FLORIDA LAND AND WATER ADJUDICATORY
COMMISSION
BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST
FUND
STATE BOARD OF ADMINISTRATION
The above agencies came to be heard
before
THE FLORIDA CABINET, Honorable Governor Bush presiding, in
the
Cabinet Meeting Room, LL-03, The Capitol, Tallahassee,
Florida,
on the 11th day of May, 2004 commencing at
approximately
9:30 a.m.
Reported by:
KRISTEN L.
BENTLEY
Certified Court Reporter
ACCURATE STENOTYPE REPORTERS,
INC.
2894 REMINGTON GREEN
LANE
TALLAHASSEE, FL 32308 (850)878-2221
.
2
APPEARANCES:
Representing the Florida Cabinet:
JEB
BUSH
Governor
CHARLES H.
BRONSON
Commissioner of Agriculture
CHARLIE
CRIST
Attorney General
TOM
GALLAGHER
Chief Financial Officer
* * *
ACCURATE STENOTYPE REPORTERS, INC.
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3
I N D E X
FLORIDA LAND AND WATER ADJUDICATORY
COMMISSION
(Presented by TERESA TINKER)
ITEM
ACTION
PAGE
1
Approved
4
2
Approved
4
3
Approved
4
4
Approved
5
5
Approved
5
BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST
FUND
(Presented by COLLEEN CASTILLE)
ITEM
ACTION
PAGE
1
Approved
6
2
Approved
39
3
DEFERRED
40
4
DEFERRED
40
5
DEFERRED
41
6
Approved
41
7
DEFERRED
41
STATE BOARD OF
ADMINISTRATION
(Presented by COLEMAN STIPANOVICH)
ITEM
ACTION
PAGE
1
Approved
43
2
Approved
45
3
Approved
47
ACCURATE STENOTYPE REPORTERS, INC.
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FL LAND & WATER ADJUDICATORY COMM. - MAY 11,
2004 4
1
PROCEEDINGS
2
THE GOVERNOR: The next cabinet meeting will be
3 Tuesday, May 25th,
2004.
4
The Florida Land and Water Adjudicatory Commission.
5
CFO GALLAGHER: Motion on the minutes from March 9th.
6
GENERAL CRIST: Second.
7
THE GOVERNOR: Moved and seconded. Without
8 objection, Item 1
passes.
9
MS. TINKER: Item No. 2, recommend approval of the
10 proposed final rule
establishing the Pine Island Community
11 Development District
in Lake County.
12
CFO GALLAGHER: Motion on 2.
13
COMMISSIONER BRONSON: Second.
14
THE GOVERNOR: Moved and seconded. Without
15 objection, the motion
passes.
16
MS. TINKER: Item No. 3, recommend approval of the
17 proposed final rule
establishing the Arborwood Community
18 Development District
in Fort Myers.
19
CFO GALLAGHER: Motion on 3.
20
GENERAL CRIST: Second.
21
THE GOVERNOR: Moved and seconded. Without
22 objection, the item
passes.
23
MS. TINKER: Item No. 4, recommend approval of the
24 proposed final rule
establishing the Connerton West
25 Community Development
District in Pasco
County.
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FL LAND & WATER ADJUDICATORY COMM. - MAY 11,
2004 5
1
CFO GALLAGHER: Motion on 4.
2
GENERAL CRIST: Second.
3
THE GOVERNOR: Moved and seconded, without objection,
4 the item passes.
5
MS. TINKER: Item No. 5, recommend approval of the
6 proposed final rule
establishing the villages of Westport
7 Community Development
District in the city of
8 Jacksonville.
9
CFO GALLAGHER: Motion on five.
10
GENERAL CRIST: Second.
11
THE GOVERNOR: Moved and seconded. Without
12 objection, the item
passes.
13
MS. TINKER: Thank you.
14
THE GOVERNOR: Thanks, T-square.
15
16
17
18
19
20
21
22
23
24
25
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BOARD OF TRUSTEES - MAY 11,
2004
6
1
THE GOVERNOR: Board of Trustees.
2
MS. CASTILLE: Good morning, Governor, members of the
3 cabinet.
4
THE GOVERNOR: Good morning.
5
MS. CASTILLE: Item 1 is consideration of an option
6 agreement to acquire
perpetual conservation easement
7 within the Green Swamp
Florida Forever Project.
8
THE GOVERNOR: Is there a motion?
9
CFO GALLAGHER: Motion on 1.
10
GENERAL CRIST: Second.
11
THE GOVERNOR: Moved and seconded. Without
12 objection, the item
passes.
13
Yes, Treasurer.
14
CFO GALLAGHER: You know, before we get to the next
15 one, one of the
things that we talked about in the past --
16 and it's because the
next one is an option agreement for a
17 conservation easement
-- is spelling out what we're
18 getting, either what
they're retaining or what we're
19 buying for the money
that we spend -- we had a discussion
20 on that about a year,
about six, eight months ago. Where
21 are we on that?
22
MS. CASTILLE: Well, we have -- we did have that
23 discussion about a
year ago, I think it was. And
24 ultimately, it turned
out that we have not been very
25 successful in the
negotiations on conservation
easements
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1 with a conservation
easement that spells out exactly what
2 they are allowed to do
versus what they are prohibited
3 from doing. The
landowners believe that it's their land,
4 the underlying fee is
theirs, they have been good stewards
5 of it historically,
and that is consequently why we choose
6 a conservation
easement, because they have been good
7 stewards of it.
8
CFO GALLAGHER: Well, but they can sell it subject to
9 the conservation
easement. And at that point, we may not
10 have somebody that's
-- I mean, I agree with what you're
11 saying as far as past
owners. Most of them have been --
12 many of these lands,
I mean, Fisheating Creek, for
13 example, has been in
the family for -- probably when
14 Florida
started. So that family has been great.
15
But some of these other ones, somebody can buy the
16 property and have a
whole different idea what to do with
17 it than those that
hold it and that's where my concern has
18 been from the
beginning, not so much with the people we're
19 dealing with but
somebody down the road. So, I mean, you
20 can't do one that
says, by the way, this is the list of
21 things that happens
after they sell it. It's what do we
22 do in case that
happens.
23
THE GOVERNOR: You could do that.
24
CFO GALLAGHER: What happens if you sell it, sure.
25 That would be a
condition I'd like less as an owner than
I
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1 would -- just do it
right in the first place.
2
MS. CASTILLE: I think one of the things that we
3 struggled with is if
the property owner does decide to
4 sell the property what
value can they get out of it and
5 what use can they use
out of it. And what we're trying to
6 work -- one of the --
I think a solution to what you
7 suggested may be that
we have a -- that we become a player
8 in the sale of the
property so that there is an
9 understanding that it
is a conservation easement for
10 protecting that
property in perpetuity.
11
THE GOVERNOR: Treasurer Gallagher's point is right
12 on target. And
the fact that an owner would have
13 reluctance of putting
conditions on use for something
14 that, in effect,
we're paying for, I mean, it's a
15 conservation
easement. But remember, we're buying this at
16 anywhere from, what,
50 to 70 percent of value? The point
17 of this is to
conserve what they do now, not to allow any
18 potential other
uses. And if they have a problem with
19 that, then they don't
have to provide an easement to us.
20 And they don't have
to sell it. I'm not talking about
21 this specific piece
of property, by the way.
22
CFO GALLAGHER: That's why I brought it up before we
23 were on this
issue.
24
THE GOVERNOR: Ron, you want to speak? Come on up to
25 the microphone.
We're going to have a policy
discussion
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1 since there's nothing
on the agenda today.
2
MS. CASTILLE: There are some prohibitions on the
3 property and on some
of the leases we negotiate. For
4 instance, on both of
the two properties that we have,
5 there are prohibitions
against cutting cypress down.
6 There are prohibitions
on cutting hardwoods, specifically
7 cypress. There
are -- there's provisions for -- let me
8 see. On the
first one, there is a prohibition for mining
9 and excavation.
Prohibitions for a certain amount of
10 things that would
change the character of the land.
11
On the second one, there is an allowance for row
12 crops but on pasture
lands alone. So that the character
13 of the land remains
the same and the ecosystem that we
14 purchase the land for
that is a functioning ecosystem
15 remains the same.
16
THE GOVERNOR: So, in fact, you do have owners that
17 will be willing to
--
18
MS. CASTILLE: We do.
19
CFO GALLAGHER: Well, we did see a list -- I mean, on
20 this one, one of the
reasons I didn't bring it up on this
21 particular one is
that there are some, at least in my
22 review, are some
specific prohibitions like you mentioned
23 including commercial
water wells and trash dumping and
24 cutting, removing,
and mowing and spraying pesticides and
25 new construction of
any
--
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1
THE GOVERNOR: Got a prohibition of a fish pond
2 that's 160 acres?
3
CFO GALLAGHER: I didn't see any fish ponds but I
4 don't think they can
dig a hole so it's hard to have a
5 fish pond without
digging.
6
Then there is some permitted things. And so this one
7 is a little different
than what, at least I've seen given
8 to us in the past, the
one that's coming up.
9
THE GOVERNOR: Mr. Richman, would you like to speak?
10
MR. RICHMOND: It's Ron Richman and Item No. 2 is not
11 my item. But,
Mr. Gallagher, they have changed this a
12 lot. There are
-- there is a section of what you can do
13 and a section of what
you can't do and they pretty well
14 jive. And then
you have a baseline document which is done
15 after you see
it. But it draws out all this and you
16 can't -- for
instance, you can't change the roads in
17 there. You can
use the existing roads, jeep roads or
18 whatever. And
that is all done on a baseline document.
19
Then when they fly over it annually or go on the
20 property, they see
exactly and can compare and can come
21 back and have a
conversation with the owner. You will
22 have, for instance,
most of these leases, conservation
23 easements allow for
hunting. We know exactly where the
24 food plots are going
to be and that's where they got to
25 be. So it comes
out to baseline document. So it
really
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1 is pretty tight right
now.
2
THE GOVERNOR: Thank you.
3
MS. CASTILLE: Thank you, Ron.
4
THE GOVERNOR: Any other comments, conversation on
5 this important
subject?
6
COMMISSIONER BRONSON: Well, I would like, Governor,
7 if this appears to be
appropriate at this time, I just
8 want to make sure that
whatever agreements are set in
9 place, that it's
agreed to by the landowner at the time
10 these easements are
put in place and somebody doesn't come
11 in ten years from now
under a new administration or a new
12 leadership in DEP and
says, Well, we've decided now we
13 want to change all
this and we want to add some of these
14 other criteria to
this property.
15
Because once a person has put their property in
16 perpetuity in one of
these easements, knowing that they're
17 going to be able to
either raise cattle or whatever their
18 farming operation is,
and most of these are going to be
19 farms of some type,
or if they end up doing an easement on
20 the swamps and the
cypress ponds but yet they are doing
21 timber which is a
legitimate silviculture, agriculture
22 process, that they
don't start changing the rules after
23 the signature.
That's one of my biggest fears. If you
24 want agriculture to
stay in business, to keep open lands
25 and all this where
the State doesn't have to
buy
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1 everything, they got
to know they have the capability of
2 making a living.
Otherwise, they're going to unload. And
3 that's what's
happening right now, quite frankly,
4 Governor.
5
And I want the Cabinet to understand this and the
6 House and Senate and
newspapers and everybody in the state
7 of Florida,
agriculture is under big pressure right now.
8 And some of them have
decided to try to stay in business
9 and their family, do
conservation easements. Others have
10 been pressured by
three and four different provisions of
11 life. One is
environmental issues. One is trade issues
12 abroad that has
affected their businesses. And many times
13 that pressure has
caused these people to want to give
14 their land up to say,
I'm tired of it. I can't do it
15 under these
conditions.
16
And quite frankly, the provisions that was talked
17 about that I saw
some, I thought some real wrong reporting
18 on because I think
people got the wrong information on, is
19 these agriculture
enclaves, simply because on one hand,
20 yes, you like to keep
those open spaces. Well, if you do,
21 buy them and make
them parks.
22
But the point is, agriculture cannot be surrounded by
23 development and then
those people who move in say, I don't
24 want you to spray
your crops. I don't want you to put
25 this kind of
fertilizer on. I don't want you to do
all
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1 this. They
cannot survive in agriculture in the state of
2 Florida under those
conditions.
3
THE GOVERNOR: You want me to sign that bill?
4
COMMISSIONER BRONSON: Well, I can tell you right
5 now, I'd love to sit
down with you and really talk to you
6 about what's happening
to agriculture in this state. And
7 it's not a pretty
sight, especially for families.
8
Now corporations tend to handle things a little
9 different. But
farm families can't take that kind of
10 pressure.
They're just not making that kind of money in
11 agriculture to be
able to do that. So before people go
12 off and write these
stories about how bad it is because
13 some organization
came and talked to them about it, I'd
14 like for them to come
talk to us and let's sit down and
15 talk about the facts
of what's going on in agriculture in
16 this state. And
I think you'll see, as Paul Harvey said,
17 there's a whole rest
of the story here that isn't being
18 talked about.
19
THE GOVERNOR: Secretary, would you like to comment?
20
MS. CASTILLE: I agree with you, Commissioner.
21
CFO GALLAGHER: Good move.
22
(Laughter.)
23
MS. CASTILLE: I have spent the last month visiting
24 some farms and
talking with some of the folks who are
25 engaged in
agriculture and I went to, all day on
Saturday,
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1 I visited dairies in
the Suwannee area with my new pair of
2 dairy boots. So
I could visit your farm any time you'd
3 like now,
Commissioner.
4
There is a huge pressure on agriculture and we do
5 want to keep
agriculture in this state. In looking at
6 what other countries
do, the commissioner brings up a very
7 good point. When
we're looking at what other countries
8 do, other countries
subsidize their agriculture so that
9 they can keep those
open spaces. But I don't think that's
10 a policy we wanted to
engage in in this state. What we've
11 tried to do is to
keep agriculture in business and we've
12 tried to do that with
these conservation easements.
13
What we try to do is to have best management
14 practices engaged
upon when we have these conservation
15 easements and as we
move towards, I think, higher growth
16 in this state, we're
going to be faced with more of our
17 agriculture being
under pressure and so that is one of the
18 reasons why this
board has followed it a policy of
19 supporting
conservation easements and allowing them to, if
20 they're engaged in
ranching right now and there are -- and
21 there is pasture
land, to take that pasture land and to
22 move it into row
crops.
23
And we talked about protecting the land from
24 pesticides as much as
possible. And row crops, I believe
25 you're working on
best management practices for row
crops
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1 now. Am I right,
Commissioner?
2
COMMISSIONER BRONSON: (Nods affirmatively.)
3
MS. CASTILLE: And we're working together with the
4 commissioner to
accomplish those.
5
COMMISSIONER BRONSON: To follow up, and I understand
6 the challenges that
DEP is under too. But let me tell you
7 that right now cattle
prices are pretty good. We usually
8 run about a one in
seven year cycle. And probably four of
9 the seven years are
not good at all. As a matter of fact,
10 you're at least at
break even or maybe a little worse. So
11 people have to look
for other avenues to go to.
12
You've got a piece right now that you can put under
13 conservation
easement, there may be cattle on it. But 20
14 years from now when
the dynamics change again in the world
15 marketplace, they may
need to go to row crop or something
16 to be able to stay in
agriculture business with part of
17 their pasture
land. They should have some availability to
18 do that or you're not
going to have agriculture sustain
19 itself and stay in
business.
20
You have to be able to fluctuate with the market
21 pressures of the
world. It's -- agriculture is one of the
22 few places -- few
industries left in this country that is
23 an absolute supply
and demand issue. If the demand is not
24 there, you're not
going to get anything for your crop,
25 whatever that crop
is. And you're at the mercy of
the
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1 markets of the
world. And so if you want people to be
2 able to do this and
stay in business and put these
3 conservation easements
on -- and let me tell you about how
4 this is shaping
up.
5
You got conservation easements being put in today by
6 families who, in their
opinion, will stay in agriculture
7 forever given the
opportunity to make any kind of living.
8 But what's going to
happen is when that conservation and
9 perpetuity goes into
place, then the children that come up
10 and the IRS and the
taxes due after the head of the family
11 dies, all of that
hits at the next generation. Where it
12 really hits is the
second generation after this easement
13 goes in because the
grandkids are going to get hit again
14 with what to do and
how they're going to make a living on
15 that same property
under certain conditions.
16
That's why, Madam Secretary, I want to make sure
17 nobody is playing
around with what happens over the next
18 20 to 30 years when
these successive generations on these
19 family properties
take over. Because if you start
20 limiting what they
can do in their own family agriculture
21 operations, you have
destroyed the ability to make a
22 living.
23
CFO GALLAGHER: If they got paid --
24
THE GOVERNOR: Exactly.
25
CFO GALLAGHER: They are getting paid now. What
if
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1 they sold their
land? The kids aren't going to be raising
2 anything.
3
COMMISSIONER BRONSON: No, no. But you don't
4 understand here.
What's happened is in these agricultural
5 situations, they are
giving or taking a conservation
6 easement which is
being paid for by the State, that's
7 true. And it
says whatever this area is, based on the
8 conditions set forth
in that conservation easement, you
9 will never be able to
develop any of that land. They
10 understand
that. That part they understand.
11
What they are having a problem with and what they are
12 afraid of is coming
back and putting regulations on the
13 land they can farm
because it's next to the land you gave
14 a conservation
easement on and now you've changed the
15 whole scope --
16
THE GOVERNOR: Commissioner, if a conservation
17 easement is granted,
you can't -- I guess theoretically,
18 another part of DEP
could come back and hammer them or a
19 law could be passed
that could provide some burden for
20 some use that might
be accepted in the easement. But the
21 easement itself can't
be renegotiated on a one-sided way.
22 It's a transfer of
title. So your direct concerns, I
23 think, are -- will be
taken care of by the legal document
24 once it's
signed. Your point though, in general, is a
25 good one. As a
state and as a nation, we're putting
huge
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1 pressures on
agriculture.
2
And then the response, of course, is the government
3 comes in to provide
more subsidy and more -- except we
4 don't get as much
subsidy as the other farmers in other
5 parts of the
country. But -- so we're getting government
6 more involved through
more regulation, through more rules,
7 and then through more
subsidies, and what was probably the
8 greatest, most
efficient production machine ever created
9 since the beginning of
mankind now has got huge, huge
10 problems.
11
CFO GALLAGHER: Here's my problem. What these
12 easements do is they
list prohibited uses and permitted
13 uses. And then
anything -- and correct me if I'm wrong --
14 anything that's not
specifically mentioned ends up
15 being -- sort of
comes out of the purposes statement and
16 you sort of refer to
that and, I guess, have your
17 arguments on whether
it is or whether it isn't based on
18 the purposes
statement.
19
MS. CASTILLE: Right.
20
CFO GALLAGHER: What I believe that we should be
21 paying for and
getting is that the permitted uses are
22 listed. In
other words, we're buying all the uses except
23 what we're going to
permit them to do on their property
24 because we're paying
them for that and we should list what
25 those things
are. If it's farm, then it's farm. I
think
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1 they ought to get to
farm.
2
If they're allowed to take, you know, grow pine trees
3 and cut them, that's
fine. Whatever we negotiate. But
4 whatever we don't
negotiate is prohibited because
5 otherwise, down the
road, things happen that weren't
6 expected to have
happened. And that's what ought to be
7 negotiated. What
do you want to do with your property?
8 Well, I want to do
this, this, and this. I want to make
9 sure that my family
down the road can do this, this, and
10 this. And
either that's agreeable to us or it's not. And
11 if is, then we pay
them and we get the conservation
12 easement. If
it's not, then we probably shouldn't be
13 buying it.
14
MS. CASTILLE: Well, what I'm hearing is I'm hearing
15 two different points
of view coming from you,
16 Commissioner --
Treasurer Gallagher, and you, Commissioner
17 Bronson. I'm
hearing, Commissioner Bronson, that what you
18 would like us to do
is to provide a more flexible way for
19 people to make a
living in the future for farming
20 practices -- with
farming practices.
21
And commissioner -- Treasurer Gallagher, what I'm
22 hearing you say is
that you rather us specifically say you
23 can engage in row
crops -- I mean, we take all of the
24 development rights
away. What ends up not being
25 negotiated is
specific agricultural
activities.
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1
CFO GALLAGHER: Well, if that's all you're talking
2 about, then you can
allow just specifically say what
3 agricultural
activities are allowed. I mean, I'm not
4 going to say what they
are. They can be any agriculture
5 activity. But
the idea is that's what the owner should
6 look if they are
worried about the future of their family
7 and what they might
do, they ought to put language in
8 there that's going to
protect that. And if that's fine
9 with us, that's what
we agree to as opposed to leaving it
10 some nebulous thing
that is decided under a purpose
11 statement.
12
MS. CASTILLE: Well, I think the concern that we have
13 and the difficulty
that we have to overcome is trying to
14 determine what the
agricultural market is going to be in
15 the next ten years or
five years or, you know, 15 years.
16
CFO GALLAGHER: Well, yeah, but --
17
THE GOVERNOR: We're not talking -- saying you're
18 prohibiting --
19
CFO GALLAGHER: I mean, I'm not saying you can only
20 grow soybeans.
I mean, my goodness, let them grow
21 whatever they want to
grow. I'm not against it. I don't
22 have a problem with
that. But I think we ought to let --
23 that should be the
negotiations, you know, what do you
24 want to do. Let
them tell you.
25
THE GOVERNOR: That's pretty much, just listening
to
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1 Colleen talk, that's
pretty much what is going on right
2 now. I think
they did listen to you the last time we had
3 this --
4
CFO GALLAGHER: Well, the difference is they're doing
5 permitted uses.
Actually, they are doing what's
6 prohibited and what's
permitted, they're spelling those
7 out. And then
they are referring to a purpose statement
8 as opposed to what I
would like is, Here are the permitted
9 uses and everything
else is not.
10
THE GOVERNOR: Representative, would you like to say
11 something? Good
morning.
12
REPRESENTATIVE SAUNDERS: Good morning, Governor and
13 cabinet. Dean
Saunders, Saunders Real Estate.
14
THE GOVERNOR: How come you guys are here, by the
15 way? Is this
your item?
16
REPRESENTATIVE SAUNDERS: Actually, I have -- one of
17 the conservation
easements you're considering today is one
18 of my clients.
19
THE GOVERNOR: Okay. Thank you.
20
REPRESENTATIVE SAUNDERS: Typically, Treasurer
21 Gallagher, what the
Department has done in the past is
22 provided some, in the
improved pasture areas, those areas
23 that are already
disturbed, allowed the farmer, a rancher
24 to have, say, 25
percent of that area that in any one
25 calendar year he
could either sod and/or farm. I
will
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1 tell you that a lot of
what the ranchers will do is
2 typically use -- they
may -- you know, money may be tight
3 or they may be wanting
to renovate their pasture. You
4 know, if Bahia sits
around for seven or eight years, it
5 gets a little stale
and it needs to be renovated. A lot
6 of times they'll go in
and plant a hundred acres of
7 watermelons, sod the
grass, plant the watermelons behind
8 it and plant grass
behind that because it's good and
9 fertile then and it's
just part of a pasture replenishing.
10
And I can tell you that I have seen some concern
11 expressed from y'all
as to the ability to row crop. And
12 that has expressed
itself vis-a-vis your department, as it
13 should, and in their
negotiations with clients of mine who
14 are interested, maybe
not in really row crop farming
15 necessarily, but
perpetuity is forever. And, you know,
16 they've seen up and
down markets and they want to preserve
17 as much latitude as
possible to earn a living. And, you
18 know, a 25 percent
restriction is not particularly that
19 great. You
know, 75 percent of it's got to remain in
20 grass while the other
25 percent of it could either be cut
21 sawed or row
cropped.
22
I'd submit to you that I think that's very
23 reasonable.
I've not found any of my clients who've been
24 interested in doing
more. Frankly, if they are running a
25 cattle operation,
they don't have enough pasture,
you
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1 know, to run their
cattle on if they are doing more than
2 that, they'd have to
cut back on their herd, so. And I
3 would tell you that on
the permitted uses, again, just
4 philosophically, I
understand where you're coming from but
5 understand where my
clients are coming from. You know,
6 they are going to be
selling, you know, the goody (sic) to
7 their land.
8
And you also need to understand the number one reason
9 my clients do this is
not because of the money, it really
10 is because they want
to protect the land. And I always
11 thought it would be
-- you know, the number one reason
12 would be they want
the money. The money is certainly an
13 interest. I'm
working with one right now who's primarily
14 interested in getting
the property transferred from his
15 mom and daddy to
him. Okay. And he's got siblings and
16 all that.
17
So it needs to be treated fairly. That's his number
18 one reason to do
it. He wants the land protected but it
19 also affords him the
ability to continue his lifestyle.
20 It's an estate
planning issue for him. There's a lot of
21 that going on.
22
But the number one reason they want to do it really
23 is to protect the
land. But they also don't want to end
24 up doing something
then later on their kids end up having
25 to declare bankruptcy
because they don't have
the
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1 flexibility to make a
living off the land. So I would
2 submit to you,
particularly as to the row crop issue, that
3 I think your
department has done a good job in trying to
4 negotiate a reasonable
amount that affords somebody the
5 flexibility to make a
living and affords you the
6 protection that you're
looking for.
7
CFO GALLAGHER: Wouldn't the farmer be better off
8 having it spelled out
as to what's permitted as opposed to
9 leave it nebulous so
down the road somebody can't come
10 back to the next
buyer and say, By the way, we're not
11 looking at it that
way anymore, you can't do that? I
12 mean, I think it's
good for both sides.
13
REPRESENTATIVE SAUNDERS: The problem with that,
14 Treasurer Gallagher,
is, from my perspective, the
15 agriculture market
will change. There will be new crops.
16 We'll be doing new
things in Florida. I mean, it just
17 will change.
And so if you allow certain row crop
18 farming -- by the
way, that typically leaves out perennial
19 crops, citrus and
those kinds of things that are there
20 permanently. So
that is one thing, again, that your staff
21 has done. And
most of my clients are willing to give up.
22 In some cases,
they've actually negotiated, you know, a
23 certain amount of
acreage that could be planted in a
24 perennial crop.
25
But I think as long as you allow some row
cropping
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1 and allow the
flexibility for the landowners to figure out
2 what crops he might
plant, I think you mentioned that you
3 weren't really
interested in saying they only could plant
4 soybeans.
5
CFO GALLAGHER: No, not at all.
6
REPRESENTATIVE SAUNDERS: Giving them the
7 flexibility.
8
CFO GALLAGHER: I want them to have that kind of
9 flexibility but I also
want them to know and us to know
10 what that is.
11
THE GOVERNOR: General Crist.
12
GENERAL CRIST: Thank you. I just had a question, I
13 guess to
Colleen. And I think the Treasurer raises a very
14 good point. It
seems to me, you know, what's the point in
15 having conservation
easements at all? What's the goal?
16
MS. CASTILLE: The goal is to keep the land in the
17 stewardship in which
we found it which is generally
18 excellent
stewardship, otherwise we don't engage in a
19 conservation easement
with the owner. And to allow the
20 owner to make -- the
flexibility to have a good living and
21 to not dictate
that. I mean if you take --
22
GENERAL CRIST: I mean, are we trying to preserve
23 land or are we trying
to allow farming or don't we know?
24
MS. CASTILLE: Both. We are trying to do both.
25
GENERAL CRIST: Seems like we're kind of
half
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1 pregnant on this thing
to me.
2
MS. CASTILLE: And we are. And that is what we are
3 trying to do. It
is a policy of the governor and cabinet
4 that you have
determined that --
5
GENERAL CRIST: Well, it's legislative too, isn't it,
6 Colleen?
7
MS. CASTILLE: Conservation easements were actively
8 spelled out in the
Florida Forever Program.
9
THE GOVERNOR: Also we don't have -- it's not our
10 money so it's easy to
spend 300 million a year for this,
11 100 million a year
for that. And we're all proud we're
12 doing it, but it's a
lot of money. We're buying more land
13 than any government
entity in the United States, probably
14 in the world.
15
COMMISSIONER BRONSON: More than the United States in
16 general.
17
THE GOVERNOR: More than the federal government.
18 This is a way to
expand, to leverage a good public policy
19 which is to instead
of buying something for 100 percent or
20 98 percent of
appraised value, we buy it for 60 percent.
21 And it preserves a
way to allow people to manage their
22 properties far better
than the State could ever do.
23
To me it's a win/win. And we've expanded it
24 dramatically, this
cabinet has, as a question of good
25 policy and I think we
should continue to do
it.
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1
And Treasurer Gallagher's concern, both your
2 concerns, are right on
target. And I think actually the
3 middle ground is what
we're doing now may accomplish --
4 achieve the objective
of mitigating both your concerns.
5 Hate to be the guy in
the middle (laughter), it's making
6 me nervous.
7
COMMISSIONER BRONSON: Governor, it is a
8 philosophical debate
and hopefully based on science and
9 technology as the
process grows. And I understand where
10 the treasurer is
coming from. But if you were to try to
11 write in what is
permissible today as new technologies are
12 being developed by
the universities and by the federal
13 government and other
people as to what you can use and
14 can't use and how
you're going to control it under best
15 management practices,
the perfect example I can give you,
16 and all the horse
organic matter I've been reading and
17 hearing about the
dairies in the Suwannee River area, and
18 I happened to see
some editorials indicating that effluent
19 was flowing directly
into the Suwannee River out of these
20 dairies. There
is nothing further from the truth of what
21 I saw in those
articles. Someone has got the idea based
22 on somebody's
conversation that's going on. It's not
23 going on.
24
As we have developed best management practices, we
25 have cut down in that
area. Because of a
voluntary
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1 program, we're ahead
of schedule on the federal
2 government's Clean
Water Program to clean waters in those
3 areas to keep nitrogen
and other things out of that water
4 and it's not all
coming from agriculture. You know, the
5 16 1/2 million people
who live in this state are part of
6 the problem.
It's not all agricultures. So what I'm
7 getting to is, I've
already seen this type of back and
8 forth comments about
agriculture is the big bad polluter
9 when actually
agriculture is so far ahead of the general
10 public in trying to
stop runoff and so forth as to the
11 best management
practices put into place.
12
As new best management practice come on line,
13 development by
universities and others, we want
14 agriculture to adopt
those. We put that in our water
15 policy for
agriculture, that's in there. We have asked
16 that our agriculture
people, as they can develop and adopt
17 these new programs,
to add that so that we are ahead of
18 schedule on doing our
share of stopping pollution from
19 going into the
rivers, from causing major problems. And
20 I, you know, it goes
back to what the Treasurer wants do.
21 If you say today here
are the things that we're going to
22 allow you to do and
something new is developed that says
23 you can do another
crop, another program in the next 30
24 years, that may be
doable, since it's not written in
25 there, you can't do
it. And I don't want to limit
within
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1 the scope of working
with DEP -- and here's something else
2 I don't want. I
don't want a staff person for DEP who
3 does not have the
background in agriculture and
4 agriculture production
and fertilizers and chemicals and
5 all the things that
when I graduated from school I had to
6 take all those science
courses that included chemistry and
7 water hydrology and a
number of things.
8
I don't want somebody at DEP who's a regulator
9 saying, I don't think
that looks good so we're not going
10 to allow this.
I want it to be based on factual science
11 which means we need
to be talking between our department
12 of agriculture and
our chemists and our people who are
13 qualified in that
field talking with DEP to make those
14 decisions, not having
someone in DEP make it without any
15 conversation with our
department whatsoever on those
16 issues.
Because, to me, you can't make a justifiable
17 position by taking
one side without all the facts behind
18 it. And so if
we're going to do this, and I agree,
19 Treasurer, if you're
going to pay this kind of money from
20 the State for
conservation, you want to make sure nobody
21 is violating the
conservation agreement. But the point is
22 you also don't want
to limit that family who's giving up
23 that property their
ability to make a living without
24 either the State
coming in and finish buying that property
25 or something
happening there so that that family
will
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1 survive in agriculture
if they wish to do so.
2
THE GOVERNOR: Treasurer Gallagher?
3
CFO GALLAGHER: I think we can get where we both want
4 to go. I don't
know that there's anything that stops this
5 cabinet or future
cabinets from looking at a conservation
6 easement and saying
what they believe it says they can do
7 or can't do or even
for that matter changing it at the
8 request of the other
party.
9
MS. CASTILLE: The conservation easements are not
10 unilateral.
They are signed by both parties.
11
CFO GALLAGHER: And can be changed by both parties.
12
MS. CASTILLE: Well, if the landowner doesn't want to
13 change them.
14
GENERAL CRIST: Only with mutual consent.
15
CFO GALLAGHER: Exactly.
16
MS. CASTILLE: Right.
17
CFO GALLAGHER: And so who's going to speak for
18 future
cabinets? I don't certainly have a problem with
19 spelling out in a
conservation easement that we can look
20 at through the
department requests for different crops or
21 different practices,
best practices that have been agreed
22 to by the normal way
they do them through the
23 universities, et
cetera, that can be brought, you know, in
24 the future to a
cabinet at the request of the landowner I
25 don't have a problem
with those kinds of things. I
just
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1 think we ought to be
specific about them instead of having
2 it open to a purpose
statement. That's where I'm coming
3 from.
4
THE GOVERNOR: We don't have any -- Secretary, we
5 don't have any -- do
we have any litigation right now
6 based on
interpretation of conservation easements? Do we
7 have any
disputes? Is there any concerns? I mean, we're
8 talking this is a
policy discussion about the future as we
9 expand this
practice. But are there any -- do we have any
10 practical real-world
examples other than Dean mentioned
11 perhaps in the
negotiations there may be these come up and
12 it may impact the
signing of the easement itself. But do
13 we have any problems
right now?
14
MS. CASTILLE: I have people shaking their head yes
15 over here and people
shaking their head no over here.
16 (Pause.) Not in
Florida.
17
CFO GALLAGHER: Not in Florida. That would lead one
18 to believe --
19
MS. CASTILLE: What is the problem?
20
MS. STOCKWELL: The litigation we've seen -- I'm
21 Sandra Stockwell, I'm
with the office of general counsel
22 at DEP. The
litigation we've seen is coming out of the
23 Northeast and what
we're learning from that litigation
24 currently simply is
that a conservation easement will be
25 enforced if the
landowner has given away in
the
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1 conservation easement
a right, the courts will enforce
2 that against
them. So that's what we're learning in the
3 current
litigation. But we haven't had any in Florida and
4 none surrounding this
issue.
5
CFO GALLAGHER: Well, see, that's the reason I want
6 us to be specific as
to what we bought. Because that's --
7 if we're not specific,
then the courts can make a decision
8 on what we bought for
us. And that's why I'm pushing for
9 more specifics than
these. And I'm not saying what they
10 ought to be. I
just want the money we pay to be equal to
11 what we are getting
and have it be specific. And I think
12 if do have some court
cases, that is going to be an
13 important part of
it.
14
THE GOVERNOR: Why don't we do this. See if this --
15
CFO GALLAGHER: We've pretty much beaten this up.
16
MS. CASTILLE: Governor, may I make --
17
COMMISSIONER BRONSON: Really, the discussion has
18 been great because it
shows that there is a pull and tug
19 on this issue as to
what's right and what's wrong and
20 what's in the
middle. And what we've got to determine is
21 what's best based on
the leases, based on the land and
22 based on Florida's
future, however long that's going to
23 be. And there's
only one probably that's going to be able
24 to determine that and
we don't have direct contact with
25
him.
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1
But the fact of the matter is we've got to be able to
2 determine and quite
frankly even though we're putting
3 cypress swamps in all
these things, in these easements,
4 and saying, You cannot
disturb it, what if you have an
5 invasive species that
goes into these swamps -- and by the
6 way, in central
Florida we already have the old world vine
7 that's killing and
about to kill off trees by the
8 thousands if we're not
very careful here -- to go in and
9 take care of those
problems. You're going to have to go
10 into those areas and
disturb them based on an agreement
11 you said you weren't
going to do just to do the job of
12 taking care of
invasive species.
13
CFO GALLAGHER: Those things should be able to be
14 approved by the
Department or by this --
15
THE GOVERNOR: Why don't we do this --
16
COMMISSIONER BRONSON: That's why flexibility needs
17 to be in there.
18
CFO GALLAGHER: I'm not against being able to change
19 an agreement that's
been agreed to by two parties. But
20 that has to be agreed
to by the two parties.
21
THE GOVERNOR: Treasurer, how about this for a
22 suggestion. How
about if you get someone from your staff
23 and, General, if you
would like to do so as well and if
24 our team wants to
volunteer, they can as well.
25
CFO GALLAGHER: Don't forget
Bronson's.
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1
THE GOVERNOR: No, he's the big dog here. Get your
2 guys and let's see if
we can create a template, see what's
3 wrong with what we
got. Because I'm not sure it's
4 necessarily -- it may
be the best of all worlds. But
5 let's thoughtfully
attempt to create a template to make it
6 easier for the
Department to deal with your concerns,
7 Commissioner, and deal
with yours, Treasurer, to see if
8 it's possible to have
-- now, that will be adjusted based
9 on each property being
unique and different. But maybe we
10 could look at the
standard starting point, see if it needs
11 to be adjusted, to
take into consideration that we're
12 using this tool now
far more than we did when the document
13 was probably
created. Does that make sense?
14
CFO GALLAGHER: My guess, my hope is that the
15 Department is using
some kind of a template to do this as
16 it is. So we
ought to start with what -- we should
17 understand what
theirs is to begin with instead of
18 reacting to it, which
I'm admittedly doing. And if we got
19 in the beginning and
understood exactly what the template
20 is and everything
else, everybody would be happy.
21
THE GOVERNOR: That's kind of what I was saying.
22
CFO GALLAGHER: You're right.
23
MS. CASTILLE: Historically, we did start with a
24 template. Our
first conservation easement was with the
25 Lykes brothers and we
specifically had a
conservation
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1 easement that did what
you are asking, Treasurer.
2
CFO GALLAGHER: Yes, you did.
3
THE GOVERNOR: Well, that was a unique conservation
4 easement. That
was the mother of all conservation
5 easements.
6
MS. CASTILLE: Here's what's happened on the ground
7 with our acquisition
agents. Keep in mind that the folks
8 we're generally buying
conservation easements from are
9 folks who've have been
in agriculture in this state for a
10 very long time.
And I don't mean any offense by this, but
11 this is a group of
people who generally say, DEP, leave us
12 alone. We
really don't want you here. We don't want you
13 walking on our
property.
14
THE GOVERNOR: Colleen, there are a few people
15 outside the
longstanding ranchers and farmers of the state
16 that believe the same
thing.
17
MS. CASTILLE: Yes.
18
(Laughter.)
19
CFO GALLAGHER: Probably 99 percent.
20
THE GOVERNOR: It's the nature of your job. Don't be
21 offended by that.
22
MS. CASTILLE: But the point is is that we just
23 engaged in
negotiations with a number of property owners.
24 We are successful in
40 percent of those negotiations, in
25 part because we have
been more flexible on
our
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1 conservation
easements. When we go to a property owner,
2 we begin negotiations
and we say, Here is what we will
3 allow you to do on
your property. They're offended by
4 that.
5
CFO GALLAGHER: Why would it be: Here's what we're
6 not buying from
you. In other words, we're paying you 50,
7 60 percent of the
value of the property. Here's what
8 we're buying.
Here's what we're not buying. So you get
9 to keep what we're not
buying. I mean, that's really what
10 we're doing.
This is what we're buying. And that's sort
11 of where I'm coming
from.
12
MS. CASTILLE: That's what we're doing.
13
CFO GALLAGHER: All right. Well, we'll look at it.
14
MS. CASTILLE: Mr. Draper has asked to respond on
15 this issue.
16
THE GOVERNOR: Mr. Draper, and then we'll move on
17 maybe to the rest of
the agenda.
18
MR. DRAPER: Eric Draper with Audubon. I wanted to
19 add one other point,
which the Legislature passed
20 legislation a few
years ago dealing with this issue that
21 specifically said
there is a distinction between a
22 conservation
easement, as you're doing under Florida
23 Forever, and an
agricultural conservation easement. As
24 I've listened to this
debate -- which has been very good,
25 by the way -- it
seems to me that you might want
to
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1 include in your
investigation looking at that other type
2 of easement that was
created under 570 which would allow
3 specifically for an
easement intended to protect the
4 agricultural values on
the land but also protect the
5 wildlife watershed
values as opposed to the more
6 environmentally based
traditional conservation easement
7 you've been doing
under Florida Forever.
8
You know, there's different tools you can develop for
9 different outcomes
that you want. And I think as we've
10 looked at the loss of
over 150,000 acres a year,
11 agricultural land
over the past several years, kind of
12 anticipating more of
that in the future, in some cases you
13 want to do a
conservation easement to protect the
14 environmental values
and in some cases you want a
15 conservation easement
to protect the agricultural values
16 where that is an
important thing to do.
17
Typically, an agricultural-based conservation
18 easement is going to
cost less to the taxpayers but allow
19 more economic
activity on the land than a more traditional
20 environmental-based
conservation easement. Anyway, those
21 are found within the
statutes right now. And,
22 Commissioner Bronson,
you may remember that you published
23 a report on this a
few years ago talking about protecting
24 world lands.
It's just as important to protect those
25 agricultural values
as it is to protect the
environmental
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1 values. Thank
you.
2
COMMISSIONER BRONSON: Governor, if I might. Eric,
3 out of that 150,000
acres, how much of that became state
4 land?
5
MR. DRAPER: That's conversion to agriculture
6 according to the
University of Florida study. I think the
7 actual rate is
increasing. And most of that is the kind
8 of landscapes we want
to protect in the state. It's ranch
9 land and
timberland. But that's actual conversion to
10 agriculture, not
conversion to public land, public
11 ownership.
12
THE GOVERNOR: Conversion from agriculture?
13
CFO GALLAGHER: No, to.
14
MR. DRAPER: Conversion from agriculture to
15 development.
16
CFO GALLAGHER: That was strictly at the development
17 figures, not what the
state buys for conservation land and
18 taken out of
agriculture.
19
MR. DRAPER: No, that's the development figure.
20 That's conversion
from agriculture to development. And
21 there's updated
statistics on that that was just released
22 by the University of
Florida a few months ago. I just
23 don't have those
numbers at hand. But the rate of loss to
24 the agricultural land
is fairly significant. And I think
25 what you want to look
at here are two issues. One
is
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1 protecting the
environmental values that are on the lands,
2 that's very important,
Florida Forever. But you also want
3 to look at the place
where you've got important
4 agricultural features
that you want to maintain also. I
5 would point
specifically, Commissioner Bronson, to your
6 ranching economy which
is a very, very important part of
7 Florida's economic and
cultural history. And that is
8 vanishing very, very
quickly.
9
COMMISSIONER BRONSON: For a number of reasons which
10 I gave earlier,
that's the reason why we need to work
11 these issues out or
you're going to lose more of it. And
12 we're not going to be
able to save it even under
13 conservation
easements if we're not careful.
14
THE GOVERNOR: Okay. Where are we?
15
MS. CASTILLE: We're on Item No. 2, which we --
16
CFO GALLAGHER: Item 2.
17
THE GOVERNOR: Do we need a motion?
18
CFO GALLAGHER: Motion on 2.
19
COMMISSIONER BRONSON: Second.
20
THE GOVERNOR: Moved and seconded. Without
21 objection, the item
passes. Thank you, gentlemen.
22
Item 3.
23
MS. CASTILLE: Item 3 is -- we're withdrawing this.
24 We've got a couple of
problems on boundary amendments and
25 some lease confusions
on the property. So we'd like
to
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40
1 defer it until we get
those worked out.
2
COMMISSIONER BRONSON: Governor, I'd like to
3 recommend that we
defer this to the June 24th meeting
4 instead of withdrawing
it, using it as a deferral to
5 June 24th so they can
work on a number of issues that they
6 are trying to work
out.
7
CFO GALLAGHER: Second.
8
MS. CASTILLE: Commissioner, I'd like to ask that we
9 defer it until August
because we won't be able to get
10 these worked out by
June. We've got to go through some
11 title searches and
straighten out some --
12
COMMISSIONER BRONSON: Then I will amend it to
13 August -- the first
meeting in August.
14
MS. CASTILLE: The first meeting in August.
15
CFO GALLAGHER: Second.
16
THE GOVERNOR: There's a motion to defer to the first
17 meeting in August and
a second. Without objection the
18 item passes -- or the
item is deferred.
19
CFO GALLAGHER: Motion to defer Item 4 to June 24th.
20
COMMISSIONER BRONSON: Second.
21
THE GOVERNOR: There's a motion to defer Item 4 until
22 June 24th and a
second. Without objection, the item
23 passes.
24
CFO GALLAGHER: Motion to withdraw Item 5.
25
GENERAL CRIST:
Second.
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1
MS. CASTILLE: Again, Item 5, the applicant has asked
2 to defer it until June
24th.
3
THE GOVERNOR: There's a motion to defer until
4 June 24th and a
second. Without objection the motion
5 (sic) is deferred.
6
MS. CASTILLE: Item 6 is an application for the
7 conveyance of some
formerly submerged lands and the
8 acceptance of the
donation of two parcels of privately
9 owned lands.
10
CFO GALLAGHER: Motion on 6.
11
COMMISSIONER BRONSON: Second.
12
THE GOVERNOR: There's a motion and a second.
13 Without objection,
the item passes.
14
CFO GALLAGHER: A motion on 7 to defer to May 25th.
15
THE GOVERNOR: Or April 29th -- oh, yes.
16
COMMISSIONER BRONSON: Second.
17
THE GOVERNOR: There's a motion to defer until
18 May 25th, Item 7, and
a second. Without objection, the
19 motion passes.
20
Anything you want to say or do you want to be quiet
21 about it?
22
MS. CASTILLE: I'd like to be quiet about it.
23
THE GOVERNOR: All right.
24
MS. CASTILLE: Thank you.
25
THE GOVERNOR: I just -- this is a place where
the
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1 Commissioner, I think
is -- Commissioner Bronson has been
2 justifiably making the
point that there needs to be
3 greater cooperation
with his department and the Department
4 of Environmental
Protection on issues related to
5 agriculture and the
impact on farming and ranching. I
6 would urge, similarly,
that as it relates to some of these
7 issues where there is
a clear established policy, in this
8 case, the restoration
of the Everglades, that we work
9 together as a team as
well.
10
The stumbling block on this property is there is a
11 commercial mining
operation which may or may not have all
12 of the proper
permits, leave that for someone else to
13 decide. But if
this was a high priority as it was
14 obviously a huge
complicated purchase of all this land,
15 then we need to work
together and anticipate these things
16 a little better
too. That's just an editorial comment.
17
MS. CASTILLE: Thank you, sir.
18
THE GOVERNOR: There is a -- we already did the
19 motion to defer.
20
MS. CASTILLE: We did. That's the end of our agenda.
21
THE GOVERNOR: Thank you. You weren't counting on
22 spending so much time
with us today, were you, Colleen?
23
MS. CASTILLE: I wasn't but it's always fine.
24
25
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STATE BOARD OF ADMINISTRATION - May 11,
2004 43
1
THE GOVERNOR: State Board of Administration.
2
CFO GALLAGHER: Motion on the minutes.
3
GENERAL CRIST: Second.
4
THE GOVERNOR: Moved and seconded. Without
5 objection, the item
passes.
6
Item 2.
7
CFO GALLAGHER: Motion on 2.
8
THE GOVERNOR: Item 2, Coleman.
9
MR. STIPANOVICH: Yes. Thank you, Governor, members.
10
THE GOVERNOR: Good morning.
11
MR. STIPANOVICH: Good morning. Governor, Item
12 No. 2, we're bringing
back to you which was on the
13 previous cabinet
agenda. Having to do with actual
14 legislation that you
signed this morning.
15
THE GOVERNOR: Yes, I did.
16
MR. STIPANOVICH: And it should be of a benefit. I
17 know you've been
interested in this particularly as well
18 as everyone in
general, benefit to the consumer. And
19 we're looking for an
emergency rule so that we can get
20 these contracts out
and signed by June 1 which is what the
21 law requires.
22
THE GOVERNOR: So the intent is to get the rules done
23 in the next few
weeks?
24
MR. STIPANOVICH: Yes, sir. That's right. Exactly.
25 We're kind of
reversing the order of things. What we
will
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STATE BOARD OF ADMINISTRATION - May 11,
2004 44
1 do is go ahead and get
out the contracts and come back.
2 And it's usually 90
days or less, we'll come back with
3 workshops and bringing
the rules back to you-all. But in
4 the meantime, we can
get out the contracts and get them
5 back and get them
signed.
6
THE GOVERNOR: Treasurer, do you have any comments?
7
CFO GALLAGHER: No, except that I think that this is
8 a very good thing for
the insurance homeowners' market in
9 the state of
Florida. It will assist the private sector
10 in writing additional
business. We had letters from a
11 group of companies
that probably added 30, 40,000 policies
12 that they will write
because of the ability for them to
13 get this reinsurance
that we are adding in capacity which
14 hopefully will
encourage more private sector businesses to
15 write in Florida and
have a smaller input into citizens'
16 property insurance,
which is now way in excess of 800,000
17 policies.
18
So that's our goal to encourage the private sector to
19 continue to make more
business and to have less in
20 citizens and this
will, with any luck at all, at least
21 slow down the influx
in the citizens' property insurance
22 and allow other
writers to write business. So that's why
23 I made the
motion.
24
GENERAL CRIST: Second.
25
THE GOVERNOR: Moved and seconded.
Without
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STATE BOARD OF ADMINISTRATION - May 11,
2004 45
1 objection, the item
passes.
2
MR. STIPANOVICH: Thank you, Governor.
3
Item 3 has to do with a non-FRS defined contribution
4 programs policy
statement and it specifically addresses
5 three programs, the
State University System Optional
6 Retirement Program,
which is under the Department of
7 Management Services,
Division of Retirement, and the
8 Senior Management
Service Optional Annuity Program under
9 DMS, Division of
Retirement. And then the State of
10 Florida Deferred
Compensation Program under the CFO's
11 office.
12
What we're looking to do here is really just
13 officialize (sic), so
to speak, what we've been doing
14 pretty much all along
and that we would have this policy
15 statement that I
would ask that you approve so that we can
16 move forward with
some rulemaking having to do with our
17 responsibilities in
these three areas. And part of that
18 would be we would
enter into interagency agreements with
19 these two offices and
would be some nominal charge for
20 providing these
services. But basically, we're there to
21 assist as the law
addresses to assist these offices with
22 these non FRS defined
contribution programs.
23
THE GOVERNOR: General?
24
GENERAL CRIST: Thank you. Just reading here on the
25 last line, it says
about nominal fees versus no
fees.
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2004 46
1 Which would this
do?
2
MR. STIPANOVICH: It will be service-based and, for
3 example, last year, we
went back and said if we were
4 charging 200, which is
reasonable or an hourly basis,
5 based on the people
that would be involved in providing
6 this service, if last
year, for example, if you took the
7 Treasurer's office,
the Chief Financial Office,
8 it probably would
cost, for providing support, would have
9 been about $3,000,
total.
10
For Department of Management Services, which had an
11 extraordinary kind of
year, I think we reviewed 21
12 products, whether it
would be approving or termination of
13 products, 21
different reviews that would have amounted to
14 about 7,500. I
think that's probably an extraordinary
15 kind of year.
So we're not talking about much money at
16 all in terms of
providing services. And the reason that
17 is important,
General, is, as you well know, as the
18 fiduciaries of the
pension plan, we are paid out of
19 separate trust
funds. And so the people that are working
20 on this are paid out
of the Defined Contribution Trust
21 Funds as well as the
Defined Benefit Trust Fund and we're
22 providing
professional services for non FRS programs. So
23 to avoid any kind of
criticism from an audit, we need to
24 be compensated for
providing these services.
25
CFO GALLAGHER: Motion on
3.
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STATE BOARD OF ADMINISTRATION - May 11,
2004 47
1
GENERAL CRIST: Second.
2
THE GOVERNOR: Moved and seconded. Without
3 objection, the item
passes. Thank you very much.
4
(Thereupon, the proceedings concluded at 10:20 a.m.)
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1
2
CERTIFICATE OF REPORTER
3
4 STATE OF FLORIDA )
5 COUNTY OF LEON )
6
7
I, KRISTEN L. BENTLEY, Court Reporter, certify that
8 the foregoing proceedings were taken before me at
the time and
9 place therein designated; that my shorthand notes
were
10 thereafter translated under my supervision; and the
foregoing
11 pages numbered 1 through 47 are a true and correct
record of
12 the aforesaid proceedings.
13
14
I further certify that I am not a relative, employee,
15 attorney or counsel of any of the parties, nor am I
a relative
16 or employee of any of the parties' attorney or
counsel
17 connected with the action, nor am I financially
interested in
18 the action.
19
DATED this 18th day of May, 2004.
20
______________________________
21
KRISTEN L. BENTLEY, Court
Reporter
Notary Public
22
850-878-2221
23
24
25
ACCURATE STENOTYPE REPORTERS,
INC.
.
Cabinet
Affairs
