Cabinet
Affairs |
1
2 T H E C A B I N E T
3 S T A T E O F F L O R I D A
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Representing:
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FISCAL ACCOUNTING INFORMATION BOARD
6 STATE BOARD OF ADMINISTRATION
DIVISION OF BOND FINANCE
7 INFORMATION RESOURCE COMMISSION
DEPARTMENT OF REVENUE
8 STATE BOARD OF EDUCATION
ADMINISTRATION COMMISSION
9 FLORIDA LAND AND WATER
ADJUDICATORY COMMISSION
10 TRUSTEES OF THE INTERNAL
IMPROVEMENT TRUST FUND
11
12 The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Chiles
13 presiding, in the Cabinet Meeting Room, LL-03,
The Capitol, Tallahassee, Florida, on Tuesday,
14 November 19, 1996, commencing at approximately
9:55 a.m.
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16 Reported by:
17 LAURIE L. GILBERT
Registered Professional Reporter
18 Certified Court Reporter
Notary Public in and for
19 the State of Florida at Large
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22 ACCURATE STENOTYPE REPORTERS, INC.
100 SALEM COURT
23 TALLAHASSEE, FLORIDA 32301
904/878-2221
24 1-800/934-9090
25
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1 APPEARANCES:
2 Representing the Florida Cabinet:
3 LAWTON CHILES
Governor
4
BOB MILLIGAN
5 Comptroller
6 SANDRA B. MORTHAM
Secretary of State
7
BOB BUTTERWORTH
8 Attorney General
9 BILL NELSON
Treasurer
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FRANK T. BROGAN
11 Commissioner of Education
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ACCURATE STENOTYPE REPORTERS, INC.
November 19, 1996
3
1 I N D E X
2 ITEM ACTION PAGE
3 FISCAL ACCOUNTING INFORMATION BOARD:
(Presented by Martin Young,
4 Secretary)
5 1 Approved 6
2 Approved 6
6 3 Approved 7
7 STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
8 Executive Director)
9 1 Approved 12
2 Approved 12
10 3 Approved 12
4 Approved 12
11 5 Approved 13
6 Approved 18
12 7 Approved 29
13 DIVISION OF BOND FINANCE:
(Presented by J. Ben Watkins, III,
14 Director)
15 1 Approved 31
2 Approved 32
16 3 Approved 33
4 Approved 33
17 5 Approved 33
6 Approved 34
18
INFORMATION RESOURCE COMMISSION:
19 (Presented by John Douglas,
Interim Executive Director)
20
1 Approved 35
21 2 Approved 35
3 Approved 36
22 4 Approved 36
5 Approved 36
23 6 Approved 37
7 Approved 39
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ACCURATE STENOTYPE REPORTERS, INC.
November 19, 1996
4
1 I N D E X
(Continued)
2
ITEM ACTION PAGE
3
DEPARTMENT OF REVENUE:
4 (Presented by L.H. Fuchs,
Executive Director)
5
1 Approved 40
6 2-6 Approved 41
7 STATE BOARD OF EDUCATION:
(Presented by Robert L. Bedford, Ph.D.,
8 Deputy Commissioner)
9 1 Presentation 44
2 Approved 62
10 3 Presentation 62
4 Approved 78
11
ADMINISTRATION COMMISSION:
12 (Presented by Robert B. Bradley, Ph.D.,
Secretary)
13
1 Approved 79
14 2 Approved 79
3 Approved 80
15 4 Approved 80
5 Approved 81
16 6 Approved 83
17 FLORIDA LAND AND WATER
ADJUDICATORY COMMISSION:
18 (Presented by Robert B. Bradley, Ph.D.,
Secretary)
19
1 Approved 85
20 2 Approved 85
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ACCURATE STENOTYPE REPORTERS, INC.
November 19, 1996
5
1 I N D E X
(Continued)
2
ITEM ACTION PAGE
3
BOARD OF TRUSTEES,
4 INTERNAL IMPROVEMENT
TRUST FUND:
5 (Presented by Virginia B. Wetherell,
Secretary)
6
1 Approved 87
7 2 Approved 96
3 Approved 96
8 4 Approved 96
5 Approved 97
9 6 Approved 97
7 Approved 97
10 Substitute 8 Deferred 98
Substitute 9 Deferred 98
11
CERTIFICATE OF REPORTER 100
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ACCURATE STENOTYPE REPORTERS, INC.
FISCAL ACCOUNTING INFORMATION BOARD
November 19, 1996
6
1 P R O C E E D I N G S
2 (The agenda items commenced at 10:09 a.m.)
3 (Secretary Mortham was not present in the
4 Cabinet meeting room.)
5 GOVERNOR CHILES: Fiscal Accounting
6 Information Board.
7 MR. YOUNG: Good morning.
8 Martin Young, Secretary to the Fiscal
9 Accounting Information Board. And we have three
10 agenda items this morning.
11 Item 1 is the approval of the minutes for
12 the February 27th, 1996, meeting.
13 COMPTROLLER MILLIGAN: I move the minutes.
14 TREASURER NELSON: Second.
15 GOVERNOR CHILES: They're moved and
16 seconded.
17 Without objection, minutes are adopted.
18 MR. YOUNG: Item 2, approval of proposed
19 legislative changes.
20 COMPTROLLER MILLIGAN: Motion.
21 TREASURER NELSON: Second.
22 GOVERNOR CHILES: Moved and seconded.
23 Without objection, it's approved.
24 MR. YOUNG: Item 3, approval of the repeal
25 of Board rules.
ACCURATE STENOTYPE REPORTERS, INC.
FISCAL ACCOUNTING INFORMATION BOARD
November 19, 1996
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1 COMPTROLLER MILLIGAN: And motion.
2 TREASURER NELSON: Second.
3 GOVERNOR CHILES: Moved and seconded.
4 Without objection, it's approved.
5 MR. YOUNG: Thank you. That concludes our
6 agenda.
7 GOVERNOR CHILES: All right.
8 (The Fiscal Accounting Information Board
9 Agenda was concluded.)
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ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
8
1 GOVERNOR CHILES: State Board of
2 Administration.
3 MR. HERNDON: Good morning, Governor --
4 GOVERNOR CHILES: Good morning.
5 MR. HERNDON: -- members of the Board.
6 How are you this morning?
7 GOVERNOR CHILES: Nice to see you, Mr. --
8 COMMISSIONER BROGAN: And he would be --
9 MR. HERNDON: The new -- the new Director
10 of the State Board.
11 COMMISSIONER BROGAN: Yes, sir.
12 MR. HERNDON: How are you this morning?
13 COMMISSIONER BROGAN: Seem like a fine --
14 ATTORNEY GENERAL BUTTERWORTH: Well,
15 Governor --
16 TREASURER NELSON: He's the new kid on the
17 block.
18 COMMISSIONER BROGAN: We'll help you all we
19 can.
20 MR. HERNDON: I'm looking forward to it.
21 Thank you.
22 TREASURER NELSON: You don't have to worry
23 about him. There are three of us over here you
24 have to worry about.
25 COMMISSIONER BROGAN: I need to sit this
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 one out, Tom.
2 MR. HERNDON: I understand. I understand.
3 ATTORNEY GENERAL BUTTERWORTH: It's about
4 time somebody in State government has had more
5 jobs than I have, I tell you.
6 MR. HERNDON: That's quite a record to --
7 ATTORNEY GENERAL BUTTERWORTH: It really
8 is. It took me 25 years, it only took you
9 three.
10 MR. HERNDON: That's right. I'm going to
11 keep trying till I get it right.
12 GOVERNOR CHILES: Did you have any business
13 to bring before us today?
14 MR. HERNDON: We have a couple of small
15 items, Governor, if you don't mind.
16 The first item is approval of the minutes
17 of the meeting held November 7th.
18 GOVERNOR CHILES: All right, sir. Is there
19 a motion?
20 ATTORNEY GENERAL BUTTERWORTH: Could you
21 please explain those minutes?
22 COMMISSIONER BROGAN: I can't help you,
23 Tom.
24 GOVERNOR CHILES: Do you want to try the
25 second item?
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 MR. HERNDON: Well, this one might -- might
2 have a little bit more attraction.
3 Approval for fiscal sufficiency for a
4 series of multifamily housing revenue refunding
5 bonds.
6 COMPTROLLER MILLIGAN: Would you give me
7 some explanation on that, Tom?
8 MR. HERNDON: Certainly.
9 We have before us actually the first of
10 four items for housing revenue refunding bonds.
11 In this particular instance, this is a
12 multifamily housing project that is coming
13 before you from 1985 Series P.
14 We have looked at the funding stream for
15 this project, and are satisfied that it does
16 meet the fiscal sufficiency test as required by
17 law.
18 COMPTROLLER MILLIGAN: A motion.
19 GOVERNOR CHILES: Are these going to be
20 bid, or --
21 MR. HERNDON: That I do not know,
22 Governor. But Division of Bond Finance and the
23 Housing Finance Authority are here, and they
24 would be prepared to speak to the competitive
25 versus negotiated bid aspects of it.
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November 19, 1996
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1 GOVERNOR CHILES: Have you taken a stand in
2 that area?
3 MR. HERNDON: If my memory serves me
4 correctly, I think we have always favored
5 competitive bidding, and only in those --
6 GOVERNOR CHILES: Let's see. Now --
7 MR. HERNDON: -- we -- well, that's the
8 Executive Director's Office of the State Board
9 of Administration. And that's all I can speak
10 for.
11 COMPTROLLER MILLIGAN: Well, in that event,
12 I'll make a motion on the minutes, and on the
13 Number 2 item.
14 TREASURER NELSON: Well, Governor, I have a
15 question before I second them.
16 Would you explain the concept of
17 smoothing?
18 MR. HERNDON: Yes, sir. I'd be happy to.
19 Smoothing is a practice whereby highs and
20 lows in trend lines are smoothed out. In other
21 words, the tops and bottoms are lopped off to
22 generate an average, or something closer to a
23 flat line so that for statistical purposes, you
24 can eliminate peaks and valleys that otherwise
25 cause aberrations in the analysis.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 TREASURER NELSON: Governor, I second both
2 motions.
3 GOVERNOR CHILES: Moved and seconded on
4 Items 1 and 2.
5 Without objection, they're approved.
6 MR. HERNDON: Item number 3 is also
7 approval of fiscal sufficiency for a series of
8 multifamily housing revenue bonds.
9 COMPTROLLER MILLIGAN: Motion.
10 TREASURER NELSON: Second.
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, it's approved.
13 MR. HERNDON: Item number 4 is the third in
14 this series of fiscal sufficiency evaluations,
15 which we concur in for multifamily housing
16 bonds.
17 COMPTROLLER MILLIGAN: Motion.
18 TREASURER NELSON: Second.
19 GOVERNOR CHILES: Moved and seconded.
20 Without objection, it's approved.
21 MR. HERNDON: And Item number 5 is also
22 approval of fiscal sufficiency for a
23 Housing Finance Agency Housing Revenue Bond of
24 thirteen million three hundred fifty thousand
25 dollars.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 COMPTROLLER MILLIGAN: Motion.
2 TREASURER NELSON: Second.
3 GOVERNOR CHILES: Moved and seconded.
4 Without objection, it's approved.
5 MR. HERNDON: Governor, Item number 6 would
6 require that you convene the Trustees as Inland
7 Protection Financing Corporation --
8 GOVERNOR CHILES: I will call the meeting
9 of the Corporation to order.
10 MR. HERNDON: All right. I don't know
11 whether Secretary Wetherell is here at the
12 moment.
13 Here she is. She may wish to join us.
14 We have two items before you. The first is
15 the approval of the Master Bond Resolution.
16 TREASURER NELSON: I'll move it.
17 COMPTROLLER MILLIGAN: Well, let me -- let
18 me -- I'll second that.
19 But let me make a motion really to approve
20 Items 2-A through 2-C, which includes the Master
21 Resolution and the service contract. And -- and
22 the Secretary set out all actions in minutes.
23 TREASURER NELSON: I second.
24 COMPTROLLER MILLIGAN: But I -- I would
25 like to continue with that motion with the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 understanding that the Department of
2 Environmental Protection will provide a
3 presentation to the Financing Corporation at the
4 January 28, 1997, Cabinet meeting, on the
5 Department's plans to strengthen its postaudit
6 and recovery efforts under the reimbursement
7 program.
8 Let me attempt to explain why this
9 strengthening is necessary. The reimbursement
10 program, which I think most know, has had a
11 difficult history. The Department has initiated
12 a number of review procedures to reduce
13 unallowable expenditures under this
14 reimbursement program.
15 However, postaudits are still producing a
16 significant amount of unallowable expenses. The
17 Department's current staff of two auditors and
18 one OPS attorney, with no data tracking base to
19 accomplish any meaningful postaudit review of
20 these applications is simply not acceptable.
21 To make the point, as of September 1996, we
22 have paid five hundred and thirty million
23 dollars against 10,975 applications. We have a
24 backlog of three hundred and forty-eight
25 million dollars against slightly less than
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
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1 6,000 applications.
2 During that time, we have completed
3 25 postaudits completed on the 10,000
4 disbursements, with over two million six hundred
5 thousand disallowances, approximately 25 percent
6 disallowance rate. Five postaudits are in
7 progress.
8 It takes an average of 200 man-hours per
9 audit. It doesn't take Albert Einstein to
10 figure out that it will take over 500 years to
11 complete the audits with the current effort.
12 I might also add that applications on
13 audits have revealed insurance payments possibly
14 directed to the same reimbursement application.
15 The Department must establish a responsive
16 audit program to ensure timely review of
17 reimbursement applications within the five-year
18 window provided in the Legislature.
19 If necessary, I would hope that the
20 Legislature will assist the Department with
21 resolving this problem.
22 It's a weighty issue. And I don't believe
23 that DEP is getting the support that they need
24 to really accomplish the audit in this very,
25 very serious and expensive proposition for the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 taxpayers of this state.
2 When you are dealing with a disallowance
3 rate of approximately 25 percent, we're talking
4 in the vicinity of two hundred and fifty
5 million dollars that we are supposed to be
6 pursuing in an audit process that literally, at
7 the current rate, would take 500 years to
8 complete.
9 So we need -- we're trying to help you,
10 frankly, Ginger. And we need to -- we need to
11 come up with a program that will enable us to
12 effectively audit these requests for payment.
13 MS. WETHERELL: I understand, sir, what
14 you're saying. And my staff has told me that
15 they've been -- that our Inspector General has
16 been working with a group of people.
17 This, indeed, will help us, and we will be
18 happy in January to bring you back a process for
19 postaudit. And hopefully we can improve our
20 performance through this process. So we will be
21 back.
22 COMPTROLLER MILLIGAN: Well, I'm not
23 demeaning your performance. Your performance in
24 the audits that have been conducted has been
25 very effective. But you just don't have the
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
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1 manpower --
2 MS. WETHERELL: Right.
3 COMPTROLLER MILLIGAN: -- to accomplish the
4 number of audits that need -- postaudits that
5 need to be accomplished in the five-year window
6 that you have to do it.
7 MS. WETHERELL: Right.
8 COMPTROLLER MILLIGAN: And someone's got to
9 step forward and provide the resources.
10 MS. WETHERELL: Right. And I appreciate
11 that. As you know, the struggle that we've been
12 through for the last --
13 COMPTROLLER MILLIGAN: Yes.
14 MS. WETHERELL: -- several years trying to
15 make this whole program work.
16 So we'll report back in January and see if
17 you're more comfortable with the process.
18 COMPTROLLER MILLIGAN: Okay. Thank you.
19 MS. WETHERELL: Thank you.
20 COMPTROLLER MILLIGAN: So the motion before
21 us, Governor, is to certainly approve A through
22 C --
23 GOVERNOR CHILES: Yes, sir.
24 COMPTROLLER MILLIGAN: -- with a plan of
25 how they're going to handle the postaudit coming
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
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1 back to us 28 January I think it was.
2 GOVERNOR CHILES: All right. Without
3 objection, it's approved.
4 MR. HERNDON: All right. With that motion
5 then, Governor, and members, that would conclude
6 the business of the Inland Protection Financing
7 Corporation.
8 You can adjourn that, you can revert back.
9 GOVERNOR CHILES: All right, sir. We
10 adjourn that meeting.
11 MR. HERNDON: We revert back then to Item
12 number 7 on the State Board of Administration's
13 agenda, which is an amendment to the Florida
14 Hurricane Catastrophe Fund, 1996-97 budget,
15 which has been provided to you.
16 TREASURER NELSON: Governor, I've got some
17 questions before we move this item.
18 Could we have Jack Nicholson come up?
19 MR. HERNDON: He's joining us now.
20 TREASURER NELSON: Okay.
21 Just to lay the predicate here: What
22 you're doing is getting your bonding procedures
23 in place so that if we got hit by a catastrophic
24 hurricane, a lot of those procedures would be
25 out of the way. And that's why you're hiring
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 this financial advisor, so that you could go
2 into the market with a five billion dollar bond
3 issue; is that right?
4 MR. NICHOLSON: That's right. They will be
5 helping us do several things: Providing general
6 advice on how to structure the debt, helping us
7 go to the credit agencies and make presentations
8 to not only the credit agencies, but the bond
9 insurers and investors, and basically helping us
10 to structure that program and prepare the proper
11 bond documentation and so forth.
12 TREASURER NELSON: And it would require
13 strategies in multiple markets, including
14 international markets, for a bond issue of that
15 size; would it not?
16 MR. NICHOLSON: Yes, it would. And that's
17 one advantage of hiring Lehman, is their ability
18 to access those markets.
19 TREASURER NELSON: All right. And I think
20 that underscores the fact of why you need the
21 expertise of a firm like Lehman in order to
22 ensure the marketability of the bonds in the
23 event of a catastrophe.
24 Now, what I'm concerned about is the fee.
25 Six hundred and forty-five thousand dollars is
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
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1 unusually high for a financial advisor fee.
2 You want to comment on that?
3 MR. NICHOLSON: Yes.
4 We did an RFI, and sent that out to a
5 number of top financial advisors. Our feeling
6 was that we needed someone with some knowledge
7 and capacity, and particularly knowledge of the
8 markets and the knowledge of how to structure a
9 five billion dollar bonding deal.
10 And I want to point out that that would be
11 the largest municipal bond issuance ever. The
12 only other one that we're aware of that has been
13 contemplated is, I think, New York Power and
14 Light has contemplated such a deal, but they
15 have not pulled it off yet.
16 So our thoughts on that is we need expert
17 advice, we need the best advice we can possibly
18 get.
19 And I want to point out that the issuance
20 of bonds is very expensive from the standpoint
21 of, say, bond insurance. And that would be one
22 of the things that might be in our program, we
23 may insure some of the bonds. That's a cost of
24 three to five million dollars.
25 As you're aware, in dealing with the JUAs
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
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1 and their lines of credit, if we need to set up
2 some type of credit facility, those can run as
3 much as twenty-five to thirty million dollars.
4 So we think that it's wise on our part to
5 choose good counselors, in this case,
6 Lehman Brothers, to lead us through that
7 process, and help us access the markets.
8 TREASURER NELSON: All right. Now, what
9 I'm concerned about here with regard to this fee
10 is they can give you the advice, they get paid
11 this fee, and then the -- so you get things in
12 place.
13 And then you go out on the bond issue, and
14 Lehman can turn around and participate in the
15 bond issue; can they not?
16 MR. NICHOLSON: That -- that would be an
17 option. The problem with having a financial
18 advisor serve as an underwriter is the conflict
19 of interest, and, you know, we certainly don't
20 want them to structure it for their benefit.
21 That is an option in our contract that we
22 will allow them to -- we may allow them to do
23 that. And the reason for that is to provide us
24 with the maximum capacity possible. I don't
25 think we have the ability to eliminate players
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
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1 when we're talking about the biggest issue ever.
2 So it's a large -- it is a large market out
3 there, but it is going to take a large marketing
4 effort to sell five billion, and perhaps even
5 six billion by the time we get all our ducks
6 lined up.
7 TREASURER NELSON: Is -- with this high a
8 fee, is their payment schedule -- and you break
9 this down into two parts, a fee, and expenses --
10 is their payment schedule tied to their
11 performance?
12 MR. NICHOLSON: No, it's not. Other than
13 the fact that we have to have the product. At
14 any time they're not performing, we can
15 terminate their contract.
16 TREASURER NELSON: I guess another way of
17 asking the question: Is -- does Lehman have to
18 complete Part B(2)(a) with a certain preliminary
19 rating in order to get the second installment
20 next March?
21 MR. NICHOLSON: Right. I think that's laid
22 out. I'd have to look at the contract and the
23 details of it. But there are certain, I would
24 call them, deliverables that we want to see. We
25 have the ability at any time to terminate this
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November 19, 1996
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1 contract if they're not performing. So it's our
2 job to manage them through this, and get the
3 results.
4 TREASURER NELSON: All right. Do they have
5 to complete that portion with a certain
6 preliminary rating in order to get the
7 installment next March?
8 MR. NICHOLSON: Yes. I believe --
9 TREASURER NELSON: That's in the contract.
10 MR. NICHOLSON: I believe that's -- I would
11 have to look particularly -- and I've got it
12 right here.
13 TREASURER NELSON: All right. Governor,
14 while Jack is looking for that, I would like us
15 to -- to have periodic reports as to how this is
16 progressing, since this is a rather high fee.
17 MR. NICHOLSON: I'm sorry I'm so slow
18 here. I believe you're correct in how you state
19 it.
20 TREASURER NELSON: You believe what?
21 I'm sorry, I couldn't hear you.
22 MR. NICHOLSON: I believe you are correct,
23 we are anticipating them to help us obtain a
24 certain rating. And the limitation is not --
25 I mean, whether it's Lehman Brothers, or
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
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1 whoever, that's not so much the limitation. The
2 limitation is our revenue stream and the story
3 that we're able to tell to the rating agencies
4 to get the rating.
5 TREASURER NELSON: All right. Well, why
6 don't you -- since it might be sort of difficult
7 to find that in the contract, why don't you
8 report that to us at the next Cabinet meeting --
9 MR. NICHOLSON: Okay.
10 TREASURER NELSON: -- so that we've got
11 that on the record.
12 MR. NICHOLSON: Yes, sir.
13 COMPTROLLER MILLIGAN: Governor, if I
14 could --
15 Are you finished, Bill?
16 TREASURER NELSON: I've got one more thing
17 on a different subject. Go ahead.
18 COMPTROLLER MILLIGAN: Well, I'm concerned,
19 as you are, about the fee.
20 And the comment Jack has made in reference
21 to the RFI, but you didn't follow-up on that
22 comment.
23 What was the result of the RFI?
24 MR. NICHOLSON: Okay. I'll be glad to go
25 through that.
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1 We -- what we did, we advertised in
2 Bond Buyer. That's the --
3 COMPTROLLER MILLIGAN: Yes.
4 MR. NICHOLSON: -- the publication. And we
5 also sent out the questions to a number of top
6 firms that we were aware that had the ability to
7 provide us with the expertise in, you know,
8 international marketing and that sort of thing
9 that would be associated with this type of deal.
10 We got back ten responses from firms. We
11 have -- created a team of five individuals that
12 were made up of -- well, Tim Tinsley out of
13 Bond Finance, Peter Collins out of our policy
14 division, Tom Beenck out of our legal area. And
15 then from my staff, Joan Stafford-Lazar and
16 Cindy Gokel participated on that team. Those
17 five people were to review and grade the
18 responses.
19 In that process, they -- we weighted and
20 graded various questions according to their
21 importance, and then created a ranking of the
22 responses, and Lehman was at the top of the
23 ranking, followed by J.P. Morgan and
24 Morgan Stanley.
25 We asked those three firms to come in and
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1 make oral presentations. They went over their
2 program, we asked them questions. Both
3 Ben Watkins and myself also sit in on the orals
4 to participate, not to evaluate.
5 Our team then met and evaluated of those
6 three, and they unanimously ranked Lehman at the
7 top.
8 If you look at the fees that were being
9 proposed -- I think they range from upwards of
10 two million dollars, but I believe J.P. Morgan's
11 was 1.5 million; Morgan Stanley was 300,000,
12 with a contingency kicker. They wanted to
13 participate on fif-- I think 50 cents per
14 thousand for any of the financing that was
15 actually done. That would have worked out to a
16 lot more expense than the -- our contract with
17 Lehman.
18 Lehman with a flat 600,000 for fees, 4500
19 for out-of-pocket, which included travel, and
20 all other costs associated, like printing,
21 faxing, and document transfers and so forth.
22 So it was our belief that Lehman not only
23 represented the best in terms of the scope of
24 services that would be provided to us, but also
25 the best in terms of overall cost.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
27
1 COMPTROLLER MILLIGAN: Are you familiar
2 with expectant value?
3 MR. NICHOLSON: Yes, sir.
4 COMPTROLLER MILLIGAN: Did you consider
5 expectant value? Did you do any expected value
6 analysis?
7 MR. NICHOLSON: In the cost?
8 COMPTROLLER MILLIGAN: Yeah.
9 MR. NICHOLSON: No, sir, we did not.
10 COMPTROLLER MILLIGAN: Okay.
11 MR. NICHOLSON: And cost was not a -- the
12 prime consideration. It was more of can they do
13 the services, can they do it in a format that we
14 would like to have it done.
15 And that is, we want to look at the options
16 and evaluate the options, and move forward with
17 the program.
18 And Lehman gave us, I believe, the
19 valuation team -- if I can speak for them --
20 I think it gave them confidence that we could
21 proceed with this program to ultimately be in a
22 position to issue five billion dollars.
23 COMPTROLLER MILLIGAN: Thank you, Governor.
24 TREASURER NELSON: Governor --
25 GOVERNOR CHILES: Yes, sir.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
28
1 TREASURER NELSON: -- before I move the
2 item, would you share briefly with the Cabinet
3 what we have been doing on a Cat Fund financing
4 plan coordinating with the JUA, and the Florida
5 Windstorm Association, if they had to go into
6 the market to get bonds as well.
7 MR. NICHOLSON: Yes, sir.
8 There have been a couple of meetings. I
9 know that the Treasurer had -- was concerned
10 about this last summer. And called a meeting of
11 the Cat Fund staff, as well as the JUA, the wind
12 pool, and the Florida Insurance Guarantee
13 Association, together to discuss our mutual
14 concerns with respect to issuing of bonds.
15 The problem being that if we all go to the
16 market at the same time, what's going to
17 happen? Is that going to crowd out others? Are
18 we going to have some friction and some problems
19 with that issuance.
20 There's been some discussions on how each
21 of the entities operate, when we would need to
22 go to the market, what levels of loss that would
23 be triggered before we would have to bond,
24 for instance.
25 In our situation with the Cat Fund, we have
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
29
1 to exhaust our current assets, which at year-end
2 will be 1.4 billion. Year end next year will be
3 close to two billion. So you have to have a
4 storm of that magnitude before it would get into
5 the bonding scenario.
6 Certain things we have discussed is the
7 nature of the market out there. It is a large
8 market, a one trillion dollar bonding market out
9 there, so to speak. And I think some of the
10 points that I've been trying to make in these
11 discussions are, it's the marketing effort that
12 is the big deal here, and that we're -- each of
13 the entities are going to have to put together a
14 program and actually market that program to be
15 able to sell those securities.
16 And if we all do that and coordinate in
17 terms of the timing of what we're doing, I think
18 that we'll have the ability to place a sizable
19 amount of debt at the time of a catastrophe.
20 TREASURER NELSON: Governor, I move Item 7.
21 GOVERNOR CHILES: It has been moved.
22 COMPTROLLER MILLIGAN: And seconded.
23 GOVERNOR CHILES: And seconded.
24 Without objection, it's approved.
25 MR. HERNDON: That completes the agenda --
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
November 19, 1996
30
1 GOVERNOR CHILES: Thank you.
2 MR. HERNDON: -- for the State Board.
3 GOVERNOR CHILES: Thank you, sir.
4 COMPTROLLER MILLIGAN: Governor, I have an
5 administrative --
6 GOVERNOR CHILES: We do have other business
7 to bring before the Cabinet. Next time I hope
8 you can be a little briefer in your --
9 MR. HERNDON: Yes, sir. I'll bear that
10 admonition in mind, Governor.
11 GOVERNOR CHILES: Thank you.
12 COMPTROLLER MILLIGAN: Administrative
13 correction. When I mentioned 25 postaudits have
14 been completed, I inadvertently said on $10,000
15 disbursement. It's ten million dollar
16 disbursement.
17 GOVERNOR CHILES: All right, sir.
18 COMPTROLLER MILLIGAN: Those big numbers
19 get me.
20 GOVERNOR CHILES: Yes, sir.
21 (The State Board of Administration Agenda
22 was concluded.)
23 *
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE
November 19, 1996
31
1 GOVERNOR CHILES: Division of Bond Finance.
2 MR. WATKINS: Item number 1 is approval of
3 the minutes of the November 7 meeting.
4 COMMISSIONER BROGAN: Move approval.
5 COMPTROLLER MILLIGAN: Second.
6 GOVERNOR CHILES: Moved and seconded.
7 Without objection, it's approved.
8 MR. WATKINS: Item number 2 is a resolution
9 authorizing the issuance and negotiated sale of
10 multifamily housing revenue refunding bonds on
11 behalf of the Florida Housing Finance Agency.
12 COMPTROLLER MILLIGAN: Governor, that
13 answers your question on competitive versus
14 negotiated.
15 GOVERNOR CHILES: Yes, sir.
16 COMPTROLLER MILLIGAN: We don't seem to be
17 making as much progress as we might like in
18 consideration of negotiated versus competitive.
19 I hope that we hear eventually on the result of
20 that last operation where we did so well.
21 MR. WATKINS: We are in the process of
22 evaluating -- working with the Housing Agency
23 and evaluating how to incorporate an evaluation
24 criterium for the multifamily housing
25 transactions.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE
November 19, 1996
32
1 In fact, we have a meeting tomorrow to
2 discuss the process that we can incorporate
3 within the Housing Agency's existing review and
4 approval process that will provide an objective
5 evaluation on a transaction by transaction
6 basis, and can then formulate a recommendation
7 about the best way to execute the transaction.
8 So we are -- we are working and making
9 progress and moving in that direction, and
10 hopefully we'll have a report to you in the next
11 60 days or so about the results of that process.
12 GOVERNOR CHILES: We're glad to hear that.
13 COMMISSIONER BROGAN: That being the case,
14 Governor, I'll move Item 2.
15 GOVERNOR CHILES: It's been seconded --
16 COMMISSIONER BROGAN: And by the way,
17 Governor, that would be Items 2 (B) -- (A), (B),
18 and (C), if that's acceptable.
19 COMPTROLLER MILLIGAN: And I second.
20 GOVERNOR CHILES: All right. Without
21 objection, it's approved.
22 MR. WATKINS: Item number 3 is a resolution
23 authorizing the negotiated sale of multifamily
24 housing revenue bonds on behalf of the Florida
25 Housing Finance Agency.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE
November 19, 1996
33
1 COMPTROLLER MILLIGAN: Motion.
2 COMMISSIONER BROGAN: Second.
3 GOVERNOR CHILES: Moved and seconded.
4 Without objection, it's approved.
5 MR. WATKINS: Item number 4 is adoption of
6 an authorizing resolution for up to $300 million
7 for Florida Housing Finance Agency revenue
8 bonds.
9 COMMISSIONER BROGAN: Move approval.
10 COMPTROLLER MILLIGAN: And second.
11 GOVERNOR CHILES: Moved -- without
12 objection, it's approved.
13 MR. WATKINS: Item number 5 is a resolution
14 authorizing the redemption prior to maturity of
15 State of Florida pollution control bonds.
16 COMMISSIONER BROGAN: Move approval.
17 COMPTROLLER MILLIGAN: And second.
18 GOVERNOR CHILES: Moved and seconded.
19 Without objection, it's approved.
20 MR. WATKINS: Item number 6 is a resolution
21 authorizing the redemption prior to maturity of
22 State of Florida full faith and credit
23 Polk County Road Refunding Bonds.
24 COMMISSIONER BROGAN: Move the item.
25 COMPTROLLER MILLIGAN: Second.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE
November 19, 1996
34
1 GOVERNOR CHILES: Moved and seconded.
2 Without objection, it's approved.
3 MR. WATKINS: Thank you.
4 GOVERNOR CHILES: Thank you, sir.
5 (The Division of Bond Finance Agenda was
6 concluded.)
7 *
8
9
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12
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14
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
INFORMATION RESOURCE COMMISSION
November 19, 1996
35
1 GOVERNOR CHILES: Information Resource
2 Commission.
3 MR. DOUGLAS: Good morning, Governor,
4 members of the Cabinet.
5 GOVERNOR CHILES: Good morning.
6 MR. DOUGLAS: Item number 1 is the approval
7 of the minutes of the meeting of September 10th,
8 1996.
9 COMMISSIONER BROGAN: So move.
10 ATTORNEY GENERAL BUTTERWORTH: Second.
11 GOVERNOR CHILES: They're moved and
12 seconded.
13 Without objection, they're approved.
14 MR. DOUGLAS: Item number 2 is approval of
15 the Information Resource Commission's quarterly
16 performance report for July 1st through
17 September 30th.
18 COMPTROLLER MILLIGAN: Motion.
19 COMMISSIONER BROGAN: Second.
20 GOVERNOR CHILES: Moved and seconded.
21 Without objection, it's approved.
22 MR. DOUGLAS: Item number 3 is approval of
23 an amendment to the Department of Labor and
24 Employment Security's Agency Strategic Plan for
25 Information Resources Management.
ACCURATE STENOTYPE REPORTERS, INC.
INFORMATION RESOURCE COMMISSION
November 19, 1996
36
1 COMMISSIONER BROGAN: Move approval.
2 ATTORNEY GENERAL BUTTERWORTH: Second.
3 GOVERNOR CHILES: Moved and seconded.
4 Without objection, it's approved.
5 MR. WATKINS: Item number 4 is an approval
6 of an amendment to the Agency for
7 Health Care Administration's Agency Strategic
8 Plan for Information Resources Management.
9 COMPTROLLER MILLIGAN: Motion.
10 COMMISSIONER BROGAN: Second.
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, it's approved.
13 MR. DOUGLAS: Item number 5 is an approval
14 of an amendment to Chapter 44.4, Florida
15 Administrative Code, relating to computer
16 security.
17 COMMISSIONER BROGAN: Move approval.
18 ATTORNEY GENERAL BUTTERWORTH: Second.
19 COMPTROLLER MILLIGAN: Second.
20 GOVERNOR CHILES: Moved and seconded.
21 Without objection, it's approved.
22 MR. DOUGLAS: Item number 6 is approval of
23 a resolution recognizing November 27th, 1996, as
24 Computer Security Day in Florida.
25 COMPTROLLER MILLIGAN: Motion.
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INFORMATION RESOURCE COMMISSION
November 19, 1996
37
1 COMMISSIONER BROGAN: Second.
2 GOVERNOR CHILES: Moved and seconded.
3 Without objection, it's approved.
4 MR. DOUGLAS: Item number 7 is approval of
5 a resolution concerning the year 2000 computer
6 date problem.
7 COMMISSIONER BROGAN: I'll --
8 GOVERNOR CHILES: What's the resolution?
9 MR. DOUGLAS: That we fix it, sir.
10 GOVERNOR CHILES: I'm glad you fixed it.
11 COMPTROLLER MILLIGAN: Get a bunch of
12 sixteen years old -- sixteen year old, Governor,
13 they'll fix it, right?
14 ATTORNEY GENERAL BUTTERWORTH: They'll do
15 it.
16 COMMISSIONER BROGAN: Governor, I'll move
17 the item. But -- and I appreciate the tenacity,
18 John. What's the current status, and where do
19 you think this is all going to lead in the
20 future?
21 And I realize, by the way, this is not just
22 going on in the state of Florida, it's going on
23 all over the world, I suppose --
24 MR. DOUGLAS: Right.
25 COMMISSIONER BROGAN: -- depending on the
ACCURATE STENOTYPE REPORTERS, INC.
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November 19, 1996
38
1 systems.
2 But is there some great computer mind
3 somewhere in the world who's identified the
4 solution to this that will be appropriate for
5 all of us to follow?
6 MR. DOUGLAS: I wish that were true. There
7 isn't a magic wand or a silver bullet for this.
8 It's a matter of simply rolling up one's
9 sleeves, and doing a lot of analysis and
10 corrections of these systems.
11 There are a lot of different systems,
12 different languages, different platforms in
13 terms of the computers. They all have to be
14 dealt with individually. So it is a lot of work
15 to get this done.
16 And it does affect everyone. It's not just
17 us, and the -- what makes it even more
18 challenging is everyone, including people we
19 need to share information with, are trying to
20 make these same repairs at the same time.
21 So it's important that we coordinate with
22 this -- all those players as much as possible.
23 COMPTROLLER MILLIGAN: I particularly,
24 Governor, appreciate the revisions that have
25 been made to the resolution to really broaden
ACCURATE STENOTYPE REPORTERS, INC.
INFORMATION RESOURCE COMMISSION
November 19, 1996
39
1 its scope so that we not only just look at
2 fixing the year 2000 problem, but really look at
3 our systems in the totality, and try to
4 capitalize on an investment that works best for
5 the State, and not just fix the 2000 year
6 problem.
7 As an aside, I was attempting to record
8 something on my video recorder, and I
9 inadvertently put 19 in. And lo and behold, the
10 year 2019 was when I was going to record.
11 So a lot of systems already have
12 accommodated the year 2000 problem. We're just
13 now getting to it.
14 MR. DOUGLAS: Right.
15 GOVERNOR CHILES: Is there a second?
16 COMPTROLLER MILLIGAN: Second.
17 GOVERNOR CHILES: Moved and seconded.
18 Without objection, it's approved.
19 MR. DOUGLAS: Thank you, Governor,
20 members.
21 (The Information Resource Commission Agenda
22 was concluded.)
23 *
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
November 19, 1996
40
1 GOVERNOR CHILES: I have just been handed a
2 note that Dan Webster is the Speaker. He got
3 64 votes.
4 So that's done.
5 COMMISSIONER BROGAN: Then to please the --
6 GOVERNOR CHILES: Department of Revenue.
7 COMMISSIONER BROGAN: -- then to please the
8 press, Governor, I'll go under the dais here and
9 bring out my new agenda.
10 ATTORNEY GENERAL BUTTERWORTH: Do you want
11 to change chairs?
12 GOVERNOR CHILES: Department of Revenue.
13 MR. FUCHS: Perhaps, Governor, we could ask
14 the new Speaker to join with the President of
15 the Senate and solve the 2000 problem by just
16 ordering that the clocks be held at 11:59.
17 GOVERNOR CHILES: That sounds like --
18 MR. FUCHS: It's worked in the past.
19 Item 1 is a request for approval of
20 minutes.
21 COMMISSIONER BROGAN: So move.
22 COMPTROLLER MILLIGAN: Second.
23 GOVERNOR CHILES: Moved and seconded.
24 Without objection, they're approved.
25 MR. FUCHS: Items 2 through 6 are consent
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
November 19, 1996
41
1 modifications of property tax administration
2 rules.
3 COMPTROLLER MILLIGAN: And motion on all --
4 on Items 2, 3, 4, 5, and 6.
5 GOVERNOR CHILES: All right. Without --
6 there's a motion.
7 Is there a second?
8 ATTORNEY GENERAL BUTTERWORTH: Second.
9 COMMISSIONER BROGAN: Second.
10 GOVERNOR CHILES: Second.
11 Without objection, we'll take Items 2
12 through 6, and they're unanimously adopted
13 without objection.
14 MR. FUCHS: I understand, with your
15 permission, Governor, that Commissioner Brogan
16 would like to have a very brief report on our
17 Florida State Employees Campaign.
18 GOVERNOR CHILES: I think he's already
19 made --
20 COMMISSIONER BROGAN: We did ours. How are
21 you doing down there?
22 MR. FUCHS: Well, we -- we were -- I think
23 we were left out --
24 COMMISSIONER BROGAN: Remembering
25 Dan Webster is the new Speaker of the Florida
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
November 19, 1996
42
1 House, of course.
2 I understand you guys are doing great
3 things.
4 MR. FUCHS: Well, our list, I think that
5 you had showed zero percent, due to a reporting
6 problem, but I think we're up close to 90,
7 and --
8 COMMISSIONER BROGAN: Great.
9 MR. FUCHS: -- hopefully we'll make the
10 goal.
11 COMMISSIONER BROGAN: Great.
12 MR. FUCHS: Thank you.
13 COMPTROLLER MILLIGAN: I appreciate the
14 problem in reporting.
15 MR. FUCHS: I've been twisting arms though,
16 General.
17 COMMISSIONER BROGAN: Governor, he is --
18 he's bound and determined that he's not serving
19 meals this year.
20 COMPTROLLER MILLIGAN: Well, let me tell
21 you what. If I wind up having to serve again,
22 you will think the MREs that you had last year
23 were --
24 GOVERNOR CHILES: No, no, no. No, that's
25 not going to fly this year, General.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
November 19, 1996
43
1 No, sir. I want foie gras as the first
2 course.
3 All right.
4 COMPTROLLER MILLIGAN: Well, since I'm not
5 going to be buying this year -- I don't know who
6 is -- but you heard the direction.
7 COMMISSIONER BROGAN: So noted.
8 COMPTROLLER MILLIGAN: That may be.
9 GOVERNOR CHILES: State Board of Education.
10 ATTORNEY GENERAL BUTTERWORTH: How do you
11 spell that, Governor?
12 GOVERNOR CHILES: Hell, I don't know.
13 (The Department of Revenue Agenda was
14 concluded.)
15 *
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
44
1 DR. BEDFORD: Good morning,
2 Governor Chiles, members of the State Board of
3 Education.
4 The first item will be an update on charter
5 schools. I believe Commissioner Brogan is going
6 to make this presentation.
7 COMMISSIONER BROGAN: Governor, and members
8 of the State Board of Education, we just thought
9 that in light of the fact that we're closing in
10 on mid-year, we would provide to you a brief
11 update on the status of charter schools.
12 You have being handed to you now some
13 background information. And I'm just going
14 to -- if you'll allow me -- hit several of the
15 highlights, just to let you know where we are,
16 and I think where we're headed in the future.
17 As you know, we join 24 other states who
18 have some sort of charter school legislation.
19 There are now hundreds of charter schools around
20 the country.
21 Of course, President Clinton suggested that
22 he would like to see 3,000 charter schools by
23 the year 2000. That's assuming that computers
24 ever allow that year to come.
25 In the state of Florida, we have, we think,
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
45
1 a good piece of charter school legislation.
2 Already we have six school districts that have
3 charter schools up and running.
4 But just to let you know, the Department
5 and our role in this, we have put out there,
6 4,050 information packets distributed during
7 workshops; 1,725 information packets have been
8 mailed; 1,025 individuals added to the charter
9 school database; 1600 plus phone calls for
10 information requests; and there have been now
11 done 76 workshops and town meetings for school
12 boards, district staff members, community
13 organizers, et cetera.
14 Our current status. There are, as I
15 mentioned today, six charter schools up and
16 running. They are -- and if I can do this from
17 memory -- Dade County, Leon County, Polk County,
18 Okaloosa, Escambia, and Walton County.
19 They serve a variety of needs from
20 elementary to middle school to high school, at
21 risk students, disadvantaged students, students
22 who have handicapping conditions.
23 And we applaud those six school districts,
24 because they really did, I think, go above and
25 beyond the call, considering, Governor, that the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
46
1 bill was signed into law almost in the summer,
2 which required, of course, a great deal of
3 activity on the part of the organizers, and
4 cooperation on the parts of the school
5 districts. And they're to be commended for
6 helping to work out the kinks in that short
7 order.
8 There are 20 to 25 charter schools being
9 planned and developed by community groups for
10 the 1997-98 academic year. Thirteen charter
11 applications have been received by local school
12 boards since July of '96, three charter school
13 applicants were denied approval for 96-97, two
14 charter school applicants have been denied
15 approval for 97-98.
16 And, of course, you know, I think, that we
17 are required to bring to you, and will be
18 forthcoming with that, a process through the law
19 that requires a rule be put in place regarding
20 an appeal for a charter which is denied at the
21 local level.
22 And it will not look unlike the process
23 that the State Board uses in its other roles as
24 we consider recommended orders, and things like
25 that.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
47
1 The number of children enrolled. There are
2 currently 458 students enrolled. That came from
3 635 student applicants. And you can see the
4 racial demographics: Approximately 52 percent
5 African American; 46 percent, Caucasian;
6 2 percent, other.
7 Economic indicators: Approximately
8 55 percent of the students enrolled are on the
9 free and reduced lunch program, 11 percent
10 require exceptional education services, and
11 91 percent of the students attended public
12 school last year.
13 There was a great deal of initial concern
14 that there would be a massive influx of private
15 school students to charter schools, and only
16 8 percent of those enrolled currently in charter
17 schools were in private schools last year.
18 I suppose, members of the State Board, and
19 Governor, there's -- there's some good and bad
20 to what's going on, or at least disappointments
21 and frustrations.
22 I think the good, again, is the fact that
23 six districts found ways to overcome the
24 hurdles, decided that they would charter a
25 school. And I've always believed, if you decide
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
48
1 first that you're going to do something, it's
2 amazing how the hurdles will start to be crossed
3 by those who are required to do so.
4 And that begs -- bodes very well, I think,
5 for some of our districts.
6 There are more on the drawing board, as you
7 can see. And, again, from what we understand,
8 they serve a variety of needs, and a variety of
9 student populations, all over the state of
10 Florida, and that's exciting.
11 I think what we stand to gain in terms of
12 charter schools is the knowledge that parental
13 choice, opportunities, strong accountability,
14 and the ability to deregulate and work with much
15 less restrictions from regulations really can
16 have an impact.
17 I think on the -- the side of
18 disappointment, however, has got to come the
19 fact that at this point we're really only
20 looking at probably two, at least to our
21 knowledge, schools -- existing public schools
22 that are considering conversion to charter
23 school status.
24 If you recall during the debate, one of the
25 things that we heard regularly was all public
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
49
1 schools should have that kind of deregulation,
2 and all public schools should be charter
3 schools. And, in essence, the legislation
4 creates that ability, where all schools can,
5 in essence, become charter schools.
6 But we're seeing a rather disappointing
7 number of schools who are actively looking at
8 converting to charter school status.
9 And I think that will change. I think over
10 time, as people become more comfortable with
11 what existing charter schools can do with
12 deregulation, and public school choice, and
13 accountability, I think more schools will
14 consider converting to that status.
15 But I think last on the list of
16 frustrations, and the jury's still out on this,
17 is apparently the -- the idea that some school
18 boards appear to be somewhat recalcitrant to the
19 idea of allowing charters to be set up, and by
20 virtue of that fact, are taking what already is
21 an inordinate number of rules and regulations in
22 applying even more to those who would apply to
23 set up a charter.
24 We've heard everything from districts
25 saying that if you want to convert your existing
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
November 19, 1996
50
1 public school, we will back a U-Haul up to it;
2 empty it out lock, stock, and barrel; and then
3 it's for you to fill it again with your money
4 and your dollars. And we've heard we will
5 charge you a square footage requirement if you
6 convert your public school. And also a number
7 of double standard issues that we've heard being
8 placed on charter schools.
9 And I think we'll work through that as
10 well.
11 I think the vast majority of school
12 districts are developing their policies in a
13 forthright manner, trying to give charter
14 schools an opportunity, while still protecting
15 the health and safety and welfare of the
16 potential occupants of those schools.
17 But I think one of the things that the
18 system needs to guard against is what so many in
19 the Legislature were fearful of, and that is
20 that they would take a great idea, and,
21 in essence, smother it, or at least restrict it
22 to the point where charter schools cannot be set
23 up; or if they are, are smothered with even more
24 rules and regulations than our existing public
25 schools have.
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November 19, 1996
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1 So that's -- those are some of the good
2 things that are happening, and some of the more
3 frustrating things that are happening with
4 charter schools.
5 All in all, I can tell you, we're very
6 proud of the legislation. It was a bipartisan
7 effort, as you all well know. Members of the
8 House and Senate, Republicans and Democrats
9 overwhelmingly supported the piece of
10 legislation that passed.
11 And I think that puts a great deal of
12 responsibility on the local school systems to
13 honor that piece of legislation, and see to it
14 that -- that we're not just moving massive
15 regulation now to a whole new level.
16 And I think the frustrations we'll work
17 through. But I will also say this, that the
18 same Legislature who in bipartisan fashion
19 passed this piece of legislation, in my opinion,
20 will have a short fuse, if and when it comes to
21 a few school districts who have determined that
22 they are going to fight the whole charter school
23 movement, or at least try to camouflage that by
24 placing more rules and regulations on charter
25 schools than already exist on traditional
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1 schools.
2 And that would be a shame because I think
3 the vast majority, as I mentioned, of school
4 districts are doing a good job of honoring the
5 integrity of that piece of legislation.
6 One last issue. It's akin to this. But as
7 you know, another piece of legislation that
8 passed at the same time -- as a matter of fact,
9 in the same bill, which did not get as much play
10 as did charter schools, is also moving along out
11 there.
12 As you know, by the end of this year, by
13 this summer, all 67 school districts are
14 required to have debated and discussed and
15 considered and ultimately compiled a plan for
16 their own district of expanded public school
17 choice initiatives.
18 So right now, again, there's technical
19 assistance being provided, and people are
20 starting to hold town hall meetings and consider
21 what expanded public school choice might look
22 like in those districts as well.
23 So, it's an adventure, as you can well
24 imagine. But, again, I think the people who
25 have had the courage, not only from the
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1 organizers' standpoint, but the side of the
2 local school systems, to be courageous in
3 stepping out front, are to be applauded.
4 I was down at the space coast one day
5 talking with a group considering organizing a
6 school. It ultimately was not given a charter.
7 But I think one of the -- one of the
8 organizers who -- who's been working at the
9 space coast for years and years said it best.
10 One of the Board members said, well, you know,
11 we're going to wait and see what some other
12 school districts and some other charter schools
13 do.
14 And the organizer who works for NASA said,
15 who was the first man on the moon? The
16 School Board member thought, and he said,
17 Neil Armstrong.
18 And he said, good.
19 Who was the second man on the moon?
20 And the School Board member thought, and
21 said, I don't know.
22 He said, most people don't. That's what's
23 so important about being first.
24 And he said, I would hate to see us sit
25 back and wait for somebody else to be first when
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1 we could do the courageous thing and charter the
2 schools.
3 So you are seeing a lot of courage out
4 there on a new initiative. And, of course,
5 there's still much that remains to be seen. But
6 we're excited about the possibilities, not just
7 in Florida, but I think nationally for what this
8 can not only do for the children and the
9 teachers and the parents in these schools, but
10 ultimately the residual, which is more
11 important, and that is, what these schools can
12 do for all of public education.
13 So with that, Governor, be glad to try to
14 answer any questions that members of the
15 State Board might have.
16 GOVERNOR CHILES: Question. Yes, sir.
17 TREASURER NELSON: I want to talk to you
18 about that school in Cocoa, the Academy for
19 Aerospace Technology.
20 Now, they -- and you and I have both been
21 there, and that is an impressive operation. And
22 they want to become a charter school.
23 But there are 140 students, and climbing,
24 in that academy. And that's part of Cocoa
25 High School, and that's part of the FTEs, and,
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1 therefore, the funding.
2 So naturally, the School Board and the
3 superintendent isn't going to want to give up
4 those 140 FTEs.
5 So we've got a funding situation that is at
6 cross purposes on the issue of whether or not
7 somebody ought to be a charter school or not.
8 Now, how do you resolve that little
9 sticky wicket?
10 COMMISSIONER BROGAN: Well, that -- therein
11 lies part of the dilemma here. Of course, I've
12 always said education is about children. But
13 I think more importantly, we -- we all know,
14 sadly, it's still all about power and money.
15 And I think that as we look at a situation
16 like that, you've got an example where, in fact,
17 the school system, I think, is concerned that if
18 they fund the hundred and --
19 TREASURER NELSON: -- forty --
20 COMMISSIONER BROGAN: -- forty students who
21 are a school within a school, actually, because
22 that particular program is already on the campus
23 of -- of an existing high school, that that will
24 somehow have a detrimental effect to the overall
25 school population.
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1 And, you know, when I was down there, we
2 talked about some of these issues. And I'm
3 convinced that as creative as people can be in
4 the charter and the contracts, et cetera, there
5 are ways to recognize, for example, that some of
6 those students may still, while enrolled in the
7 Academy, may still all be taking advantage of
8 some of the other functions at the school.
9 What I recommended there, Commissioner, is
10 that there is a 5 percent availability of the
11 100 percent of per pupil funding granted to
12 districts in charter schools. In other words,
13 the district may keep 5 percent of the total per
14 pupil expenditure that follows the student.
15 And what I recommended was simply that that
16 5 percent of those 147 students remain there at
17 the school to help offset some of the other
18 costs that those students might -- might engage
19 in by staying there at the school campus.
20 I guess my point is: Where there's a will,
21 there's a way.
22 I'm like you, I was very impressed --
23 TREASURER NELSON: Well --
24 COMMISSIONER BROGAN: -- with that Academy,
25 and I -- I would love to see it chartered in the
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1 future.
2 TREASURER NELSON: Well, is that the way to
3 do it, for the people that want to be the
4 charter school?
5 COMMISSIONER BROGAN: That was --
6 TREASURER NELSON: Otherwise, they're going
7 to be continuously blocked by the School Board
8 that says, we can't afford to lose these FTEs.
9 COMMISSIONER BROGAN: Right. And that, by
10 the way, is something that you see in other
11 places around the state where people want to
12 block a charter school from opening, because
13 they don't want to lose the FTE, whether it's a
14 school within a school, or a newly established
15 school.
16 TREASURER NELSON: Is that something we
17 should address legislatively?
18 COMMISSIONER BROGAN: There's the
19 possibility we may have to. If -- not only
20 that, Commissioner, but if there are other kinds
21 of roadblocks that we find where the
22 Legislature --
23 GOVERNOR CHILES: Now --
24 COMMISSIONER BROGAN: -- may be helpful, we
25 may have to do that.
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1 GOVERNOR CHILES: What about the fact that
2 they are going to be able to appeal to the State
3 Board of Education?
4 COMMISSIONER BROGAN: Yes, sir. The way
5 the appeal works, according to the law, is
6 this: The way our Constitution is written, all
7 the great legal minds seem to feel that the
8 total supervision of Florida's public education
9 system resides in the hands of the locally
10 elected school boards.
11 So that having been said, the way the
12 legislation was designed on an appeal, that --
13 let's take that one, for example, Governor.
14 That group could appeal their case ultimately
15 once our rule is in place, and that'll be to you
16 in December.
17 They could bring their case to the State
18 Board of Education. As it will be written, we
19 are permitted to hear the case. We are
20 permitted to render a recommendation back to the
21 local school system.
22 That recommendation, for example, might be
23 that we know you denied it; we feel, having
24 heard all the evidence, and heard the -- the
25 charter recommendation from the group, we think
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1 it is something viable and something that should
2 be chartered.
3 But even at that, the local school system,
4 based on the system that's in place in this
5 state, still has the ability to deny the
6 charter.
7 Now, being attorneys, you know what good
8 cause means. And what's written into the law is
9 that at that point, they could only deny the
10 charter with good cause, obviously trying to
11 keep them from being arbitrary or capricious in
12 their decision, or just simply saying, we'll
13 never have a charter school in this district.
14 But still, the bottom line is that it rests
15 solely in the hands of that local School Board,
16 unless, in fact, the charter school agents were
17 to take them to court and challenge the issue of
18 good cause.
19 That is, by the way, one of the most
20 frustrating parts of our system. States where
21 more charter schools are off the ground have an
22 appeal system, or have multicharter
23 possibilities.
24 For example, in some states, you can go to
25 the local School Board for a charter, or you can
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1 go to a university, you can go to a community
2 college, or other entities to get your charter
3 approved.
4 And some states have an appeal so that
5 there is a higher authority that if you are
6 denied at the local level, you can take your
7 appeal to a higher authority, and they can
8 literally approve your charter.
9 GOVERNOR CHILES: Well --
10 COMMISSIONER BROGAN: So ours is a little
11 clumsy in that regard.
12 GOVERNOR CHILES: It's clumsy. But, again,
13 we're embarking on new ground.
14 I would say that before you start talking
15 about change in the legislation or anything, you
16 ought to test what you have. I'm not sure a
17 school board would persist for just monetary
18 reasons if the State Board of Education,
19 you know, made some findings. That gets to be a
20 political thing, you know, then as to whether
21 they're -- whether they're following up. I
22 don't know. And, you know, there is a
23 constitution revision session coming up.
24 Probably what you point out seems to be a
25 constitutional problem. So I'm not sure about
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1 by statute you can cure it anyway.
2 COMMISSIONER BROGAN: It is --
3 GOVERNOR CHILES: That's probably -- that's
4 why the statute is the way it is. But,
5 you know, it may well be that they ought to
6 think about whether they want to appeal.
7 COMMISSIONER BROGAN: And I think,
8 Governor, your point's well taken. It's,
9 I think, too early --
10 GOVERNOR CHILES: Yeah.
11 COMMISSIONER BROGAN: -- to tell on --
12 GOVERNOR CHILES: You don't want to --
13 COMMISSIONER BROGAN: -- a lot of these
14 issues. We should know, having gone through the
15 full cycle and heard some of these appeals --
16 GOVERNOR CHILES: Yeah.
17 COMMISSIONER BROGAN: -- just how it's
18 going to go.
19 But, bottom line is it's exciting, and
20 we -- we're -- should be very proud as a state
21 that we join others and are engaged in a
22 movement that, again, I think most importantly
23 has the possibility of having a profound effect
24 on all public education before it's said and
25 done. So --
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1 GOVERNOR CHILES: Thank you.
2 COMMISSIONER BROGAN: -- just wanted to
3 update you and thank you for the chance to do
4 so.
5 GOVERNOR CHILES: Uh-hum.
6 DR. BEDFORD: Item 2, Seminole Community
7 College request for a designation of a center in
8 southwest Seminole County.
9 COMMISSIONER BROGAN: Move approval.
10 COMPTROLLER MILLIGAN: Second.
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, it's approved.
13 DR. BEDFORD: Item 3 is an informational
14 presentation, a Close Look at Successful
15 Schools.
16 Andrea Willett with the Bureau of School
17 Improvement will make that presentation.
18 (Attorney General Butterworth exited the
19 room.)
20 MS. WILLETT: Good morning. And thank you
21 for the opportunity to speak with you.
22 I wanted to bring you some good news for a
23 change about public schools in the state of
24 Florida.
25 In conjunction with Federal funds, local
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1 funds, and contract, and already Department of
2 Education employees, we looked at schools that
3 were successful that you would think they
4 probably ought not to be.
5 We said, let's take a look at the schools
6 that have a higher poverty rate, and say, is
7 there really something going on that we can use
8 that we can work with other schools and say that
9 this is a school that you can talk to, look at,
10 use as a model.
11 We looked at elementary schools that had
12 60 percent or more poverty.
13 We had middle schools that had 50 percent
14 or higher of their student body in poverty, and
15 30 percent of the high schools.
16 We looked across the state and said, okay,
17 what are the odds that this school -- a school
18 in this situation would, in fact, be a
19 successful school in that they would have higher
20 student achievement, or at least student
21 achievement that we would be recognizing as
22 successful.
23 At the elementary level, if you have a
24 poverty rate of 60 percent or more, you are four
25 times less likely to be --
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1 GOVERNOR CHILES: Either that's not in
2 focus, or I'm not in focus. I --
3 MS. WILLETT: It's not working very well.
4 GOVERNOR CHILES: Thank you.
5 MS. WILLETT: It was working earlier.
6 Sorry.
7 GOVERNOR CHILES: Great.
8 Now, how many schools did you look at in
9 each one of those areas?
10 MS. WILLETT: When we looked at the entire
11 school population for high poverty, we looked at
12 a pool of about 100 all the way
13 across-the-board, and then narrowed it down to
14 these schools.
15 GOVERNOR CHILES: Yeah. But how many were
16 "these?" I mean --
17 MS. WILLETT: At the elementary level, we
18 ended up with 30 schools -- I'm sorry,
19 20 elementary schools, 13 middle schools, and
20 14 high schools.
21 GOVERNOR CHILES: Thank you.
22 MS. WILLETT: The middle school level, if
23 they had this poverty rate, they were 16 times
24 less likely to have higher student achievement,
25 or to have two or three subjects above the state
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1 median. So we're looking again at reading,
2 writing, and mathematics.
3 At the high school level, they were
4 23 times less likely to have student achievement
5 at these levels, or better.
6 It would be -- if we're going to do that,
7 then we wanted to say, okay, what did they do?
8 Sir, I set up this earlier, and it got
9 moved.
10 I'm sorry.
11 We looked at these schools, and we said,
12 what happened here, what's going on, why are
13 these schools being successful when other
14 schools are saying maybe they really aren't
15 as -- can't be as successful.
16 Every single one of the schools had a high
17 value on staff development. They invested in
18 the people that worked in those schools to make
19 sure that they had the tools that they needed.
20 Teachers were very collegial in their
21 efforts, it was a constant and continuous effort
22 to look at what -- how we could do things
23 better.
24 There was a very clear school mission.
25 Everybody understood exactly what it is they
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1 were about. They were focusing on the work of
2 the children. The mission statements were in
3 school improvement plans, they were plastered
4 across the schools, people knew what the work of
5 the school was, and they were going about it on
6 a daily basis. They were taking their work very
7 seriously.
8 There was strong supportive and
9 instructional leadership. Leaders managed by
10 walking around. Schools were clean, leaders
11 were constantly looking for ways to improve
12 activities, they were strong motivators, they
13 were constantly looking for ways to recognize
14 both the students and the staff in those
15 schools, and to talk about the good things that
16 they were doing.
17 There was a -- a safe and orderly learning
18 environment. There were no -- there's no
19 graffiti on these school walls, there's no trash
20 in the hallways, children are not worried about
21 being in that school, teachers and staff members
22 are not worried about being at that school. The
23 climate is very conducive to learning.
24 Instructional programs are relevant and
25 engaging; and discipline is swift, it's firm,
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1 but it's very fair.
2 There's frequent monitoring of student
3 progress, kids are not lost in the cracks in
4 these schools.
5 There's a very clear message that we
6 monitor what we -- we value what we monitor, we
7 monitor it frequently, and it's an ongoing
8 process that's not a one-time event.
9 People are very much aware of where they
10 stand and how they're doing, and what they need
11 to do to get even better.
12 There are item analyses of the testing that
13 has taken place, and the curriculum is
14 strengthened through that test taking skill, and
15 through the test item analysis that has taken
16 place.
17 And parents -- the positive home school
18 community, parents know what's going on with
19 those children in those schools. These schools
20 are very open to the community, open to the
21 parents, open to the people who walk in on -- in
22 off the campus.
23 That is not in conflict with the safe and
24 orderly environment, however. People know who's
25 supposed to be there. The parents are very much
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1 welcome, the community is very welcome on that
2 campus.
3 And parents are very much involved, and
4 families are very much involved in their
5 student's behavior and in their activities, and
6 in their learning.
7 The learning opportunity and the time on
8 task are increased.
9 Students have opportunities to learn in
10 academic settings before, during, and after
11 school. You'll see children reading in the
12 hallways at break times, at recess times.
13 You'll see lots of programs and
14 possibilities, tutors are available for
15 students. Learning is taken very seriously by
16 both the children, the staff, and certainly by
17 the community of where these schools reside.
18 Last, but not least, everybody in these
19 schools believes these children can learn. It's
20 not an if, and, or but; it is, yes, children can
21 learn, they expect them to learn --
22 (Secretary Mortham entered the room.)
23 MS. WILLETT: -- they act as if they can
24 learn, they teach as if they can learn, and
25 these children learn.
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1 We've taken a look at each one of these
2 schools. We're using them as a model for some
3 of the schools that are being less successful
4 right now, and we will continue to use this as a
5 technical assistance avenue for the schools here
6 in the state of Florida.
7 You have available to you three of the
8 books that reflect each of the schools: The
9 elementary, the middle, and the high school.
10 I'll be glad to answer any questions that
11 you have about this. And thank you for the
12 opportunity to bring you some good news.
13 DR. BEDFORD: Thank you, Andrea.
14 GOVERNOR CHILES: Can -- I think this is
15 a -- an outstanding report. And I'm delighted
16 that you've done this analysis. I think it's
17 tremendously important.
18 And how do you -- what is our plan now as
19 to how we -- we move forward with this?
20 COMMISSIONER BROGAN: Well, Governor what
21 the -- much of what is in these documents came
22 from the request of people in some of our less
23 successful schools to suggest that they want to
24 change, they want to be different --
25 GOVERNOR CHILES: Yeah.
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1 COMMISSIONER BROGAN: -- but they need some
2 leadership as to how to do that.
3 I think it also helps to dispel some of the
4 mythology that still it sadly exists out there
5 that poorer children simply can't learn the way
6 other children can learn.
7 So what we're now doing, is, of course,
8 working with our original 158 critically low
9 performing schools. And we're about a week
10 away, I think, from finishing crunching the
11 numbers to determine how many of those schools
12 are officially off the list, how many new
13 schools will move on.
14 But as is required by the law, and should
15 be, we've formed a triumvirate between the
16 Department of Education, the School Board, and
17 that school, trying to work to help to change
18 the program in those schools to increase student
19 achievement levels.
20 The beauty here, by the way, is that this
21 doesn't just translate to schools that are far
22 less successful. The idea is that if these
23 kinds of -- of changes can take place with a
24 tough student population, they ought to
25 translate just about anywhere. And so all
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1 schools have something that they can learn from
2 this.
3 (Attorney General Butterworth entered the
4 room.)
5 COMMISSIONER BROGAN: But again, one of the
6 things that we originally heard when we began to
7 identify schools is that the vast majority of
8 them were of a poor nature, high minority
9 schools, and, therefore, that was to be
10 expected.
11 And I think what this does is simply
12 explode that myth that not only shouldn't it be
13 expected, it can't be accepted, that those
14 children can learn like any other child can
15 learn, but we've got to change the program; and
16 hopefully, things just like this, and some of
17 the other activities. And I think Andrea
18 mentioned it also, the staff development
19 component, the leadership of those schools.
20 I will be patently candid with you, and
21 tell you that for many years, it was sometimes
22 easier to slide a weak leader into a less than
23 successful school, because they typically didn't
24 have the parent population who would go to that
25 school board meeting on Tuesday night and pound
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1 on that podium.
2 Many of the parents in those schools were
3 intimidated by the school or the school
4 district, and didn't feel that they were able to
5 do that.
6 More and more difficult to be able to hide
7 weak leadership, I think, now in the state of
8 Florida. And let me tell you that those school
9 principals are really in many ways the deciding
10 factor as to whether a school is able to achieve
11 at its potential, or whether it can't.
12 GOVERNOR CHILES: That wouldn't list it as
13 such. I'm confident, from all the observations
14 I and others have made, that you find a good
15 school, you find a very good principal.
16 COMMISSIONER BROGAN: Yes, sir.
17 GOVERNOR CHILES: It's always true. You
18 didn't list that as such. You listed staff and,
19 you know, overall. But --
20 COMMISSIONER BROGAN: Leadership, I think
21 you had, Andrea, right --
22 MS. WILLETT: Yes, sir. Strong and
23 supportive leadership.
24 GOVERNOR CHILES: Yeah. Right. I knew
25 that you --
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1 DR. BEDFORD: Yes.
2 GOVERNOR CHILES: -- you sort of --
3 COMMISSIONER BROGAN: But you've -- I've
4 heard you say that many times, Governor. And
5 you're right. I've been at this 20 years, and
6 I believe that -- I'm sure it sounds general,
7 but strong principal, good school; weak
8 principal, weak school.
9 And that's one of the things that I think
10 is coming out of this whole process more and
11 more is that if you want to turn a school around
12 and really help those children learn at their
13 maximum potential, you've got to put in the best
14 principals you can find.
15 And you also have to give that principal
16 the support to make whatever staffing changes he
17 or she thinks is necessary within the faculty
18 and staff to see to it you've got the strongest
19 group of people that you can find.
20 It's critical.
21 GOVERNOR CHILES: Can you tell me -- and
22 maybe you did and I didn't pick it up -- of
23 the -- what 30 or 35 schools that we're -- K-6,
24 whatever that number was, what percentage of
25 that was there of the schools that are under the
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1 60 percent, or within the 60 percent of poverty,
2 or 50 percent of poverty.
3 What -- how did that --
4 DR. BEDFORD: I don't -- Andrea, I don't --
5 MS. WILLETT: I'm sorry. I didn't hear the
6 question.
7 DR. BEDFORD: Yeah.
8 GOVERNOR CHILES: The -- what I was asking
9 is: You selected how many students for --
10 I mean, how many schools for the K through 6?
11 MS. WILLETT: There were 20 elementary
12 schools, Governor.
13 GOVERNOR CHILES: Twenty elementary
14 schools.
15 MS. WILLETT: Yes, sir.
16 GOVERNOR CHILES: All right. That was
17 20 out of how many elementary schools that would
18 have qualified under the -- if it was 50 percent
19 of poverty that you used?
20 MS. WILLETT: Let me check those figures.
21 Do we have --
22 DR. BEDFORD: I don't think --
23 MS. WILLETT: Do we have that -- that
24 number, Gerry?
25 MR. RICHARDSON: Well, half the elementary
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1 schools --
2 MS. WILLETT: Gerry Richardson is one of
3 the --
4 GOVERNOR CHILES: Yeah. I'm just trying to
5 get in my mind --
6 MS. WILLETT: -- and he does the number
7 crunching.
8 GOVERNOR CHILES: -- if we found 20 that
9 were good --
10 COMMISSIONER BROGAN: Right.
11 GOVERNOR CHILES: -- we found 20 out of how
12 many that were over 50 percent of poverty?
13 MR. RICHARDSON: We actually visited 20 out
14 of about 100 that qualified.
15 GOVERNOR CHILES: Okay.
16 MR. RICHARDSON: They had to qualify on the
17 basis of 60 percent --
18 GOVERNOR CHILES: Yeah.
19 MR. RICHARDSON: -- free and reduced lunch,
20 and higher achievement.
21 GOVERNOR CHILES: Okay.
22 Well, wait a minute. And higher
23 achievement. You didn't find 100 that had
24 higher achievement, and poverty, and free lunch,
25 did you?
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1 MR. RICHARDSON: Yes, sir. There were over
2 100 elementary schools that would have qualified
3 in this initial criteria.
4 GOVERNOR CHILES: Okay. Then how --
5 MR. RICHARDSON: And we picked out 20.
6 DR. BEDFORD: And you picked on
7 exemplary --
8 GOVERNOR CHILES: Out of how many --
9 COMMISSIONER BROGAN: Total.
10 GOVERNOR CHILES: -- total that hit the
11 50 percent and hit the free lunch, but did not
12 hit the exceptional students?
13 MR. RICHARDSON: Well, roughly half. Since
14 the median poverty rate for elementary schools
15 is about 55 percent, and there are about
16 1450 schools, elementary schools, so you have
17 about 725.
18 GOVERNOR CHILES: Okay. Thank you.
19 COMMISSIONER BROGAN: Which shows you how
20 much work we have to do --
21 GOVERNOR CHILES: That's about --
22 COMMISSIONER BROGAN: -- ahead of the --
23 GOVERNOR CHILES: -- 1/7 under that --
24 DR. BEDFORD: Right.
25 GOVERNOR CHILES: -- you know, would be in
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1 the -- would have been achieving. That's what I
2 was trying to get --
3 COMMISSIONER BROGAN: That's right.
4 GOVERNOR CHILES: -- how many were not.
5 COMMISSIONER BROGAN: Yes, sir.
6 GOVERNOR CHILES: Is there some way -- I
7 know we have existing the report card. Is there
8 some other way we could start recognizing those
9 schools? Nothing like recognition, I think.
10 COMMISSIONER BROGAN: You bet. As a matter
11 of fact, we are working on right now a
12 recognition program that would identify any
13 school, whether it's a critically --
14 GOVERNOR CHILES: Yeah.
15 COMMISSIONER BROGAN: -- low school, any
16 school that manages to take their children to
17 higher levels of learning.
18 And be it either a monetary recognition or
19 a symbolic recognition, you're right, there's no
20 better recognition than the State stepping
21 forward and saying, for example, in these
22 20 schools, we acknowledge what you're doing.
23 We know the hardships you're facing, and you're
24 to be congratulated and rewarded for that. And
25 we're working on that right now.
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1 GOVERNOR CHILES: Good.
2 DR. BEDFORD: We have an Item 4, a good
3 cause item. Appointment to the St. Petersburg
4 Junior College District Board of Trustees.
5 COMMISSIONER BROGAN: Move approval.
6 SECRETARY MORTHAM: Second.
7 GOVERNOR CHILES: Moved and seconded.
8 Without objection, it's approved.
9 DR. BEDFORD: That concludes the Department
10 of Education.
11 GOVERNOR CHILES: All right.
12 (The State Board of Education Agenda was
13 concluded.)
14 *
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1 GOVERNOR CHILES: All right.
2 Administration Commission.
3 DR. BRADLEY: Item number 1 is recommend
4 approval of the minutes of the meeting held
5 November 7th, 1996.
6 COMMISSIONER BROGAN: Move approval.
7 SECRETARY MORTHAM: Second.
8 GOVERNOR CHILES: Moved and seconded.
9 Without objection, they're approved.
10 DR. BRADLEY: Item number 2 is recommend
11 the approval for authorization to establish one
12 position in excess of the number fixed by the
13 Legislature in the Department of
14 Community Affairs.
15 COMPTROLLER MILLIGAN: Motion.
16 GOVERNOR CHILES: Moved.
17 ATTORNEY GENERAL BUTTERWORTH: Second.
18 GOVERNOR CHILES: Seconded.
19 Without objection, it's approved.
20 DR. BRADLEY: Item number 3, recommend the
21 approval of the transfer of general revenue
22 appropriations in the Department of Elder
23 Affairs.
24 SECRETARY MORTHAM: Move approval.
25 COMMISSIONER BROGAN: Second.
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1 GOVERNOR CHILES: Moved and seconded.
2 Without objection, it's approved.
3 DR. BRADLEY: Item number 4, recommend the
4 approval of the transfer of general revenue
5 appropriations under items A., B., and C. in the
6 Department of Health and Rehabilitative
7 Services.
8 SECRETARY MORTHAM: Move approval.
9 COMMISSIONER BROGAN: Second. Items A.,
10 B., and C.
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, it's approved.
13 DR. BRADLEY: Item number 5 is a request
14 to -- request authorization to enter an amended
15 draft final order.
16 There's a couple of people here that you
17 might want to recognize. I think the Mayor of
18 Tarpon Springs, Mayor Anita Protos is here. She
19 may or may not want to talk.
20 And also we have available for questioning
21 several folks, including the Petitioner,
22 Laura Johnson, John Hubbard, and Lynne Moeller.
23 SECRETARY MORTHAM: Move authorization.
24 COMMISSIONER BROGAN: Second.
25 GOVERNOR CHILES: Moved and seconded.
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1 Without objection, it's approved.
2 DR. BRADLEY: Okay. Item number 6 is a
3 request approval to publish a notice of
4 proposal, rule making, in the Florida
5 Administrative Weekly regarding uniform rules of
6 procedure.
7 We have Debby Kearney here available for
8 questions if you would like to talk to here.
9 ATTORNEY GENERAL BUTTERWORTH: I'd like to
10 move this, Governor. I think you have some
11 other members of the committee out there, and a
12 lot of work was placed into this.
13 Maybe they could also be identified?
14 DR. BRADLEY: All right. Maybe I can get
15 Debby Kearney to come up --
16 ATTORNEY GENERAL BUTTERWORTH: Okay.
17 SECRETARY MORTHAM: Second.
18 GOVERNOR CHILES: It's been moved and
19 seconded.
20 While she's coming up, I want to thank the
21 administrative law section of the Florida Bar.
22 They've given a tremendous amount of time and
23 effort to --
24 ATTORNEY GENERAL BUTTERWORTH: Yes.
25 In fact, the former chair of that section,
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1 Hearing Officer Linda Rigot, is out in the
2 audience also. I'd ask her to come forward
3 also.
4 GOVERNOR CHILES: Terrific.
5 ATTORNEY GENERAL BUTTERWORTH: She spent a
6 lot of time on this program.
7 GOVERNOR CHILES: Yes, sir.
8 MS. KEARNEY: Who I would also want to --
9 GOVERNOR CHILES: Why don't you come on up.
10 MS. KEARNEY: -- Bill Williams, who's the
11 current Chair. And Linda Rigot, who's an
12 Administrative Law Judge, as you mentioned --
13 ATTORNEY GENERAL BUTTERWORTH: Uh-hum.
14 MS. KEARNEY: -- is the outgoing Chair.
15 And these two and their executive counsel just
16 put in a tremendous amount of work, volunteer
17 hours. And we really appreciate it.
18 ATTORNEY GENERAL BUTTERWORTH: It was on
19 our own time, and not government time, right,
20 when they were doing this?
21 MS. RIGOT: Yes, sir.
22 (Governor Chiles exited the room.)
23 SECRETARY MORTHAM: Okay. It's been moved
24 and seconded.
25 Any discussion?
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1 All those in favor, say aye.
2 THE CABINET: (Aye.)
3 SECRETARY MORTHAM: Okay. Passes
4 unanimously.
5 DR. BRADLEY: Just a second,
6 Madam Chairman. Let me ask the question of
7 somebody.
8 That was the Administration Commission.
9 I think the Governor has to vote in the
10 affirmative; isn't that correct?
11 Is he coming -- is he coming back; do you
12 know?
13 SECRETARY MORTHAM: I really don't know.
14 COMMISSIONER BROGAN: General -- General,
15 knock on that door, will you?
16 COMPTROLLER MILLIGAN: He's gone.
17 ATTORNEY GENERAL BUTTERWORTH: Did you lock
18 the door?
19 COMMISSIONER BROGAN: He took a stack of
20 papers with him. It may be awhile.
21 ATTORNEY GENERAL BUTTERWORTH: Bill, it's
22 you and I now.
23 DR. BRADLEY: May I suggest we go on to
24 FLAWAC, and we really need the Governor's vote
25 on that last --
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1 SECRETARY MORTHAM: I think that would be
2 perfectly fine.
3 Let's move on to FLAWAC.
4 ATTORNEY GENERAL BUTTERWORTH: Administ--
5 number 6?
6 DR. BRADLEY: I couldn't understand.
7 ATTORNEY GENERAL BUTTERWORTH: You don't
8 need his vote on number 6.
9 DR. BRADLEY: That's the
10 Administration Commission. Yes, sir --
11 ATTORNEY GENERAL BUTTERWORTH: Okay.
12 DR. BRADLEY: -- I believe we do.
13 He has to vote in the affirmative on all
14 items in the Administration Commission,
15 I believe.
16 Maybe someone can -- I'm more than willing
17 to be corrected.
18 MS. TINKER: Yes.
19 SECRETARY MORTHAM: That's all right. I'm
20 sure he will be returning.
21 DR. BRADLEY: Okay.
22 (The Administration Commission Agenda was
23 continued.)
24 *
25
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1 SECRETARY MORTHAM: Let's go on to FLAWAC.
2 DR. BRADLEY: I apologize. Item number 1.
3 Request approval of the minutes of
4 September 10th, 1996 --
5 COMMISSIONER BROGAN: Move approval.
6 DR. BRADLEY: -- Commission meeting.
7 COMPTROLLER MILLIGAN: Second.
8 SECRETARY MORTHAM: Moved and seconded.
9 Without objection, it's approved.
10 DR. BRADLEY: Item number 2 is request
11 authorization to --
12 (Governor Chiles entered the room.)
13 DR. BRADLEY: -- enter the draft final
14 order denying acceptance of the request for
15 review.
16 ATTORNEY GENERAL BUTTERWORTH: Motion.
17 DR. BRADLEY: I have available for
18 questions Kirby Green.
19 SECRETARY MORTHAM: Motion?
20 COMPTROLLER MILLIGAN: Second.
21 SECRETARY MORTHAM: Motion and second.
22 Without objection, it's approved.
23 (The Florida Land and Water Adjudicatory
24 Commission Agenda was continued.)
25 *
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1 SECRETARY MORTHAM: Governor, they're
2 really pleased you're back. Really pleased.
3 We're going to go back to the last
4 agenda --
5 GOVERNOR CHILES: I understand you needed a
6 vote?
7 SECRETARY MORTHAM: You -- yes, sir.
8 ATTORNEY GENERAL BUTTERWORTH: Any reason
9 why you walked on that vote, Governor?
10 GOVERNOR CHILES: I vote aye. I vote aye.
11 SECRETARY MORTHAM: Okay. I think that
12 makes it unanimous.
13 DR. BRADLEY: That was Item 6 on the
14 Administration Commission agenda.
15 SECRETARY MORTHAM: Okay. We got through
16 the Administration and FLAWAC.
17 GOVERNOR CHILES: All right.
18 SECRETARY MORTHAM: Thank you.
19 GOVERNOR CHILES: Thank you, ma'am.
20 (The Administration Commission Agenda was
21 concluded.)
22 *
23
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87
1 GOVERNOR CHILES: Trustees.
2 ATTORNEY GENERAL BUTTERWORTH: Motion on
3 the minutes.
4 COMMISSIONER BROGAN: Second.
5 GOVERNOR CHILES: Moved and seconded.
6 Without objection, minutes are approved as
7 read.
8 MS. WETHERELL: Substitute Item 2 is a
9 purchase agreement for a Greenways and Trails
10 program. And I do need to -- I'd like to
11 recognize some people who traveled up here for
12 that item, if I could.
13 First is the Mayor of Fanning Springs,
14 Carol McQueen; the President of the Dixie County
15 Chamber of Commerce, Ronnie Lambert; the
16 Coordinator for Gilchrist County,
17 Ronnie McQueen; Commissioner of Dixie County,
18 John Driggers; City Manager of Cross City,
19 Gary Poore; Executive Director of the Chiefland
20 Chamber, Carol Pomeroy; and the Board member of
21 Dixie, Lori Moeller.
22 And they're here for questions, if you have
23 any, on this item.
24 SECRETARY MORTHAM: I would like to move
25 approval.
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1 COMMISSIONER BROGAN: Second.
2 GOVERNOR CHILES: Moved and seconded.
3 ATTORNEY GENERAL BUTTERWORTH: Governor, I
4 just --
5 GOVERNOR CHILES: Yes.
6 ATTORNEY GENERAL BUTTERWORTH: -- have some
7 questions. I'm not opposed to this program, but
8 I have some questions on this particular one.
9 Madam Secretary, I understand that there
10 are some power line poles already on this
11 corridor, which is -- which is not the same
12 thing as we had during the Seminole -- in the
13 Seminole County situation a couple weeks ago --
14 MS. WETHERELL: Right.
15 ATTORNEY GENERAL BUTTERWORTH: -- we were
16 in competition. They said the reason why we had
17 to pay so much money is we were in competition,
18 perhaps, with a power company who wanted to put
19 some power poles on there perhaps.
20 And originally CSX wanted to sell it to the
21 power company for, like, 20 million dollars.
22 I understand here there are already power
23 lines on this particular corridor that we're
24 buying; is that correct?
25 MS. WETHERELL: That's my understanding.
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1 ATTORNEY GENERAL BUTTERWORTH: And what is
2 the kV of that particular --
3 MS. WETHERELL: Pardon?
4 ATTORNEY GENERAL BUTTERWORTH: What is the
5 wattage or the kV -- what is the kV of that
6 particular -- I think --
7 MS. WETHERELL: Current kV?
8 ATTORNEY GENERAL BUTTERWORTH: -- the time.
9 MS. WETHERELL: We know what we can go up
10 to. We know --
11 UNIDENTIFIED SPEAKER: It can go up to 230.
12 MS. WETHERELL: Yeah. We --
13 ATTORNEY GENERAL BUTTERWORTH: It can go up
14 to --
15 MS. WETHERELL: -- don't know the current,
16 but it can go up to 230 --
17 ATTORNEY GENERAL BUTTERWORTH: It can go up
18 to 230 without --
19 MS. WETHERELL: -- volts.
20 ATTORNEY GENERAL BUTTERWORTH: -- it coming
21 back to the Board or anything.
22 MS. WETHERELL: No, sir. They have to come
23 back to the Board of Trustees.
24 ATTORNEY GENERAL BUTTERWORTH: Okay. Now,
25 how much -- when they appraise this, since last
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1 time we were told that we were in competition
2 with the power companies, how much do we get as
3 a discount because there already is the kV line
4 out there? There already is an existing line
5 which can be expanded to a 250, which is kind of
6 high --
7 MS. WETHERELL: Right.
8 ATTORNEY GENERAL BUTTERWORTH: -- which
9 would mean just more than one pole. I think
10 it'd almost mean the -- the A type of pole.
11 So how much of a discount did the
12 appraisers give us -- and, again, did they do
13 the across-the-fence type appraisal.
14 MS. WETHERELL: Well, we were looking at
15 the appraisal reports this morning, and both of
16 them did -- and I'll ask that Bruce Staskiews
17 speak to it specifically.
18 But they did -- they did look at the issue
19 of the easements, and they did discount for the
20 easements. But they did not specify the actual
21 or dollar amount of the discount.
22 So if you would like to hear from
23 Mr. Staskiews.
24 MR. STASKIEWS: Thank you.
25 MS. WETHERELL: Thank you.
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1 MR. STASKIEWS: The appraisals -- on the
2 one appraisal, they used comparable sales of
3 other corridors to determine the value of this
4 particular corridor.
5 ATTORNEY GENERAL BUTTERWORTH: And they
6 were -- but the other ones -- were the other
7 ones that they compared it to over-the-fence, or
8 were they other types?
9 MR. STASKIEWS: No. They were -- the way
10 it is is they look at other corridors that are
11 in place, and then they go by that corridor as
12 to what was paid for that per acre, and that's
13 what was the basis for this.
14 The --
15 ATTORNEY GENERAL BUTTERWORTH: Who was the
16 purchaser? Was the State the purchaser again,
17 or was somebody else the purchaser?
18 MR. STASKIEWS: It was -- the State was the
19 purchaser on some, local utility companies
20 purchased other corridors, the Department of
21 Transportation may have purchased them.
22 On the one appraiser here, he discounted
23 the comparable sales, the per acre value, by
24 10 percent, because of the encumbrance of the
25 power line easement.
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1 So the comparable values that he used
2 that -- in his report, were already discounted
3 by 10 percent. And what he did, there were
4 values from two to nine thousand dollars an
5 acre. And he fell in the middle range of
6 approximately $4500 per acre.
7 And that's what the other appraiser did,
8 too. He considered that there were encumbrances
9 with the easements. And that's why he fell in
10 the middle range of the comparable per acre
11 values of the other corridors.
12 ATTORNEY GENERAL BUTTERWORTH: Okay. My
13 notes here show that the sales comparison across
14 the fence were almost identical.
15 MR. STASKIEWS: Correct.
16 ATTORNEY GENERAL BUTTERWORTH: Okay. Mine
17 does not show any discount. Maybe you can show
18 me that --
19 MR. STASKIEWS: Yeah. That was in one
20 chart, in one of the appraisal reports where he
21 looked at the other corridors, and he discounted
22 each one by 10 percent.
23 ATTORNEY GENERAL BUTTERWORTH: Okay. So
24 both appraisers discounted, or only one
25 appraiser discounted?
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1 MR. STASKIEWS: The one appraiser;
2 discounted it with the 10 percent, the other one
3 considered it in the value that he did, and
4 that's why he came out at the middle of the
5 range of the appraised values on the other
6 corridors.
7 ATTORNEY GENERAL BUTTERWORTH: Well, I
8 still think the person has stepped the wrong
9 way. I mean, I don't know. I think we were the
10 only purchaser, and I'm not opposed to the
11 project.
12 But again, I think we're being hit with
13 across-the-fence. We're being told that we have
14 to buy these because the only other purchasers
15 are power lines. Well, here, the power line's
16 already there, and you can go up to two fifty.
17 If they come to us, can we start charging
18 them rent on that? Or are we foreclosed in the
19 contract from -- I'm not concerned about a
20 69 kV, I'm really not. I'm not concerned about
21 the one pole.
22 But once it gets to a two thirty, I'm a
23 little concerned about that. Or two fifty,
24 whatever it is.
25 MR. STASKIEWS: Well, on -- for the
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1 construction, according to the easement
2 agreement, anything that they would want to
3 increase or put in place, I mean, they have to
4 come to us for approval, or at least review of
5 everything they're doing.
6 And, you know, I can't say that we can
7 charge for it or anything there. But, you know,
8 at least it has to come back to the Board to be
9 considered.
10 ATTORNEY GENERAL BUTTERWORTH: What did
11 they pay for the easement themselves; do we
12 know?
13 MR. STASKIEWS: I don't have that
14 information.
15 ATTORNEY GENERAL BUTTERWORTH: Is there an
16 ongoing payment; do we know?
17 MR. STASKIEWS: Not that I'm aware of.
18 ATTORNEY GENERAL BUTTERWORTH: Could there
19 possibly be an ongoing payment which would go to
20 CSX? Do you know that?
21 MR. STASKIEWS: It was a sale of the
22 easement to them. What the arrangements were of
23 the sale, I don't know.
24 ATTORNEY GENERAL BUTTERWORTH: So they
25 could sell -- so we could be buying this, and
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1 they could still be paying for the easement to
2 CSX after we buy this. That could be happening.
3 MR. STASKIEWS: That's a possibility.
4 ATTORNEY GENERAL BUTTERWORTH: Okay.
5 I just have some questions, Governor.
6 GOVERNOR CHILES: It's been moved and
7 seconded.
8 Without objection, it's approved.
9 We thank y'all for your attendance here.
10 ATTORNEY GENERAL BUTTERWORTH: For future
11 ones, Governor, I would certainly hope that we
12 go more into some of these questions.
13 MS. WETHERELL: One of our --
14 ATTORNEY GENERAL BUTTERWORTH: At least
15 have the answers for me.
16 MS. WETHERELL: Yes, sir. I understand.
17 And we -- as staff talk about these things,
18 too, one of the difficulties is is that, as
19 you know, these are not our appraisers, and we
20 operate off of a certified list of independent
21 appraisers.
22 And we do not instruct them as how to
23 appraise. If we get into instructing them as
24 how to appraise, then obviously, we don't have
25 a -- the market value. And that's kind of the
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1 dilemma. And --
2 ATTORNEY GENERAL BUTTERWORTH: Okay. Well
3 then, I would like to have the information by
4 next Cabinet meeting as to just whether or not
5 CSX is still getting the money on these leases
6 and such like that.
7 I think there are a lot of unanswered
8 questions here. And if the answers come out to
9 be wrong, I would -- I will move to reconsider.
10 MS. WETHERELL: Okay. We'll try to get
11 a -- any answer that we can.
12 All right. Item 3, quarterly management --
13 COMMISSIONER BROGAN: Move quarterly --
14 MS. WETHERELL: -- reports --
15 COMMISSIONER BROGAN: -- reports.
16 SECRETARY MORTHAM: Second.
17 GOVERNOR CHILES: Moved and seconded.
18 Without objection, it's approved.
19 MS. WETHERELL: Item 4 is an option
20 agreement for Highlands Hammock Additions.
21 COMMISSIONER BROGAN: Move approval.
22 SECRETARY MORTHAM: Second.
23 GOVERNOR CHILES: Moved and seconded.
24 Without objection, it's approved.
25 MS. WETHERELL: Item 5 are two purchase
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1 agreements for Florida State University.
2 SECRETARY MORTHAM: Move approval.
3 COMMISSIONER BROGAN: Second.
4 GOVERNOR CHILES: Moved and seconded.
5 Without objection, it's approved.
6 MS. WETHERELL: Item 6 is an option
7 agreement for Belle Meade CARL project and a
8 waiver of survey.
9 SECRETARY MORTHAM: Move approval.
10 COMMISSIONER BROGAN: Second.
11 MS. WETHERELL: Item 7 is a --
12 GOVERNOR CHILES: Moved and --
13 Is there a second?
14 COMPTROLLER MILLIGAN: Yes.
15 COMMISSIONER BROGAN: Yes, sir.
16 GOVERNOR CHILES: Moved and seconded.
17 Without objection, it's approved.
18 MS. WETHERELL: Item 7 is a resolution
19 establishing a memorial site for the victims of
20 ValuJet Flight 592.
21 SECRETARY MORTHAM: Move approval.
22 COMMISSIONER BROGAN: Move approval.
23 Second.
24 GOVERNOR CHILES: Moved and seconded.
25 Without objection, it's approved.
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1 MS. WETHERELL: Substitute Item 8, we're
2 recommending deferral to the 12-10-96 Cabinet
3 meeting.
4 COMMISSIONER BROGAN: Move deferral.
5 COMPTROLLER MILLIGAN: Second.
6 ATTORNEY GENERAL BUTTERWORTH: Second.
7 GOVERNOR CHILES: Moved and seconded.
8 Without objection, it's deferred.
9 MS. WETHERELL: And Substitute Item 9,
10 we're recommending deferral to the first meeting
11 in March of '97.
12 COMMISSIONER BROGAN: Move deferral.
13 SECRETARY MORTHAM: Second.
14 GOVERNOR CHILES: Moved and seconded.
15 Without objection, that's --
16 MS. WETHERELL: That concludes --
17 GOVERNOR CHILES: -- deferred.
18 MS. WETHERELL: -- concludes the Board of
19 Trustees agenda.
20 GOVERNOR CHILES: Thank you.
21 MS. WETHERELL: Thank you.
22 (The Board of Trustees of the Internal
23 Improvement Trust Fund Agenda was concluded.)
24 *
25
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1 (The Cabinet meeting was concluded at
2 11:28 a.m.)
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1 CERTIFICATE OF REPORTER
2
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4 STATE OF FLORIDA:
5 COUNTY OF LEON:
6 I, LAURIE L. GILBERT, do hereby certify that
7 the foregoing proceedings were taken before me at the
8 time and place therein designated; that my shorthand
9 notes were thereafter translated; and the foregoing
10 pages numbered 1 through 100 are a true and correct
11 record of the aforesaid proceedings.
12 I FURTHER CERTIFY that I am not a relative,
13 employee, attorney or counsel of any of the parties,
14 nor relative or employee of such attorney or counsel,
15 or financially interested in the foregoing action.
16 DATED THIS 2ND day of DECEMBER, 1996.
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19 LAURIE L. GILBERT, RPR, CCR
100 Salem Court
20 Tallahassee, Florida 32301
(904) 878-2221
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ACCURATE STENOTYPE REPORTERS, INC.
