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                         The above agencies came to be heard before
               THE FLORIDA CABINET, Honorable Governor Bush presiding, in the
               Cabinet Meeting Room, LL-03, The Capitol, Tallahassee, Florida,
               on the 9th day of November, 2004, commencing at approximately
               9:25 a.m.


                                        Reported by:

                                     KRISTEN L. BENTLEY
                                  Certified Court Reporter


                             ACCURATE STENOTYPE REPORTERS, INC.
                                  2894 REMINGTON GREEN LANE
                           TALLAHASSEE, FL  32308   (850)878-2221





                         Representing the Florida Cabinet:

                         JEB BUSH

                         CHARLES H. BRONSON
                         Commissioner of Agriculture

                         CHARLIE CRIST
                         Attorney General

                         TOM GALLAGHER
                         Chief Financial Officer

                                           * * *
















                                   ACCURATE STENOTYPE REPORTERS, INC.


                                          I N D E X

               (Presented by Ben Watkins)

               ITEM                  ACTION                 PAGE
               1                     Approved               5
               2                     Approved               5
               3                     Approved               6
               4                     Approved               6
               5                     Approved               7
               6                     Approved               7

               (Presented by KEVIN MCCARTY)

               ITEM                  ACTION                 PAGE
               1                     Approved               9
               2                     Approved               9
               3                     Approved               10

               (Presented by JAMES ZINGALE)

               ITEM                  ACTION                 PAGE

               1                     Approved               17
               2                     Approved               18

               (Presented by ROCKY McPHERSON)

               ITEM                  ACTION                 PAGE

               1                     Approved               20
               2                     Approved               20
               3                     Approved               21





                                   ACCURATE STENOTYPE REPORTERS, INC.


                                    I N D E X (Continued)


               (Presented by GUY TUNNELL)

               ITEM                  ACTION                 PAGE

               1                     Approved               25
               2                     Approved               26

               (Presented by COLLEEN CASTILLE)

               ITEM                  ACTION                 PAGE

               1                     Presentation
               2                     Denied                 87

               (Presented by COLEMAN STIPANOVICH)

               ITEM                  ACTION                 PAGE

               1                     Approved               89
               2                     Approved               89
               3                     Approved               89
               4                     Approved               90
               5                     Approved               90
               6                     Approved               91








                                   ACCURATE STENOTYPE REPORTERS, INC.

                        DIVISION OF BOND FINANCE - 11/9/04

          1                              PROCEEDINGS

          2              THE GOVERNOR:  The next cabinet meeting is Tuesday,

          3         November 23rd.

          4              Division of Bond Finance.  Ben.

          5              MR. WATKINS:  Good morning, Governor.

          6              THE GOVERNOR:  Good morning.

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

          8         of the September 21st meeting.

          9              CFO GALLAGHER:  Motion.

         10              THE GOVERNOR:  Is there a second?

         11              COMMISSIONER BRONSON:  Second.

         12              THE GOVERNOR:  There's a motion and a second.

         13         Without objection, Item 1 passes.

         14              MR. WATKINS:  Item No. 2 does two things.  It

         15         authorizes a new money issue and a refunding.  The first

         16         piece is authorization of up to 36 and a half million

         17         dollars of housing facility revenue bonds for Florida

         18         International University.  And the second piece is a 24

         19         and a half million dollar refunding of existing housing

         20         facility revenue bonds.

         21              CFO GALLAGHER:  Motion on 2.

         22              COMMISSIONER BRONSON:  Second.

         23              THE GOVERNOR:  Moved and seconded.  Without

         24         objection, the item passes.

         25              MR. WATKINS:  Item No. 3 is also a multi-part
                                   ACCURATE STENOTYPE REPORTERS, INC.

                        DIVISION OF BOND FINANCE - 11/9/04

          1         resolution.  Part 1 is a resolution authorizing the

          2         issuance and competitive sale of up to $13,550,000 of

          3         parking facility revenue bonds for the University of

          4         Central Florida.  And the second part of that is

          5         authorizing of refinancing of up to $5,350,000 of existing

          6         outstanding parking facility revenue bonds.

          7              CFO GALLAGHER:  Motion on 3.

          8              GENERAL CRIST:  Second.

          9              THE GOVERNOR:  Moved and seconded.  Without

         10         objection, the item passes.

         11              MR. WATKINS:  Item No. 4 is a report of award on the

         12         competitive sale of $200 million in PECO bonds.  The bonds

         13         were awarded to the low bidder at a true interest cost of

         14         4.55 percent.

         15              CFO GALLAGHER:  I have true interest at 4.5827.

         16              MR. WATKINS:  I rounded it off, Treasurer.

         17              CFO GALLAGHER:  Motion on 4.

         18              GENERAL CRIST:  Second.

         19              MR. WATKINS:  Item No. --

         20              THE GOVERNOR:  Hang on a second.  There's a motion

         21         and a second.  Without objection, the item passes.  Excuse

         22         me.

         23              MR. WATKINS:  Sorry.

         24              Item No. 5 is a report of award on the competitive

         25         sale of $16 million of parking facility revenue bonds for
                                   ACCURATE STENOTYPE REPORTERS, INC.

                        DIVISION OF BOND FINANCE - 11/9/04

          1         the University of South Florida.  The bonds were awarded

          2         to the low bidder at a true interest cost of approximately

          3         3.74 percent.

          4              CFO GALLAGHER:  Motion on 5.

          5              GENERAL CRIST:  Second.

          6              THE GOVERNOR:  Moved and seconded.  Without

          7         objection, the item passes.

          8              MR. WATKINS:  And Item No. 6 is a report of award on

          9         the competitive sale of $171,695,000 of PECO refunding

         10         bonds.  The bonds were awarded to the low bidder at a true

         11         interest cost of approximately 4.09 percent, resulting in

         12         debt service savings to the State of $23.4 million on a

         13         gross basis or on a present value basis, approximately

         14         $15.7 million.

         15              CFO GALLAGHER:  Motion on 6.

         16              COMMISSIONER BRONSON:  Second.

         17              THE GOVERNOR:  Moved and seconded.  Without

         18         objection, the item passes.

         19              Thank you, Ben.  And thank you, by the way, for your

         20         expertise and hard work on the Accelerate projects.  We

         21         really appreciated your input.  I think we've structured

         22         something that will accelerate these projects but not at

         23         the expense of the taxpayers in south Florida.  Appreciate

         24         what you did.

         25              MR. WATKINS:  It was an honor and a privilege and we
                                   ACCURATE STENOTYPE REPORTERS, INC.

                        DIVISION OF BOND FINANCE - 11/9/04

          1         look forward to working with the South Florida Water

          2         Management District to move forward in implementing --

          3         developing and implementing that financing program.

          4              THE GOVERNOR:  They may not be as much looking

          5         forward to it as we are.

          6              MR. WATKINS:  Right.  I understand.



















                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1              THE GOVERNOR:  Financial Services Commission.

          2              CFO GALLAGHER:  Motion on the minutes.

          3              THE GOVERNOR:  Office of Insurance Regulation.

          4              COMMISSIONER BRONSON:  Second.

          5              THE GOVERNOR:  Hello, Kevin.

          6              There's a motion and a second.  Without objection,

          7         Item 1 passes.

          8              MR. McCARTY:  Item 2 and 3 involve approval of the

          9         NAIC manuals.  Item 2, the Office is requesting approval

         10         of adoption of the 2004 National Association of Insurance

         11         Commissioners' annual and quarterly reporting required.

         12              CFO GALLAGHER:  Motion on 2.

         13              COMMISSIONER BRONSON:  Second.

         14              MR. McCARTY:  Item 3 --

         15              THE GOVERNOR:  Hang on.  There's a motion and a

         16         second.  Without objection, the item passes.  You guys are

         17         in a hurry to go back to work.  That's good.

         18              MR. McCARTY:  Well, we got a lot of work to do.

         19              THE GOVERNOR:  Yes, you do.

         20              MR. McCARTY:  Yes, sir.  The Office is requesting

         21         approval of the adoption of the 2004 NAIC financial

         22         examiner's handbook.

         23              CFO GALLAGHER:  Motion on 3.

         24              COMMISSIONER BRONSON:  Second.

         25              THE GOVERNOR:  There's a motion and a second.
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         Without objection, the item passes.

          2              Kevin --

          3              CFO GALLAGHER:  Um.

          4              THE GOVERNOR:  Yes, Treasurer?

          5              CFO GALLAGHER:  I was probably going to do what

          6         you're probably going to do.

          7              THE GOVERNOR:  Ask the same question?  Go ahead.

          8              CFO GALLAGHER:  Feel free.

          9              THE GOVERNOR:  No, go ahead.

         10              CFO GALLAGHER:  I have two, actually.  One, I'd like

         11         to have a discussion on the issue that's gotten a lot of

         12         news lately in brokerages and kickbacks to those

         13         brokerages from insurance companies.  And we have a

         14         working group working on that and we've also issued a

         15         subpoena because we have -- the State of Florida has

         16         contracted with a broker to get us our coverage for our

         17         property and casualty insurance.  That broker is Marsh &

         18         McLennan and they charged us a fee of $295,000 which we

         19         agreed to pay.  And we basically had a clause in there

         20         that said that they would not receive any money from

         21         insurance companies.

         22              And there was another clause in that contract that

         23         said usual and customary was okay, whatever that is.  I

         24         guess they are going to maybe call kickback commissions or

         25         extra commissions or something from insurance companies
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         that.  But we're about to find out because we've

          2         subpoenaed that information.  But I think it would be good

          3         to give us an overview of sort of what you see.  Other

          4         than that's an issue that I'm personally responsible for,

          5         I'm wondering about other businesses in Florida that have

          6         used brokers to buy large policies in the --

          7              MR. McCARTY:  Well, in the subject of Marsh &

          8         McLennan is the broker we've contracted in Florida which

          9         also the subject of Spitzer investigation which has filed

         10         a civil suit alleging bid rigging and unlawful contingency

         11         fees and unlawful steering of business to affiliated

         12         parties and companies.

         13              There are a number of investigations going on in the

         14         state of Florida right now.  There is a task force that

         15         you appointed recently looking into that.  Our office is

         16         working with the Attorney General's office on the task

         17         force as well investigating the brokers.  The Attorney

         18         General has issued ten orders.  Ten subpoenas.  We're

         19         working on doing some joint subpoenas in the next several

         20         days with respect to licensees in the Office of Insurance

         21         Regulation.  In the broad context, I think it's important

         22         for us to ensure with regard to the State risk management

         23         as well as all other businesses in Florida that those

         24         transactions are done as transparent as possible.  And if

         25         there is any activity, unlawful, criminal or civil
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         liability, we are certainly going to ferret out that and

          2         pursue that and I think we're very proud to be working

          3         with both the CFO and the Attorney General in coordinating

          4         these efforts.  There's different efforts that are being

          5         coordinated because different authorities, and we need to

          6         issue separate subpoenas to make sure they are legally

          7         correct.  So that's why coordination is critically

          8         important on this matter.

          9              THE GOVERNOR:  Yes, General.

         10              GENERAL CRIST:  Governor, I wanted to thank Kevin for

         11         working so well with our antitrust department.  I want to

         12         thank the CFO for his assistance in helping to hopefully

         13         making sure that the consumers of the state of Florida are

         14         protected in this scenario.  And I wanted to make it

         15         clear, we're not alleging anything with the issuance of

         16         our subpoenas.  We're merely in the discovery phase and

         17         have received a complaint from a consumer in Florida and

         18         as a result, issued subpoenas to try to make sure they're

         19         being dealt with in a fair and appropriate fashion.  But

         20         thank you very much for your work.  Thank you, Treasurer.

         21              MR. McCARTY:  Ironically, the Spitzer investigation

         22         which was originated in New York, the victims, one of the

         23         victims, is a Florida company.  So I think it's prudent

         24         for us to be expanding our -- again, there's no

         25         allegations in the instant case.  We just want to make
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         sure there's no improprieties going on with regard to

          2         Florida consumers.

          3              THE GOVERNOR:  Okay.  Treasurer, you have another

          4         question?

          5              CFO GALLAGHER:  I have another one.

          6              I want to bring to light to the commission that we,

          7         along with Kevin, primarily Kevin, but we authorized the

          8         issuance of emergency orders for hurricane victims that

          9         mandated that companies not non renew which is a double

         10         negative or that they must renew policyholders through

         11         hurricane season.  One of the reason for those is that if

         12         you have a damaged home, obviously you're not renewed by

         13         your company, they are going to still pay the claim, and

         14         they're required to do that.  But it's impossible for you

         15         to get insurance from someone else on a damaged home.

         16         Because at that point, you know, somebody would be taking

         17         on a liability they don't want.  They inspect and they're

         18         not going to insure a home that's not completed.

         19              So I think that we should look at and have Kevin

         20         bring back to the next meeting an answer to those people

         21         that have -- because of the time it's taken adjusters to

         22         get there, the time it's going to take for individuals to

         23         get contractors to do the work on their homes, this is

         24         going to be an extended period of time that they are not

         25         going to be able to get coverage.  And their policy may
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         run out where they are and our emergency rules that we

          2         have are going to expire.  And so we may even need a

          3         legislative fix on this, I don't know.  But I would like,

          4         one, to at least have notice that at the next cabinet

          5         meeting I think we may want to extend the time on at least

          6         damaged homes, if not others, and have Kevin get back to

          7         us on his recommendations on a new emergency rule that

          8         will cover damaged homes or some other solution to this

          9         and maybe it will require special session legislation, I

         10         don't know.  But I think Kevin could give us some ideas.

         11         If we bring it up today, that gives notice.  It could be

         12         on the agenda and a solution can be brought up before the

         13         expiration of the existing rules.

         14              THE GOVERNOR:  You-all good to go on that?

         15              GENERAL CRIST:  (Nods affirmatively.)

         16              THE GOVERNOR:  I think it would be a good idea also,

         17         if there is a requirement for special session, the sooner

         18         we can get that done.  If you -- in the interim between

         19         now and two weeks from now, if your office concludes that

         20         we need to have some statutory change, we need to know

         21         about it pretty quick because we're trying to finalize the

         22         ground rules of the session shortly after the

         23         organizational meeting which will be next week, right?

         24              CFO GALLAGHER:  Right.

         25              THE GOVERNOR:  Next Tuesday and Wednesday.  So if you
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         could do that, that would be wonderful.

          2              Kevin, how are we doing on the --

          3              CFO GALLAGHER:  By the way, our meeting is

          4         November 23rd so we're actually skipping really two weeks.

          5              THE GOVERNOR:  That's about right.  That's two weeks,

          6         isn't it?

          7              Kevin, how are we doing on the adjusters getting out

          8         to see people?

          9              MR. McCARTY:  So far it appears as though the

         10         complaints that have been registered with Treasurer

         11         Gallagher's department have declined.  We have been in

         12         contact with most of the major companies and they have

         13         indicated to us that they are going to certainly meet the

         14         standards established by the Financial Services Commission

         15         in our last meeting.

         16              There -- we still have pockets of companies which we

         17         are pleased to report is a small number of companies that

         18         are still struggling with regard to getting the adjusters

         19         out to meet the minimum standards that we've established.

         20         As I mentioned to you before, we have a program that we

         21         have put together in conjunction with Treasurer Gallagher

         22         to put the resources together with those companies that

         23         have not been able to get adequate number of adjusters.

         24         We have been able to place some adjusters in some of those

         25         companies and we continue to monitor them and augment
                                   ACCURATE STENOTYPE REPORTERS, INC.
                     FINANCIAL SERVICES COMMISSION - 11/9/04

          1         their services to the best of our abilities.  But pleased

          2         to report that we believe that most companies are going to

          3         be able to file in compliance with the emergency rule.

          4              CFO GALLAGHER:  And we are working on a Web site

          5         where adjusters that have capacity can put their name down

          6         and companies that are looking for capacity can get to

          7         those adjusters and find the people they need.  So we're

          8         sort of acting as a --

          9              MR. McCARTY:  In our next cabinet meeting I'll be

         10         able to also give you an aging report that breaks down 30,

         11         60, 90 days out as to each company.

         12              THE GOVERNOR:  But by the next cabinet meeting

         13         wouldn't we have gotten to the -- wasn't it the 30 day?

         14              CFO GALLAGHER:  The last hurricane is December 8th.

         15              MR. McCARTY:  Right.  December 8th.  But the first

         16         one is November 20th.  You'll have the certification

         17         November 22nd for November 23rd.

         18              THE GOVERNOR:  Okay.  Any other questions or

         19         comments?  (No response.)  Thank you, Kevin.

         20              MR. McCARTY:  Thank you, Governor, members.





                                   ACCURATE STENOTYPE REPORTERS, INC.
                         DEPARTMENT OF REVENUE - 11/9/04

          1              THE GOVERNOR:  Department of Revenue.

          2              CFO GALLAGHER:  Motion on the minutes.

          3              GENERAL CRIST:  Second.

          4              THE GOVERNOR:  There's a motion and a second.

          5         Without objection, Item 1 passes.  Good morning, Jim.

          6              DR. ZINGALE:  Good morning.  The second item is a

          7         proposed final order, HAAS Publishing.  Last cabinet

          8         meeting the cabinet deferred this issue, encouraging the

          9         Department and the taxpayer to try to come up with a

         10         settlement.  Last Friday -- review of the quick numbers.

         11         Total assessment, not counting the penalty that was

         12         already compromised, 992,000, 562,000 in tax; 430,000 in

         13         interest.

         14              The taxpayer, last Friday, offered 325,000 in tax,

         15         substantially less than the tax due.  We waived 430 -- we

         16         offered a waiver of $430,000 in interest.  That would put

         17         the taxpayer basically only at the tax position, would

         18         leave the taxpayer where most other leases are, that all

         19         other leases are, that have these same circumstances.

         20         Taxpayer came back this morning and offered still less

         21         than the tax due, 425,000, wants to make it sure that at

         22         least that number doesn't imply that they believe there is

         23         any liability due.

         24              Taxpayer has the right after this order, if it's

         25         approved, to go to district court.  So we are less than
                                   ACCURATE STENOTYPE REPORTERS, INC.
                         DEPARTMENT OF REVENUE - 11/9/04

          1         50 percent of the original assessment.  Tried to get a

          2         settlement.  Can still settle up to the district court

          3         hearing.  But with your permission, we would like to go

          4         forward with the final order.

          5              CFO GALLAGHER:  Let me just make this clear so that

          6         everybody understands what it is, including the taxpayers'

          7         counsel who is here.  Today they can pay $552,000 which

          8         is --

          9              DR. ZINGALE:  Tax.

         10              CFO GALLAGHER:  -- tax only.  After this board takes

         11         a motion, which I think it will, they are back at the

         12         552,000 plus the 430,000 which the ALJ said and that is

         13         what goes to circuit court if they choose to take it or

         14         they can pay the $982,000.

         15              DR. ZINGALE:  We can still settle between now and

         16         that district court.  There is still an opportunity if

         17         they come back and choose to want to pay just tax that we

         18         can accept that.

         19              CFO GALLAGHER:  Until the district court starts --

         20              DR. ZINGALE:  Absolutely.

         21              CFO GALLAGHER:  Okay.  In that case, I move to

         22         approve Item 2.

         23              THE GOVERNOR:  Is there a second?

         24              COMMISSIONER BRONSON:  I'll second.

         25              THE GOVERNOR:  There is a motion and a second.  All
                                   ACCURATE STENOTYPE REPORTERS, INC.
                         DEPARTMENT OF REVENUE - 11/9/04

          1         in favor say aye.

          2              (Aye.)

          3              All opposed?

          4              (No response.)

          5              DR. ZINGALE:  Thank you.




















                                   ACCURATE STENOTYPE REPORTERS, INC.
                    DEPARTMENT OF VETERAN'S AFFAIRS - 11/9/04

          1              THE GOVERNOR:  Department of Veteran's Affairs.

          2              MR. McPHERSON:  Good morning again, Governor.  Item 1

          3         is the approval of our minutes from previous session.

          4              COMMISSIONER BRONSON:  Motion.

          5              CFO GALLAGHER:  Second.

          6              THE GOVERNOR:  There's a motion and a second.

          7         Without objection, Item 1 passes.

          8              MR. McPHERSON:  Thank you, sir.  Item 2 is approval

          9         of quarterly reports for the Department recommending

         10         acceptance.

         11              CFO GALLAGHER:  Motion on 2.

         12              GENERAL CRIST:  Second.

         13              THE GOVERNOR:  There's a motion and a second.

         14         Without objection, Item 2 passes.

         15              MR. McPHERSON:  Sir, Item 3, within the material

         16         before you, is the FDBA budget proposal, legislative

         17         budget request for our budget for fiscal year '05/'06.  It

         18         is essentially a continuation budget with approximately

         19         $50 million.  It has several small items requesting

         20         additional funds for necessities required for enhancement

         21         and outreach activities, needed equipment, and they are

         22         all primarily trust fund issues.

         23              Since submitting this in September, we have continued

         24         to work with OPB.  There are two issues.  Senate Bill

         25         12-02 staffing is one that will be additive to the request
                                   ACCURATE STENOTYPE REPORTERS, INC.
                    DEPARTMENT OF VETERAN'S AFFAIRS - 11/9/04

          1         and it will depend, of course, on legislative action

          2         regarding staffing for Senate Bill 12-02 during the next

          3         session.  And another item we're working with OPB on is

          4         the architectural engineering funding for state veteran's

          5         nursing home No. 7.

          6              CFO GALLAGHER:  Motion on 3.

          7              GENERAL CRIST:  Second.

          8              THE GOVERNOR:  There's a motion and a second.  All in

          9         favor say aye.

         10              (Aye.)

         11              I abstain so that I can submit my own budget to the

         12         Legislature.

         13              MR. McPHERSON:  Yes, sir.

         14              THE GOVERNOR:  Thanks, Rocky.











                                   ACCURATE STENOTYPE REPORTERS, INC.
                    FLORIDA DEPT. OF LAW ENFORCEMENT - 11/9/04

          1              THE GOVERNOR:  Florida Department of Law Enforcement.

          2              MR. TUNNELL:  Good morning, Governor, members of the

          3         cabinet.

          4              THE GOVERNOR:  Good morning.

          5              MR. TUNNELL:  FDLE has two items on the agenda this

          6         morning.  The first is our first quarter performance

          7         report for the period ending September 30th.  Our

          8         contracts, agreements and purchases over $100,000 for the

          9         same period.  As you-all know, hurricanes have been our

         10         priority this past quarter.  I know that like me, each of

         11         you are very proud of the way Florida's first responders

         12         worked together to come to the aid of the impacted areas

         13         within our state.

         14              On our performance report overall, we stayed on track

         15         in our information and professionalism program areas.  But

         16         obviously because of the impact of the storms, our

         17         investigative measures were greatly affected.  FDLE, as

         18         you know, leads the ESF or emergency services function 16

         19         which is responsible for coordinating the State's law

         20         enforcement resources.  We had some 6,000 plus officers,

         21         state officers, that responded to the hurricanes during

         22         these past several months, executing over 300 missions.

         23              In addition, 422 of FDLE's own members worked in

         24         excess of 83,000 hours during the storm season assisting

         25         local law enforcement with search and rescue efforts,
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                    FLORIDA DEPT. OF LAW ENFORCEMENT - 11/9/04

          1         security, traffic control escorts for fuel and other

          2         supplies relative to storm recovery.  Our crime lab

          3         services were also very adversely affected.  Labs were

          4         nonoperational for a total of some 36 days where our

          5         technicians and scientists were busy taking down

          6         instruments, protecting against possible water and

          7         electrical damage during the storms, unpacking, bringing

          8         back online, checking for damage, et cetera, et cetera.

          9         And you may have heard that our Pensacola facility was

         10         very severely damaged because of Hurricane Ivan.  The lab

         11         has been relocated to temporary facilities at the Escambia

         12         County sheriff's office.  And they were still doing very

         13         limited casework involving chemistry, latents, firearms,

         14         crime scene assists, having to ship a number of their more

         15         involved examinations to other labs across the state.  We

         16         expect them to be some six months before they're back in

         17         full operation.

         18              THE GOVERNOR:  Guy, are you going to rebuild in the

         19         building or take advantage of the opportunity to

         20         modernize?

         21              MR. TUNNELL:  Yes.  Yes, sir, on both counts.  We're

         22         in the process of working with DMS to try to find another

         23         facility that was much more agreeable with our operational

         24         needs.

         25              THE GOVERNOR:  That's probably one of the oldest
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                    FLORIDA DEPT. OF LAW ENFORCEMENT - 11/9/04

          1         state buildings in the --

          2              MR. TUNNELL:  Yes, sir, has to be.  It's an old

          3         elementary school.

          4              THE GOVERNOR:  What's the name of it?

          5              CFO GALLAGHER:  It's an old school, isn't it?

          6              MR. TUNNELL:  It's an old school.  I can't remember

          7         the name of the school.

          8              THE GOVERNOR:  Really old.

          9              MR. TUNNELL:  Very, very old.  I think it was built,

         10         I heard, 1922 maybe; '21, '22 and it's a beautiful

         11         building but it's just not very --

         12              THE GOVERNOR:  Not so lovely right now.

         13              CFO GALLAGHER:  Doesn't have any roof on it now, does

         14         it?

         15              MR. TUNNELL:  No, sir, it doesn't.  It doesn't have

         16         much for all three floors.  I saw some photographs the

         17         other day and it's being totally rebuilt from inside out.

         18         But they say they are going to have it back running in six

         19         months.  So we'll see.

         20              THE GOVERNOR:  Good.

         21              MR. TUNNELL:  We hope so.  Again, overall, we haven't

         22         worked the volume of cases that we would normally expect

         23         to be able to because of the storms either in our

         24         laboratory environment or in our field investigations.  So

         25         we've done very well with the state that we're in, in
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                    FLORIDA DEPT. OF LAW ENFORCEMENT - 11/9/04

          1         summation.

          2              THE GOVERNOR:  Is there a motion.

          3              GENERAL CRIST:  Motion.

          4              CFO GALLAGHER:  Second.

          5              THE GOVERNOR:  There's a motion and a second.  Item 1

          6         passes without objection.

          7              MR. TUNNELL:  Thank you.  The second item is a

          8         submission of 13 rules for final adoption in Title 11 of

          9         the Florida Administrative Code.  These rules are all in

         10         FDLE's alcohol breath test program.  The bulk of them are

         11         a result of our transition to new and more sophisticated

         12         alcohol breath testing equipment.  The new equipment

         13         that's been purchased will replace equipment that is

         14         approaching 15 years in age.  Certainly it's not the best

         15         technology that's out there available.  This new equipment

         16         that's been selected is called the Intoxilyzer 8000.

         17              THE GOVERNOR:  Is that better than the 7000?

         18              MR. TUNNELL:  Yes, sir.  Actually, we're using 5000,

         19         so it's a big jump.

         20              THE GOVERNOR:  It's a four-generation jump.

         21              CFO GALLAGHER:  I notice one of these rules, 8.0036,

         22         approval of dry gas standards source.  What in the world

         23         is alcohol dry gas standards?

         24              THE GOVERNOR:  That's a tough question.

         25              MR. TUNNELL:  That's a tough question.  Is that a
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                    FLORIDA DEPT. OF LAW ENFORCEMENT - 11/9/04

          1         trick question, Treasurer?

          2              CFO GALLAGHER:  Well, you know, I'm not trying to

          3         embarrass anybody.  I have no idea what it is.  Maybe you

          4         can just --

          5              THE GOVERNOR:  Guy, just make up something.  We'll

          6         all nod our heads.

          7              (Laughter.)

          8              MR. TUNNELL:  According to my notes, this rule

          9         revision updates the approval process for alcohol dry gas

         10         standards as -- by specifying industry criteria and

         11         deleting unnecessary provisions, quote, unquote.  Does

         12         that help?

         13              CFO GALLAGHER:  That's exactly what my notes say.

         14         You know, I still don't know what dry gas --

         15              MR. TUNNELL:  I thought might sound familiar.

         16              THE GOVERNOR:  Try this answer.  I'll get back to

         17         you, Treasurer.

         18              MR. TUNNELL:  I used that yesterday.

         19              CFO GALLAGHER:  Motion on 2.

         20              GENERAL CRIST:  Second.

         21              THE GOVERNOR:  There's a motion and a second.

         22         Without objection, Item 2 passes.  Thank you.

         23              MR. TUNNELL:  Thank you very much.  Appreciate it.


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                           BOARD OF TRUSTEES - 11/9/04

          1              THE GOVERNOR:  Board of Trustees.

          2              MS. CASTILLE:  Good morning, Governor, members of the

          3         cabinet.

          4              THE GOVERNOR:  Good morning, Colleen.

          5              MS. CASTILLE:  Thank you.  We only have two items

          6         before you today, Governor, and members of the cabinet,

          7         but important items nonetheless.  Both are important

          8         policy issues.

          9              We have a report on the -- on what we're doing with

         10         our oceans initiative which, thank you for your support,

         11         Governor, during the legislative session.  We initiated

         12         our initiative during the legislative session and got the

         13         support of the Legislature for the first million dollars

         14         of research and education.  The impetus for this was the

         15         U.S. commission on ocean policy that has been gathering

         16         data nationwide for the last two years.  And they had

         17         issued their draft policy recommendations back in the

         18         April time frame.  Florida was the first out of the shoot

         19         to build on some of their recommendations and to formalize

         20         an initiative of our own.  We also initiated two other

         21         items of partnership with the other gulf states as well as

         22         the country of Mexico.

         23              On the U.S. ocean commission report, which finalized

         24         its recommendations on September 20th of 2004, the key

         25         recommendations, and there were over 200 recommendations,
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                           BOARD OF TRUSTEES - 11/9/04

          1         but the key recommendations were very similar to the way

          2         that we manage -- that we have begun to manage our waters.

          3         The ecosystem-based approach, which we both make a land

          4         and sea connection with, emphasis on regional management

          5         which we have with our coastal and aquatic managed areas

          6         and initial -- another 200 recommendations.

          7              But let me first give you a bit of why it's

          8         important, a bit of information as to why it's important.

          9         For the U.S., the coastal marine -- the ocean is a large

         10         part of our nation's economy.  It's $54 billion in goods

         11         and services.  30 billion to the U.S. economy through

         12         recreational fishing.  It attracts 180 million Americans

         13         each year.  Travel and tourism is the nation's largest

         14         employer and the second largest contributor to the gross

         15         domestic product.  It generates more than $700 billion

         16         annually.

         17              Next slide.  For Florida's ocean economy, the

         18         $53 billion and more than 700 jobs that are generated from

         19         tourism are largely dependent on our coastal beaches and

         20         shores.  The recreational commercial fishing, thank you,

         21         Governor, and Fish and Wildlife Conservation Commission,

         22         Florida is the world's fishing capital.  We generate

         23         $6.6 billion for Florida's economy with commercial and

         24         recreational fishing.  Recreational boating contributes

         25         14.6 billion.  So for a total of $74 billion to Florida's
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                           BOARD OF TRUSTEES - 11/9/04

          1         economy, our oceans are an important element to protect.

          2              For 77 percent of Florida's residents live in coastal

          3         counties.  75 percent of both gross retail sales and

          4         taxable retail sales occur in the coastal counties.  For

          5         those counties in Florida that have reefs, the reefs

          6         themself have a particular impact to our economy, positive

          7         impact.  We have --

          8              THE GOVERNOR:  36,000 jobs in Broward County because

          9         of the reefs?

         10              MS. CASTILLE:  Yes, sir.  There is a tremendous

         11         amount of tourism that is associated with that.  They have

         12         dive shops, they have boating shops, they've got ships

         13         that take folks out there.  We got these from Fish and

         14         Wildlife Conservation Commission.  Our coastal

         15         development, Florida is a great place to live.

         16         Development densities show it.  If you look at this slide,

         17         the darker the colors, the denser the development.  In the

         18         most southeastern counties and Hillsborough, Pinellas, and

         19         a little bit up the northeast coast, you'll notice that

         20         there are 300 to 299.9 persons per square mile.  So most

         21         of our population is in our coastal areas which indicates

         22         its attraction.

         23              Our ocean resources, we've got 1300 miles of

         24         shoreline along our coasts.  We've got 6 million acres of

         25         submerged land and we have 2.66 million acres of sea
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                           BOARD OF TRUSTEES - 11/9/04

          1         grasses.  Our sea grasses are beginning -- well, let me

          2         give you a little bit more about the Florida loop current.

          3         And why it's important, not just for us, to protect our

          4         resources here but for everyone else.

          5              The Florida loop current, which is what you see in

          6         the Gulf of Mexico and moves up into the Gulf Stream on

          7         the right side with the dark red, the triangles in there

          8         are the flow of the current.  And you'll note that we are

          9         not alone in our -- in our existence with the Gulf of

         10         Mexico.  But just north of this loop current is where what

         11         they have called the dead zone from the Mississippi River,

         12         is in that highly mixing -- high mixing zone north of the

         13         loop.  So as it mixes, it mixes in some of those nutrients

         14         and brings them into the loop through our --

         15              THE GOVERNOR:  So are you telling me that we're

         16         spending $8 and a half billion to clean up the Everglades

         17         to stop the phosphorus from coming down to the Everglades

         18         and it might not matter?

         19              MS. CASTILLE:  No, I'm not telling you that.  It

         20         matters completely because Florida Bay, which is protected

         21         from much of that current by the Keys, is completely

         22         dependent upon the Everglades.  And Florida Bay is, of

         23         course, connected to the Ten Thousand Islands --

         24              THE GOVERNOR:  So you don't think the nutrients make

         25         it into the --
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                           BOARD OF TRUSTEES - 11/9/04

          1              MS. CASTILLE:  There is -- the science is not decided

          2         on that yet.  That is one -- that is -- there are numerous

          3         institutes that are studying whether some of the red tide,

          4         some of the black tide that we've seen, are associated

          5         with nutrients that are coming from the middle of the Gulf

          6         or whether they are coming from our shores.  So the jury

          7         is still out on that.

          8              THE GOVERNOR:  When will the jury convene and have a

          9         decision?

         10              (Laughter.)

         11              MS. CASTILLE:  I will tell you a little bit about

         12         what we're doing with our oceans initiatives to get more

         13         of this information.

         14              CFO GALLAGHER:  Before you get to this next one.

         15              MS. CASTILLE:  Yes, sir.

         16              CFO GALLAGHER:  The colors are speed or temperature?

         17              MS. CASTILLE:  The colors are temperature.  And the

         18         arrows are direction.

         19              CFO GALLAGHER:  I figured that part.  What I'm

         20         looking at it's hard for me to comprehend what would make

         21         the Gulf Stream get so warm over on the east coast of

         22         Florida but yet it's not out there in the Gulf of Mexico

         23         and it sort of cools down.  What heats it up?  Shallowness

         24         or something?  I know it's not very shallow.

         25              MS. CASTILLE:  I never asked that question when I
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                           BOARD OF TRUSTEES - 11/9/04

          1         learned about this in science class, about what made it

          2         warm.

          3              CFO GALLAGHER:  So you're sure it's temperature and

          4         not speed?

          5              MS. CASTILLE:  Yes, sir.  I am absolutely sure it's

          6         temperature.

          7              THE GOVERNOR:  The answer is, Treasurer, I don't

          8         know, but I'll get back to you.

          9              MS. CASTILLE:  No, I do know that that is

         10         temperature.  I just don't know what makes it that.

         11              THE GOVERNOR:  That's the question you could get back

         12         to all of us.  That's a good question.

         13              MS. CASTILLE:  All right.  The next slide is the

         14         biodiversity.  You've heard, Governor, in some of the

         15         speeches that I've attended with you and spoken with you

         16         that the biodiversity of our coastline is -- where the

         17         integration of the upland and the coast is where some of

         18         our highest diversity is.  It is also, in some of our

         19         south coast area there where we've got the reefs, the only

         20         reefs that we have in North America.  So you'll see the

         21         highest biodiversity is about from, I think, Brevard

         22         County on around to Collier and Lee Counties.  Also, a

         23         little bit north of Cuba as well.

         24              The currents are what provide Florida with its

         25         richest marine biodiversity and it's that warm temperature
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                           BOARD OF TRUSTEES - 11/9/04

          1         that supports it.  We do have some bad news and so we do

          2         have challenges.  The challenges that we have before us

          3         are some of the ships and pollution that are taking a toll

          4         on our coral reefs.  We just recently had another ship

          5         that hit some of the reefs off of Broward County.

          6              Sewage spills -- yes, sir.

          7              CFO GALLAGHER:  Colleen, I hate to do this to you.  I

          8         want to go back again.  And I'd like you to tell me what a

          9         tetrapod is.

         10              MS. CASTILLE:  I can tell you what a copepod is.  I

         11         don't know what a tetrapod is.

         12              CFO GALLAGHER:  -- (inaudible) invertebrates, fishes

         13         and tetrapods.  I don't know what it means.

         14              MS. CASTILLE:  Copepod is -- I don't know what a

         15         tetrapod is.  But a copepod is actually what we have.  We

         16         have two things that tell you the health of a waterway.

         17         For freshwater, it's a polycyte and for saltwater it's a

         18         copepod.

         19              THE GOVERNOR:  Very impressive.  But the answer is,

         20         Treasurer, I don't know what the answer is --

         21              MS. CASTILLE:  I don't know what a tetrapod is.

         22              THE GOVERNOR:  -- but I'll get back to you with the

         23         answer.

         24              MS. CASTILLE:  But I'll get back to you.

         25              (Laughter.)
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                           BOARD OF TRUSTEES - 11/9/04

          1              THE GOVERNOR:  Why is that so hard?

          2              MS. CASTILLE:  All of the secretaries have that

          3         problem.  So we have some challenges.  Sewage spills are

          4         quite frequent.  We have aging infrastructure in a lot of

          5         our older communities and we've -- as you know, what we've

          6         done with the Keys, Key West, we've completely replaced

          7         the sewage system there.  We're looking at Miami-Dade

          8         who's trying to upgrade their sewer system.  We still have

          9         ocean outfalls in our waterways.  We are improving the

         10         level of treatment for those ocean outfalls but it is our

         11         goal in our strategic plan, Governor, if you recall, to

         12         eliminate those ocean outfalls in the next ten years.

         13              CFO GALLAGHER:  Many years ago, there was this study

         14         by this MINSA group that said that ocean outfalls are okay

         15         as long as you take them way out and go way deep.  Is that

         16         proven not true or does it still got a shot?

         17              MS. CASTILLE:  Well, that would be following the

         18         philosophy of the solution to pollution is dilution which

         19         is --

         20              CFO GALLAGHER:  I like the poem.

         21              MS. CASTILLE:  Which Dionna taught me that.  But we

         22         try to get away from that but we have not gotten to that

         23         point in our -- in our technology where we can have

         24         absolutely harmless effluent from our outfalls.

         25              CFO GALLAGHER:  So your solution to pollution is
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          1         tertiary treatment?

          2              MS. CASTILLE:  That would be one.  It's more

          3         expensive.  Tertiary treatment is more expensive.

          4              CFO GALLAGHER:  Okay.

          5              MS. CASTILLE:  Again, we have beach closings.

          6         Recently, it was reported that our beach closing has

          7         increased.  A two-fold reason for that.  We are testing

          8         more.  We've been required under the Clean Water Act to

          9         test our beaches, so we are -- the Department of Health

         10         has increased its testing locations and frequency.  So we

         11         have been able to find that those near shore waters are

         12         frequently being found with high nutrient levels.  And

         13         I'll expand upon that in a little bit.

         14              EPA released a coastal condition report.  In this

         15         slide what you see is -- you see on the bottom left-hand

         16         corner the ecological elements that are reviewed.  On the

         17         right-hand side are the outcome for each of these.  If you

         18         look on the southeast coast of the United States, there

         19         are more of these elements in the poor category than there

         20         are in the other categories.  So it's an indication that

         21         there are issues that we need to address.

         22              CFO GALLAGHER:  On that slide, it's interesting that

         23         of all the coastal areas, we're doing the best.

         24              MS. CASTILLE:  On the east coast.

         25              CFO GALLAGHER:  I'm looking overall southeast --
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                           BOARD OF TRUSTEES - 11/9/04

          1              MS. CASTILLE:  Well, we have on the southeast coast

          2         we have half of Florida is darker blue.

          3              CFO GALLAGHER:  (Inaudible.)

          4              MS. CASTILLE:  Right.

          5              THE GOVERNOR:  It's also because of the --

          6              MS. CASTILLE:  Of the currents.  It's in the currents

          7         is what --

          8              CFO GALLAGHER:  So is our problem what's coming out

          9         of Mississippi?

         10              MS. CASTILLE:  I can't tell you that.  A jury is

         11         still out on that issue.  Those are -- all of our marine

         12         institutes are studying that issue.  Next slide, please.

         13         Let's talk about the coral reef decline.  The coral reefs

         14         in the Carribean have seen disastrous declines in the last

         15         decades.  The Keys have not escaped this regional problem.

         16              The coral cover in the Keys, remember our only

         17         barrier reef in the United States, has declined 37 percent

         18         in the last eight years since 1996, 37 percent.

         19              We do have some good news.  We've got a blue

         20         infrastructure in place.  We've got national marine

         21         sanctuaries.  We've got three national marine -- we've got

         22         one national marine sanctuary.  We've got three estuarine

         23         research reserves.  And we've got 41 aquatic preserves.

         24         We have designated, since 1993, 1.9 million acres of our

         25         coastal lands as aquatic preserves, which, as you know,
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          1         get additional protection, a higher level of protection

          2         than our normal coastal waters.  We are working with NOAA

          3         on an extensive reassessment of our aquatic preserves to

          4         make sure we are preserving those marine environments.

          5              Marine reserves.  Marine protected areas.  We have a

          6         number of marine protected areas throughout the state and

          7         it's those marine protected areas that sort of raise a red

          8         flag to some people and what the real concern is is marine

          9         reserves.  Marine reserves are the subset of a marine

         10         protected area.  We'd like to change the lingo to marine

         11         managed areas because we're starting to see that

         12         especially the fishermen and those who make their living

         13         off the coastal waters understand that there is a big

         14         benefit from marine reserves in other type of managed

         15         areas.

         16              Just recently, as I was flipping through the channels

         17         on television and I was watching Outdoor Network, they

         18         were actually having some of the major fishermen discuss

         19         the benefits of the marine reserves and the size of the

         20         fish and the numbers of the fish that are able to be

         21         caught on the outside of those reserves.  So they are

         22         having their intended consequences of improving the

         23         ecosystem.

         24              Next slide.  So what are we doing in Florida?

         25         Governor Bush, as I mentioned earlier, instituted a
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                           BOARD OF TRUSTEES - 11/9/04

          1         regional Gulf of Mexico effort.  We are meeting with the

          2         Agency -- with similar agencies around the Gulf of Mexico

          3         and I think it's -- is it December, Kathy, or November?

          4         In November all of the scientists and aquatic managed area

          5         folks are meeting at the Stennis Laboratory in Alabama to

          6         discuss what we can do jointly for the Gulf of Mexico so

          7         that we are coordinated all of that research and

          8         monitoring that's going on between the states.

          9              We are entering into -- well, the DEP and the Fish

         10         and Wildlife Conservation Commission launched the oceans

         11         initiative which I'll give a little bit more detail later.

         12         We're entering into a memorandum of agreement with the

         13         Great Barrier Reef Marine Park Authority on the coral

         14         resilience.  I'll get into that a little bit later.  And

         15         we're participating in the development of a regional ocean

         16         observing system.  And we're also reassessing our

         17         priorities and making sure, as we did with the springs

         18         initiative, that all the folks in the agency are aware of

         19         what we are doing so we don't -- so that we don't approve

         20         any more ocean outfalls or if we do, we do it at a higher

         21         treatment level and reduce those impacts to the ocean.

         22              The stronger alliance for the Gulf of Mexico, we are

         23         involving the Mexico gulf governors as well through the

         24         Gulf of Mexico States Accord.  There was yet another

         25         meeting with all of the states including Mexico at the
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                           BOARD OF TRUSTEES - 11/9/04

          1         Hart Institute in the University of Texas -- in Corpus

          2         Christi.  So the most important part of all of this is the

          3         data gathering to find out what do we know.  With our

          4         oceans initiative, we need to find out what is the science

          5         gap that we have.  What is it that we know, what is it

          6         that we don't know, and then initially how can we -- how

          7         can we move forward with increasing the awareness to

          8         Florida's public on estAblishing the partnerships to

          9         enhance recreation, ecotourism, commerce and understanding

         10         that this is most importantly an ecosystem that we need to

         11         protect because it is an important factor in our quality

         12         of life, but as well as an important part of our economy.

         13              With the $1 million appropriation from the

         14         Legislature this year, DEP and Fish and Wildlife

         15         Conservation Commission have contracted with a couple of

         16         items that we know are the most important issues to

         17         address.  We're funding projects such as the sea grass

         18         mapping and restoration.  We've lost over 200,000 acres of

         19         sea grass over the last 15 years.  We have -- we're

         20         funding a bacterial source study to determine what the

         21         causes of the beach closings are.  Governor, this is the

         22         very exciting DNA work that I told you about with regard

         23         to the fecal coliform bacteria.  It sounds not very

         24         exciting, it sounds like --

         25              THE GOVERNOR:  I was riveted.
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          1              MS. CASTILLE:  Sounds like toilet entertainment.

          2              CFO GALLAGHER:  Toilet entertainment?  (Laughter.)

          3         I'm glad I don't make those meetings.

          4              MS. CASTILLE:  However, it is very important.  Let me

          5         just give you a very real example of what we're doing here

          6         in Tallahassee.  And we're doing this across the state.

          7         We are -- take the Ochlockonee River.  The Ochlockonee

          8         River begins in the lower Georgia area.  It flows through

          9         Gadsden County, a rural agricultural area.  It flows

         10         through Leon County to the west of us but it is also --

         11         flows down through Wakulla County and Franklin County and

         12         comes out at two areas there, Mashes Sand in Wakulla

         13         County and Alligator Point Beach on Franklin County.

         14              What we are doing is we are testing the nutrients

         15         which, by the way, both beaches have been closed since

         16         October because of high nutrient levels.  But what we are

         17         testing is the nutrients in trying to determine the DNA of

         18         which the nutrients come from.  So we'll be able to tell

         19         whether it's from septic tanks, whether it's from goat

         20         farms, chicken farms, and there is --

         21              THE GOVERNOR:  I resent the fact that you're

         22         attacking the beleaguered goat farmers of north Florida.

         23              CFO GALLAGHER:  Well, we know it's not going to be

         24         pig farms.  We ran them out of the state, right, Charlie?

         25              COMMISSIONER BRONSON:  That's right.
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          1              THE GOVERNOR:  On this note, the word tetrapoda means

          2         four legs in Greek.  Amphibians, reptiles and mammals are

          3         the major groups of the tetrapoda.

          4              CFO GALLAGHER:  Including snakes that don't have any

          5         legs but they used to.

          6              (Laughter.)

          7              COMMISSIONER BRONSON:  Governor, I did --

          8              MS. CASTILLE:  Science can be fun.

          9              COMMISSIONER BRONSON:  I did have a comment I would

         10         like to make on this and that is --

         11              CFO GALLAGHER:  Tetrapods?

         12              COMMISSIONER BRONSON:  No.

         13              (Laughter.)

         14              THE GOVERNOR:  The runoff?

         15              COMMISSIONER BRONSON:  I just want to make sure --

         16         yes.  And I think it's an important issue here.  And no

         17         matter -- while all our environmental friends are going to

         18         put more pressure on Florida to do everything we can and

         19         we pay for to clean up our potential problem, and I just

         20         asked the CFO about the flow of the water that we looked

         21         at awhile ago.  And that is if our neighboring countries

         22         from South, Central America, and Mexico are not doing all

         23         the things that they can do then the pressures when you

         24         test water off our coast with that water flow, it may be

         25         bringing things in that are really not responsible for
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          1         Florida but from our neighbors that we're still testing as

          2         if it's our problem and we're spending millions, if not

          3         billions of dollars trying to clean up which would include

          4         our friends down the Mississippi River which we know how

          5         high industrial that's been for over 100 years.  And that

          6         water flows down and that mixture swirls that water and

          7         therefore, we're picking up contaminants that may not be

          8         our fault but coming from somewhere else that we're paying

          9         for.

         10              So I don't mind being a part of doing our share of

         11         cleanup and responsibility, but I don't think Florida

         12         should pay for all of it and be totally responsible just

         13         because we're dipping water up off our shores that may be

         14         coming from somewhere else and being contaminated from

         15         somewhere else.  So I just want to make sure we're looking

         16         at this from a very broad perspective of what the science

         17         is going to tell us.  And I think they need to be telling

         18         us what's coming in around the tip of South America,

         19         what's coming in from other areas so that we know what

         20         we're dealing with.  And right now all I've heard is what

         21         Florida can do for what we test off our shores and that's

         22         fine.  But it may not all be our problem and yet we're

         23         going to have to pay for it.  So I just want to be -- make

         24         sure we're looking at this from a very broad, open

         25         approach here.
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          1              CFO GALLAGHER:  So what Charlie wants to know is that

          2         when you're doing that DNA testing and figuring out

          3         whether it's from septic tanks, can you figure out whose

          4         it's from.

          5              MS. CASTILLE:  You actually can.

          6              CFO GALLAGHER:  So we'll know whether it's some South

          7         American septic tank, Mexican or ours.

          8              MS. CASTILLE:  I think right now what we are trying

          9         to do is reduce the cost of the tests.  Right now, the

         10         test is about $50,000 for one run of the -- so we're

         11         trying to bring that down and we're partnering with other

         12         states to do that.  This is a joint project between the

         13         University of Tennessee and the University of Florida.  I

         14         believe there are other universities as well.  To address

         15         Commissioner Bronson's concern, this is actually -- the

         16         U.S. ocean commission was -- has worked very closely with

         17         the departments of state and I guess you would call it a

         18         parallel project with the entire world on oceans.  We're

         19         doing these very same things with other countries and I

         20         believe it was April or May of this past year I attended a

         21         conference with worldwide attendance in Miami talking

         22         about these very same issues.  And there were governors of

         23         countries, there were governors of states in countries

         24         from all over the world.  We had interpreters, they were

         25         all very concerned about this same thing.
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          1              There was actually corporations from across the world

          2         in attendance as well.  What came from that, from that

          3         initiative, was a resolution in which all of the countries

          4         agreed to utilize best practices very much like our best

          5         management practices that we utilize here in Florida.

          6         That was used as a model for what we're doing on a

          7         worldwide basis.  So, Commissioner, you make a very good

          8         point.

          9              My presentation here was very Florida-centric because

         10         of our oceans initiative here.  But it is not a singular

         11         partnership.  It is a worldwide partnership.

         12              COMMISSIONER BRONSON:  Well, my -- and I understand

         13         that and I just wanted to make sure we weren't taking on

         14         the lion's share of the responsibility and the cost when

         15         it really should be a shared responsibility because my

         16         guess would be, just like we did here in Florida over

         17         years when we started growing so fast that nobody could

         18         keep up with it.  So the idea was if your sewage treatment

         19         plant can't take care of it, you just put it in a pipe and

         20         you ship it off out to wherever you got to ship it to

         21         which is exactly what we did.  And I'll use Orlando for a

         22         perfect example of that.  When they were shipping

         23         everything down to Shingle Creek into Lake Tohopekaliga

         24         which got up to about your knees when it used to be a

         25         sandy bottom lake and all that effluent flow got up to
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          1         about your knees.  By 1968 you couldn't even walk out

          2         there.

          3              So my guess is other growing countries like Mexico,

          4         the coastline, South America that are now really beginning

          5         to grow, they are not handling their problem the way it

          6         needs to be and they're probably shipping it out in pipes

          7         and it's hitting that water and flowing right on up to us.

          8         So I just want to make sure we're looking at the whole

          9         thing.

         10              MS. CASTILLE:  We are.

         11              THE GOVERNOR:  Or the industrial waste coming out of

         12         the Mississippi River.

         13              MS. CASTILLE:  And this group of scientists that's

         14         meeting at the Stennis Labs, there was -- I think the U.S.

         15         Oceans Commission made a presentation in Iowa.  Was it in

         16         the state of Iowa?

         17              THE GOVERNOR:  U.S. oceans commission met in Iowa?

         18              MS. CASTILLE:  Well, because Iowa is where much of

         19         that industrial and agricultural effluent to the

         20         Mississippi comes from.  So Iowa is very concerned about

         21         it, about what issues we may bring up.  So it's a

         22         nationwide problem.  It's a worldwide problem and it takes

         23         time and it does take money to meet and to share the

         24         information and to -- and the more the scientists get

         25         together, the more they can compare and contrast
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          1         information and the more they educate some scientists who

          2         come from either states that don't have as quality a

          3         program as we have or countries that have a quality of

          4         program that we have.

          5              THE GOVERNOR:  General?

          6              GENERAL CRIST:  Colleen, I'd be interested -- you

          7         mentioned that recreational and commercial fishing

          8         together generate 6.6 billion.  If you could get me a

          9         breakdown of one versus the other and what all is included

         10         to get to those numbers, I'd be interested to see that.

         11              MS. CASTILLE:  Okay.  We can do that.

         12              THE GOVERNOR:  All right, Colleen.  Are you wrapping

         13         it up here?

         14              MS. CASTILLE:  Yes, sir, I am.  The other most

         15         important issue that we are working on is resilience

         16         management on the coral reefs.  This is a cutting edge

         17         scientific research project that has found that some reefs

         18         in the Pacific Ocean have a resilience threshold or a

         19         sense of resilience that they can withstand many of the

         20         same pollutants that, for instance, our coral reefs in the

         21         Keys are experiencing.  And what we're trying to do is

         22         determine what is it in the DNA of the coral, what is it

         23         in either the waters or the temperature of the waters or

         24         the currents that make those coral reefs resilient.  And

         25         we're bringing them in, partnering with the Nature
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          1         Conservancy to do that scientific study.  Those are just a

          2         couple of the issues we're working on.  And so that's

          3         again, that would be worldwide research that would be

          4         conducted here in Florida.

          5              Let me just go ahead and cut to the chase here.  We

          6         have a new vision in Florida that we make folks more aware

          7         of that Florida is not just a state, it's a state with

          8         oceans and coasts and what we're trying to do is to make

          9         sure that we protect these resources for our future and

         10         our children's future.

         11              THE GOVERNOR:  Any other comments?  (No response.)

         12         What was the Suwannee River basin part that you left out?

         13              MS. CASTILLE:  The Suwannee River basin was a very

         14         similar initiative that we were doing with the

         15         Ochlockonee.  The Ochlockonee -- I use the Ochlockonee

         16         because I happened to have done a little bit more research

         17         on that one then I did with Suwannee.  Although we're

         18         working -- we have the partnership in the Suwannee with

         19         the dairy folks to reduce the effluent that may make it

         20         into the Suwannee basin.  It's a significant partnership.

         21         But what we're able to see, and it's the same thing in

         22         every river that you have.  You have the nutrients that go

         23         into the river.  You have the impacts to the benthic

         24         resources, to the shellfish, to the fish dock, the fish

         25         biomass.  But not only that, but you have impacts to how
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          1         people recreate.

          2              When we have these beaches that are closed, you know,

          3         the kids who live and play on the river can't go in.  And

          4         if you've spent your life growing up in Alligator Harbor

          5         and you can't go in there anymore and you can't catch -- I

          6         mean, people who live in these areas literally live off of

          7         the ocean.  They catch fish, they catch shrimp.  They pull

          8         oysters and clams from the waterways and that's how they

          9         subsist.  And that's no longer an option for those folks

         10         when we close those beaches down.

         11              THE GOVERNOR:  Okay.  Thank you, Colleen.  Just one

         12         other item.  If you could give me the details on the

         13         budget recommendation for the continuation of this, I

         14         would appreciate it.

         15              MS. CASTILLE:  We have that.  I have dual beach and

         16         budget issue today with you at 2:30.

         17              THE GOVERNOR:  Excellent.  Item 2.

         18              MS. CASTILLE:  Okay.  Item 2.  Item 2 is a request

         19         for -- well, it's a request for the county of Palm Beach

         20         to share title with Palm Beach County and the Board of

         21         Trustees for a 5,000 plus acre parcel in western Palm

         22         Beach County.  Let me just orient you here.  If you

         23         look -- you can see it a little better on the right-hand

         24         side.  It says JW Corbett Wildlife Management Area.  That

         25         blank white triangle to the north of there is Pratt
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          1         Whitney.  The angled road going across is Beeline

          2         Expressway.  And if you look at the very corner of JW

          3         Corbett and it says Northlake Boulevard, that is the

          4         Scripps property.

          5              So you'll note that in this area, we have quite a bit

          6         of land under conservation.  The piece of -- the item

          7         before us is a direction that we were given by the

          8         Governor and cabinet in 1999 which was after a report

          9         titled, Joint Title to Land Purchase by the Trustees and

         10         Counties, and the trustees directed us to develop

         11         procedures for negotiating shared title.

         12              This is actually not an issue that -- this is not the

         13         first time for this issue.  It's one that, Treasurer

         14         Gallagher, you may recall, we've probably had at least two

         15         other times and were never really able to address many of

         16         the issues.  In 19 -- on November 9th we were to go to

         17         closing for a piece -- for this piece of property with

         18         Palm Beach County.  Palm Beach County notified us at the

         19         hearing -- I mean at the closing that they wanted to have

         20         joint title to this property.  We balked at that because

         21         at the closing we were notified that the acquisition

         22         dollars that Palm Beach County has prohibits hunting on

         23         their conservation property.

         24              We had specifically, the management plan for this

         25         property specifically addressed hunting and preserved the
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          1         hunting ability on these properties.  So we withdrew from

          2         that closing and Palm Beach County asked us for a deferral

          3         until the June -- I think June 12th cabinet meeting.

          4         During the legislative session, one of the legislators

          5         from the Palm Beach County area proposed some legislation

          6         that would allow the joint -- that would specifically

          7         allow the trustees to enter into joint ownership.

          8              We had some concern with that.  We have always tried

          9         to preserve the trustees' control and ownership of the

         10         property that we purchase on your behalf.  When there is a

         11         joint -- when there is a joint acquisition, each owner has

         12         the ability to mortgage and lease a deed or interest and

         13         dispose of the property without the knowledge or approval

         14         of the other partner.  By state law, the Board of Trustees

         15         can sell its interest except it must offer the property to

         16         local governments first on a right of first refusal basis.

         17              So if we enter into joint ownership with a county, we

         18         have to notify them that we are changing our ownership in

         19         some fashion or another.  It is not the same with a county

         20         or a municipality.  They do not have to notify us.

         21         Ultimately, I think the reality would be that we would

         22         find out that something was happening to the property but

         23         it would -- the burden would be upon us to go to court --

         24         if the county chose not to stop their activity, the burden

         25         would be upon us to go to court to estop the county from
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          1         taking this particular action.

          2              Again, a co-owner can pledge the property to secure a

          3         federal grant without our knowledge.  And should the grant

          4         not be fulfilled, the federal government could seize the

          5         property and the co-owner, which would be us, could find

          6         ourselves enjoined with the feds on an ownership.  The

          7         co-owners each have a right to partition the property and

          8         it is an unconditional right.

          9              The court would then make the determination as to

         10         dividing the property into two separate ownerships or

         11         selling the property and dividing the proceeds.  What we

         12         have done here is we have recommended a denial of a joint

         13         ownership with the County.  If you look at the map, I'm

         14         not sure if you can tell the colors very well.  Well, look

         15         at the right-hand map.  The right-hand map where the

         16         bold -- where the bold lines are --

         17              THE GOVERNOR:  Does your map have A, B, C?

         18              MS. CASTILLE:  My map doesn't.

         19              THE GOVERNOR:  That's A?

         20              MS. CASTILLE:  The bold ownerships is what we would,

         21         as the State, acquire if we did a separated ownership.

         22         The left side.

         23              THE GOVERNOR:  Say it again.

         24              MS. CASTILLE:  There are two dark parcels.  The left

         25         side is -- this is better.
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          1              THE GOVERNOR:  This is simpler, I think.

          2              MS. CASTILLE:  Okay.  The parcels, the actual parcels

          3         that are above C and A --

          4              (Off-the-record discussion.)

          5              MS. CASTILLE:  Okay.  The parcel -- if we decided not

          6         to do joint ownership and continued with this closing,

          7         what we would recommend is we would recommend a 50/50

          8         split.  And what we would purchase from Palm Beach County

          9         would be Parcel C and Parcel A and the right-hand side

         10         would remain with Palm Beach County.

         11              CFO GALLAGHER:  Now what you're saying -- has Palm

         12         Beach County already bought this?

         13              MS. CASTILLE:  Palm Beach County has already bought

         14         it.  We typically -- it's generally with the water

         15         management districts but we do -- we do an acquisition

         16         agreement where a county or the water management district

         17         would acquire the property and then come to us for a 50/50

         18         split.

         19              CFO GALLAGHER:  We do 50/50 splits on joint ownership

         20         with water management districts.  To the best of my

         21         knowledge, we've never done one with anybody else.

         22              MS. CASTILLE:  We have -- to the best of my

         23         knowledge, we haven't either.  But there is a speaker who

         24         remembers a cabinet meeting differently than we do and

         25         says --
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          1              CFO GALLAGHER:  Where is she?

          2              MS. CASTILLE:  Ultimately, we did not do the joint

          3         ownership but the Governor and cabinet approved a joint

          4         ownership apparently.

          5              THE GOVERNOR:  That's a separate subject.  We have

          6         the right to do it.

          7              MS. CASTILLE:  We do.  We do have a right to do it.

          8              THE GOVERNOR:  We don't need to have legislation to

          9         do it in my opinion.  I think we have the right to do it.

         10         The question is should we do it and that's worthy of

         11         discussion.

         12              MS. CASTILLE:  So that's the debate --

         13              THE GOVERNOR:  Did we agree that we were going to buy

         14         this property in advance of their purchase?  In other

         15         words, was there an understanding, commitment?

         16              MS. CASTILLE:  Yes.

         17              CFO GALLAGHER:  But we didn't say exactly how because

         18         there was a big discussion --

         19              MS. CASTILLE:  Well, we knew we were going to do a

         20         joint ownership.  We were going to hold shared title,

         21         right?

         22              MS. ARMSTRONG:  No, we went down --

         23              THE GOVERNOR:  Eva, talk into the microphone.

         24              MS. ARMSTRONG:  This project goes back to 1992 when

         25         it was first put on the Preservation 2000 list.  And at
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          1         that point shared title was not part of the plan.  It was

          2         going to be a bargain share purchase with the County and

          3         we were going to share funds but we were going to hold

          4         title which goes way back.

          5              CFO GALLAGHER:  Which is what we normally do with

          6         counties on every deal that I've been involved in.

          7              MS. ARMSTRONG:  Correct.  I do need to clarify.  At

          8         one point, the Board of Trustees and this County shared

          9         title on what was MacArthur State Park.  In 1996, the

         10         County came to the Board of Trustees and said they did not

         11         like that arrangement and the Board of Trustees bought

         12         them out.  I think they gave up interest in something else

         13         and Board of Trustees now fully own MacArthur Park.  I

         14         don't know all the details, but it was in 1996.

         15              CFO GALLAGHER:  Well, we've already learned that this

         16         joint ownership doesn't work at least in one instance.

         17              MS. CASTILLE:  Well, the issues that frequently come

         18         up is counties tell us that they are concerned that we may

         19         develop the property.  Which in the history of the Board

         20         of Trustees has not really been a large -- a big issue.

         21         We, on quite a frequent basis, get requests from

         22         municipalities and from counties for giving up state land

         23         for development purposes and it's in very rare occasions

         24         that we do that.

         25              THE GOVERNOR:  We could -- the simple fact is that we
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          1         could have a 50/50 arrangement and you brought up

          2         legitimate concerns that we would have with a local

          3         government about their ability to mortgage the property or

          4         to do things on the property without notice.  You could

          5         put that in the agreement.  I mean, it would be a legal

          6         binding agreement.  Likewise, if people were concerned

          7         that the State was going to develop the property, that

          8         could be put into the agreement.  That's what agreements

          9         are for, I would imagine.

         10              CFO GALLAGHER:  Put a title restriction on it.

         11              THE GOVERNOR:  I mean, this is -- this seems like a

         12         big -- the question is do we want to do it or not.  And

         13         I'd like to hear from the local permit people.  I don't

         14         think -- I mean, that's why we have the ability to

         15         structure deals on a case-by-case basis.  I don't know why

         16         we need to try to reinvent the wheel here.  Give the

         17         lawyers a chance to go into a room and work it out.

         18         That's what they do for a living.

         19              COMMISSIONER BRONSON:  And, Governor, I'd like to

         20         know what is the benefit to the State for us to even -- I

         21         mean, I haven't heard what the true benefit yet of us

         22         doing this is for the people of the state of Florida.

         23         What benefit to the citizens of this state if we make this

         24         agreement do the rest of the people in the state get out

         25         of doing a joint agreement with Palm Beach County?
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          1              THE GOVERNOR:  Shouldn't we hear from Palm Beach

          2         County and then we'll open it up for discussion?

          3              MS. CASTILLE:  Yes, we should.

          4              MS. ARMSTRONG:  And if I might, let me clarify the

          5         map real quick because I think I've confused the

          6         secretary.  If you'll look at these two maps, this one is

          7         the way the contract was before where the State would buy

          8         this piece, these two dark pieces and the County would

          9         retain this one.  This is the current contract, the way

         10         you had approved it in the spring.  This is the one where

         11         we would jointly hold title to all of it, ignore the A, B,

         12         C, and D, those were parcel-specific.

         13              THE GOVERNOR:  That's what Palm Beach -- that's

         14         what's in front of us --

         15              MS. ARMSTRONG:  This is what's before you today.

         16              THE GOVERNOR:  -- and what Palm Beach would like for

         17         us to do?

         18              MS. ARMSTRONG:  Correct.  You would jointly hold 100

         19         percent title, both parties to all of the hatched area.

         20         And I confused the secretary.  I'm sorry about that, okay?

         21         I'm going to put this one back up for discussion purposes.

         22         Will you back that up a little bit?

         23              CFO GALLAGHER:  If the County would tell us what's

         24         wrong with the old agreement and why a new one.

         25              MS. CASTILLE:  Mr. John VanArnam, Palm Beach County.
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          1              THE GOVERNOR:  Welcome, sir.

          2              MR. VANARNAM:  Good morning, Governor and members.

          3         I'm not one of our commissioners.  I'm a staff person with

          4         the County.  I'm the deputy director of our environmental

          5         resources management --

          6              THE GOVERNOR:  You don't look like Karen Marcus.

          7              MR. VANARNAM:  No, so I want to make that clear.  As

          8         the secretary pointed out, this is not a new issue.  Four

          9         points, if I may.  This is not a new issue.  Back in

         10         December of '99, the Department, then Secretary Struhs,

         11         brought this issue before you and he asked for three

         12         things.  One was to accept the report by your land

         13         acquisition counsel, LaMack.  The second was to develop

         14         procedures for shared titles.  And third was to direct

         15         staff to develop procedures that would resolve any future

         16         conflicts relative to ownership and management.  And he

         17         pointed out when he testified in front of this body that

         18         those should be exceptions rather than the rule.

         19              The trustees approved that recommendation unanimously

         20         and unfortunately the Department never developed those

         21         procedures that they asked for authorization to develop.

         22              You asked about why shared title and I want to give

         23         you a few reasons why shared title with local government

         24         makes sense and is consistent with the Florida Statutes.

         25         One is when you have a local government partner, the State
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          1         gets essentially double acreage for the same purchase

          2         price.  We are sharing, putting 50 percent of the money up

          3         towards an acquisition.

          4              All of your state management rules related to

          5         acquisition and management apply.  The legislative intent

          6         for conservation for the goals of the State's conservation

          7         lands program are furthered by partnership with the local

          8         government.  With the local government as the land manager

          9         and most of these types of arrangements are structured in

         10         that way, the responsibility for management of the site

         11         falls on the local government and the local governments

         12         fund the management of these sites which can get rather

         13         expensive essentially, if you're in an area where you have

         14         a lot of problems with invasive exotics and encroachment

         15         of development.

         16              The local government --

         17              THE GOVERNOR:  I'm sorry.  But is that the

         18         understanding that if we purchase this -- if we purchase a

         19         50 percent interest in the whole amount that you would

         20         continue to manage it?

         21              MR. VANARNAM:  Yes, sir.

         22              THE GOVERNOR:  And if we don't, we are obligated to

         23         manage it?

         24              MR. VANARNAM:  The option agreement that was on the

         25         table was we'd agree to manage the State portion also if
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          1         we went ahead and split the property in half which was

          2         what the Department seems to prefer as opposed to the

          3         shared title arrangement, we had agreed to manage both

          4         parcels.

          5              THE GOVERNOR:  So in either case --

          6              MR. VANARNAM:  We would have managed it.

          7              THE GOVERNOR:  You're talking in past tense here,

          8         past, would have, I mean --

          9              CFO GALLAGHER:  You will.

         10              THE GOVERNOR:  We're hoping that this goes forward.

         11         The reverse of what you said is also true which is that

         12         we're extending the reach of the County's conservation

         13         plan.  You bought it.  We're paying for half of it, I

         14         assume.  I don't know what price compared to what you

         15         bought it for if there is some benefit that the County

         16         gets out of that just out of the appreciation of the

         17         value.  You're extending our reach and we're extending

         18         yours irrespective of whether it's a 50 percent ownership

         19         of a larger piece or if we break it up.

         20              MR. VANARNAM:  Yes, sir.  I mean, that's one of the

         21         benefits for the citizens of Florida --

         22              MR. WATKINS:  It's a benefit either way.  It's a

         23         benefit whether we split it in two or if we buy 50 percent

         24         interest.

         25              MR. VANARNAM:  Yes.
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          1              CFO GALLAGHER:  Question.  If we only buy 50 percent,

          2         you own 50 percent, we own 50 percent, two separate

          3         pieces, you're still going to manage both?

          4              MR. VANARNAM:  Well, let me suggest -- or tell you

          5         that there has been discussions that if this shared title

          6         approach is not approved by the trustees, it's likely that

          7         the Board or our board will authorize a request to the

          8         State to withdraw from that option agreement so that

          9         essentially -- and that was asked at the cabinet or at the

         10         aides' meeting and the Department said they would not

         11         object to that.

         12              THE GOVERNOR:  So you would rather --

         13              MR. VANARNAM:  We would retain the whole property.

         14              THE GOVERNOR:  And then we could go spend money on

         15         other properties that have conservation value.

         16              MR. VANARNAM:  Right.

         17              CFO GALLAGHER:  Why are we here?

         18              THE GOVERNOR:  It's like sticking a gun to your head

         19         and saying I'm going to stick you up.

         20              CFO GALLAGHER:  I'm going to shoot myself.

         21              MR. VANARNAM:  If I could continue.

         22              THE GOVERNOR:  Please.

         23              CFO GALLAGHER:  Yeah, if you could explain that one.

         24              MR. VANARNAM:  In terms of the benefits, one of the

         25         benefits of a shared title arrangement is that -- one of
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          1         the main reasons we're interested, we feel in terms of

          2         long-term protection for the land, there will be a greater

          3         level of long-term protection for the land.  We're

          4         protecting ourselves from ourselves, you're helping us do

          5         that and we're also protecting the land against some

          6         action by a future Board of Trustees 20, 30, 40 years into

          7         the future.  We are both -- both levels of government are

          8         bought in and listed on the title and are helping to

          9         protect that, provide the long-term protection for the

         10         property.  That's one of the things that's missing when

         11         you essentially split the property in half.

         12              CFO GALLAGHER:  Well, if we buy -- you already own it

         13         all.  And if we buy half of it from you, we can make a

         14         deal that basically says that you must give us the first

         15         option on the other piece.  We must give you the first

         16         option on our piece and you can't develop yours unless we

         17         agree to develop ours.  And we'll crisscross it so nobody

         18         can do anything unless the other one agrees.  Right now,

         19         you have the title and we could put a title restriction on

         20         the whole property when the sale is done because you got

         21         it under one title now.  You're going to have to split it

         22         and have two separate titles anyway, aren't you?

         23              MR. VANARNAM:  Yes.

         24              THE GOVERNOR:  So, in other words, again, back to the

         25         point of why a 50 percent interest in the whole property
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          1         is better than the opposite, we could structure in the

          2         purchase -- in the agreement, a way to accommodate the

          3         county commission not trusting us and vice versa.  I mean,

          4         it could be done either way.  You haven't given us

          5         anything to say this is so unique that it requires a

          6         50 percent purchase rather than separating it.

          7              CFO GALLAGHER:  And let me just mention from my own

          8         point of view, what we would be doing is setting a

          9         brand-new precedent that I'm not sure I'm comfortable with

         10         right now when it doesn't have to be done.  In other

         11         words, there's other ways to accomplish what you-all want

         12         and what I don't have a problem with.  But to do the

         13         50/50, all of a sudden, we have a new precedent and every

         14         county and city is going to come to us and say, Let's do

         15         one of these 50/50 we all own it type things, and then we

         16         end up with properties all over the place, we don't even

         17         know what we have and we don't know who's managing it.

         18         And we've never done it before other than with water

         19         management districts which is sort of part of this, and

         20         I'm real uncomfortable starting that precedent when we

         21         don't have to, for whatever that's worth.

         22              THE GOVERNOR:  Is there another -- maybe in Palm

         23         Beach they're more respectful of the people that speak and

         24         let them finish.  But we're kind of --

         25              CFO GALLAGHER:  You obviously haven't been to a Palm
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          1         Beach County commission meeting.

          2              (Laughter.)

          3              THE GOVERNOR:  If there are other issues that are

          4         important, please let us know.

          5              MR. VANARNAM:  In terms of an agreement, we spent

          6         three or four months crafting an agreement that's got 14

          7         specific covenants that we agreed, deed restrictions

          8         placed on the property.  There is a reverter clause.

          9         There's a right of first refusal and there's a 14-page

         10         lease that goes along with it.  All of those things were

         11         structured to protect the interests of the State and to

         12         protect the Trustees.  A lot of time was spent on that and

         13         we feel it accomplishes that.

         14              So you talked about under an arrangement could you

         15         structure some agreements and the governor, you mentioned

         16         earlier, that's what agreements are for and we did.  We

         17         spent a lot of work on that.  We felt we had a commitment

         18         from the Department to move forward.  We put a lot of time

         19         into it as did the State and then we were somewhat

         20         surprised at the denial recommendation.

         21              THE GOVERNOR:  Well, let's ask the Department why you

         22         would put Palm Beach County through this and then at the

         23         end have them come here with a denial request.

         24              MS. CASTILLE:  It was for just the reason that

         25         Treasurer Gallagher brought up, that we would have a
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          1         number of counties who were wanting to do this and the

          2         management concerns with having to make sure that every

          3         time we do something on a piece of property we notify

          4         every time the County does something on the piece of

          5         property, and it would be multiple counties.

          6              But the other issue is the restrictive covenants that

          7         we would put in there, it would definitely be the good

          8         faith intention of both parties to adhere to those and

          9         we're just leery of doing that.

         10              THE GOVERNOR:  But why did you go months of

         11         discussions and work out an agreement?  I'm missing the

         12         point.  If those concerns were clear beforehand, why put

         13         everybody through a torturous process?

         14              MS. ARMSTRONG:  That was me.  Well, I'll take the

         15         responsibility, it was.  I had Sandra Stockwell who is

         16         your Board of Trustees DIRT (phonetic) lawyer do the

         17         negotiations with Palm Beach County.  And when they got

         18         done, she came in, sat down with me, and we went over the

         19         contract.  And I said, Ultimately are we able to protect

         20         the public trust with this contract?  Will we, you know,

         21         10, 15, 20 years down the road still be protecting what we

         22         need to protect?  And we couldn't come to yes because you

         23         end up back in court.  It won't be today.  It won't be

         24         five years or ten years.  We're talking about 15 years

         25         when something will happen on that property and we'll all
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          1         be gone and we'll be in court and the judge will divide

          2         the property and end up splitting it and we're right back

          3         here with split property.

          4              You can't put the legal protections in place in that

          5         contract to deal with all the different things that happen

          6         on a piece of property when two governments jointly own

          7         it.  And I'm the one who said, I can't in good conscience

          8         for what you folks hired me to do, recommend you enter

          9         into this contract on this piece of property.  So that's

         10         why I recommended denial and that's why we're here.

         11              And we told Palm Beach County during the legislative

         12         process, we said, Look, instead of going into rulemaking,

         13         let's try one of these and see if it works.  And so we

         14         did.  I had them in good faith negotiate that contract.

         15         Do the best you can to put the legal protections in place

         16         in that contract.  But ultimately it just doesn't work.

         17              So I said, Okay, let's take it to the cabinet.  Let's

         18         have a full discussion of the policies around it.  But as

         19         your Director of State Lands and your DIRT lawyer who's

         20         excellent on these issues, we just didn't feel we could

         21         recommend this was the way for the State to go if you're

         22         going to protect these conservation lands in joint

         23         ownership with another government entity.

         24              We just don't see how it works.  Split title works.

         25         They say they're interested in leveraging the property and
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          1         protecting it.  Boy, you leverage those dollars, you take

          2         the dollars in, you buy the big piece of property, you get

          3         the lower price and then split title and both entities get

          4         to manage it for the best way they see fit.  You end up

          5         there ultimately anyway.

          6              THE GOVERNOR:  Everything you said makes sense, Eva.

          7         But the same would apply by splitting title.  You have the

          8         exact same -- there's no way 20 years from now to know how

          9         a crazy judge would rule if one of the entities wanted to

         10         do something that was dramatically different than the

         11         intent when it was purchased.

         12              MS. ARMSTRONG:  Right.

         13              THE GOVERNOR:  I mean, if you're trying to plan for

         14         that, neither one of these scenarios guarantees that

         15         that's going to happen.

         16              MS. ARMSTRONG:  Correct.

         17              THE GOVERNOR:  So, again, I go back to the question

         18         that it seems to me that, just from a policy -- put aside

         19         this particular property and maybe the speaker could

         20         answer this question.  What benefits -- the treasurer

         21         asked the question:  What benefits does the State get -- I

         22         think it was the treasurer -- in return for doing --

         23         accommodating you in terms of the structure?  What do we

         24         get?  The only thing I can see, based on the conversation

         25         so far, is we get someone else to manage the property.  I
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          1         think that's a benefit.  I mean, Palm Beach County is a

          2         good steward of the land.  I think they are recognized as

          3         such.  So we get that benefit.  We get to save the

          4         management costs.  I can't think of anything else.

          5              MR. VANARNAM:  The State gets the benefit of a true

          6         partnership with their local government partners.  We put

          7         up half the money, you guys put up -- the State puts up

          8         half the money.  The public benefits.  We share title.  We

          9         have a tight agreement that we're going to manage it

         10         exactly the way the State wants us to manage it and it's a

         11         win -- we look at it as a win/win, better long-term

         12         protection for the property.

         13              CFO GALLAGHER:  And the alternative is that you-all

         14         own it completely.  We take it off the list and on we go.

         15              MR. VANARNAM:  Yes, sir.

         16              CFO GALLAGHER:  That's like a slam dunk.  Don't buy

         17         half of it, to me.  I mean, you know, you're saying, Why

         18         don't you go ahead and spend money so you could own half

         19         of what we already bought.

         20              MR. VANARNAM:  Well, that is an option.  We'll keep

         21         the property, we'll manage it for conservation purposes

         22         and we're trying to get other entities to hold easements

         23         to help protect against the future action of the Board of

         24         County Commissioners.  We've offered easements to the

         25         Water Management District at no cost.  We've offered
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          1         easements to Audubon and the Nature Conservancy.  We are

          2         trying to tie this property to ensure that a future board

          3         doesn't take some action that will take it out of

          4         preservation.  That's an option that we are trying to

          5         pursue.

          6              CFO GALLAGHER:  Maybe what we ought to do is buy a

          7         conservation easement from you and then we own -- we keep

          8         you from ever developing it by paying you some money and,

          9         you know, you get to manage it like we do with individuals

         10         every day.

         11              MR. VANARNAM:  That would be fine.

         12              THE GOVERNOR:  Really?

         13              MR. VANARNAM:  Yeah, I have no problem with that at

         14         all.

         15              THE GOVERNOR:  There you have it.

         16              CFO GALLAGHER:  That way, you get the money and you

         17         manage it and we set the rules on how you manage it.

         18              MS. CASTILLE:  One of the other issues with this

         19         piece of property is the management of it.  The property,

         20         prior to Palm Beach County owning it or purchasing it, was

         21         in hunting.  And Palm Beach County's conservation funds

         22         restrict hunting from properties that they purchase.

         23              COMMISSIONER BRONSON:  I got a question on that one

         24         then.

         25              MS. CASTILLE:  So if we purchased it in a separate --
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          1         so currently, there is no hunting on the property.  If we

          2         purchased it in a 50/50 purchase, we would take the upper

          3         half which is connected to the Hungryland Slough area and

          4         we would be able to return hunting to those lands.  And we

          5         do have two other speakers -- three other speakers here

          6         and so that's kind of one of the issues in Palm Beach

          7         County.

          8              COMMISSIONER BRONSON:  Well, if the County keeps

          9         total control over it, I mean there's nothing -- if that's

         10         the County's rule on it, that's one thing.  But if the

         11         State is a managing partner, one of the things I hear

         12         every day is:  How much more forest land are we going to

         13         open up for hunting for the State because for the public

         14         to get a chance to hunt, a lot of those areas are closing

         15         down.  And if they don't hunt on State land, there's no

         16         land for people to hunt on.

         17              Now for those who think hunting is bad and all that,

         18         I think they need to go look at Ducks Unlimited and the

         19         Wild Turkey Federation and look at the amount of wildlife

         20         that's been produced on these lands and paid for by

         21         hunters' licenses and they'll find out there's more game

         22         available than ever before because it's being managed

         23         properly.

         24              And being from one of the three most populated

         25         counties in the state, your own population is looking for
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          1         hunting lands and they are looking for the State mostly

          2         for it.  And, of course, you've got Corbett wildlife

          3         management area down there which is open to everybody in

          4         the state, not just the people in that county.  But that

          5         would be one of the things I'd want to talk to you about

          6         is sometimes by people in the county saying hunting is

          7         bad, they don't understand that doing it the right way,

          8         you can actually have a very good game population, very

          9         good wildlife population, and foliage population by

         10         managing it in the right way.  So just to say, No hunting,

         11         if the County owns it, they certainly have a right to do

         12         that.  If the State is a partner in it, I'm not sure we

         13         want to do that.

         14              MR. VANARNAM:  Very quickly.  On the hunting issue, I

         15         don't disagree with anything you said.  We did turn

         16         over -- sell a portion of the Pal Mar piece north of

         17         Indiantown Road to the Fish and Wildlife Commission who

         18         agreed with this approach so they could hunt, add that to

         19         their Hungryland Slough area and their holdings north of

         20         there so that it could be hunted.  The Fish and Wildlife

         21         Conservation Commission agreed with the management

         22         approach to have this piece that we're talking about here

         23         which is below Indiantown Road to be managed by the County

         24         under the County's management.

         25              So the hunting issue was dealt with by turning over
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          1         the piece north of Indiantown Road to the Fish and

          2         Wildlife Conservation Commission.  I don't think the

          3         hunting is an issue with all due respect to the secretary.

          4              MS. CASTILLE:  We have two other speakers -- three

          5         other speakers.  We have Eric Draper from the Audubon

          6         Society, Florida Audubon, sorry.

          7              MR. DRAPER:  Thank you, Colleen.

          8              THE GOVERNOR:  Good morning.

          9              MR. DRAPER:  Good morning.  I mostly want to focus on

         10         this issue from a policy point of view.  I actually

         11         managed the Land Acquisition Referendum Campaign back in

         12         1991 that approved the County's program to buy this land

         13         and a lot of the other land.  I remember specifically just

         14         on the hunting issue, Commissioner Bronson, that we sold

         15         the voters on two important points.  One is that there

         16         would be the promise of matching money from the State for

         17         the County's purchases.  And the second is these were

         18         primarily sold as park lands.  That's what the voters

         19         believed they were going out and approving.

         20              The point that I'm most interested in here is

         21         maintaining the partnership with the counties.  We had

         22         four counties at election day approve tax increases and

         23         bonds to have their own land acquisition programs.

         24         Brevard did it for the third time.  Dade did it for the

         25         third time.  Indian River has a second program in place
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          1         now.  And Osceola has a new program which, by the way, I

          2         think is nonhunting lands.

          3              THE GOVERNOR:  Nonhunting in Osceola?

          4              MR. DRAPER:  I believe that that's the case.  I

          5         believe that's the case.  I was told that the other day.

          6         The point is they're tending toward more park land type

          7         purchases.  It's very important that you continue the

          8         partnership with Palm Beach County.  Probably Palm Beach

          9         County has been the Trustee's strongest partner in terms

         10         of protecting lands, its shared purchases, and the County

         11         is managing other lands in that situation, and sending a

         12         message to other county governments that this is the

         13         type -- this is the way we'll extend the Florida Forever

         14         Program and try and maximize the purchases as much as you

         15         can.

         16              As I've listened to this debate during the cabinet

         17         aides' meeting, participated in it during the legislative

         18         session last year, and listened to it this morning, I'm

         19         concerned that the State might just be focusing too much

         20         on risk adversity and not focusing enough on the

         21         opportunity here.  It seemed to me at the point the

         22         treasurer raised the question of just buying an easement

         23         over the property, that might just be the solution to this

         24         situation, is look for other ways to structure this deal.

         25         If you decide to deny today, please do so with some
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          1         direction to the staff to restructure this in such a way

          2         that they can come back to you and we can actually

          3         complete something that really is -- this deal has been

          4         being worked on for over ten years.  Find a way to make it

          5         work.

          6              I read the attorney's memo, Stockdale's memo on this

          7         thing.  And I just find it feels like there is too much

          8         focus on risk and not enough focus on opportunity here.

          9         And what we should do is to work as hard as we can to try

         10         to keep this partnership going and extend the benefit to

         11         both the taxpayers of Palm Beach County and the State of

         12         Florida.  Thank you.

         13              THE GOVERNOR:  Thank you.  General?

         14              GENERAL CRIST:  Colleen, maybe you can help me out.

         15         If I'm oversimplifying, let me know.  But it seems to me

         16         what we're talking about here is whether or not you want

         17         to have the State and the County go together to purchase

         18         some land to preserve it, to reduce the cost to, I guess,

         19         about half to each one, then determine somebody is going

         20         to manage it.  Is that the idea?  Just reduce costs to

         21         both governments?

         22              MS. CASTILLE:  Yes, leverage our dollars.  Allow each

         23         of us to go out and buy more land.  We pay only for

         24         50 percent and then go out and buy more land.

         25              GENERAL CRIST:  Okay.  But the reality is it's the
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          1         same taxpayer that's doing it, isn't it?

          2              MS. CASTILLE:  I think the tax base is different from

          3         each, but, yes.  From each 50 percent share.

          4              GENERAL CRIST:  And we have not done this before?

          5         This would be the first time we would do this mutual sort

          6         of land buying deal?

          7              MS. CASTILLE:  Yes, sir.

          8              GENERAL CRIST:  But it might, in the long run, enable

          9         us to buy more land.

         10              MS. CASTILLE:  It would.

         11              GENERAL CRIST:  Okay.

         12              MS. CASTILLE:  We have two more speakers.  Manley

         13         Fuller from the Florida Wildlife Federation and then Bill

         14         Roberts from the Association of Counties.

         15              MR. FULLER:  Good morning, Governor and cabinet.  The

         16         Florida Wildlife Federation thinks that certainly there

         17         ought to be opportunities to partner with counties and

         18         should be pursued to maximize conservation land

         19         acquisition benefits.  But we're -- we support the staff

         20         recommendation in this case because we think there are

         21         other ways to partner besides having a shared title.  I

         22         followed some of these discussions, been on the periphery

         23         of these discussions for several years about this issue in

         24         Palm Beach County in Pal Mar.  And I was under the

         25         impression that back in the summer that an agreement had
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          1         been reached between the State and the County that they

          2         were going to divide the property with the County

          3         retaining 100 percent title to approximately half of it

          4         and the State was going to retain title to the other half

          5         and I that's -- I didn't realize this item was coming up

          6         again with the blended title issue.

          7              We're concerned that the guarantees under the State

          8         constitution on conservation standards could be brought

          9         into question with joint ownership.  I had reviewed

         10         staff -- legal memorandum.  I'm not an attorney but I'd

         11         also spoken with -- at a meeting with an attorney, Jack

         12         Peoples, and we had an informal discussion about this and

         13         he said, Well, you don't want to go joint title.  He said

         14         there's other ways you can structure agreements to do it

         15         to protect both parties' interests.  So we're concerned

         16         about the joint title and think what Commissioner -- I

         17         think what Colleen Castille laid out with the State

         18         acquiring a portion of it and the County acquiring it and

         19         just have a mutual management agreement that's for the

         20         parcels would be the way to go.  Or as Commissioner

         21         Gallagher suggested, possibly something along the

         22         conservation easement line.

         23              One thing that I do want to say regarding comments by

         24         Commissioner Bronson, and the federation agrees with him

         25         completely, that there is a misunderstanding by some
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          1         people that you can't have wildlife benefits, tremendous

          2         wildlife benefits and have hunting on a parcel.  And we

          3         don't like that portion of Palm Beach County's language

          4         which prohibits hunting.  While we recognize that most of

          5         the parcels acquired within Palm Beach County, hunting

          6         would be an inappropriate activity because the areas are

          7         too urbanized, suburbanized, whatever.  That doesn't mean

          8         that some of the agricultural lands that might be -- might

          9         come under a county purchase or on the periphery might not

         10         be able to have things like dove fields, things like that.

         11         And we think that we don't like to see language in these

         12         county initiatives that would absolutely prohibit hunting

         13         on a piece of property, recognizing that there are many

         14         properties where it isn't appropriate.  So we think this

         15         has been one -- something about the Palm Beach language

         16         that we have been concerned about for sometime.  Although

         17         we very strongly support counties doing what Palm Beach

         18         County is doing.

         19              So that -- we would support the staff recommendation,

         20         but we think there's other ways to get to where we all

         21         want to get and we think there are other ways where the

         22         State and the counties and other districts, particularly

         23         counties, can maximize conservation benefit both for

         24         residents of individual counties as well as residents of

         25         the state.
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          1              THE GOVERNOR:  Commissioner.

          2              COMMISSIONER BRONSON:  Thank you, Governor.  Manley,

          3         let me ask you.  You've been involved over the years.

          4         Audubon has, Sierra, almost every organization has been

          5         involved in the process of either outright purchases of

          6         land for the State under a set of guidelines where we go

          7         in and set which is going to be in the Class A, Class B

          8         and sometimes that gets changed.  But the way I'm looking

          9         at this right now, this would almost give counties, should

         10         other counties decide to do the same thing, a chance to

         11         jump in and either jump over or get us involved in doing a

         12         split buy of land that may not meet the Class A, Class B

         13         land purchases that we are right now we've got more land

         14         out there available than we have money to buy it with.

         15              So therefore, you start putting this in, that's

         16         another whole process in there that the counties may want

         17         the land saved but it may not be that high up on our state

         18         list that we're looking at now that everyone has been

         19         meeting on.  So that shoes more land in front of us to

         20         make a deal that may not be exactly where we think we need

         21         to go with our State money even if it is under an

         22         agreement for conservation easement.  It may not be at the

         23         top of our list in conservation easements either.

         24              So I see this as a potential to put more land in

         25         front of us to put money on without doing the process
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          1         we've been doing which is to systematically go down those

          2         lists as to what we think is the most important land for

          3         either purchase or conservation easements.

          4              MR. FULLER:  Well, Commissioner, I think that

          5         there -- one situation, as you're well aware, we have more

          6         potential conservation purchases on the list than we have

          7         money to follow up on.  And the counties, I think -- I

          8         can't speak for ARC, but I believe in their

          9         recommendations if other partners can help leverage a

         10         piece of property that they think is valuable, that will

         11         be useful.  But you would not want to have a situation

         12         where, you know, a county was pushing property that really

         13         didn't meet the State's criteria if that's what you're

         14         getting at.

         15              So I could see what you're saying as a possibility.

         16         But in most cases, you know, you would think that -- you

         17         have, you know, counties like say Brevard and Brevard has

         18         got a lot of real high quality natural areas in it.  It

         19         also has tremendous growth pressure.  So in a place like

         20         Brevard, there has been, I think, some good coordinated

         21         and cooperation between the State and the County.  So I

         22         think there is an opportunity there.  But I think if you

         23         cloud the title, you bring in potential conflict.  Do the

         24         State constitutional standards apply to a property where

         25         there is joint title.  And eventually, some judge would
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          1         have to parcel that out.  Whereas if you-all maintain, we

          2         own 100 percent here on this side of the road and the

          3         County owns 100 percent, we have a cooperative management

          4         agreement.  You've effectively protected the property but

          5         you don't get into those potential legal quagmires.  Thank

          6         you.

          7              THE GOVERNOR:  Thank you.

          8              MS. CASTILLE:  Just to address the commissioner's

          9         comments and also Attorney General Crist.  We frequently

         10         purchase land bargain shared with counties.  But what has

         11         happened historically is that the counties turn over 100

         12         percent title to us after that.  And it is a legitimate

         13         why, Commissioner, of moving your project up the list.  If

         14         you come to us with an acquisition that the County is

         15         either getting ready to acquire or has already acquired,

         16         then on that B list it begins to be one of the bargain

         17         properties that we get because we get it for 50 percent of

         18         value.

         19              THE GOVERNOR:  I think, don't we, when our federal

         20         partners are involved, they maintain 100 percent title.

         21         There is no 50/50 joint ownership when the feds are

         22         involved, are they?

         23              MS. CASTILLE:  I think it differs on different pieces

         24         of property.  Because on the Corbett piece of property, we

         25         have 100 percent title on that but they have this sort of
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          1         string attached to us, as you recall, where if we do

          2         anything with it, we have to go ask them for authority to

          3         sell --

          4              THE GOVERNOR:  But we don't have any -- do we have

          5         any 50/50 ownership?

          6              MS. CASTILLE:  Federal title?  I don't think so.

          7              THE GOVERNOR:  And the feds don't allow that, do

          8         they?

          9              MS. CASTILLE:  I don't think so.

         10              THE GOVERNOR:  Do you have one more speaker?

         11              MS. CASTILLE:  And we have one more speaker, Mr. Bill

         12         Roberts representing the Association of Counties.

         13              THE GOVERNOR:  Good morning.

         14              MR. ROBERTS:  Thank you, Governor and members of the

         15         cabinet, I'm Bill Roberts with the Florida Association of

         16         Counties.  We were here four years ago talking about this

         17         issue.  As you recall, those of you who were on the

         18         cabinet at that time, that you did adopt the policy which

         19         the Association of Counties brought to you on behalf of

         20         Indian River and Brevard counties.  There are two

         21         approaches there that -- in answer to Commissioner

         22         Bronson's comments -- that were very important to Indian

         23         River County.

         24              Indian River County raised the money to purchase the

         25         lands from a revenue bond issue which was funded by their
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          1         tourist development tax.  The holders of those bonds

          2         raised the issue, Well, why should you just give money to

          3         the State to buy lands and get nothing in return?  In that

          4         instance, it was not the County coming to the State but

          5         the State coming to the County.  And that project, I

          6         think, was called the Carson Flat purchase.  The State was

          7         going to pay 50 percent.  The County, 25 percent and the

          8         Water Management District, 25 percent.

          9              So the one issue that was discussed before the

         10         governor and cabinet was the bond obligations.  The second

         11         thing is Indian River County had a lot of citizens who

         12         were interested in participating in the preservation of

         13         this large tract of land, 6,000 acres in the northern part

         14         of the county which is open for hunting.  The county

         15         simply wanted to put a sign up and say, This property is

         16         being protected by the State of Florida, by the Water

         17         Management District and by Indian River County.  Simply a

         18         matter of public policy of putting their money up,

         19         $2 million in this instance, and having the recognition

         20         that they had acquired something for it for the benefit of

         21         the citizens.

         22              I think all of the negative comments that have been

         23         made can be easily handled with management agreements.

         24         There, again, it's an opportunity to do something that we

         25         haven't done before and it would encouraged counties to
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          1         put up their money to assist the State and the water

          2         management districts in acquiring the properties that are

          3         already on the A and B list.  That both the attorney

          4         general and the general counsel for the Department back in

          5         1999 could find no legal reason why we couldn't do this.

          6         We don't think there is a logical reason why we shouldn't

          7         do it.  Thank you.

          8              THE GOVERNOR:  Thank you very much.  Colleen.

          9              MS. CASTILLE:  Yes, sir.

         10              THE GOVERNOR:  I'm looking at the last person that

         11         spoke.  You mentioned the fact that we looked at this

         12         issue and -- four years ago.

         13              MS. CASTILLE:  December 14, 1999.

         14              THE GOVERNOR:  Right.  And it looks as though we

         15         unanimously asked for the Department to come up with rules

         16         that would deal with this issue that we wanted to pursue a

         17         policy that gave us the flexibility should we so desire to

         18         do so.

         19              MS. CASTILLE:  Right.  And --

         20              THE GOVERNOR:  Did you-all do it?

         21              MS. CASTILLE:  No, sir, I started that.  That was my

         22         opening comment about the requirement that we go forward

         23         with rules.  When we started moving forward with the

         24         rules, we came up with all of these problems with the

         25         joint chair title.
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          1              THE GOVERNOR:  Well, just out of curiosity since I'm

          2         a little old and I've got a lot of data that comes in

          3         front of me all the time, when we ask you to do something

          4         and you don't do it, isn't appropriate to come back to us

          5         and tell us?

          6              MS. CASTILLE:  Well this is what we talked about

          7         during session that we would work on a set of rules.  As

          8         we started working on the rules, we figured what we'll do

          9         is a joint agreement so that we can get a joint agreement

         10         worked out.  And this is -- we're having concerns with

         11         doing this.

         12              THE GOVERNOR:  In 1999, December, we asked you to get

         13         back to us.

         14              CFO GALLAGHER:  Struhs.

         15              THE GOVERNOR:  Struhs, slash, Department.  Colleen,

         16         don't take it personally.  Eva, you might be able to take

         17         it personally.

         18              (Laughter.)

         19              MS. ARMSTRONG:  Let me help.  Okay.  In 1999, that

         20         was like my fourth month on the job here and I was still

         21         in a major straight up learning curve.  A lot of things

         22         changed from then and now and we've become much more

         23         sophisticated in a number of areas in land acquisition.

         24         The white paper that was written in 1999 was written by a

         25         man who worked on office of environmental services staff,
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          1         who, let me assure you was not an attorney.  We have since

          2         hired Sandra Stockwell who is an expert in real estate law

          3         and the best way to describe what she did when she first

          4         looked at the white paper and I said, We're supposed to be

          5         developing rules on shared title, was start choking.  She

          6         said, No, this is not worth the paper it's written on and

          7         let me tell you why.  So she proceeded to educate us in

          8         the challenges --

          9              THE GOVERNOR:  I'm just asking why she didn't educate

         10         us.

         11              MS. ARMSTRONG:  Well, we can have her do that today

         12         right now, if you'd like.

         13              THE GOVERNOR:  It's a simple question.

         14              MS. ARMSTRONG:  So we became far more --

         15              THE GOVERNOR:  We may have misguided -- it could have

         16         been a foolhardy recommendation that we approved that we

         17         do this.  I don't think it is.  In 1999 --

         18              MS. ARMSTRONG:  In 1999 it was a lack of knowledge

         19         recommendation in 1999, I'm here to admit.  And we've

         20         become more educated.  So rather than in the spring going

         21         down the road of developing a rule, I said, Wait.  Let us

         22         try one in reality and so we have the contract.

         23              THE GOVERNOR:  Just asking a simple question.  1999

         24         to 2004 is five years.  What happened in between now and

         25         the spring?
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          1              MS. ARMSTRONG:  We became educated in the

          2         sophistication of real estate law.

          3              THE GOVERNOR:  For the record, next time that we ask

          4         incorrectly or correctly for the Department to go through

          5         rulemaking or to craft a policy and there is a reason why

          6         it can't be done, I would suggest that you come back to us

          7         and tell us that.

          8              MS. ARMSTRONG:  Okay.

          9              THE GOVERNOR:  Not in five years.

         10              MS. ARMSTRONG:  Okay.  Yes, sir.

         11              THE GOVERNOR:  That's all I'm saying.

         12              MS. ARMSTRONG:  Yes, sir.

         13              CFO GALLAGHER:  I have a question on this particular

         14         piece.

         15              THE GOVERNOR:  Yes.

         16              CFO GALLAGHER:  There are mineral, gas, et cetera

         17         rights that somebody else has.  Can you explain why that

         18         is?  I mean, is that the way Palm Beach bought it or was

         19         it on there before Palm Beach bought it or what is the

         20         deal?

         21              MS. ARMSTRONG:  Well, Palm Beach bought them.  We

         22         have a memo.  They're held by a third party.  The

         23         appraisers looked at it and felt they didn't hold much

         24         value because the minerals aren't of much value and they

         25         were not attributed to value in the purchase.
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          1              CFO GALLAGHER:  All right.  But who holds them?

          2              MS. ARMSTRONG:  Third party.

          3              CFO GALLAGHER:  Was that third party the person that

          4         Palm Beach County bought the land from?

          5              MS. ARMSTRONG:  No.  Third party to that --

          6              CFO GALLAGHER:  Prior to that?

          7              MS. ARMSTRONG:  Correct.  Not the party that Palm

          8         Beach bought it from.  Not the party that that held them

          9         in -- yes, not the the party that --

         10              CFO GALLAGHER:  So it's way back somewhere.

         11              MS. ARMSTRONG:  Correct.

         12              MS. CASTILLE:  To summarize, we have before us the

         13         request to share joint title and to share 50 percent of

         14         the purchase and a recommendation of denial from the

         15         Agency.  Through our discussion, one of the options we

         16         discussed was having a 50/50 severance of title and

         17         separate ownership which would still meet the benefits of

         18         the County option which is to leverage both dollars and

         19         would meet some of the management desires that we have

         20         which is to keep the parcel in hunting as a legitimate use

         21         for the property, managed use for the property.  And Fish

         22         and Wildlife Conservation Commission has agreed to manage

         23         the property in addition to Hungryland Slough if that's

         24         what your choice is.  Or alternatively you can --

         25              THE GOVERNOR:  So you're proposing, as an
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          1         alternative, something the County, I believe the

          2         representative of the County said they won't accept.

          3              MS. CASTILLE:  They have since came back to us and

          4         said they will not accept it at today's meeting.

          5              CFO GALLAGHER:  Well, I have a motion I'll make.  And

          6         that is that we deny this as it sits and allow you to go

          7         renegotiate with the County and our aides as to what the

          8         future should be with this property.

          9              GENERAL CRIST:  Second.

         10              THE GOVERNOR:  So it's a denial with an admonition to

         11         go forth and see either through a conversation easement or

         12         some other means.

         13              CFO GALLAGHER:  Right.

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

         15         other discussion?  Without objection, Treasurer

         16         Gallagher's motion passes.  So there is a denial of the

         17         request and --

         18              MS. CASTILLE:  Direction to move forward.

         19              THE GOVERNOR:  -- direction to go forward.  And I

         20         would add that I don't have a problem doing -- I just --

         21         maybe the -- your colleague that believes that having

         22         50/50 arrangements with counties is impossible, I'd like

         23         to have an explanation about that.  I'm not opposed to

         24         this as a means, you know, one other means of -- like

         25         conservation easements, another means of extending the
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          1         reach of conservation.  We should use whatever means are

          2         appropriate for each on a case by case basis.  So if there

          3         is a problem, let's have a conversation about them on a

          4         broader context.

          5              CFO GALLAGHER:  I don't mind the conversation.  But

          6         for the record, I have major reservations about doing it

          7         and maybe when we hear the conservation, I might switch to

          8         the other side.

          9              MS. CASTILLE:  Okay.  Shall we schedule another

         10         discussion on the major policy?

         11              CFO GALLAGHER:  Right.

         12              MS. CASTILLE:  Okay.

         13              CFO GALLAGHER:  Or you can come to our offices and

         14         talk about it.  You don't have to take up -- maybe two of

         15         us don't want to hear about it, I wouldn't blame them.

         16              THE GOVERNOR:  That might be a good first step.

         17              MS. CASTILLE:  Okay.  We will do that.  Thank you,

         18         Governor, members of the cabinet.  That is our last item.

         19              CFO GALLAGHER:  Halleluiah.

         20              THE GOVERNOR:  Thank you, Colleen.





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                      STATE BOARD OF ADMINISTRATION 11-9-04

          1              THE GOVERNOR:  State Board of Administration.

          2              CFO GALLAGHER:  Motion on the minutes.

          3              COMMISSIONER BRONSON:  Second.

          4              THE GOVERNOR:  Moved and seconded.  Without

          5         objection, Item 1 passes.

          6              MR. STIPANOVICH:  Good morning, Governor, members.

          7              THE GOVERNOR:  Good morning.

          8              MR. STIPANOVICH:  Item No. 2 is a request for

          9         approval of fiscal sufficiency of amount not exceeding

         10         36,500,000 State of Florida, Florida Education System,

         11         Florida International University Housing facility revenue

         12         bonds --

         13              GENERAL CRIST:  Motion.

         14              CFO GALLAGHER:  Second.

         15              THE GOVERNOR:  There's a motion and a second.

         16         Without objection, Item 2 passes.

         17              THE WITNESS:  Item 3 is a request for fiscal

         18         sufficiency of an amount not exceeding 24,500,000, State

         19         of Florida --

         20              CFO GALLAGHER:  Motion on 3.

         21              GENERAL CRIST:  Second.

         22              THE GOVERNOR:  There's a motion and a second.

         23         Without objection, Item 3 passes.

         24              MR. STIPANOVICH:  Item No. 4 is a request for

         25         approval of fiscal sufficiency of an amount not exceeding
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          1         13,550,000 State of Florida, Florida Education System,

          2         University of Central Florida parking lot facility revenue

          3         bonds.

          4              GENERAL CRIST:  Motion.

          5              CFO GALLAGHER:  Second.

          6              THE GOVERNOR:  There's motion and a second.  Without

          7         objection, Item 4 passes.

          8              MR. STIPANOVICH:  Item No. 5 is a request for

          9         approval of fiscal sufficiency of amount not exceeding

         10         5,350,000 --

         11              CFO GALLAGHER:  Motion on 5.

         12              GENERAL CRIST:  Second.

         13              THE GOVERNOR:  There's a motion and a second.

         14         Without objection Item 5 passes.

         15              MR. STIPANOVICH:  Item 6, request approval of fiscal

         16         sufficiency determination -- was there a motion, Governor?

         17              THE GOVERNOR:  I didn't hear it.  Fight on.  Item 6

         18         is a what?

         19              MR. STIPANOVICH:  Okay.  Request for approval of

         20         fiscal determination of amount not exceeding 39,285,000

         21         tax exempt Florida Housing Finance Corporation multifamily

         22         mortgage revenue refunding bonds.

         23              GENERAL CRIST:  Motion.

         24              CFO GALLAGHER:  Second.

         25              THE GOVERNOR:  There's a motion and a second.
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                      STATE BOARD OF ADMINISTRATION 11-9-04

          1         Without objection, the item passes.

          2              (Thereupon, the proceedings concluded at 11:15 a.m.)























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                      STATE BOARD OF ADMINISTRATION 11-9-04


          2                        CERTIFICATE OF REPORTER


          4    STATE OF FLORIDA    )

          5    COUNTY OF LEON      )


          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 90 are a true and correct record of

         12    the aforesaid proceedings.


         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 22nd day of November, 2004.

         20                              ______________________________

         21                             KRISTEN L. BENTLEY, Court Reporter
                                        Notary Public
         22                             850-878-2221



                                   ACCURATE STENOTYPE REPORTERS, INC.