Criminal Justice Standards and

         18         Training Commission as well as the Florida PBA and other

         19         union representatives.  We got a few of the members in the

         20         audience, I believe.  Some of their leadership helped work

         21         on this.  If you approve the rules today, they will take

         22         effect on or after March the 30th.

         23              CFO GALLAGHER:  Motion on 2.

         24              GENERAL CRIST:  Second.

         25              THE GOVERNOR:  Moved and seconded.  Without

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                  DEPARTMENT OF LAW ENFORCEMENT - MARCH 9, 2004
          1         objection -- any discussion?  (No response.)  Without

          2         objection, the item passes.

          3              MR. TUNNELL:  Thank you, sir.  For the record, I

          4         drink a glass of orange juice, a large glass of orange

          5         juice every day.

          6              THE GOVERNOR:  You're my role model.

          7              MR. TUNNELL:  What is it?  A day without orange juice

          8         is like a day without sunshine.  Thank you.


















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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              THE GOVERNOR:  Administration commission.  Tsquare,

          2         how are you doing?

          3              MS. TINKER:  Real good, Governor.  How are you doing?

          4              THE GOVERNOR:  Item 1.

          5              CFO GALLAGHER:  Motion on the minutes.

          6              GENERAL CRIST:  Second.

          7              THE GOVERNOR:  Moved and seconded.  Without

          8         objection.  Item 1 is passed.

          9              Item 2.

         10              MS. TINKER:  Item 2, Request authorization to

         11         initiate rulemaking to amend the comprehensive plans of

         12         Monroe County and the city of Marathon.  I'll just add,

         13         Governor, that staff recommends no further action on the

         14         village of Islamorada at this time other than to recognize

         15         that they have made significant commitments toward the key

         16         issues of wastewater, affordable housing, and land

         17         acquisition.  And they'll be, on their own, amending their

         18         comprehensive plan.  We have several speakers this

         19         morning, Governor.  The speakers have agreed to limit

         20         their time.

         21              THE GOVERNOR:  To what?

         22              MS. TINKER:  To two minutes each.

         23              THE GOVERNOR:  Okay.

         24              MS. TINKER:  We're going to start with Secretary

         25         Castille.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              THE GOVERNOR:  I don't see her.  This is a tradition

          2         that was started by David Struhs.

          3              (Laughter.)

          4              CFO GALLAGHER:  Never show up on time.

          5              THE GOVERNOR:  I thought that this would be --

          6              CFO GALLAGHER:  It's when you're important, you don't

          7         have to be here.

          8              THE GOVERNOR:  -- the Castille era would be different

          9         since she was the chief cabinet aide but no.

         10              CFO GALLAGHER:  Oh, here she is.

         11              THE GOVERNOR:  Glad you could make it, Colleen.

         12              MS. CASTILLE:  Thank you, sir.  I was trying to

         13         convince the Dunnellon people we were moving more quickly

         14         than anticipated and to stay here.

         15              THE GOVERNOR:  Are we?

         16              MS. CASTILLE:  I think we are.

         17              THE GOVERNOR:  Don't leave us if we're moving fast.

         18              MS. CASTILLE:  It appears that we are.  Governor and

         19         cabinet, members of -- Governor, members of the cabinet,

         20         I'd like to give you an update on our activities with the

         21         communities of Monroe County and the interest groups based

         22         on our last meeting on the administration commission rule.

         23              When we last left the cabinet meeting, there were

         24         some concerns that the commitments from the community

         25         level were not quite as strong as we needed them to be and

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         that there was not comfort on how much land we were able

          2         to protect with acquisition and with some of the rules

          3         that the County would impose for habitat protection.

          4              What have we've done with the County and the

          5         community since that time is to meet with them in a public

          6         meeting, go over the tier process and the habitat

          7         protection plan that they propose for their land

          8         development regulations.  And just to sort of wrap it up,

          9         what we've done is we've come to you with a

         10         410-million-dollar commitment from the State and local

         11         level for land acquisition, central wastewater, and

         12         affordable housing.

         13              The water quality continues to decline if we do

         14         nothing in the Keys.  And so stopping development and

         15         stopping permits will not get us to the desired goal.

         16         It's necessary to have the commitments for the wastewater.

         17         And in order to do that, the most important thing on the

         18         community level is to provide for an economically diverse

         19         community and to provide for affordable housing.  So what

         20         we're recommending here for you today is a restoration of

         21         some permits that were lost in the past.  But all of those

         22         permits will now go for affordable housing in all three

         23         communities, Islamorada, Marathon, and Monroe County for

         24         affordable housing in perpetuity.

         25              And for that, we are happy to be in partnership with

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         the communities and I know that not everybody is happy

          2         with this.  And generally, I would love to always bring to

          3         you something that everyone is happy with.  But we commit

          4         that we are going to develop wisely in the Keys and

          5         slowly.  But to make sure that we do provide for the

          6         humans' needs as well as the environmental needs.  And we

          7         do have some presenters here and I'm going to let Theresa

          8         bring them up.

          9              MS. TINKER:  The next four speakers are representing

         10         environmental interests in the Keys.  Richard Grosso,

         11         Charles Pattison, Eric Draper and Marianne Giggenbach.

         12         And they can announce who they are representing when they

         13         come up.

         14              THE GOVERNOR:  Good morning.

         15              MR. GROSSO:  Thank you.  Good morning, Governor,

         16         members of the cabinet.  Richard Grosso.  I'm here

         17         representing Florida Keys Citizens Coalition World

         18         Wildlife Fund, last stand in the key deer protection

         19         alliance.  In December, you heard about the studies of the

         20         caring capacity study.  We shouldn't lose any more

         21         habitat, we have species going extinct.  We have a

         22         critical problem with habitat loss and shouldn't lose any

         23         more.

         24              You were reminded of the water quality findings.

         25         We've exceeded the limits of pollution in the Keys.  You

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         were reminded of the hurricane evacuation problem.  We are

          2         over the 24-hour evacuation limit.  The proposed concept

          3         to you, which suggests that you adopt a rule that

          4         increases the rate of growth in the face of those facts,

          5         is wholly inappropriate in our opinion.

          6              Increasing the rate of growth in the face of those

          7         compelling facts with each growth limit having been

          8         exceeded simply doesn't make sense.  We would hope that

          9         you would direct your staff that as it goes through the

         10         rulemaking process, when a final rule comes back to you

         11         later this spring or early in the summer, that that issue,

         12         the facts, really be looked at and that issue be

         13         addressed.

         14              The new thing that has changed to where they're

         15         suggesting it would change your opinion that substantial

         16         progress wasn't made, that the dollar commitments and a

         17         moratorium proposed on habitat loss.  The moratorium is

         18         short term and it's full of holes.  It's a moratorium on

         19         habitat loss in a small subset of the important habitat

         20         areas.  That's important that you understand that.  The

         21         dollar commitments are good.  We fully support the

         22         increased dollars for acquisition for wastewater.  But

         23         they're not different than the commitments that have been

         24         there in the past and haven't been lived up to.

         25              So increasing the rate of growth, repealing the

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         requirement that new nutrients be offset every year, are

          2         not appropriate responses, even to the good things that

          3         are in this rule.  So, again, we would ask that you direct

          4         your staff to take a hard look at the environmental and

          5         the economic facts, remembering that in that in the Keys

          6         the environment is the economy.  It is a multi hundred

          7         million dollars, hundreds of millions of dollars a year.

          8         The environment in the Keys contributes to the economy.

          9         It is not doing the Keys a favor necessarily to increase

         10         the rate of destruction of hammocks and increase the rate

         11         of water pollution in the Keys.  Please keep that in mind

         12         as you go through this process.

         13              Again, the concept that they're asking you to submit

         14         to rulemaking is a very bad one, a very ill-conceived one

         15         in terms of what it does to the rate of growth, what it

         16         does not do to habitat protection.  But we do support the

         17         dollar figures if those commitments are lived up to in the

         18         past.  But we don't have a good history of living up to

         19         those commitments in the Keys.  And increasing the rate of

         20         growth while we wait and see what happens is not a good

         21         idea.  Thank you for your time.  Thank you for your

         22         attention to this critical matter.

         23              (Applause.)

         24              MR. PATTISON:  Governor, my name is Charles Pattison.

         25         I'm the executive director of 1,000 Friends of Florida.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         Thank you for listening to our comments.  We were here

          2         last December 16th as well when you heard the report that

          3         substantial progress had not been made.  And we were very

          4         pleased too that a lot of discussion has taken place

          5         that's resulting in some additional commitments.  At the

          6         same time, we understand that hurricane evacuation

          7         clearance times have been exceeded.  And as you know,

          8         that's a fundamental basis for the whole comprehensive

          9         planning process in the Keys.

         10              We've also had time to look at the agreements that

         11         your staff and DCA have negotiated.  And we too would

         12         support the idea that this tremendous infusion of dollars

         13         is a critical part of the solution to better environmental

         14         help in the Keys.  We've looked at those concepts too.

         15         And we have a few points that we think ought to be

         16         emphasized by the administration commission as rulemaking

         17         goes forward.  I've just got four of those.

         18              One does deal with the moratorium and what it

         19         actually encompasses.  I think there is a question about

         20         the land area that's actually included.  We thought it

         21         would be helpful to have some clarity added to the rule

         22         for that.  Also, it's how long the moratorium stays in

         23         place.  We would hope that it stays in place no longer

         24         than is minimally necessary.  But it has to be however

         25         long it takes to get the county's land development

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         regulations and comprehensive plan updated.

          2              I've mentioned that the dollars are very significant.

          3         I think it would be helpful if the chart that your staff

          4         prepared at the -- for the age presentation a week ago

          5         could actually be referenced as part of the rule.  I think

          6         it's very easy then to see what the commitments are for

          7         all parties.

          8              Affordable housing, I don't know of any group that

          9         has opposed increasing affordable housing in the Keys.  I

         10         think that is a critical issue.  The thing we had

         11         suggested was that the ratio between market rate housing

         12         and affordable housing be changed.  I mentioned that to

         13         Chairman Murray of the Keys and he had said he thinks the

         14         Keys numbers currently are about 60 percent market rate,

         15         40 percent affordable housing.  That would be great if

         16         that could be memorialized.  Anything that increases that

         17         ratio would be helpful.

         18              The commitment though on the financial particulars,

         19         we think, ought to be tied to specific performance

         20         measurements.  Any increases in permits ought to be

         21         directly tied to whether or not the wastewater facilities

         22         are on line and providing the credits.  I know that's the

         23         concern that a lot of us have about the nutrient credits,

         24         they're based on future wastewater facilities being on

         25         line.  So hopefully they get built.  But if not, those

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         credits would have already been given.

          2              The last point, this hurricane evacuation that's

          3         mentioned in the potential agreement, that cannot be

          4         allowed to slip at all, that's a key piece.  We would hope

          5         that the benchmarks could be set so that the performance

          6         measurements of that study could be closely tracked.

          7              So those are the four points that we would like to

          8         see specifically added to your direction to the staff and

          9         the rulemaking.  Thank you.

         10              MS. TINKER:  I'm scanning the crowd for Eric Draper.

         11         But I don't see Eric.  So, Marianne, you want to come on

         12         up?

         13              MS. GIGGENBACH:  Good morning, Governor.  Marianne

         14         Giggenbach with The Nature Conservancy.  We see this as an

         15         important step in the process and we want to commend

         16         Secretary Castille and all the people who worked on this

         17         to make it happen, the County, et cetera.  And I think

         18         that it's unprecedented in the sense that we accomplished

         19         some good things in a short period of time.  You've heard,

         20         however, that there are still some concerns along the way.

         21         And I think that what we would advocate is that as

         22         rulemaking goes forward, that it stays an open process,

         23         that it is something where the parties are held

         24         accountable in a very open way for meeting the things that

         25         have been agreed to so that this program and this

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         agreement does not in some way become compromised down the

          2         road.

          3              So for us, I think that we think it's an important

          4         step forward but we really want the State to continue its

          5         hands-on approach to this to make sure that everything

          6         gets followed through on in a good way for this special

          7         place that we call the Keys.  Thank you.

          8              THE GOVERNOR:  Thank you.

          9              MS. TINKER:  Next we'll move to the local government

         10         representatives.  First is Scott Janke, city manager with

         11         the City of Marathon.

         12              THE GOVERNOR:  Good morning.

         13              MR. JANKE:  Good morning, Governor and cabinet

         14         members.  I'd like to first apologize, Randy Mearns, the

         15         mayor for Marathon couldn't be here today.  We have a

         16         council meeting in Marathon tonight and you never know

         17         what the airlines are going to do.  But I'd like that

         18         thank also, Secretary Castille and her staff for all the

         19         work that's been done in the last four or five months to

         20         get us so far.

         21              The proposal that's in your hands now, I think is

         22         fair and equitable.  It helps the City of Marathon, which

         23         is 12,000 people, commit $60 million to build sewer

         24         systems to help us clean up the Keys.  The amount of

         25         increased housing that would be allowed under the

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         proposal, six houses a year for the market rate, is not

          2         going to adversely impact us.  As a matter of fact, it

          3         will help us with infill development and help us build an

          4         economic base that we could help use then to pay for that

          5         $60 million.

          6              THE GOVERNOR:  Glad you brought that up.

          7              MR. JANKE:  Thank you.  And we are not upside down in

          8         market rate to afford real growth right now.  As a matter

          9         of fact, if you approve this agreement and we get rules

         10         written to do it, the City of Marathon will have put

         11         something along the lines of 200 to 210 affordable housing

         12         units in place this past year compared with 19 market rate

         13         homes.  So to get to any kind of a 50/50 mix will take

         14         years of increased market rates.  Hurricane evacuation --

         15              THE GOVERNOR:  So is the mix -- the mix is not the

         16         same in the rest of the Keys, is it?

         17              MR. JANKE:  Well, no.  There's actually an 80/20 mix

         18         currently.  There's been some discussion of having you-all

         19         change, through rulemaking, that to be 50/50 or even turn

         20         it over the other way.  What I'm saying is in reality,

         21         because we focused so much on affordable housing in the

         22         last year, we'll have about 200 to 210 units going into

         23         the ground over the next year of affordable housing, yet

         24         only about 19 market rate, which helps us build that tax

         25         base to support building sewers, building storm water

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         control systems, setting aside land for habitat

          2         protection.  The rule is fair and equitable on both sides.

          3         And I commend your staff, the cabinet aides, for spending

          4         enough time to listen to us the last few times we've been

          5         here and I appreciate all the help.  Please don't let us

          6         fail.

          7              I was in Washington a week ago doing the same

          8         discussion with people back there and I plead one thing,

          9         Don't let us fail.  Everybody is watching.

         10              THE GOVERNOR:  How could we let you -- we're not

         11         going to let you fail, but don't fail.

         12              MR. JANKE:  We're not going to fail.

         13              THE GOVERNOR:  It's typical, you know, we'll be

         14         blamed if you fail.  We're not going to let you.

         15              MR. JANKE:  We have a 100-million-dollar sewer

         16         project for the 12,000 residents in Marathon.

         17              THE GOVERNOR:  Just build it.

         18              MR. JANKE:  60 million of our own money and we're

         19         looking to the federal --

         20              THE GOVERNOR:  Build it and make it technologically

         21         appropriate and make sure it's done the right way and

         22         we're going to back it up with our commitment.  For the

         23         people that are here that may not have had this -- been

         24         part of this debate for the last decade or more, this is a

         25         pretty dramatic departure where instead of the State just

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         saying, Thou shalt not do this, basically command and

          2         control saying you can't do things, we're saying a little

          3         of that.  And we're also saying, Here is money, $93

          4         million for land acquisition, $18 million that we're

          5         hopefully, Representative Paul is here, the Legislature

          6         will appropriate for providing support.  And the county --

          7         for Marathon, for example, that's $5,000 per person.

          8         They're making a commitment, citizens of this community,

          9         $5,000 per person to build a sewer system.  This is a

         10         totally different approach and I just commend all of the

         11         municipalities that have stepped up, some reluctantly.

         12         You-all have been there from the get-go and we just

         13         appreciate it.

         14              MR. JANKE:  Well, thank you.  And the City of

         15         Marathon has committed itself to doing the right thing.

         16         We simply asked for some assistance from you folks.  Thank

         17         you very much.

         18              THE GOVERNOR:  Don't use the "F" word again though.

         19              MS. TINKER:  The next speaker is Mayor Murray Nelson

         20         from Monroe County.  And while Mayor Nelson is coming up,

         21         I just want to remind you that the City of Key West is not

         22         included in this rulemaking action today.  You did

         23         continue the designation for the City of Key West and we

         24         just want to make sure Key West understands that if there

         25         are dollars appropriated by the Legislature, they would be

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         eligible to receive some of those dollars as well because

          2         they made significant strides, particularly in their

          3         wastewater and storm water issues.

          4              THE GOVERNOR:  Mayor, welcome back.

          5              MAYOR NELSON:  It's very good to be here this

          6         morning.  I hope everyone had a nice evening last night

          7         and it's a pleasure to be here, Governor.  Cabinet

          8         members, I want to thank you very much for all your

          9         participation and I've really been impressed with the

         10         knowledge that your staff has about Keys issues.  I would

         11         like to have convey the appreciation of the Board of

         12         Monroe County Commissioners and the cities of Islamorada

         13         and Marathon for your interest in the Florida Keys.

         14              This partnership will provide an opportunity for the

         15         state of Florida and Monroe County to address our common

         16         goals of meeting the requirements of 2820 and the Monroe

         17         County comprehensive plan.  I would like to personally

         18         thank Teresa Tinker and the governor's staff for their

         19         patience in reaching this agreement and for their

         20         knowledge of the Keys issues.  As mayor, I've signed the

         21         Florida Keys comp certificate for Colleen Castille and I

         22         cannot think of anyone more worthy.  Colleen Castille, Jim

         23         Quinn, Rebecca Deton (phonetic) and their aides have made

         24         the partnership possible by instilling a sense of trust

         25         with all the involved parties.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              I would also like to thank all the environmental

          2         groups who have supported this issue and to address the

          3         needs of the environmentally sensitive lands, wastewater

          4         and workforce housing.  And last but not least, I would

          5         like to thank Representative Sorensen for his tireless

          6         efforts to ensure this agreement was brought to an

          7         equitable solution.

          8              Governor and cabinet members, thank you for your

          9         leadership and courage, for your consideration of this

         10         proposal presented here today by your staff and DCA  A new

         11         dawn has risen over Monroe County and the relationship we

         12         have with the State of Florida.  I am proud to have shared

         13         in this historical endeavor and I am thrilled that this

         14         agreement will be implemented under your administration.

         15         God bless you and yours and a hardy attaboy for all who

         16         have participated.  And thank you very much for having us

         17         here today.

         18              THE GOVERNOR:  Thank you, Mayor.  I want to make sure

         19         that we get a tape of your very eloquent remarks so that

         20         Teresa Tinker who's been working on this longer than I've

         21         been in public service can have it for her memoirs.  Very

         22         kind of you to say that.  Appreciate it.

         23              MS. TINKER:  The last speaker on this item is

         24         Representative Ken Sorensen.

         25              THE GOVERNOR:  Representative Sorenson, you say

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         something nice too --

          2              (Laughter.)

          3              CFO GALLAGHER:  Don't be too nice, nobody will

          4         believe it.

          5              (Laughter.)

          6              THE GOVERNOR:  Good morning, Representative.

          7              REPRESENTATIVE SORENSEN:  Good morning, my governor

          8         and my cabinet.  It's great to see you.  And I do have

          9         some good things to say, all nice things.  Yes, yes.  The

         10         big bear has probably gone away.  Okay.  This really is,

         11         as we say in the House, this is a great day in the state

         12         of Florida.  For the first time in 27 years an issue that

         13         brought me back out of private life to try and resolve

         14         this issue, which I could never do by myself, and there

         15         are a lot of people I have to thank in that process.  And,

         16         Governor, that starts with you.  The reality was this

         17         problem has been here all along.  And what the problem was

         18         we said, We're going to save the Florida Keys.  You can't

         19         use your land and there is just nothing we're going to do

         20         about that.

         21              For the first time in the history of almost a quarter

         22         of a century, you and your people have stepped forward and

         23         allowed us to get away from that conundrum.  The reality

         24         is the 93-million-dollar commitment for purchasing lands,

         25         the $18 million in your budget, and we have Jerry Paul

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         here.  I've asked him to hang around to make sure he

          2         understood how important this is.  The entire cost of this

          3         project is going to be a billion dollars.  It would not

          4         happen, we would not have made the progress without your

          5         leadership.  And I really wanted to say that.

          6              Also, for Monroe County, for the city of Islamorada,

          7         for Marathon, Key West, Key County Beach, and I don't

          8         think I left anybody out, but everyone came together in

          9         this process to put this 410 million-dollar package

         10         together.  We've got a great opportunity.  Now there may

         11         be some people up there that when my good friend the

         12         governor leaves, it may be the governor at some time in

         13         the future, but I want you to understand this is the

         14         beginning of the process and we're going to need to

         15         continue to fund this thing as time goes on and we just

         16         can't make this a one-shot deal.

         17              I thank you for everything you've done, Governor.

         18         The reality is that we've never had such a real

         19         partnership before.  We have an opportunity.  I also would

         20         like to thank my new friend Teresa Tinker and my new

         21         friend Colleen Castille.  Anyway, I think we've made

         22         progress for the first time and I thank you, Governor.

         23         We've got a great opportunity here.  Let's move forward

         24         and let's not let the boat get rocked.  Thank you, sir.

         25              THE GOVERNOR:  Don't everybody start crying.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              (Laughter.)

          2              REPRESENTATIVE SORENSEN:  If I can, what I sent up

          3         there to you is -- there've been some articles that said

          4         there was a boom going on in the Florida Keys.  That's the

          5         1990 and the 2000 census.  Correction, the 1990 and the

          6         2000 census.  If you look at it, I think you'll see we've

          7         gown by just a little over 1,000 since 1990.  There is no

          8         boom.

          9              THE GOVERNOR:  Well, we got a -- the State has a

         10         responsibility to be a significant partner in this.  And I

         11         worry a lot about not the fancy people that we all aspire

         12         to be to be able to live in the Keys, but the folks that

         13         work in county government, work in city government,

         14         they're teachers, they're nurses that provide services for

         15         people in the Keys, they can't afford to live there.  So

         16         we have to find a way to expand affordable housing or the

         17         schools won't be open and emergency rooms won't work and

         18         the quality of life for the basics won't exist.  So I

         19         think this is a good first step.  And Ken, I appreciate

         20         you saying it's a first step.  And I don't know why you're

         21         counting on Jerry Paul to help you out since he's a

         22         short-timer, he's leaving in a couple of months to go to

         23         Washington.  That's the best you can do?

         24              (Laughter.)

         25              Any other speakers?

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              MS. TINKER:  No, sir.  Staff requests authorization

          2         to initiate the rulemaking process.

          3              CFO GALLAGHER:  Governor, I'd like to say something

          4         if I may, real quickly.  Just I want to let everybody know

          5         that Senator Bullard made sure, that's her district, that

          6         we all heard from her, at least I sure did.  And I want to

          7         thank Colleen for her continued hard work on this.  I'm

          8         very encouraged by how far DCA and Monroe County have come

          9         really in three months.  And just want to remind everybody

         10         that this just really initiates rulemaking.  And the

         11         environmentalists should participate in that rulemaking

         12         because that's where the rubber meets the road.  And by us

         13         starting this, their concerns should be included in the

         14         process.  And I look forward to you coming to us with a

         15         proposed rule.  And with that, I'll move the issue.

         16              GENERAL CRIST:  Second.

         17              THE GOVERNOR:  There's a motion and a second.  Any

         18         other discussion?  Without objection, the motion passes.

         19         Thank you very much.

         20              MS. TINKER:  Item 3 deals with the University of

         21         South Florida campus master plan.  Staff recommends

         22         entering the amended draft final order.  Again, Governor,

         23         we have several speakers who have agreed to limit their

         24         time.  We're going to start with the Intervenors in the

         25         proceeding.  First speaker is Steve Pfieffer representing

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         Dr. Mullins and Andrea Ginsky.

          2              THE GOVERNOR:  Good morning, Mr. Chairman.  How are

          3         you doing?  Good morning.

          4              MR. PFIEFER:  Good morning.  Governor, members of the

          5         cabinet, my name is Steve Pfieffer.  I'm here representing

          6         two of the petitioners in this proceeding, Dr. David

          7         Mullins and Ms. Andrea Ginsky.  They are not here today,

          8         they apologize for that.  Dr. Mullins is teaching a

          9         calculus class at this very moment.  Ms. Ginsky works with

         10         the public library in Sarasota and needed to be there

         11         today.  Dr. Mullins and Ms. Ginsky live directly adjacent

         12         to the south border of what will be the Sarasota, Manatee

         13         branch of the University of South Florida.

         14              THE GOVERNOR:  Is it possible do we have a map?  Keep

         15         going.  We'll work on it.

         16              MS. TINKER:  We'll work on it.  We'll find one.

         17              (Thereupon the map was displayed.)

         18              MR. PFIEFER:  I'll put my finger on where their lots

         19         are.

         20              THE GOVERNOR:  That won't work.  Have to put your

         21         finger on the map.

         22              MR. PFIEFER:  About halfway down the southern border

         23         of the university campus, which is to the left of the

         24         screen of the proposed campus, is where Dr. Mullins and

         25         Ms. Ginsky live.  One of their properties is directly

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         adjacent to the border.

          2              THE GOVERNOR:  If you could.  I apologize if you

          3         could point on that piece of paper.

          4              CFO GALLAGHER:  Now put your finger there.

          5              THE GOVERNOR:  Put your finger -- thank you.

          6         Appreciate it.

          7              MR. PFIEFER:  Yes, sir.  Sorry for my failure of

          8         technology there.  One of their lots is directly adjacent

          9         to the border.  Their other two lots are one narrow lot

         10         away.  The impacts of the campus on them are potentially

         11         huge.  They are residential properties that they own.

         12         It's where they live.  The impacts relate to light noise

         13         and potential intrusions into their neighborhood from

         14         parking and pedestrian interactions with their

         15         neighborhood.  Their issues in this proceeding have always

         16         been compatibility issues, compatibility of the campus,

         17         with a 350-car parking lot that's located 50 feet from

         18         their properties.

         19              This campus is a difficult site for a number of

         20         reasons.  It is a small site and especially a small site

         21         for the size of a campus that is being proposed.  In fact,

         22         once this campus is developed, it will be the most

         23         intensely developed campus in the university system.

         24         There are environmental constraints on the campus and

         25         there are compatibility constraints on the campus that

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          1         make designing this campus in a manner that will

          2         accommodate these interests very difficult.

          3              We have some issues with the campus master planning

          4         process.  For example, your own staff spent time with one

          5         of the witnesses in this proceeding, all without any

          6         opportunity for cross-examination by the other parties in

          7         this case, all without any opportunities for rebuttal from

          8         the parties of this case.  There are some things you may

          9         here with regard to this campus and that is this is --

         10         that there will be future local permitting processes --

         11         there will not be.  This process is not like a local

         12         government comprehensive planning process where you would

         13         have a comprehensive plan implementing land development

         14         regulations and finally a development order all required

         15         to be compatible with one another.  This campus master

         16         planning document is the only enforceable document that

         17         there will be.  It is, in effect, the land development

         18         regulations, it is, in effect, the development order.

         19              You may hear that this only a plan, that we'll flesh

         20         out other issues later.  But there will be no enforceable

         21         later with regard to this plan.  You also may hear that

         22         there is requirements to be compliant with Manatee County

         23         land development regulations, and there absolutely are not

         24         any requirements for that.  And the 50-foot buffer, in

         25         fact, is what is required under the Manatee land

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         development regulations to buffer properties like this.

          2         But there are many other requirements in those land

          3         development regulations too regarding lighting, regarding

          4         noise, none of which have been applied to this campus.

          5              We believe that a host local government has not been

          6         treated as such.  I understand that is a legal issue and

          7         one that continues to follow this case.  We feel that it

          8         would be irresponsible of us to raise these issues and not

          9         offer a fix.  And we have offered a fix.  We have provided

         10         some provisions that if they were included with the plan,

         11         would accomplish rendering it compatible with the

         12         residential neighborhood.  These proposals all relate to

         13         lighting.  They relate to noise and they relate to

         14         potential pedestrian and traffic impacts into our

         15         residential neighborhood.  None of these have found their

         16         way into the proposed order.

         17              We certainly would hope that the neighbors of this

         18         campus would get the same protection that every other

         19         citizen of Manatee County gets which would be assurance

         20         that the project will, and the buffering of the project

         21         will be consistent with the land development regulations

         22         in Manatee County.  We do appreciate that there has been a

         23         date established for when the so-called opacity issues

         24         will be met.  But other than that, there has been no

         25         commitment to abide by the land development regulations in

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         Manatee County.

          2              The -- there was no analysis during the course of

          3         this process undertaken with regard to lighting impacts on

          4         the adjoining neighborhood, with regard to noise impacts

          5         on the adjoining neighborhood, and with regard to

          6         potential off-site parking and pedestrian impacts on this

          7         neighborhood, no analysis at all.  We do appreciate your

          8         listening to us.  We appreciate it.  Many people have

          9         worked hard during this process.  We have too.  We

         10         continue to have these issues.  We have no wish to

         11         continue pursuing these issues in legal proceedings.  We

         12         would rather pursue them as matters to be resolved so that

         13         we can be good neighbors and so can the campus.  We'd be

         14         happy to answer any questions and I appreciate your

         15         attention.

         16              THE GOVERNOR:  I think there may be questions.

         17              MS. TINKER:  The next speaker is Betsy Roberts

         18         representing the Sierra Club, Manatee, Sarasota group.

         19              THE GOVERNOR:  Good morning.

         20              MS. ROBERTS:  Good morning, Governor Bush and members

         21         of the cabinet.  I am Betsy Roberts, chair of the Manatee

         22         Sarasota Sierra club, a volunteer who has driven six

         23         hours, given up two days of work as a home health nurse,

         24         and then paid been nothing to attend this meeting.  I am

         25         also missing my first election in 42 years so you can

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         figure out how old I am.  During the last one and a half

          2         years I have spent days at hearings and doing research on

          3         this proposed expansion.  After reading the original draft

          4         order I was generally pleased with the preservation and

          5         conservation of this unique habitat by the DCA

          6              But after the unilateral changes made during the

          7         midnight amendment on Friday with none of the Petitioners

          8         present, I lost all confidence in our system.  All that

          9         was good in the original order was literally stricken,

         10         leaving USF free to destroy one of the last coastal upland

         11         areas of the west coast of Florida and, with it, rare

         12         plants, gopher tortoises and frogs who live together and

         13         are both listed.  They are listed because of loss and

         14         fragmentation of their habitat.  This will be accomplished

         15         with the proposed roads, classrooms and administration

         16         buildings of this new campus.

         17              An ecosystem is extremely difficult to recreate and

         18         this has been recommended by USF.  The tortoise may not

         19         look smart, but remember that famous race and who won.

         20         The tortoise can and does select its optimum environment

         21         for life.  It is well-documented that it has voted for

         22         this with its feet.  Unfortunately, it does not fit into

         23         the USF campus master plan.  I urge you to reconsider the

         24         expansion of USF on this unique classroom on Sarasota Bay

         25         when there are other viable alternatives.  Thank you very

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         much.

          2              THE GOVERNOR:  Thank you for being here.

          3              MS. TINKER:  Next speaker is Renee Sansoucy, followed

          4         by Claudia Cuomo.

          5              MS. SANSOUCY:  Good morning.

          6              THE GOVERNOR:  Good morning.

          7              MS. SANSOUCY:  My name is Renee Sansoucy and I am one

          8         of the seven Petitioners in this case.  I'm also a

          9         resident of the uplands.  The reason I got involved in

         10         this process in the first place is the very real fear that

         11         I will lose my home through USF's right to imminent

         12         domain.  It's obvious that not if, but when USF outgrows

         13         Crossley, they have nowhere to go but the uplands.

         14              As I got further involved, it became painfully clear

         15         that the Crossley site is grossly inadequate in size and

         16         has way too many constraints to accommodate the needs of a

         17         full-blown university campus.  I have come this far

         18         without legal representation and I have learned a great

         19         deal the hard way about this process, which to say the

         20         least leaves a lot to be desired.  It's been a long,

         21         frustrating, not to mention expensive, journey to get to

         22         this point.  Dealing with USF who alleges to be a good

         23         neighbor has been less than encouraging.  In fact, all of

         24         our concerns fell on deaf ears up until the DCA, hearings.

         25              For the first time since the process began, someone

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          1         was actually listening and understanding the severe

          2         inadequacies of this master plan.  Though I don't fully

          3         agree with all the DCA'.S. final recommendations, they

          4         proficiently address the most flagrant of the noncompliant

          5         aspects of the plan such as:  One, the need for

          6         conservation areas.  Two, the lack of data backing up

          7         enrollment numbers.  Three, absolutely no traffic studies

          8         of the context areas, just to name a few.

          9              The DCA recommendations, a literal mountain of data,

         10         information, exhibits, evidence were then turned over to

         11         Governor's budget and policy's office for the formidable

         12         task of formulating a final draft order.  Here again, the

         13         final draft order submitted for the March 3rd cabinet

         14         aides meeting was very comprehensive.  It is clearly

         15         evident that staff considered the relevant laws, codes,

         16         regulations as well as all the facts entered into the

         17         record.  The ensuing draft order thoroughly understood the

         18         very real constraints of the Crossley site and addressed

         19         them in an incredibly well thought of and deliberate

         20         manner.

         21              Now, and this absolutely baffles me, the amended

         22         order before you today has been substantially changed and

         23         rewritten at the very last minute, giving USF the green

         24         light to proceed with their fundamentally and fatally

         25         flawed plan.  These changes were effectuated without any

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         documentation whatsoever.  And I know because I asked.

          2         Apparently they were based on several conversations though

          3         not with any of the Petitioners.  What in the world

          4         happened here?  Is this what this incredibly lengthy

          5         process comes down to, politics behind closed doors?

          6              I became an American citizen three weeks ago and this

          7         is not what I understood to be the American way.  I

          8         sincerely hope that you will base your judgment on the

          9         DCA's and staff's incredibly dedicated work and not the

         10         tainted version of the order before you today.  Thank you.

         11              THE GOVERNOR:  Thank you very much.  Congratulations.

         12              MS. CUOMO:  Good morning.  My name is Claudia Cuomo.

         13         I am a Petitioner and a volunteer.  First of all, I want

         14         to express my deep shock and disappointment over the

         15         amendments that were made to the draft final order.  These

         16         amendments invalidate a one-and-half year long process in

         17         which review agencies, the public, the Petitioners as well

         18         as the DCA and the administration commission participated.

         19         I did not expect a state university to rewrite established

         20         facts and findings in such a way showing complete

         21         disrespect for the time and effort that we all invested.

         22         I therefore consider these amendments an insult to all

         23         participants and to the entire process.

         24              Like the other participants -- excuse me, like the

         25         other Petitioners, I have given one and a half years of my

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          1         lifetime to protect an irreplaceable jewel on Florida's

          2         west coast.  I do not receive a high salary like the

          3         expensive lawyers that USF can afford with taxpayers'

          4         money.  I have paid to participate in this process and I

          5         have made many personal sacrifices.

          6              The University has known for a long time about the

          7         environmental and historical constraints of the Crossley

          8         site and about its access problems.  I don't see any

          9         hardships, only negligence on the part of USF.  It ignored

         10         the environmental feasibility contingency in the 1995

         11         master plan, its no-build policies for sensitive habitats.

         12         It declined a guaranteed joint use driveway with the

         13         Hilton.  It ignored recommendations made in its own

         14         environmental constraints report.  It ignored and

         15         contravened agency and public input.  And just now, it

         16         also ignored crucial evidence and sworn testimony and

         17         refuses to follow DCA recommendations in the initial draft

         18         final order.

         19              It has violated Florida law by already doing

         20         extensive damage to protected gopher tortoise burrows and

         21         habitats and I have pictures of this year's survey tracts,

         22         the gopher burrows, they collapsed and there was extensive

         23         damage.  This is illegal, what's done by the University of

         24         South Florida.  I have pictures of this damage.  There are

         25         no hardships because USF has other viable campus

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          1         relocation options.  Feasibility issues have emerged early

          2         on in the process.  USF has limited itself entirely to the

          3         Crossley site and has not even made any effort to adjust

          4         the campus plans to the site's ecological sensitivity.

          5         USF wants the frosting on the cake without making any

          6         concessions like a grandiose entrance and bay views.

          7              The hardship is entirely with our community who will

          8         lose an irreplaceable piece of Florida history.  And with

          9         those who participated in the process with vigilance and

         10         good faith to find out that there is no process after all.

         11              Thank you very much.

         12              THE GOVERNOR:  Thank you.

         13              MS. TINKER:  The next speaker is Zita Conner, a

         14         resident of the county.

         15              MS. CONNER:  Good morning.

         16              THE GOVERNOR:  Good morning.

         17              MS. CONNER:  My name is Zita Conner and I'm a

         18         volunteer who has taken off from work and my family to be

         19         able to speak with you today.  I have attended USF's

         20         public hearings and have given notice that I am opposed to

         21         their proposed expansion on 28 acres of old Florida upland

         22         habitat located on Sarasota Bay.  This is 28 acres with no

         23         room to expand.  The Schroeder Manatee ranch offered a

         24         donation of a 30-acre site with an option for USF to

         25         acquire up to an additional 50 acres at a price of $10,000

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          1         per acre, well under current market value, for a USF

          2         Lakewood Ranch Campus.  As USF mentions in its historical

          3         background for campus development, Lakewood Ranch eastern

          4         development is the fastest growing 25 to 45-year-old

          5         population in the region.  USF student enrollment has

          6         doubled since 2001.  They now have over 3,000 students

          7         enrolled.

          8              Also, state senator Michael Bennett said last

          9         Wednesday that he believes the Crossley site is not big

         10         enough for the long term for USF.  He favors renovating

         11         offices at Tropicana Products in East Bradenton after the

         12         company moves its headquarters to Chicago in June.

         13         Senator Bennett also stated that USF can pick up

         14         300,000 square feet at Tropicana for the same price as

         15         100,000 square feet at the Crossley.

         16              Jim Beaver from the Florida Wildlife Commission

         17         visited the Crossley site in January 2003 and observed a

         18         high density of gopher tortoise burrows occurring in

         19         uplands habitats on the tract.  He stated in a letter to

         20         me that this campus master plan will result in the

         21         permanent elimination of one of the last ecologically

         22         valuable upland habitats located on the mainland shore

         23         directly adjacent to Sarasota Bay.  USF knows how valuable

         24         these gopher tortoises and their habitats are.  After all,

         25         two USF biologists were awarded a

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          1         five-year 2-million-dollar grant from the National Science

          2         Foundation to study gopher tortoises.

          3              So I ask you this:  How is it in the public's best

          4         interest to permanently eliminate one of the last

          5         ecologically valuable upland habitats on Sarasota Bay?

          6         Florida stands to lose a great treasure if USF is

          7         permitted to build their campus on this site.

          8              Thank you.

          9              MS. TINKER:  The next group of speakers are

         10         representing the University of South Florida, Dan Stengle,

         11         the general counsel; Dick Beard, chairman of the board;

         12         and Dr. Laurie Stryker, CEO of the USF Sarasota-Manatee

         13         campus.

         14              MR. STENGLE:  Governor, members of the cabinet, my

         15         name is Dan Stengle and Teresa was used to me being a

         16         general counsel.  I'm no longer a general counsel.  I'm an

         17         attorney with the law firm of Hopping, Green and Sams in

         18         Tallahassee and was employed by the University of South

         19         Florida -- hired by the University of South Florida to

         20         respond to the petition contesting the development of the

         21         Crossley site.

         22              This is a very unique statute that we're operating

         23         under.  And what it sounds to me and it's something that

         24         we have heard before, the Petitioners are not satisfied

         25         with the process.  It is a very difficult process.  It is

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          1         a very time-consuming process.  In fact, the hearings held

          2         by the Department of Community Affairs extended over some

          3         70 hours and six days to address all of these issues.  The

          4         Department of Community Affairs evaluated the evidence and

          5         issued its report on December 19th and we are here today

          6         as the culmination of that very extensive process, but a

          7         process that statutorily recognizes a balance and requires

          8         a balance.

          9              The statute itself that sets out this process says

         10         that campuses provide research and educational benefits of

         11         statewide and national significance and further provide

         12         substantial educational, economic, and cultural benefits

         13         to their host local governments.  And it addresses the

         14         adverse impact that a university master plan can have on

         15         public facilities and services and natural resources.  The

         16         statute specifically says, On balance, however,

         17         universities should be considered as vital public

         18         facilities of the state and local governments.

         19              Throughout this process, the University of South

         20         Florida has striven, and I believe successfully, to

         21         balance those historic resources, the entrance to the

         22         historic Crossley mansion, the environmental resources

         23         which are being -- we have with us today the environmental

         24         expert who actually did the studies of the gopher

         25         tortoises and the habitat on site with us here if there

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         are questions that need to be directed to him.

          2              We have reviewed the draft order.  We don't agree

          3         with everything in the draft order either.  But we

          4         recommend its adoption.  This is the first campus master

          5         plan challenge that has come down since the devolution of

          6         the process.  There's only been one before and that was in

          7         1997, the University of Florida, since its devolution, the

          8         responsibility down to the Board of Trustees of the

          9         University.  And unless there are questions of me, we have

         10         the chair, as you recognize, Governor, a gentleman who

         11         played an extraordinary important role in this process,

         12         the chair of the Board of Trustees of the University of

         13         South Florida, Dick Beard.

         14              MR. BEARD:  Governor Bush, commissioners, thank you

         15         for hearing us this morning.  USF's Board of Trustees must

         16         prepare and adopt campus master plans.  We are in

         17         agreement with the plan before you along with the

         18         Sarasota-Manatee board President Genshaft and Dr. Stryker.

         19         In order for us to meet our educational mission in

         20         Sarasota, we must build a new campus.  It was required

         21         because of the split between USF and New College and our

         22         continued growth.

         23              This location allows us to share 100,000 square feet

         24         of joint facilities which are next door to us or just

         25         south of us with New College which will save us millions.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         We believe it is a balanced plan.  It accomplishes the

          2         needs of the neighbors, the environment, and our mission.

          3              Let me introduce Dr. Stryker who will tell you a

          4         little bit more about our plan.  Dr. Stryker.

          5              DR. STRYKER:  Good morning, Governor and cabinet

          6         members.  This has been a long process and I share some of

          7         the frustration that maybe you heard from the Petitioners

          8         this morning.  We have been through -- this process

          9         started in November of 2002 when we held two neighborhood

         10         meetings with the uplands neighborhood because, as you see

         11         from the map, the neighborhood is bracketed by the current

         12         shared campus and the proposed Crossley expansion.  Let me

         13         point that out a minute.  (Indicating.)  So we recognize

         14         that we had to have special dialog with them and we did in

         15         November.

         16              That following spring or winter and spring we had

         17         three public hearings even though two were required.

         18         Those were hours of testimony that we took.  The -- in May

         19         the Board adopted the master plan, that's May 2003.  And

         20         since that time we've been going forward on the detailed

         21         site planning and the building plan because at the time

         22         the Legislature funded in 2002 the master plan, they also

         23         funded the building plan.  And so we have the building

         24         plan, we have the site plan and much of that has

         25         progressed since the time the original master plan

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         amendment was done last May.

          2              So during that process and then subsequently the

          3         hearings that were referenced in DCA, the 70 hours of

          4         hearings, we have been listening.  And we have said to our

          5         neighbors over and over again, we have been listening and

          6         we have made adjustments to the plan.  Today there are

          7         four disputed issues which we believe are being resolved

          8         for -- from the order or in the order in front of you.

          9              First, the environmental preservation.  And as

         10         mentioned, Mr. Gary Comp, who was formerly the

         11         environmental director for Sarasota County for 17 years

         12         and our environmental consultant, worked with us along

         13         with Sazocki and Associates (phonetic), a world-class

         14         planner for universities, to come up with a plan that was

         15         sensitive to the issues here, environment, historic.  But

         16         the base issue is how we're going to serve those students.

         17              In the plan before you, we are providing a 6-acre

         18         preservation area for the resident species with a required

         19         management plan.  At the time of the hearings back in

         20         November, that was a four acre, that's now gone to a six

         21         acre.  So there has been movement, there has been

         22         adjustment.  Our plan also maintains an efficient and safe

         23         transportation network.  And one of the things in the

         24         former order, the order we saw last week, the change in

         25         the parking would have presented, we think, both a safety

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          1         problem and reduced access to the day care center that's

          2         planned in the building for many of our students who have

          3         families.

          4              We understand the concerns of the neighbors.  In

          5         fact, this plan builds out the campus in a way that will

          6         accommodate our future needs and it does not depend on

          7         additional land in this neighborhood because we want that

          8         live/work and we think that's a very valuable piece.

          9              Under the order, we have a 50-foot buffer.  And it

         10         was stated this was a normal Manatee County requirement.

         11         And I can tell you that is not the case.  The 50-foot

         12         buffer is a very generous buffer with 80 percent opacity

         13         and other commitments that we've made to make sure that we

         14         shield the neighborhood from the parking lights and the

         15         campus as much as possible.

         16              We've also agreed and amended the order that we set a

         17         date certain because that was a question that came up last

         18         week and that's in your amendment today.  But -- and the

         19         bottom line, quite simply, we are out of room.  This

         20         campus was acquired in 1991 for our purpose.  We're vital

         21         to the economic future of this community and we ask for

         22         your support in this amended order today.  I would be

         23         remiss not to ask my chairman, my board chairman, Jan

         24         Smith to come up and just make a few comments, if you

         25         would indulge that.  Jan Smith, our volunteer.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              MR. SMITH:  Governor, members of the cabinet, thank

          2         you for having us today.  I had some prepared remarks but

          3         I'm going to do away with those because I think the facts

          4         have been presented succinctly.  I'm a volunteer too.  I'm

          5         a businessman in Bradenton, Manatee County.  We have

          6         several folks here from the Sarasota business community

          7         that are up today.  For several years I was the chairman

          8         of the Manatee Community College Board which feeds

          9         60 percent of those graduates to the University of South

         10         Florida, Sarasota-Manatee.  We're out of room.  It's a

         11         very simple situation.  Unless we want kids to be educated

         12         sitting at picnic tables somewhere, we need to do

         13         something.

         14              THE GOVERNOR:  What about the Senator Bennett

         15         proposal?

         16              MR. SMITH:  What about the Senator Bennett proposal?

         17              THE GOVERNOR:  No, I asked you first.

         18              (Laughter.)

         19              MR. SMITH:  Well, let's see.  I'll try to give you a

         20         complete answer and not too long-winded.  We've been

         21         working -- you know, as Laurie Stryker said, the state of

         22         Florida acquired the Crossley property for the expansion

         23         in 1991.  The Legislature in its wisdom decided to

         24         separate New College and USF.  I served on the education

         25         governance reorganization task force, Governor, which you

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          1         might recall.  And we believe in the seamless education

          2         business.

          3              It seems very difficult to me when we're told over

          4         and over again that there is not enough money to go and

          5         try to do something at Lakewood Ranch or somewhere else

          6         which would cost millions of dollars.  If we went to the

          7         Tropicana site, if that's what you're referring to, there

          8         is no library at the Tropicana site.  It's a huge

          9         facility.  I think it would be a wonderful facility if we

         10         were to get it for nutrition, for some other research type

         11         facility, because it's a wonderful facility, it's huge.

         12              But to retrofit the university on that, as a campus,

         13         I don't think is really in the best interest of our

         14         community.  It sits in my hometown, Bradenton, so I would

         15         obviously love to have it and have something done with it.

         16         But the fact of the matter is as we sit between two

         17         counties, where we are now on the Crossley,

         18         Sarasota-Manatee, that seems to serve our population.  I

         19         don't know if I'm adequately answering your question

         20         but --

         21              THE GOVERNOR:  You are.

         22              MR. SMITH:  We feel very strongly we must move on.

         23         It's our time to move on.

         24              THE GOVERNOR:  General.

         25              GENERAL CRIST:  Yeah, along the same lines.  Governor

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          1         picked up on an issue I was curious about.  Tropicana,

          2         and/or Lakewood, why were they not acceptable?

          3              MR. SMITH:  Well, we have a --

          4              GENERAL CRIST:  It's a friendly question.

          5              MR. SMITH:  I understand and I'm a friendly person.

          6         A couple of years ago when Lakewood came into the dialog,

          7         there was no money available supposedly to do that sort of

          8         thing, at least that's what our representatives told us.

          9         And we have a Crossley site.  As a taxpayer, it seems to

         10         make sense to build on something that you already own and

         11         use a library that you already have that you could share

         12         with New College.  We have a cultural district, an

         13         educational district there with USF and Ringling and so

         14         forth.  And so we think it makes a lot of sense to have

         15         those there.

         16              THE GOVERNOR:  Treasurer.

         17              CFO GALLAGHER:  With the amendments and changes that

         18         have been made by the -- since the cabinet meeting and

         19         those changes that have been made and the university has

         20         agreed with and those considered as added to this, I'll

         21         move that we approve this item.

         22              THE GOVERNOR:  Is there a second?

         23              COMMISSIONER BRONSON:  Second.

         24              THE GOVERNOR:  Okay.  Is there any other speakers?

         25              MR. SMITH:  Thank you very much.

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1              MS. TINKER:  No, sir.  There are no other speakers.

          2              THE GOVERNOR:  Teresa, tell me -- if you could

          3         summarize the changes after there was references made

          4         about backroom deals and secret negotiations and things

          5         that are somewhat disturbing, can you explain what

          6         happened since --

          7              MS. TINKER:  Well, I can tell you, there were no

          8         backroom deals or secret negotiations.  During the cabinet

          9         meeting we spent an extensive amount of time on this item.

         10         All the speakers were heard from and they offered their

         11         solutions to the problem.  It was clear during that

         12         discussion and hearing what the speakers had to say that

         13         we had not fully taken into account many of the issues

         14         that had been raised in the process.

         15              THE GOVERNOR:  Tell me, give me a summary, if you

         16         could, of what changes in terms of the proposed order and

         17         the final order in the last week.  If you could just give

         18         me some of those.

         19              MS. TINKER:  It really has to do with the layout of

         20         the design.  And basically the original staff

         21         recommendation tracked the Department of Community

         22         Affairs' recommendation, which was to preserve the front

         23         part, the front 6 acres or so of the property for the

         24         tortoises and to maintain the habitat there.

         25              We realized that that really was not possible due to

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          1         other issues, safety, the desire to keep the entranceway

          2         into Crossley Mansion preserved.  There were a variety of

          3         things.  So after we talked to the environmental

          4         consultants, after we talked to the parties, we came back

          5         and looked at that again.  And instead of having that

          6         piece of the property preserved, we're asking the County,

          7         in fact your order requires the University to preserve a

          8         minimum of 6 acres of coastal scrub and open space as

          9         habitat suitable for the environmental species that are

         10         there.  It requires the University to add policies to the

         11         plan to prepare and implement a habitat management plan

         12         for the species of concern.  It requires that -- the

         13         supplementation of native vegetation to ensure adequate

         14         ecological values.

         15              It also requires that, for the road coming in, that

         16         there be eco tunnels underneath that road to allow the

         17         tortoises to pass through without being harmed by the

         18         traffic.  So we believe this is an alternative to what the

         19         Department recommended, but it does continue to recognize

         20         the environmental values on this property while allowing

         21         the University to go forward with a design that meets --

         22         tries to balance all of the interests involved in this

         23         particular proceeding, including those things that were

         24         raised by State agencies.

         25              THE GOVERNOR:  Thank you.  Any other discussion?

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                    ADMINISTRATION COMMISSION - MARCH 9, 2004
          1         There is a motion and a second.  All in favor say aye.

          2         All opposed.  (No response.)  Very good.  The motion

          3         passes.























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                FL LAND & WATER ADJUDICATORY COMM - March 9, 2004
          1              THE GOVERNOR:  Wait a second.  Did we skip the

          2         Florida Land and Water Adjudicatory Commission?  You guys

          3         can go.  Representative Regan, it's nice seeing you.

          4              MS. TINKER:  Item 1.  Recommend approval of the

          5         minutes of the November 12th, 2003 meeting.

          6              GENERAL CRIST:  Motion.

          7              CFO GALLAGHER:  Second.

          8              THE GOVERNOR:  There is a motion and a second.

          9         Without objection, the item passes.

         10              MS. TINKER:  Item 2.  Request approval of the

         11         proposed final rule contracting the boundaries of the

         12         Lakewood Ranch Community Development District 5 in Manatee

         13         County.

         14              CFO GALLAGHER:  Motion on 2.

         15              GENERAL CRIST:  Second.

         16              THE GOVERNOR:  Moved and seconded.  Without

         17         objection, the item passes.  Thank you, Teresa.









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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Board of Trustees.  The Board of

          2         Trustees of the Internal Improvement Trust Fund.  Item 1.

          3              MS. CASTILLE:  Good morning again, Governor and

          4         members of the cabinet.  The Board of Trustees of the

          5         Internal Improvement Trust Fund, Item No. 1, is an

          6         acquisition of the -- consideration of an option agreement

          7         to acquire 365 acres within the Division of Recreation and

          8         Parks for the Rainbow River State Park from the Griffitts

          9         with the Division of Recreation and Parks.  The

         10         acquisition is for $2.3 million and is at 100 percent of

         11         appraised value and it's a recent appraisal.

         12              Members of the cabinet and Governor, we do have some

         13         senators and representatives here who would like to come

         14         up and talk for a moment.  And I'd like to go ahead and

         15         recognize Senator Nancy Argenziano, if I may.  She has a

         16         committee meeting to get back to.

         17              THE GOVERNOR:  Senator, good to see you.

         18              SENATOR ARGENZIANO:  Thank you, Governor and members.

         19              THE GOVERNOR:  Representatives, welcome.  Are you

         20         going to introduce them?

         21              SENATOR ARGENZIANO:  You want me to introduce them

         22         all?  These are my buddies.

         23              THE GOVERNOR:  They're your colleagues.  I know you

         24         love the Florida House, so.

         25              (Laughter.)

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Representatives Baxley and Cretul are

          2         here.  Thank you for being here.

          3              SENATOR ARGENZIANO:  Thank you, Governor and members.

          4         Thank you so much for hearing us today and hi to all the

          5         Dunnellon residents and my friends.

          6              THE GOVERNOR:  I couldn't tell where you were from.

          7              SENATOR ARGENZIANO:  First, Governor and members, I'd

          8         really like to applaud DEP's efforts.  This has been

          9         several years --

         10              THE GOVERNOR:  Oh, this is the second thing I want to

         11         get on record.

         12              (Laughter.)

         13              MS. CASTILLE:  It's early in the day, sir.

         14              SENATOR ARGENZIANO:  Yes, it is early.  Give me time.

         15         No, they have done a remarkable job over several years of

         16         trying to acquire this piece of property.  And I'm here,

         17         number one, to give my full support.  And, Governor, as

         18         you know, the springs initiative, which I commend you for,

         19         is a great initiative.  The Legislature has found in the

         20         past several years that our springs not only need

         21         protection right at the head anymore, there is an area

         22         around and the Governor has made great moves forward in

         23         protecting those springs.

         24              Now, as a past realtor in Marion County and Citrus

         25         County, I can tell you, and I was specialized in

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                        BOARD OF TRUSTEES - March 9, 2004
          1         waterfront property, that first magnitude springs, you

          2         don't find them on every corner.  And I know there's been

          3         talk in the past about, Oh, the appraisal is too high.

          4         The price is too high.  I can tell you, the appraisal, in

          5         my opinion, and by several realtors in my area think it

          6         was kind of low.  So we've done a great job.  And I also

          7         want to let you know that the family has been contacted,

          8         the attorney of the family has been contacted by the

          9         Huizenga Group and offered more money than what we're

         10         going to pay.

         11              THE GOVERNOR:  For what?

         12              SENATOR ARGENZIANO:  For this parcel.

         13              THE GOVERNOR:  What would the Huizenga Group want to

         14         do with this?

         15              SENATOR ARGENZIANO:  We have no idea and we're a

         16         little nervous.

         17              THE GOVERNOR:  Bottle water.

         18              SENATOR ARGENZIANO:  We don't want a stadium.  I

         19         don't know, Governor.  I can just tell you I know that the

         20         property is valued and would be considered by several

         21         other entities.  I just think it goes a long way in

         22         working in harmony with the springs initiative and other

         23         initiatives that we're taking and I'm here to give my full

         24         support of that and hope you do too.

         25              THE GOVERNOR:  Thank you, Senator.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              (Applause.)

          2              CFO GALLAGHER:  Governor, I'll move Item 1.

          3              GENERAL CRIST:  Second.

          4              THE GOVERNOR:  Does anybody else want to speak?  I

          5         mean, we're all for it.  There is a rule up here where

          6         after you've made the sale and the deal is closed, if you

          7         keep talking, you may have a chance of losing the deal

          8         so --

          9              (Laughter.)

         10              CFO GALLAGHER:  Jump out the window.

         11              MS. CASTILLE:  With respect to that, Governor, I do

         12         have to mention that this is a community where my Aunt

         13         Doris lives (laughter) and if I don't mention her and her

         14         active --

         15              THE GOVERNOR:  Is she here?

         16              MS. CASTILLE:  She is not here, but she has friends

         17         here who have all come to give me hugs on her behalf.

         18              THE GOVERNOR:  Wow, Aunt Doris is well known.

         19              CFO GALLAGHER:  Hello for Aunt Doris.

         20              THE GOVERNOR:  There is a motion and a second.  Any

         21         other discussion?  Without objection, the item passes.

         22         It's a great piece of property.

         23              (Applause.)

         24              You-all are so easy to please.

         25              MS. CASTILLE:  Item No. 2.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Appreciate you-all being here.

          2              MS. CASTILLE:  We have a consideration of a request

          3         to the Board of Trustees to release a 60-foot-wide

          4         ingress-egress easement and a one-mile segment of a second

          5         60-foot-wide ingress-egress easement containing

          6         approximately 4.95 acres and 7.19 acres respectively in

          7         Collier County acquired by the Board of Trustees as part

          8         of two Rookery Bay National Estuarine Research Reserve

          9         acquisitions.

         10              THE GOVERNOR:  Is there a motion?

         11              CFO GALLAGHER:  Motion on two.

         12              GENERAL CRIST:  Second.

         13              THE GOVERNOR:  Moved and seconded.  Without

         14         objection, the item passes.

         15              Item 3.

         16              MS. CASTILLE:  Item 3, consideration of a partial

         17         modification of restrictions on approximately 10.63 acres

         18         and partial assignment and assumption in the city of Cape

         19         Coral.

         20              CFO GALLAGHER:  Motion on 3.

         21              COMMISSIONER BRONSON:  Second.

         22              THE GOVERNOR:  There is a motion and a second.  Is

         23         there anybody here to -- you'll let us know if somebody is

         24         here to speak.

         25              MS. CASTILLE:  We have people available for

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                        BOARD OF TRUSTEES - March 9, 2004
          1         questions.

          2              THE GOVERNOR:  I'm sorry?

          3              MS. CASTILLE:  We have people here available for

          4         questions if anyone has any.

          5              THE GOVERNOR:  There's a motion and a second.  Any

          6         other discussion?  Without objection, the item passes.

          7              MS. CASTILLE:  Item No. 4, Leon County Sunland

          8         Hospital surplus.  This is one of the great opportunities

          9         we have for selling some of our assets.  We've put the

         10         Sunland property out for surplus and received several bids

         11         on the property and are asking for approval of a request

         12         to acquire the property for $4.573 million -- I mean

         13         selling the property.  Sorry.

         14              CFO GALLAGHER:  Governor?

         15              THE GOVERNOR:  Yes, Treasurer?

         16              CFO GALLAGHER:  This is the second time we've put

         17         this up for sale.  And I know the rules allow you-all to

         18         do it the way you did it, Colleen, but I think it's

         19         important and I'm going to maybe talk about it later, but

         20         I think there's a lot of things that are delegated, this

         21         isn't one, this is by rule.  But I think you need to

         22         communicate, I think, with the trustees on things that are

         23         coming up.  This would be one of them that you're going to

         24         put out to bid, so we're knowledgeable of it from the

         25         beginning.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              On this particular piece of property, what we're

          2         doing is giving somebody an opportunity to take a piece of

          3         property, tear down the existing facility, which is going

          4         to cost between one-and-a-half, and maybe less than that,

          5         and up to maybe $3 million, and have a piece of property

          6         that's probably worth 9 million.  We should look at in the

          7         state --

          8              THE GOVERNOR:  Whoa, after it gets rezoned.

          9              CFO GALLAGHER:  That's true, possibly some things

         10         would happen.  But that's a number I've been told.

         11              THE GOVERNOR:  This is all going on some record

         12         somewhere.

         13              CFO GALLAGHER:  It may not need rezoning for that, I

         14         don't know.

         15              THE GOVERNOR:  Does it need rezoning?  Because that's

         16         an excellent question.

         17              MS. CASTILLE:  It all depends on what they want to do

         18         with the property but it will likely need to be rezoned.

         19              THE GOVERNOR:  What can be done on it now?

         20              MS. CASTILLE:  Eva?

         21              MS. ARMSTRONG:  It's currently zoned

         22         office/residential.

         23              THE GOVERNOR:  Is that what the appraisal was --

         24              MS. ARMSTRONG:  Yes, sir.

         25              CFO GALLAGHER:  And it could go to a shopping center

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                        BOARD OF TRUSTEES - March 9, 2004
          1         type --

          2              MS. ARMSTRONG:  It would depend upon what, under

          3         Tallahassee's land use office/residential includes.  I

          4         mean, I think if a Target went in there, it would require

          5         rezoning and probably a comprehensive plan amendment.

          6              CFO GALLAGHER:  But there are people that think

          7         that's a good place for a Target type store and probably

          8         interested in putting one there.  That would run it up to

          9         about 9 million.  My point is that, and I know we're not

         10         in the land development business, but we're always in the

         11         buy high and sell low business.  And this is a prime

         12         example of that.  That property has been sitting there

         13         since I was in the Legislature in the '70s and we shut it

         14         down.  The building has been there since then.  It's

         15         totally fallen apart and deteriorated.  And somebody is

         16         going to have to spend a million and a half bucks or so to

         17         clear it off.  So now they got a 5 or 6 million-dollar

         18         cost in it and change, a couple of years' worth of time

         19         and it's worth three more million.  If I remember

         20         correctly, a couple of years ago we put this out and got,

         21         what, a million and a half offered for it?

         22              MS. ARMSTRONG:  No bids.

         23              CFO GALLAGHER:  No bids?

         24              MS. CASTILLE:  Zero bids.

         25              CFO GALLAGHER:  Well, we didn't even get a million

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                        BOARD OF TRUSTEES - March 9, 2004
          1         and a half.  I think we got a minimum of three and got

          2         nothing.  So somebody obviously figures out that they can

          3         buy it for four and a half and spend some money and get

          4         eight or nine out of it and that's what land developers

          5         do.

          6              But I think we should be, one, I think it's in all of

          7         our best interest for you to tell us that these properties

          8         are coming up and you're going to put them out and you're

          9         going to have a minimum of what it is, et cetera, and we

         10         can ask those questions in the front end about what's it

         11         cost, fair change, et cetera, instead of, Here it is, vote

         12         on it.

         13              THE GOVERNOR:  Yeah, Colleen.

         14              (Laughter.)

         15              CFO GALLAGHER:  So that's step one.  Now that you're

         16         there, Ms. Colleen, I really do think that it would be --

         17              MS. CASTILLE:  Treasurer, we would be happy to inform

         18         you.  We do surplus all levels of property, some of which

         19         is delegated for the final sale of those properties to the

         20         department.  And I recognize what is a large parcel and

         21         what we should inform you of.  In my previous life as the

         22         secretary of the Department of Community Affairs, we have

         23         come to recognize that redevelopment is a difficult

         24         activity for any developer to undertake, and that

         25         appraisals are based on the bundle of rights that come

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                        BOARD OF TRUSTEES - March 9, 2004
          1         with the property.

          2              For the property to be worth $9 million, it's a

          3         bundle of rights that the existing owner is going to have

          4         to go provide -- to do a site plan, to do engineering, to

          5         do a number of things, not to mention public hearings with

          6         the surrounding community members.  So it's a bundle of

          7         rights that comes with a lot of hurdles to overcome as

          8         well.  I think that the property --

          9              THE GOVERNOR:  Why don't you say yes to Treasurer

         10         Gallagher's very good --

         11              MS. CASTILLE:  Yes, sir, we will bring it to you.

         12              THE GOVERNOR:  You're talking about informally?

         13              CFO GALLAGHER:  Just come by, visit.  Tell our

         14         cabinet aides so they can tell us so we know what's coming

         15         along.  And I'll bring it up later, but on the

         16         delegations, I believe it's time for us to look at all the

         17         delegations and redo those.  We have a new size cabinet, a

         18         new cabinet basically and some of us forget all those

         19         things that we delegated.  I know you-all haven't

         20         forgotten them, but we have.  And we need to look at those

         21         again and just get sort of updated on what they are and I

         22         think repass them again sometime between now and July.

         23              MS. CASTILLE:  I think that's an excellent idea,

         24         Treasurer, and we'll bring that, probably not at the next

         25         meeting, but --

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                        BOARD OF TRUSTEES - March 9, 2004
          1              CFO GALLAGHER:  We can skip a few meetings to give

          2         you time to look at them all, bring them to us and let's

          3         look at what we've delegated and make a decision on

          4         whether we want to continue delegating or if it's

          5         something we want to hear about or some -- maybe we'd make

          6         it an informal basis where you let us know what you're

          7         doing through the process.

          8              MS. CASTILLE:  Okay.

          9              THE GOVERNOR:  There is a motion and a second.

         10              CFO GALLAGHER:  I didn't hear that yet.  But I will

         11         make one if that's what you'd like.

         12              (Laughter.)

         13              THE GOVERNOR:  Thank you.

         14              CFO GALLAGHER:  I'll reluctantly move this item.

         15              THE GOVERNOR:  Is there a second?

         16              COMMISSIONER BRONSON:  Second.

         17              THE GOVERNOR:  All in favor say aye.  All opposed.

         18         (No response.)  Onward.

         19              MS. CASTILLE:  Item No. 5 is the USA Board of

         20         Trustees Family Paradise Island Resort settlement

         21         agreement.  The consideration of the settlement agreement

         22         between USA Family Paradise Island Resort and the Board of

         23         Trustees resolving encroachments in Monroe County.

         24              CFO GALLAGHER:  Motion on 3 --

         25              MS. CASTILLE:  Five.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              CFO GALLAGHER:  Motion on 5.

          2              GENERAL CRIST:  Second.

          3              MS. CASTILLE:  It's value for value swap.

          4              THE GOVERNOR:  There's a motion and a second.  Any

          5         discussion?  Without objection, the item passes.

          6              MS. CASTILLE:  Item No. 6.  Governor, members of the

          7         cabinet, we have before you a request for Atlantic Dry

          8         Dock Corporation to modified a five-year sovereignty --

          9         two sovereignty submerged land leases to increase their

         10         preempted area from 278,590 square feet to 554,605 square

         11         feet for a proposed 50,000-ton capacity dry dock facility.

         12         The modifications of the five-year submerged land lease

         13         increased the preempted area from 107,000 plus square feet

         14         to 302,000 square feet.

         15              This facility is located on the St. Johns River

         16         adjacent to the Mayport Naval Station.  And the addition

         17         of these dry docks will be for the retrofit of Navy ships.

         18         The facility -- there are probable issues that I'd like to

         19         discuss with you.  The facility presently is currently

         20         paid up in compliance with existing submerged land leases.

         21         In the past there have been a few noncompliance issues

         22         with existing leases that were corrected by obtaining the

         23         not-necessary authorizations when the company was

         24         notified.  Erosion are some issues.

         25              Taylor Engineering evaluated the impact of shoreline

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                        BOARD OF TRUSTEES - March 9, 2004
          1         erosion potentially created by the proposed expansion at

          2         the facility and the hydrodynamic models indicate that the

          3         project should have no impact on shoreline erosion or the

          4         stability of the existing revetments which protect the

          5         shoreline from much higher wave-induced energy along the

          6         adjacent north shore of the St. Johns River.

          7              The dredging that is performed is performed within

          8         the applications of the riparian area of the company.  And

          9         the eastern dry dock will be, if you look here, the

         10         eastern dry dock is right here.  (Indicating.)  Here's the

         11         riparian line right here which extends out.  And the

         12         eastern dry dock will be 350 feet from the nearest

         13         property line along the shoreline.  And as it goes out

         14         into the waterway, will be 100 feet from that riparian

         15         line at the waterward end of the dry dock.

         16              There are some speakers here on the issue.  I think

         17         Mr. -- is Rick Collins here?

         18              MR. COLLINS:  Yes, I am.

         19              MS. CASTILLE:  Mr. Collins is an adjacent property

         20         owner.

         21              THE GOVERNOR:  Come on up, Mr. Collins.  How are you

         22         doing?

         23              MR. COLLINS:  Good.

         24              THE GOVERNOR:  You don't need a microphone.

         25              MR. COLLINS:  No, I don't.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              (Laughter.)

          2              They say a picture speaks a thousand words.  I

          3         brought some pictures to do my talking today.  This is a

          4         picture that was taken two days ago.  You might need to

          5         zoom in if you can.  This is my property here.  I've owned

          6         it since '79.  I stick out about 60, 70 feet more to the

          7         river because I riprap and nobody else did.  This is

          8         actually a fairly clean shot here.  You can see the

          9         existing dry dock has been moved out of the way because

         10         they've been dredging here.  And all you're really going

         11         to see here is this is the dock that they actually put the

         12         dry dock next to.  This is where they're going to put the

         13         new one here.  You can see how close it's going to be when

         14         they do get beside us.

         15              If you can visualize now, right here they saved

         16         300 feet which is roughly 100 yards.  A structure 900-foot

         17         long and roughly 150 foot high, it's not going to be very

         18         pretty.  I've also got some other photos here.  They've

         19         been dredging.  They moved the other dry dock out of the

         20         way to do some maintenance dredging there.  Since they've

         21         been doing that the last two months, my -- they talk about

         22         experts and studies.  We can all be experts if you've got

         23         a pair of eyes.  All you've got to do is go stand on my

         24         property right now.  My riprap is, the stuff I've got, is

         25         sinking into the river right now as we speak.  I've got

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                        BOARD OF TRUSTEES - March 9, 2004
          1         pictures that will show that.

          2              The trees here, I've got -- you can see kind of the

          3         trees here on the side.  They've been here forever.

          4         They're all starting to die.  This is a view of my

          5         property looking from the dry dock.  This is my riprap

          6         here.  You can see the trees.

          7              THE GOVERNOR:  Why are the trees dying?

          8              MR. COLLINS:  The trees that are on the water here,

          9         there's three of them.  They're all starting to die.

         10         There's one, I've got another photo to show you --

         11              THE GOVERNOR:  Why?

         12              MR. COLLINS:  There's no land underneath it.  The

         13         river is starting to go even faster now.  The riprap is

         14         not stopping it.  They're all starting to die.  There's no

         15         ground for the trees to --

         16              THE GOVERNOR:  Because of the dredging?

         17              MR. COLLINS:  The dredging.  The dredging they're

         18         doing, the maintenance dredging, is causing my property

         19         right now to slough into the river right now as we speak.

         20         I've got pictures.  Here's another interesting shot right

         21         here.  This is the border of Atlantic Dry Dock.  This is

         22         what they put in there.  Obviously, they need to put some

         23         more riprap in there.  This is starting to eat my property

         24         up.  I've told them numerous times this is happening.

         25         They've never done anything about it.  And they've dropped

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                        BOARD OF TRUSTEES - March 9, 2004
          1         these steel containers there which is against the law to

          2         put for riprap but that's what they've done.  They put the

          3         things there.

          4              But, yes, you can come right now on my property,

          5         Governor.  Here's another picture.  I'll show you the

          6         trees that are dying right here.  You can see the tree

          7         right here that's been there for -- I had the place since

          8         '79.  It was there when I bought the place.  They're dying

          9         now.  They're all starting to die.  I've got a very good

         10         picture that shows that the riprap is falling into the --

         11         here's a picture I took of the neighbor's dock.  The

         12         currents have always been treacherous in there.  This is a

         13         living river.  I mean, it's like a child.

         14              Since I've owned the place, I've probably put 100

         15         loads of riprap in there.  I mean, you have to continually

         16         add riprap to this thing all the time because it

         17         continually sloughs into the river.  It's the worst I've

         18         ever seen now.  I mean, the currents are treacherous.

         19         This dock right beside me now is getting ready to fall

         20         down here in the last couple of years.  I mean if you walk

         21         on it, it's spooky to walk on the thing just from the

         22         currents going by.

         23              THE GOVERNOR:  Well, I'm a little confused about how

         24         this property owner is the cause of something you say is

         25         always been, you know, the currents are --

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. COLLINS:  Well, the currents have always been

          2         hard running through there.  But, like I say, since the

          3         last two months --

          4              THE GOVERNOR:  You're at a point, right?

          5              MR. COLLINS:  What was that?

          6              THE GOVERNOR:  You're at a point?

          7              MR. COLLINS:  Yes, I'm at the point right beside him.

          8              THE GOVERNOR:  Okay.  I just --

          9              MR. COLLINS:  Since they've been dredging there,

         10         Governor, it's increased the currents even more on this

         11         side.  I mean, all the currents hit on this north side.

         12         All I'm saying, since they've just been doing the

         13         maintenance dredging the currents have gotten to the

         14         point.  It's going to be a big problem here when you

         15         dredge it.  Bigger cubic yards is going to make a big

         16         hole, it's going to fill with water and the water is going

         17         to have to get out of that.  Where is it going to go?

         18         It's going to go right beside that north shore and it's

         19         going to erode everything that's there.  It's happening

         20         right now just from the maintenance dredging.

         21              THE GOVERNOR:  Okay.  Anything else?

         22              MR. COLLINS:  I think that's it.

         23              THE GOVERNOR:  Thank you for being here.

         24              MS. CASTILLE:  Governor, we have two other homeowners

         25         who would like to speak as well, Nancy O'Donnell and John

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                        BOARD OF TRUSTEES - March 9, 2004
          1         Adcox.  And we have two officials from Atlantic Dry Dock

          2         here as well to answer questions.

          3              THE GOVERNOR:  Good morning.

          4              MS. O'DONNELL:  Good morning, Governor.  It's an

          5         honor to be here and to speak to you and to the cabinet.

          6              THE GOVERNOR:  State who you are for the record, I'm

          7         sorry.

          8              MS. O'DONNELL:  Sir?

          9              THE GOVERNOR:  Can you state who you are for the

         10         record?

         11              MS. O'DONNELL:  Yes.  My name is Nancy O'Donnell.  I

         12         live at 8720 McKenna Drive.  And I have come to speak to

         13         you regarding the Atlantic Dry Dock's dredging and

         14         submerged land lease.  I believe it will negatively impact

         15         our waters here.  I believe that it will impact the

         16         environment and will endanger the commercial and boating

         17         public.

         18              And it's incompatible with the surrounding

         19         residential community in the Fort George area.

         20         Specifically Atlantic Dry Docks' dredging permit and lease

         21         should be denied or tabled on the following grounds.  The

         22         dredging has the potential of interfering with what we

         23         call the mile point study and that has not been addressed.

         24         The area of the study spans -- it spans from Mayport which

         25         you see here (indicating), all the way around to White

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                        BOARD OF TRUSTEES - March 9, 2004
          1         Shell and that is -- encompasses this area right here

          2         (indicating) that -- which is the area.

          3              THE GOVERNOR:  Where do you live, ma'am?

          4              MS. O'DONNELL:  I live -- that dock right there

          5         (indicating), is mine.

          6              THE GOVERNOR:  So that was the dock that your

          7         neighbor was talking about?

          8              MS. O'DONNELL:  Yes, sir.  That's the one that's in

          9         peril.  And so I have high interest in that area, of

         10         course.  On this mile point study what we've found is that

         11         it's federally funded, federally approved, it has money,

         12         this year from the JAX Port Authority and they will match

         13         that money for 2005.  So it's an ongoing project.  And

         14         this project is to mitigate the north shore, which is --

         15         the Corps of Engineers have already admitted and know that

         16         it is constantly -- has constant erosion.

         17              Now what we want to do is to -- I'm asking that we

         18         table this or defer this or deny this permit until such

         19         time as the mile point study can mitigate those areas and

         20         save the property in that area.  It's been said by the bar

         21         pilots that this area right here is the most treacherous

         22         of the Jacksonville channel in the Jacksonville harbor.

         23         And this --

         24              THE GOVERNOR:  Why is that -- why is the dry dock

         25         operation the cause of that?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MS. O'DONNELL:  The dry dock operation would be the

          2         cause of that because of what they want to do on the west

          3         side.  In this area right here (indicating), they intend

          4         to put a pier and a dry dock in this area as well.

          5              THE GOVERNOR:  I understand that.  But you're saying

          6         it's the most treacherous part of the navigation for these

          7         pilots right now without the --

          8              MS. O'DONNELL:  Yes, it is.  But when you add these

          9         other things, then it's going to make it more so.

         10              THE GOVERNOR:  That's my point.  I don't know enough

         11         about this.

         12              MS. O'DONNELL:  Number one, you're going to have --

         13         it's like a dog leg.  You can see it better on this map

         14         right here.  It's a dog leg.  And when you get something

         15         of this size right here and a big ship coming here, it's

         16         going to be a dog leg here.  It's going to be a blind spot

         17         and then you're going to have small boat owners right

         18         here.  When they did the risk analysis, it was a three on

         19         the chart with the current configuration.  Three means

         20         that --

         21              THE GOVERNOR:  So this study is a navigation study?

         22              MS. O'DONNELL:  Yeah, it's actually --

         23              THE GOVERNOR:  I thought you were talking about

         24         environmental erosion and other things.  This study is

         25         being done to look at --

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MS. O'DONNELL:  It's being done by the Corps of

          2         Engineers and they've got to mitigate the north shore

          3         because of the dredging they do and in order to control

          4         the river.  And we fear what will happen is if they dredge

          5         now and they put this dry dock here, that it will further

          6         impact the mile point study.  And if it does that, then

          7         all of the work that we've done and all the mitigation

          8         that the Corps of Engineers is going to do, is going to be

          9         impacted negatively.

         10              THE GOVERNOR:  Okay.  I understand now.  I'm sorry,

         11         slow on the uptake.

         12              MS. O'DONNELL:  I'm sorry.  I'm nervous.

         13              THE GOVERNOR:  You're doing great.

         14              MS. O'DONNELL:  Okay.  One other thing I wanted to

         15         say.  Can you hone in on that right here?  Speaking of the

         16         risk analysis, of course they did one to say whether the

         17         dry dock and the extensions they are going to have is

         18         going to -- how it's going to impact the public.  And what

         19         they found was in this study that the way they configured

         20         the dry docks and the piers, they were going to be about

         21         300 feet from the channel.

         22              And due to the treacherousness of that channel, that

         23         it would be an impact on category -- for example, category

         24         of three.  The Category 3 is a number three.  No. 3 is the

         25         next to highest you can have in danger.  It means death to

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                        BOARD OF TRUSTEES - March 9, 2004
          1         people.  So this is a serious safety problem in this area

          2         that they recognize.

          3              Now what they did is they reduced one of the docks 80

          4         feet and the Coast Guard captain agreed that then it would

          5         be okay.  But what he did say was that he would only knock

          6         this down by one factor.  So now you have a Category 2

          7         here -- I mean a Category 3.  You got a No. 2 under it.

          8         Which, by their standards, the risk on that is -- a

          9         probable increase means that you'll have one to five

         10         collisions between 10 and 50 years.  So it is still a big

         11         risk for the public and especially along Sister's Creek.

         12              You're getting bigger ships.  You're getting the

         13         Carnival cruises, the ones that are 600 feet.  And what I

         14         want to say to that is the risk factor in this area is

         15         most certainly -- has got to be high for collision.  And

         16         while the officials, which is the Coast Guard captain, may

         17         be willing to take the risk of a catastrophic event in

         18         this area, which is what they are talking about on this

         19         risk analysis, or what if one death occurs or a

         20         catastrophic event due to these risks, who will be

         21         accountable for that?  If this committee approves this

         22         dredging and submerged land lease, it too will have to

         23         bear some of the accountability.  So this is a serious

         24         safety problem that we want to address.

         25              THE GOVERNOR:  Thank you.  Commissioner?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              COMMISSIONER BRONSON:  Yes, Governor.  How many

          2         collisions over the past number of years have there been

          3         in this area?  I mean, you're talking about the potential

          4         of some type of boat collision or has there been --

          5              MS. O'DONNELL:  I don't have that data.  But it is a

          6         likely probability.  You've got to take -- you know, I

          7         don't know if there have been any in the area.

          8              THE GOVERNOR:  Thank you, ma'am, for coming.  Are you

          9         finished?

         10              MS. O'DONNELL:  I could say more but, yeah, I'll

         11         quit.  I have more.

         12              THE GOVERNOR:  You did very well and you made your

         13         point.  Colleen?

         14              MS. CASTILLE:  Governor and members of the cabinet,

         15         the risk analysis that Ms. O'Donnell is referring to is

         16         one that was requested by Atlantic Marine and Dry Dock to

         17         the U.S. Coast Guard.  And a letter has been sent from the

         18         U.S. Coast Guard which evaluated that report and discussed

         19         ways to mitigate the issues in the report and the final

         20         paragraphs of the letter from the Coast Guard are that,

         21         Based on the latest proposal to limit the west pier

         22         extension to 80 feet with no overhang beyond that

         23         extension toward the river, I have decided and this is

         24         the -- I'm not sure what his rank is -- Captain Learch

         25         (phonetic), who has decided that he will not object to

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                        BOARD OF TRUSTEES - March 9, 2004
          1         AMI's expansion.  And in his professional opinion, the

          2         navigational risk assessment scores would each be reduced

          3         by at least one factor.

          4              THE GOVERNOR:  Okay.  Any other speakers?

          5              MS. CASTILLE:  Yes.  Mr. Adcox.

          6              MR. ADCOX:  Governor, cabinet.  John Adcox, glad to

          7         meet you.  My name is John Adcox.  I live at 8746 McKennah

          8         Drive in Jacksonville.  And I certainly appreciate the

          9         opportunity you're affording me to speak this morning.

         10         We're all very tired.  I already see that.  You've already

         11         heard several issues on the dry dock.  I'm against it,

         12         obviously, and I live the second house over on the other

         13         side of Nancy.  And my rationale for asking you to further

         14         study this is a little different from the rest of the

         15         folks who's been heard.

         16              First of all, Atlantic Dry Dock never gave us any

         17         public notice.  And I find this very deceiving.  I am a

         18         college professor and I try to believe in ethics and I

         19         don't think they did that.  They gave no public notice

         20         provided to the community for this particular permit.  No

         21         notice was provided to my family whose property is

         22         200 feet from the Atlantic Dry Dock property or to the

         23         community.  To support this statement, because they're

         24         going to counteract it, I refer the group to a

         25         conversation with Mr. Mike Seymore who's the past

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                        BOARD OF TRUSTEES - March 9, 2004
          1         president, and the president at the time the community

          2         club that this took place, that I had with him and he's

          3         also an employee of Atlantic Dry Dock and has been for 23

          4         years.  My conversation yesterday morning with Mike

          5         Seymore, Mr. Seymore, is there's no records in the

          6         Hecksher Drive Community Club minutes of the presentations

          7         by Atlantic Dry Dock on this particular project --

          8              THE GOVERNOR:  I'm sorry.  Were there any local

          9         approvals?

         10              MR. ADCOX:  No, sir.  There's been no local

         11         approvals.

         12              THE GOVERNOR:  Okay.

         13              MR. ADCOX:  And as president, he's in charge of, by

         14         the way, the minutes.  My memory of the meeting attended

         15         by Atlantic Dry Dock, and I did go, they were there -- I'm

         16         not saying there's no -- I'm talking about this particular

         17         project.  Yes, they did come to the club, but not to

         18         address this project.

         19              They came in, they talked about several things.  And

         20         my wife will probably say a little bit more about it.  And

         21         they do refer to a new pier.  Nothing about a dry dock.

         22         And so anyway, they said that might occur in a few years

         23         and if they did want to go further, they'd come back and

         24         address us again.  We're right there.  We wanted to know

         25         about this so we could also study these issues.  Nothing

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                        BOARD OF TRUSTEES - March 9, 2004
          1         was indicated.

          2              Mr. Seymore also indicated yesterday the reason there

          3         was nothing written in the meeting minutes was that there

          4         was no significant data being provided and no early

          5         notice.  The club requires a month notice of the agenda

          6         coming up.  And that's the reason why he said he never

          7         wrote any meeting minutes.  I talked to him yesterday.

          8              The second item I want to bring -- I only got three

          9         items and I'll hurry up.  The second item is really for

         10         you.  The City of Jacksonville has an intent, of course,

         11         to create a cruise business, they've done that.  It is my

         12         clear understanding that because of the larger cruise

         13         ships who can't get underneath the JEA power lines, can't

         14         get underneath the Dames Point Bridge, that they really

         15         would like to set up a cruise terminal closer to the ocean

         16         side that would accommodate these much larger ships, the

         17         Super Bowl and all that, I guess you probably know, it has

         18         been a problem.

         19              This large -- there is a public ramp.  Let me get

         20         this right here.  This right here is Carlucci's ramp.

         21         This area is being considered by the City to put a new

         22         cruise terminal.  I would ask that, you know, I'm sure

         23         Atlantic Dry Dock says it's going to say no.  I'd ask that

         24         you talk to Mayor Peyton about what their plans are.  It

         25         is in the early stages, but I know that the cruise

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                        BOARD OF TRUSTEES - March 9, 2004
          1         business is really taking off in Jacksonville and they

          2         want the bigger ships.

          3              THE GOVERNOR:  Where are the cruises?  They are there

          4         to have cruises taking off --

          5              MR. ADCOX:  Yes, sir.

          6              THE GOVERNOR:  Where are they taking off from?

          7              MR. ADCOX:  They have to go underneath the Dames

          8         Point Bridge with an eight-foot clearance.  And they are

          9         smaller ships and they're right now on the other side.

         10         They had a big thing in the paper about it.

         11              THE GOVERNOR:  On the other side?

         12              MR. ADCOX:  Yes, sir.  The only way we can get the

         13         larger ships is to bring -- have a cruise terminal on this

         14         side.  My point being about the cruise terminal, if they

         15         put that huge dry dock with that big blank 85 or 100-foot

         16         high wall, there's going to be no way they can get those

         17         huge ships in there and turn them around.

         18              All right.  The last matter -- and I just think Mayor

         19         Peyton should be consulted about what their plans are

         20         about the business end of it.  But anyway, the last -- and

         21         I don't work for him.  I was -- the last matter deals with

         22         the liability.  There is no doubt that our waterfront

         23         property is going to have severe erosion.  In the last

         24         year or two years since they put this other dry dock, I've

         25         lost at least a foot of sand and I can prove that.  The

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                        BOARD OF TRUSTEES - March 9, 2004
          1         value of our property will diminish and the whole nine

          2         yards.

          3              THE GOVERNOR:  Hang on a second.  This is the third

          4         time this has been brought up.  I'm asking sincerely, I'm

          5         not asking knowing the answer.  They haven't done what

          6         they are proposing to do yet and there is erosion.

          7              MR. ADCOX:  That's correct, from the existing one.

          8         See, there is already one just like it but smaller there.

          9              THE GOVERNOR:  Why is the dry dock a problem for

         10         erosion?  I'm missing -- I think we'll ask DEP.

         11              MR. ADCOX:  There's been no study done by an

         12         independent person.  Let Dry Dock pay for the study.  I

         13         mean, come on.  They paid for the study.  They did the

         14         whole scenario.  We have not been an afforded an

         15         opportunity to do our own study to counteract theirs' and

         16         that's the problem here.  We haven't been given due

         17         process.  And I think they should be held -- anyway, the

         18         bottom line is I would hope that they would be held liable

         19         for whatever happens down the road if this goes through.

         20         In conclusion, with all this information, I would hope

         21         that you would not destroy this property, this whole

         22         island.  It is a beautiful island, it is a historic

         23         island.  I would appreciate -- just put it on hold and

         24         let's study this thing.

         25              THE GOVERNOR:  Appreciate you coming.  Secretary

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                        BOARD OF TRUSTEES - March 9, 2004
          1         Castille, have you-all made contact with the City of

          2         Jacksonville?

          3              MS. CASTILLE:  Yes, we did make contact.  I believe I

          4         can state that Mayor Peyton is supportive of this project.

          5         Yes, the city.

          6              THE GOVERNOR:  And what about the question, it seems

          7         like a legitimate question to me, if the cruise ship

          8         terminal, what's the --

          9              MR. TAYLOR:  The current cruise ship terminal is

         10         further west of Carlucci Park, that was pointed out.  So

         11         it's even further inland.

         12              THE GOVERNOR:  If it's -- how many feet clear?

         13         Eight feet clear for smaller cruise ships, I guess they

         14         don't aspire --

         15              MR. TAYLOR:  To a larger facility.

         16              THE GOVERNOR:  Is that -- are you sure?

         17              MR. TAYLOR:  No, I'm not.  My assumption is the City

         18         may be looking for that but that's not something I'm aware

         19         of.

         20              THE GOVERNOR:  Was there a specific question related

         21         to this property as the mayor, the mayor's office from an

         22         economic development perspective, have they been asked

         23         about this and the possible conflict of two significant

         24         economic development opportunities next to each other that

         25         may be in conflict with one another?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. TAYLOR:  No, sir.  They have not asked us at DEP.

          2              MS. CASTILLE:  Did we ask them?

          3              THE GOVERNOR:  We haven't asked them?

          4              MR. TAYLOR:  The only other connection, and I'm

          5         familiar with the city government, is the port working

          6         with the applicant and I think the applicant can speak to

          7         that better than me.

          8              THE GOVERNOR:  Let's hear from the applicant.  I

          9         think this may be the last.  Oh, you want to speak?

         10         Please.  This will be our last item until we break.

         11              MS. ADCOX:  Thank you, Governor Bush, I appreciate

         12         the opportunity to speak before you and the cabinet today.

         13              THE GOVERNOR:  Are there any other speakers before we

         14         hear from the applicant?

         15              MS. ADCOX:  I'm the last one.  I guess they thought

         16         that my husband would take my place.  I'm Barbara Adcox,

         17         John's wife.  I live roughly 200 feet from Atlanta Dry

         18         Dock's easterly property line.  I wanted to tell you that

         19         we were not notified by Atlantic Dry Dock of their intent

         20         to permit these two new dry docks and additional pier.  We

         21         were not notified by the DEP nor were we notified by the

         22         Corps of Engineers.  I found out roughly three weeks ago

         23         from Nancy O'Donnell, who was notified by the DEP of this

         24         permit application.  Rick Collins was notified by the

         25         Corps of Engineers and he lives in Alaska, he doesn't even

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                        BOARD OF TRUSTEES - March 9, 2004
          1         live there, and he told us about it.  Once I received

          2         notification from Nancy of the intended permit, I wrote to

          3         DEP in protest of this application.  The DEP sent me back

          4         a response and a copy of their intent to issue a permit

          5         with specific conditions.

          6              I also received a letter from Atlantic Dry Dock, not

          7         giving me any resolutions but inviting me to come take a

          8         site visit at the shipyard and we could discuss our

          9         concerns.  I will tell you that early last year Atlantic

         10         Dry Dock, Mr. Herschel Vineyard and Ed Flemming did make

         11         an unannounced visit to our Hecksher Drive Community Club.

         12         I was at the club meeting that particular night.  They

         13         talked about several items.  First they talked about a

         14         vessel that they were getting ready to dock and they

         15         invited all the residents to attend the dockage of this

         16         vessel.  They talked about a pontoon-type barge that

         17         they're stuck with because their client backed out and the

         18         barge is sitting in Sister's Creek or intercoastal

         19         waterway.

         20              And then they did talk briefly about the potential of

         21         somewhere in the future maybe having to add another pier

         22         to facilitate their growth.  They did not mention anything

         23         about additional dry docks.  The community club and the

         24         community members as a whole were already up in arms about

         25         the existing 600-foot dry dock that Atlantic Dry Dock

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                        BOARD OF TRUSTEES - March 9, 2004
          1         installed in the year 2000.  They installed this dry dock

          2         based on a ten-year-old dredging permit that allowed them

          3         to do that.  And so we could not contest it at that time

          4         because they were acting on a permit that they already

          5         had.

          6              During that meeting with the Hecksher Drive Community

          7         Club, they did assure us that we would be properly

          8         notified should they move forward with their intent to

          9         permit that, that at this time there were no contracts in

         10         place, there was no activity, they were not doing

         11         anything.  Well, as it turns out, evidently at least nine

         12         months ago, in June of last year, Atlantic Dry Dock

         13         started this permit application process without notifying

         14         any -- without notifying my husband and I.

         15              The DEP notified Nancy O'Donnell in February.  So

         16         I've known about it roughly for three weeks.  Atlantic Dry

         17         Dock has had nine months to prepare their studies, to get

         18         their evaluations.  We've had basically three weeks to get

         19         our act together.  What I'm asking is that we be given

         20         additional time to evaluate this situation because I can

         21         give you firsthand testimony about the existing dry dock

         22         and the problems that it's already causing for us, the

         23         residents and the community members.  There is noise

         24         pollution, there is light pollution, there is air

         25         pollution, there is water pollution, there is shore

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                        BOARD OF TRUSTEES - March 9, 2004
          1         erosion.  There is loss of privacy and there is loss of

          2         overall well-being because of living next to this

          3         industrial facility.

          4              THE GOVERNOR:  Could I ask you a question?

          5              MS. ADCOX:  Yes, sir.

          6              THE GOVERNOR:  Was this development that is adjacent

          7         to the Atlantic ship building, was it developed -- were

          8         the houses built after the facility was built?

          9              MS. ADCOX:  We purchased our land on McKenna Drive in

         10         1991.  At that time, the shipyards in downtown

         11         Jacksonville were quite active.  Atlantic Dry Dock was

         12         nothing more --

         13              THE GOVERNOR:  But all the development to the north,

         14         I guess, it's north at least --

         15              MS. ADCOX:  It would be to the east of it.

         16              THE GOVERNOR:  The east, I'm sorry.  Were those

         17         houses built with the existing -- with the facility may

         18         be --

         19              MS. ADCOX:  In its limited capacity, yes, sir.

         20         Atlantic Dry Dock was there, has been there since the '60s

         21         and was basically pretty dormant at the time we bought our

         22         property.  There are numerous, numerous new houses being

         23         developed along Fort George Island.  It's just a beautiful

         24         pristine area.  I'm not prepared today to argue with all

         25         of the issues brought about by the claims that I have.

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                        BOARD OF TRUSTEES - March 9, 2004
          1         I'm just asking that we as the residents in the community

          2         be given equitable time to perform our own studies and

          3         make our own evaluations before this be approved.

          4              THE GOVERNOR:  Thank you for being here.  Secretary

          5         Castille, what of the question of notification from the

          6         property owners?  What are you required to do and what did

          7         you do?

          8              MS. CASTILLE:  You're required to notify those

          9         property owners who are within 500 feet of your project.

         10         In this case, Atlantic Dry Dock went beyond what was

         11         required.  And I would like to ask Mr. Herschel Vineland

         12         (sic) from Atlantic Dry Dock if he can explain to you

         13         everything that he's done.

         14              MR. VINEYARD:  Governor, I have a full presentation

         15         but I'm going to be very brief because you're standing up.

         16              (Laughter.)

         17              THE GOVERNOR:  That's me, it's not you.

         18              MR. VINEYARD:  Members of the cabinet --

         19              MS. CASTILLE:  I'm sorry, I have to correct myself.

         20         This is a modification and notice is not required for

         21         modification.  We have lawyers that are arguing.

         22              MR. VINEYARD:  Governor, real quickly.  Two of the

         23         issues that were brought up.  Cruise ships, actually

         24         Jacksonville Seaport Authority is using this expansion as

         25         a sales point to the cruise companies.  Imagine, you could

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                        BOARD OF TRUSTEES - March 9, 2004
          1         say, Mr. Cruise Company, you can come offload your

          2         passengers.  You don't have to go to Virginia to get your

          3         dry docking done or your repairs done.  You go just a very

          4         short distance and that saves them multiple days of travel

          5         time to go get the repairs done.  So the cruise ships are

          6         actually excited.  The seaport authority told me that they

          7         were using our expansion as a sales point.  So I gather

          8         that was an issue for you and I just wanted to let you

          9         know.

         10              THE GOVERNOR:  Well, the issue is really related at

         11         this turn.  If that's the potential cruise port because of

         12         the bridge heights and all that, I don't know if the Coast

         13         Guard has looked at that.

         14              MR. VINEYARD:  Well, you can imagine -- and the

         15         answer is, yes, the seaport authority is looking at that

         16         property.  And just so you know, as far as a navigational

         17         issue, I have a copy which I've given to Ms. Castille, a

         18         letter from the Saint Johns River Pilot's Association.

         19         They're the guys that have to drive those big ships in.

         20         And they sent a letter to you yesterday in full support of

         21         this project.  So the navigational issue, not only has the

         22         Coast Guard said that this is not a problem, but the bar

         23         pilots in their notice to you said that's not a problem

         24         either.

         25              THE GOVERNOR:  Okay.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. VINEYARD:  Any other questions from members of

          2         the cabinet or you, Governor?

          3              THE GOVERNOR:  Why do you need to do this?  Business

          4         good?

          5              MR. VINEYARD:  That's a great question, Governor.

          6         Thankfully, the Port of Jacksonville is growing and we're

          7         having more commercial ships come in as well as additional

          8         military activity.  The commercial ships are growing, the

          9         size.  60 percent of the ships that pass right past our

         10         shipyard, we can't serve.  They're too large.  With this

         11         dry dock, we can actually get that business, keep those

         12         Florida manufacturing jobs here and not have them go to

         13         Virginia where they're going today.

         14              In addition, military ships, we have the contract to

         15         dry dock all the ships at Mayport Naval Station but we're

         16         looking ahead.  We know right now the Navy is designing

         17         and soon building the new generation of warships.  We

         18         can't lift them.  If those ships are going to be done in

         19         Jacksonville, we've got to make these plans and

         20         arrangements to get a bigger dry dock.

         21              There are 13 cargo ships that serve our troops in

         22         Iraq and they go in and out of Jacksonville.  Not one of

         23         them, not one of them can we dry dock.  Governor, I know

         24         you know the Virginia politicians are eager to get the

         25         Kennedy away from us.  And right now they're feasting on

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                        BOARD OF TRUSTEES - March 9, 2004
          1         those 13 cargo ships.  We'd like for those jobs and that

          2         work to stay in Florida.

          3              THE GOVERNOR:  The question -- this is really for

          4         Colleen.  The question of environmental impacts, is

          5         someone here to discuss the impacts today and what the

          6         impacts will be going forward for the proposal?

          7              MS. CASTILLE:  Yes, sir, there are.  I'm going to ask

          8         Mario Taylor if he'll come up to address them.

          9              THE GOVERNOR:  If you could concisely describe,

         10         you've heard the concerns expressed by the property

         11         owners.

         12              MR. TAYLOR:  Yes.

         13              THE GOVERNOR:  If you could explain to me, and maybe

         14         the rest of you guys understand this, but I'm a little

         15         confused about these impacts today and why there would be

         16         greater impacts going forward.

         17              MR. TAYLOR:  Well, Governor, to our knowledge, based

         18         on the studies that's been done, and I have the Taylor

         19         Environmental Engineering study regarding erosion.  There

         20         are no environmental impacts today on erosion or will be

         21         none in the future.

         22              THE GOVERNOR:  The erosion occurs irrespective of

         23         the --

         24              MS. CASTILLE:  Let me address this.  Governor, this

         25         is the Mayport Naval Station where the Army Corps of

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                        BOARD OF TRUSTEES - March 9, 2004
          1         Engineers keeps a pretty well-maintained dredged channel.

          2         The channel is currently dredged to about 40 feet now to

          3         allow for the passage of large ships.  The study that the

          4         neighbors have referred to is an Army Corps of Engineers

          5         study that is a two-fold study and it's not in process

          6         yet.  They've done a feasibility study for the upcoming

          7         study.  But the purpose is two-fold:  To address the

          8         erosion along all sides of the river at this point because

          9         there's massive amounts of water that pass through this

         10         waterway.

         11              But secondly, they desire to dredge it to 45 feet to

         12         allow for the passage of even larger ships.  So the Army

         13         Corps of Engineers is doing the study.  They recognize

         14         that erosion is part of it and will hopefully address the

         15         erosion.  It's a matter of the natural features of this

         16         piece of property being at the point and in a bend in the

         17         river.

         18              MR. TAYLOR:  The only other issues that I can recall,

         19         Governor, was regarding issues of noise.  The City of

         20         Jacksonville has a pretty aggressive both air and water

         21         program and there have been no noise complaints other than

         22         one filed last year in the entire history.  And I don't

         23         recall if another one was mentioned.

         24              THE GOVERNOR:  Any questions?  Any discussion?

         25         Everybody has spoken.  Is there a motion?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              GENERAL CRIST:  Motion.

          2              THE GOVERNOR:  Is there a second?

          3              COMMISSIONER BRONSON:  Second.

          4              THE GOVERNOR:  Any other discussion?  All in favor

          5         signify by saying aye.  All opposed.  (No response.)  Very

          6         good.

          7              MS. CASTILLE:  Thank you, Governor, members of the

          8         cabinet.  I realize that you have an 11:45 appointment.

          9              CFO GALLAGHER:  Can I ask a question?

         10              THE GOVERNOR:  Yes, Treasurer.

         11              CFO GALLAGHER:  Do we have a lot of people here to

         12         talk about the pipelines because I think those are the

         13         only two issues that are left.

         14              MS. CASTILLE:  We do.

         15              THE GOVERNOR:  How many people?

         16              CFO GALLAGHER:  Is that against?  Got a bunch of

         17         people against?

         18              MS. CASTILLE:  No, I don't believe we do.

         19              CFO GALLAGHER:  Bunch of people for?

         20              MS. CASTILLE:  There's two people against it.  And I

         21         think mostly everybody here is either staff or are for it.

         22              CFO GALLAGHER:  That sounds like we might be able --

         23              THE GOVERNOR:  I've got some -- Commissioner, I got

         24         questions on the issues.  This is big-time stuff and I'd

         25         rather --

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                        BOARD OF TRUSTEES - March 9, 2004
          1              CFO GALLAGHER:  Could we do this then?

          2              THE GOVERNOR:  There is a lot riding on this for the

          3         applicants and I got real concerns about some

          4         environmental issues.  And I don't want to rush it.

          5              CFO GALLAGHER:  I thought maybe we could hold these

          6         up to the next cabinet meeting.

          7              THE GOVERNOR:  In Leesburg?

          8              CFO GALLAGHER:  Leesburg or here, whichever.

          9              MS. CASTILLE:  I think one of the applicants is at

         10         least waiting on this to move forward with other

         11         applications, AES.

         12              THE GOVERNOR:  Why don't we do this.  If we could --

         13         we'll come back at 12:30 and that way the commissioners

         14         will have a time to go through this, we'll do Coleman's

         15         issues very quickly, Coleman, if you don't mind.  And

         16         we'll be finished.  And that way we can have a thoughtful

         17         discussion about some of this.  It's a big deal to me.

         18              CFO GALLAGHER:  Governor, we could probably do

         19         Coleman's in less than 30 seconds.

         20              THE GOVERNOR:  Okay.  We can do that.

         21              MS. CASTILLE:  And there are also members of the

         22         Bahamian Port Authority here who have come to speak on

         23         that issue.

         24              (Break in testimony.)


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                   STATE BOARD OF ADMINISTRATION - May 9, 2004
          1              THE GOVERNOR:  State Board of Administration.

          2              CFO GALLAGHER:  Motion on the minutes.

          3              GENERAL CRIST:  Second.

          4              THE GOVERNOR:  Item 1, there is a motion and a

          5         second.  Without objection, the item passes.

          6              Item 2.

          7              MR. STIPANOVICH:  Is a request for approval of fiscal

          8         sufficiency of an amount not exceeding --

          9              CFO GALLAGHER:  Motion on two.

         10              GENERAL CRIST:  Second.

         11              THE GOVERNOR:  Moved and seconded.  Without

         12         objection, the item passes.

         13              MR. STIPANOVICH:  Third and final item.  Again,

         14         approval of fiscal determination of amounts not exceeding

         15         7,900,000, tax exempt, and 4,640 --

         16              CFO GALLAGHER:  Motion on 3.

         17              GENERAL CRIST:  Second.

         18              MR. STIPANOVICH:  Thank you, Governor, and members.

         19              THE GOVERNOR:  Moved and seconded.  Without

         20         objection, the item passes.

         21              So we will convene back at 12:30 to finish the Board

         22         of Trustees.

         23              (Thereupon, a recess was had at 11:57 p.m.)



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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Colleen, would you like to start?

          2              MS. CASTILLE:  Thank you, Governor and Commissioner

          3         Bronson.  We are taking up, on the Board of Trustees'

          4         agenda item for March 9th, this is substitute Item 7.  The

          5         request is AES Ocean Express, LLC and it's a recommended

          6         consolidated intent for a new gas, natural gas pipeline

          7         across the ocean from the Bahamas to Fort Lauderdale.

          8              AES Ocean Express proposes to own, construct, and

          9         operate and maintain a 24-inch in diameter natural gas

         10         pipeline and associated above-ground facilities that

         11         originate in the exclusive economic zone designated as

         12         mile post 0.0.  It extends 51 miles through the ocean

         13         floor and state waters and terminates onto two delivery

         14         points in central eastern Broward County.  The pipeline

         15         will interconnect at its origination point, an AES Ocean K

         16         pipeline.  Ocean K pipeline is to be constructed by a

         17         Bahamian affiliate of Ocean Express and will originate at

         18         AES Ocean K liquified natural gas facility.

         19              The AES pipeline is -- the AES has their FERC

         20         certification.  They have -- they will impact 3.7 -- I'm

         21         sorry, 3.27 acres of hard bottom and mitigation will

         22         require them to remove tires that are previous artificial

         23         reefs that were put in in the late '70s, early '80s --

         24              THE GOVERNOR:  How many tires?

         25              MS. CASTILLE:  -- by Broward County.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  How many tires?

          2              MS. CASTILLE:  117,000 credits which equals how many

          3         tires?  117,000 tires.

          4              THE GOVERNOR:  Colleen, if -- I may have

          5         misunderstood you.  But the pipeline is being constructed

          6         by --

          7              MS. CASTILLE:  AES.

          8              THE GOVERNOR:  AES is building the pipeline?

          9              MS. CASTILLE:  Yes.

         10              THE GOVERNOR:  I thought you mentioned some other

         11         entity?

         12              MS. CASTILLE:  In the Bahamian affiliate, Ocean

         13         Express.

         14              THE GOVERNOR:  Is that for the LNG facility or is

         15         that the pipeline itself?

         16              MS. CASTILLE:  Where's Richard Brightman?  Here he

         17         is.

         18              MR. BRIGHTMAN:  Good morning, Governor.  Richard

         19         Brightman on behalf of AES Ocean Express.  Ocean Express

         20         is an American company that's going to build the pipeline

         21         only in America up to the exclusive economic zone.  From

         22         that point, obviously, there will be another pipeline that

         23         connects to it that will be owned and operated by a

         24         Bahamian affiliate of AES that will connect to the LNG

         25         facility in the Bahamas.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  The question really relates to who is

          2         liable.  Is AES liable for any malfunctions in the

          3         construction of the pipeline?

          4              MR. BRIGHTMAN:  Yes.

          5              THE GOVERNOR:  We look to AES, not to any subsidiary

          6         or not to a Bahamian company or not to anybody else?

          7              MR. BRIGHTMAN:  That is correct.

          8              THE GOVERNOR:  Okay.

          9              MS. CASTILLE:  The actual AES wanted to make a

         10         two-minute presentation which I'd like to let them do if

         11         you don't mind, sir.  We're going to let staff go first.

         12              THE GOVERNOR:  What staff?

         13              MS. CASTILLE:  My staff.

         14              MR. RACH:  We prepared a presentation that we

         15         provided to cabinet aides and we're really here to address

         16         any questions you have specifically about the project.  We

         17         haven't prepared a presentation per se.

         18              THE GOVERNOR:  You haven't?

         19              MS. CASTILLE:  We have a long one.

         20              MR. RACH:  It's still on the computer so we can bring

         21         it up.

         22              MS. CASTILLE:  We don't want to do the long one.

         23              THE GOVERNOR:  Has this been done before, this type

         24         of technology, for boring down 100 feet below the reef?

         25              MR. RACH:  There have been similar projects.  If you

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                        BOARD OF TRUSTEES - March 9, 2004
          1         remember the fiber optic projects, those projects --

          2              THE GOVERNOR:  I don't remember it being 100 feet

          3         down.  Was it that deep?

          4              MR. RACH:  I'm not sure exactly.  I'm not sure if

          5         they were that deep.

          6              THE GOVERNOR:  What happens if the geology is -- how

          7         do you know if you can do it?  So much for the DEP staff.

          8              MS. CASTILLE:  Actually, I would like the AES to do

          9         their presentation, please.

         10              THE GOVERNOR:  Well, I want to make sure that if,

         11         with all due respect to the applicant, that we have some

         12         capability to understand these things as well.  After all,

         13         it's our land.  And if there is anything you disagree

         14         with, please let me know.  I'm sure what will be said is

         15         accurate and all that.  But, you know, this is -- it was a

         16         simple question:  Has this been done before.  And,

         17         Colleen, I'd like to know if the staff or someone in the

         18         Department of Environmental Protection can answer that

         19         question.  If they can't, how can we regulate them?

         20              MR. RACH:  During our review process of processing

         21         these applications, we requested numerous information from

         22         both applicants to provide us with assurances that the

         23         technology and techniques they are performing are feasible

         24         and workable.  And we incorporate safeguards in the event

         25         that there are accidents, if you will, that there will be

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                        BOARD OF TRUSTEES - March 9, 2004
          1         rapid recovery of the reefs.  There's performance bonds,

          2         mitigation bonds as safeguards to provide us assurances

          3         that if there are any accidents in terms of impacts to the

          4         reefs that they --

          5              THE GOVERNOR:  Has it been done before?

          6              MR. BRIGHTMAN:  Yes.

          7              THE GOVERNOR:  Just a simple question.  I'm sorry

          8         to --

          9              MR. BRIGHTMAN:  Yes.

         10              THE GOVERNOR:  Thank you.  Has it been done in

         11         Florida before?

         12              MR. BRIGHTMAN:  Yes.

         13              THE GOVERNOR:  Where?

         14              MR. BRIGHTMAN:  It was done by the Gulfstream

         15         pipeline that was constructed a couple of years ago on the

         16         west coast of Florida when they drilled from Port Manatee

         17         out to a little island called Spoil Island and then

         18         drilled out from Spoil Island under some seagrass beds to

         19         a point where the pipeline was then trenched.

         20              THE GOVERNOR:  Using the same technology?

         21              MR. BRIGHTMAN:  Using the same technology, horizontal

         22         drilling technology, yes.

         23              CFO GALLAGHER:  How deep did they make it?

         24              MR. BRIGHTMAN:  I don't know the exact depth that the

         25         Gulfstream pipeline drill went.  They were shorter drills.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Have they gone through -- I mean,

          2         grass is -- the coral reef, I assume, is a different

          3         substructure than grass.  Is it --

          4              MR. BRIGHTMAN:  The drill does not go through either

          5         the coral reefs or the grass.  It goes well beneath,

          6         through the solid rock that supports those structures on

          7         the surface.

          8              THE GOVERNOR:  Okay.  So the technology exists for

          9         that kind of deep boring?

         10              MR. BRIGHTMAN:  Yes, sir, it does.

         11              THE GOVERNOR:  And then there is an element of

         12         this -- or is that the other applicant -- where you do --

         13         you're going above the reefs.

         14              MR. BRIGHTMAN:  We are not installing the pipe over

         15         the reef permanently.  In order to do the HDD, you have to

         16         first --

         17              THE GOVERNOR:  What's HDD?

         18              MR. BRIGHTMAN:  Excuse me.  Horizontal directional

         19         drill.  That's the technology we're talking about.  In

         20         order to do that, you first drill the hole.  And then you

         21         have to pull the string of pipe into the hole.  And during

         22         that relatively short period of construction in pulling

         23         that pipe into the hole that's already been drilled, it

         24         will be floated over one section of the reef.

         25              THE GOVERNOR:  And that's only temporarily?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. BRIGHTMAN:  That's only temporarily, during the

          2         construction.  About a couple, a few weeks at most.

          3              THE GOVERNOR:  Okay.

          4              CFO GALLAGHER:  How long is the hole?

          5              MR. BRIGHTMAN:  The offshore -- or the landfall HDD?

          6              UNIDENTIFIED SPEAKER:  Landfall HDD is 6100 feet

          7         long.

          8              CFO GALLAGHER:  How much?

          9              MR. BRIGHTMAN:  6100 feet.

         10              CFO GALLAGHER:  More than a mile?

         11              MR. BRIGHTMAN:  That's correct.

         12              MR. RACH:  There have been longer drills done before

         13         on other projects.

         14              CFO GALLAGHER:  Longer than a mile.

         15              MR. BRIGHTMAN:  Yes.

         16              CFO GALLAGHER:  And pipe pulled through.  Where does

         17         it come up, way upland?

         18              THE GOVERNOR:  This graph that we have here is a

         19         little difficult to read.  Is there a better one that

         20         shows the outer reef and the inner reef?  Maybe yours is

         21         bigger -- better on the television.

         22              That's better.  It's still kind of -- now we're

         23         talking.  Thank you.

         24              MR. RACH:  This is the third reef.  We have the outer

         25         second reef, the inner second reef.  The first directional

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                        BOARD OF TRUSTEES - March 9, 2004
          1         drill is going beyond the inner reef, second inner reef.

          2         Then they're lying in between the two.  Then it's going

          3         through a smaller gap and then directional drilling

          4         underneath the third reef.

          5              CFO GALLAGHER:  The one that's run up and down that

          6         long thing, that's the reef you're building at --

          7              MR. BRIGHTMAN:  No, that's in a sand area between the

          8         two sections of the second reef.

          9              CFO GALLAGHER:  Okay.  So that's sitting up --

         10              MR. BRIGHTMAN:  On the surface covered with concrete

         11         mats, yes.  On the surface of the ocean floor, not on the

         12         surface of the water.

         13              CFO GALLAGHER:  That's covered with poured concrete.

         14              MR. BRIGHTMAN:  No, they're articulated concrete

         15         mats.  They're large mats, 10 by 20 or so feet with 1 feet

         16         or so squared concrete blocks that are tied together so

         17         they can bend and mold to the shape of the pipe.

         18              CFO GALLAGHER:  And then sand will just accumulate.

         19              MR. BRIGHTMAN:  Exactly.

         20              CFO GALLAGHER:  Then you've gone under the first

         21         reef, slide that down, please.

         22              THE GOVERNOR:  Do you have a two-minute slide show

         23         that goes through some of this so we don't --

         24              MS. CASTILLE:  We have a presentation that's on the

         25         computer that we can pull up.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Yeah, but you didn't want to do it.

          2         So that's why we're asking these questions.

          3              MS. CASTILLE:  I was trying to do the time frame, you

          4         know, keeping in mind the time.

          5              THE GOVERNOR:  We ended up spending more time --

          6              MS. CASTILLE:  You're right.  Let's go ahead and pull

          7         up that data.

          8              THE GOVERNOR:  Maybe that answers some of the -- if

          9         we can just get the two minutes done and then we'll start

         10         grilling you again.

         11              (Pause.)

         12              While you're preparing it, I hope that one of the

         13         first questions answered is why we didn't use the same

         14         corridors that we established, as you recall, after

         15         several years, why didn't we use the same corridors

         16         instead of the directional drilling below the reefs and

         17         being on top of the reefs temporarily?  Why didn't we use

         18         the same darn corridors that we spent two years in

         19         excruciating pain to create finally with approvals for the

         20         telecom companies?

         21              CFO GALLAGHER:  Because they're liable to cut through

         22         the telecom line doing it.

         23              MS. CASTILLE:  It is going through a mini gap here.

         24         But the --

         25              THE GOVERNOR:  A mini gap?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MS. CASTILLE:  A mini gap instead of one of the

          2         larger gaps.  And the reason why we didn't do it is

          3         because it's significantly south of the Port Everglades

          4         inlet and it would end up going through neighborhoods

          5         versus this that goes straight in and goes over to the

          6         port --

          7              THE GOVERNOR:  Secretary, we have -- they have

          8         done -- you know, they did the dip in between the reefs.

          9         Why couldn't you do the same with the gaps that we

         10         established after two years of review for the telecom?

         11              MR. BRIGHTMAN:  We go through gaps, just different

         12         gaps.  We evaluated and the gaps that were established

         13         during the telecommunications rulemaking were specifically

         14         evaluated by FERC as alternatives when they did their

         15         environmental impact statement and the conclusion was that

         16         this is the best route.

         17              One thing that you need to understand about these

         18         gaps, both the gaps that were identified in the

         19         telecommunications rulemaking and the gaps that we're

         20         currently using, they're gaps in a single one of the three

         21         reefs, not gaps in all of the reefs.  You can't -- there

         22         is no place where there are gaps lined up in all the three

         23         reefs where you can just lay the pipe out without going

         24         through the reefs.

         25              So we have identified a different gap and we have

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                        BOARD OF TRUSTEES - March 9, 2004
          1         used that gap in the siting of this line.

          2              THE GOVERNOR:  I don't see where --

          3              MR. BRIGHTMAN:  There are actually two gaps that are

          4         being used.

          5              THE GOVERNOR:  Is that the outer reef?

          6              MR. BRIGHTMAN:  There is a large gap in the third

          7         reef which is being used for the pullback string for the

          8         landfall HDD and then there is a smaller gap in reef to

          9         outer that is being used to place the pipeline in as it

         10         goes offshore toward the offshore HDD.

         11              THE GOVERNOR:  Okay.  Thank you.

         12              MR. RACH:  This is the larger gap they are using to

         13         pull the pipeline.

         14              THE GOVERNOR:  All right.  Let's get the two-minute

         15         drill down.  Two-minute warning.

         16              MR. RACH:  My name is Tim Rach with Southeast

         17         District.

         18              THE GOVERNOR:  Thank you, Tim.

         19              MR. RACH:  This is the offshore route for the AES

         20         Ocean Express pipeline.  We've identified four different

         21         habitat types that the pipelines, both pipelines, will be

         22         impacting.  Habitat A is your higher relief, higher

         23         density reef, coral reef.  Habitat B is a little bit lower

         24         relief and lower dense -- or a lower diversity coral reef.

         25         Habitat C is the submerged breakwater spoil area that is

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                        BOARD OF TRUSTEES - March 9, 2004
          1         only applicable for the Tractebel Calypso project.

          2         Habitat D is your sand habitat that's in between or in

          3         close proximity to the reef systems or it's sand on top of

          4         a harsh substrate that is ephemeral, that moves back and

          5         forth.

          6              AES Ocean Express, the offshore construction you see

          7         in the slide, their float-over pullback is going through

          8         that larger gap.  It's within the Navy restricted area,

          9         therefore, they weren't able to get authority to

         10         permanently land the pipe through that gap.  But they have

         11         gotten permission to at least do some type of work with

         12         pulling it in.  As you can see in the -- first, they are

         13         doing their onshore horizontal directional drill, doing

         14         the float-over, pullback through that area.  They're doing

         15         the direct lay with the concrete mats in between the

         16         second reef inner and the second reef outer and then

         17         they're going through a smaller gap through the second

         18         reef outer doing another offshore water-to-water

         19         horizontal directional drill to go underneath the third

         20         reef.

         21              THE GOVERNOR:  How deep is the water there?

         22              THE WITNESS:

         23              MR. RACH:  It's about 80, 80 feet.  60 to 80 feet in

         24         that area.  Quickly going over some -- I'm not -- I'll

         25         just touch on a few.  In terms of avoidance minimization

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                        BOARD OF TRUSTEES - March 9, 2004
          1         of their design, they've selected routes to avoid the

          2         Habitat A, which is that higher relief, higher diversity.

          3         They've had temporary work areas implemented, a coral

          4         relocation plan.  Doing the horizontal directional drills.

          5         They've realigned their concrete mats covering the

          6         pipeline.  They've initiated a frack out monitoring

          7         program, sedimentation monitoring and have accepted a

          8         lower turbidity unit to ensure that turbidity does not

          9         affect the adjacent reefs.

         10              In terms of impacts, they have no impacts to Type A.

         11         They do have 1.2 acres of impacts to Type B coral reefs.

         12         No impacts to type C which is not applicable for this

         13         location.  And 2.07 acres of Type D sand habitat impacts,

         14         for a total of 3.27 acres.  Their mitigation is going to

         15         be a total of what we're calling 8.07 mitigation units,

         16         which a mitigation unit is essentially a little over

         17         14,000 tires.  So total tires removed in the mitigation

         18         area is 117,176 tires --

         19              THE GOVERNOR:  Mitigation units, is that arbitrary?

         20              MR. RACH:  We -- designing the mitigation plan with

         21         our sister agencies and the federal agencies, we looked at

         22         the density of the tires off the coast and they've

         23         averaged about 3 feet deep up to seven layers' thickness.

         24              THE GOVERNOR:  I know.  But if you got rid of 117,000

         25         tires, you're trying to convert that to numbers of acres

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                        BOARD OF TRUSTEES - March 9, 2004
          1         to reach some -- it's the tires' removal irrespective of

          2         the number of acres, right, that matters.

          3              MR. RACH:  Right.  It's the total tires removed.

          4              THE GOVERNOR:  That's a lot of tires.

          5              COMMISSIONER BRONSON:  Governor, can I ask a

          6         question?

          7              THE GOVERNOR:  Sure.

          8              COMMISSIONER BRONSON:  Now how many -- you're talking

          9         about removal of 117,000 tires, I believe it is?

         10              MR. RACH:  Correct.

         11              COMMISSIONER BRONSON:  Now did I read or see

         12         somewhere where there is 2 million tires out there?

         13              MR. RACH:  Rough estimate, yes.

         14              COMMISSIONER BRONSON:  So there's been 2 million

         15         tires dumped out there?

         16              MR. RACH:  Correct.

         17              THE GOVERNOR:  Two million?

         18              COMMISSIONER BRONSON:  So my understanding is some of

         19         those tires that were originally linked to create a

         20         reef --

         21              MR. RACH:  Artificial reef.

         22              COMMISSIONER BRONSON:  Which amazes me because you

         23         can go offshore to any of the battle sites of World War II

         24         and while all their equipment has a lot of coral

         25         attached -- or not coral, but crustation attached to it,

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                        BOARD OF TRUSTEES - March 9, 2004
          1         the tires have none.  So I'm really surprised that anybody

          2         ever thought you could build a coral reef with rubber

          3         tires.

          4              But anyway, so we got 2 million tires out there.

          5         They are going to mitigate by pulling off 117,000.  And

          6         these other loose tires, when we have a big hurricane come

          7         ashore, is going to be churning up the rest of these

          8         2 million tires and floating them in and bumping them into

          9         all this stuff; is that correct?

         10              MR. RACH:  That's correct.

         11              THE GOVERNOR:  Dr. McCallister will give us a little

         12         history lesson on how the heck we came up with that idea

         13         to put 2 million tires off the waters of Florida.

         14              MR. RACH:  Essentially the areas that we've

         15         determined as priority areas in terms of tire removal, the

         16         intention is to remove majority of the tires off the face

         17         of the reef and the tires that are rolling back into that

         18         area so that area won't fill back up.

         19              COMMISSIONER BRONSON:  Even with the churning of

         20         tidal waters with hurricanes and stuff, it's not going to

         21         churn up the loose tires?

         22              MR. RACH:  Based upon the analysis that Broward

         23         County has looked at through the years they've determined

         24         the movements of the tires and the direction that the

         25         tires are going.  So that's how the mitigation plan has

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                        BOARD OF TRUSTEES - March 9, 2004
          1         been designed.

          2              COMMISSIONER BRONSON:  Well, you know, I'm going to

          3         tell you, this reminds me a little bit of what some of the

          4         guys down around the Everglades are going through.

          5         Evidently, when this was done everybody thought this was

          6         a, quote, sound practice.  And that's how the guys around

          7         the Everglades had it.  They were doing sound practices

          8         from 30, 40 years ago and now they're going to have to pay

          9         for all of the reclamation there and it sounds like this

         10         is about like the same thing.  Everybody thought it was a

         11         good idea when they did it but now we're stuck with all

         12         these tires out there.  Now whoever puts the pipeline in

         13         has to clear 117,000.  But what do we do with the rest of

         14         the 2 million?

         15              MR. RACH:  We would hope that future beach

         16         renourishment projects or other coastal projects would use

         17         this area as a mitigation plan to remove additional tires

         18         in the future.

         19              COMMISSIONER BRONSON:  Some divers did it for a long

         20         time.

         21              MR. RACH:  It essentially has been the Agency's

         22         standpoint that we would rather see restoration of the

         23         existing natural reef versus adding more concrete modules.

         24         We feel that this is a more beneficial project than

         25         installing more artificial reefs.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  Okay.

          2              MR. RACH:  In terms of environmental concerns,

          3         float-over method, possible drilling, mud releases with

          4         horizontal directional drilling, staff's response for

          5         those in terms of what we incorporated into the permit,

          6         we're limiting this -- these types of techniques to one

          7         try.  If you fail on that attempt, you're going to have to

          8         come back to the agencies and request a modification.

          9              THE GOVERNOR:  Is that the same for the other

         10         applicant?

         11              MR. RACH:  Yes.  We're requesting that the reef

         12         construction, the onshore portion, be done first prior to

         13         any pipelines that are coming from the Bahamas.  So

         14         therefore if for one reason or another there are accidents

         15         or it's not able to be constructed, that we don't have,

         16         you know, a few million dollars of pipeline sitting out

         17         beyond our shorelines waiting to come in.

         18              We've instituted an inadvertent coral impact bond

         19         where if there are some impacts, there is money already

         20         set aside to do that mitigation.  We're requiring two

         21         times the mitigation based upon those habitat types for

         22         any unpermitted impacts.  And, also, there's a third-party

         23         inspector that's going to be out there daily reporting to

         24         the agencies.

         25              THE GOVERNOR:  What about on -- I'm sorry, Treasurer.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              CFO GALLAGHER:  Two times seems like an awful low

          2         number considering you can't replace coral.  I mean, it

          3         takes hundreds of years to grow back.  How did you come up

          4         with that number?

          5              THE GOVERNOR:  Looks like he was negotiating.

          6              MR. RACH:  We essentially, for each habitat type,

          7         we've instituted a mitigation ratio going from Habitat A,

          8         being the highest, at eight to one.  So if they impact a

          9         Habitat A, that's not a permitted impact, they're looking

         10         at 16 to one which is, you know, if you do the, in terms

         11         of the mitigation cost, it's pretty substantial.

         12              THE GOVERNOR:  What do you consider to be the -- two

         13         questions.  What do you consider to be the greatest risk

         14         as it relates to the construction of this, and any comment

         15         at all on on-land considerations and concerns as well

         16         since this hooks up several miles from the port.

         17              MR. RACH:  Right.  I think the greatest risk in terms

         18         of the offshore portion would be the float-over and pull

         19         back for that.  If the floats fail, you have the potential

         20         for that pipeline to roll or break the reef.  And the

         21         other project has similar types of concerns.  They're not

         22         doing the float-over, they are doing a guided pole where

         23         they are dragging, pulling it through, back through the

         24         holes that they just drilled.

         25              THE GOVERNOR:  And on-land considerations, anything

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                        BOARD OF TRUSTEES - March 9, 2004
          1         to worry about there?

          2              MR. RACH:  Well, as Colleen said, the on-land portion

          3         is mostly an industrial area.  It's essentially near the

          4         port and airport.  So most of it is not in residential

          5         areas and they are doing associated trenching and

          6         directional drills in that location also.

          7              THE GOVERNOR:  Okay.  Is this the two-minute

          8         proposal?

          9              (Laughter.)

         10              MR. RACH:  The last slide is just talking about the

         11         proprietary fees.  Essentially, they're based upon the

         12         fiber optic telecommunications rulemaking.  In this case,

         13         they are requesting a larger easement area.  So instead of

         14         just the six cents, it's going to be 15 cents per linear

         15         foot and then also $5 per linear foot based upon actual

         16         footprint of the pipeline and any matting.

         17              CFO GALLAGHER:  How much is the Bahamian government

         18         charging?

         19              MR. RACH:  I'm not sure.

         20              THE GOVERNOR:  A lot more.

         21              CFO GALLAGHER:  How about finding out for us?

         22              THE GOVERNOR:  I know.

         23              CFO GALLAGHER:  You do?

         24              THE GOVERNOR:  Actually, as we speak, I don't know if

         25         our Bahamian guests have checked back home, but at 10:00

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                        BOARD OF TRUSTEES - March 9, 2004
          1         they had -- AES was in front of the cabinet in the

          2         Bahamas, I believe, for approval of the Bahamian approval.

          3         But their situation is different in the sense that I think

          4         it's 5 million plus but it's also related to the LNG plant

          5         itself which is a significant difference than a pipeline,

          6         I assume; is that correct?

          7              MR. BRIGHTMAN:  Correct.

          8              THE GOVERNOR:  Did they get the approval?

          9              MR. BRIGHTMAN:  Don't know yet.

         10              THE GOVERNOR:  No one checked?  No one called?  I

         11         should have done that.  Would have been good to know.  If

         12         they said no, we'd need to move on to the next one.

         13              MR. RACH:  One last point I want to make.  We

         14         researched the prior cabinet records back in '68, '70 and

         15         '73.  The cabinet did approve the artificial reef, the

         16         tire reef out there.  So our predecessors --

         17              COMMISSIONER BRONSON:  Excuse me.  So the cabinet in

         18         '73 approved the use so they must have thought it was

         19         going to work when they approved it or somebody gave them

         20         the indication it would work when they approved it.  But

         21         who did the application come from?

         22              MR. RACH:  At the time, it was Broward Artificial

         23         Reef Incorporated?

         24              COMMISSIONER BRONSON:  Florida Artificial Reef

         25         Incorporated.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. RACH:  Broward Artificial Reef Incorporated.

          2              COMMISSIONER BRONSON:  Oh, Broward.  So it was a

          3         private entity?

          4              MR. RACH:  I believe it was a private entity and

          5         later those permits were transferred to Broward County, I

          6         believe, in the middle '80s from the records we've been

          7         able to pull.

          8              THE GOVERNOR:  Even Gallagher wasn't around.

          9              (Laughter).

         10              CFO GALLAGHER:  '73, I was on my way.  I was working

         11         on it.

         12              THE GOVERNOR:  You wouldn't have supported that idea

         13         though in retrospect, right?

         14              CFO GALLAGHER:  If I would have known what I know

         15         now, of course not.  Neither would anybody else.

         16              THE GOVERNOR:  Okay.  Thank you.  Colleen, do you

         17         have any other -- do you want to hear from the applicant?

         18              MS. CASTILLE:  Yes, I think it's time to hear from

         19         the applicant.  Two minutes.

         20              MR. BRIGHTMAN:  She's going to hold me to it too.

         21         (Laughter.)  Again, Richard Brightman on behalf of AES

         22         Ocean Express, LLC.  I am accompanied by Don Bartlett, the

         23         project manager from AES, and by Eric Amadon, the

         24         principal environmental consultant for the project.

         25              I just want to give you a little bit of history as to

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                        BOARD OF TRUSTEES - March 9, 2004
          1         the approvals that have already occurred for this project.

          2         There was a FERC certificate issued for this project on

          3         January 29th after about a two-year process which included

          4         a full-blown environmental impact statement with

          5         cooperating agencies being the Minerals Management Service

          6         Corps of Engineers, NOAA Fisheries, and the Federal

          7         Department of Transportation.

          8              The time for appeal of that certificate has now run.

          9         There was no appeal.  Broward County environmental

         10         resource license was issued for this project on

         11         February 26th after over a year of discussions and

         12         providing information to Broward County.  The city of

         13         Dania Beach on February 24th issued an easement for the

         14         portion, very small portion of the pipeline that's going

         15         through property that is owned by the City of Dania Beach.

         16              As the Governor mentioned in the Bahamas, as we

         17         speak, or maybe earlier today, the Bahamian portion of

         18         this project is being considered by the Bahamian cabinet.

         19         That process began in the fall of 2001.  Their

         20         environmental impact assessment process was completed

         21         already with favorable results.  What's before the cabinet

         22         today is what's called the heads of agreement which is, as

         23         I understand it, the commercial terms for the ultimate

         24         approval of the project.  The project included three open

         25         houses for the public and the local community.  At least

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                        BOARD OF TRUSTEES - March 9, 2004
          1         seven or eight multi-agency meetings where we had DEP,

          2         Broward County, the federal resource agencies all present

          3         to discuss aspects of the project and to determine how

          4         this would be done.

          5              All those meetings resulted in a very thick document

          6         that's called the Environmental Construction Monitoring

          7         and Verification Plan.  We call it the ECMVP which is a

          8         bit of a tongue twister, but it contains detailed plans,

          9         procedures and guidelines that control every step of the

         10         construction of this.  This has been accepted by FERC now

         11         as the standard by which all pipeline projects will be

         12         judged in the future.

         13              It incorporates lessons learned from previous

         14         projects where they've tried some of these techniques and

         15         maybe some things went wrong.  We've learned from those

         16         activities.  And as I said, it is now the standard for

         17         approval of these types of projects.  This project is

         18         important for Florida's future.  Florida needs more clean

         19         burning gas to generate the electricity that's projected

         20         to be needed by the Florida Electric Reliability Council.

         21         But it's not just about more gas.

         22              This is -- this project represents an entirely new

         23         source of gas.  It will increase the reliability of the

         24         gas supply to the state of Florida.  It will increase the

         25         diversity of the fuel sources available to the citizens of

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                        BOARD OF TRUSTEES - March 9, 2004
          1         Florida, and it will provide some additional competitive

          2         in the marketplace and we request your approval.

          3              THE GOVERNOR:  Two minutes.  Well done.  Yes,

          4         General.

          5              GENERAL CRIST:  Who will use it?  Will it be provided

          6         to a company to disperse for citizen usage?

          7              MR. BRIGHTMAN:  This pipeline will be a common

          8         carrier.  It will provide gas to whoever wants to purchase

          9         it.  It connects to -- or will connect to the existing

         10         pipeline infrastructure in the area.  And so the gas that

         11         comes across on this pipeline will be able to be delivered

         12         wherever that current pipeline system is.

         13              THE GOVERNOR:  That pipeline goes -- connects into

         14         Broward and goes north through the state, right?

         15              MR. BRIGHTMAN:  That's correct.  Actually, it even

         16         goes to Tallahassee.

         17              THE GOVERNOR:  Goes both.

         18              MR. BRIGHTMAN:  North and south, yes.

         19              THE GOVERNOR:  East and west.

         20              MR. BRIGHTMAN:  Right.

         21              THE GOVERNOR:  One of the issues that I -- are there

         22         any other federal permitting?

         23              MR. BRIGHTMAN:  The Minerals Management Service has

         24         not yet issued their --

         25              THE GOVERNOR:  The what?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. BRIGHTMAN:  The Minerals Management Service.

          2              THE GOVERNOR:  What's that?

          3              MR. BRIGHTMAN:  They are an agency within the

          4         Department of the Interior that has control over the

          5         federally controlled lands outside the territorial seas

          6         and they would grant what would be the equivalent of the

          7         easement over sovereign submerged lands which you are

          8         currently considering on the federal property.

          9              THE GOVERNOR:  International waters --

         10              MR. BRIGHTMAN:  International waters.  It would be

         11         outside of state waters, yes.

         12              THE GOVERNOR:  How -- there are three proposals for a

         13         gas pipeline to connect to Florida from the Bahamas.

         14         You're further along.  You have FERC approval, no one else

         15         has that as I understand it.  You're further along in the

         16         Bahamian process.  But in doing a little due diligence,

         17         just reading the Bahamian papers, it doesn't look like the

         18         Bahamas is going to not approve others just because

         19         you-all went first.

         20              So what happens, we're going through this process to

         21         approve three fairly complicated -- looks complicated to

         22         me at least, pipeline proposals.  All three of them going

         23         to go forward or is only one of them going to go forward?

         24         And if that's the case, General Crist asked a very good

         25         question, which is users.  The major user in the area, I

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                        BOARD OF TRUSTEES - March 9, 2004
          1         assume, is the utility company.  And they're not

          2         partnering with you, they are partnering with another

          3         entity as I understand it.  Do they buy your gas?  Give us

          4         a little bit of the business plan here.

          5              MR. BRIGHTMAN:  I can't speak for the utility

          6         customer, whether they would buy our gas, because they're

          7         not here.  I would say that if I were them, I would buy

          8         gas that was available and if I needed gas.  And if our

          9         gas is available and the other project isn't, then I would

         10         buy our gas.  By the way, you mentioned three --

         11              THE GOVERNOR:  Do it backwards.  Because that's a

         12         good point.  But if you don't have a customer, are you

         13         going to build the pipeline irrespective?  Are we going to

         14         have three pipelines or are we going to have one?  Because

         15         obviously, if Florida Power & Light is a partner in one of

         16         the gas transmission proposals, I would assume that they

         17         would probably be more likely to buy gas from themselves

         18         than from you.

         19              MR. BRIGHTMAN:  First of all, I think "partner" is

         20         too strong a word.  It's my understanding they have an

         21         option to become a partner as opposed to an actual equity

         22         share.

         23              THE GOVERNOR:  Same principle would apply, don't you

         24         think?

         25              MR. BRIGHTMAN:  The other project, by the way, is a

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                        BOARD OF TRUSTEES - March 9, 2004
          1         project in name only.  They've not filed any applications

          2         anywhere in the United States or at least as far as I know

          3         in the Bahamas.  I don't know so much about the Bahamas.

          4         But they filed no applications in the United States,

          5         either at the federal level or at the state level.

          6              THE GOVERNOR:  News from the Bahamas, they've not

          7         acted yet.

          8              MR. BRIGHTMAN:  Governor, another answer to your

          9         question is that one of the procedures that FERC goes

         10         through in deciding whether or not to issue the

         11         certificate, the first process that they go through is to

         12         determine the need.  They do a market analysis as to

         13         whether there is a need for an additional -- ability to

         14         transmit gas.  In this case, they've agreed there is a

         15         need for ours.  Whether they agree there is need for

         16         others, I don't know.

         17              THE GOVERNOR:  That need is not defined as south

         18         Florida or that need is not defined as Florida.  That's

         19         defined as east coast, correct?

         20              MR. BRIGHTMAN:  They determine the need for the

         21         market in general.  They don't necessarily, to

         22         circumscribe it in terms of a particular geographic area.

         23         The projections for the need for gas are far in excess of

         24         the capacity of this pipeline or at least either of the

         25         other two.  So --

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                        BOARD OF TRUSTEES - March 9, 2004
          1              THE GOVERNOR:  But that also, again, as I think is

          2         the case, and correct me if I'm wrong, please, the FERC

          3         process would not be Florida-specific or south

          4         Florida-specific.  It would be east coast.  In other

          5         words, this gas could be transmitted through a pipeline

          6         system up to Philadelphia or to New Jersey or to Virginia.

          7              MR. BARTLETT:  Governor, my name is Don Bartlett, as

          8         Richard indicated earlier.  While it is possible for the

          9         gas physically to be transported further north, we do not

         10         anticipate that the gas would go any further than probably

         11         West Palm Beach.  If anything, it may defer gas traveling

         12         the great distance that it currently travels now in order

         13         to serve Florida.  It's an opportunity for the state of

         14         Florida through the Florida Reliability Coordinating

         15         Council, their own need analysis has identified 2.4

         16         billion cubic feet of natural gas by the year 2010.  We're

         17         currently in 2004, giving us six years -- less than six

         18         years to bring you some much needed infrastructure into

         19         the state.  Our focus has primarily been serving the state

         20         of Florida.

         21              THE GOVERNOR:  If FERC -- I'm just thinking.  If we

         22         become the port, is it possible for this process to become

         23         such that Florida is the point of entry for natural gas

         24         from the Carribean, electrified and sent to the Bahamas,

         25         produced, transmitted over pipelines, and then we service

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                        BOARD OF TRUSTEES - March 9, 2004
          1         the eastern United States, just as Texas and Louisiana now

          2         service the south and Florida, in which case I'm not sure

          3         that's a great deal for us.

          4              MR. BARTLETT:  While it is technically possible for

          5         that to take place, the current infrastructure existing

          6         onshore in the state of Florida will not accommodate

          7         numerous projects to come in and continue to supply

          8         natural gas until that infrastructure would have to be

          9         substantially upgraded.

         10              THE GOVERNOR:  That's my concern.  You get my

         11         concern.  I don't know enough about the industry to know

         12         if this is kind of a once you get a port you become a port

         13         of entry to the extent that three applicants are coming

         14         relatively in the same place.  Does that then, you know --

         15         I'm not sure the benefit of Florida for that.  I see the

         16         benefit of additional sources of natural gas for our

         17         growing economy.  I'm not sure of the benefit if we become

         18         the port of entry for other people's use and then we go

         19         through the siting of additional pipelines instead of to

         20         bring it in to use we create siting challenges for us up

         21         the coast to export it to our competitors.  You don't see

         22         that as an issue?

         23              MR. BARTLETT:  Governor, I'd be more concerned with

         24         the opposite scenario, if these projects did not move

         25         forward, that the current infrastructure would be

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                        BOARD OF TRUSTEES - March 9, 2004
          1         upgraded, other pipelines will have to come in from the

          2         continental U.S. somewhere in order to supply the forecast

          3         needs for the state alone.

          4              THE GOVERNOR:  So you recommend that we approve all

          5         three?

          6              MR. BARTLETT:  I would recommend as the marketplace

          7         continues to grow that the need for all three projects is

          8         definitely there and documented by the Florida Reliability

          9         Coordination Council.

         10              COMMISSIONER BRONSON:  Governor, to even follow

         11         further than where you've gone, you know, over the past 15

         12         to 20 years, I've seen some major, major changes in the

         13         electrical systems of this country where power plants have

         14         to buy electricity from other smaller plants.  And you

         15         have to make your lines available for any cross

         16         transactions that may take place between states or cities

         17         or whatever.

         18              Is the gas industry going to do -- is it going in the

         19         same direction, if the lines coming in from Texas and

         20         Louisiana go low and there is a source over here, that you

         21         can connect the lines to move the gas from place to place?

         22         Are we going to have the same types of changes in how we

         23         do business in the gas business as we did in the

         24         electrical business?

         25              MR. BRIGHTMAN:  There is a fundamental difference

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                        BOARD OF TRUSTEES - March 9, 2004
          1         between the way the electric grid was previously run and

          2         the way the pipeline system is currently run and that is

          3         that all of the major pipelines coming into the state of

          4         Florida, now the Florida Gas Transmission Line,

          5         Gulfstream, and these projects, should they be approved,

          6         are already common carriers.  They will carry anybody's

          7         gas if it meets the tariff to be carried.

          8              COMMISSIONER BRONSON:  I'm talking about

          9         connectability from your line to the next guy's line and

         10         moving that gas.  That's already -- in the gas business,

         11         that's already available?

         12              MR. BRIGHTMAN:  That is correct.  We are already

         13         going to interconnect with the Florida Gas Transmission

         14         Pipeline System.

         15              THE GOVERNOR:  One of the other -- it's a very good

         16         question because there is another technology I'd like to

         17         get your comments on.  This could be brand X and I'm

         18         guessing you probably think this is a really bad idea.

         19         But isn't there technology emerging that allows for

         20         liquified natural gas to be offloaded in gas form from

         21         ships themselves at ports?

         22              MR. BRIGHTMAN:  At ports, certainly.  That's what

         23         we're planning to do in the Bahamas.

         24              THE GOVERNOR:  But you're -- then you liquefy it.

         25         And I'm talking about the liquification, the gasification

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                        BOARD OF TRUSTEES - March 9, 2004
          1         process taking place on board the ship.  That's not what

          2         you're going to do in the Bahamas.

          3              MR. BRIGHTMAN:  No, it's not.  The LNG in the Bahamas

          4         will be offloaded as a liquid and then regasified on the

          5         island.  And then product crossing the pipeline as a gas.

          6         There is technology available to regasify it onboard the

          7         ship.

          8              THE GOVERNOR:  So why don't we have a pipeline?

          9              MR. BARTLETT:  The size of the ships in order to

         10         regasify, the quantity of gas in order to put in the

         11         pipelines, those ships I wouldn't be able to comment on

         12         how large those ships would have to get in order to be

         13         able to achieve that.

         14              THE GOVERNOR:  Very large.

         15              CFO GALLAGHER:  I have a question here.  The feds

         16         determine a need.  And this sort of reminds me of what

         17         usually happens in real estate, there is an established

         18         need so every developer, be it condominiums or whatever,

         19         realizes that here's a business opportunity.  There is a

         20         need for X number of feet of gas in Florida and the

         21         pipeline that's in there, even though it's going to be

         22         overbuilt, a little bit bigger, isn't going to be enough.

         23              So three guys are all going to fill that one need.

         24         They're all going to come in three different places.  And

         25         now we have three times as much need as -- or I guess

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                        BOARD OF TRUSTEES - March 9, 2004
          1         three times as much fill as we have need.  And somebody

          2         gets halfway done and goes broke.  And there we are, we

          3         got something halfway torn up.  How do we keep that from

          4         happening?

          5              MR. BRIGHTMAN:  I guess my response to that is, The

          6         need has been identified at 2.4.  And this project would

          7         provide .8 and similar by the other projects.  And so even

          8         if you put all three of those projects together, you have

          9         not exceeded the current need.

         10              MR. BARTLETT:  That's only out to 2010.  By 2020,

         11         they expect that additional gas requirements would

         12         increase by another 2 BCF a day.  So, I mean, these three

         13         projects will not satisfy the current forecast need in the

         14         marketplace by --

         15              THE GOVERNOR:  Why didn't you propose a project that

         16         was three times bigger?  Simplify things for us, have one

         17         big mother of all pipelines instead of three.  What's

         18         the --

         19              CFO GALLAGHER:  The big pipe.

         20              THE GOVERNOR:  If the market that you're saying is so

         21         great, what are we missing here?

         22              MR. BARTLETT:  It's a very valid question, Governor.

         23         We sized our pipeline in order to supply a certain

         24         quantity of gas in the Florida marketplace that we

         25         expected to be required in the next near future.  Looking

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                        BOARD OF TRUSTEES - March 9, 2004
          1         further out is a decision that, you know, we didn't decide

          2         to go any further.  Also the limited infrastructure of the

          3         current FGT system that their infrastructure coming in the

          4         area that we're tying into would also be limited --

          5              THE GOVERNOR:  Well, if it's limited, why do we want

          6         to approve three pipelines then if it can't get --

          7              CFO GALLAGHER:  All feeding into the same guide.

          8              THE GOVERNOR:  -- all feeding into a system that's

          9         inadequate to take all three?

         10              MR. BARTLETT:  The difference gets into the

         11         compressionability of the natural gas.  The pipeline, as

         12         it comes down Florida heading south towards Miami,

         13         continues to shrink in size.  There is a loss of pressure

         14         in that pipeline.  By us tying into that physical

         15         location, we give it a much increased, from a pressure

         16         perspective, allowing you to flow gas further to the south

         17         but also allowing you to drop off gas at two large major

         18         power plants of the current utility system in the Port

         19         Everglades area.  One being the Fort Lauderdale Power

         20         Plant and the other one the Port Everglades Power Plant

         21         where the utility has recently announced in their ten-year

         22         plan that they're now are currently looking at the

         23         opportunity to do something with the Port Everglades Power

         24         Plant, not to say that they will.  It's currently an

         25         oil-fired facility.  A lot of issues in Broward County

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                        BOARD OF TRUSTEES - March 9, 2004
          1         regarding that.  It's these types of projects that will

          2         allow other options to look at repowering into the future

          3         of these older facilities.

          4              In addition, as you clearly pointed out, is the, you

          5         know, people are looking at these projects as these two

          6         initial projects have moved forward and we are the -- you

          7         know, further along as far as the permitting perspective,

          8         there have been discussions with other utility companies.

          9         And the reason for the other utility companies being

         10         interested in the project is for -- obviously the need

         11         that is required and the fact that they want to get into

         12         the market to supply their own power requirements.

         13              THE GOVERNOR:  Colleen, you guys are finished, right?

         14         You did your --

         15              MR. BRIGHTMAN:  Yes.

         16              THE GOVERNOR:  What are we proposing here?  What is

         17         being proposed?  An easement for how long?

         18              MS. CASTILLE:  Twenty-five years.

         19              THE GOVERNOR:  But it doesn't require construction?

         20              MS. CASTILLE:  A construction permit?

         21              THE GOVERNOR:  No, I mean you get an easement but do

         22         you have to build a pipeline?

         23              MS. CASTILLE:  If you -- I don't understand the

         24         question, sir.

         25              THE GOVERNOR:  Within that period of time does the

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                        BOARD OF TRUSTEES - March 9, 2004
          1         pipeline have to be built?

          2              MS. CASTILLE:  Five years.  It has to be built within

          3         five years.

          4              THE GOVERNOR:  If it doesn't start in five years,

          5         they lose --

          6              MR. BRIGHTMAN:  The permit expires.

          7              THE GOVERNOR:  But the easement doesn't?

          8              MR. BRIGHTMAN:  As currently written, yes.

          9              THE GOVERNOR:  Why would we want to give an easement

         10         longer -- if the market is so great and if FERC says there

         11         is a big need and all the things you said, why would we

         12         give an easement longer than five years?

         13              MR. BRIGHTMAN:  An easy way to solve that problem,

         14         Governor, is to simply put a special condition in the

         15         easement that as it expires, well, if the permit expires

         16         then it's not renewed without the pipeline being

         17         constructed.

         18              CFO GALLAGHER:  Yeah, because if you don't do that,

         19         then they can sell the permit to anybody else and get

         20         another five years.

         21              MR. BRIGHTMAN:  We're happy to accept that condition

         22         because we believe we're going to build the pipeline.

         23              THE GOVERNOR:  Okay.  I'm just thinking.  We have the

         24         luxury or the challenge of riches here, three different

         25         proposals.  I don't believe all three are going to go

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                        BOARD OF TRUSTEES - March 9, 2004
          1         forward because of the backbone issues.  I just don't --

          2         it's also pretty pricey these days and users may not be as

          3         excited about natural gas as we were several years ago.

          4         It's the most expensive alternative rather than the

          5         cheapest today although it's the cleanest.  But to go

          6         through this process to grant something and then not have

          7         it happen is kind of troubling to me.

          8              CFO GALLAGHER:  I have a question.

          9              THE GOVERNOR:  Yes.

         10              CFO GALLAGHER:  Colleen, how much does it cost to

         11         remove all those tires?

         12              MS. CASTILLE:  I don't know how much it costs to

         13         remove all the tires.

         14              MR. BRIGHTMAN:  Broward County did what I would

         15         describe as a bench test.  They actually went out and

         16         removed some tires, not a lot, but some, and calculated

         17         how much it would cost to do that.  Based on their

         18         calculations, somewhere between 7 and $800,000 per unit --

         19              CFO GALLAGHER:  Per unit?

         20              MS. CASTILLE:  14,000 tires.

         21              MR. BRIGHTMAN:  Which is 14,000 tires.  We're going

         22         to be removing eight units and change.

         23              CFO GALLAGHER:  How many units is 2 million tires or

         24         how many are out there?

         25              MR. BRIGHTMAN:  I'm not that good at math.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MS. CASTILLE:  It's about 160.

          2              CFO GALLAGHER:  Somebody just arose that may know the

          3         answer.

          4              MR. GREGG:  I believe it's around 60, 60 units will

          5         be required to be removed.  There are portions of the area

          6         that are up to three layers thick.  So that would be three

          7         units to clear one acre of sea floor there.  That

          8         multilayer area is 17 acres times approximately three plus

          9         the balance to the 31-acre footprint of the whole area.

         10              CFO GALLAGHER:  So could somebody do some math for

         11         me?  Here comes a guy with a calculator.

         12              MS. CASTILLE:  Approximately 117,000 units -- 117,000

         13         tires is eight units.  If there are 2 million tires, there

         14         is a little less than 20 times eight units.  And so that's

         15         about 160, less than that is about 130.

         16              MR. GREGG:  133 approximately units per 2 million

         17         tires.

         18              CFO GALLAGHER:  133 units.  How much does it cost a

         19         unit?

         20              MS. CASTILLE:  7 --  800,000.

         21              CFO GALLAGHER:  800,000.  So you're talking

         22         $100 million.

         23              MR. BRIGHTMAN:  We didn't put them there.

         24              GENERAL CRIST:  They're causing a problem?

         25              MR. BRIGHTMAN:  They are damaging the natural reef.

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                        BOARD OF TRUSTEES - March 9, 2004
          1              CFO GALLAGHER:  The reason I ask this, for whatever

          2         it's worth, that we're sitting here talking about, you

          3         know, a few fees and a little bit of money.  In the

          4         Bahamas, they're going to get 10 million point 8 for, in

          5         year one of the -- of any one of the projects.  So

          6         multiply that times three.  And then in year five, that

          7         figure is expected to double.  In year ten, it's expected

          8         to go to 30 million.  In year 15, the government should be

          9         getting 40 million to 50 million from a company that's

         10         operating the LNG, which means the liquified natural gas

         11         plant.

         12              MR. BARTLETT:  The purpose of the LNG facility and

         13         why it's in the Bahamas is that there's no place to put it

         14         here in the state of Florida.  We would love to put it

         15         here in the state of Florida.  It would save ourselves at

         16         least $130 million in cost of the pipeline.  We did the

         17         evaluations of where we could put this LNG facility.  This

         18         facility is serving the state of Florida.

         19              CFO GALLAGHER:  Nobody wants it.

         20              MR. BARTLETT:  Not to say nobody wants it.  It's just

         21         to say it would be tough to do.  We're only talking a

         22         pipeline here.  You know, that's something that's in the

         23         ground, nobody can see it.  But it is here to serve the

         24         state of Florida.  What the Bahamas are receiving, they

         25         are receiving jobs, they are receiving, as you indicated,

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                        BOARD OF TRUSTEES - March 9, 2004
          1         certain royalty payments.  It's all being addressed in the

          2         heads of the agreement and why it's been taking so long to

          3         get it resolved.  But this project is here to serve the

          4         state of Florida.

          5              THE GOVERNOR:  Thank you.  We have some opponents of

          6         the project, Colleen?

          7              MS. CASTILLE:  Yes, sir, we do.

          8              THE GOVERNOR:  Would they like to speak?

          9              MS. CASTILLE:  Yes, they would.  We have Dan -- I'm

         10         sorry, Dan.

         11              COMMISSIONER BRONSON:  While we're doing that,

         12         Governor, let me ask a question.  Since the lease itself,

         13         the question on the leasing, if we go through with one or

         14         two or however many that may come up for approval, should

         15         we have the assignability of the lease directly put back

         16         to -- in case there is any potential problem, that the

         17         assignability of that lease has to be approved by this

         18         cabinet so that that cannot be assigned by the individuals

         19         with the --

         20              THE GOVERNOR:  Do we already have that?

         21              MS. CASTILLE:  Do we already have what, sir?

         22              MR. BRIGHTMAN:  That's the way the easement is

         23         currently written.  It is not assignable without the

         24         approval of the trustees.

         25              COMMISSIONER BRONSON:  Okay.  I just wanted to make

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                        BOARD OF TRUSTEES - March 9, 2004
          1         sure of that.  I wasn't sure.

          2              MS. CASTILLE:  We have two more presenters.  We have

          3         Dr. Ray McCallister in support.  And I'll ask him to go

          4         second.  And we have Dan Clark from Cry of the Water.

          5              MR. CLARK:  Yes, hello.  Thank you.  The thing that

          6         troubles me most with these projects is not what's written

          7         in the EIS.

          8              THE GOVERNOR:  How are you doing, by the way?  Nice

          9         seeing you.

         10              MR. CLARK:  How do you do, Governor.  For the record,

         11         my name is Dan Clark, Cry of the Water.  What troubles us

         12         the most about these projects is not what's written in the

         13         EIS.  As we've seen with most of these projects that go on

         14         in and around the reefs, the biggest problem is the

         15         unforeseen mechanical damages.  What looks good on paper

         16         is not easily applied when you're working with huge ships.

         17              I'm briefly going to mention the other project here

         18         just briefly, the Tractebel project.  They went out and

         19         tried to do some test drillings, some core samples for

         20         that project.  Just in order to drill a dozen 3-inch holes

         21         or 11 3-inch holes, there was coral damage.  The problem

         22         is -- it was unforeseen coral damage.  The problem is, if

         23         everything goes as planned, the damages aren't quite so

         24         bad.  But things never go as planned when you're working

         25         with these huge ships around these reefs.  You have

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                        BOARD OF TRUSTEES - March 9, 2004
          1         problems with anchoring the vessels and all those sort of

          2         things.  Another problem we have is the EIS that was done

          3         for FERC, we don't believe those EISs were complete like

          4         with the other project.  Didn't mention anything about

          5         transplanting corals in the FERC documents.

          6              THE GOVERNOR:  That's in the other one?

          7              MR. CLARK:  That's in the other one.

          8              THE GOVERNOR:  Why don't you --

          9              MR. CLARK:  Okay.  Similarly, for this project, they

         10         are saying they can build this bridge across the reef in

         11         which they're going to suspend this long piece of pipe

         12         that they have to pull through the corridor.  And they say

         13         they can do that without impacting the hard bottoms of

         14         that reef.  I don't know any physical way to anchor up

         15         those bridges without putting anchors on those hard

         16         bottoms.  And we believe what will happen is the same

         17         thing that's happened with the other EIS, is once they

         18         start the project they're going to say, Oh, now we need an

         19         anchorage area here.  And the new practice is becoming

         20         just to snatch corals up and move them.  Okay?  And these

         21         are complete ecosystems.  You don't just move the corals

         22         out --

         23              THE GOVERNOR:  That's the second applicant that's

         24         proposing that.  These guys aren't proposing that, are

         25         they?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. CLARK:  Not yet.  But we believe once they get

          2         their equipment on site they're going to say, Oh, we

          3         decided we can't anchor this.  We can't build this bridge,

          4         we want to make it safer, so therefore, we need more

          5         designated anchorage areas.  And this has been the problem

          6         with a lot of these EISs.

          7              And if this does go forward at all, what we'd ask you

          8         guys to do is, there is another step that can take place.

          9         The Army Corps of Engineers can ask for an EIS.  That EIS

         10         would have to be prepare by these corporations, not by

         11         FERC.  And that could be a more thorough process.  If

         12         you're thinking at all about going ahead with these

         13         projects, that's what should happen next.  If you guys are

         14         thinking about doing this, defer this thing, put it off,

         15         ask the Corps to do a more thorough evaluation of these

         16         processes and make sure that all the best available

         17         information is contained in those EISs.

         18              I stood before you a year ago on a project, there was

         19         a lot of good stuff that wasn't put in that EIS.  And I've

         20         given some of that stuff to your staff.  I won't go there

         21         now.  But feel free to look at it.  Seriously, this is a

         22         problem.  They will say anything to get permits.  And then

         23         once we get into the project, suddenly everything changes.

         24         It's a new game plan.  And that's why these EISs need to

         25         be complete.  They need to have the best available

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                        BOARD OF TRUSTEES - March 9, 2004
          1         information.

          2              THE GOVERNOR:  Do you like the mitigation?

          3              MR. CLARK:  No, I think it's a terrible idea.  The

          4         tires need to go.

          5              THE GOVERNOR:  No, I'm not talking about that.  I'm

          6         talking about in the event of a -- let's assume for a

          7         moment, whatever the terminology is, as the temporary

          8         system is created to pull the pipe through and something

          9         bad happens and they need to readjust, they need to put a

         10         foundation into the coral, as you suggest, the mitigation

         11         that we have as part of that, you think --

         12              MR. CLARK:  Well, their mitigation, you're going to

         13         say, Go out and pick up tires.

         14              THE GOVERNOR:  More tires?  We're already picking up

         15         tires.

         16              MR. CLARK:  More tires.  But that's what it will be

         17         as more impacts come about.  That's what happened -- I'm

         18         talking about the other one very briefly -- but that's

         19         what happened with the other one.  When the impacts

         20         happened, they said, Oh, we're going to make you pick up

         21         more tires.  And this has suddenly become a way to deal

         22         with an old bad project that somebody stood before you

         23         before -- not before you, but before another body that was

         24         here and got passed.

         25              THE GOVERNOR:  Aren't they putting up money though?

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                        BOARD OF TRUSTEES - March 9, 2004
          1              MR. CLARK:  They're putting up a bond, yes, I

          2         believe.  There should be a bond.  We asked that there be

          3         large bonds on both of these projects.  But --

          4              THE GOVERNOR:  That's the mitigation for --

          5              MR. CLARK:  But if that money is spent to go pick up

          6         tires, it's not necessarily adequate mitigation.  The

          7         tires are in a different part of the county, by the way.

          8         They're not even in the same neighborhood here.  They're

          9         up the coast.  So going and doing the mitigation --

         10              THE GOVERNOR:  You're not big on the tire thing, are

         11         you?

         12              MR. CLARK:  No, I'm not real big on the tires and

         13         they are doing damage, okay, especially the loose ones.

         14         But the ones they should be picking up are the ones that

         15         are loose rolling around the reef, not necessarily the big

         16         pile of tires.  And just for the record, the biggest

         17         lobster I ever caught in my life, I caught in a bundle of

         18         those tires.

         19              THE GOVERNOR:  Don't tell me you're defending the

         20         tires now.

         21              MR. CLARK:  I'm not.  I'm not by any means.

         22              THE GOVERNOR:  After all we went through together on

         23         the beach renourishment, you can't be telling me that.

         24              MR. CLARK:  I'm not.  But the tires really need to be

         25         looked at separately and they really shouldn't be looked

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                        BOARD OF TRUSTEES - March 9, 2004
          1         at as viable mitigation for this project.  I don't agree

          2         for either one of these projects that the tires should be.

          3              COMMISSIONER BRONSON:  Let me ask you.  So then you

          4         feel like whoever the entity was that did the original

          5         tire deal ought to clean up the tires?

          6              MR. CLARK:  Yes, sir.

          7              COMMISSIONER BRONSON:  Which would be the County?

          8              MR. CLARK:  Yes, sir.  Well, the County was very

          9         involved in it.  I believe Waste Management might also

         10         have had a hand in it back when.  They were looking for a

         11         way to get rid of tires.  I don't know the exact details

         12         of that.  It was before I was involved in all this.

         13              Let me just touch on a couple of things that they

         14         mentioned.  One of the most important things I think, and

         15         it's going to pertain to both of these pipelines, there

         16         was a guy that came to the FERC -- one of the FERC

         17         hearings down in south Florida.  He was a member of the

         18         Pipefitters of America.  They're the guys that build these

         19         pipelines on land and maintain all that stuff.  He said he

         20         don't think the infrastructure -- and you heard these

         21         people tell you -- they don't think the infrastructure in

         22         south Florida can handle the volume of all three of these

         23         pipes.  They said they thought it would be dangerous to

         24         try to put that much product through the infrastructure in

         25         south Florida.  They said it would be a better idea if you

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                        BOARD OF TRUSTEES - March 9, 2004
          1         want to bring natural gas in to bring it in upstate

          2         Florida where the infrastructure could better handle that.

          3         Because as they just stood here and told you, as the pipes

          4         go south, they get smaller.  You're going to try to put a

          5         huge volume of material into a small pipeline down there.

          6         And, you know, now you raise safety issues on land as

          7         well.  Not just my coral issues but now you're raising

          8         public safety issues as well.

          9              THE GOVERNOR:  Whether it comes north to south, or

         10         goes south to north, it's the same capacity problem, it's

         11         not going to change.

         12              MR. CLARK:  Well, they did stand here and just tell

         13         you as it goes south, the pipe shrinks.  I heard somebody

         14         say it, I wrote it down, one of the people that just

         15         presented.  So, you know, that raises a question of why

         16         they are bringing it in down south as well.  We'd like to

         17         see a full EIS done by the Army Corps of Engineers.  If

         18         you guys would defer this vote and put that off possibly

         19         until a better evaluation of this whole process was done,

         20         I think you could make a better more informed decision

         21         just like the people that made the idea to put these tires

         22         down should have made a better and more informed decision

         23         back then.

         24              I'll wait and I can get the rest of my comments in on

         25         the other pipeline.  Like I said, the biggest thing is, we

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                        BOARD OF TRUSTEES - March 9, 2004
          1         think a better evaluation of the true impacts needs to be

          2         done.  And there is no mitigation.  If that pipe falls off

          3         that bridge out over that reef, first of all, I think

          4         that's a crazy idea, I don't think it can be done.  If it

          5         falls off there, there will be no mitigation for that

          6         reef.  I mean, you're talking about wiping out century-old

          7         corals and there's no mitigation for that stuff, picking

          8         up tires or anything else.  Thank you.

          9              THE GOVERNOR:  Thank you for being here.

         10              CFO GALLAGHER:  By the way, just a question.  What's

         11         the pipeline made of?  Is it concrete, is it rubber?  What

         12         is it?

         13              MR. BARTLETT:  Majority of the pipeline is carbon

         14         steel.  A section of the pipeline is stainless steel to --

         15              THE COURT REPORTER:  I can't hear.

         16              (Inaudible.  Speaker not at podium.)

         17              MR. BARTLETT:  -- the testing facilities.

         18              THE GOVERNOR:  Where are you making it?  Birds Pipe

         19         and Steel from Panama City?

         20              MR. BARTLETT:  I believe that's the case if the price

         21         is right.

         22              CFO GALLAGHER:  So it's either steel or stainless

         23         steel.

         24              MR. BARTLETT:  Yes, sir.

         25              CFO GALLAGHER:  And you pull this thing after you

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                        BOARD OF TRUSTEES - March 9, 2004
          1         weld it and pull it through?

          2              THE COURT REPORTER:  I can't hear.

          3              (Inaudible.  Speaker not at podium.)

          4              MS. CASTILLE:  Come on up.

          5              MR. BARTLETT:  The pipeline itself is manufactured in

          6         spool pieces ranging from probably 20 feet long to 40 feet

          7         long.  It's brought onto, say, the vessel in the near

          8         shore area where the entire -- for the onshore pipeline

          9         pull at 6100 feet is fabricated.  The special welding

         10         facilities on these ships, that's all these ships do.

         11         They're specially designed.  They are oceangoing vessels.

         12         The process is automated.  The wells are welded, X-rayed.

         13         Every weld is X-rayed to ensure quality control, that

         14         there is no potential of a bad weld taking place.

         15              The pipeline is laid out in the ocean floor.  It's

         16         then hydrostatically tested to ensure that, again, a

         17         second phase to make sure the pipeline is complete.  That

         18         hydrostatic test is 1.5 times the maximum operating

         19         pressure of the pipeline.  When the pipeline is then moved

         20         into position and pulled into the bore hole, the pipe is

         21         again tested to ensure that all the welds are still

         22         intact, verifying the integrity of the pipeline.  This is

         23         a continuous operation throughout the whole process.

         24              Once the offshore section is installed, that whole

         25         section, being about 80 odd miles, is hydrostatically

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                        BOARD OF TRUSTEES - March 9, 2004
          1         tested again to ensure that there is no leaks in the

          2         pipeline.

          3              The onshore is fabricated the same way.  Quality

          4         control, all the drills, all the welds are hydrostatically

          5         tested, coded, cathodic protection to ensure that there is

          6         no problems with the integrity of the pipeline.

          7              CFO GALLAGHER:  How big around is the pipe?

          8              MR. BARTLETT:  Twenty-four inches.

          9              CFO GALLAGHER:  And how big around is the hole it

         10         goes in?

         11              MR. BARTLETT:  It would be about 36 inches in

         12         diameter.

         13              CFO GALLAGHER:  So you only have -- you really have

         14         six inches around it that you're pulling this thing

         15         through?

         16              MR. BARTLETT:  Give or take.

         17              CFO GALLAGHER:  It's going to be a 6-inch bigger hole

         18         than the one you're pulling through, thereabouts.

         19              MR. BARTLETT:  Thereabouts.  And that hole gets

         20         filled with a fluid that will allow kind of a float

         21         pull-through.  So it's not a heavy friction pull.

         22              CFO GALLAGHER:  The pipe is straight.

         23              MR. BARTLETT:  The pipe bends.  There's a lot of

         24         flexibility in the pipe even though it doesn't -- from

         25         first thought there is no flexibility, but there is a

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                        BOARD OF TRUSTEES - March 9, 2004
          1         great deal of flexibility in the long section of pipe.

          2         These pulls and these pipelines and this technology has

          3         been used in numerous locations and we have some handouts

          4         that we can pass out to the members here today to justify

          5         that.  This is not new technology that we're doing.

          6              MR. BRIGHTMAN:  It's the same technology that was

          7         used in Gulfstream, the same construction methods and

          8         welding and testing and everything.

          9              THE GOVERNOR:  Thank you.  Other speakers, please?

         10              MS. CASTILLE:  Dr. McCallister.

         11              THE GOVERNOR:  Doc, nice to have you back in

         12         Tallahassee, sir.

         13              DR. McCALLISTER:  Glad to see you guys again.  If I

         14         even tried to cover all the points that I had down, I've

         15         given you a sheet.  Maybe you got it, maybe you didn't.

         16         But it listed eight concerns that I had.  And instead of

         17         going over all of those, I'm going to talk about what I

         18         recommend that we do to handle those concerns.  So I'll

         19         touch on it briefly.

         20              The first concern that I had here was the damage

         21         that's already been done.  What should have been a

         22         no-brainer, drilling 11 holes through the reef, has

         23         already resulted in some damage.

         24              THE GOVERNOR:  This application or the --

         25              DR. McCALLISTER:  Well, I'm going to kind of lump the

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                        BOARD OF TRUSTEES - March 9, 2004
          1         two together because the same sort of thing --

          2              THE GOVERNOR:  I'm not sure they want to be lumped

          3         together.

          4              (Laughter.)

          5              DR. McCALLISTER:  But AES is going to be doing a lot

          6         of work out there.  And one of the people that actually

          7         did one of the projects here had a private conversation

          8         with me.  He and I go back 50 years at least.  And I said

          9         to him, What's the possibility of damage?  He said, Any

         10         time we do major -- we do a major marine construction job,

         11         he said, The opportunity for collateral damage is enormous

         12         and he said, Major damage is not unusual.  Now we're

         13         talking about both Tractebel and AES, the possibility of

         14         major damage.  We demonstrated in a no-brainer that damage

         15         could occur, that is the drilling 11 holes.  The

         16         technology for drilling holes goes way back, 100 years.

         17              We drilled holes and now we're using bentonite clay.

         18         Bentonite clay is fixatropic.  When you stop shearing it,

         19         it sets up as a gel.  I was going to bring some here and

         20         show you, turn it upside down.  It would be a gel, and

         21         then tap it, shear it, and it would be all over the floor.

         22         But I figured your cleanup guy would be pretty upset at

         23         me.  Probably you would too.

         24              THE GOVERNOR:  Is that to bore the hole?

         25              DR. McCALLISTER:  When you bore a hole, you need to

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                        BOARD OF TRUSTEES - March 9, 2004
          1         lubricate the bit, boring it.  And you need to bring the

          2         cuttings back.  Otherwise, you just pack the cuttings all

          3         around it or you plug up the hole.  So you bring the

          4         cuttings back along the bore to the shale shake or shake

          5         out the particles and pump the bentonite clay, the mud,

          6         the drilling mud, back in.  It's a mixture of bentonite

          7         clay -- hopefully that's all it is, is bentonite clay and

          8         water in this case.  They use other additives elsewhere

          9         but they're dangerous to the reef if they get out.

         10         Bentonite clay is very dangerous to the reef if it gets

         11         out.

         12              THE GOVERNOR:  They don't have -- this clay is left

         13         as refuse?

         14              DR. McCALLISTER:  I'm sorry?

         15              THE GOVERNOR:  It's suctioned up, isn't it?

         16              MR. BARTLETT:  Yes.

         17              DR. McCALLISTER:  I missed the point though.

         18              THE GOVERNOR:  You use the clay to create the

         19         lubrication to do the boring?

         20              DR. McCALLISTER:  Right.  It has another function to

         21         it.  If you have sand you go through, as it pumps out into

         22         the sand, it gels and it holds the hole open.  But now in

         23         this case it may or may not be necessary for maintaining a

         24         hole.

         25              THE GOVERNOR:  But there is not tons and tons of clay

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                        BOARD OF TRUSTEES - March 9, 2004
          1         that is -- remains as the by-product of this process.

          2         That is recouped, isn't it?

          3              DR. McCALLISTER:  You'd kind of hope that all of it

          4         would come back, that you wouldn't need any of it.  But if

          5         it's down in the sand, it's probably not a problem.  It's

          6         when it comes up through the labyrinth of the reef and

          7         hits the celobites, the critters that live inside the

          8         reef, or comes up to the surface like your bubbles do when

          9         you dive through a cavern in the reef, that's when we're

         10         really concerned about it.

         11              And when you can do it with salt water, I've talked

         12         to drillers that drilled for Sedco BP and they said, You

         13         could drill a 150-foot hole with salt water in coral reef.

         14         And we didn't, we used bentonite, I don't know why.  They

         15         cased the hole but the bit is below the casing.  And we're

         16         pumping bentonite out into the labyrinth of the reef all

         17         the way down as the hole goes down.  So we've got 11

         18         masses of bentonite.  I don't know how much.  They said

         19         not much was lost.  Anyway, that was one concern that I

         20         had.

         21              AES proposes to lay their pipe on the bottom.  Now

         22         they tell me there are too many other places that are much

         23         more important for terrorists.  But if it wasn't against

         24         the law, the minute that pipe was down there, I'd get

         25         another buddy, I'd get a little explosives and a couple of

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                        BOARD OF TRUSTEES - March 9, 2004
          1         lobster nets and I'd go out there and I'd ball a hole in

          2         that pipe just to show that it could be done very easily.

          3         It's not a big planning thing like the World Trade Center,

          4         that's what I'm trying to say.  Any two guys that have

          5         access to some Semtex or some C-4 and a timer could blow

          6         that pipe.  The articulated mats, we laid those on the

          7         Boca Raton ocean outfall pipeline.  They're like a

          8         checkerboard.  There's a block here and a block here and a

          9         block here and a block here.

         10              (Off-the-record discussion.)

         11              DR. McCALLISTER:  Well, in any case, I'd like to see

         12         them trench the AES pipeline and they say it would be too

         13         much turbidity in the water.  But Tractebel believes they

         14         can trench at least six feet deep in the spoil pile.  And

         15         if they can do six feet deep, I don't see why AES can't do

         16         12 feet or 15 feet in the gap between the two second

         17         reefs, the second reef inner and the second reef outer,

         18         and bury the pipeline so it isn't nearly as attractive a

         19         target.  Okay.  That's one of the two items that I had.

         20              One of the most important and they say not a big

         21         thing, why did they put a shutoff valve in the Tampa Bay

         22         pipeline?  Supposedly, it was to protect the Tampa Bay

         23         bridge there.  But we don't have a bridge.  We have a

         24         pipeline 90 miles long, 21 1/2 inches approximately inside

         25         diameter, filled with gas at the same pressure as a

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                        BOARD OF TRUSTEES - March 9, 2004
          1         3,000-pound -- a 3,000-cubic-foot cylinder, scupic

          2         cylinder (phonetic), natural gas, highly flammable.

          3              And one of the RAIs, the answer to it was, Don't have

          4         to worry about it because it's under water and there's no

          5         oxygen down there.  Where does it come?  It comes to the

          6         surface, of course.  And another answer was that it's half

          7         as heavy as air, it goes straight up.  Well, have you ever

          8         had a gas leak in the house and you could smell it out in

          9         the next room?  Why didn't it hang in the upper part of

         10         the room?  We're all exhaling CO2, it's twice as heavy as

         11         air in here.  If you get down on the floor, you don't get

         12         CO2 poisoning because the air is viscous enough that the

         13         gas goes up but it's moved by the air molecules and it

         14         spreads out.  And you'll get a ball -- if you had a

         15         rupture in the pipe, you'd have a ball half a mile across

         16         if it didn't get ignited.  It takes a very hot flame, they

         17         told me, Frank Wang, who used to be the Calypso chief

         18         engineer, said it takes a very hot flame to ignite this

         19         gas.  What does that mean to you?  Oxyacetylene torch and

         20         welder?  But I said to him at one of the meetings, Frank,

         21         I said, any cigarette will set it.  Well, that's a very

         22         hot flame.  So in other words, we've been jerked around a

         23         little bit in the --

         24              THE GOVERNOR:  A cigarette -- as gas dissipates

         25         through 60 feet of water and comes up and you're on a boat

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                        BOARD OF TRUSTEES - March 9, 2004
          1         and you're trying to catch a dolphin and you light a

          2         cigarette, you're going to blow yourself up to

          3         smithereens?

          4              DR. McCALLISTER:  Any outboard motor.  I said that to

          5         Frank.  He said, Yeah, a spark from an outboard motor is a

          6         very hot fire.

          7              THE GOVERNOR:  So there's no shutoff value at all?

          8              DR. McCALLISTER:  When I talked to AES they said the

          9         problem is if it's shut off, somebody hits that red switch

         10         and shuts it off, we'd shut down the whole area.  Well, if

         11         there is a breach in the pipe, we want to shut down the

         12         whole area.  But if there's no breach and it's an

         13         accidental shutoff, he hits the switch again, it can be

         14         designed that way and you turn the gas pipe on again.

         15         There's enough reserve capacity in the line to take care

         16         of a ten-minute or a half hour shutdown.  So I still think

         17         that we need a shutoff value in the line.

         18              THE GOVERNOR:  They just said there is three shutoff

         19         valves.  What are we missing here?

         20              CFO GALLAGHER:  If he had a mile-long, you know, he

         21         said it was like a SCUBA tank, it he had one of them a

         22         mile long --

         23              DR. McCALLISTER:  Ninety miles.

         24              CFO GALLAGHER:  Ninety miles.  Okay.

         25              DR. McCALLISTER:  The shutoff valves are on land on

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                        BOARD OF TRUSTEES - March 9, 2004
          1         both ends.

          2              CFO GALLAGHER:  Bottom line is, you got 3,000 pounds

          3         in there, it takes forever to get that pressure out.

          4              DR. McCALLISTER:  Well, that means if you have a

          5         rupture over here, it's going to blow.  And at one of the

          6         meetings -- it's going to blow until it's empty, until

          7         it's ambient pressure.  If it's a hole the size of my

          8         head, that might be several days to a week.  I haven't run

          9         the figures on that.  I'm not sure I'm competent to run