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THE CABINET

STATE OF FLORIDA

_____________________________________________________


                                     Representing:

 

DIVISION OF BOND FINANCE
OFFICE OF INSURANCE REGULATION
FINANCIAL MANAGEMENT INFORMATION BOARD
BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND
STATE BOARD OF ADMINISTRATION

 

 

                         The above agencies came to be heard before
               THE FLORIDA CABINET, Honorable Governor Bush presiding, in the
               Cabinet Meeting Room, LL-03, The Capitol, Tallahassee, Florida,
               on the 13th day of April, 2004 commencing at approximately
               9:55 a.m.

 


                                        Reported by:

                                     KRISTEN L. BENTLEY
                                  Certified Court Reporter

 

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

 

 

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                                                                           2
               APPEARANCES:

                         Representing the Florida Cabinet:

                         JEB BUSH
                         Governor

                         CHARLES H. BRONSON
                         Commissioner of Agriculture

                         CHARLIE CRIST
                         Attorney General

                         TOM GALLAGHER
                         Chief Financial Officer

                                           * * *

 

 

 

 

 

 

 

 

 

 

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                                                                           3
                                          I N D E X

               DIVISION OF BOND FINANCE
               (Presented by BEN WATKINS)

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


               FINANCIAL MANAGEMENT INFORMATION BOARD
               (Presented by UNIDENTIFIED)

               ITEM                  ACTION                 PAGE
               1                     Approved               7
               2                     Approved               7


               OFFICE OF INSURANCE REGULATION
               (Presented by UNIDENTIFIED)

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


               BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND
               (Presented by EVA ARMSTRONG and COLLEEN CASTILLE)

               ITEM                  ACTION                 PAGE

               1                     Approved               11
               2                     Approved               34
               3                     Approved               35
               4                     Approved               35
               5                     DEFERRED               91
               6                     DEFERRED               91
               7                     Approved               92
               8                     Approved               108
               9                     Approved               108

 

 

 

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                                                                           4
                                    I N D E X (Continued)

 

               STATE BOARD OF ADMINISTRATION
               (Presented by COLEMAN STIPANOVICH)

               1                     Approved               109
               2                     Approved               109
               3                     Approved               113

 

 

 


               CERTIFICATE OF REPORTER                       114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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                    DIVISION OF BOND FINANCE - APRIL 13, 2004
                                                                           5
          1                              PROCEEDINGS

          2              GOVERNOR BUSH:  The next cabinet meeting will be

          3         Thursday, April 29th.  Is that right?  Thursday?

          4               CFO GALLAGHER:  Yep.

          5              GOVERNOR BUSH:  I guess it is.  Division of Bond

          6         Finance.

          7               CFO GALLAGHER:  Motion on the minutes, March 30th.

          8              COMMISSIONER BRONSON:  Second.

          9              GOVERNOR BUSH:  There is a motion and a second.

         10         Without objection, Item 1 passes.

         11              Item 2.  Ben, how are you?

         12              MR. WATKINS:  I'm doing very well, Governor.  Thank

         13         you.  Item No. 2 is a resolution authorizing the

         14         competitive sale of up to $130 million in revenue bonds

         15         for the Tampa Hillsborough County Expressway.  This is the

         16         second piece of financing that was originally implemented

         17         two years ago in order to complete the funding of the

         18         reversible lanes project in Tampa Hillsborough County.

         19               CFO GALLAGHER:  Motion on 2.

         20              GOVERNOR BUSH:  There's a motion.

         21              COMMISSIONER BRONSON:  Second.

         22              GOVERNOR BUSH:  And a second.  Without objection,

         23         Item 2 passes.

         24              MR. WATKINS:  Item 3 is a report of award on the

         25         competitive sale of $23.1 million of housing facility

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                    DIVISION OF BOND FINANCE - APRIL 13, 2004
                                                                           6
          1         revenue bonds for Florida State University.  It was a

          2         combined new money and refunding issue.  The new money

          3         component represented about 16 and a half million dollars

          4         of the total.  The refunding component was $6.7 million of

          5         the total.  The bonds were awarded to the low bidder at a

          6         true interest cost of 4.25 percent and the refunding piece

          7         generated gross savings of about a million and a half

          8         dollars or a million dollars on a present-value basis.

          9               CFO GALLAGHER:  Motion on 3.

         10              COMMISSIONER BRONSON:  Second.

         11              GOVERNOR BUSH:  Moved and seconded.  Without

         12         objection, the motion passes.  Thank you.

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                FINANCIAL MGMT INFORMATION BOARD - APRIL 13, 2004
                                                                           7
          1              GOVERNOR BUSH:  Financial Management Information

          2         Board.

          3               CFO GALLAGHER:  Motion on the January 27th meeting

          4         minutes.

          5              GENERAL CRIST:  Second.

          6              GOVERNOR BUSH:  There is a motion and a second on

          7         Item 1.  Without objection, the motion passes.

          8              Item 2.  Good morning.

          9              MR. NORTHAM:  Good morning, Governor, cabinet

         10         members.  The second and final item on our agenda is the

         11         acceptance of the ERP Integration Task Force Quarterly

         12         Report.

         13               CFO GALLAGHER:  Motion.

         14              GENERAL CRIST:  Second.

         15              GOVERNOR BUSH:  Moved and seconded.  Without

         16         objection, the item passes.  Can I ask a question?

         17              MR. NORTHAM:  Yes, sir.

         18              GOVERNOR BUSH:  Have you followed the proviso

         19         language in, I think it's the House budget, that suggests

         20         that if a vendor does -- something related to either

         21         vendors or jobs created overseas that it's not allowed.  I

         22         was just wondering, isn't SAP our -- who's the vendor?

         23               CFO GALLAGHER:  People Soft.

         24              GOVERNOR BUSH:  People Soft?

         25               CFO GALLAGHER:  (Nods affirmatively.)

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                FINANCIAL MGMT INFORMATION BOARD - APRIL 13, 2004
                                                                           8
          1              GOVERNOR BUSH:  Do they do all of their contracts in

          2         state?

          3               CFO GALLAGHER:  That's a contract that already

          4         exists so it's not an issue.  It would have to be in the

          5         future.

          6              GOVERNOR BUSH:  I think the reality of these ideas

          7         though are --

          8               CFO GALLAGHER:  I can tell you it's very expensive.

          9              GOVERNOR BUSH:  -- foolhardy.  So you haven't looked

         10         at that?

         11              MR. NORTHAM:  No, sir.

         12               CFO GALLAGHER:  You get to veto things, Governor.

         13              GOVERNOR BUSH:  Well, it's hard to veto proviso

         14         language in the budget.  I've done it before.  Thank you.

         15              MR. NORTHAM:  Thank you, sir.

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                 OFFICE OF INSURANCE REGULATION - APRIL 13, 2004
                                                                           9
          1              GOVERNOR BUSH:  Office of Insurance Regulation.

          2               CFO GALLAGHER:  Motion on the minutes of

          3         January 27th meeting.

          4              GENERAL CRIST:  Second.

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

          6         Without objection, Item 1 passes.

          7              Item 2.

          8              MR. McCARTY:  Item 2 is adoption of the amendments to

          9         the rule.  Chapter 690-149, filing of forms and rates for

         10         life and health insurance.

         11               CFO GALLAGHER:  Motion on 2.

         12              COMMISSIONER BRONSON:  Second.

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

         14         Without objection, Item 2 passes.

         15              MR. McCARTY:  Item Agenda 3 is adoption of amendments

         16         to Rule Chapter 690-149 for the adoption of standard risk

         17         rates.  The rates are amended to adopt the new standard

         18         risk rates as required by statute.

         19               CFO GALLAGHER:  Motion on 3.

         20              COMMISSIONER BRONSON:  Second.

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

         22         Without objection, the item passes.

         23              MR. McCARTY:  Agenda Item No. 4 is repeal of Rule

         24         690-166.045, special purpose homeowners insurance company

         25         notice requirements.

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                 OFFICE OF INSURANCE REGULATION - APRIL 13, 2004
                                                                          10
          1               CFO GALLAGHER:  Motion on 4.

          2              COMMISSIONER BRONSON:  Second.

          3              GOVERNOR BUSH:  Moved and seconded.  Without

          4         objection, the item passes.

          5              MR. McCARTY:  Item 5 is recommendation of Ray Neff to

          6         be designated as the chairman of the board of directors of

          7         the Florida Workers' Comp Joint Underwriting Association.

          8               CFO GALLAGHER:  Motion on five.

          9              COMMISSIONER BRONSON:  Second.

         10              GOVERNOR BUSH:  Moved and seconded.  Without

         11         objection, the item passes.  Thank you, Kevin.

         12              MR. McCARTY:  Thank you, Governor, members of the

         13         commission.

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                        BOARD OF TRUSTEES - APRIL 13, 2004
                                                                          11
          1              GOVERNOR BUSH:  Board of Trustees.

          2               CFO GALLAGHER:  Motion on the minutes of January

          3         27th, February 10th, and February 26th.

          4              COMMISSIONER BRONSON:  Second.

          5              GOVERNOR BUSH:  Oh-oh.  I don't see Colleen.  There

          6         is a motion on Item 1 and a second.  Without objection,

          7         the item passes.

          8              MS. ARMSTRONG:  Item 2, we have -- I'll step in for

          9         her for just a minute.  She was talking to a staff member

         10         out there.  We have a special presentation for you related

         11         to the Apalachicola River.  And I'd like to ask Vicki

         12         Tschinkel, the State director for the Nature Conservancy,

         13         and Eric Draper, Government Relations Director for Florida

         14         Audubon to step up.

         15              GOVERNOR BUSH:  Thank you.  Vicky, Eric, good

         16         morning.

         17              MS. TSCHINKEL:  Good morning, Governor.  Gentlemen.

         18         This is an unusual event and we really are here to thank

         19         all of you.

         20              GOVERNOR BUSH:  That's unusual?

         21              (Laughter.)

         22              MS. TSCHINKEL:  I'm always here to thank you,

         23         Governor.  But this time I'm really thanking you.

         24               CFO GALLAGHER:  We didn't do anything yet.

         25              MS. TSCHINKEL:  No, but you have.  It's very unusual,

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                        BOARD OF TRUSTEES - APRIL 13, 2004
                                                                          12
          1         I think, in most human endeavors that we can look back on

          2         fairly consistent behavior and devotion to an objective.

          3         And the State of Florida, through thick and thin, has been

          4         working on the protection of the Apalachicola River for

          5         over 30 years.  Starting with the assistance to helping

          6         the federal government buy St. Vincent's Island in 1968.

          7              So we thought that it would be worth, as they say in

          8         modern parlance, to take a moment and think about what

          9         we've accomplished, yes, and some challenges ahead.  But

         10         to really think about this special river.  It's kind of

         11         wide.  It's the widest floodplain of any river in Florida.

         12         It's silent.  It's modest and complex.  But it is being

         13         allowed to do what a river should do.  It's free to

         14         provide what nature intended, at least almost always free

         15         to do what nature intended.  Also, at the same time, I

         16         don't know if Secretary Castille has came in yet or not.

         17              GOVERNOR BUSH:  She made it.

         18              MS. TSCHINKEL:  She is here.  We want to take the

         19         opportunity to pass the official banner of protection to

         20         Colleen and the Florida -- Audubon of Florida and the

         21         Nature Conservancy have prepared a special commemorative

         22         for today, the Apalachicola Day that you have declared in

         23         your resolution.  And this is a compendium of many

         24         wonderful visual thoughts about the Apalachicola River and

         25         we're giving Colleen the first copy of this.  And for

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                        BOARD OF TRUSTEES - APRIL 13, 2004
                                                                          13
          1         that, I'd like to invite Eric Draper up here, who's

          2         already up here, who is the policy director for Audubon of

          3         Florida.

          4              So, Colleen, we're just so proud to see you in this

          5         position and we're so proud that you're going to have the

          6         opportunity to work on the river in a new capacity.  I

          7         know you've been working for many years.  And I hope that

          8         you will get many minutes of enjoyment looking through

          9         those pictures.

         10              MS. CASTILLE:  Thank you very much.

         11              MS. TSCHINKEL:  Thank you.  What we would like to do

         12         now -- and we're going to do it quickly, we know you are

         13         very busy -- is we're going to give you just a very short

         14         version, a very few of those photographs, mention a few

         15         important things about the river.  And then we would like

         16         to take the opportunity to introduce to Colleen some of

         17         the people she may not already know who are sitting here,

         18         who have worked on the Apalachicola River, some way longer

         19         than even I have, which I won't talk about how long that's

         20         been.

         21              And we may have one or two elected officials who

         22         would choose to speak briefly.  But we're going to be very

         23         quick.  So I'm going to turn it over now to Eric who's

         24         going to start with a first few slides.

         25               (Thereupon, the video presentation was displayed.)

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                        BOARD OF TRUSTEES - APRIL 13, 2004
                                                                          14
          1              MR. DRAPER:  Thank you very much.  Eric Draper with

          2         Audubon of Florida presenting to you a short slide show on

          3         the Apalachicola River.  The State and conservation

          4         partners have been working to protect the Apalachicola

          5         River and bay for more than 30 years.  It begins in the

          6         Blue Ridge Mountains and it's the only river in Florida

          7         that actually carries snow melt from the mountains,

          8         terminates in the Apalachicola Bay and is one of the most

          9         productive and pristine bays in North America.  It's the

         10         primary nursery area for Gulf of Mexico species.  In terms

         11         of magnitude of flow, the Apalachicola River is the

         12         largest river in Florida, the fifth largest river flowing

         13         into the Gulf of Mexico.  And it's --

         14              GOVERNOR BUSH:  That's the picture the guy got in

         15         trouble with making a comment on.  Never mind, I won't say

         16         it this time.

         17              MR. DRAPER:  Well, here's another statistic for you.

         18         Which it is one of only six biodiversity hot spots in the

         19         United States.  And some locals even consider it the

         20         Garden of Eden.  It is a complex rivering system of steep

         21         ravines, marshes, barrier islands, and upland lobleaf

         22         pines ponds.  It is the largest floodplain forest in

         23         Florida at 112,000 acres.  And at one time supported a

         24         thriving timber industry.

         25              There are 131 freshwater fish species and 33 mussel

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                        BOARD OF TRUSTEES - APRIL 13, 2004
                                                                          15
          1         species living in the Apalachicola River basin.  So it's

          2         really quite biodiverse.  It also supports the largest

          3         population of flatwood salamanders which you see pictured

          4         here.  It is a haven for rare and endangered species.  And

          5         the Gulf sturgeon, which is not pictured here, primeval

          6         fish used to travel up this river two to 300 miles to

          7         spawn on the limestone shoals as a historic fishery for

          8         the Gulf.

          9              GOVERNOR BUSH:  Eric, are you going to show the

         10         picture of the bear in the bay?

         11              (Laughter.)

         12              MR. DRAPER:  I'm not looking at this.  My text does

         13         not show a bear thing.  We're moving to birds now.

         14              GOVERNOR BUSH:  Okay.

         15              MR. DRAPER:  This is something I actually know

         16         something about, Governor.

         17              (Laughter.)

         18              GOVERNOR BUSH:  Beautiful.

         19              MR. DRAPER:  Thank you.  That was helpful.  This is

         20         the annual spring migration of birds through this area.

         21         Millions of songbirds right now are leaving South America,

         22         moving through Cuba, moving through the Florida Keys, and

         23         moving right up into this vortex of floodplain forest

         24         along the Gulf Coast, working their way north.  And some

         25         of these are also resident species such as the pileated

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         woodpecker, red-cockaded woodpecker, resident species,

          2         very important and make up part of the biodiversity of

          3         this area.  We also have, a lot of times we talk about the

          4         oysters that are so important in the Apalachicola Bay but

          5         we don't talk about the oyster catchers, which is actually

          6         a very charismatic bird and draw people from all over the

          7         country who come to Florida specifically to bird-watch and

          8         of course spend their very good eco tourism dollars here.

          9         So birds are a very important part --

         10              GOVERNOR BUSH:  You called them a charismatic bird?

         11              MR. DRAPER:  I would call the oyster catcher a

         12         charismatic bird.

         13              GOVERNOR BUSH:  Because it draws people to the --

         14              MR. DRAPER:  They do.  People come from all over the

         15         country --

         16              GOVERNOR BUSH:  I don't doubt it.  I just never heard

         17         the term used for a bird before.  They are beautiful.

         18              (Laughter.)

         19              MR. DRAPER:  I'm supposed to pay attention to this

         20         monitor.

         21              MS. TSCHINKEL:  Oh, I pay attention to the governor

         22         and the cabinet members.

         23              I don't know if they mean the bird itself is

         24         charismatic, Governor.  But bird watchers are very

         25         charismatic people.  They'll drive all over the word to

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         see a particular bird.  And I guess they see something

          2         there that is very special.

          3              GOVERNOR BUSH:  They are.  They're beautiful.

          4              MS. TSCHINKEL:  We've already talked about the

          5         oysters.  And there's a lot more to protecting oysters and

          6         protecting river flow.  We also have a lot of agencies in

          7         Florida that have to protect the health of the water or

          8         the oysters can't be eaten.  So we have a lot of agencies

          9         that are involved that are not even environmental

         10         agencies.  But unless for some weird reason you want to

         11         eat oysters from some other state, we got to protect the

         12         Apalachicola oysters because 90 percent of Florida's

         13         oysters come from that river.

         14              Then there's this other funny statistic which I don't

         15         have quite right but something like 70 percent of the blue

         16         crabs in the entire United States that you eat spend part

         17         of their larval life or other life in Apalachicola Bay.

         18         It's way more than 50 percent.  And that stuff you get up

         19         in Maryland, you ask where those blue crabs come from.

         20         But, you know, we've had a long interactive human --

         21              GOVERNOR BUSH:  How does this work?

         22              MS. TSCHINKEL:  Next time you go to the White House

         23         and they serve you some blue crabs you tell me.

         24              GOVERNOR BUSH:  How does the crab travel to Maryland?

         25              MS. TSCHINKEL:  Well, those crabs don't.  But

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         actually, they harvest them further south and they just

          2         bring them up and they call them oysters.  And then you

          3         have to say, Are those Maryland oysters?  Then they get

          4         real embarrassed.

          5              We've had this kind of relationship with this river

          6         for a long time.  It's a logging area.  It still is.  But

          7         it brought cotton down from the mid 1800s, all through the

          8         early 1920s.  So it was used for transport, still used for

          9         logging cypress, long leaf pine, hydropower, recreation,

         10         of course fishing.  Now the fishing industry is special

         11         because it is special.  We have a way of life in

         12         Apalachicola that doesn't exist in very many cities in the

         13         United States of America anymore because we have a healthy

         14         fishing village there that is now also becoming a very

         15         healthy chic village as people -- I keep reading about it

         16         in the New York Times which is kind of weird.  But it's

         17         also becoming a major development area.  The current

         18         estimated value of the river to Florida is two-and-a-half

         19         billion dollars a year.  If you take the broader basin

         20         into account, it's probably more than double that.  I

         21         like --

         22              GOVERNOR BUSH:  What you're saying is that

         23         Representative Kendrick is chic?  And Representative

         24         Bense?

         25              MS. TSCHINKEL:  It's -- we all can make our

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                        BOARD OF TRUSTEES - APRIL 13, 2004
                                                                          19
          1         decisions.  We can all make our decisions about how sheik

          2         we want to to be.  But it's interesting.  People are

          3         noticing this place.  It's become very special.  350,000

          4         pounds a year of Tupelo honey are harvested from the

          5         word's largest Tupelo forest in that basin.  And those

          6         bees are moved in there.  You know, so there's people

          7         actually moving bees in there for the special honey during

          8         the season and then they move them out.

          9              There are tremendous recreational opportunities

         10         there.  Anything you want, hiking, fishing, hunting,

         11         picnicking, bird watching -- even bird watching, Eric.

         12         And there is horse trails and of course wonderful swimming

         13         out on the coast.  There are many partners working

         14         together on this.  We have federal partners, U.S. Forest

         15         Service, U.S. Fish and Wildlife Service.  We have

         16         important nongovernmental entities.  The Florida Wildlife

         17         Federation.  The Apalachicola Bay and River Keepers that

         18         have been doing a great job locally.  Our agencies,

         19         Northwest Florida Water Management District, you-all,

         20         Department of Environmental Protection taking a lead.

         21         It's amazing how many agencies are involved in this river.

         22              GOVERNOR BUSH:  Department of Defense?

         23              MS. TSCHINKEL:  That's right, Department of Defense

         24         now.

         25              In all, the State of Florida, in those 30 years, has

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         invested more than $165 million in protecting this river.

          2         For the return, annual return, of the benefits of the

          3         river, that seems small.  We've got public lands with

          4         exotic names, Torreya State Park, the Apalachicola

          5         National Forest.  I always liked Dead Lake State Park.  I

          6         always thought we could have done better on that one.  The

          7         St. George Island State Park, don't forget, that's part of

          8         the same system.  And the list goes on and on.

          9              This is an investment in our future, our quality of

         10         life, and our natural heritage.  You know, nothing that is

         11         worth having that's wonderful is not worth fighting for.

         12         Hopefully we don't have to fight very hard but the threats

         13         of development and pollution, overlogging, all these

         14         things are things we have to worry about.  The delicate

         15         balance of this amazingly quiet river, just how much fresh

         16         water there is, when it comes in, all those things affect

         17         what the animals are going to be in the floodplain and the

         18         bay.  And unfortunately nature does this to a fairly close

         19         call.

         20              GOVERNOR BUSH:  Don't forget Atlanta.

         21              MS. TSCHINKEL:  Well, I wasn't going to mention that

         22         but you mentioned it, so yes.  And it is true, withdraws

         23         both for agriculture and I just read that the two fastest

         24         growing counties I think in the U.S. are in Atlanta.  And

         25         just look at the map and we are very dependent on the

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          1         goodwill of the people of Georgia to help us with this.

          2              So our goal, to finish up, our goal today has been to

          3         acknowledge the incredible work of our State, particularly

          4         our State governmental officials and all the people who've

          5         worked in science, government and as private citizens to

          6         protect the river all this time.  And we want to encourage

          7         and support you as you continue to do this wonderful job

          8         and we're all here today to show that support and show

          9         that encouragement to you.

         10              In the end, our society will be defined not only by

         11         what we create, but by what we refuse to destroy, and that

         12         was the former head of the Nature Conservancy.  It's an

         13         important quote to think about.

         14              Thank you so much for your wonderful attention.  And

         15         I would like to take the opportunity with Eric to

         16         introduce the people that are here.  But we would like to

         17         introduce speaker designate Bense if that would be all

         18         right for him to speak first.

         19              GOVERNOR BUSH:  I guess so.

         20              (Laughter.)

         21              REPRESENTATIVE BENSE:  Thank you, Governor.

         22         Appreciate the --

         23              GOVERNOR BUSH:  Nice haircut.  I got one too.

         24              (Laughter.)

         25              REPRESENTATIVE BENSE:  You like that, huh?  It helps

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          1         our image a little bit, I think.  I want to take just a

          2         minute, Governor, to really thank you for your hard work

          3         on the preservation of the Apalachicola River.  When Port

          4         St. Joe and Gulf County and Apalachicola were added to my

          5         district back in 2002, it reignited a fondness I've always

          6         had for the Apalachicola River since I was a boy.  And I

          7         tell you, we have a wonderful opportunity here.

          8              We are going to spend eight billion dollars to fix up

          9         the Everglades, and for a lot less than that, a lot less

         10         than that, we can save the Apalachicola River from the

         11         same destiny that the Everglades suffered from.  And,

         12         Governor, I commend you for your efforts to protect the

         13         river.  You know, we really have four key issues with the

         14         river.  Number one is the fact that Georgia is trying to

         15         take too much water for their issues in Atlanta.

         16              Secondly, we have dredging going on in the river for

         17         32 boats, for barges that pass through it every year,

         18         which is ridiculous.  And, thirdly, we have some pollution

         19         points along the river that we're eliminating.  And,

         20         lastly, the developments going along on the river and

         21         you've addressed all those issues, Governor.  And you

         22         fought Georgia when they thought they had the upper hand

         23         in trying to get a higher ratio of water.  And I

         24         appreciate your efforts.  And the cabinet and general,

         25         thank you for your efforts for fighting to keep the

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          1         Apalachicola River the way it is now and protecting those

          2         jobs in the seafood industry that we have in Apalachicola

          3         and let's keep on fighting.  Thanks a lot.

          4              GOVERNOR BUSH:  Thank you, Allan.

          5              MS. TSCHINKEL:  We'd like to just recognize briefly

          6         some people.  But, first, Representative Will Kendrick

          7         who's been down here with us for about an hour.  I don't

          8         know where he's sitting right now.  There he is.  We just

          9         wanted to wave hello and say thank you so much for coming.

         10              GOVERNOR BUSH:  Representative Kendrick, who's with

         11         you?  I saw some young people came in with you.  Where are

         12         they from?

         13              REPRESENTATIVE KENDRICK:  My future body guards from

         14         Cross City.

         15              (Laughter.)

         16              GOVERNOR BUSH:  He needs the support.

         17              MS. TSCHINKEL:  We're going to just briefly recognize

         18         people by asking them to stand as a group.  State Agency

         19         and Federal Agency program partners, Ken Haddad, I think

         20         is here or he was planning on being here.  John Brown from

         21         the Division of Forestry.  Great.  Gary Knight from the

         22         Florida Natural Areas Inventory.  And we may have somebody

         23         here from the U.S. Forest Service and U.S. Fish and

         24         Wildlife Commission.  So I want to thank them for coming

         25         as well.

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          1              MR. DRAPER:  We also have representatives from our

          2         federal legislators.  Danny Collins representing

          3         Representative Alan Boyd.  And representing Senator

          4         Graham -- I'm sorry, Senator Graham sends his regards.  We

          5         have from local government and civic groups, we have

          6         Cheryl Sanders, a Franklin County Commission Chair.  And

          7         from my environmental colleagues, Grahal Farr with Florida

          8         Wildlife Federation.  Lester Abberger, a board member of

          9         1000 Friends of Florida; David McClain, Apalachicola Bay

         10         and River Keepers along with Lee Edmiston.  Roy Rogers who

         11         is the chairman of the board of the Nature Conservancy's

         12         Florida chapter.  We have John Eubanks, Liberty County

         13         Chamber of Commerce, county support there.  And John

         14         Robert Middlemass, member of the board of directors of

         15         both the Nature Conservancy and Audubon of Florida.

         16              MS. TSCHINKEL:  And to finish up, just a couple more

         17         landowners.  We are very, very grateful to the landowners

         18         who've worked with us there and allowed the State of

         19         Florida to purchase these important lands.  I think George

         20         Wilson, representing the St. Joe company is here.  And

         21         there are former government officials, scientists, and

         22         state agency people who contributed a good part of their

         23         careers.  Bobby Howell, who I think might be also General

         24         Howell, although I get confused, with the clerk of the

         25         court in Franklin County when this protection started a

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          1         long time ago.  Pam McVety who used to worked for you,

          2         Governor, in DEP.  And Steve Leitman who is the civilian

          3         protector for many years of the Apalachicola River.

          4              We thank you so much for your courtesy.  And,

          5         Colleen, we're all ready to help you any way we can.  We

          6         don't want to get in the way, but we want to be there.

          7              MS. CASTILLE:  Thank you.  It's an incredible

          8         partnership that has been put together on protecting both

          9         the water and the lands around the Apalachicola River and

         10         we are very grateful for all of your help because we can't

         11         do it alone and it takes citizen initiative in order for

         12         us to accomplish anything.  So thank you all for being

         13         here.  And thank you for your constant work and vigilance

         14         on everything with this river and with the land

         15         surrounding it.

         16              GOVERNOR BUSH:  Thank you for the presentation.

         17              (Applause.)

         18              MS. CASTILLE:  And, Governor, members of the cabinet,

         19         that's a perfect segue into our next item, Item 2, which

         20         is the acceptance of an assignment option agreement from

         21         the Nature Conservancy to acquire 1604 acres in the

         22         St. Joe Timberlands Project.

         23               CFO GALLAGHER:  Motion on two.

         24              COMMISSIONER BRONSON:  Second.

         25              GOVERNOR BUSH:  There is a motion and a second.  I

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          1         have a question.

          2              MS. CASTILLE:  Yes, sir.

          3              GOVERNOR BUSH:  Is there someone here that can

          4         discuss the timber value one more time for me so I can get

          5         my arms around this?

          6              MS. CASTILLE:  We have Zack Ryan here to discuss the

          7         timber values.

          8              GOVERNOR BUSH:  Help me.  Welcome back.

          9              MR. RYAN:  Thank you very much.

         10              GOVERNOR BUSH:  The general question I have really is

         11         we are buying this land obviously not to harvest the

         12         timber.  Although maybe there is some agreement for some

         13         limited harvesting, I don't remember.  But we buy the land

         14         and typically, unless this is in the path of development,

         15         the only other option is to -- that someone might be

         16         interested in purchasing it for timber value; isn't that

         17         correct?  I mean that's the general --

         18              MR. RYAN:  Yes, sir.

         19              GOVERNOR BUSH:  So it's legitimate to put a value if

         20         we're competing with people that would want to purchase

         21         the property for timber value.  I'm interested in really

         22         two things, just to focus your attention.  One is how do

         23         you value timber and what's the latest trends in that.

         24         And where are these buyers?  Are there buyers in the same

         25         area that are purchasing timberlands and competing with

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          1         the State?  That will give me comfort to know that we're

          2         taking those two things, in a thoughtful way, taking those

          3         into consideration.

          4              MR. RYAN:  If I may, let me introduce Jerry Brooks

          5         with Natural Resource Planning Services.  Jerry was the

          6         consulting forester that was hired on that project, hired

          7         by our firm to assist in cruising the timber and

          8         appraising the timber for purposes of incorporating those

          9         results into our overall final appraisal.  So we can --

         10         we're prepared here to answer your question in several

         11         different ways.  Certainly Jerry can answer the questions

         12         regarding the technical aspects of how the timber was

         13         initially valued, what the competitive market is for that

         14         product, et cetera, who's buying it.  And then if there

         15         are other questions as to how that was incorporated into

         16         the overall appraisal assignment, I can answer those.  So

         17         I'll turn it over to Jerry for the moment.

         18              MR. BROOKS:  Well, I did the timber appraisal along

         19         the Torreya, the Neil Torreya tract.  And in answer to the

         20         question I think you're asking, there is a very

         21         competitive timber market in that area, both cypress,

         22         hardwood and of course pine.  Pine being the biggest in

         23         the northwest Florida area, most of the mills we have are

         24         devoted to pine.  But there is also a very active cypress

         25         market and that there is a cypress mill at Blountstown and

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          1         there is another at Hosford.  Cypress is in short demand

          2         so there is a very active market for that.  Plus,

          3         hardwood, both pulpwood and saw timber which this tract

          4         consisted mostly of.  There is hardwood saw mills and, of

          5         course, paper mills that use the pulpwood.

          6              And the second part of your question was is there --

          7         are there people out there actively pursuing to purchase

          8         those forest lands?  The --

          9              GOVERNOR BUSH:  You just answered, you said yes,

         10         didn't you?

         11              MR. BROOKS:  There is also people actively purchasing

         12         forest land with timber, not just the timber.

         13              GOVERNOR BUSH:  Okay.

         14              MR. RYAN:  So absolutely in general there is a very

         15         active market for the component separate and independent

         16         of one another and for the land in a total package.  There

         17         is competition from pension fund players.  There's

         18         competition from recreational users.  There is competition

         19         from long-term, short-term, mid-term, speculative

         20         investors.  There is -- the acreage market, I've said a

         21         number of times, is absolutely on fire, not just in the

         22         State of Florida but throughout the Southeast, and there

         23         is an active, very active competition for properties

         24         ranging anywhere from this size up to the 10s and 20s and

         25         30,000s of acres at a time.

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          1              GOVERNOR BUSH:  So how many 20,000-acre tracts of

          2         land, other than the state, have been purchased in this

          3         area in the last two or three years?

          4              MR. RYAN:  In this particular area or in the state of

          5         Florida?

          6              GOVERNOR BUSH:  No, this particular area.

          7              MR. RYAN:  North Florida, I can think of perhaps at

          8         least a half a dozen in that size range within the past

          9         two-year period easily, that have transferred to the

         10         private sector.  It's very active.  I'm working with some

         11         people right now in Georgia regarding hundreds of

         12         thousands of acres and there's going to be stiff

         13         competition for it.  It really does happen.  It's a very

         14         active market and I'd be happy to provide you specific

         15         examples of those if you'd like me to follow up with them.

         16              GOVERNOR BUSH:  I would.  Treasurer?

         17               CFO GALLAGHER:  The value of, say, pine basically

         18         thinning most of it out and everything is like maybe 700

         19         bucks an acre?

         20              MR. BROOKS:  Pardon me?

         21               CFO GALLAGHER:  The value of pine that's not great

         22         big trees but medium-sized, say they're 20 some years old,

         23         would be about $700 an acre?

         24              MR. BROOKS:  Approximately, yes, sir.

         25               CFO GALLAGHER:  So when we're looking at this and

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          1         we're paying, I don't know, I guess --

          2              GOVERNOR BUSH:  1600.

          3               CFO GALLAGHER:  1600 you could figure --

          4              MR. BROOKS:  This was exceptional timber.

          5               CFO GALLAGHER:  Had a lot of hardwood in it?

          6              MR. BROOKS:  Most of it was hardwood and there was

          7         some extremely good cypress.  The pine there was very

          8         good.  We were discussing earlier, the average heights,

          9         for instance, of the cypress and pine timber on this tract

         10         was averaging over 100 feet and diameters were, breast

         11         height were, you know, a lot of them averaging in the

         12         20-inch range.  So this was superior timber to what we run

         13         into most of the time.  This was exceptional stuff.

         14              GOVERNOR BUSH:  The other buyers buy at the same

         15         basis that we do?  We buy it for the underlying value of

         16         the land and then we buy it for the timber value and add

         17         it up and that's what we pay?

         18              MR. RYAN:  And that's a wonderful question.  This

         19         property was exceptional in --

         20              GOVERNOR BUSH:  I think I asked that question to you

         21         a while back.

         22              MR. RYAN:  Yes, you did, indeed.  This property was

         23         exceptional in all categories.  In fact, it was the focus

         24         of a field trip for a previous set of cabinet aides about

         25         three years ago.  I took a group of them out there because

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          1         everything about this property is unusual and unique.  It

          2         classifies as almost 90 percent wetlands.  You stand in it

          3         and your feet are completely dry.  You can pick up sand.

          4         It's just incredibly unique in that regard.  It's not your

          5         stereotypical wetlands in any shape, form or fashion.

          6         Hardwood timber, often you will run into values of five to

          7         $700 an acre in this region simply because you do not have

          8         the quality and size of hardwood timber that you do in

          9         other areas of the country.  This tract has that type

         10         product on it.  It's largely saw timber.  It is not a

         11         pulp -- it has only a small portion of pulpwood product.

         12         The majority of it is a high quality and high grade of

         13         timber.

         14              So it's very exceptional on both sides of the

         15         equation, land and timber.  And for that very reason, in

         16         appraising the property, I had to look at the two

         17         components separate and independent and make a

         18         determination at the end as to how I thought those two

         19         components would play in the market.  And both aspects,

         20         both components of the property, were very well supported

         21         and I believe would perform extremely well in competition.

         22              GOVERNOR BUSH:  Could you answer the question then as

         23         it relates to -- if timber -- if a timber company wants to

         24         buy timberland, they are buying the land because of the

         25         timber, right?

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          1              MR. RYAN:  That's correct.

          2              GOVERNOR BUSH:  And there's a residual value that, I

          3         guess, could be resold.  So is there a point past which

          4         the robust market that you described goes because, you

          5         know, the economics of it don't work, or do they buy the

          6         underlying land value and the timber just like we do even

          7         though we are not going to harvest the timber?

          8              MR. RYAN:  You are in direct competition with them.

          9         They are in competition with you.  And it's not just in

         10         this state.  Yes, they do -- to answer your question

         11         directly, yes, they do, in many of the markets, look at

         12         the components.  And again, I'm consulting with some

         13         individuals right now on the brokerage side and that's

         14         exactly how we're approaching the possible acquisition of

         15         the property.

         16              And it's a much larger piece than this, it's 30,000

         17         acres, and it's in a transitional area.  And my clients

         18         are saying, Let's look at our land component and then

         19         let's have our timber valued, and we will make our offer

         20         based on those two components.  But it does depend, there

         21         can be exceptions, but absolutely, yes, it does happen and

         22         you're not doing something exceptional here.

         23              GOVERNOR BUSH:  Were there other offers on this

         24         property?

         25              MR. RYAN:  Not to my knowledge.  This -- it's

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          1         currently owned by the Nature Conservancy and being

          2         transferred to you.  So in that particular part of the

          3         process, I don't know that that was an option.

          4              GOVERNOR BUSH:  Okay.  I'm asking these questions

          5         because if I don't, we just go about our merry way and pay

          6         more than we should.  And I hope you're not worried about

          7         that.  That's just my job.

          8              MR. RYAN:  We may look a little beat up but --

          9              GOVERNOR BUSH:  You did better this time.

         10              MR. RYAN:  Thank you very much.

         11              COMMISSIONER BRONSON:  If I may too, on these types

         12         of transactions, especially if our Division of Forestry

         13         ends up being the managing part of one of these

         14         situations, we look at the timber that was planted.  If

         15         it's planted timber, many times what you'll find on these

         16         lands is because slash pine grows much faster, softer

         17         timber much faster, they'll plant it because they can pull

         18         it off quicker if you're in that business, if you're in

         19         the timber business.

         20              What we do is go in and look at the soil types and

         21         all as to what trees -- if we go in and take trees out for

         22         one reason or another, we may not plant the same pines

         23         back in that area.  We may put long leaf in certain areas

         24         or, I've seen people trying to grow long leaf on sand pine

         25         land.  That usually doesn't work that well because they

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          1         don't grow as fast or don't grow as well.

          2              But if Forestry is a part of this, then what we do is

          3         go in and take standards that the Forestry Association has

          4         put up on land types.  And so therefore, this piece of

          5         land in 50 or 75 years may look a little bit different

          6         than it does today depending on what they decide needs to

          7         go back as they pull timber out for disease and so forth

          8         and replant.  And a lot of our state land deals like this,

          9         those issues are reworked, replanted.  And what you're

         10         going to have is what most people consider to be a more

         11         natural Florida situation when it comes back instead of

         12         planting it for timber itself.

         13              So there is a difference in how this will probably

         14         look by the time we're very old and can't get around.

         15         Somebody will have to push us out tere to take a look at

         16         it.

         17              (Laughter.)

         18              GOVERNOR BUSH:  Any other questions?  There is a

         19         motion and a second.  Without objection, the motion

         20         passes.  Thank you.

         21              Item 3.  There may be other questions.  Don't leave.

         22         I'm finished asking questions but others may.

         23              MS. CASTILLE:  The responses that Zack and Jerry gave

         24         were across the board on all three of the properties.

         25              GOVERNOR BUSH:  I understand.

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          1              MS. CASTILLE:  Item 3 is a purchase agreement to

          2         acquire 833 acres in Gadsden County, Apalachicola River

          3         Florida Forever Project.

          4               CFO GALLAGHER:  Motion on 3.

          5              GENERAL CRIST:  Second.

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

          7         Without objection, the item passes.

          8              MS. CASTILLE:  Item 4 is a purchase agreement to

          9         acquire 278 acres, the Neil purchase, as part of the

         10         Apalachicola River Florida Forever Project.

         11               CFO GALLAGHER:  Motion on 4.

         12              GENERAL CRIST:  Second.

         13              GOVERNOR BUSH:  Moved and seconded.  Without

         14         objection, the item passes.

         15               CFO GALLAGHER:  Motion to defer No. 5.

         16              GOVERNOR BUSH:  There is a motion to defer?

         17              MS. CASTILLE:  No. 5?

         18               CFO GALLAGHER:  Yeah, I'd like to give them a couple

         19         more weeks to negotiate with -- and let them actually go

         20         down and actually try to meet with them and get it going.

         21         Either we can do that or we can sit here and talk about it

         22         for about an hour.

         23              GOVERNOR BUSH:  Well, a lot of people have come.  How

         24         many people have come to talk on Item 5?

         25              (Pause.)

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          1              That's quite a few people.

          2              MS. CASTILLE:  And our last negotiation session was

          3         with Mr. Hardy's attorney this morning before the cabinet

          4         meeting.

          5               CFO GALLAGHER:  I guess you could report on that.

          6              MS. CASTILLE:  Not any different than it was on

          7         Friday.

          8               CFO GALLAGHER:  That's what I figured.

          9              GOVERNOR BUSH:  Well, I think it would be important

         10         to have the -- first, out of respect for the folks that

         11         came, to allow people to be heard.  And, secondly, I

         12         haven't made up my mind on it.  I'd like to hear from

         13         the -- Mr. Hardy's representative.  I want to look him in

         14         the eye, whoever that is.  And his son has come all the

         15         way up.  So at a minimum, we ought to say hello to him.

         16               CFO GALLAGHER:  Okay.  Well, I'll withdraw my motion

         17         at this time.

         18              GOVERNOR BUSH:  Thank you, Treasurer.

         19              MS. CASTILLE:  Thank you, Treasurer.

         20              Item 5, the decision before you today is to request

         21         the waiver of the trustees' policy prohibiting use of

         22         eminent domain action upon a homestead property.  And

         23         secondly, to direct the Department to acquire Mr. Jesse

         24         Hardy's property, upon which two bona fide offers have

         25         been made.  And, thirdly, to delegate authority to prepare

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          1         and execute the paperwork.

          2              The Everglades Restoration Project and conservation

          3         of natural lands are our top two environmental priorities.

          4         Southern Golden Gate Estates was the first construction

          5         project to begin the restoration.  Governor, as you

          6         recall, it was recently as last October that you and

          7         representatives of Federal and State working groups met on

          8         the banks of the prairie canal for the historic

          9         groundbreaking of the very first CERP project, Project 1,

         10         Phase 1.  We have a picture of that same canal for you

         11         today and we're proud to be able to tell you that Phase 1

         12         is a success.  The water levels are returning as expected

         13         and that is good news.  Our engineers were right.

         14              GOVERNOR BUSH:  Anybody question them?

         15              MS. CASTILLE:  Yes, sir.  We get questions on

         16         everything we propose.  Because the goal of the Southern

         17         Golden Gate Estates project is not only to restore the

         18         sheet flow, a slow flow of fresh water to Fakahatchee Bay

         19         and the Ten Thousand Islands, but to replenish the well

         20         fields of the city of Naples, provide water storage for

         21         both the surface water and the underground water and to

         22         provide flood protections to citizens north of I-75.

         23              So the success of this project is vitally important

         24         to the millions of people who live in southwest Florida as

         25         well as the economic and environmental health of the

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         southwest Everglades.  This has been a complicated

          2         project, 19,000 parcels of land.  Land to be bought, all

          3         by handful in State ownership as we speak.  And of those,

          4         17 were homesteads and only one holdout, Mr. Jesse Hardy.

          5         The others have been successfully resolved and relocation

          6         of those homesteads is in process.

          7              This brings us to the issue at hand today.  The last

          8         homesteading citizen has failed to participate in the

          9         public education process informing property owners of the

         10         effect of the restoration project and has begun an

         11         aquaculture business just three years ago.  The rock pits

         12         being constructed to facilitate the fish ponds will act as

         13         giant sinks and draw groundwater in much the same way the

         14         canals we are filling draw groundwater.

         15              GOVERNOR BUSH:  Colleen, excuse me.  Who gave the

         16         permit for the rock pits, I guess that's what you call

         17         them?  State government?

         18              MS. CASTILLE:  It is not a permit.  He gets an

         19         exemption from the Department of Agriculture.

         20              GOVERNOR BUSH:  So State government gave him the

         21         right to dig the hole?

         22              MS. CASTILLE:  The county gave him the permit, gave

         23         him the right.

         24              GOVERNOR BUSH:  If he got an exemption from the

         25         Department of Agriculture, the right was given to him by

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         the Department of Agriculture here, right?

          2              COMMISSIONER BRONSON:  Well, Governor, if I can --

          3         and we have gone down to take a look at Mr. Hardy's

          4         operation.  Mr. Hardy's operation meets all of the

          5         applicable standards with best management practices and

          6         everything else that's required under an aquaculture

          7         permit.  And that is the permit that Mr. Hardy is

          8         operating under.

          9              Now whether people agree with the size of the hole

         10         that he's digging or whatever else, I can tell you that if

         11         you go to Hardee County or if you go to Polk County or

         12         some of these other counties that have pits that are just

         13         as big, if not bigger, they are loaded full of fish.  And

         14         that's what he plans to do, is up put these pits full of

         15         fish as his operation.

         16              So from -- the question is really in the nutshell, do

         17         we need to condemn because the whole area is going to

         18         flood or is his area going to be out of the flood area.

         19         And is he operating under the rules and regulations of

         20         aquaculture in the state of Florida.  And I can tell you

         21         he's operating based on everything we've seen under those

         22         rules and has a bona fide fish operation.

         23              GOVERNOR BUSH:  Well, here's the problem,

         24         Commissioner.  This plan -- this project has been underway

         25         for how many years?  Long time?

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          1              MR. BARNETT:  Fifteen.

          2              GOVERNOR BUSH:  It's not whether -- it's not whether

          3         the hole, the pond, whatever, it's bigger than a pond.

          4         Whatever that thing is.

          5              MS. CASTILLE:  Rock pit.

          6              GOVERNOR BUSH:  Complies with the best practices for

          7         aquaculture.  I mean, that's what you-all have to look at,

          8         but let's assume for a moment this property stays, he has

          9         a homestead with the commercial operation on it, which is

         10         kind of unique, and we redesign the project around it,

         11         what kind of mitigation would be required to make sure

         12         that indigenous -- that this indigenous plants -- that

         13         plants from other places that may be on the property don't

         14         migrate onto the restored area.  How do we protect the

         15         property from creating problems with the very fish that

         16         are being harvested there and its impact on the restored

         17         area?  There are a lot of questions, off-site issues now

         18         that we'd have to deal with.  So that was my principal

         19         question I have is, was any thought given to granting this

         20         commercial operation in the middle of a project where we

         21         knew we were making an effort to buy all the land.

         22              MR. BARNETT:  Governor, Ernie Barnett with the

         23         Department of Environmental Protection.  I want to address

         24         a couple of your issues.  And with respect to Commissioner

         25         Bronson, we are in agreement, the aquaculture operation is

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         in full compliance with the BMPs.  And under the

          2         agriculture exemption, under 373, the IRC permitting, he's

          3         done everything proper.  Their inspections are all

          4         adequate and up to date and we're very confident with

          5         that.

          6              There is a secondary issue of equal importance.  And

          7         that is clearly when the agriculture exemption was issued,

          8         it was never contemplated that it would also have an

          9         ancillary, what we would view, as a mining operation.  So

         10         there are provisions under 376 that have not been met,

         11         like a mind reclamation plan, some of the things, the

         12         footprint in which the sorted and graded material may trip

         13         other thresholds for regulatory action.

         14              We, as an agency, have just become aware of the size

         15         and magnitude of what it means.  And we have looked very

         16         carefully.  We have not proceeded with any enforcement

         17         action that may or may not be appropriate at this point

         18         because quite frankly, we've been trying to do a willing

         19         seller acquisition.  And any enforcement action on our

         20         part would very much be viewed as devaluing of his

         21         property and unfair treatment in an acquisition phase.

         22              So we are walking through -- I agree with the

         23         Commissioner 100 percent.  Their agency has done a great

         24         job.  In fairness to the Department of Agriculture, at the

         25         time in which he applied for the aquaculture exemption

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         permit, it was three years ago.  We didn't have a

          2         preferred plan, we didn't know the exact effect on this

          3         property.  We had a lot of uncertainty.  We are not there

          4         today.  Today we do know there will be flooding.  We do

          5         know there's adverse effects and the landscape has

          6         changed.

          7              GOVERNOR BUSH:  Well, let's just accelerate this

          8         conversation and then we'll have people come up and visit.

          9         But is there a way to protect the restoration plans,

         10         recognizing there's going to be flooding, I assume

         11         Mr. Hardy knows that, and he still wants -- he doesn't

         12         want to sell his property, is there a way to reengineer

         13         this, not buy the property and protect the restoration

         14         efforts from what is going on on that property?

         15              MR. BARNETT:  Let me address those issues in a very

         16         brief presentation.  Because I think we get to that exact

         17         question.  A fundamental issue, and you all have been

         18         extremely supportive of the acquisition of Southern Golden

         19         Gate, the entire acquisition, this isn't one of 68 project

         20         components under the Comprehensive Everglades Restoration

         21         Plan.  Its critical importance to Everglades is that over

         22         about 40 percent of the water that enters Everglades

         23         National Park coming in through this basin, Southern

         24         Golden Gate, is now this area, and it's cross-hatched, its

         25         critical importance is that it's also contiguous with the

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          1         Florida Panther National Wildlife Refuge.  Belle Meade

          2         incorporates it with Southern Golden Gate as part of

          3         Picayune State Forest, Collier Seminole State Park is

          4         contiguous and the Ten Thousand Islands National Wildlife

          5         Refuge, not to mention Fakahatchee Strand as well as the

          6         Big Cypress.  So this was sort of the hole in the

          7         donought.  We now have, of the 19,000 -- Secretary

          8         mentioned 19,988 parcels in ownership, four parcels left

          9         to go.

         10              The restoration plan -- this gets to your question,

         11         Governor -- essentially involves removing all levels of

         12         service and all flood controls south of I-75.  I-75

         13         borders to the north.  We have U.S. 41 to the south,

         14         Tamiami Trail.  And it essentially involves the

         15         plugging -- and you saw the initial plugs from the Prairie

         16         Canal which we have completed, the first phase of that.

         17         It involves doing a similar action in all the other

         18         remaining three canals.  But also, we had to put pumps to

         19         the north.  And the strategic location of those pumps are

         20         very important because they do two things.  They meet the

         21         ecological objectives and the ability to store the

         22         surfacing groundwater but they also meet the other public

         23         purpose which is providing flood protection --

         24              GOVERNOR BUSH:  North of I-75.

         25              MR. BARNETT:  -- north of I-75.  That's the reason we

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          1         couldn't put the pump stations north of -- they were

          2         located at this location.  They're not any further north

          3         because we have a phenomenon called pail water.

          4         Water doesn't flow -- in storm events, water doesn't flow

          5         smoothly through the pumps, it backs up.  And the property

          6         that Mr. Hardy has is represented right here.  It is a

          7         strategic location.  It is the hole in the donought, the

          8         only last remaining parcel of the 19,800 and some odd

          9         parcels.

         10              We do have, I will point out, the Miccosukee Tribe

         11         which we're proceeding to the condemnation process and

         12         court actions are ongoing with these three parcels here.

         13         And those are the last four remaining parcels in this

         14         project.

         15               CFO GALLAGHER:  Could you explain why --

         16         specifically why the pump has to sit right where you got

         17         it next to Hardy's land?

         18              MR. BARNETT:  We were balancing two primary -- and

         19         the location of all four pumps across -- all three pumps

         20         across the northern rege (sic).  We're balancing two main

         21         primary objectives.  Maximizing the ability to store

         22         surface and groundwater and achieve ecological restoration

         23         south and provide flood protection to the north.  And the

         24         Faka-Union Canal is the primary drainage system for all of

         25         northern Golden Gate.  And the reasons the pumps are

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          1         located where they are is to provide enough distance south

          2         of the -- of I-75 that you would achieve flood protection

          3         at the I-75 property interface.  And I'll show you the

          4         hydrographs and the hydrological results of that very

          5         briefly.

          6               CFO GALLAGHER:  Okay.  His property is the one --

          7         before you move that, put your pen on his property.

          8              MR. BARNETT:  Right there.  And I'm going to zoom in

          9         for you right now to this -- we're zooming in to his

         10         property in that middle pump station, in the spreader

         11         canal system, his property is contiguous with the -- his

         12         southern end of his property is contiguous with the pump

         13         station.

         14               CFO GALLAGHER:  Okay.  So my understanding is the

         15         reason you put the pump there is to clear the water from

         16         75 south.

         17              MR. BARNETT:  Correct.  This area, although the canal

         18         remains in place, this entire area has no flood

         19         protection.

         20               CFO GALLAGHER:  Right.  So you put the pump there,

         21         it's going to pump the water further south.

         22              MR. BARNETT:  Right.  But you'll have water pooling

         23         in this area behind because we have to go far enough --

         24         this is 75.  We have to go far enough below 75 to have

         25         that surge zone, if you will.

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          1               CFO GALLAGHER:  But your other pump stations are

          2         back behind this one.

          3              MR. BARNETT:  They drain smaller drainage districts.

          4         This one over here primarily drains the Ten Thousand

          5         Islands National Wildlife Refuge and they want more water

          6         -- I'm sorry, the Florida Panther National Wildlife

          7         Refuge.

          8               CFO GALLAGHER:  So what happens if you -- there is a

          9         dike around his property and he comes and goes by boat

         10         or --

         11              MR. BARNETT:  We've evaluated that option.  And to

         12         provide the level of service of flood protection he's

         13         afforded now, would cost over in excess of 5.8 million.

         14              GOVERNOR BUSH:  Why would we want to if he agreed to

         15         less protection?  I mean, aren't you suggesting that the

         16         trade-off would be if you don't want to sell the land --

         17               CFO GALLAGHER:  If you don't want to sell it, we'll

         18         put a dike around there.  And if you flood, you flood, not

         19         our problem.

         20              MR. BARNETT:  We have two statutory reasons.  One

         21         constitutional, one federal statute.  We don't believe --

         22         we certainly know under the Florida Constitution we can't

         23         diminish his level of service without providing adequate

         24         compensation.  So what I'm hearing you say is there some

         25         way to negotiate a -- he would give up his right to flood

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          1         protection for some form of compensation.

          2              GOVERNOR BUSH:  Yeah, the compensation is known as

          3         land as he wants it.  But, you know, that's the other --

          4         that's a topic for discussion with he and his owner.  But,

          5         I mean, you can waive your God-given constitutional rights

          6         in return for something, can't you?

          7              MR. BARNETT:  Yes, but the second, probably more

          8         important, as far as this specific project is concerned,

          9         is the savings clause under the Water Resources

         10         Development Act of 2000.  It says we are prohibited from

         11         diminishing his level of service without --

         12               CFO GALLAGHER:  His agreement.

         13              MR. BARNETT:  He is within the footprint of the

         14         project.

         15               CFO GALLAGHER:  But if he agrees, he stays there and

         16         he agrees to have a dike put and we do our best effort,

         17         then he takes the chances on what happens if flooding.  So

         18         he contends, at least what I've heard, is it's really not

         19         going to flood there.  And even though we know it is, as

         20         long as he says he's willing to take that chance.

         21              MR. BARNETT:  There was -- a couple of extra factors

         22         for your consideration is that the -- we believe he's in

         23         harm's way.  And as a professional in environmental

         24         restoration, I think we're setting a dangerous precedent.

         25         Secondly, and I think probably more importantly is that

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          1         even though we have almost a 6 million-dollar cost,

          2         capital cost just to do it, that doesn't include the

          3         ongoing O & M cost for perpetuity.

          4              The activity of constructing additional pits, there

          5         is probably another, in total, would be over 80 acres of

          6         excavated property at a 20-foot depth.  It's very

          7         difficult to engineer around it.  You can engineer around

          8         it.  It's much more simple than just building a levy.  You

          9         have to build a seepage control facility around it to

         10         actually gather the water.  As pits draw the water to the

         11         area you have to collect that water and pump it south.

         12              The average ongoing O & M cost for perpetuity of the

         13         life of project will probably exceed over probably

         14         100 million -- I mean, $100,000 a year, probably 150, is

         15         one of the estimates we discussed.  So you incur not only

         16         that extremely high capital cost for construction, but you

         17         also add an additional end cost to the project which is

         18         very significant.

         19              MS. CASTILLE:  But, Treasurer, there is also a legal

         20         ramification in that we've been working with 16 other

         21         property owners.  The judge has told us that we have to

         22         treat each of the property owners equally in this case or

         23         he will reevaluate the 16 that we have already --

         24              GOVERNOR BUSH:  Sixteen willing sellers compared to

         25         one unwilling one.

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          1              MR. BARNETT:  There's also about 3,000 eminent domain

          2         cases that were not --

          3              GOVERNOR BUSH:  Not homestead.  I would respect --

          4         and the judge can say what he wants.  But seems to me this

          5         is a pretty unique piece of property with a pretty unique

          6         owner as it relates to all of the purchases that we've

          7         made.  There is no other purchaser or seller, unwilling

          8         seller, of a homestead property, I don't believe.  At

          9         least I was told this is the only one.  That's why it's

         10         the hole in the doughnut there, isn't it?

         11              MR. BARNETT:  It is the only one that will go before

         12         the trustees.  There are eminent domain parcels and other

         13         CERP projects.

         14              GOVERNOR BUSH:  That are homestead?

         15              MR. BARNETT:  Yes.

         16              GOVERNOR BUSH:  Where are they?

         17              MR. BARNETT:  They are in the water preserve area and

         18         the eight and a half square mile area.

         19              GOVERNOR BUSH:  That don't come in front of us.

         20              MR. BARNETT:  They do not come in front of this body.

         21              GOVERNOR BUSH:  Come in front of water management

         22         districts?

         23              MR. BARNETT:  Yes.  And they have the eminent domain

         24         authority legislatively and statutorily.

         25              GOVERNOR BUSH:  So you're saying that the commercial

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         catfish farm, whatever it is, you can't envision

          2         organizing a newly engineered process around it that

          3         wouldn't cost -- you think it would cost 150,000 bucks a

          4         year?

          5              MR. BARNETT:  That's probably a very conservative

          6         estimate on O & M cost in addition to the upfront capital

          7         cost for construction, additional construction costs.

          8              GOVERNOR BUSH:  Okay.

          9              MR. BARNETT:  And, Governor, if I might add, you hit

         10         upon a very important note that this is only one of these

         11         that have come in front of the trustees.  We do have

         12         200,000 additional acres we need for certain.  Although it

         13         is a different body that is making those eminent domain

         14         decisions, I think it's unrealistic for us to expect where

         15         we have a 20,000-acre reservoir that we're going to find

         16         20,000 acres of willing seller/owners in every instance.

         17              GOVERNOR BUSH:  I agree with that.

         18              MR. BARNETT:  We're going to get crossways with other

         19         homesteads unfortunately as we go forward.

         20              GOVERNOR BUSH:  I'm just breaking out in a rash just

         21         thinking about this.

         22              MR. BARNETT:  Me too, sir.

         23              MS. CASTILLE:  It's a very difficult decision.  If I

         24         might, Governor, we have a couple of other presentations,

         25         short.  Bob Scanlon with a brief history of the eminent

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         domain litigation.  And then we have speakers on

          2         Mr. Hardy's behalf.  And then we have some

          3         environmentalists at the end who would like to speak on

          4         this.  And then I'll wrap up with a closing argument.

          5              MR. SCANLON:  Governor and cabinet, I've been asked

          6         to answer two or three questions from a legal standpoint.

          7         Number one, where are we --

          8               CFO GALLAGHER:  You want to give your name so the

          9         court reporter will get it down.

         10              MR. SCANLON:  I'm Bob Scanlon.  I've been

         11         representing the DEP in this acquisition through my

         12         office.

         13              MS. CASTILLE:  Deputy Attorney General?

         14              MR. SCANLON:  I'm not a deputy attorney general, no.

         15         I'm one of the grunts that do the work.  We've

         16         condemned -- we filed suit on 1861 parcels of land.  We

         17         own 1858 parcels.  That's over 300 lawsuits we're filing.

         18         The three parcels we don't have that are in suit are the

         19         Miccosukee parcels which we just got a ruling from the

         20         judge that he's going to let the case go forward.  There

         21         is a lot to be determined yet, but that's where we are.

         22              We had four appeals.  We had four people appeal from

         23         the fact that the taking occurred.  One of those appeals

         24         was settled.  We one the other three appeals in the Second

         25         District Court of Appeal.  We have acquired fee simple

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         title in all of those parcels.  There were people that

          2         asked the judge not to give us fee simple title.  But our

          3         position all the way through, through the testimony we

          4         presented at every order of taking was we were required to

          5         have fee simple title for public safety to get the septic

          6         tanks out of the ground, to be able to degrade the roads

          7         and canals and protect public safety and to accomplish the

          8         project.  This obviously is the last parcel we'd be filing

          9         suit on to acquire.

         10              The question I was asked:  Is there a legal impact if

         11         we treat Jessie Hardy differently.  As I've said, we've

         12         presented orders of taking hearings over 300 times and

         13         have always taken the position we had to have fee simple.

         14         People have come in and said, Judge, they don't need to do

         15         that.  They don't need fee simple.  The judges in Collier

         16         County have given us fee simple, all 1861 pieces of land.

         17         And those were not all willing sellers, by the way.  Even

         18         though they weren't homesteads.  There were people that

         19         opposed the taking.

         20              The trial court has been very specific that he's only

         21         allowing this taking for this environmental project.  He's

         22         not allowing it for us to go out there and create a

         23         55,000-acre park.  That if something happens and this

         24         project does not go forward, that he would be willing to

         25         readdress those orders he's already entered.

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1              GOVERNOR BUSH:  Has anybody suggested we not go

          2         forward with the contract?  Judge didn't have to worry

          3         about that.

          4              MR. SCANLON:  The question about can we flood his

          5         property.  That obviously creates tort issues, whether we

          6         can be sued for tort, whether we can be sued for inverse

          7         condemnation which we probably could.  If we took only a

          8         flowage easement and we actually flooded his land where he

          9         could not use it at all, that actually probably would be

         10         considered a fee simple taking and not just a flowage

         11         easement and that could lead to litigation.  But, I mean,

         12         that would have to be decided by the courts.

         13              GOVERNOR BUSH:  Let me ask you if he waived his

         14         rights in that regard, if he waived his rights in a

         15         binding agreement, then is there some superseding legal

         16         doctrine that would allow him to undo the agreement he had

         17         with the State to then sue?

         18              MR. SCANLON:  I think what -- I don't know the answer

         19         to that to be honest with you.  I can't answer that.

         20              GOVERNOR BUSH:  I don't know if it's ever been done.

         21              MR. SCANLON:  What would probably happen is we would

         22         take some kind of flowage easement which would allow him

         23         to stay on the property and allow us to keep using it.

         24         I'm handling a suit right now where the Water Management

         25         District acquired a flowage easement.  There are issues

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          1         whether we flooded more than the flowage easement and

          2         whatever.  And trial court over the effect of whether the

          3         easement was big enough in another area of the state.

          4              What's the process we will go through.  If this is

          5         approved today, we'll get the title work updated.  We'll

          6         file suit.  We'll try to set a hearing out about 90 days

          7         because there are some liens on the property, I believe.

          8         So there are other parties that would be in this lawsuit.

          9         We would have a hearing before the judge on the taking.

         10         His lawyer, Bill Moore, at one time was my mentor, so I've

         11         known him for about 30 years and litigated against him for

         12         about 20, I guess, he will present his engineering

         13         testimony that we don't need this land, that it can be

         14         done without it.  We'll present our testimony that we need

         15         it.  And the court has to make a decision, this is a

         16         legitimate public purpose.  Do we need this property for

         17         the public purpose?  Do we need fee simple or can an

         18         easement do?  And then, do we have a good faith appraisal.

         19              Which our appraisal testimony will probably be more

         20         in the range of $1 million, not the dollars we're taking

         21         about here.  Then the judge would decide when -- if he

         22         decides we can have the property, the last issue he will

         23         decide is when can we get that property.  And that will be

         24         issues in terms of timing in order to get him off the

         25         property in order to do the project and for permitting and

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          1         all that kind of thing.  They will have a right to

          2         immediate appeal if the judge grants the order of a

          3         taking.  They don't have to wait until the trial is over

          4         on compensation.  And then the final issue will be how

          5         much compensation and ultimately a jury of 12 people would

          6         decide that if we can't settle it.

          7              GOVERNOR BUSH:  Thank you.  Any questions?

          8              MR. SCANLON:  Thank you.

          9              MS. CASTILLE:  At this time we have -- I'd like to

         10         call up speakers on behalf of Mr. Jesse Hardy.

         11              GOVERNOR BUSH:  If all you-all are coming to speak,

         12         if you'd do us a favor, if it's already been said, you

         13         don't need to repeat it.  And if you could just be brief,

         14         we'd appreciate it.  But we appreciate you coming up.

         15              Who is this young man?

         16              MS. HILTON:  Good morning, Governor Bush.  This is my

         17         son Tommy.  This is Tommy Hilton.

         18              GOVERNOR BUSH:  Hey, Tommy.

         19              MS. HILTON:  And we're a little nervous.

         20              GOVERNOR BUSH:  Don't be nervous.

         21              MS. HILTON:  My name is Tara Hilton.  We came up

         22         today from Naples.  My family and I, we have ridden

         23         horses, fished, we've raised puppies out there.  We've

         24         grown vegetable gardens.  And me and Tommy have lived with

         25         Jesse since '95 when my mother passed away so -- but Jesse

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          1         has been a part of our family my whole life.  He's --

          2         Jesse is Tommy's father and my best friend and we have a

          3         dream being fish farmers.  We want to do this.  We're not

          4         going to do it to sell mass quantities of fish.  We want

          5         to do it so the people of Collier County can bring their

          6         sons, their little girls, come out and fish, play in the

          7         dirt, and have a place for kids to be kids because all

          8         these places are disappearing.  And I believe if they take

          9         our land they are going to put a gate up right there and

         10         no one will be out there to use this property any longer.

         11              And Tommy has been sick his whole life.  And this is

         12         where he's grown up and this is our home.  And we're not

         13         trying to stop any projects.  And if you would just let us

         14         stay and it floods, we'll swim out and give you the land.

         15         We just don't want to leave.  We don't allow anyone to

         16         hunt on our property, we never have.  We have deer.  We

         17         can sit in our bedroom watching TV and we have deer that

         18         come up right to our windows.  Our dogs don't run 'em,

         19         they just walk around.

         20              We had a pig one time, a piney wood rooter who came

         21         out of the woods with the tusks and he became so friendly

         22         that he started living under our house.  And I mean, it's

         23         a good place to raise kids and, you know, kids any more

         24         they sit on the couch with Nintendo games but Tommy, he's

         25         outside being a little boy.  We're not hermits.  We live

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          1         20 minutes away from the nearest store.  I don't see

          2         how -- we talked to the surveyors when they were out there

          3         right at our property surveying and they said it would

          4         take 12 feet of water to flood our land.  I don't know,

          5         only God can give us water and I don't know where these

          6         people think the water is going to come from.  There is no

          7         water there now and there hasn't been a rainy season that

          8         I've seen that's even been any water on our roads in eight

          9         years.

         10              GOVERNOR BUSH:  I think when the canals go, it kind

         11         of may change the whole situation.  I think that's the

         12         thought.

         13              MS. HILTON:  Well, if they put the pump down below

         14         our property, it will be pulling the water away from us.

         15         Doesn't that make sense to you?

         16              GOVERNOR BUSH:  It did until Ernie described the fact

         17         there may be back flowage.  I don't know.  But --

         18              MS. HILTON:  Well, have you ever thought that maybe

         19         these people just want to tell you what they want to say

         20         to you because maybe it's not true?

         21              GOVERNOR BUSH:  Once in a while I think that

         22         (laughter) but not always.  Not always.  That's why we ask

         23         questions.

         24              MS. HILTON:  Right.

         25              GOVERNOR BUSH:  They are sincere people and they are

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          1         doing something that's important.  And, you know, there

          2         may be disagreements about the impacts of some of these

          3         issues but I certainly wouldn't -- I think the motives are

          4         pure on both sides here.

          5              Yes, Treasurer.

          6               CFO GALLAGHER:  I guess the question is, I see you

          7         have an engineering report that said it's not going to

          8         flood in your area.  I mean, how willing are you-all to

          9         basically say you don't sue us if it floods?

         10              MS. HILTON:  That's no problem.  We'll -- like I

         11         said, if we flood where we can't get out, we'll swim out

         12         and give it to you.

         13               CFO GALLAGHER:  Well, we'd be paying you for it.

         14         We're not trying to take it from you for nothing -- not

         15         pay you.  But that may be a consideration that you talk to

         16         the Department about.

         17              GOVERNOR BUSH:  You may want to let the lawyer

         18         representing Mr. Hardy have an opinion about that too.

         19         We'll find out.

         20               CFO GALLAGHER:  Well, that's true.  It's his

         21         property.  But thank you.

         22              MS. HILTON:  Well, we just wanted to come so you

         23         could see that we're human beings and we live there and it

         24         is our home.  Thank you, Governor Bush.

         25              GOVERNOR BUSH:  Thank you.  You did fine, by the way.

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          1         You shouldn't have been nervous.

          2              MS. HILTON:  I'm shaking like a leaf.  Thank you.

          3         Can my son Tommy say something to you, please?

          4              GOVERNOR BUSH:  Sure.  Turn the microphone.

          5              UNIDENTIFIED SPEAKER:  He would just like to shake

          6         your hand.

          7              (Pause.)

          8              GOVERNOR BUSH:  Yes, sir.

          9              MR. DAVIS:  I'm Norman Davis.  I've come all the way

         10         from Kentucky to help Jesse.

         11              GOVERNOR BUSH:  Are you the guy that did the ballad?

         12              MR. DAVIS:  I'm sorry?

         13              GOVERNOR BUSH:  The song?

         14              MR. DAVIS:  No.

         15              GOVERNOR BUSH:  Oh, okay.  Just checking.

         16              MR. DAVIS:  The wife and I, we've been to Florida a

         17         number of times.  I would like to retire here if I know

         18         I'm going to get to stay where I want to move.  That's

         19         been a concern of ours.  I had several things I wanted to

         20         talk about, but most of them have been covered.  I do

         21         appreciate seeing the map where the pumps will be on the

         22         south of Mr. Hardy's property.  That's one thing I came to

         23         talk about.  I feel we could also redraw the engineering

         24         plan.  Maybe another pump or two to help with some of the

         25         pooling in emergency situations, I don't know.  This is

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          1         for the engineers.

          2              But I do feel like what we have a major problem in is

          3         we have different engineering reports.  We have the

          4         State's and then we have Mr. Thompson's.  Mr. Thompson's

          5         report does state that he will not be flooded.  It does

          6         state that the water levels will even drop.  Do you

          7         gentlemen have Mr. Thompson's plan?

          8              GOVERNOR BUSH:  Yes, sir.

          9              MR. DAVIS:  Good deal.  You'll notice down on Page 1,

         10         effects on Mr. Hardy.  Mr. Hardy's -- at the bottom,

         11         Mr. Hardy's property is on the east side and it talks

         12         about it.  I have a three-page report.  I hope we have the

         13         same one.

         14              GOVERNOR BUSH:  Yes, sir.

         15              MR. DAVIS:  It talks about the canal.  His property

         16         line is at 62nd and the south property line is 66th.  And

         17         they showed -- we showed the graphic earlier where the

         18         pump will be below this right at the canal.  Now, what

         19         Mr. Thompson is saying here is that based on the recent

         20         evidence or latter elevation information obtained from

         21         Collier County, not anyone on the ground but from the

         22         county and they should know, this indicates that during

         23         the wet season the canal adjacent to Mr. Hardy's property

         24         will be maintained, that's the key, "maintained",

         25         approximately 4 foot below existing ground surface.

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          1              Under existing conditions during the wet season.  The

          2         canal typically at or near the top of the bank.  I've been

          3         to this canal.  I've been to Mr. Hardy's several times.

          4         It's actually a little below.

          5              Thus -- and then he goes on further to state, Thus it

          6         appears that the project intended to rehydrate the

          7         Southern Golden Gate will be -- in fact, have the

          8         potential to lower the wet season water table.

          9              I'm assuming we'll have more pump operation.  I'm

         10         assuming the flow of the water.  I'm not an engineer.

         11         During the dry season, the elevations in the canal are

         12         proposed to be controlled at 7.2.  Now we have reports

         13         stating he's anywhere from nine or 10 to 12 to 13 feet in

         14         elevation.  Seven foot is not going to do it.

         15              Now we talk about tearing the roads out.  I'd like to

         16         touch on that a minute.  As was on the map, the pump will

         17         be down by the canal where there is an existing road.  Now

         18         why on God's green earth would we want to take and tear

         19         the roads out when we are, as in the conclusions of

         20         Mr. Thompson, we're going to need a road for a canal for

         21         maintenance.  We're going to need it.  That's also the

         22         same road Mr. Hardy uses.  As a matter of fact, where you

         23         cut off at the present time, you cut off at the present

         24         time, Mr. Hardy can, or the State, or a joint venture,

         25         they can cut a path approximately 300 yards over to the

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          1         bridge.  There will be no flooding, no flooding of the

          2         access.

          3              Now, I feel like you're really missing out on a

          4         golden opportunity.  I don't know whether -- I don't know

          5         which report is right, which engineering report.  Collier

          6         County should know.  I would hope the State would know.

          7         But the people on the ground should know.  We have

          8         neighbors --

          9              GOVERNOR BUSH:  Mr. Thompson works for the Collier

         10         County government?

         11              MR. DAVIS:  Pardon?

         12              GOVERNOR BUSH:  The engineer, when you say "Collier

         13         County should know", what do you mean?

         14              MR. DAVIS:  His information came from Collier County.

         15              GOVERNOR BUSH:  Okay.

         16              MS. CASTILLE:  He did not visit the property.

         17              GOVERNOR BUSH:  He didn't visit the property?

         18              MR. DAVIS:  No, he did not visit the property but

         19         they should --

         20              GOVERNOR BUSH:  Don't tell me he's from Kentucky.

         21              MR. DAVIS:  I hope not.  Anyway, Collier County

         22         government should have this information.  They should have

         23         these elevations, I mean, we all know that.  But I feel

         24         like we're missing out on something.  I come to Naples

         25         every winter.  I like your warm weather.  Mine up there,

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          1         it gets pretty cold.  I don't like our white stuff.  I do

          2         like your white stuff on the beach.  But Naples has a

          3         severe lack of real recreation outside of the air boat

          4         rides, going to ball game, the things in town.

          5              Jesse and I, we've talked.  He'd like to provide the

          6         aquaculture farm as well as he would like to provide an

          7         area where the people can go to to enjoy what you're

          8         doing.  Jesse is in favor of your project, totally in

          9         favor.  I don't think anybody will argue with that.  But I

         10         think the State, the County, and Jesse can all work

         11         together to provide the access road to the pumps.  I feel

         12         like you can, well, work on a recreational facility for

         13         the people in this area even if it did take some

         14         redesigning and everyone could work together.

         15              GOVERNOR BUSH:  Thank you, sir.

         16              MR. DAVIS:  Appreciate it.

         17              GOVERNOR BUSH:  Thank you for being here.

         18              Yes, ma'am.

         19              MS. KEMP:  Good morning, Governor and members of the

         20         cabinet.  My name is Cindy Kemp.  I am the president of

         21         the property rights action committee in Naples, Florida.

         22         Today, I drove over six-and-a-half hours from Naples on my

         23         24th wedding anniversary.

         24              GOVERNOR BUSH:  Congratulations.

         25              MS. KEMP:  Thank you.  And even though it's a

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          1         pleasure and an honor to meet with you, I would have

          2         preferred to have taken some romantic vacation with my

          3         husband.  But the property rights community is so

          4         concerned about what is happening to Jesse Hardy and

          5         everyone's property rights in Naples that my plans

          6         changed.

          7              I'm a little disturbed.  Jesse thought he was going

          8         to be able to participate via telephone.  And last night,

          9         he found out that was not permissible.  But he was under

         10         that impression from the meeting on April 7th that he

         11         would still be able to do that.  So I'm a little concerned

         12         about that.

         13              I have lived in Naples for 14 years.  I live in the

         14         rural area of Northern Golden Gate Estates, actually on De

         15         Soto Boulevard directly opposite of Jesse Hardy, just

         16         across Alligator Alley.  I have been following the

         17         Everglades restoration plans from the beginning.  I have

         18         seen so many plans and models presented.  This is why the

         19         property rights action committee was formed, to be a

         20         watchdog for property rights.  This is why we were the

         21         host for the Sawgrass Rebellion, an event where a caravan

         22         of farmers and property rights advocates trecked across

         23         the country from California to Naples to stage the largest

         24         gathering, to educate and fight back against the

         25         atrocities that are taking place in the name of

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          1         environmentalism.  If 1500 farmers in the Klamath basin

          2         could have their lives destroyed because of an endangered

          3         sucker fish which later the science was proven false after

          4         the fact, I have to wonder how right on is the science for

          5         the Everglades restoration when there already have been

          6         close to 20 different models presented and I frequently

          7         read of scientists that actually make the case that some

          8         of the plans could actually destroy the Everglades.

          9              Property rights are a precious gem to be guarded.  I

         10         can tell that's what you believe.  They are the core of

         11         our freedoms.  The Declaration of Independence states,

         12         Life, liberty, and the pursuit of happiness.  I cannot

         13         understand ever giving up any of our rights that our

         14         founders passionately designed for our freedoms.  Property

         15         rights must be respected.

         16              As we've discussed, the engineering reports shows

         17         that the Everglades restoration can continue and allow

         18         Jesse to stay put.  Please, let's work this out so

         19         everyone is a winner.  I propose designing the project to

         20         take it further south around Jesse.  Let's make this

         21         project appealing to the environmentalist, to Jesse, to

         22         the Naples community and to the State of Florida.  Let's

         23         design a state of an art nature center with active

         24         participation by tourists, include a planetarium, a

         25         learning center, guided tours, et cetera and link it with

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          1         the University of Florida.  Have both excursions down to

          2         the port of the islands.  Open an area for the people of

          3         Naples to play in.  With over 75 percent of Collier County

          4         in preservation, it's hard to find a place for such

          5         activities.  We want public access to our lands.  Please

          6         don't fence us out.  It could be named the Jeb Bush

          7         Environmental Learning Center.

          8              (Laughter.)

          9              We could have Indian culture, Florida history and

         10         Florida landscape.  And we could have a living museum.

         11         Jesse's aquafarming could be a valuable asset to the State

         12         and support his effort of appreciation for nature.  The

         13         property is homesteaded.  Our property rights are

         14         precious.  I wish that everyone truly understood the

         15         importance of property rights.  It's a travesty to see our

         16         rights continually chipped away.  These are rights

         17         enumerated in the Bill of Rights.  It provokes me to see

         18         200 years of freedom being reversed.  It's a sad thought

         19         to think that our soldiers who are putting their lives on

         20         the line in Iraq fighting for freedom will return to the

         21         greatest nation that enjoys so many blessings and will

         22         have to live with a possibility that their home could be

         23         taken from them.  Because that's exactly what's happening

         24         to Jesse.

         25              Please do not eminent-domain Jesse Hardy.  The

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         property rights community is watching.  We stand for life,

          2         liberty, and happiness.  And all that we ask is that our

          3         Constitution and our rights be respected.  Think of the

          4         Golden Rule and we'll remember in November.  Thank you.

          5              GOVERNOR BUSH:  Thank you very much.  If you'd be

          6         brief, we'd appreciate it.

          7              MR. GERSTEL:  Good morning, Governor Bush and cabinet

          8         members.  It's my honor to meet you especially, Governor

          9         Bush.  My name is Mark Gerstel.  I'm from Naples, Florida.

         10         And that beautiful young lady is my wife.  And this is a

         11         first for me for two reasons.  One, to speak in front of

         12         the Governor and to meet him and second to spend my

         13         wedding anniversary at a cabinet meeting.

         14              Why am I here?  To discuss the waiver to

         15         eminent-domain homestead property owner Jesse Hardy of

         16         Collier County.  To me, this is a disgrace.  Jesse Hardy

         17         is a disabled veteran, a Navy Seal.  Is this the way we

         18         treat our heroes?  Because he is my hero.  Last week,

         19         while discussing the compensation offered, DEP, for

         20         Mr. Hardy's land with my son -- and by the way, I'm very

         21         proud, our son has just been accepted to Vanderbilt

         22         University to start law school in September.  Our son

         23         said, The average person would take that $4 million for

         24         his land and run.  That's the American way.  But Jesse

         25         said, It's not the money.  Give the money to some needy

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          1         children.  You know, put it towards education.  Do

          2         something else with it.  I don't want the money.  He said,

          3         It's our freedoms that are being challenged.  It's his

          4         land.  It's his property.  It's his home.

          5              Mr. Jesse Hardy is a man of character, which it seems

          6         like Governor Bush understands that.  There's not many of

          7         us, and I'm sure you would agree with me, who would turn

          8         down $4 million.  There's not many people like Jesse

          9         Hardy.  Last week, Florida House of Representatives Greg

         10         Evers and Jerry Parrish from DEP traveled to Jesse's home

         11         and they had the pleasure of spending three hours with him

         12         and his son Tommy.

         13              Representative Evers said in the Naples Daily News,

         14         He is not really comfortable with the State's pursuit of

         15         Jesse Hardy.  These two men have seen Jesse in his

         16         habitat.  He's been there for 27 years.  Take him out of

         17         it and he'll die.  Is that what we want?  And as you

         18         discussed earlier, Governor, make some changes with the

         19         project.  Listen to some of the ideas me and my wife came

         20         up with, you know, the Jeb Bush Foundation.

         21              GOVERNOR BUSH:  I think we're going to discount that

         22         one.

         23              (Laughter.)

         24              MR. GERSTEL:  In closing, if you vote to obtain the

         25         waiver and proceed with eminent domain on Jesse Hardy's

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          1         homesteaded property, it will not look good.  Picture

          2         this.  It will go to trial with a jury in his own home

          3         county, Collier County.  Jesse will be in front of his own

          4         peers.  Jesse will get to tell his story.  The jury, his

          5         own peers, will get to visit, learn to love Jesse as

          6         anyone who meets Jesse will, it will happen to them.

          7         They'll get to meet his little son and fall in love with

          8         little Tommy.  It will not be good for anyone.  And mark

          9         my words, if we decide as a state to obtain a waiver on

         10         the eminent domain policy on a homesteaded property owned

         11         by Jesse Hardy, it will not be good, especially for our

         12         state.

         13              GOVERNOR BUSH:  Thank you.  Happy anniversary.

         14              MR. GERSTEL:  Thanks a lot, Governor.

         15              GOVERNOR BUSH:  You ought to maybe go to Wakulla

         16         Springs when you're heading back or see some of the sights

         17         up here.  It's quite beautiful.

         18              MR. GERSTEL:  Thank you very much.

         19              GOVERNOR BUSH:  And by the way, we purchased it, you

         20         know, for your use.  We have the best State park system

         21         and we have -- there is a legitimate role to play for

         22         government to preserve some of these beautiful pieces of

         23         property.  And Collier County has some and so does -- take

         24         some time to visit up here.  It may not be as romantic as

         25         some fancy places outside the state, but you'll love it.

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          1              MR. GERSTEL:  Actually, we were planning to go to

          2         Amelia Island, the Ritz Carlton.

          3              GOVERNOR BUSH:  Okay.  That's good enough.

          4              MR. GERSTEL:  One last thing.  By the way, you asked

          5         who wrote the ballad of Jesse Hardy, his Navy buddy, Larry

          6         Bailey, wrote the ballad.  And our friend from Naples,

          7         Bill Lhota sang or put the lyrics to the song.

          8              GOVERNOR BUSH:  Thank you.  Thank you very much.

          9              Good morning.

         10              DR. McCOMBS:  Good morning.  Thank you, Governor.

         11         I'm Dr. John McCombs.  I'm here at the bequest of Jesse

         12         Hardy to plead his case.  And he is in the process of

         13         getting his land patent and his deed from the Internal

         14         Improvement Fund.  He's written to the BLM and to DEP Land

         15         Records Division and talked to them on the phone and tried

         16         to recover those records in a certified fashion.  And so

         17         far, he's been getting the runaround.  So he does not have

         18         those documents yet but he is aware of them and he's

         19         trying to put them up on the record as soon as possible.

         20              Under those documents, he has a preemption right

         21         under the act of Congress called the Swamp and Overflowed

         22         Lands Act.  And that's pursuant to the assent in Florida

         23         Statute 6.01.  And, also, I need to mention that we need

         24         to invoke the Florida Constitution since it was omitted

         25         from Florida Statute 2.01.

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          1              What's happened here is that the State, by taking

          2         this property, would be impairing the obligation of

          3         contract.  That would be pursuant to U.S. Constitution and

          4         Florida Constitution at Article I, Section 10.  And

          5         pursuant to a case law called Kittle versus Trustees of

          6         the Internal Improvement Fund, wherein that case it said,

          7         Can a creature of the State, which the DEP is, can a

          8         creature of the state do that which the State is

          9         prohibited from doing.  The State has no standing with

         10         respect to the supreme law of the land and Article VI,

         11         Clause 2 of the Constitution of the United States of

         12         America with respect to the Treaty of Amenity, settlement,

         13         and limits --

         14              GOVERNOR BUSH:  Doctor, are you saying that the State

         15         does not have the power to use eminent domain for projects

         16         of -- where there is a public purpose?

         17              DR. McCOMBS:  If the public purpose is taking private

         18         property which is homesteaded --

         19              GOVERNOR BUSH:  No, the public's purpose could be

         20         I-75.  Someone's homestead was taken just north of this

         21         property to build --

         22              DR. McCOMBS:  That would be an absolute necessity.

         23         This is not.

         24              GOVERNOR BUSH:  That's where the argument might be.

         25              DR. McCOMBS:  Yeah, I understand.

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          1              GOVERNOR BUSH:  I don't think it's as ironclad as

          2         what you're saying, that this restoration project isn't --

          3              DR. McCOMBS:  Well, the first place where eminent

          4         domain shows up is in the Constitution of 1885.  The

          5         previous constitutions to that, it's not there.  These

          6         contracts were let before 1885 so that Mr. Hardy stands in

          7         the shoes of the owner, of the first owner of the

          8         property.  And so because of that --

          9              GOVERNOR BUSH:  Well, under that --

         10              DR. McCOMBS:  -- eminent domain goes out the window.

         11              GOVERNOR BUSH:  That will be an interesting legal

         12         debate that probably isn't relevant for here.  Are you --

         13         I'm not a lawyer, so I yield to the --

         14              DR. McCOMBS:  No, I'm not an attorney.

         15              GOVERNOR BUSH:  -- legal beagles on that.

         16              DR. McCOMBS:  If you look at several other cases

         17         called -- one is called Suma Corporation versus State of

         18         California.  The State of California was prohibited from

         19         taking land that was pursuant to the Treaty of Guadelupe

         20         Hidalgo.  If you fly out to LAX and look toward the west,

         21         you'll see vacant land.  That's Suma Corp property right

         22         there.

         23              GOVERNOR BUSH:  But we've already -- I mean, just

         24         to -- I'm sorry to interject again.  But we've already

         25         purchased property in this area using eminent domain and

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          1         the courts have upheld that have every time.  So I think

          2         that's been clearly established.

          3              DR. McCOMBS:  Well, that's here in the state.  And I

          4         don't know if anybody has made the argument pursuant to

          5         Suma Corp.  If they haven't, then maybe that's a flaw in

          6         their arguments and maybe that could be overcome.

          7              The other questions I'd like to put forward here is:

          8         Is Mr. Hardy considered an alien in Florida?

          9              GOVERNOR BUSH:  Excuse me?

         10              DR. McCOMBS:  An alien.  Is Mr. Hardy considered to

         11         be an alien in Florida?  Or another question I'd like to

         12         have answered:  Is Mr. Hardy considered a citizen of

         13         another state?  Also, does Mr. Hardy have the rights,

         14         according to Article I, Section 2 of the Florida

         15         Constitution?  And, also, I'd like to make a continuing

         16         objection to the taking of this property as violative of

         17         his indefeasible rights as granted by God and pursuant to

         18         Chisolm versus Georgia 2 U.S. 419.

         19              In that case, Chief Justice John J., Justice Wilson

         20         and Justice Cushing said the same thing, said, Your rights

         21         come from God, not from the State.  God created man.  Man

         22         created the state for his own useful purposes and

         23         benefits.  And because of that, under Boyd versus U.S., it

         24         refers to Lord Camden.  Lord Camdon talks 600 years ago

         25         that ma n entered into society to protect his rights and

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          1         his property.  And so I think that the eminent domain use

          2         in this case is an abomination, an atrocity.  And I wish

          3         that you would not allow this to happen.

          4              GOVERNOR BUSH:  Thank you, sir.  Thanks for coming

          5         up.

          6              Yes, sir.  Briefly.

          7              MR. JACOBSON:  Governor and members of the

          8         commission, my name is John Michael Jacobson.  I'm

          9         director of the Everglades Institute.  And, Governor, I'll

         10         be very brief.  I came up because there were statements

         11         that I had run across that were of such overt unreality

         12         that I had to drive from the Everglades all the way up

         13         here to try to address at least a few of them.  But given

         14         that I've been up all night, it's going to be a very brief

         15         one.

         16              To start with, this case of Jesse Hardy is, in

         17         effect, a microcosm of both economic and constitutional

         18         negative impacts which resulted from faulty premises in

         19         the Everglades Project and these can easily be reversed by

         20         correction of these faulty premises.  It would appear

         21         there is no sound biological or hydrological reason for

         22         the taking of this land.  And I might add, it's been

         23         egregiously underevaluated by the Agency.  To start with

         24         the basic faulty premises.

         25              One of the reasons for taking this land was it was

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          1         considered to be land usable by the Florida panther, i.e.,

          2         this is preservation of an endangered species.  This

          3         raises some very major problems which are sure to come up

          4         and hopefully since this is a program from quite awhile

          5         ago the present administration might be able to avoid

          6         this.  The basic argument is that this is a valid

          7         subspecies.  By 1990, Dr. Relke's (phonetic) paper

          8         indicated that this cat had South American genes in it.

          9         That is it was a hybrid and did not qualify under the

         10         Endangered Species Act.

         11              However, in 2000, Dr. Colver's (phonetic) paper, the

         12         genomic ancestry of the American puma, Felix Concolor,

         13         defined clearly and unambiguously the DNA evidence showing

         14         the panther in North America, that is from the Yukon all

         15         the way to the southern border of Mexico and from the

         16         Atlantic to the Pacific were all, quote, genetically

         17         homogeneous, that is, one animal.  And I might point out

         18         that she specifically addressed the issue of the 15 --

         19         quote, the 15 previously accepted subspecies were shown to

         20         be one cat.

         21              In short, the cat that is shot in the Bush Ranch,

         22         state of Texas, shot without season or limit, they're

         23         varmints out there, those cats were brought down here and

         24         are now considered to be, by some bureaucratic argument,

         25         to be endangered.  This I think may be very difficult to

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          1         sustain.  If it is not a legitimate subspecies and is not

          2         legitimately under the Endangered Species Act, then there

          3         is a question of hundreds of millions of dollars which has

          4         been misappropriated by prior agency actions under prior

          5         administrations.

          6              And there is also the question of whether these

          7         things are compatible with humans.  But that's a very

          8         different issue.  I did have to -- if I could take just

          9         one moment.  There were a few things that were mentioned

         10         today, and my problem is that I have come to this

         11         recently.  The reason I mentioned this regarding

         12         Mr. Hardy, ma'am, was that specifically one reason for

         13         taking this was the panther.  So this is on issue.  I

         14         could not hear from the background because I've got one

         15         ear out due to an ear infection.

         16              But I believe someone -- Ms. Castille, and she

         17         mentioned there was a real problem in that a lot of people

         18         had had land taken and there were questions about the

         19         issue of -- I can't read my own writing.  Yes, whether

         20         this was done properly, the issues which were raised by

         21         the other two gentlemen.  And the argument was advanced

         22         by, I believe, two of the Agency people here that since we

         23         had dealt with all of these other people, that we had to

         24         deal with Mr. Hardy the same way.  I would suggest it

         25         might lead to a major problem in that if this was

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          1         improperly done in the past, I don't believe past

          2         injustice justifies a present one.

          3              And speaking of one other little minor item, two of

          4         them, there was an objection to his, quote, mines, being

          5         reservoirs.  As I remember, the CERP project requires

          6         substantial digging of reservoirs to wisely provide for

          7         worst-case drought water surfaces.  This man is providing

          8         these at no cost and he's being taken to task by the

          9         agencies.  This I would find to be somewhat questionable.

         10              Finally, the issue of removing septic tanks under

         11         Florida regulations, septic tanks can be placed anywhere

         12         as long as they are done X number of feet above water

         13         level.  This is a matter of a small amount of fill.  In

         14         any case, I'll provide the bound comments in your office

         15         later today.

         16              GOVERNOR BUSH:  I appreciate it.

         17              MR. JACOBSON:  And thank you very much for the

         18         opportunity to again address you.  It's been six or eight

         19         years as I remember.

         20              GOVERNOR BUSH:  Thank you.  I hope your ear infection

         21         get better.

         22              MS. CASTILLE:  Mr. Walter Pine.

         23              MR. PINE:  My name is Walter Pine.  I'm with the

         24         Center for Civil Rights Advocacy out of Brevard County.

         25              GOVERNOR BUSH:  Out of where?

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          1              MR. PINE:  Brevard County.  I want to bring to your

          2         attention that there is a general opposition amongst

          3         property owners to eminent domain seizures, especially

          4         when it can be interpreted that it may some day impact

          5         them.  Many of the phrases and terms that are used for

          6         these eminent domain seizures are used to justify wildlife

          7         corridors and other areas that are presently being

          8         preserved.  It's very difficult for the average citizen to

          9         differentiate between the justification that's being used

         10         here and to build this preserve and the justification

         11         that's used in their own county.  They often see this as a

         12         threat to their own properties.  And I see no difference

         13         in the language.  So the question is, Is there a real

         14         threat?

         15              The culture that exists at the DEP has come under

         16         question recently and I think today is a good example.

         17         When DEP introduced the groups they're involved with,

         18         majority of them were environmental.  Preserving the

         19         environment was their primary priority.  There were no

         20         property rights groups, constitutional rights groups, no

         21         State sovereignty groups, no groups that placed a priority

         22         on the preserving of our constitutional rights.  We all

         23         agree that saving the environment is an important thing.

         24         But prior to saving the environment, we should save our

         25         constitutional rights.  We do not need to lose ownership

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          1         to save the environment.

          2              Mr. Hardy has chosen to stay on this land.  Whether

          3         it floods or not, I don't think is an issue.  People have

          4         lived in Louisiana in flooded lands for many generations

          5         so it's possible to live in the land.  The question is is

          6         whether or not he will -- seems to be whether or not he

          7         will indemnify the State for that action the State takes

          8         to reestablish the natural patterns and life within the

          9         Everglades.  If he's willing to live with that, he should

         10         be able to maintain his property.  There is no reason to

         11         remove this.  This is a request for a waiver of a public

         12         policy.  In order to waive the public policy that the

         13         people desired, that waiver must overcome the rights of

         14         Mr. Hardy.  Nothing here has done that.  He is -- as has

         15         been mentioned, he is willing to live with the

         16         circumstances as they impact him.

         17              GOVERNOR BUSH:  Well, we'll find out.  We haven't

         18         really heard from Mr. Hardy's representative quite yet.

         19         But that's a -- we hope to hear that.

         20              MR. PINE:  If I may -- all right.  Granted, that's

         21         yet to be heard from him personally.  We have heard about

         22         contiguous properties and the panther being on contiguous

         23         property and this property being important to us.  There

         24         is questions there.  The issue was brought up of

         25         nonindigenous species being on Mr. Hardy's property.

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          1         Well, in most the State of Florida, if you know much about

          2         the wildlife of Florida, you can walk on any piece of

          3         property and find a nonindigenous lizard, frog, plant or

          4         other form of wildlife; it's not uncommon.  We have a

          5         problem with that.  Mr. Hardy should not be overly

          6         impacted or specifically targeted by that criteria.

          7         Because there are nonindigenous species throughout

          8         Florida.  We don't have bounties on them, we don't collect

          9         them, we don't try to get rid of them in a well planned

         10         organized manner.  Why should Mr. Hardy lose his property

         11         because we don't have a policy?

         12              GOVERNOR BUSH:  We do and we spend millions to clean

         13         up lands regularly.  Recently in Miami there was a huge

         14         fire where an eagle's nest was burned and it was in

         15         mellelukas that created an explosive area.  We're spending

         16         millions of dollars to clean up mellelukas.  So there is a

         17         policy.  Someone argued that we don't spend enough and do

         18         it quick enough and we have a definite policy and we have

         19         funding sources to do it.

         20              MR. PINE:  That's exactly where I was going,

         21         Governor.  The issue is is how much money we spend on

         22         recovery of nonindigenous species and on the science that

         23         founds these decisions.  We spend millions of dollars

         24         taking land.  We spend millions of dollars turning land

         25         into state land.  But we spend only a few dollars on the

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          1         science and the research that goes into it.

          2              It's very difficult and I think very unwise for us to

          3         base our decisions on science that we pay a few pennies

          4         for decisions, that we spend millions of dollars on.  It

          5         should be appropriate that we spend a proportionate amount

          6         on the management information that we use to make our

          7         decisions whether it be science, whether it be studies,

          8         surveys or whatever, we're not doing that.  Mr. Hardy

          9         should not be subject to unusual circumstances because we

         10         haven't done that.

         11              At this point, I see no reason that you should waive

         12         the current policy.  There is nothing that overcomes his

         13         rights and I would ask that you don't waive it at this

         14         point in time.  Thank you.

         15              GOVERNOR BUSH:  I appreciate it.  Thank you.

         16              MS. CASTILLE:  Mr. Moore is Mr. Hardy's attorney.

         17              GOVERNOR BUSH:  Mr. Moore, welcome.

         18              MR. MOORE:  Thank you, Governor.  My name is Bill

         19         Moore with the firm of Brigham, Moore.  We represent

         20         Mr. Hardy in this matter.  Obviously, we got a lot of

         21         other help here.  But I would like to make it clear that

         22         our focus, at least as long as I'm the lawyer on the case,

         23         is not to object to the policy of environmental

         24         restoration.  We do not and Mr. Hardy does not object to

         25         that goal.  That's -- that is not the issue nor do I wish

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          1         to relitigate all that.  What he wants, of course, is to

          2         keep his property.  What he does not want at all is a dime

          3         from the State.  This is not a matter driven by money at

          4         all.

          5              GOVERNOR BUSH:  Are you an eminent domain lawyer?

          6              MR. MOORE:  Yes, Your Honor.  Your Honor (laughter).

          7         You can tell that.  Yes, I am.  In fact, I heard the

          8         four-and-a-half million dollar offer was made by a couple

          9         of folks that went down to speak with him.  That's well

         10         over the appraisal.  That's probably more than it's worth.

         11         What doesn't make sense to me is that every time we deal

         12         with the DEP and we're told to go back and negotiate they

         13         keep coming back and saying, Well, how much more money do

         14         you want?  They're not getting the point.  It's not about

         15         money.  What I ask you to do, please, is look at the

         16         science that -- there are conclusions that are given in

         17         these prepared statements for you.

         18              The conclusions are not backed up.  For example,

         19         please don't think that the canals are being filled around

         20         him, they're not.  In fact, the Union Canal is going to

         21         remain there.  There is nothing in the science that we've

         22         seen from the State that shows it will be flooded.  But to

         23         take that point one step further, you mentioned the waiver

         24         earlier.  Let's say he is flooded.  That's what a flowage

         25         easement is all about.  That's what a couple of good

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          1         lawyers, and Bob Scanlon is one of the best, we could sit

          2         down, we could go through it, work out a waiver that's

          3         ironclad, that will not subject the State to any further

          4         lawsuit.  That is not a problem and of course the

          5         Constitution doesn't forbid that.  One of the earlier

          6         speakers for DEP suggested there was a Constitutional

          7         prohibition to that, of course not.  Of course you can

          8         waive any of those rights.  Nor is there a statutory

          9         prohibition of it.

         10              GOVERNOR BUSH:  So what about -- would your client be

         11         willing to discuss the commercial fishing operation or

         12         whatever it's called?

         13              MR. MOORE:  Absolutely.  In fact, we were up here

         14         early last year and this matter was deferred.  And under

         15         your instructions, the DEP was told to go back and

         16         negotiate with us.  I had raised some issues about a life

         17         estate and easements.  And the kind of negotiation that

         18         you're talking about was what I expected.  What we got

         19         instead was, Well, how much money do you want.  We said,

         20         No, it's not about that.  Well, how much money?  That's

         21         all we've been talking about with them and not because we

         22         don't want to talk about that, sure.

         23              If there is a problem with the fish, you can have

         24         some kind of restrictions.  You could carve out a

         25         restriction that we'd be able to agree with.  If you think

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          1         they're a noxious species, we could handle that by

          2         restricting those.  All of that is perfectly available

          3         under the tools that we have to work out something less

          4         than fee acquisition.  And there is no judge rule, and I

          5         haven't seen it and I would defy the DEP to show, saying

          6         that we can't give Jesse Hardy an easement or a flowage

          7         easement.  Judge didn't rule that at all.  What he said

          8         was he didn't want this turned into a recreational park as

          9         opposed to the purposes for which it went before him and

         10         that's perfectly understandable.

         11              So basically what I think has happened here is there

         12         is a certain amount of staff insistence, that the staff

         13         has been working on this so long, and I've seen it -- I've

         14         been around government long enough to see it -- that it's

         15         really what one appellate court called the tunnel vision

         16         of bureaucracy.  And I think if we had an instance where

         17         you could step back instead of taking these conclusions

         18         like, Oh, it's going to flood.  Or, Oh, he's in harm's

         19         way.  If you took a look at that and see whether it was

         20         really true and had an independent investigator look at

         21         it, an ombudsman, perhaps, someone who's not a staff

         22         employee of the DEP -- and they are good folks.  And they

         23         are well motivated.  I'm not criticizing them at all.  But

         24         I think there is a certain momentum by these staff that is

         25         seeking to impel this decision.

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          1              GOVERNOR BUSH:  Here's a possible suggestion, that we

          2         take your good faith suggestion, we defer this item.

          3         Here's the constraint so that we can negotiate and from a

          4         fresh perspective to see if possible this can be

          5         reengineered and that the flowage easement or the other

          6         issues that -- where Mr. Hardy's property might

          7         actually -- we could mitigate the possibilities of that

          8         property impacting this project, which is a legitimate

          9         concern.  We've spent lots of money and I would argue this

         10         is a legitimate role for government to play.  This is not

         11         some kind of marginal thing.  It has been thoroughly

         12         vetted in the science and it is a serious effort to

         13         protect the quality of life for a lot of people in the

         14         next generation.

         15              So I am completely supportive of this project.  And

         16         if there is a way to accommodate his desire to stay on

         17         this property and our needs to make sure that whatever

         18         solution is scientifically sound and doesn't cost us an

         19         arm and a leg forever and ever.  In other words, to make

         20         this accommodation and if the assertion was made that the

         21         cost, just ongoing maintenance was going to be higher than

         22         the property value, that would create a real problem.

         23              MR. MOORE:  That would certainly create a problem.

         24         And I ask you, please, when those kind of assertions are

         25         made, ask for the backup just like you did earlier on

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          1         another issue.

          2              GOVERNOR BUSH:  Well, that's what we want to do in

          3         the next two weeks.  Is that --

          4               CFO GALLAGHER:  I move to defer, this is not a new

          5         motion, to defer this item --

          6              GOVERNOR BUSH:  You've deferred your deferral motion.

          7               CFO GALLAGHER:  Right.  But I'm about to put it back

          8         on to allow us some negotiations with the lawyer of

          9         Mr. Hardy over the next two weeks to see if there is a use

         10         plan that can be put in where Mr. Hardy can stay there.

         11         Although, he must sign away any damages, in my opinion,

         12         that would come because of flooding that would happen,

         13         recognizing what the project is and recognizing we're more

         14         than willing to buy it from him so that that won't happen.

         15              MR. MOORE:  I think that's only fair.  And I believe

         16         Commissioner Bronson had made the question earlier that

         17         the question really is:  Can Jesse Hardy stay on site

         18         without damaging the project in any way.  And I think

         19         that's what we ought to be looking at.  And we'd be happy

         20         to do that and that waiver is certainly appropriate of the

         21         damages.  We'd be happy to do that.  Thank you very much.

         22               CFO GALLAGHER:  That's my motion.

         23              COMMISSIONER BRONSON:  I'll second that.

         24              GOVERNOR BUSH:  There is a motion to defer and a

         25         second.  Now -- yes, General.

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          1              GENERAL CRIST:  Go ahead, Governor, if you have a

          2         question.

          3              GOVERNOR BUSH:  Do you think two weeks is enough?

          4              MS. CASTILLE:  Governor and members of the cabinet,

          5         we have other speakers as well.  The three major

          6         environmental groups as well as former Secretary of State

          7         Jim Smith who has been involved in this project for a long

          8         time.

          9               CFO GALLAGHER:  Well, the question is if it's coming

         10         back, do they want to talk now or wait until it comes back

         11         and see what you come up with?

         12              MS. CASTILLE:  I would like for you to have the

         13         benefit of their information.

         14              GOVERNOR BUSH:  I'm getting -- we're getting a no

         15         back there.

         16              MS. CASTILLE:  No what?

         17              (Off-the-record discussion.)

         18              GOVERNOR BUSH:  There is a motion to defer.  Your

         19         motion, is there a time certain on that?

         20               CFO GALLAGHER:  Yeah, I'm hoping that they'll be

         21         back in two weeks.  You can negotiate a lot of things in

         22         two weeks.  We see the Legislature do in two days what is

         23         a lot more complicated than this.

         24              GOVERNOR BUSH:  This is going to take some time to

         25         develop the engineering aspects of this.

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          1              MS. CASTILLE:  We have actually considered -- in the

          2         engineering report that we did, we considered the effects

          3         of his proposal of the three different -- or the 80 acres

          4         of rock pits that he planned.  We considered that and

          5         determined what the effects would have and that's what we

          6         have prepared for you.

          7               CFO GALLAGHER:  I would suggest that you take all of

          8         those downsides.  And some of those things, I think,

          9         probably can't be done if we're going to do what we're

         10         going to do.  And so those things ought to be discussed

         11         with him and see where you come back in regards to his

         12         being able to use this property as a homestead for sure.

         13         And if he wants to grow fish somewhere, maybe he has to do

         14         that somewhere else.  Putting 200 --

         15              GOVERNOR BUSH:  Let's make the best faith effort.  I

         16         mean, this is a sincere -- I'm at least convinced now.

         17         And I was anxious to have my -- be convinced of this, that

         18         Mr. Hardy is sincere about this, that this isn't some kind

         19         of positioning to get a lot of money out of the State.

         20         Which the eminent domain process, by the way, does.  For

         21         those that believe in private property rights, the eminent

         22         domain process allows for property owners to get sums of

         23         money that are very fair.

         24              And I'm, you know, I believe in private property

         25         rights but I also believe the taxpayers' money ought to be

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          1         treated like your family budget's money.  And I'm pretty,

          2         as you know, stingy.  If we can make an effort, if it

          3         requires getting some new thinking as relates to

          4         engineering, you know, I don't know who these people are,

          5         but if there could be a consensus about some of this and

          6         the costs can be looked at, I think we ought to try one

          7         more time with a fresh approach.  And, Colleen, I hope

          8         you're getting a sense of the -- this governor and cabinet

          9         are reluctant to use this power.  We will use it, I guess,

         10         but we're reluctant to use it as it relates to people's

         11         homesteads.

         12              GENERAL CRIST:  Governor?

         13              GOVERNOR BUSH:  Yes, General.

         14              GENERAL CRIST:  I would agree it's not something

         15         certainly ever to be used lightly.  And you have two very

         16         important competing interests, the individual property

         17         rights of Mr. Hardy and obviously the interests of the

         18         people of the state of Florida to preserve something

         19         that's very precious to all of us.  So if a little more

         20         time can give us the opportunity to have both of those

         21         interests be balanced appropriately and represented well

         22         and everybody win, that would be a pretty good thing.

         23              MS. CASTILLE:  General, I agree with you.  And we

         24         will sincerely go back and evaluate the options here at

         25         the table and we will bring Mr. Hardy in and his

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          1         representative for those discussions.  But lest you leave

          2         with an incomplete picture of what the private property

          3         rights tenet of the Constitution is, I do want to remind

          4         you that it is not just that private property rights shall

          5         not be taken.  The full measure of the Constitution is

          6         that a citizen may not be deprived of life, liberty or

          7         property without due process of law.  Nor shall private

          8         property be taken for public use without just

          9         compensation.

         10              We do have two competing important principles and our

         11         founding fathers did understand that there would be times

         12         in this nation's future when the country and the citizens

         13         needed a public works project.  The Everglades restoration

         14         project is one such project that is not just an

         15         environmental project, it is for the future growth of this

         16         state.  It is for the health of the Everglades.  And it is

         17         for water, water for people.  And I would like for you to

         18         remember that you have strictly adhered to your principles

         19         in not using the eminent domain authority of the state.

         20         And so you have been limited and you have held true to the

         21         Constitution of the United States and to the vision of our

         22         founding fathers who wanted limited government and who

         23         believed the inherent rights of people were given by God

         24         and not by government.

         25              So remember that and remember that we will take every

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          1         effort to consider Mr. Hardy's rights that were not given

          2         by government but, in fact, the rights of government have

          3         been given by him and by all of the people in this room.

          4              GOVERNOR BUSH:  Thank you, Secretary.

          5               CFO GALLAGHER:  Mr. Moore, are you going to be

          6         negotiating for Mr. Hardy?

          7              MR. MOORE:  I guess.

          8               CFO GALLAGHER:  Okay.  Good.  I just wanted to

          9         establish he's got a negotiator.

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

         11         second.  Any other discussion?  Without objection, as

         12         Treasurer Gallagher had predicted an hour ago, the motion

         13         has been deferred.

         14              Thank you-all for coming up and we will make a

         15         sincere effort to try to resolve this.  If not, maybe

         16         we'll see you back up here.

         17              MS. CASTILLE:  Item 6.

         18               CFO GALLAGHER:  Move to defer Item 6.

         19              MS. CASTILLE:  Deferred to the May 11th cabinet

         20         meeting.

         21               CFO GALLAGHER:  To May 11th.

         22              COMMISSIONER BRONSON:  Second.

         23              MS. CASTILLE:  Thank you.  Item 7.

         24              GOVERNOR BUSH:  Wait a second.  I need to say that

         25         there is a motion and a second.  Without objection the

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          1         item passes.

          2              MS. CASTILLE:  No, we deferred it --

          3              GOVERNOR BUSH:  Oh, the next one?

          4              MS. CASTILLE:  Oh, you mean on Item 5?

          5               CFO GALLAGHER:  Six got deferred.

          6              GOVERNOR BUSH:  There is a motion to defer and a

          7         second.

          8              MS. CASTILLE:  Yes.

          9              GOVERNOR BUSH:  Without objection, the item is

         10         deferred.  Where are we now?

         11               CFO GALLAGHER:  Seven.

         12              GOVERNOR BUSH:  I'm sorry.

         13              MS. CASTILLE:  We're on Item 7 now.

         14              GOVERNOR BUSH:  Item 7.

         15              MS. CASTILLE:  This is a request for special events

         16         lease for Mr. Dane Graziano in Escambia County, Florida --

         17         I'm sorry, in Fort Walton Beach.

         18              GOVERNOR BUSH:  Is there a motion?

         19               CFO GALLAGHER:  Motion on 7.

         20              GOVERNOR BUSH:  It's moved and -- is there a second?

         21         General?

         22              GENERAL CRIST:  Second.

         23              GOVERNOR BUSH:  Moved and seconded.  Without

         24         objection, the item passes.  This is a good example of

         25         using the --

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          1               CFO GALLAGHER:  A person that's gone right.

          2              GOVERNOR BUSH:  Yeah.  Guy had done good here.  He

          3         was a problem lessee and now he's been fulfilling his part

          4         of the bargain.  So we're appreciative.

          5              MS. CASTILLE:  He's been well educated in the

          6         process.

          7              GOVERNOR BUSH:  Excellent.

          8              MS. CASTILLE:  Item 8.

          9               CFO GALLAGHER:  Is there a reason why we can't do

         10         Item 8 and 9 together?

         11              MS. CASTILLE:  At the request of the applicants, they

         12         wanted to do it separately.

         13               CFO GALLAGHER:  Okay.  That's a reason then.

         14              MS. CASTILLE:  Item 8 is a request for an application

         15         for a 25-year sovereignty submerged land lease -- public

         16         easement, I'm sorry, with fees for a natural gas

         17         transmission pipeline by AES Ocean Express.  This pipeline

         18         is approximately 90 miles coming from Ocean Cay to the

         19         Florida Power & Light station adjacent to Port Everglades

         20         in Fort Lauderdale, Florida.  This particular pipeline

         21         comes in through the Dania Beach traffic circle south of

         22         John U. Lloyd State Park and follows a -- we can't see the

         23         line on that one.  And follows roads up until it gets to

         24         the airport and then goes on the airport property over to

         25         Florida Power & Light.  This particular piece -- excuse

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          1         me.

          2              GOVERNOR BUSH:  General, did you want to make a

          3         comment?

          4              GENERAL CRIST:  Yes.  Thank you, Governor.  We have

          5         two former members of the cabinet with us today.  Former

          6         Secretary of State George Firestone and former Secretary

          7         of State and a predecessor of mine, General Jim Smith.

          8         And just wanted to acknowledge their presence and thank

          9         them for being here.  Thank you, Governor.

         10              MS. CASTILLE:  Thank you, General.

         11              GOVERNOR BUSH:  Welcome back.

         12              (Off-the-record discussion.)

         13              MS. CASTILLE:  As you know, we had a significant

         14         cabinet meeting about a month ago where we presented most

         15         of the information here.  A lot of the questions that you

         16         had are what I would like to address today.

         17              GOVERNOR BUSH:  Colleen?

         18              MS. CASTILLE:  Yes, sir.

         19              GOVERNOR BUSH:  If we could take a literally a

         20         five-minute break for the court reporter.  Just take a pit

         21         stop real quick.  Probably will be great since this will

         22         take a little time.  Three minutes.

         23              (Brief recess.)

         24              MS. CASTILLE:  Governor, members of the cabinet,

         25         we're ready to begin when you are.

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          1              GOVERNOR BUSH:  Thank you.  Let's begin.

          2              MS. CASTILLE:  One of the questions that was brought

          3         up at the last meeting was we spent a lot of time

          4         identifying gaps in the reefs and directing applicants to

          5         utilize those gaps.  In the -- on AES -- on AES, there is

          6         a gap that the company is coming to and we're looking for

          7         the map.

          8              GOVERNOR BUSH:  I just can't see it.

          9              MS. CASTILLE:  It's the wrong map.  (Pause.)  There

         10         is a gap that the -- AES is using a gap and coming in

         11         through an area that has no residential construction, has

         12         no residential homes and has no commercial enterprises

         13         either.  So the most important aspect of where the

         14         companies are trying to evaluate the location of their

         15         pipeline is the impact that it will have on land.

         16              In this case, AES representative Richard Brightman

         17         was actually very involved in the process of us

         18         establishing and identifying those gaps for use.  And when

         19         we looked at this particular piece of property, there is a

         20         Navy facility here where they were not allowed to bring --

         21         where they were not allowed to bring the -- their pipeline

         22         into the area.

         23              GOVERNOR BUSH:  Are you pointing?

         24              MS. CASTILLE:  I am not pointing.  We're still

         25         waiting on --

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          1              GOVERNOR BUSH:  Okay.

          2              MS. CASTILLE:  There's the gap.  Okay.  So the gap,

          3         it does come through the gap.  It comes in through the gap

          4         there and then comes around the Navy property which is

          5         right around that area and then comes into the Dania Beach

          6         traffic circle.  Then it goes into -- it goes up a road

          7         and to the airport property to the south of the airport

          8         property.  You could probably barely see the yellow line

          9         there.  That is the location of it.  Then it goes up on

         10         the western side of the property and over to Florida Power

         11         & Light.  We asked, last night, both companies to give us

         12         a reason and possibly an alternative cost if they

         13         relocated the pipeline to a location completely north of

         14         any of the high quality reefs that we have in the Dade,

         15         Broward and Palm Beach area.

         16              GOVERNOR BUSH:  Colleen, I may have misunderstood.  I

         17         apologize if I did.  You said it went through the gap.

         18              MS. CASTILLE:  It went through the gap in the reef.

         19              GOVERNOR BUSH:  It didn't go through the gap that we

         20         established at the Board -- it didn't go through a gap.

         21         The question was could it go through the gap.  And the

         22         answer is it can't feasibly for economic reasons, correct?

         23              MS. CASTILLE:  That is correct.

         24              GOVERNOR BUSH:  But it isn't going through the gap.

         25         The gap, as I understand it, is our established gaps for

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          1         laying of the cable.

          2              MS. CASTILLE:  Yes.  But it is going through the gap

          3         on the outer reef, the third reef.  Is that correct, Tim?

          4              MR. RACH:  Correct.

          5              MS. CASTILLE:  And then it is being directionally

          6         drilled underneath the other two reefs that we have, the

          7         first and second reef.  Directionally drilled under those

          8         which is at additional cost.

          9              GOVERNOR BUSH:  That's not the gap.

         10              MR. RACH:  It's not a defined gap.

         11              GOVERNOR BUSH:  Thank you.  Just want to make that

         12         clear since that was the question that I posed that I

         13         think you were following up on.

         14              MS. CASTILLE:  The three gaps -- okay, the gaps that

         15         go through all three reefs.

         16              GOVERNOR BUSH:  Yes, ma'am.

         17              MS. CASTILLE:  It does not go through that gap.

         18              GOVERNOR BUSH:  Thank you.

         19              MS. CASTILLE:  So the directional drilling of the --

         20         underneath the reefs is a costly process.  And so what we

         21         asked last night was did the companies consider an

         22         alternative location that would completely avoid all of

         23         the reefs throughout -- through the Dade, Broward, and

         24         Palm Beach area.  And the answer was, yes, they did

         25         suggest that.  It did go through the FERC evaluation.

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          1         There were a significant number of water bodies that it

          2         would have to go through.  There is also a hard bottom

          3         reef that would have some impact.  So there would be

          4         additional cost to that.  And they would have to connect

          5         to the pipeline far north of where the gas is needed.

          6              In this case, what would have to happen is they would

          7         have to build a pipeline adjacent to the existing Florida

          8         Gas Transmission line and send it all the way down south

          9         to where it was needed and put in compression pumps to

         10         keep the gas moving down that location.

         11              GOVERNOR BUSH:  But the onshore impacts --

         12              MS. CASTILLE:  The onshore impacts were far

         13         greater --

         14              GOVERNOR BUSH:  -- were significant.

         15              MS. CASTILLE:  Yes, were far greater than what we

         16         have here.

         17              GOVERNOR BUSH:  You might even have eminent domain

         18         issues.

         19              (Laughter.)

         20              MS. CASTILLE:  Yes, we would.  And am I correct that

         21         utilities are given eminent domain authority?

         22              GOVERNOR BUSH:  They are but we try to avoid that.

         23              MS. CASTILLE:  Yes, we do, as much as possible.  So

         24         AES -- so we were following on -- this is a new process

         25         for us.  We did not have a rule -- we do not have a rule

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          1         in place for public transmission lines.  And we tried to

          2         take two rules that we had, both an upland rule and a

          3         private easement rule and melded the two together.  In

          4         using our fiber optic cable rule, we established a cost of

          5         $125,000 for the easement and a -- and then there was some

          6         mitigation that we have -- that we also have provided.

          7              (Pause.)

          8              So we also had proprietary issues and we had

          9         regulatory issues.  And what we tried to do was to balance

         10         both the proprietary and the regulatory protective

         11         measures on these projects in balancing the public trust.

         12         On the AES Ocean Express, we provided a 25-foot easement

         13         with the following conditions:  That if the pipeline is

         14         not constructed or the construction initiated within -- is

         15         not initiated within five years after the permit issuance,

         16         that the easement shall expire.  That if the applicant

         17         qualifies for a permit extension for the construction

         18         phase beyond the initial five years and should the

         19         applicants wish to maintain the original easement terms,

         20         that the request shall be brought before the Board of

         21         Trustees for consideration.  And that any assignment of

         22         the easement would also have to be approved by the Board

         23         of Trustees.  The resource impacts on AES Ocean Express

         24         are 2.07 acres of sand --

         25              GOVERNOR BUSH:  Colleen?

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          1              MS. CASTILLE:  Yes, sir.

          2              GOVERNOR BUSH:  How about nonassignability rather

          3         than -- or maybe there would be some assignability to a

          4         corporate entity that's described, you know, where there

          5         is no change in controlling interest or something.  But I

          6         thought we were looking at the -- doing it the inverse or

          7         the reverse of what you just described.

          8               CFO GALLAGHER:  So it's not assignable.  And if they

          9         want a new one, they have to come to us.

         10              MS. CASTILLE:  Well, it's only assignable with your

         11         approval.

         12              GOVERNOR BUSH:  I know, but it's --

         13              MS. CASTILLE:  You want it to be nonassignable, we

         14         can do that.

         15              GOVERNOR BUSH:  Is there a legal reason why we

         16         couldn't do that?

         17               CFO GALLAGHER:  Speak now or hold your peace,

         18         gentlemen.  This goes for both of them.  So don't think

         19         we're just talking about AES.

         20              GOVERNOR BUSH:  The issue -- again, I'm not a lawyer.

         21         I only play one for purposes of cabinet meetings.  But if

         22         you do it the way you're proposing, Colleen, they could,

         23         perhaps, challenge our decision of denial of the

         24         assignability.  And I think the burden ought to be on --

         25         not on us, but on the applicants, given the fact that,

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          1         while they may disagree, I think there's only going to be

          2         one of these things for awhile.

          3               CFO GALLAGHER:  You got two people that want to talk

          4         about that.

          5              MR. BRIGHTMAN:  Good morning, Governor, members of

          6         the Board of Trustees.  I'm Richard Brightman on behalf of

          7         AES Ocean Express.  We had agreed to the nonassignability

          8         condition that we discussed last time.  One important

          9         factor that needs to be carved out of that is a collateral

         10         assignment.  That is, an assignment to lenders that is

         11         collateral for a loan to construct the pipeline.  So we

         12         cannot have just an absolute blanket prohibition of all

         13         assignments because that then begins to interfere with the

         14         ability to finance the construction.

         15              We seek to have a collateral assignment which isn't

         16         an actual assignment of the easement.  We would still

         17         retain the easement.  And then if the foreclosure were to

         18         ever occur when that collateral assignment would kick in,

         19         the approval of that would have to come back to the board

         20         for its approval.  That's the collateral assignment that

         21         we feel is appropriate under the circumstances.

         22               CFO GALLAGHER:  Well, people automatically think

         23         they can sell it to somebody else to go get their money

         24         back.

         25              MR. BRIGHTMAN:  Upon your approval.  You would have

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          1         the right to approve or not, whoever that might be.

          2               CFO GALLAGHER:  Well, that still puts us in a

          3         position where those that make the loan expect it and

          4         would sue us because they signed it for collateral and now

          5         they won't be able to get it.

          6              MR. BRIGHTMAN:  And, in fact, we went through this

          7         with staff and we wrote into the draft easement document

          8         the specific criteria that would be looked at under that

          9         collateral assignment which would be the basis upon which

         10         the Board would make that decision.  And it had to do with

         11         the satisfactory character of the S and E and the meeting

         12         of all the conditions that are in the easement and those

         13         kinds of things that at least we thought were the

         14         appropriate criteria for the basis for that decision, you

         15         know.

         16               CFO GALLAGHER:  What you're doing then is you're

         17         really putting us in a box because as opposed to it being

         18         a decision that we could make as a proprietary owner of

         19         that property, all of a sudden you're saying, By the way,

         20         if they meet all these criteria, you got to give it to

         21         them and that's not where we want to be, at least not

         22         where this particular person wants to be.

         23              MR. BRIGHTMAN:  That's just in the draft easement.

         24         If you want to change that and take those out, that's

         25         fine.  But my point is it's important -- at least for our

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         project -- that we have the ability to do a collateral

          2         assignment, to use the whole project including the

          3         easement as collateral for a loan to finance construction

          4         or some other portion.

          5               CFO GALLAGHER:  At that point, it's the same as

          6         assignable because you want to assign it, you run it

          7         through the bank.

          8              MR. BRIGHTMAN:  No, the assignment would be

          9         specifically conditioned if it ever came to pass upon the

         10         approval of the Board.  That's what we understood the

         11         request to be last time.

         12               CFO GALLAGHER:  Carry me through this.

         13              MR. BRIGHTMAN:  Yes, sir.

         14               CFO GALLAGHER:  You're not going to do the deal.  So

         15         you go to the bank.  The bank forecloses it.  The bank

         16         comes to us and says, We're going to give it to these

         17         people.  We're stuck.  Now these people, whoever they are,

         18         get it.

         19              MR. BRIGHTMAN:  No, I think at that point you have

         20         the ability and the right to look at who these people are.

         21         Do they have the appropriate wherewithal, expertise, and

         22         background in order to do the project appropriately and in

         23         accordance with --

         24               CFO GALLAGHER:  And what if we just don't want any

         25         more going there or we don't want to have -- maybe we find

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          1         out something new about pipelines and we don't want to

          2         have any more pipelines?  We don't have a choice.  That's

          3         the issue I'm worried about.

          4              MR. BRIGHTMAN:  I think that there are procedures,

          5         revocation procedures that are available under existing

          6         law that you could seek to impose at that time if you made

          7         that decision.

          8              COMMISSIONER BRONSON:  Governor, if I might.  How

          9         does that protect the bank then or whoever is going to

         10         make the loan under that assignment?  How are they

         11         protected?

         12              MR. BRIGHTMAN:  Very little protection, you're

         13         absolutely right.  The banks hate it because it is not

         14         just an automatic assignment.

         15               CFO GALLAGHER:  Let me just ask the other lady that

         16         was going to stand up.

         17              MS. CASTILLE:  Anne Longman.

         18              MS. LONGMAN:  Good morning, Governor Bush, cabinet

         19         members.  My name is Anne Longman.  I'm with the law firm

         20         of Lewis, Longman and Walker.  And I'm the attorney for

         21         the Tractebel Calypso project.  I don't think I disagree

         22         with anything that Mr. Brightman has said.  But I'm not

         23         sure I understand the question.  If we could maybe restate

         24         the question.

         25               CFO GALLAGHER:  The question is, one, we agreed to

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                        BOARD OF TRUSTEES - APRIL 13, 2004
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          1         nonassignable.

          2              MS. LONGMAN:  Right.

          3               CFO GALLAGHER:  But the question is -- the question

          4         to you is:  Do you need to use this pipeline as a

          5         collateral for borrowing to build it?

          6              MS. LONGMAN:  And I can't answer that question here

          7         today.

          8               CFO GALLAGHER:  Here's the issue.  Whether you do or

          9         not, if, in fact, you want that clause in there that it is

         10         used for collateral, then we're stuck with the bank takes

         11         it over and the bank can put it wherever they want or sue

         12         us to allow them to do that.

         13              MS. LONGMAN:  Well, I actually think -- and I must

         14         say that I --

         15               CFO GALLAGHER:  Or lenders.  It may not be a bank.

         16              MS. LONGMAN:  Yeah.  I have not thought about this

         17         issue before today because this has not been posed to us

         18         before.  But what is in the agenda item is any assignment

         19         of the easement would have to be approved by the trustees.

         20         I actually think that that gives you plenty of protection

         21         if you simply state it in that way.  This is a little bit

         22         awkward because it may be that the other project here has

         23         some different needs and requirements than the Tractebel

         24         Calypso project.  I think the way that it was stated in

         25         the agenda item is sufficient both to protect you and to

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          1         protect my client.

          2               CFO GALLAGHER:  Let me ask you a question then.  If

          3         you're financing it, don't you sign some kind of

          4         assignment, collateral assignment, in order to get the

          5         loan?  I mean, I can't imagine that you wouldn't, but you

          6         tell me.

          7              MS. LONGMAN:  Well, I don't know.  And there may be

          8         people here who are more involved in the financial aspect

          9         of this than I am.  But what I understood you to be saying

         10         was that you wanted to be protected in the event of

         11         another entity coming in and actually moving forward with

         12         the project, which I find completely understandable.

         13               CFO GALLAGHER:  Right.  But, see, another entity

         14         comes in two ways.  They can come in because they buy it,

         15         the rights from you, which is the one you've agreed that

         16         we won't have.

         17              MS. LONGMAN:  Yes.

         18               CFO GALLAGHER:  Or it can be by foreclosure of

         19         lenders who then have the right to do it themselves.

         20              MS. LONGMAN:  And I am agreeing with you.

         21               CFO GALLAGHER:  All right.  So what do we do about

         22         that?

         23              MS. LONGMAN:  I think there is a way to write this.

         24         I think this is a lawyer job.  That if we can articulate

         25         what the goal is, that we can do it with lawyering.  If an

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          1         assignment to a lender results in a foreclosure, that then

          2         means another entity is going to carry forward with the

          3         project.  I think that falls within what you are trying to

          4         accomplish.  You don't want another entity that you

          5         haven't looked at moving forward with the project.  And I

          6         think we can write it that way without affecting someone's

          7         ability to finance their project.

          8               CFO GALLAGHER:  Well, that's where I'm coming from.

          9         Let's do this.  I'm willing at this point, we've gotten

         10         that one discussed.  We know where that needs to be.  We

         11         know we're going to have the $5 million up, no assignment.

         12         No. 3 was a five-year term.  Non -- it can't be carried

         13         past the five years without it coming back here and starts

         14         de novo basically although you're going to have all the

         15         information.  And with that, I'll move to approve 8 and 9.

         16              GOVERNOR BUSH:  Yes, let's get -- is there a second,

         17         first?

         18              COMMISSIONER BRONSON:  I'll second that.

         19              GOVERNOR BUSH:  Both of them?

         20              COMMISSIONER BRONSON:  Yes.

         21              GOVERNOR BUSH:  Okay.  Yes, General.

         22              GENERAL CRIST:  Yes, I just have a question about the

         23         five-year limitation.  Does that affect the ability to be

         24         successful?

         25              GOVERNOR BUSH:  No, that's to start.

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          1              MR. BRIGHTMAN:  We don't think so.  It would take

          2         circumstances beyond our wildest imagination, perhaps.  I

          3         could imagine rather wildly.  But it would take extreme

          4         circumstances for it to be a factor at all.

          5              GOVERNOR BUSH:  Okay.  There is a motion and a

          6         second.  Colleen, have you finished your presentation?

          7              MS. CASTILLE:  Yes, sir.

          8              GOVERNOR BUSH:  Do we have any speakers that haven't

          9         spoken on this issue before?

         10              (No response.)

         11              Okay.  Any other discussion?

         12              MS. CASTILLE:  Would you like us to -- the language

         13         on the nonassignability, would you like us to present that

         14         to your offices?

         15               CFO GALLAGHER:  Obviously we would like to look at

         16         that.

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

         18         other discussion?  Without objection, the motions pass.

         19              There you have it.

         20              MS. CASTILLE:  Thank you, Governor and members of the

         21         cabinet, that concludes our agenda.

         22

         23

         24

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                  STATE BOARD OF ADMINISTRATION - April 13, 2004
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          1              GOVERNOR BUSH:  State Board of Administration.

          2               CFO GALLAGHER:  Motion on the minutes on March 30th

          3         meeting.

          4              GENERAL CRIST:  Second.

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

          6         Without objection, Item 1 passes.

          7              Item 2.

          8              MR. STIPANOVICH:  Item 2, Governor and members, is

          9         the request for approval of fiscal sufficiency of an

         10         amount not exceeding 130 million State of Florida

         11         Tampa-Hillsborough County Expressway authority bonds.

         12              GENERAL CRIST:  Motion.

         13               CFO GALLAGHER:  Second.

         14              GOVERNOR BUSH:  Moved and seconded.  Without

         15         objection, the item passes.

         16              MR. STIPANOVICH:  Item 3 is the Florida Hurricane

         17         Catastrophe Fund request for approval of three separate

         18         items.  The first is five rules that deal with

         19         ineligibility and exemption from Florida Hurricane

         20         Catastrophe Fund revenue bonds, insurer responsibility and

         21         reimbursement of contracts.

         22               CFO GALLAGHER:  Governor, I'd like to move that we

         23         approve the Florida Hurricane Catastrophic Fund's 2004,

         24         2005 premium formula.  This premium formula accommodates

         25         the passage of the Catastrophe Fund's proposed legislation

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                  STATE BOARD OF ADMINISTRATION - April 13, 2004
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          1         with a 2004 effective date and incorporates the adjustment

          2         to rates which would provide for higher limits, 15

          3         billion, and resetting of the insurance industry

          4         retention, 4 billion.  If the effective date of the

          5         legislation is 2005, my motion authorizes the SBA staff to

          6         increase the capacity for 2004 to the maximum allowable

          7         based on the May bonding capacity estimates --

          8              GOVERNOR BUSH:  Can you explain that?

          9               CFO GALLAGHER:  -- allowing for appropriate

         10         rounding.  Yes.

         11              GOVERNOR BUSH:  Thank you.

         12               CFO GALLAGHER:  I made that motion.  There is some

         13         legislation pending.  If it passes, it will increase the

         14         bond amount to the 15 billion, 4 billion retention.

         15              GOVERNOR BUSH:  Right.

         16               CFO GALLAGHER:  This will be us approving that so

         17         they'll be able to run the numbers and get it out to the

         18         insurance companies.  Otherwise, it will be as high as

         19         they're allowed to do it without that.

         20              GOVERNOR BUSH:  Okay.

         21              GENERAL CRIST:  Just one question.  Is there any

         22         rationale to waiting to see if the legislation passes?

         23               CFO GALLAGHER:  Sorry?

         24              GENERAL CRIST:  Is there any rationale to waiting to

         25         see if the legislation passes?  Is there a need to act

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                  STATE BOARD OF ADMINISTRATION - April 13, 2004
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          1         today?

          2               CFO GALLAGHER:  Well, the best thing to do is if, in

          3         fact, they know -- if the legislation passes and they know

          4         we're in agreement, then they will do all the computations

          5         necessary, let the insurance companies necessary know, and

          6         it will allow them to talk to their reinsurers and

          7         negotiate a change in their reinsurance package to go

          8         along with this.  So the sooner they'd know it, the better

          9         off we all are.

         10              GOVERNOR BUSH:  This just gives you a chance to do

         11         some advance work.

         12              GENERAL CRIST:  Get some numbers essentially.

         13              GOVERNOR BUSH:  And as it relates to the rates, that

         14         still would come back to us.

         15               CFO GALLAGHER:  Well, this would approve the rates.

         16         And, by the way, for what's that worth, this basically, if

         17         the legislation changes, it basically has about a 6.77

         18         savings.  I'm going to remember that number off the top of

         19         my head --

         20              MR. STIPANOVICH:  That's correct, Treasurer.

         21               CFO GALLAGHER:  6.7 is from memory.  For the

         22         industry which should help us.  It's very important that

         23         we have a larger capacity and this will assist in that in

         24         expanding the capacity by changing the max allowed.

         25              GENERAL CRIST:  So if I might.  The point of the

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                  STATE BOARD OF ADMINISTRATION - April 13, 2004
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          1         motion is to increase capacity so people have coverage in

          2         the event we have a catastrophic event.  And this allows

          3         this to track the legislation that may pass in the next

          4         three weeks, to go ahead and compute what the numbers

          5         might be.

          6               CFO GALLAGHER:  That's right.

          7              GENERAL CRIST:  Any idea what the impact would be on

          8         the individual homeowner who would be covered?

          9               CFO GALLAGHER:  There's two things you have to look

         10         at.  One, no, we don't know what gets passed on to the

         11         individual homeowner.  And because we don't know what

         12         individual companies buy in reinsurance in the open

         13         market.  So not knowing that, we don't know what their

         14         costs are.  We do know this.  That if this passes this

         15         year, the bill does, and, you know, our motion passes

         16         here, that there will be an increased capacity to insure

         17         homes which means a more competitive market, easier to buy

         18         insurance.  We do know that.  The price, I don't think we

         19         can put any guarantee on it.  But there are companies that

         20         once they have this capacity, they will be writing more

         21         business.

         22              GOVERNOR BUSH:  There is a motion.  Treasurer

         23         Gallagher has made a motion.  Is there a second?

         24              GENERAL CRIST:  Second.

         25              MR. STIPANOVICH:  Governor?

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                  STATE BOARD OF ADMINISTRATION - April 13, 2004
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          1              GOVERNOR BUSH:  Yes.

          2              MR. STIPANOVICH:  Just for clarity purposes, this is

          3         agenda Item 3.  There are three parts of this agenda item.

          4         If you want to make the motion to approve all three parts.

          5               CFO GALLAGHER:  Let me just restate.  The motion I

          6         made includes Items 3.1, 3.2, and 3.3.

          7              GOVERNOR BUSH:  Your 3.2 is amended, correct?

          8               CFO GALLAGHER:  Right.

          9              GOVERNOR BUSH:  There is a motion on Item 3 as

         10         amended by Treasurer Gallagher specific to Item 3.2 and

         11         there is a second.  Is there any other discussion?  Motion

         12         passes unanimously.

         13              MR. STIPANOVICH:  That completes my agenda, Governor

         14         and members.

         15              GOVERNOR BUSH:  That's it?

         16              MR. STIPANOVICH:  Yes, sir.

         17              GOVERNOR BUSH:  Thank you, Coleman.

         18              (Thereupon, the proceedings adjourned at 12:30 p.m.)

         19

         20

         21

         22

         23

         24

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                                                                         114
          1

          2                        CERTIFICATE OF REPORTER

          3

          4    STATE OF FLORIDA    )

          5    COUNTY OF LEON      )

          6

          7              I, KRISTEN L. BENTLEY, Court Reporter, certify that

          8    the foregoing proceedings were taken before me at the time and

          9    place therein designated; that my shorthand notes were

         10    thereafter translated under my supervision; and the foregoing

         11    pages numbered 1 through 113 are a true and correct record of

         12    the aforesaid proceedings.

         13

         14              I further certify that I am not a relative, employee,

         15    attorney or counsel of any of the parties, nor am I a relative

         16    or employee of any of the parties' attorney or counsel

         17    connected with the action, nor am I financially interested in

         18    the action.

         19              DATED this 28th day of April, 2004.

         20                              ______________________________

         21                             KRISTEN L. BENTLEY, Court Reporter
                                        Notary Public
         22                             850-878-2221

         23

         24

         25

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