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           13                  The above agencies came to be heard before
                THE FLORIDA CABINET, Honorable Governor Bush presiding, in
           14   the Leesburg Opera House, Leesburg, Florida, on Tuesday,
                March 30, 2004 commencing at approximately 9:30 a.m.

                                       Reported by:
                                     EVELYN M. ANDREWS
                             Registered Professional Reporter
           19                    Registered Merit Reporter


                           JASKO COURT REPORTING SERVICES, INC.
           22                     305 N. SINCLAIR AVENUE
                                  TAVARES, FLORIDA  32778




                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1   APPEARANCES:


            3        Representing the Florida Cabinet:

            4        JEB BUSH
                     CHARLES H. BRONSON
            6        Commissioner of Agriculture

            7        CHARLIE CRIST
                     Attorney General
                     TOM GALLAGHER
            9        Chief Financial Officer


           11                             * * * *
















                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1                            I N D E X

                (Presented by Coleman Stipanovich)
                ITEM           ACTION              PAGE
            4   1              Approved             12
                2              Approved             14
            6   (Presented by Ben J. Watkins, III)

            7   ITEM           ACTION              PAGE
                1              Approved             17
            8   2              Approved             19
                3              Approved             21
            9   4              Approved             22
                5              Approved             35   
           11   (Presented by Rocky McPherson)

           12   ITEM           ACTION              PAGE
                1              Approved             41
           13   2              Approved             42
                3              Approved             42
           15   (Presented by David Westberry)

           16   ITEM           ACTION              PAGE
                1              Approved             54
           18   (Presented by Guy Tunnell)

           19   ITEM           ACTION              PAGE
                1              Approved             57
           21   (Presented by Eva Armstrong)

           22   ITEM           ACTION              PAGE
                1              Approved             80
           23   2              Approved             82   
                3              Approved             93
           24   4              Deferred             98

           25   CERTIFICATE OF REPORTER             98


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


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

            2             GOVERNOR BUSH:  State Board of Administration.

            3             CFO GALLAGHER:  Motion on the Minutes.

            4             GOVERNOR BUSH:  Let's let Coleman describe

            5        what the State Board of Administration is because

            6        -- how many people know what the State Board of

            7        Administration is in advance?  I'm curious.  No,

            8        you don't count.  Phil, the reporter from the

            9        Miami Herald knows.  Anybody else?

           10             Well, Coleman, you're going to have educate

           11        this group because it's something that's --

           12             CFO GALLAGHER:  Very important place.

           13             GOVERNOR BUSH:  It's enormously important.

           14             MR. STIPANOVICH:  Thank you, Governor; thank

           15        you, members.      

           16             First of all I'd like to say that the State

           17        Board of Administration is one of only two public

           18        funds in the country that has a surplus of assets

           19        that exceed liabilities and that's really what

           20        we're all about is the 12.6 billion surplus that we

           21        have to make sure we fund the future liabilities of

           22        our participants and beneficiaries of the

           23        retirement plans.  So under the leadership of the

           24        Trustees, I'm happy to report that.

           25             GOVERNOR BUSH:  Why don't you describe what it


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        is first --

            2             MR. STIPANOVICH:  Okay.

            3             GOVERNOR BUSH:  -- so that they can be

            4        impressed that there's a surplus.

            5             MR. STIPANOVICH:  Very good, Governor.  Thank

            6        you. 

            7             The State Board of Administration was

            8        originally created under the Florida Constitution

            9        in 1885 and it was created to manage a debt

           10        service of bond revenues from gas tax proceeds. 

           11        Since then of course the State Board of

           12        Administration has evolved to be one of the largest

           13        money management organizations in the United

           14        States.  We currently manage a hundred thirty-seven

           15        billion dollars in 25 different managed accounts

           16        including the Florida Retirement System which

           17        amounts to a hundred and three billion dollars. 

           18        The State Pension Fund manages seven different

           19        asset classes.  We manage domestic equities,

           20        international equities, global equities, fixed

           21        income, real estate, alternative investments and

           22        cash and equivalents. 

           23             There are over 75 investment managers for the

           24        State Board of Administration and we manage over

           25        100 investment portfolios across all these asset


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        classes.  We own over several thousand stocks and

            2        hundreds of bonds as well as hundreds of other

            3        investments in real estate and alternative

            4        investments in our internal and external

            5        portfolios. 

            6             The State Board of Administration is

            7        responsible for the Florida Retirement System

            8        Financial Guidance Program, which was -- came about

            9        in 2002, which is the Defined Contribution Program. 

           10        This retirement -- this program is responsible for

           11        the education of 635,000 employees covered by the

           12        Florida Retirement System.  Employees can access

           13        multi-media educational services free of charge. 

           14        They can access personal benefit statements, which

           15        helps them in their financial planning, free of

           16        charge.  They have access to one-on-one counseling

           17        through -- by phone, on the computer or in

           18        workshops.  And it's an award, nationally

           19        award-winning website under the Defined

           20        Contribution Program.

           21             Other mandates that the State Board of

           22        Administration -- if you recall I said a hundred

           23        three billion dollars of the hundred thirty-seven

           24        billion dollars is the pension fund and then we

           25        have another half a billion, I'm happy to report,


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        we finally crossed the half a billion threshold

            2        for the Defined Contribution Program.  But of the

            3        balance of 34 billion we have other mandates.  We

            4        manage the local government surplus trust funds,

            5        which Leesburg may be a member of, but for county

            6        and local governments.  We manage the Lawton

            7        Chiles Endowment Fund.  We manage the Division of

            8        Bond Finance Debt Service Fund and we manage the

            9        Florida Hurricane Catastrophe Fund. 

           10             The State Board of Administration also

           11        provides investment related to government --

           12        assistance to governmental entities such as the

           13        State University System Optional Retirement

           14        Program, the State Senior Management Service

           15        Optional Annuity Program, and the State Deferred

           16        Compensation Plan. 

           17             The State Board of Administration also

           18        administratively supports the Florida Division of

           19        Bond Finance and the Florida Pre -- College Prepaid

           20        College Program.

           21             Additionally we also have three special

           22        corporations that we preside over, the Florida

           23        Water Pollution Control Financing Corporation, the

           24        Veteran Fraud Restitution Corporation and Inland

           25        Protection Corporation. 


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1             The SBA is committed to providing superior

            2        investment performance services through prudent

            3        financial management while adhering to high ethical

            4        and professional standards.  That's our mission. 

            5        And as fiduciaries, and the Trustees being the

            6        primary fiduciaries and the Executive Director, we

            7        always act in the sole interest of the participants

            8        and beneficiaries of the Florida Retirement System.

            9        That is the State Board of Administration,

           10        Governor.

           11             GOVERNOR BUSH:  So we have about 760, is that

           12        right, 760,000 people that are participants in the

           13        Florida Retirement System?

           14             MR. STIPANOVICH:  It's over 800,000, Governor,

           15        when you count the 200,000 retirees and the 635,000

           16        active members.

           17             GOVERNOR BUSH:  Just so, I mean, all public

           18        school teachers, all School Board employees, most

           19        of the County Commission employees, all State

           20        employees.

           21             CFO GALLAGHER:  Some city.

           22             GOVERNOR BUSH:  Some city.  What's the -- in

           23        terms of the size it's the --

           24             MR. STIPANOVICH:  It's the fourth largest

           25        pension fund in the country and the eighth largest


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        in the world.

            2             GOVERNOR BUSH:  And it is of the -- of all the

            3        public pension funds, North Carolina and Florida's

            4        pension funds are the only that have an actuarial

            5        surplus, which is something that --

            6             CFO GALLAGER:  Good management.

            7             GOVERNOR BUSH:  -- is attributed to the

            8        conservative management but not overly

            9        conservative, good solid conservative management of

           10        the pension fund.  And I'm proud of the fact that

           11        we don't get involved in politics with this.  We

           12        shield -- our job really as Trustees is to shield

           13        Coleman from all sorts of political pressures of

           14        great ideas to invest in that may have political

           15        ramifications.  This is focused on the

           16        beneficiaries, which are the retirees and soon to

           17        be retirees and people that have this as an

           18        important part of their savings.  And, you know,

           19        we're not perfect but I think we do a relatively

           20        good job. 

           21             And it was very encouraging, Coleman.  I

           22        commend you and your team for the news that came

           23        out a couple weeks ago about the surplus compared

           24        to other places.

           25             CFO GALLAGHER:  Governor --


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1             MR. STIPANOVICH:  Thank you, Governor.

            2             CFO GALLAGHER:  -- if I may also mention for

            3        those in the audience, you are -- this is the

            4        Trustees meeting that you're watching happen in

            5        public.  Some of the larger pension funds we have a

            6        lot of fun talking about how long their meetings

            7        last.  They are days into the meeting, sometimes

            8        three and four days.  The California pension funds

            9        take that long with the Treasurer of the State and

           10        the Controller of the State and there are many

           11        Trustees all meet in rooms for days about

           12        investments, and investment advisors, and it takes

           13        forever to get anything settled.

           14             You are watching -- we don't get involved in

           15        those decisions.  They're non-political decisions

           16        made by the staff in the State Board of

           17        Administration.  We oversee and set policy, set

           18        guidelines for investments and let them make the

           19        individual decisions, so there's no political part

           20        of it made whatsoever.  No -- and of course, if one

           21        of us tried, then Coleman would tell the other

           22        ones.  And so none of us would do that.

           23             So, that is probably why we're successful as

           24        we are, is there is no politics involved in it and

           25        that's one of the things that I've been very proud


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        of as long as I've been involved in the State Board

            2        of Administration. 

            3             And we thank you for the job you're doing,

            4        Coleman.

            5             MR. STIPANOVICH:  Thank you, Treasurer.

            6             GOVERNOR BUSH:  Is there -- do we have a

            7        motion and a second on Item 1?

            8             CFO GALLAGHER:  Motion of the Minutes, yeah.

            9             GENERAL CRIST:  Second.

           10             GOVERNOR BUSH:  There's a motion and second. 

           11        Without objection Item 1 passes.

           12             Item 2?

           13             MR. STIPANOVICH:  Item 2, Governor and

           14        Members, is really just an update on the Defined

           15        Contribution Program.  It's been probably close to

           16        a year since we've done an update, and the program

           17        was implemented on July 1 of 2002.

           18             GOVERNOR BUSH:  Just start with -- you know,

           19        all this Tallahassee language, we all understand

           20        it; but what is Defined Contribution, Coleman?

           21             MR. STIPANOVICH:  The Defined Contribution

           22        Program, the Legislature created what they call the

           23        Public Employee Optional Retirement Program, which

           24        is really a Defined Contribution Program.  You

           25        probably can identify it with a 401K.  It's really


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        a 401A, and the only reason there's an A instead of

            2        a K is because it's a public plan.  So, it's

            3        equivalent to a 401K.  And I think most of the

            4        people in the room probably know what a -- your

            5        private sector, self-directed retirement program it

            6        would be equivalent to a 401K.  The next closest

            7        thing would be like an individual retirement

            8        account of which you literally have all

            9        responsibility over.

           10             GOVERNOR BUSH:  So, we've moved from a   

           11        defined -- we have now an option.  Most public

           12        pensions were defined benefit, which means that

           13        you put money in, or your employer does, in our

           14        case it's the employer,  and you get a fixed amount

           15        when you retire based on how long you served.  And

           16        that's still available, but now we're providing

           17        this other option which allows for portability and

           18        it allows for you to make self --  make your own

           19        investment decisions.

           20             MR. STIPANOVICH:  And the program really, the

           21        Trustees were very much in favor of this.  Of

           22        course the Legislature passed the law which enabled

           23        us to have this program.  But the idea amongst --

           24        a couple points that the Governor made about

           25        portability of the plan, but it's a self-directed


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1        program where, you know, with the right kind of

            2        investment education you can make those kind of

            3        decisions, but you're vested in a year where you

            4        can take your assets with you. Prior to that there

            5        was a ten year vestature, and if you left prior to

            6        ten years you didn't get to take anything with you. 

            7        Now in the defined benefit plan it's six years, so

            8        you're able to take your assets with you in the

            9        Defined Contribution Program and make your own

           10        investment decisions with a lot of help from the

           11        State in terms of investment education.  So it's

           12        really an extra program.  It's an optional program. 

           13        You're not required to go into it.  You have the

           14        choice.  You have the choice of being in the

           15        Defined Benefit Program, which is a guaranteed

           16        future retirement or the self-directed program,

           17        which is the Defined Contribution Program.

           18             GOVERNOR BUSH:  Thank you.

           19             MR. STIPANOVICH:  Item 2.

           20             CFO GALLAGHER:  Motion.

           21             GENERAL CRIST:  Second.

           22             GOVERNOR BUSH:  Moved and seconded.  Without

           23        objection Item 2 passes.

           24             Thank you, Coleman.

           25             MR. STIPANOVICH:  Okay.  Thank you.


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1             GOVERNOR BUSH:  Division of Bond Finance. 

            2        Ben, how are you doing?

            3             MR. WATKINS:  Pretty good, Governor, thank

            4        you.

            5             First, an overview of the Division of Bond

            6        Finance.  My name is Ben Watkins and I'm the

            7        Director of the Division of Bond Finance.  The

            8        Governor and Cabinet sit as my governing board much

            9        like they do for the State Board of Administration. 

           10        They're wearing a different hat now and that is the

           11        governing board members of the Division of Bond

           12        Finance who is responsible for borrowing money for

           13        the State; and we do that by issuing tax exempt

           14        bonds.  So, and it's known in Tallahassee-speak as

           15        an executive branch agency, which simply means I

           16        report to the Governor and Cabinet.  The

           17        Legislature determines what we borrow for and how

           18        much we borrow; and then as an executive branch

           19        agency we're responsible for implementing that

           20        legislative directive by issuing tax exempt bonds.

           21             The State has total debt outstanding of 20.4

           22        billion dollars as of the end of 2003.  And that

           23        consists of various financing programs for

           24        different purposes.  So, for example, we issue

           25        bonds on behalf of the State Board of Education for


                             JASKO COURT REPORTING SERVICES, INC.
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            1        school construction.  And that makes up more than

            2        half of the total amount of debt we have

            3        outstanding; so 11 billion dollars of money has

            4        been borrowed for school construction. 

            5             Another example is, we borrow money for right

            6        of way acquisition and bridge construction for the

            7        Department of Transportation; and we borrow money

            8        for toll roads, like Florida's turnpike and that

            9        makes up another five billion dollars of the 20

           10        billion dollars in debt outstanding.  And we also

           11        administer a financing program for the Department

           12        of Environmental Protection called Preservation

           13        2000 or its successor Florida Forever, and that's

           14        used to acquire environmentally sensitive lands and

           15        that's another three billion of the 20 billion

           16        dollars that we have in debt outstanding.

           17             And just to give you a sense of the order of

           18        magnitude in terms of what we do on a day-to-day

           19        basis, last year we sold 28 separate bond issues

           20        totalling 4.1 billion dollars.  And last year was

           21        a little unusual in the sense that about half of

           22        that, about two billion of the four billion dollars

           23        was refinancing debt at lower interest rates and

           24        saving the State money on our future interest costs

           25        on the debt that we have outstanding.


                             JASKO COURT REPORTING SERVICES, INC.
                                (352) 343-4200 OR 800-779-4200


            1             So, that is our role in State Government. 

            2             GOVERNOR BUSH:  Thank you, Ben.

            3             MR. WATKINS:  Item number 1 is approval of the

            4        Minutes of the March 9th meeting.

            5             GENERAL CRIST:  Second.

            6             GOVERNOR BUSH:  Moved and seconded.  Without

            7        objection Item 1 passes.

            8             MR. WATKINS:  Item number 2 is a resolution

            9        selecting financial advisors from -- for the

           10        Division of Bond Finance.  From time to time we

           11        have the need for independent review of certain

           12        aspects of our financings and we hire financial

           13        advisors.  And the recommendation -- we use the

           14        same process that we normally utilize in engaging

           15        professionals, and that is, we formed a selection

           16        committee, and consisting of six people, three

           17        people from my office, Kevin Stanfield from the

           18        Treasurer's Office and Jim Boxold and Cathy

           19        Giordano from Commissioner Bronson's office.  And

           20        I'd like to thank them for their time, effort and

           21        energy that they put in in reading the responses

           22        and grading the responses to the RFP that we

           23        received back from the financial advisors.

           24             Based on those, review of the RFP and the

           25        grading of the questions, we rank the firms


                             JASKO COURT REPORTING SERVICES, INC.
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            1        according to their scores.  There were nine firms

            2        responding.  And what I have done is recommended

            3        the top 50 percent of those firms as qualified

            4        firms who will then be put under contract and

            5        engaged on an as-needed basis on an hourly basis to

            6        the extent that we need independent financial

            7        advisors.

            8             GOVERNOR BUSH:  How do you have -- if you have

            9        nine firms --

           10             CFO GALLAGHER:  Nine firms.

           11             GOVERNOR BUSH:  --  50 percent is four and a

           12        half firms.  Did you cut one firm in half or

           13        something?

           14             MR. WATKINS:  Well, actually --    

           15             CFO GALLAGHER:  He really meant four.

           16             MR. WATKINS:  We round it down, Governor, or

           17        round it up as the case may be; but that is the

           18        basis for the recommendation. 

           19             The four firms that are being recommended are

           20        First Southwest Company, Public Financial

           21        Management,  Public Resources Advisory Group, and

           22        P. G. Corbin and Company. 

           23             Coincidentally, over the last four years we

           24        had four firms under contract that we utilized. 

           25        And just to give you a sense of order of magnitude,


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            1        the aggregate amount over the four year period

            2        that we spent on financial advisory services was

            3        only $70,000.  So, it's not a service that we, that

            4        we have a great deal of need for because of the

            5        technical expertise we have in-house.

            6             CFO GALLAGHER:  But we do have a financial

            7        advisor on every one of our issues?

            8             MR. WATKINS:  When we do negotiated

            9        transactions, our normal method for selling bonds

           10        is to sell them competitively, which basically

           11        means we put them out to the bid and we accept the

           12        lowest interest rate available in the marketplace

           13        on those transactions.  And when we sell bonds

           14        competitively we don't need a financial advisor,

           15        but in the exception to the general rule where a

           16        negotiated transaction is necessary, we do require

           17        and use a financial advisor as an independent check

           18        and balance and review of the pricing of the

           19        transaction.

           20             GOVERNOR BUSH:  Thank you.

           21             CFO GALLAGHER:  Motion on 2. 

           22             COMMISSIONER BRONSON:  Second.

           23             GOVERNOR BUSH:  Moved and seconded.  Without

           24        objection Item 2 passes.

           25             Item 3?


                             JASKO COURT REPORTING SERVICES, INC.
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            1             MR. WATKINS:  Item number 3 is a resolution

            2        authorizing the issuance of up to 300 million

            3        dollars in State infrastructure bank bonds for the

            4        Department of Transportation.  This is a new

            5        financing program for the State.  It is -- has been

            6        statutorily authorized last year.  We're in the

            7        process now of doing the work necessary in order to

            8        structure the transaction, get bond ratings, and to

            9        bring the transaction to market.  The 300 million

           10        dollars is simply an estimate of the possible need

           11        for borrowing over the next four or five years. 

           12        This simply initiates the process for

           13        authorization.  This will come back to you again as

           14        another agenda item prior to the time we sell

           15        bonds.  The first bond issue is expected to be

           16        about 40 million dollars.  It funds loans to  

           17        local governments and expressway authorities for 

           18        project -- to finance projects.  It is -- it's not

           19        secured by a traditional State revenue string; so

           20        in the majority of cases it's like a State

           21        revolving loan fund that we set up for DEP to make

           22        loans to local governments for water and wastewater

           23        projects.  It's the same sort of concept applied in

           24        the transportation context.

           25             CFO GALLAGHER:  With no full faith and credit


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            1        behind it, only the revenue from the projects or

            2        local government.

            3             MR. WATKINS:  That's correct.

            4             GENERAL CRIST:  Motion.

            5             CFO GALLAGHER:  Motion.

            6             COMMISSIONER BRONSON:  Second.

            7             GOVERNOR BUSH:  Moved and seconded.  Without

            8        objection the item passes.

            9             MR. WATKINS:  Item number 4 is a report of

           10        award on the competitive sale of the 148 million

           11        dollar Department of Environmental Protection,

           12        Florida Forever refunding bonds.  The bonds were

           13        awarded to the low bidder at a true interest cost

           14        of 2.86 percent.  And the transaction generated a

           15        debt service savings of approximately 14.2 million

           16        dollars or one and a half million dollars on an

           17        annual basis.  So, interest rates have stayed lower

           18        for longer and we found another candidate to do and

           19        executed another refunding, much to my surprise.

           20             CFO GALLAGHER:  With a total savings of about

           21        12 million.

           22             MR. WATKINS:  On a present value basis, about

           23        12 million dollars, yes, sir.

           24             CFO GALLAGHER:  Motion.

           25             GENERAL CRIST:  Second.


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            1             COMMISSIONER BRONSON:  Second.

            2             GOVERNOR BUSH:  Moved and seconded.  Without

            3        objection Item 4 passes.

            4             MR. WATKINS:  Item number 5 is the update of

            5        the debt affordability report.  By way of

            6        background and for the benefit of the audience, one

            7        of the things, one of the initiatives of the

            8        Governor and Cabinet in an effort to better manage

            9        the State's finances have developed a debt

           10        affordability study, which then has subsequently

           11        been formalized by Statute.  And what the Statute

           12        requires us to do is, on an annual basis to

           13        aggregate all of the debt that we have outstanding

           14        and provide a lot of information to the Legislature

           15        on what our annual debt service requirements are,

           16        how much debt we have outstanding, and it also

           17        established a benchmark debt ratio.  And that debt

           18        ratio is simply the debt service that we have to

           19        pay on an annual basis divided by the amount of

           20        revenues that we have available to make those

           21        payments with. 

           22             So, much like in your personal life it would

           23        be the amount of your mortgage payment divided by

           24        the total amount of your income on an annual basis

           25        expressed as a percentage.  And that benchmark debt


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            1        ratio we established a target for the State of six

            2        percent, or the Legislature, did established a

            3        target of six percent and a cap of seven percent. 

            4        And so what we do is to annually look at this

            5        information but then update this information when

            6        the revenue, new revenue estimates are available. 

            7        There's a process at the State level that drives

            8        the budgetary process and those are revenue

            9        estimates. 

           10             So, revenue estimates are provided to give an

           11        indication of how much money we have available to

           12        spend for next year's budget; and then that's used

           13        as the basis for formulating the State's budget. 

           14             So, we had estimates immediately prior to the

           15        legislative session commencing in March; and the

           16        purpose of this update is to take those new revenue

           17        estimates and change the projections or update the

           18        projection for those new assumptions.  And that is,

           19        in effect, what the update provides for. 

           20             Some highlights of the 2003 report were that

           21        our benchmark debt ratio for the first time

           22        exceeded our six percent target at the end of 2003

           23        at 6.12 percent.  And we had total debt outstanding

           24        of 20.4 billion dollars and our annual debt

           25        service requirements are one and a half billion


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            1        dollars.   So, what that means is, at each and

            2        every year for the foreseeable future, before we

            3        appropriate money for any other services, we have

            4        to set aside a billion and a half dollars to pay

            5        debt service on the bonds that have already been

            6        issued and the money that's already been spent. 

            7             Then the debt affordability study then takes

            8        all of the financing programs that we have and

            9        makes a projection of what our excepted issuance is

           10        for all of those financing programs for the next

           11        ten years.  And for all of our existing financing

           12        programs, the amount that we expect to issue over

           13        the next ten years is ten and a half billion

           14        dollars, and that's with no new borrowing for

           15        constitutional initiatives for things like high

           16        speed rail and class size reduction.

           17             Taking all of that into account, in December

           18        we expected that benchmark debt ratio to continue

           19        to grow for the next three years reaching

           20        approximately 6.67 percent, dangerously close to

           21        the seven percent cap that we -- has been set as a

           22        policy limit.  The revenue estimates in March

           23        indicate stronger revenue collections reflecting

           24        an improving economy, and that information is on

           25        page 2.  So, we expect approximately 600 million


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            1        dollars a year in additional revenues because of

            2        the improving economy primarily. 

            3             And when you take the increased revenues

            4        combined with our expected issuance, what we see is

            5        that debt ratio coming down closer to our target,

            6        putting us in better financial shape than we

            7        expected to be in December because we expect to

            8        have -- not because of anything we've done on the

            9        borrowing side, but simply because we expect to

           10        have more revenues available to use to make our

           11        debt service payments with.

           12             GOVERNOR BUSH:  Ben, are you -- you did not

           13        factor in the 500 million plus or minus 50 million

           14        that is -- that the Legislature, I think, has,

           15        they've accepted our proposal to not indebt the

           16        State for Florida Forever for a portion of PECO or

           17        for the capital outlay for school construction if

           18        they would use cash.  That's not included -- looks

           19        like you're including debt for that for this year

           20        rather than cash.

           21             MR. WATKINS:  Right.  That wasn't reflected in

           22        our initial update, Governor; and what I've done is

           23        to rerun the numbers --

           24             GOVERNOR BUSH:  Oh.

           25             MR. WATKINS:  -- with your proposal?


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            1             GOVERNOR BUSH:  I haven't looked.

            2             MR. WATKINS:  So, if you may --

            3             GOVERNOR BUSH:   Looks better, I assume.

            4             MR. WATKINS:  Absolutely. 

            5             GOVERNOR BUSH:  I hope it looks better.

            6             CFO GALLAGHER:  It does.

            7             COMMISSIONER BRONSON:  A little better till

            8        next year.

            9             Thank you.

           10             MR. WATKINS:  What the Governor is referring

           11        to is the March revenue estimates indicated over

           12        the next two years the State's going to receive 1.1

           13        billion dollars in revenues that we didn't expect

           14        because of the improving economy.  And the

           15        Governor's recommendation has been to, rather than

           16        to spend that money on -- basically what we do with

           17        that money is to reduce the amount that we expected

           18        to borrow for the current year by 500 million

           19        dollars. 

           20             So, it takes the additional revenues or the

           21        windfall that we got from the revenue estimates and

           22        simply uses cash instead of borrowing the money for

           23        the programs or for the financing needs that we had

           24        indicated would be forthcoming.  So, it's 300

           25        million for Florida Forever, so our annual issuance


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            1        under the Florida Forever Program is normally 300

            2        million dollars a year; and the Governor has

            3        proposed using this additional cash instead of

            4        bonds to pay for that program.

            5             GOVERNOR BUSH:  Yes.

            6             MR. WATKINS:  And also an additional 290

            7        million dollars for school construction that would

            8        be -- so, using this cash rather than bonding,

            9        preserving our future bonding capacity for the

           10        future. 

           11             And what that serves to do is to reduce the

           12        amount of debt that we expect to issue over the

           13        next ten years, and is a further improvement in our

           14        benchmark debt ratio.  And so you can see with the

           15        horizontal line, the green dotted line is -- and

           16        I'm sorry for the -- apologize to the audience that

           17        you don't have a picture, a picture is worth a

           18        thousand words -- the dotted green line was

           19        improvements because of the improved revenue

           20        estimates and the red line is further improvement,

           21        bringing that debt ratio down even further because

           22        we're using cash in lieu of bonding as you've

           23        recommended.  And what that serves to do is to save

           24        us about a half a billion dollars in avoided

           25        interest costs in the future.


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            1             GOVERNOR BUSH:  It's like, it's what I compare

            2        it to -- and I really wanted to mention this

            3        because the Legislature deserves a lot of -- they

            4        get criticized a lot, so does the Governor, I

            5        guess, but the Legislature gets criticized a lot. 

            6        In this area, if they accept this, which it appears

            7        they will, they deserve a lot of praise.  It would

            8        be as though say your family got a $2,000.00 or

            9        $3,000.00 bonus, a one time shot of money in some

           10        fashion or, you know, it can happen a lot of

           11        different ways.  Maybe you called the

           12 and you found 3,000 bucks.  So,

           13        instead of saying, "Well, let's go buy --" what we

           14        could do with this money is we could make a down

           15        payment on a fancy car, you know.  And then -- but

           16        not having any clue on how you're going to pay for

           17        the monthly payments thereafter.  That -- when

           18        families do that they get in trouble.  When

           19        governments do it, they get in a heap of trouble. 

           20        And, you know, look at what happened to California,

           21        because basically they were taking one time monies

           22        to spend on ongoing things at a rate far faster

           23        than the people's ability to pay for it. 

           24             So, and the temptation of the Legislature,

           25        because there's so many people up there asking for


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            1        well-intended, really good projects.  I mean,

            2        everybody's got a great idea on how to spend other

            3        people's money, and they're doing it with the best

            4        of intentions; but the cumulative effect is there's

            5        just this enormous pressure to spend and spend and

            6        spend.  And by doing this, in all honesty we're

            7        probably the only state that I'm aware of that

            8        would have the discipline, if it happens -- and

            9        three weeks from now I will let you know.  It'll

           10        be, it'll be pretty darned historic.  And I just --

           11        both the Speaker and the President and their

           12        leadership teams aren't going to get the credit

           13        from the, you know, the people that kind of cover

           14        what goes on in Tallahassee, you know, but they

           15        deserve it.  And I wanted you-all to know it

           16        because it's pretty extraordinary.

           17             CFO GALLAGHER:  Governor, on your example, if

           18        they got the $2,000.00, if they put it on their

           19        house as opposed to spend it for the car and low --

           20        just put the cash against the amount they were

           21        spending on the house --

           22             GOVERNOR BUSH:  To lower their debt, exactly.

           23             CFO GALLAGHER:  -- to lower the debt is what

           24        he's talking about doing as opposed to, you know,

           25        buying something else, which is what the


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            1        Legislature is intending to do, so.

            2             GOVERNOR BUSH:  That's exactly right.  They

            3        would lower their mortgage or lower their car loan

            4        and not buy the car.

            5             COMMISSIONER BRONSON:  Motion on Item 5.

            6             CFO GALLAGHER:  Pay off credit cards, do

            7        something good.

            8             GENERAL CRIST:  Second.

            9             GOVERNOR BUSH:  Are you finished, Ben?

           10             MR. WATKINS:  One other thing and really just

           11        following on, you can tell me to sit down and shut

           12        up at any point, Commissioner.  I work for you, so

           13        if you want to be done, we're done. 

           14             COMMISSIONER BRONSON:  Go ahead.  I thought he

           15        was through.  Go ahead.

           16             MR. WATKINS:  One of the things that I would

           17        just like to highlight in reflecting and really a

           18        follow on to what the point the Governor is making

           19        is, it's really made my job easy in dealing with

           20        people in the credit markets and dealing with

           21        lenders because of the way that the State has

           22        managed themselves.

           23             Through the leadership of this Board and the

           24        Legislature, we've made the very, very difficult

           25        decisions early on, post 9/11 to cut spending, to


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            1        live within our means.  And no other state did that

            2        and they're living with the consequences of those

            3        decisions today.

            4             California, for example, authorized 16 billion

            5        dollars of debt two weeks ago by voter referendum

            6        and that was just to fill the hole.  That was just

            7        to get them even to pay for their deficit spending

            8        in years past, plus another 12 billion for schools. 

            9        So, in one day in California they approved 28

           10        billion dollars in debt. 

           11             Well, it's taken us over a hundred years to

           12        accumulate 20 billion dollars in debt.  And so, you

           13        see by order of magnitude we are in far better

           14        shape financially than any other states; and I

           15        could go on and on with examples.  Illinois with a

           16        ten billion dollar pension obligation bond to fix

           17        their budget hole.  New Jersey tobacco

           18        securitization six billion dollars in order to

           19        plug their hole.  New York   doing -- using

           20        financing technicians simply to plug holes in

           21        budgets. 

           22             The State of Florida by contrast has the

           23        strongest reserves that we've ever had in our

           24        history at 2.6 billion dollars, roughly 12.2

           25        percent of our general fund spending.  Our budget


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            1        stabilization fund was never tapped.  So, we are --

            2        we have no peer across the 50 states in terms of

            3        the strength of our financial position currently. 

            4             And so that, in dealing with lenders that   

            5        makes my job, it's a very easy story to tell and

            6        music to their ears because what they're looking   

            7        for is prudent financial management and

            8        conservative practices.  And the Legislature is

            9        sort -- has done that and has put us in a very

           10        strong financial position.  And not only that, with

           11        your proposal to use cash in lieu of bonding, not

           12        only do we start     out with strong reserves, and

           13        having an improving revenue picture, which helps

           14        our debt position, but we're also now talking about

           15        using cash in lieu of bonding.  So, we are far

           16        better than any other state and the growth rate in

           17        our debt is flattening out. 

           18        I know you-all have been concerned about the

           19        steepness of that historical development in that

           20        benchmark debt ratio and that is now flattening   

           21        out.  So --

           22             GOVERNOR BUSH:  Why don't you end the sermon.

           23             MR. WATKINS:  We're done.

           24             CFO GALLAGHER:  If I may --

           25             COMMISSIONER BRONSON:  Governor -- oh, I'm


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            1        sorry.  The one thing that I don't know whether all

            2        the citizens here understand, too, and thanks to

            3        our forefathers who put this in the constitution,  

            4        the Legislature has to produce a balanced budget at

            5        the end of their session; and therefore, we don't

            6        have Legislatures -- number one, it's good we're   

            7        only there 60 days and not like California and

            8        they're there every day, but we actually produce a

            9        balanced budget which helps in this savings that we

           10        have.

           11             CFO GALLAGHER:  If I may.

           12             GOVERNOR BUSH:  Yes, Treasurer.

           13             CFO GALLAGHER:  This is a good opportunity for

           14        me to mention two things.  California has a hundred

           15        billion dollar budget and ended up with a 30

           16        billion dollar shortfall and that's why they're

           17        having the problems they're having; but the reason

           18        that they have this huge shortfall is they have

           19        allowed their constitution to be amended so many

           20        times about so many things that have given people

           21        the idea that there's lots of free lunches out

           22        there and they voted for things that make no sense

           23        whatsoever.  And the people in California have a

           24        tax rate for income tax of about eight or nine

           25        percent and they're still over 30 billion


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            1        shortfall.  And so I'm going to take this

            2        opportunity to just mention one thing that I'm

            3        really serious about and, that is, to take this

            4        bullet train out of the constitution. 

            5             And those of you that would like to help,

            6        there are some signature cards where you can sign

            7        the petitions.  If you're interesting in doing

            8        that, I'll have some out here and you can get them. 

            9        And I urge you if you're a registered voter to sign

           10        that.  We need 589,000 of them.  We're going to get

           11        them, and we'll give the people an opportunity to

           12        vote on it one way or the other when then they know

           13        what the cost is.  And it's a tremendous cost.  And

           14        it's one of those things, it's another step that

           15        would get us more like California and it's the kind

           16        of thing that none of us will ever use, but yet it

           17        will cost us a tremendous amount of money and  

           18        most -- about 50 percent of the road projects that

           19        are out there that we really do need are at risk

           20        for this on a next 20 year basis.  So, we'll have

           21        some of those, anybody that wants to sign them, I

           22        thank you.

           23             Thank you for giving me the opportunity, Ben,

           24        to talk about that. 

           25             Thank you, Governor.


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            1             GOVERNOR BUSH:  Ben, do you need a motion   

            2        on --

            3             COMMISSIONER BRONSON:  We have a motion,

            4        second on 5.

            5             GOVERNOR BUSH:  There's a motion and a second. 

            6        Without objection the motion passes.  Thank you.

            7             MR. WATKINS:  Thank you.

            8             GOVERNOR BUSH:  And all those estimates do not

            9        include, as you mentioned, so we've been bragging a

           10        lot about Florida.  We have a couple of dark clouds

           11        on the horizon that we need to deal with.  One is

           12        the high speed rail in terms of the billions that

           13        that will cost, how to finance it.  The other -- if

           14        it states in the constitution; the other is the

           15        class size amendment which will cost significant

           16        amounts of money as well.  So, while we're in good

           17        shape, you know, there are perils on the horizon. 

           18        I thank my lucky stars I'm Governor of this State

           19        than others that have structural problems in their

           20        budgets that aren't going to go away immediately. 

           21        Makes it easier for us.






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            1             GOVERNOR BUSH:  Department of Veterans'

            2        Affairs.  Rocky McPherson, how the heck are you?

            3             MR. McPHERSON:  Good morning, Governor.  Fine.

            4             Sir, let me start as we have done this

            5        morning by just relating what our Department does

            6        in the State of Florida.  Obviously the same as the

            7        other two previous speakers, the Governor and the

            8        Cabinet serve as the agency head of the Department

            9        of Veterans' Affairs; and I, as their Executive

           10        Director, am honored to be their representative on

           11        veterans' issues in our State. 

           12             The primary functions that we have in the

           13        Department of Veterans' Affairs are to assist

           14        Florida's almost 1.9 million veterans in this

           15        State.  We are the second largest state in veterans

           16        population second only to California.  And we will

           17        overtake California in about 2015 to 2018 and

           18        become the number one state with veterans

           19        population.  Veterans still continue to come to

           20        Florida on a regular basis. 

           21             The -- we serve four primary functions in our

           22        Department; and the first is benefits and

           23        assistance, in which we help veterans obtain all of

           24        the benefits, Federal benefits to which they're

           25        entitled by and that they earn through their


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            1        military service to our nation.  We have in one

            2        division about 70 personnel who are stationed at

            3        all six of the V.A. Hospitals in the State of

            4        Florida and at the major outpatient clinics.  And

            5        what they do is at every facility they touch base

            6        with every veteran who comes in; and their main

            7        question is, do you -- are you receiving all of the

            8        Federal benefits you earned in your Federal -- in

            9        your military service?  And we find a tremendous

           10        number who have not.  And consequently we help them

           11        get claims through the V.A. system. 

           12             And incidentally, in both medical services and

           13        claims, veterans bring 3.5 billion dollars to the

           14        State of Florida in services directly from the

           15        Federal V.A.  And if you add to that salaries that

           16        come to retired military in the State of Florida,

           17        another 3.5 billion dollars, the contributions of

           18        veterans financially to the State are money that

           19        comes in from the Federal V.A. and retired salaries

           20        is about seven billion dollars.  A tremendous

           21        portion of money that comes into the State that's

           22        used by our citizens who are veterans.  So, we

           23        assist them on a regular basis with a large group

           24        of folks who are very good at doing that. 

           25             The second thing we do is we operate a State


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            1        Veterans' Nursing Home Program.  We currently have

            2        six facilities.  And I'm proud to announce this

            3        morning that our final newest facility in Port

            4        Charlotte received its last inspection last

            5        Thursday at Port Charlotte, and AHCA is working on

            6        their license today and tomorrow, and we hope to be

            7        able to take our first resident this week.  I would

            8        like to note that this inspection was the first

            9        inspection that we received on its initial opening

           10        survey from AHCA.  It was absolutely discrepancy

           11        free.

           12             GOVERNOR BUSH:  What's AHCA?

           13             MR. McPHERSON:  The Agency for Health Care

           14        Administration, sir.  And they do the surveys of

           15        nursing homes; and along with the Federal

           16        Government they also monitor our program on a

           17        regular basis. 

           18             So, we're very proud that that newest facility

           19        is ready to take its first resident.  We're also

           20        very proud that they have had the best opening

           21        inspection of any we've had in the history of the

           22        Department.

           23             The -- those five facilities operating right

           24        now and the newest one will take this week are

           25        currently operating at 89 percent occupancy.  Our


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            1        goal is 90 percent but that's up from 85 percent a

            2        year ago.  And in Dade County our facility we

            3        opened six months ago, they, as of yesterday, had

            4        48 residents and are on track to be at full 90

            5        percent occupancy by their one year opening date,

            6        which is our program to do that.

            7             The two other programs that we do in addition

            8        to benefits and assistance in nursing homes is, of

            9        course we monitor legislative issues, not only

           10        State legislative issues -- and there are currently

           11        about 27 bills moving through the Legislature that

           12        in one way or another affect -- yes, sir -- affect

           13        veterans or -- we also track military service

           14        issues.  But we monitor those and work through

           15        staff and with those ensuring that things that the

           16        veterans' organizations ask for are that we can

           17        afford and come into State law.

           18             I think it's important to note that in the

           19        Federal Government it's important to highlight how

           20        far Florida has come in the last four years.  Four

           21        years ago at this time there were large, large

           22        waiting lists at V.A. facilities.  Nationwide

           23        almost 450,000 people waiting for initial

           24        appointments for V.A. health care.  In the State of

           25        Florida it was about 50,000 people waiting.  Today


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            1        those waiting lists are down to less than several

            2        thousand in the State and nationally less than

            3        5,000.  And it's due to the fact that the Federal

            4        V.A. budget has increased in the last four years

            5        over 40 percent.  Largest growth except for the

            6        Defense Department because of the war on terrorism,

            7        largest growth of any department in Federal

            8        government.  So there are resources being put into

            9        the Federal V.A.  And as I mentioned, three and a

           10        half billion of those come directly to Florida

           11        annually in services and benefits to our citizens

           12        who are veterans.  Tremendous progress, still a

           13        ways to go with some small waiting lists and there

           14        are waiting lists in specialty care issues as well

           15        but those are being worked and the President's

           16        budget this year has additional increases in the

           17        V.A.

           18             And then the final element that our Department

           19        sponsors and cooperates with, with the support of

           20        the Governor and the Legislature, is what we call

           21        honoring veterans.  In Tallahassee today there

           22        exists monuments and memorials to a variety of

           23        different things.  There is a Vietnam War memorial

           24        that was constructed about ten years ago.  There is

           25        a Korean War memorial that was finished in about


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            1        '99.  There is a Medal of Honor wall that honors

            2        the 27 Medal of Honor recipients who are accredited

            3        to Florida by the Medal of Honor Society in the

            4        State rotunda in the Capital in the rotunda of the

            5        State Capital.  And finally we are working rather

            6        diligently, and it's a final item on my agenda

            7        today, to complete a Florida World War II memorial

            8        in Tallahassee.  This was directed by the

            9        Legislature several years ago and we've been

           10        working through fund raising to do it and we're

           11        currently in the design process of finishing that;

           12        and I'll give you an update on that as a part of

           13        the agenda. 

           14             So, with that, Governor, those are the

           15        functions that we perform in the State on behalf of

           16        our veterans.

           17             GOVERNOR BUSH:  Is there a motion on Item 1? 

           18             CFO GALLAGHER:  Motion on the Minutes.

           19             COMMISSIONER BRONSON:  Second.

           20             GOVERNOR BUSH:  Moved and seconded.  Without

           21        objection the item passes.

           22             MR. McPHERSON:  Okay.

           23             GOVERNOR BUSH:  Item 2.

           24             CFO GALLAGHER:  Motion on 2 and 3.

           25             MR. McPHERSON:  Yes, sir.


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            1             CFO GALLAGHER:  Do you want them together or

            2        separate?

            3             MR. McPHERSON:  Together is fine, sir.

            4             COMMISSIONER BRONSON:  Second.

            5             GOVERNOR BUSH:  There's motions on Items 2 and

            6        3 and seconds.  Without objection the motions pass.

            7             MR. McPHERSON:  And just for a note, those are

            8        our quarterly reports that we provide to the

            9        Governor and the Cabinet on the performance of our

           10        agency to our agency head. 

           11             Item 4, sir, is an update on our Florida World

           12        War II memorial.  Could I have the first slide,

           13        please? 

           14             You'll see on the wall behind you -- that's

           15        very difficult for you-all.  There's a monitor

           16        here, and I think the members have handouts, but

           17        the Florida World War II memorial will be our

           18        tribute to veterans in the State of Florida who

           19        served during the World War II effort.

           20             Yes, sir.  Next slide, please.

           21             The memorial is made up of four elements, and

           22        I'll quickly run through each one of them.  The

           23        Museum of Florida History has an exhibit dedicated

           24        solely to World War II.  It was dedicated on

           25        December the 7, 19 -- 2000 -- excuse me -- 2001.  


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            1        And it is a pretty good exhibit.  Over the last

            2        year we have broken it into three pieces and they

            3        have toured the State, the various cities.  All of

            4        that will be coming back together and rededicated

            5        on Veteran's Day 2004 and I'll show you what that's

            6        in conjunction with. 

            7             Next slide, please? 

            8             So, World War -- the project to commemorate

            9        World War II in Florida also includes a heritage

           10        trial guide series, and it is a 72-page full-color

           11        booklet that identifies sites and individuals who

           12        were significant in the State of Florida in the era

           13        of World War II in this State.  We are receiving

           14        tremendous cooperation from the Department of

           15        State with this and we are very close to printing

           16        and we look to be able to unveil that booklet on

           17        Memorial Day this year. 

           18             A third element of the World War II project is

           19        the high school education curriculum supplement. 

           20        If you open a high school history book today you

           21        will find somewhere between two and ten pages

           22        dedicated to World War II.  I don't know how you

           23        can cover something that changed our culture,

           24        literally, and changed -- preserved our

           25        civilization and our way of life in two pages in a


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            1        history book.  So one of the things we have done in

            2        conjunction with the Department of Education is

            3        create a supplement for high school history

            4        teachers.  This is very nearly complete and will be

            5        presented to the Governor and the Cabinet probably

            6        in early May.  And then during this summer we will

            7        run some teacher workshops.  And this curriculum

            8        supplement, a set of materials that teachers can

            9        use to supplement curriculums on history in this

           10        particular era of the 1940 to '50 era, will be

           11        available in high schools this fall. 

           12             And then the final element is a permanent

           13        stone monument that is under design right now and

           14        it will be placed in Tallahassee on the -- it will

           15        be located on the, I think it's the southeast

           16        corner of land in front of the gray building, which

           17        is the Museum of Florida History, natural

           18        connection to the World War II exhibit inside. 

           19        We're working through, we have gotten a pro bono A

           20        & E firm to help us design it.  We have a

           21        construction company that is working with us on

           22        costing it out and we are programming it for

           23        construction this summer and groundbreaking on

           24        Veteran's Day, November the 11th, which there's an

           25        error in that slide, it's '03 we did a


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            1        groundbreaking and '04, this Veteran's Day, we

            2        intend to dedicate it.

            3             This is a picture of the World War II

            4        monument, the national World War II monument in

            5        Washington, D.C.  You can see on the pedestal up

            6        front there's a depiction of that. 

            7             Interestingly enough, I was in Washington last

            8        week with a meeting of the 30, about 30 of the 50

            9        State Directors of Veterans' Affairs.  This

           10        memorial was finished last Friday, and it will be

           11        open to the public for the next two months but

           12        officially on Memorial Day the President will

           13        dedicate this memorial, a national memorial for

           14        World War II.  The pillar that you see there is the

           15        Florida pillar.  It's about 18 feet tall granite,

           16        and it's a replica.  All of the states have them

           17        around us.  We use that as the centerpiece model of

           18        our design for the Florida World War II memorial.

           19             Next slide, please. 

           20             This is a graphic depiction of the design of

           21        the Florida World War II memorial that it will be

           22        in front of the R. A. Gray building in Tallahassee. 

           23        And you can see there the centerpiece Florida

           24        pillar and a walkway that approaches it.  And you

           25        see on that walkway there are markers; and each of


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            1        those represents a county in the State of Florida. 

            2        And we have provided the counties opportunities to

            3        place on those markers things that they would like

            4        to commemorate their county's contribution to World

            5        War II.  We're working with county commissions to

            6        do that.  We're looking to let the contract for

            7        this in approximately July, about a three month,

            8        three to three and a half month construction

            9        period.  Looking to have it completed in October

           10        and ready for dedication in November.             

           11             Next slide, please. 

           12             This is a depiction of the walkway, the county

           13        walkway that approaches the memorial center area. 

           14             And next slide. 

           15             And the final part of the business part of

           16        this is to give you a briefing and an update on the

           17        budget.  Our Department of Veterans' Affairs has

           18        laid this out, and the total cost of all the

           19        elements of the project that I've outlined is

           20        approximately $801,000.00. 

           21             Next slide, please. 

           22             An update of where we are.  We have raised so

           23        far $606,000.00 plus change. 

           24             Next slide. 

           25             And we today have the following expenses, a


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            1        cash on hand balance of about $200,000.00.         

            2             Final slide.  I think I have two more.

            3             The cost to complete the things that I just

            4        showed you is approximately $373,000.00.  So, if

            5        you do the math and you'll find -- next slide -- I

            6        have a small deficit that we are working on

            7        fundraising on now, approximately a $165,000.00.

            8             And final slide. 

            9             The way we're going to that is a Florida World

           10        War II Congressional Medal of Honor Society

           11        partnership dinner scheduled in June of this year,

           12        which we hope to raise the final elements to allow

           13        awarding of the contract and construction of this

           14        monument that;s long overdue for Florida's

           15        veterans, in Tallahassee this summer. 

           16             That brings to a conclusion the presentation

           17        set this morning, Governor.

           18             COMMISSIONER BRONSON:  Governor, one of the

           19        things that's been amazing to me is to talk to a

           20        lot of people who served in Florida, training in

           21        Florida during World War II --

           22             GOVERNOR BUSH:  Yeah.

           23             COMMISSIONER BRONSON:  -- at all the Navy and

           24        Army air bases and the infantry base that we had

           25        here and how many of them stayed over in the '50's


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            1        or came back after the war was over in the '50's

            2        to live in Florida; and the same thing through the

            3        '50's with the air bases and all that we had here

            4        in Florida, so many people came back after they got

            5        out of the service, and that's why our numbers are

            6        so high with our retired military in the State. 

            7        And I bet there's quite a few of them in this room

            8        that trained in Florida that came back here.

            9             MR. McPHERSON:  Thank you, Commissioner.  Yes,

           10        sir.

           11             GOVERNOR BUSH:  I know one that trained   

           12        here --

           13             MR. McPHERSON:  Yes, sir.

           14             GOVERNOR BUSH:  -- that's my dad.

           15             MR. McPHERSON:  He did, absolutely. 

           16             With that, sir, that concludes our report on

           17        the memorial update, and unless you have other

           18        items I'm through this morning.

           19             GOVERNOR BUSH:  Thank you, Rocky. 

           20             MR. McPHERSON:  Thank you, sir.







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            1             GOVERNOR BUSH:  Department of Highway Safety

            2        and Motor Vehicles.  Did I miss one?

            3             MR. WESTBERRY:  Good morning, Governor.

            4             GOVERNOR BUSH:  Good morning.

            5             MR. WESTBERRY:  It's always a pleasure to be

            6        with you on Capital for a day.  Just briefly by way

            7        of description, my name is Dave Westberry, Deputy

            8        Executive Director for the Department.  As a

            9        Cabinet agency we come before you periodically for

           10        direction and guidance, some contract approvals and

           11        things of that nature.  Our Department mission very

           12        simply stated is keeping our highways safe.  That's

           13        our core mission.  It's implemented through a

           14        number of different program initiatives and

           15        statewide things that we're trying to do right now.

           16             The focal point of the Department has always

           17        been education with service and an enforcement

           18        element.  Probably the most visible portion of the

           19        Department of Highway Safety and Motor Vehicles to

           20        the citizens of the State is the Florida Highway

           21        Patrol.  They are our largest outreach group, if

           22        you will, to the community.  Leesburg is covered by

           23        Troop D, which is our Orlando-based troop, Major

           24        Cyrus Brown is with us today and we appreciate him

           25        being with us today.


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            1             GOVERNOR BUSH:  So, Major, when one of your

            2        colleagues gives a ticket for someone for speeding,

            3        you just consider it outreach?  I like that.

            4             MR. WESTBERRY:  That's part of the education

            5        and enforcement jointly.

            6             But Central Florida's a tough spot for us.  We

            7        got 17 Troopers that are assigned right now to the

            8        Lake County area and we do a good job of working

            9        with the local law enforcement groups.  We've

           10        appreciated their help and look forward to working

           11        with our new Sheriff down here. 

           12             With the help of CFO Gallagher we were able to

           13        put 31 new Troopers on the road here just recently

           14        in a graduation ceremony.  The Troop Commanders

           15        statewide are looking forward to having them on

           16        the road and we appreciate your help with that. 

           17             The other side of our Department that is most

           18        visible to the citizens is in our motor services

           19        areas.  That's both our licensing areas and our

           20        registration and titling services that we do with

           21        your vehicles and boats and things of that nature.

           22             E-commerce is helping us a great deal on this

           23        side to provide a better service to the citizens in

           24        a faster more expedient manner.  On the driver's

           25        licensing side we have a very good office here in


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            1        Leesburg that serves it.  It's one of our most

            2        productive offices that we have in the State. 

            3             And on the motor vehicle side, one of our best

            4        partners in the State is our tax collector here in

            5        Lake County, Mr. Bob McKee.  And Bob has been a

            6        great friend of the Department and I'd like to

            7        appreciate him as well.  He does a great job of

            8        serving the citizens of Lake County as an agent for

            9        the Department down here.

           10             There are a number of things on the horizon

           11        for the Department that we continue to work on. 

           12        The new driver's license.  We hope the two pilot

           13        project offices that will be up and running

           14        sometime in the next 60 days, so we'll begin to see

           15        some progress there; and then hopefully throughout

           16        the summer and into the fall we'll be issuing the

           17        new, more secure driver's license that the citizens

           18        will be able to pick up on and have that in their

           19        pocket in the near future.

           20             GOVERNOR BUSH:  When you say "more secure," 

           21        could you just describe what it'll -- what features

           22        it has?

           23             MR. WESTBERRY:  Sure.  With the leadership of

           24        the Governor and the Cabinet and the Legislature,  

           25         we have been able to devise and kind of


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            1        reimplement our new driver's license process to

            2        where we not only have a more secure process, as

            3        you come to us and go through the office in terms

            4        of identifying who you are, getting your background

            5        information, security, making sure that the

            6        documents that you provide us are valid documents

            7        of who you are, but the card itself is embedded

            8        with a number of more physical security issues that

            9        will allow us to authenticate the document law

           10        enforcement roadside, retail merchants, there are

           11        just a number of applications that this will make

           12        this a more secure document.  Right now the driver 

           13        licenses that most of you have in your pocket

           14        probably can be forged by a good college student   

           15        on most campuses statewide.  So we're hoping     

           16        that we're in a position to make that much more

           17        secure.

           18             GOVERNOR BUSH:  If they forged it for me   

           19        though I don't think anybody would believe that I  

           20        was 21.

           21             MR. WESTBERRY:  That is one of the new traits,

           22        indeed, as well that the retail merchants are

           23        excited about is the under 21 will be flipped in a

           24        vertical mode as opposed to horizontal mode and it

           25        will make it much more identifiable to them.


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            1             CFO GALLAGHER:  It's the one for under 12 to

            2        get in the movies we're worried about. 

            3             MR. WESTBERRY:  Governor, our agenda item

            4        today deals with proposed rule revisions relating

            5        to speed measuring devices.  Rule 15B-2 of our

            6        Florida Administrative Code allows us to implement

            7        Florida law regarding the radar devices and the

            8        laser measuring devices.  A while back we put

            9        together a radar task force that was worked through

           10        the Department of Transportation.  That group came

           11        up with a number of recommendations.  Basically

           12        what we felt like it was time to update our rule. 

           13        The last update was in 1994.  There's a great deal

           14        of new technology that's available out there.  We  

           15        needed to make sure that we were in a position to

           16        have these technologies properly implemented by our

           17        law enforcement folks statewide.  Our biggest

           18        concern and priority is making sure that that

           19        information is maintained, our public trusts, what

           20        we've got -- what we have out there, and that the

           21        courts find it admissible.  So we needed to do some

           22        revisions to the rule and that's what you see

           23        before you today.

           24             CFO GALLAGHER:  Motion on 1. 

           25             COMMISSIONER BRONSON:  Second.


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            1             GENERAL CRIST:  Second.

            2             GOVERNOR BUSH:  Moved and seconded.  Without

            3        objection the motion passes. 

            4             Thank you, David. 

            5             MR. WESTBERRY:  Thank you, Governor.






















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            1             GOVERNOR BUSH:  Department of Law Enforcement.

            2             Thank you.  Guy's a big man.  He can't get

            3        around you.

            4             MR. TUNNELL:  Don't want to knock him over.

            5             Good morning, Governor, members of the

            6        Cabinet, citizens of the Leesburg area.  What a

            7        beautiful place in our State.

            8             For your benefit, I'm Guy Tunnell.  I'm the

            9        Commissioner of the Florida Department of Law

           10        Enforcement or F.D.L.E. 

           11             We are, too, a cabinet agency much like my

           12        predecessor speakers.

           13             Governor, before we get started with our order

           14        of business, I'd like to give a brief overview of

           15        F.D.L.E. and our mission for the benefit of the

           16        members of the public that are here today. 

           17             We are a statewide law enforcement agency. 

           18        The Leesburg area is covered out of our Orlando

           19        Regional Operations Center.  Our mission is to

           20        promote Florida safety for Florida citizens and

           21        visitors.  We do this through a close partnership

           22        with local, State and Federal criminal justice

           23        agencies.  In doing so we provide investigative

           24        services and crime lab analysis to both local and

           25        State agencies, law enforcement and correctional


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            1        officer standards and training oversight, and

            2        criminal history information services to members of

            3        the public and criminal justice customers.  

            4             Of course F.D.L.E. is also working very

            5        closely with our public safety partners to promote

            6        our domestic security preparedness and response

            7        capabilities within the State of Florida.  One

            8        aspect of this domestic security is protecting

            9        ourselves from cybercrime.  Earlier this month we

           10        kicked off a statewide training initiative called

           11        CSAFE.  That's another acronym.  It stands for

           12        Cyber Security Awareness For Everyone. 

           13             Our computer crime center has been providing a

           14        series of one day seminars to citizens in

           15        businesses on cyber security throughout the State

           16        and it's been very successful to date.  We have

           17        delivered some seven training sessions with

           18        approximately 300 attendees and we today are

           19        fortunate to have one of our crime, computer crime

           20        experts here today, Mr. Andy Valentine.  He'll be

           21        at our F.D.L.E. booth in the agency fair available

           22        for public questions and to assist them with

           23        protecting their cyber assets.  He'll also be able

           24        to sign up citizens that are interested in

           25        receiving that training session.  We have plenty of


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            1        seats left for tomorrow's class in Bartow.  Next

            2        month we'll have classes in both Orlando and

            3        Daytona Beach.  We certainly hope the public will

            4        stop by the booth after the Cabinet meeting and

            5        learn more about cyber crime and how to protect

            6        their assets. 

            7             We have only one item on today's agenda, Item

            8        number 1.  We respectfully submit for approval

            9        F.D.L.E.'s second quarter performance report and

           10        our contracts and purchases over $100,000.00 for

           11        October 1 through December 31, 2003.

           12             COMMISSIONER BRONSON:  Move Item 1.

           13             GENERAL CRIST:  Second.

           14             GOVERNOR BUSH:  There's a motion and second. 

           15        Any discussion?

           16             Without objection the item passes. 

           17             Thank you, Guy.

           18             MR. WESTBERRY:  Thank you, Governor, Cabinet. 









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            1             GOVERNOR BUSH:  Board of Trustees of the

            2        Internal Improvement Trust Fund.

            3             CFO GALLAGHER:  Now, there's a good one to

            4        explain.

            5             GOVERNOR BUSH:  Why is it called the Internal

            6        Improvement Trust Fund, Eva?

            7             MS. ARMSTRONG:  Well, I must admit that the

            8        people who created the State in 1845 came up with

            9        that name and I guess when they donated all those

           10        acres from the Federal Government in 1845, which

           11        was 500,000 acres of swamp and overflowed lands

           12        plus the sovereignty submerged lands of the State,

           13        decided that internal improvement, which was the

           14        lands were given to the State so that the Board of

           15        Trustees at that point in time could sell them and

           16        that was the cash that funded the State.  And so

           17        internal improvement meant that then the Board of

           18        Trustees could go out and fund government, and that

           19        was Internal Improvement at that time.  I guess it

           20        made sense to them, huh?

           21             GOVERNOR BUSH:  Thank you.

           22             MS. ARMSTRONG:  Today it's like, what is

           23        internal improvement?  Today it funds our

           24        operations and yours.

           25             CFO GALLAGHER:  We're still selling land,


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            1        though, I'll tell you that.

            2             GOVERNOR BUSH:  Why would we sell wetlands to

            3        finance, you know, government now?  Now, it's all

            4        backwards, we're undoing --

            5             CFO GALLAGHER:  Right.

            6             GOVERNOR BUSH:  -- what we did two, three,

            7        four generations ago at a little bit, a little more

            8        expense than it costs to drain the swamps to

            9        populate the State.  Now we're trying to replumb

           10        and go backwards, which is --

           11             CFO GALLAGHER:  Pretty expensive.

           12             GOVERNOR BUSH:  -- full of ironies and full of

           13        billions of dollars of cost but it's worth doing, I

           14        think.

           15             And the other part of what you do that you're

           16        going to explain is that you preserve what remains

           17        so that it doesn't have to be replumbed afterwards.

           18             MS. ARMSTRONG:  Yes, sir.

           19             CFO GALLAGHER:  I think I just might mention

           20        that one of the things that set up this Board of

           21        Trustees was that we had appointed Governors for

           22        awhile and they were giving the land away to their

           23        friends.  So the constitution set up the Board of

           24        Trustees on the Internal Improvement Trust Fund

           25        that required a super majority of the Cabinet to


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            1        sell land as opposed to the Governor doing it

            2        himself.  That's not this Governor, this is 1845. 

            3             MS. ARMSTRONG:  Way back, yes, sir.

            4             CFO GALLAGHER:  And this was a protection so

            5        that the State at least got some money for what was

            6        being put out to the private sector.

            7             MS. ARMSTRONG:  So with that --

            8             GOVERNOR BUSH:  Thank you.  Treasurer

            9        Gallagher is the only one here that actually knows

           10        this firsthand because he was serving in government

           11        at the time back when Governors were appointed. 

           12             CFO GALLAGHER:  That's what happens when

           13        you're the oldest one up here, you know. 

           14             GOVERNOR BUSH:  It's the standard joke.

           15             CFO GALLAGHER:  I know I don't look it, but --

           16             GOVERNOR BUSH:  Exactly.  You'd be surprised

           17        that he is actually older than the gentleman who

           18        wrote the book about being a hundred.

           19             CFO GALLAGHER:  I'm hoping I'm looking as good

           20        as he is when I'm 70.

           21             GOVERNOR BUSH:  Eva.

           22             MS. ARMSTRONG:  So, with that, if I might --

           23             GOVERNOR BUSH:  You might.

           24             MS. ARMSTRONG:  -- my name is Eva Armstrong. 

           25        I'm the Division Director for State lands.  I'm


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            1        here this morning replacing Secretary Colleen

            2        Castille because she's in front of the Senate

            3        Natural Resources Committee for her first

            4        confirmation hearing this morning.  So, she sends

            5        her regrets. 

            6             With that, I am here for the Department of

            7        Environmental Protection, the Division of State

            8        Lands, and we represent the Board of Trustees on

            9        these matters.  We -- the Department actually does

           10        a number of things for you.  I feel kind of odd

           11        because I'm kind of at your back.  I'm going to do

           12        what the guys didn't do, I'm going to turn around,

           13        if that's okay.  We take care at the Department of

           14        Environmental Protection of air quality issues for

           15        you, water issues, any kind of contamination

           16        issues.  We have State, five -- six district

           17        offices around the State.  Vivian Garfine is the

           18        Central Office District Director.  She's here this

           19        morning.  I'd like to ask her to stand. 

           20             Also for the Governor, I think you've met

           21        Vivian, but she's heading up the Wekiva River Task

           22        Force, which has been a monumental task force

           23        effort.  And --

           24             GOVERNOR BUSH:  Did you close the deal,

           25        Vivian?


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            1             MS. ARMSTRONG:  -- I don't know how she's

            2        managed to manage all those cats she's been

            3        herding, but she's done a phenomenal job.  And I

            4        don't handle any of the regulatory issues, so I'm

            5        going to stop there on regulatory stuff. 

            6             My job is to run what is basically the State's

            7        real estate portfolio on your behalf.  The Board of

            8        Trustees act as the managers for that real estate

            9        portfolio.  Right now it's over two million acres

           10        worth.  And the majority of that are the lands that

           11        have been bought with what you've heard about

           12        before, Preservation 2000 and Florida Forever

           13        lands.  And this is the fun part of the agenda. 

           14        This was where you guys get involved.  How many of

           15        y'all have been to a State forest which is managed

           16        by Commissioner Bronson, right?  Raise your hands. 

           17        A lot.  Look at this.  That's good.  That's very

           18        good for him, he likes that. 

           19             GOVERNOR BUSH:  Not many people --

           20             MS. ARMSTRONG:  They all like that.

           21             GOVERNOR BUSH:  -- knew the State Board of

           22        Administration were people who have gone to our

           23        forest?  That's good.

           24             MS. ARMSTRONG:  How many people -- a lot more,

           25        isn't it?  How many have been to a State Park,


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            1        raise your hands.  Very good. 

            2             In fact, a lot of you -- you should have come

            3        in this morning found a card on your seat with

            4        Florida State Parks, right?  Very good.  We're

            5        going to use that in just a minute.  How many of

            6        you have actually camped in a State Park?  Usually

            7        a little bit fewer.

            8             Have you been to a cabin yet in the State

            9        Park?  'Cause that's the really good news today.  I

           10        have brought with me -- we've changed our agenda a

           11        little bit from before for y'all.  I like to keep

           12        y'all surprised, too.

           13             GOVERNOR BUSH:  Keep it complicated.

           14             MS. ARMSTRONG:  We have two big surprises on

           15        today's agenda.  The first one is State Parks. 

           16        I've actually brought with me the State Parks

           17        Director for the State of Florida, Mike Bullock. 

           18        He had to completely rearrange his agenda to be

           19        here today, so he's going to tell you about where

           20        some of those fabulous cabins are nearby that you

           21        can go to.  And on that card is the 1-800 number

           22        that you can call to reserve a camp site or a

           23        cabin.  And if you call those places, that number,

           24        and you can't get in the one you particularly want

           25        to go to, they'll arrange for a site nearby that


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            1        you can go to instead.  It's a phenomenal service

            2        that we've only started providing two years ago,

            3        maybe?  I'm telling you, it's great.  I use it

            4        personally.  So, we have spent a lot of money

            5        buying the lands for you.  They're wonderful parks

            6        out there, forests, hunting places, greenways, and

            7        we now are putting cabins in and wonderful

            8        facilities for you.  And I want to encourage you,

            9        if you haven't been; go.  If you have been going,

           10        go to more; and he's got a couple surprises to tell

           11        you more about it.  So with that, this is Mike

           12        Bullock. 

           13             GOVERNOR BUSH:  Sounds like the -- you sound

           14        like Bob Barker and the Price Is Right.

           15             MS. ARMSTRONG:  Well, we want to get them out

           16        there, don't we?

           17             GOVERNOR BUSH:  Yes, we do.

           18             MR. BULLOCK:  And thank you, Eva.  With that

           19        introduction, I'm not sure, maybe we can cut back a

           20        little bit on our marketing budget.  What a PR

           21        person.

           22             Good morning, Governor, Members of the

           23        Cabinet,  I'm Mike Bullock.  I think I have

           24        probably the best job in the Department of

           25        Environmental Protection.  Our mission is pretty


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            1        simple.  We provide resource-based recreation while

            2        preserving and protecting Florida's natural and

            3        cultural resources.  A pretty big program.  Florida

            4        is blessed through its leadership.  The areas that

            5        have been acquired for preservation for your use is

            6        just, really it's awesome.  If you haven't had a

            7        chance to visit all of our State Parks, we would

            8        really welcome you to come out and see what Florida

            9        has to offer. 

           10             Just a quick overview of some of the things

           11        that's going on for us.  Last fiscal year we had a

           12        record attendance for State Parks, over 18.2

           13        million visitors attended, visited State Parks.  If

           14        you think about it, that's more than the population

           15        of the State.  So, we're quite proud of the fact

           16        that people enjoy what the State has to offer. 

           17             This year so far for the same time frame last

           18        year, we're almost 2.5 percent ahead of that

           19        schedule.  So we're looking really for another

           20        record year for visitation in State Parks.  If our

           21        weather holds, great spring we're having, there's

           22        no doubt in my mind that we're going to beat last

           23        year's record.

           24             Florida State Parks, we have some 158 units

           25        that we manage.  There are over 700,000 acres in


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            1        the State Park System at this point, and, Eva, with

            2        the help of the Trustees, we're continuing to grow

            3        and find new areas that should be brought into the

            4        system.

            5             They -- one of the facts that we're very proud

            6        to talk about when we tell people about State Parks

            7        is, first of all, if you don't enjoy State Parks

            8        for any other benefit, the State Parks provide a

            9        tremendous economic impact for the State.  We use a

           10        formula that's derived by the national park service

           11        to calculate the number.  And last year the

           12        calculation was 575 million dollars worth of direct

           13        economic impact for the State.  And part of that

           14        formula, over 40 million dollars of sales tax is

           15        generated that goes into the State general revenue

           16        fund.  And one of the things that we're really

           17        proud of also is that jobs that are generated in

           18        the vicinities of State Parks, over 11,000 jobs are

           19        provided in local communities to support what goes

           20        on in State Parks.

           21             The parks in your region, of course I hope all

           22        of you have had a chance to visit the Lake Griffin

           23        State Park, which is just right up the road.  Lake

           24        Griffin is located in our District 3.  We have five

           25        operating districts.  And the economic numbers for


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            1        District 3 for this area is over 96 million dollars

            2        worth of direct economic benefit for your region. 

            3        Some six, or almost seven million dollars worth of

            4        sales tax are collected, and almost 2,000 jobs are

            5        provided in this area just because of the parks

            6        that you have to enjoy here. 

            7             Another thing that we're real proud to tell

            8        people about is our volunteer program.  Last year

            9        we had over 6,000 volunteers donate some 933,000

           10        hours of volunteer time in State Parks.  This

           11        equates to almost 450 full time employees to carry

           12        on the mission of the State Park System.  So, the

           13        thing that it tells me are the citizens of the

           14        State, they love their State Parks and they're

           15        willing to get involved and come out and see what

           16        we have to offer. 

           17             Eva, Eva had mentioned our cabin program and

           18        rather than tell y'all about the programs, I really

           19        would like to take the opportunity to tout

           20        something that's brand new right off the market.

           21             GOVERNOR BUSH:  You shamelessly promote.  Go

           22        ahead.

           23             MR. BULLOCK:  We have just developed a State

           24        Park Passport.  This will be for sale for the

           25        public in the very near future.  It has all of the


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            1        parks listed in it.  It tells you about it.  The

            2        great thing about is it, when you visit the parks,

            3        like a passport, you can get it stamped.  And after

            4        you visit all of the State Parks you'll be able to

            5        mail in a card and we'll send you a gift to show

            6        our appreciation. 

            7             And, Governor, we'd like to share this one

            8        with you.  We only have one copy at this time.  The

            9        order should be in in about two weeks and we will

           10        be able to have those on line for your purchase and

           11        enjoyment. 

           12             Finally, thank you, Governor, Cabinet Members,

           13        for your support of the State Park System.  We are

           14        proud to be able to take care of the resources for

           15        you, and anything we can do to help you, please

           16        call on us.

           17             GOVERNOR BUSH:  Thank you. 

           18             MS. ARMSTRONG:  So with that, what we'll do

           19        is, we have one extra special event here for you. 

           20        We brought in Wes Skiles, who is our springs expert

           21        extraodinaire.  He has taken the one hour long

           22        video, condensed it to ten minutes.  And with that,

           23        we'd like to ask the Cabinet Members to just step

           24        down here so you can see it.  It's going to be on

           25        this wall. 


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            1             Wes, do you want to go ahead and start it or

            2        do you want to come introduce it real quick, but

            3        you need to make short comments 'cause we're on a

            4        short time spot. 

            5             MR. SKILES:  Okay.  Appreciate the opportunity

            6        to be here.  Water's Journey is the realization of

            7        a lifetime goal to tell the story the about

            8        world's greatest water supply, the Floridan

            9        aquifer.  And this film is a tribute really to this

           10        administration and many efforts to approach

           11        solutions-oriented style and story-telling and

           12        education and outreach to get public consensus to

           13        embrace water supplies and to support them and

           14        protect them.  This is a short version of the one

           15        hour film Water's Journey. 

           16             (Whereupon a videotape was played, but not

           17        transcribed at this time.) 

           18             GOVERNOR BUSH:  Wow.

           19             GENERAL CRIST:  Well done.

           20             GOVERNOR BUSH:  You're pretty courageous.

           21             MR. SKILES:  Everybody calls me stupid

           22        usually.  I appreciate that. 

           23             GOVERNOR BUSH:  That's the flip side of

           24        stupid.

           25             MR. SKILES:  We have copies of the full length


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            1        film, and I would really like to thank this

            2        administration for their continued support of the

            3        Florida Springs Initiative, which, Governor, you

            4        helped develop and put into effect.  That's the

            5        legislatively funded 2.5 million dollars a year

            6        focused at protecting, managing and doing outreach

            7        associated with springs; and this has been making a

            8        great difference in our efforts to protect

            9        Florida's precious water supply.

           10             GOVERNOR BUSH:  How long -- how far were you,

           11        did you travel on that particular -- where was that

           12        and how far did it -- did you go?

           13             MR. SKILES:  We actually did a series about of

           14        dives in five different systems to illustrate all

           15        the different varieties of places that Florida's

           16        groundwater travels underneath.  Of course it's

           17        ubiquitous.  It covers the entire State and is our

           18        drinking supply; but we were mainly up in the High

           19        Springs, Lava, Lake City area and then also down in

           20        Hernando County region.

           21             GOVERNOR BUSH:  This is -- I think it's

           22        appropriate just to bring up really briefly why the

           23        discussions that -- why I signed the Executive

           24        Order to try to bring consensus on the Wekiva area,

           25        why it's important for the Legislature to reach


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            1        consensus, why a lot of our Florida Forever monies

            2        need to go to purchase this property.  You know, if

            3        you fly over the Wekiva, it is in Central Florida

            4        the one place where water resources exist in their

            5        natural state and have not been altered. 

            6             There's enormous pressures on development and

            7        you can see the impact.  I think people think

            8        there's got to be a nexus to the water to have an

            9        impact on water supply and water quality.  And in

           10        fact, what this thing, the beauty of your work is

           11        that it shows how water moves and how impacts will

           12        have, you know, can have a dramatic impact on all

           13        the watersheds far beyond where you think they do.

           14             And we're here, you know, in a county where

           15        there's south of here there's enormous pressure for

           16        development that competes with the interest of the

           17        natural systems; and we're struggling to find a way

           18        to reach some common ground, but we got to do it. 

           19        We have to.  If not, then what we fly over and see

           20        will be altered forever, so.  Your part of the

           21        solution is appreciated, what you do.  Even though

           22        you are -- it's a little scarey to think about

           23        doing what you do.  My gosh.

           24             MR. SKILES:  No cave divers were hurt in the

           25        making of the film. 


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            1             Yeah, windows of the aquifer is truly what

            2        springs are.  They're the true indicator of the

            3        health and quality of Florida's drinking water

            4        supply, and we have to use these springs to better

            5        understand the fate of Florida's water future.  And

            6        we really appreciate the forward thinking that

            7        you're putting into these issues; and, Commissioner

            8        Bronson, your continued support of BMPs and our

            9        need to push BMPs onto other aspects other than

           10        agriculture, into business and to water use will be

           11        very helpful in helping protect Florida's water

           12        supplies. 

           13             COMMISSION BRONSON:  Best management

           14        practices.

           15             GOVERNOR BUSH:  Yes, General.  Thank you.

           16             GENERAL CRIST:  I just have a question in

           17        watching the video.  How do you keep from having

           18        one of the hoses that go to your tank getting

           19        ripped on some of those rocks?

           20             MR. SKILES:  Good question.  When you watch

           21        the one hour film you realize that that's exactly

           22        what happens.

           23             GENERAL CRIST:  It did happen?

           24             MR. SKILES:  We had a gas failure into one of

           25        the masks from abrasion and sand and we had to


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            1        abort that particular dive and exit the cave.  It's

            2        a -- it's a bit like space exploration, you have to

            3        be -- I carry a lot of extra equipment.  You need

            4        two of everything, and like flying a jet on a

            5        mission, you have to save at least two-thirds of

            6        your gas to always exit the way you came from in

            7        case you don't find a way.

            8             GENERAL CRIST:  I guess we should tell the

            9        audience, that was done by professionals.  Do not

           10        try that at home.  It could be very dangerous.

           11             MR. SKILES:  Per attempt it's the most

           12        dangerous sport on earth.

           13             COMMISSIONER BRONSON:  Governor, I'd also like

           14        and something that can be verified here today,

           15        something that has been known since the day of the

           16        Spaniards coming off the coast is the fissures that

           17        are created in our lakes, Lake Jackson in

           18        Tallahassee is a prime example, that every so many

           19        decades will drain itself and then refill itself

           20        and those fissures, what goes up will pull down. 

           21        Some of the lakes that you have around here are

           22        exactly the same.  You have fissures coming out of

           23        those springs feeding those areas.  And even

           24        offshore the Spaniards used to locate all of those

           25        fissures where the fresh water came up and they


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            1        would actually drop their buckets down, because the

            2        fresh water would push the salt water aside and

            3        they would fill their buckets up there to refill

            4        their kegs of water when they were traveling.  So,

            5        I mean, this, the known fissure system has been

            6        there a long time but it's taking modern technology

            7        to tell us exactly what it looks like and the

            8        problems that we're having.  So, I appreciate all

            9        your work and I know agriculture is working very

           10        hard because of your work to clean up a lot of the

           11        systems that we have around those farming areas to

           12        keep runoff from going back into those systems.

           13             MR. SKILES:  It's much appreciated.

           14             COMMISSIONER BRONSON:  Thank you very much.

           15             CFO GALLAGHER:  And just so the audience

           16        knows, Charlie was there when those ships came in

           17        from the Spanish.  He's our historian on Florida.

           18             GENERAL CRIST:  He means Bronson.

           19             GOVERNOR BUSH:  Thank you very much. 

           20             Eva, you want to start the agenda?

           21             MS. ARMSTRONG:  Yes, sir.  Our first agenda

           22        item is substitute Item 1.  It is an option

           23        agreement to buy one of Florida's first magnitude

           24        springs.  It's in Morrison Springs, Florida Forever

           25        project.  If my staff would, like, jump up and do


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            1        these maps like right now, hurry quickly on both

            2        sides.  We have maps for the audience to be able to

            3        refer to, although it is a bit of a distance, I

            4        apologize for that. 

            5             This is being bought at 94 percent of

            6        appraised value for 3.4 million dollars.  I want to

            7        point out, it was historically a first magnitude

            8        spring.  Although since 1942 the spring flows have

            9        dropped.  It is now a second magnitude but it is of

           10        high value, and we wanted to go and acquire it.

           11             CFO GALLAGHER:  Would you describe magnitude

           12        so people in the audience will know --

           13             MS. ARMSTRONG:  Yes.  That relates to the

           14        amount of water coming out of a spring.  And I

           15        don't know the exact flow levels, but we do have

           16        Mike Bascom who can explain that.  You want to

           17        explain that?

           18             MR. BASCOM:  Certainly.  First magnitude  

           19        spring -- good morning, Mike Bascom with the

           20        Department of Environmental Protection. 

           21             A first magnitude spring constitutes a spring

           22        of greater than a hundred cubic feet per second

           23        discharge, which roughly equates to about 65

           24        million gallons per day.           

           25             For the Morrison Springs site it's roughly


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            1        about 45 million gallons per day, so it's 75 cubic

            2        feet per seconds discharge; so it's a large second

            3        magnitude spring currently.

            4             GOVERNOR BUSH:  And this purchase is, Walton

            5        County is going to be the Manager of the property?

            6             MS. ARMSTRONG:  Yes, sir.  And Mr. Ronny   

            7        Bell --

            8             GOVERNOR BUSH:  Are there any restrictions on

            9        use?

           10             MS. ARMSTRONG:  We'll develop a management

           11        plan and it'll be managed according to the

           12        management plan.  Mr. Ronny Bell, the County

           13        Manager is here if you have questions.

           14             CFO GALLAGHER:  We are, we are holding back

           15        any special uses?  That land must come back in

           16        front of the Cabinet, such as a water bottling

           17        plant --

           18             MS. ARMSTRONG:  Yes, sir.

           19             CFO GALLAGHER:  -- or anything like that?

           20             MS. ARMSTRONG:  Yes, sir.

           21             GOVERNOR BUSH:  Well, I mean, we're buying

           22        this based on the water value of --

           23             MS. ARMSTRONG:  Yes.

           24             GOVERNOR BUSH:  We're not buying it for the

           25        land value, we're buying it for the, I guess some


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            1        present value of the commercial, potential

            2        commercial value of the spring, correct?

            3             MS. ARMSTRONG:  Right.  Well, it was --

            4             GOVERNOR BUSH:  Does that mean --

            5             MS. ARMSTRONG:  -- it was appraised based on

            6        its  being available for a bottle watering company

            7        because of the adjacent sales in the area for that

            8        use.

            9             GOVERNOR BUSH:  So, the question is, do they

           10        have, like our land purchases -- you know what my

           11        question is going to be -- do they have an

           12        entitlement already for --

           13             MS. ARMSTRONG:  I have the appraiser here who

           14        can answer that question.  Would you like that? 

           15             Mr. Cameron, would you please explain how you

           16        came to your highest and best use determination?

           17             GOVERNOR BUSH:  Just simply, is this a

           18        perspective value that you estimated or -- come up

           19        please.  I won't bite.  Or a --

           20             CFO GALLAGHER:  Except on these issues.

           21             GOVERNOR BUSH:  -- or is this an entitlement,

           22        a development right that already has -- the

           23        property already has? 

           24             MR. CAMERON:  The appraised value that I came

           25        up with was a value predicated on a highest and


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            1        best use of a water bottling facility.  Essentially

            2        they --

            3             GOVERNOR BUSH:  Right.  Do they have that

            4        value now?

            5             MR. CAMERON:  They have a consumptive use

            6        permit of 1.44 million gallons a day.

            7             GOVERNOR BUSH:  So they have the consumptive

            8        use permit; and we're buying it based on the fact

            9        that if we don't buy it, they could --

           10             MR. CAMERON:  That's correct.

           11             GOVERNOR BUSH:  -- mine it, if you will?

           12             MR. CAMERON:  That's correct.

           13             GOVERNOR BUSH:  We wouldn't get the same -- we

           14        wouldn't have to pay the same amount if neighboring

           15        properties that you appraised had a consumptive use

           16        permit and this one didn't?

           17             MR. CAMERON:  That's correct.  And the

           18        comparable sales we used --

           19             GOVERNOR BUSH:  So, who gives out the

           20        consumptive use permits and how long -- what are

           21        the values -- how long do they last?

           22             MR. CAMERON:  That's --

           23             GOVERNOR BUSH:  It's the Water Management

           24        Districts?  And what's the term? 

           25             MR. BASCOM:  In this area it's Northwest


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            1        Florida Water Management District.  The term is

            2        generally about six years, but that can be

            3        negotiated at the time of the permit being issued.

            4             CFO GALLAGHER:  And this one is?

            5             MR. BASCOM:  That's correct, it would be six

            6        years for a consumptive use permit.  In this area

            7        they consider this least restrictive use.  So any

            8        consumption up to 1.44 million gallons a year would

            9        not require a permit process but would rather be

           10        consent by rule.

           11             GOVERNOR BUSH:  For six years only, then

           12        they'd have to renew it?

           13             MR. BASCOM:  That's correct.

           14             GOVERNOR BUSH:  And you appraised this based

           15        on that --

           16             MR. CAMERON:  Yes, sir.

           17             GOVERNOR BUSH:  -- that six year flow and then

           18        just assume it'd be renewed or --

           19             MR. CAMERON:  We looked at the comparable

           20        sale, the best comparable sale we had was in

           21        Washington County, which is an adjoining county,

           22        and Cypress Springs sold for 3.5 million.  And it

           23        also had the same allowed consumption of 1.44

           24        million gallons a day.  So that we kind compared

           25        the springs on a hole to hole basis.


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            1             CFO GALLAGHER:  Same acreage?

            2             MR. CAMERON:  No, it had less acreage, only

            3        had 40 acres, but it was a first magnitude spring. 

            4        So there was adjustments we had to make in

            5        comparing this spring and the other two springs we

            6        used as comparables to the subject property.

            7             CFO GALLAGHER:  Was that a cash purchase?

            8             MR. CAMERON:  Yes.

            9             CFO GALLAGHER:  Did we purchase it or somebody

           10        else?

           11             MR. CAMERON:  Somebody else. 

           12             And there's a potential that that spring could

           13        be sold for water bottling use.

           14             CFO GALLAGHER:  Okay.

           15             GOVERNOR BUSH:  Thank you. 

           16             MR. CAMERON:  Thank you.

           17             CFO GALLAGHER:  You get more for water than

           18        you do gas.

           19             GOVERNOR BUSH:  Is there a motion on Item 1?

           20             CFO GALLAGHER:  Yes.  Motion on 1.

           21             COMMISSIONER BRONSON:  Second.

           22             GOVERNOR BUSH:  Moved and seconded.  Without

           23        objection, Item 1 passes.

           24             MS. ARMSTRONG:  Item 2 is the Zimmerman

           25        Acquisition Agreement.  This is a corkscrew


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            1        regional ecosystem watershed project.  It is for .9

            2        acres,  $268,750.00.  It is for 125 percent of

            3        appraised value.  And in August of 2001 this Board,

            4        slightly different membership, approved the

            5        purchase or offers being made at a 125 percent of

            6        appraised value within this project area because of

            7        the difficulty with rapid increase of land values

            8        in the area and the critical nature of the project

            9        to Everglades restoration.

           10             I have Jackie Ripp with the Southwest Water

           11        Management District here who can answer questions

           12        regarding the technical nature of the restoration

           13        project if you desire.

           14             There is a house on the site.  It is vacant

           15        and it will be removed in order to flood the area. 

           16        If you have any questions?

           17             GOVERNOR BUSH:  There any questions?

           18             CFO GALLAGHER:  Motion on 2.

           19             GENERAL CRIST:  Second.

           20             GOVERNOR BUSH:  Moved and seconded.  I'm going

           21        to be on my best behavior since we're not at home.

           22             MS. ARMSTRONG:  You know you really want to

           23        ask a question.

           24             GOVERNOR BUSH:  No.

           25             MS. ARMSTRONG: You want to ask a question.  Go


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            1        ahead, ask a question.

            2             GOVERNOR BUSH:  No, no.

            3             MS. ARMSTRONG:  That way they get to see what

            4        you like to ask.

            5             GOVERNOR BUSH:  No, I don't want to do that.

            6             MS. ARMSTRONG:  Okay.  All right.      

            7             GOVERNOR BUSH:  I don't want -- sometimes I

            8        get a little passionate about these things but I'm

            9        going behave in front our guests, our hosts.

           10             MS. ARMSTRONG:  Okay. 

           11             GOVERNOR BUSH:  There's a motion and a    

           12        second --

           13             MS. ARMSTRONG:  He just cares a lot about the

           14        way we spend our money, that's what he's talking

           15        about, okay.

           16             GOVERNOR BUSH:  Moved and seconded.  Without

           17        objection, the item passes.

           18             MS. ARMSTRONG:  Item 3 is the sale of State

           19        owned land in Alachua County.  This is a Murphy Act

           20        parcel.  And what I wanted to explain to the guests

           21        is that Murphy Act lands, during the depression

           22        when a landowner couldn't make their taxes, the

           23        land reverted to the State of Florida.  So that we

           24        have a lot of these little parcels scattered around

           25        the State, I mean lots of them. 


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            1             In this case it's actually 22.42 acres.  Could

            2        we get those -- and where is Cathy Keyes?  If she'd

            3        just go ahead and stand up there it'd be easier,

            4        'cause we're going quickly here.  If you put that

            5        map up so you can see.  The red parcels on the map,

            6        the red blobs, if you're far in the back, are a lot

            7        of small parcels that are all pushed together. 

            8        This was actually platted out some years ago.  And

            9        the blank areas in between are not owned by the

           10        State.  Those are owned -- it's actually 20 parcels

           11        in between.  Four of those 20 are owned by other

           12        individuals.  The other 20 are owned by the

           13        landowner to the north immediately adjacent to the

           14        north.  Just to give you guys an idea what we're

           15        dealing with here.

           16             GOVERNOR BUSH:  This is an example, again, of

           17        a new attitude of government that is repurchasing

           18        properties that some area element of government

           19        allowed for the -- sold or allowed for the

           20        development.  And these plots are -- this is

           21        platted at, you know, these tiny little lots,

           22        they're spread out all over the State and now they

           23        happen to be in the path of protection.  So we have

           24        to come back after we sold them or we gave the

           25        development rights for someone to sell them, we


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            1        come back in now and either dispose of them or try

            2        to purchase them so that they're preserved for, you

            3        know.

            4             CFO GALLAGHER:  Right, but we're selling

            5        these.

            6             GOVERNOR BUSH:  We're selling this one --

            7             MS. ARMSTRONG:  We're selling these.

            8             GOVERNOR BUSH:  -- but these are just --

            9        there's thousands and thousands of little lots all

           10        over the place that in the '50's and '60's

           11        principally were platted in a totally different

           12        time that wouldn't happen now.

           13             CFO GALLAGHER:  Eva, I have a couple of

           14        questions.

           15             MS. ARMSTRONG:  Yes, sir.

           16             CFO GALLAGHER:  It's my understanding that

           17        there's not a legal access to this property at this

           18        particular time?

           19             MS. ARMSTRONG:  Correct.  We actually went and

           20        got -- had a title company do the research. 

           21             CFO GALLAGHER:  Right.

           22             MS. ARMSTRONG:  The appraiser had done a lot

           23        but the Cabinet aides weren't sure that that was

           24        good enough, so we got a title company who actually

           25        did the research.  There's no legal access to that


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            1        site.

            2             CFO GALLAGHER:  Right.  And what is the value

            3        difference if we had acquired legal access to that

            4        property?

            5             MS. ARMSTRONG:  Well, I'd like Bud Vielhauer

            6        to explain to you what it would take for us to

            7        acquire legal access, because quite frankly, I

            8        don't think we could.  I'd like you to hear it

            9        though from him if you don't mind. 

           10             Bud, would you explain it, please?

           11             MR. VIELHAUER:  Good morning.  Bud Vielhauer,

           12        Deputy General Counsel for Public Lands and Deeds.

           13             GOVERNOR BUSH:  You need to be a little

           14        louder.

           15             MR. VIELHAUER:  I'm sorry.  I also have a cold

           16        this morning. 

           17             I am Deputy General Counsel for Public Lands.

           18             In this case we had it evaluated and

           19        determined that currently there is no legal access

           20        to it.  I think Commissioner Gallagher your

           21        question was how much additional value would it add

           22        to it.  It may upwards of double the value. 

           23        However, looking at trying to go through the legal

           24        process of trying to determine whether we could get

           25        access to it, we would have to go through and


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            1        establish that there is a statutory way of

            2        necessity, which would require us either

            3        approaching the owner that has any access and

            4        getting them to give us access or sell us access,

            5        or we would have to file suit.  And filing suit

            6        legally would probably cost us close to what the

            7        value would be, the additional value that we would

            8        actually get.  So from an economic standpoint it

            9        may not work. 

           10             But also from a legal standpoint, there are

           11        some significant issues with this, in that to get a

           12        statutory way of necessity we would have to

           13        establish that we are using or going to use the

           14        property for residential purposes or agricultural

           15        purposes, and that's not what we manage this

           16        property for.  So, it would be very difficult for

           17        us legally to be able to acquire access to this

           18        property.

           19             CFO GALLAGHER:  Well, that leads me to my next

           20        question is, did we put this out for bid or did we

           21        just find somebody that wanted it and sell it to

           22        them?

           23             MS. ARMSTRONG:  No, sir.  This is a situation

           24        where the landowner immediately to the north, which

           25        is between us and 27, came in and applied to buy


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            1        the property.  They are the only landowner -- in

            2        addition, when I stated that the statistics that

            3        there are 20 outparcels within that red area and

            4        they own all of them except four.  So they're the

            5        only landowner, A, that has the access between us

            6        and 27, and the only landowner that has the parcels

            7        in the middle. 

            8             When we advertised to the 500 foot adjacent

            9        property owners, so that's the four in the middle

           10        and the other three sides to the parcel, in other

           11        words, south, north and east, nobody else

           12        responded.  And so in that case, because nobody

           13        else has access, they're the only ones who are

           14        interested in the parcel.  So we appraised the

           15        property and propose to you to sell it to them. 

           16             If we were to bid it out, I doubt anybody else

           17        is going to want it because nobody else has legal

           18        access. 

           19             So we could, I mean, we could pursue getting

           20        legal access, it's going to cost us a lot of money. 

           21        If we try to negotiate, he's the only one to

           22        negotiate with.  So, at least we're getting

           23        appraised value and we get it back on the tax

           24        roles.

           25             CFO GALLAGHER:  You're getting appraised   


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            1        value --

            2             GOVERNOR BUSH:  Without the access.

            3             CFO GALLAGHER:  -- without the access --

            4             MS. ARMSTRONG:  Access.

            5             CFO GALLAGHER:  -- from -- and you're selling

            6        it to the guy who has the access.

            7             MS. ARMSTRONG:  I know.

            8             CFO GALLAGHER:  So, he's sort of got us over

            9        a barrel here.

           10             MS. ARMSTRONG:  But there's no way out of the

           11        barrel except through a lot of money and a lot of

           12        time.  I mean, this is not a great picture, but

           13        it's, you know, it's rural Alachua County.  It's

           14        not in the path of direct, immediate development. 

           15        I mean, it's just not a great -- I mean, you look

           16        at 22 acres and you think, wow, it's a lot of land

           17        but it's divided by ownerships that he already has. 

           18        It just not a great -- you know, Murphy Act parcels

           19        are not high value parcels.

           20             CFO GALLAGHER:  Now, Murphy Act comes to us

           21        from the Federal Government?

           22             MS. ARMSTRONG:  No, sir. 

           23             CFO GALLAGHER:  No.

           24             MS. ARMSTRONG:  It's from the tax -- the

           25        1930's when the State was going through depression


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            1        and people didn't pay their taxes and it reverted

            2        to the State.

            3             CFO GALLAGHER:  And do you know --

            4             MS. ARMSTRONG:  So it's just been sitting in

            5        our inventory.

            6             CFO GALLAGHER:  Do you know the history of how

            7        long we've had it, since the '30's?

            8             MS. ARMSTRONG:  Since the '30's, yes, sir.

            9             CFO GALLAGHER:  And was the same family

           10        involved in this particular -- who owned it, do you

           11        know who owned it back then?

           12             MS. ARMSTRONG:  I don't know.  We'd have to do

           13        that research for you.  I do not know that.

           14             CFO GALLAGHER:  I mean, I'm just wondering if

           15        we've been holding it, you know, tax-free for them

           16        for --

           17             MS. ARMSTRONG:  I don't know.

           18             CFO GALLAGHER:  -- 70 years or it ain't so,

           19        and now we're going to sell it back to them for a

           20        heck of a lot more than they paid --

           21             MS. ARMSTRONG:  Right.

           22             CFO GALLAGHER:  -- in taxes if they'd have

           23        kept it.

           24             MS. ARMSTRONG:  Well, I'm looking for Scott. 

           25        Where are you?  Do we know that? 


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            1             No, we don't know that.

            2             CFO GALLAGHER:  I mean, we're selling 22 acres

            3        for $41,500.00.

            4             MS. ARMSTRONG:  Yes, sir.  But, I mean, it   

            5        is -- there is no other way around it.  I mean, we

            6        have looked, because I was more than willing to

            7        pull it if it turned out there was access or there

            8        was some other way to get that value up and I don't

            9        see another way to do.  It is an unusual situation

           10        with the access.

           11             CFO GALLAGHER:  Just to put it in comparison,

           12        we just bought .98 acres, less than one, for

           13        $268,000.00.

           14             MS. ARMSTRONG:  And that's down in    

           15        corkscrew --

           16             CFO GALLAGHER:  So, we're the high payers

           17        when we buy and we're the low payers when we --

           18             MS. ARMSTRONG:  But it's really not a fair

           19        comparison --

           20             CFO GALLAGHER:  I know.

           21             MS. ARMSTRONG:  -- because that is down --

           22             CFO GALLAGHER:  One's a swamp.

           23             MS. ARMSTRONG:  -- near I-75 and that land has

           24        increased in value 50 percent since we had that one

           25        appraised.


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            1             GOVERNOR BUSH:  You go, Eva.

            2             MS. ARMSTRONG:  A corkscrew.  Well, I'm just

            3        bing honest.  I mean, you know.  I think we ought

            4        to look at them in a situation, you know.

            5             GOVERNOR BUSH:  I'm on my best behavior, I'm  

            6         not --

            7             MR. GALLAGHER:  I guess I'm the bad guy on

            8        this one.

            9             MS. ARMSTRONG:  I know.

           10             GOVERNOR BUSH:  Yeah.

           11             MS. ARMSTRONG:  Well, if there were a way   

           12        to -- if I could tell you a way that we could get

           13        the value up on this, I'd tell we could get it up;

           14        and I just don't see any way to do it, you know.

           15             GOVERNOR BUSH:  The fact that you're thinking

           16        about it is a good encouraging step.

           17             MS. ARMSTRONG:  I know -- yeah. 

           18             GOVERNOR BUSH:  I like that.

           19             MS. ARMSTRONG:  Because -- and the others   

           20        were -- we've hired, you know, the private real

           21        estate marketing companies that we've hired on

           22        contract with State lands, we've got them taking

           23        each of the counties and the Murphy Act deeds and

           24        looking at how do we get the values up as we sell

           25        these properties.  But they're not attractive or we


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            1        would have sold them already, you know.

            2             GOVERNOR BUSH:  Is there a motion on this

            3        item, on this wonderful --

            4             CFO GALLAGHER:  Not yet.

            5             MS. ARMSTRONG:  Piece of property.

            6             GOVERNOR BUSH:  Maybe there's not a motion. 

            7             MS. ARMSTRONG:  Yeah.

            8             GENERAL CRIST:  Motion.

            9             GOVERNOR BUSH:  There's a motion.  Is there a

           10        second?

           11             COMMISSIONER BRONSON:  I'll second it.

           12             GOVERNOR BUSH:  Any other discussion?

           13             All in favor say aye. 

           14             GENERAL CRIST:  Aye.

           15             CFO GALLAGHER:  Aye.

           16             COMMISSIONER BRONSON:  Aye.

           17             GOVERNOR BUSH:  All opposed?

           18             MS. ARMSTRONG:  I have one more quick --

           19             GOVERNOR BUSH:  Hang on a second.  We're going

           20        to have -- we need to get the -- I never had this

           21        happen to me before.

           22             MS. ARMSTRONG:  Oh.

           23             GOVERNOR BUSH:  That's interesting.  Thank

           24        you.  Yes. 

           25             MS. ARMSTRONG:  One more quick thing.  We


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            1        brought posters for everybody, you can pick them up

            2        outside. 

            3             CFO GALLAGHER:  You didn't announce the

            4        outcome of the vote.

            5             MS. ARMSTRONG:  It has all the State Parks and

            6        State Forests as you go out the door.

            7             GOVERNOR BUSH:  Eva, the motion passes.

            8             MS. ARMSTRONG:  Oh, I'm sorry.

            9             CFO GALLAGHER:  He didn't get a chance to

           10        announce the outcome of the motion.

           11             MS. ARMSTRONG:  Oh, I thought he did when he

           12        said yes.  I'm sorry.  I just jump all over you

           13        sometimes, don't I?  I'm so sorry.

           14             One more time, we have this wonderful poster,

           15        everybody can pick it up on your way outside. 

           16        They're rolled up, just pick it up and walk out

           17        with it, okay.  It shows you all the State Parks. 

           18        I'm done.

           19             GOVERNOR BUSH:  What about Item --

           20             MS. ARMSTRONG:  Oh, 4 we have a deferral

           21        request for Item 4.

           22             COMMISSIONER BRONSON:  Motion to defer.

           23             CFO GALLAGHER:  Second.

           24             GOVERNOR BUSH:  There's a motion to defer and

           25        a second.  Without objection. 


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            1             GENERAL CRIST:  Question? 

            2             GOVERNOR BUSH:  Yes. 

            3             GENERAL CRIST:  Question.  It's my

            4        understanding on 4 that there hasn't been an

            5        appraisal since '99, could part of the motion, a

            6        friendly amendment to the motion be to get an

            7        updated appraisal.

            8             MS. ARMSTRONG:  I think that's one of the

            9        issues that the applicant wants to defer 4.  Would

           10        you like to hear from him?

           11             GENERAL CRIST:  Say again?

           12             MS. ARMSTRONG:  That's one of the reasons that

           13        the applicant has requested a deferral, so would

           14        you like to hear from him?

           15             GENERAL CRIST:  No, I'd just like an

           16        appraisal, that would be great, unless he wants to

           17        speak about it.

           18             MS. ARMSTRONG:  I think he'd probably like to

           19        speak about it then.

           20             GOVERNOR BUSH:  Why don't you wait till -- you

           21        want to speak about it?

           22             MS. ARMSTRONG:  We're just deferring it two

           23        weeks, so.

           24             GOVERNOR BUSH:  So, why don't you come, come  

           25        and --


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            1             MS. ARMSTRONG:  Speak about it then?

            2             GOVERNOR BUSH:  -- speak about it when, when

            3        it's an item on the agenda, how about that?

            4             GENERAL CRIST:  But in the interim can we get

            5        an appraisal?

            6             MS. ARMSTRONG:  It would take us longer than

            7        two weeks to get it appraised. 

            8             GENERAL CRIST:  I'm sorry?

            9             MS. ARMSTRONG:  It would take us longer than

           10        two weeks to get that appraisal done.

           11             GOVERNOR BUSH:  It would?

           12             MS. ARMSTRONG:  Oh, yeah.  I've tried my best

           13        to get appraisals done quicker.

           14             GENERAL CRIST:  So, how long does it take?

           15             MS. ARMSTRONG:  Forty-five days at least.

           16             GENERAL CRIST:  Forty-five days?

           17             MS. ARMSTRONG:  I have -- that's one

           18        profession I haven't been able to impress much yet

           19        with my desire to speed things up.

           20             GOVERNOR BUSH:  I thought that this was at the

           21        request of the applicant that we're doing this --

           22             MS. ARMSTRONG:  To defer it?

           23             GOVERNOR BUSH:  -- deferral?

           24             MS. ARMSTRONG:  Defer it two weeks, yes, sir.

           25             GENERAL CRIST:  Why would we just defer not


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            1        long enough to do what we'd like to have done?

            2             MR. PLANTE:  Governor, Members of the Cabinet,

            3        my name is Ken Plante, and I represent Alexander

            4        USA.

            5             The request to defer was to answer a couple

            6        of questions I didn't have answers to.  However, if

            7        there's going to be a motion to defer and get an

            8        additional appraisal, I'd like to address that,

            9        because that's something we don't want to do or

           10        limit the appraisal to the one little section

           11        that's being requested. 

           12             In 1999 -- I mean, I guess I'll withdraw the

           13        request for deferral if you want to hear it, and

           14        then I can -- if you want to request it. 

           15             In 1999 we brought this item before the

           16        Governor and Cabinet and it was approved.  It was

           17        for a spit of land --

           18             GOVERNOR BUSH:  This is going to take a long

           19        time.  This is the complicated --

           20             MR. PLANTE:  Yes, sir.

           21             CFO GALLAGHER:  It's submerged land.

           22             GOVERNOR BUSH:  Well, it's more complicated

           23        than that.

           24             MS. ARMSTRONG:  If I could, let me just

           25        suggest we defer it two weeks and hear the issue


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            1        then.  And we can't get an appraisal within two

            2        weeks.  It'll take 45 days to re-appraise it.

            3             CFO GALLAGHER:  The last time it was appraised

            4        was $800,000.00 and the purchase is 212, right?

            5             MS. ARMSTRONG:  Yeah.  It's 265 now.  But,

            6        again, we're getting into complicated matters and

            7        it'll take awhile --

            8             CFO GALLAGHER:  266.

            9             MS. ARMSTRONG:  -- and we're on a tight time

           10        frame here this morning.  So, if you wouldn't mind,

           11        Mr. Attorney General, would that be okay?

           12             GOVERNOR BUSH:  Well, let's make sure that you

           13        work with the Attorney General's staff about the

           14        concerns about it and all of our staff about the

           15        concerns --

           16             MS. ARMSTRONG:  Right.

           17             GOVERNOR BUSH:  -- about the appraisal.  And

           18        if it requires one, and you're comfortable with

           19        that, Ken, we could defer it until we got one.

           20             MR. PLANTE:  Yes, sir.  I will work with the

           21        staff.

           22             GOVERNOR BUSH:  All right.  Great.

           23             CFO GALLAGHER:  There is a lot of other legal

           24        issues, too.

           25             GOVERNOR BUSH:  There's a motion to defer.


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            1             Yeah, this a --

            2             CFO GALLAGHER:   It's got a lot to it.

            3             GOVERNOR BUSH:  If we had more time you-all

            4        might actually appreciate --

            5             CFO GALLAGHER:  You sit through one of these

            6        things.

            7             GOVERNOR BUSH:  -- the role, again, that we --

            8             CFO GALLAGHER:  We're eliminating the fun for

            9        you when we get into this kind of stuff.

           10             GOVERNOR BUSH:  There's a deferral and there's

           11        a motion to defer and a second.  Without objection

           12        the motion is deferred for two weeks. 

           13             And we appreciate you-all hosting us and thank

           14        you very much for coming to our cabinet meeting.

           15             MR. GALLAGHER:  Come on out to the agency

           16        fair, right out front. 

           17             ( Whereupon, the meeting was concluded at

           18   11:27 A.M.)









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            1                           CERTIFICATE

            2   STATE OF FLORIDA   )
            3   COUNTY OF LAKE     )

            4              I, Evelyn M. Andrews-Sarvis, Court Reporter,
                State of Florida at Large, and a Registered Professional
            5   Reporter, do hereby certify that I was authorized to and
                did report in stenotypy the above and foregoing
            6   proceedings, and that thereafter my stenotype notes were
                transcribed and reduced to typewriting under my
            7   supervision; and that the pages numbered 4 through 97,
                inclusive, contain a full, true and correct computer-aided
            8   transcription of my stenotype notes taken therein.


           10             I further certify that I am not a relative or
                employee or attorney or counsel of any of the parties, nor
           11   am I a relative or employee of any attorney or counsel
                connected with the action, nor am I financially interested
           12   in the action.


           14             Done and signed this 12th day of April 2004,
                in the City of Tavares, County of Lake, State of Florida.

           16                 _________________________________________
                              Evelyn M. Andrews-Sarvis, R.P.R., R.M.R.,
           17                 Certified Court Reporter










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