140
1 STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
2
SUGAR CANE GROWERS COOPERATIVE OF )
3 FLORIDA, INC., ROTH FARMS, INC., )
and WEDGWORTH FARMS, INC., )
4 and )
FLORIDA SUGAR CANE LEAGUE, INC., )
5 UNITED STATES SUGAR CORPORATION, )
and NEW HOPE SOUTH, INC., )
6 and )
FLORIDA FRUIT AND VEGETABLE )
7 ASSOCIATION, LEWIS POPE FARMS, )
W.E. SCHLECHTER & SONS, INC., and ) CASE NOs. 92-3038
8 HUNDLEY FARMS, INC., ) 92-3039
Petitioners, )
9 v. )
SOUTH FLORIDA WATER MANAGEMENT )
10 DISTRICT, )
Respondent, )
11 and )
MICCOSUKEE TRIBE OF INDIANS OF )
12 FLORIDA, the UNITED STATES OF )
AMERICA, FLORIDA DEPARTMENT )
13 OF ENVIRONMENTAL REGULATION, and )
FLORIDA WILDLIFE FEDERATION, )
14 Intervenors. )
------------------------------------)
15
CONTINUED DEPOSITION OF: GRACE JOHNS, Ph.D.
16
TAKEN: Pursuant to Notice Instance
17 of Sugar Cane Growers
Cooperative of Florida, Inc.,
18 Roth Farms, Inc., and
Wedgworth Farms, Inc.,
19
DATE: March 30, 1993
20
TIME: Commencing at 9:30 a.m.
21
PLACE: AA1 Parliamentary Reporting
22 3511 West Commercial Boulevard
Ft. Lauderdale, Florida
23
BEFORE: ELLEN N. COHEN, RPR
24 Stenographic Court Reporter
and Notary Public - State
25 of Florida at Large
141
1 APPEARANCES
2 HOPPING BOYD GREEN & SAMS
123 South Calhoun Street
3 Post Office Box 6526
Tallahassee, Florida 32314
4
BY: DONNA STINSON, ESQ.
5 -and-
CAROLYN S. RAEPPLE, ESQ.
6
Attorney for Petitioners Sugar Cane
7 Growers Cooperative of Florida, Inc., Roth
Farms, Inc., and Wedgworth Farms, Inc.
8
9 PEEPLES, EARL & BLANK
One Biscayne Tower
10 Suite 3636
Two South Biscayne Boulevard
11 Miami, Florida 33131
12 BY: RICK J. BURGESS, ESQ.
13 Attorney for Petitioners Florida Sugar Cane
League, Inc., United States Sugar
14 Corporation, and New Hope South, Inc.
15
POPHAM, HAIK, SCHNOBRICH & KAUFMAN
16 4000 International Place
100 S.E. Second Street
17 Miami, Florida 33131
18 BY: PAUL L. NETTLETON, ESQ.
19 Attorneys for the Respondent
20
UNITED STATES DEPARTMENT OF JUSTICE
21 ENVIRONMENT & NATURAL RESOURCES DIVISION
GENERAL LITIGATION SECTION
22 P.O. Box 663
Washington, D.C. 20044-0663
23
BY: KEITH E. SAXE, ESQ.
24
Attorneys for Intervenor United States of
25 America
142
1 A P P E A R A N C E S (Continued)
2 -and-
3 UNITED STATES ATTORNEYS OFFICE
155 Miami Avenue - Suite 600
4 Miami, Florida 33130
5 BY: ROBERT ROSENBERG, ESQ.,
Assistant U.S. Attorney
6
Attorneys for Intervenor United States of
7 America
8
ALSO PRESENT: RONALD T. LUKE J.D., Ph.D.
9 ANDREW BERNSTEIN
10
11 INDEX
PAGE
12
DIRECT EXAMINATION BY MS. STINSON..........143
13
14 EXHIBITS
PAGE
15 JOHNS' EXHIBIT No. 16....................217
17....................226
16 18-A..................228
18-B................,.228
17 19....................252
o0o
18
19
20
21
22
23
24
25
143
1 GRACE JOHNS, Ph.D.
2 the Deponent herein, having been previously duly sworn, was
3 examined and testified further as follows:
4 DIRECT EXAMINATION
5 BY MS. STINSON: (Continued)
6 Q. On Exhibit 7 from yesterday --
7 A. Yes.
8 Q. -- I had asked you about some comments in paragraph
9 3 that refer to the SWIM Plan but we didn't have the SWIM
10 Plan before us. Today I've got a SWIM Plan, let me see if
11 we can tie this together. Let me show you a copy of the
12 SWIM Plan.
13 The letter states, Exhibit 7 states that "In my
14 humble opinion, without the elimination of problems a
15 through e, the Everglades will not be saved. If we take
16 this approach, the public will no doubt try to compare the
17 benefits we estimate with economic impacts (costs) of the
18 Settlement Agreement. This is not appropriate unless we
19 also consider the costs of solving problems a, b, d and e."
20 Are those letters, a through e, those that appear
21 on page ii of the SWIM Plan?
22 A. Yes.
23 Q. By this paragraph, are you stating that the SWIM
24 Plan does not address or will not correct problems a, b, d
25 and e, or that's your understanding, that what the SWIM
144
1 Plan addresses is essentially c?
2 MR. NETTLETON: Object to the form.
3 BY THE WITNESS:
4 A. I don't remember what the rest of this document
5 talks about. I was simply referring to a, b, d and e as
6 written on this page.
7 BY MS. STINSON:
8 Q. Have you in your analysis, have you considered the
9 impact or the costs of solving problems a, b, d or e?
10 A. B might be included. Isn't that -- that, I
11 believe, is the cost of hydroperiod restoration, so in that
12 sense it's included.
13 Q. What part of hydroperiod restoration have you --
14 A. The part -- part of the cost of the STAs that we
15 looked at and their impacts were included in hydroperiod
16 restoration.
17 Q. Is that an engineering portion of the STAs
18 themselves?
19 A. Yes.
20 Q. So you are not referring to other hydroperiod
21 changes in the whole canal system?
22 A. It's whatever hydroperiod changes that the District
23 has included in their estimates of the cost of constructing
24 the STAs and hydroperiod restoration. That's what they
25 have indicated that it would cost.
145
1 Q. But I want to make real clear that that hydroperiod
2 restoration refers only to whatever hydroperiod restoration
3 is included in the STAs themselves; is that correct?
4 A. I don't recall if it's specific to just the STAs or
5 any other type of hydroperiod restoration.
6 Q. Do you recall any other hydroperiod restoration
7 that is addressed by the SWIM Plan?
8 A. I don't remember.
9 Q. What about b --
10 I'm sorry, what letter was that?
11 A. B.
12 Q. That was b.
13 What is a, does the SWIM Plan address problem a or
14 did your analysis address the costs of solving problem a?
15 MR. NETTLETON: Object to the form.
16 BY THE WITNESS:
17 A. To the extent that the act and the Settlement
18 Agreement relates to a, then it was considered.
19 BY MS. STINSON:
20 Q. Would you read A into the record just so when we
21 read it we'll be clear.
22 A. "Fragmentation of the Everglades, resulting in the
23 loss of connections between the central Everglades and
24 adjacent transitional wetlands. Everglades wildlife
25 communities and sustainability of the ecosystem may be
146
1 impaired by this separation and isolation."
2 Q. Does anything in the SWIM Plan, to your knowledge,
3 address that problem?
4 A. I don't remember, I'd have to look through the SWIM
5 Plan.
6 Q. Is there anything other than the STAs proposed by
7 the SWIM Plan that your analysis considers?
8 A. Our analysis primarily considered c. And maybe
9 perhaps to some extent a, b, d and e. But at the time I
10 wrote this letter, I was just making a statement that you
11 needed to consider, in my opinion, a through e.
12 Q. And in your opinion, the problems a through e are
13 not purported to be totally resolved by the SWIM Plan?
14 MR. NETTLETON: Object to the form.
15 BY THE WITNESS:
16 A. No, I don't -- I don't know.
17 BY MS. STINSON:
18 Q. Does your economic impact analysis consider the
19 costs and effects of solving problems a through e?
20 A. They consider the impact of the Marjorie Stoneman
21 Douglas Everglades Restoration Act and the Settlement
22 Agreement between the United States and the South Florida
23 Water Management District.
24 Q. Do you know whether those two things solve problems
25 a through e?
147
1 MR. NETTLETON: Object to the form.
2 BY THE WITNESS:
3 A. Could you restate the question, I don't quite
4 understand the question.
5 BY MS. STINSON:
6 Q. Do you know whether the Marjorie Stoneman Douglas
7 Act and the Settlement Agreement purport to resolve all of
8 the problems a through e?
9 MR. NETTLETON: Same objection.
10 BY THE WITNESS:
11 A. My understanding is they don't resolve all of them
12 but I don't know which ones -- maybe some they resolve --
13 some of them are resolved and some of them aren't, I don't
14 know.
15 BY MS. STINSON:
16 Q. Do you have, just to make this easier, a copy of
17 your contract completion report with you we can use?
18 A. No, I don't, I didn't bring it.
19 Q. In the report that you have done, the contract
20 completion report for the 10-year study, did you do any
21 analysis of the impact of changes in land ownership?
22 A. No.
23 Q. Besides sales, job earnings and employment, does
24 the report consider any other measures of economic impact?
25 A. Lost income to the mills and the growers.
148
1 Q. Anything else?
2 A. Not that I can recall at the moment.
3 Q. Are you generally familiar with the literature on
4 economic impact assessments?
5 A. Yes.
6 Q. Are there other measures of economic impact
7 considered in the literature that should be addressed in an
8 economic impact assessment?
9 MR. NETTLETON: Object to the form.
10 BY THE WITNESS:
11 A. What we've looked at are the most common. Do you
12 have anything in mind?
13 BY MS. STINSON:
14 Q. Well, are there --
15 No.
16 Are there other measures that are also often
17 considered in impact assessments other than sales, job
18 earnings, employment and then, as you indicated, lost
19 income to the mills and growers, are there additional
20 community impacts?
21 A. Well, there are tax impacts, local tax impacts.
22 Now that you mention it, we did look at the
23 property tax impacts and the state income tax impacts, but
24 we specifically looked at agricultural land in the EAA. We
25 didn't look at land that was not agricultural in the EAA.
149
1 Q. Are you saying then you didn't look --
2 Well, explain that to me, why didn't you look at
3 non-agricultural land?
4 A. We were told not to. Our assignment was to look at
5 the primary economic activities in the EAA, which are
6 agriculture and the related services.
7 Q. Have you looked at the impact of the, looking for a
8 shorthand way for saying the Marjorie Stoneman Douglas Act
9 and the Settlement Agreement, on the EAA alone as apart
10 from Palm Beach County?
11 MR. NETTLETON: Object to the form.
12 BY THE WITNESS:
13 A. We looked at the economic impact to the EAA and
14 Palm Beach County. We did not separate the EAA from Palm
15 Beach County in reporting our job losses.
16 BY MS. STINSON:
17 Q. Why did you choose to look at the geographic area
18 of Palm Beach County as opposed to geographic area of the
19 EAA in looking at the impact assessment?
20 A. Because the input/output multipliers that we used
21 were specific to the county, Palm Beach County. That's my
22 best recollection of why at this time.
23 Q. You indicate in the report that potential
24 mitigation responses, including shifting production to
25 areas within or outside the EAA, presently idle or in other
150
1 crops.
2 Have you done any analysis to determine the
3 availability of such land?
4 MR. NETTLETON: Object to the form.
5 BY THE WITNESS:
6 A. We do know that there is land on which you can grow
7 sugar cane that isn't currently in sugar cane production.
8 BY MS. STINSON:
9 Q. Within or without the EAA?
10 A. Mostly without the EAA, but there may be some
11 acreage within the EAA as well.
12 Q. How do you know that?
13 A. The Palm Beach County property appraiser's office
14 land use records indicate there is land in other uses other
15 than sugar cane and that land could be -- some of that land
16 could be converted to sugar cane production.
17 Q. What leads you to believe that it could be
18 converted, say outside the EAA, let's talk about that
19 first?
20 A. Well, there's lots of sand land that is in cattle
21 production and some of that -- and also pasture. Some of
22 that land could be converted.
23 Q. Have you analyzed the feasibility of doing that
24 from a cost or practicality standpoint?
25 A. No.
151
1 We have not looked at how much it would cost to
2 convert sand land into sugar cane land.
3 Q. Have you looked at whether that would be feasible
4 given the location of the mills?
5 A. Yes, preliminarily.
6 It appears that transporting the cane from the sand
7 lands to the mills would not be a deterrent to growing cane
8 on that land.
9 Q. And what led you to that conclusion, what analysis
10 did you do?
11 A. It was a very, just a simple analysis, mostly
12 distance. The distance from those potential lands to the
13 mills is about comparable to the distance that they are
14 currently shipping from and to.
15 Q. You indicate in your report that the area supported
16 15,600 jobs in 1990. Are these actual jobs or FTEs?
17 MR. NETTLETON: Object to the form.
18 Q. Do you know?
19 A. Those are the summation of the jobs reported by the
20 businesses to Dun & Bradstreet during their surveys.
21 Q. Again, are we talking about FTEs or jobs, do you
22 know?
23 A. Those would be --
24 MR. NETTLETON: Form.
25 BY THE WITNESS:
152
1 A. (Continuing) What do you mean by "jobs"?
2 BY MS. STINSON:
3 Q. Well, a job can be a part-time job which is not a
4 whole FTE, right, or a seasonal job which is not a whole
5 FTE?
6 MR. SAXE: Object to the form.
7 BY THE WITNESS:
8 A. When they answered the question they were talking
9 about the number of people working at their enterprise at
10 the time the question was answered.
11 BY MS. STINSON:
12 Q. And the source for this number is a survey by Dun &
13 Bradstreet; is that correct?
14 A. Yes.
15 Q. Do you know whether this includes the jobs of the
16 seasonal farm workers who harvested the vegetables, rice
17 and sod?
18 A. It does not include the H2A workers or the seasonal
19 farm workers who harvest vegetables, rice and sod.
20 Q. On the next page ES-2, you indicate that conversion
21 of the land to STAs is expected to result in an estimated
22 loss of 830 full-time equivalent jobs in sugar cane
23 milling.
24 How many of those jobs are located within the EAA
25 itself?
153
1 A. Most of them -- a good portion of those jobs would
2 be located in the EAA. The rest of them would be located
3 in other areas of Palm Beach County.
4 Q. Do you have any estimate of what number would be
5 lost in the EAA, itself?
6 A. No.
7 Q. Do you know, have you analyzed what type of workers
8 would be required for the STA construction?
9 A. Yes.
10 Q. What type?
11 A. Well, there's a list of them. You have engineers,
12 equipment operators, truck drivers, pipefitters,
13 carpenters, cement finishers, electricians and construction
14 assistants.
15 Q. Do you know whether there is a labor force that
16 includes those types of skills within the EAA?
17 A. Well, you probably have equipment operators, truck
18 drivers, carpenters. You may have some cement finishers,
19 electricians and construction assistants.
20 Q. Have you analyzed the labor force within the EAA to
21 determine the availability of those trades?
22 A. Not specifically, but we do have an understanding
23 of what type of employees would be needed to grow and
24 process sugar cane, sod and vegetables and transport them.
25 Q. On ES-4, page ES-4 at the top, you indicate
154
1 "Employment from BMPs is expected to increase by about 172
2 FTEs."
3 What kind of workers would those be, what kind of
4 workers are those? It's at the very top of ES-4.
5 A. Field people to manage the water tables, manage the
6 water, irrigation laborers to manage the irrigation water.
7 I have it in a table here. I don't recall off the
8 top of my head (perusing document).
9 There would be, most of it would be additional on-
10 farm labor to do the type of work similar to what they
11 would already be doing, R&D people, scientists, field
12 workers and laboratory technicians, a couple of those.
13 Q. What table is that that you are referring to?
14 A. Table 9-4 after page 9-14. You can get an idea of
15 the type of labor by looking at our discussion of best
16 management practices and how they would be implemented in
17 the BMP chapter.
18 Q. On page ES-5 you discuss property values or local
19 real estate tax revenues.
20 Given the way assessments and agricultural
21 exemptions work, would the decreases in property values
22 cause actual reductions in real estate taxes, do you know?
23 MR. NETTLETON: Object to the form.
24 BY THE WITNESS:
25 A. The Palm Beach County property appraiser's office
155
1 evaluates the income to farming in the EAA and that
2 appraiser uses that income to create an assessed value of
3 the property.
4 From that assessed value, the tax rate is applied
5 and that determines the real estate tax.
6 BY MS. STINSON:
7 Q. Have you done any calculations to determine what
8 effect there would be in real estate taxes?
9 A. Yes.
10 Q. Is that included in your report?
11 A. Yes.
12 Q. Have you done the calculations to determine what
13 the net effect on real estate taxes would be?
14 A. Yes.
15 Q. Point to that or tell me where to find that.
16 A. That's local taxes, local real estate taxes.
17 Property taxes. We use it interchangeably. Agricultural
18 land in the EAA pays property taxes.
19 Q. Is there a table that includes those calculations,
20 how you arrived at the 3.8 and $2.6 million?
21 A. There's a table in each section on the storm water
22 treatment areas, the BMPs and the assessments that report
23 the change in real estate taxes.
24 Q. Is there anything that will show me the actual
25 calculation by which you arrived at the numbers you
156
1 reported?
2 A. We describe what we do in the report and the
3 spreadsheet, the computer spreadsheet of this, of each
4 table, you know, these tables. Table, for example, 9-5 has
5 the calculation of the change in real estate taxes.
6 Q. And the spreadsheet would have been provided to me
7 on disk?
8 A. Yes.
9 Q. Have you performed any analysis of the match of the
10 education and skill levels of EAA workers with the types of
11 workers required by the projected job market in Palm Beach
12 County and adjacent counties?
13 MR. SAXE: Object to the form.
14 BY THE WITNESS:
15 A. Could you just be a little more specific.
16 BY MS. STINSON:
17 Q. Have you done any analysis to determine whether the
18 types of workers in the EAA that may be displaced have the
19 skills which would enable them to find jobs in Palm Beach
20 County or elsewhere?
21 A. Not that I recall specifically at this time.
22 Q. On page 1-1 you mentioned the sport fishing
23 industry in Lake Okeechobee.
24 Do you know whether the reduction of agricultural
25 activities would have any impact on that sport fishing
157
1 business?
2 A. Would you ask the question again.
3 (Whereupon, the pertinent portion of the Record was
4 read back by the Court Reporter.)
5 MR. NETTLETON: Object to the form.
6 BY THE WITNESS:
7 A. (Continuing) During our analysis we did -- I did
8 not come to the conclusion that it would have an impact.
9 BY MS. STINSON:
10 Q. Did you look at the question?
11 A. Yes.
12 Q. What did you look at to come to that conclusion?
13 A. The interaction -- just looking at the interaction
14 between agriculture and the fishing industry there. We
15 didn't look at it very closely, but it just -- it would
16 seem that, you know, from our experience there wouldn't
17 be -- and it was not brought to our attention that there
18 would be a relationship between the two such that if
19 agricultural production was affected by the Act that,
20 necessarily, the fishing industry would be affected. They
21 seemed to be pretty separate in the EAA.
22 Q. Did you look, for example, to see where the people
23 who came to sport fish were from?
24 A. That information was mostly in talking to people in
25 the EAA, so it would be anecdotal information that they
158
1 came from outside the area.
2 Q. Have you done any analysis of the impact of the Act
3 and Settlement Agreement on Clewiston?
4 MR. SAXE: Would you read back the question,
5 please.
6 (Whereupon, the pertinent portion of the Record was
7 read back by the Court Reporter.)
8 A. Well, the raw -- a raw sugar mill is in Clewiston,
9 so we looked at that. Sugar refinery in Clewiston, we
10 looked at that.
11 Q. Have you looked at the loss of jobs or retail
12 business or community impacts in Clewiston?
13 A. Yes.
14 Q. Other than the direct loss or possible losses at
15 the mill and refinery?
16 A. It affected resale and service industries.
17 Q. Do you know what county Clewiston is in?
18 A. Hendry County.
19 Q. Is there something in the report that tells us how
20 many jobs would be lost in Clewiston, how many retail jobs
21 would be affected?
22 A. It's included in the aggregate numbers for EAA in
23 Palm Beach County and we did not separate those numbers
24 out.
25 Q. Then your analysis is not just of Palm Beach
159
1 County; is that correct?
2 A. The EAA -- the regulated portion of the EAA and
3 wherever the mills are, which some of them may be outside.
4 I think the one in Clewiston is outside the regulated
5 portion but we do include that mill and that area.
6 Q. Did you include, then, the population base of
7 Clewiston and other information from Clewiston in applying
8 the RIMS multipliers?
9 A. The regulated portion of the EAA, we looked at how
10 they would respond to the Act and the Settlement Agreement
11 in terms of, first of all, the change in production and the
12 change in sales.
13 We then -- now, that change in sales affects all of
14 the raw sugar mills or could affect all the raw sugar
15 mills. So we used the RIMS multipliers that represent Palm
16 Beach County to get an estimate for that area, the EAA and
17 Palm Beach County.
18 So that impact includes the slice of the EAA, the
19 regulated portion of the EAA that's in Hendry County and
20 the portion of the EAA that's in Palm Beach County.
21 Q. But for the whole area you applied the Palm Beach
22 County multipliers?
23 A. Yes.
24 Q. Have you determined the impact on the amount of
25 sugar refined in the EAA due to reductions in the sugar
160
1 produced in the EAA?
2 MR. NETTLETON: Object to the form.
3 BY THE WITNESS:
4 A. Yes.
5 What type of impact?
6 BY MS. STINSON:
7 Q. What reduction there may be in the amount of sugar
8 refined in the EAA?
9 A. We looked at that.
10 Q. Can you point to me in the report where that
11 information is?
12 A. Yes.
13 Would you like me to?
14 Q. Yes, please.
15 A. Page 11-1. This section discusses it.
16 Q. What is your conclusion with regard to the impact?
17 A. We found there would be no impact to the
18 refineries.
19 Q. And why is that?
20 A. Because in our analyses and looking at all the
21 different -- say, even the hundred-dollar-an-acre
22 assessment, there is still enough cane or sugar grown in
23 the EAA to run them through -- run it through those
24 refineries.
25 So the reduction in marketing would come from
161
1 reduced shipping to other markets.
2 Q. Did you determine that there are any unrealized
3 potential economies of scale in EAA sugar growing, sugar
4 production?
5 MR. SAXE: Object to the form.
6 BY THE WITNESS:
7 A. Would you say that again.
8 BY MS. STINSON:
9 Q. In looking at the cost of production of sugar in
10 the EAA, did you determine whether there are or could be
11 economies of scale that do not currently exist?
12 MR. SAXE: Object to the form.
13 BY THE WITNESS:
14 A. I don't believe we did. If they don't exist or
15 didn't exist, we didn't include them.
16 BY MS. STINSON:
17 Q. Well, if there are potential -- did you determine
18 whether there are potential economies of scale that have
19 not been realized?
20 MR. SAXE: Object to the form.
21 And, Counsel, what do you mean by "potential
22 economies of scale?"
23 BY THE WITNESS:
24 A. I do not understand the question at all.
25 BY MS. STINSON:
162
1 Q. Let me come back to that one.
2 Do you know whether the ownership of vegetable land
3 relates to the ownership of sugar cane land, whether
4 they're common owners?
5 MR. SAXE: Object to the form. Ownership relates
6 to ownership.
7 BY THE WITNESS:
8 A. You want to know if I know?
9 BY MS. STINSON:
10 Q. Right.
11 A. That there's any relationship?
12 Q. Yes.
13 A. My understanding is that some of the vegetable land
14 is owned by sugar cane producers.
15 Q. Have you analyzed that as part of your impact
16 assessment?
17 A. I don't understand what you mean by "analyzed."
18 Q. Would the fact that one owner has both vegetable
19 operations and sugar operations affect a question of
20 whether land would go out of production?
21 A. To be honest with you, I don't recall.
22 Q. You indicate on page 2-3 that the EAA generated
23 about 1.5 billion in sales in 1991 and those sales are
24 presented in table 2-6. Can you tell me the source of that
25 information?
163
1 A. That's from Dun & Bradstreet, the data that they
2 provided us.
3 Q. Does that include the sugar refining?
4 A. Yes.
5 Q. Of the 15,600 people that we talked about a little
6 bit ago, and the seasonal workers that are not included in
7 that figure, do you know whether those seasonal workers
8 reside in the EAA or not?
9 A. They reside, yes, they reside at least temporarily
10 but they may go to other parts of Florida.
11 Q. Do you know whether any portion of those people
12 maintain their base, their permanent residence in the EAA,
13 the seasonal workers?
14 A. If I recall correctly, some of them do maintain a
15 permanent resident base, but I don't know how many, I don't
16 remember how many or what proportion.
17 Q. Do you have data to show how many of those seasonal
18 workers maintain a permanent residence in the EAA?
19 A. We didn't look at that issue specifically, so I
20 would have to look back and see if there's -- I don't
21 remember exactly where I got that information from.
22 Q. You indicate that 75 percent of the employees live
23 within the EAA, some in Palm Beach, Broward, Dade and
24 Martin, and 16 percent live outside the areas.
25 Do you have any information to show where they
164
1 live, the 16 percent?
2 A. We may. I'm trying to remember. We have it all on
3 a spreadsheet that you all have, so you'd be able to read
4 it off the spreadsheet. We might have aggregated it
5 from --
6 You know what, look at the survey form, see if we
7 asked it. I'm just trying to go by memory here (perusing).
8 We don't have the survey form here.
9 Well, anyway, look at the survey form and see if we
10 asked specifically for them to name the impact cities.
11 (Perusing) Oh, here we are.
12 Okay, on the business survey they would have
13 answered inside the EAA, eastern Palm Beach, Dade, Broward
14 or Martin County.
15 And the next answer would be, are they in
16 Okeechobee, Highlands, Glades or Hendry County and not in
17 the EAA.
18 And the final one would be outside of the above
19 areas.
20 So that's the most breakdown we have.
21 Q. On page 2-4 you indicate the median income of
22 households and the source of the information from Dun &
23 Bradstreet.
24 Have you compared that to the U.S. census
25 information?
165
1 MR. NETTLETON: Object to the form.
2 BY THE WITNESS:
3 A. Would you tell me what table you are referring to.
4 BY MS. STINSON:
5 Q. Not a table, page 2-4, it's the last paragraph.
6 A. Yes, if I recall correctly, we did have census data
7 and we did compare them.
8 Q. Do you know how they compared?
9 A. Well, they must have compared fine or else I would
10 not have reported what this sentence says.
11 Q. Table 2-6, did you provide to us a disk with a
12 spreadsheet which would show the calculations and the
13 sources for that information?
14 A. It should have been on the disk.
15 If it's not, then we must have lost it because I
16 gave you everything we had in our computer files.
17 Or maybe I did it by hand, and if I did it by hand,
18 you have that too. I don't remember throwing that out.
19 The raw data that this came from, you all have.
20 Q. In your 10-year report did you consider the
21 production differences between yield belts or among the
22 yield belts?
23 MR. SAXE: Object to the form. Production
24 differences.
25 BY THE WITNESS:
166
1 A. We considered productivity. Yield per acre
2 changes, differences among the yield belts.
3 BY MS. STINSON:
4 Q. And what was that based on?
5 A. Information provided by the Palm Beach County
6 property appraiser's office.
7 Q. What specific information did they provide to you?
8 A. Yield per acre by farm belt.
9 Q. And is that what we discussed yesterday, the
10 averages from the plots from different yields?
11 A. Yes, the Palm Beach County property appraiser's
12 office apparently, from what I'm told by him, averages the
13 data provided to him by the Sugar Cane League and the
14 Cooperative which is the plot data you showed me yesterday,
15 the field data.
16 And he averages them and he reports them by yield
17 belt. He has a little spreadsheet that you all have,
18 should have. And we took that information right from his
19 records.
20 Q. Subsequently, have you gotten individual data
21 for each plot?
22 A. Yes, their fields.
23 Q. Fields?
24 A. Toward the end of the project, I guess it was about
25 in June or July, I don't remember what month, we did get
167
1 individual field data from those, whatever, 140 fields in
2 the EAA, but we didn't have a chance to look at them at
3 that time.
4 Q. I'm looking for it here but at some point you use,
5 on page 4-5, you use the term "opportunity costs of
6 processing sugar."
7 A. What page are you referring to?
8 Q. 4-5. Can you define to me what you mean by that?
9 A. Okay. That would be the rate of return that you
10 could get from your next best investment of money.
11 Q. How did you determine what that was?
12 A. If I remember correctly, now I'm going from memory,
13 we used an interest rate of 8 percent.
14 Q. Why? What does that represent?
15 A. Oh. That represents that every year you want to
16 get an 8 percent return on the money that you've invested
17 in your business.
18 Q. Why did you choose that number?
19 A. Eight percent is -- well, it's an estimate of
20 your -- the next best use of your money and --
21 Q. The question is: Why did you choose 8 percent?
22 A. Just a minute.
23 It's the yield of bonds, government bonds,
24 long-term and oftentimes intermediate-term bonds. So if
25 you invest your money, a risk-free investment would be to
168
1 invest in bonds and so that -- well, now the return on
2 bonds is much lower than 8 percent, but at the time we used
3 that number because historically during the 1980s that was
4 the yield that you could get off of other investments like
5 bonds.
6 Q. On page 4-6 you've got some numbers at the top of
7 the page. What is the source and have you provided to us
8 information which would show us how you calculated each of
9 those numbers?
10 A. Yes, you have the spreadsheet. We provided you
11 with the spreadsheet that calculated those numbers.
12 Q. The information on page 4-8 on yields per belt,
13 again, have you provided us information that would show how
14 those figures were calculated?
15 A. Yes.
16 Q. And that's on a disk you've given us?
17 A. It's on one of the spreadsheets, yes.
18 Q. On 4-9, the last paragraph, you indicate
19 information or predictions from IFAS regarding soil
20 subsidence. What is the source of that?
21 A. You are talking about the last paragraph,
22 reductions by IFAS?
23 Q. Correct.
24 A. I know where it's from, I just want to make sure I
25 give you the right cite.
169
1 It's a report by George Snyder at IFAS and it might
2 be this one, cite 24 on the bottom of that page, it might
3 be that one. It's that little document that looks like
4 (indicating) this.
5 Q. And it's by George Snyder?
6 A. George Snyder at IFAS.
7 Q. Okay. We'll try to find that.
8 On page 4-10, the cost per gross farm acre, I guess
9 this is -- I'm not sure. Are those annual costs?
10 A. Yes.
11 Q. What is the source?
12 A. The source -- those are calculated numbers that I
13 calculated based on the information on BMPs that we discuss
14 in the BMP chapter, so the sources would be the sources
15 that we cite in the BMP chapter.
16 Q. Your calculations, are they on a spreadsheet that
17 you have provided to us?
18 A. Yes.
19 Q. Are the calculations in arriving at the real
20 property tax figures also on a spreadsheet?
21 MR. SAXE: Where are you, Counsel?
22 MS. STINSON: Still on page 4-10.
23 BY THE WITNESS:
24 A. Yes.
25 BY MS. STINSON:
170
1 Q. On page 4-11 you convert gross farm acre to
2 harvested acre. Tell me how you did that.
3 A. Where are you referring to on page 4-11?
4 Q. I'm looking.
5 At the top you indicated all receipt and cost items
6 are represented per gross farm acre and not per harvested
7 acre as is recorded in USDA and IFAS publications. Did you
8 do calculations to convert?
9 A. Yes.
10 MR. SAXE: Object to the form. Convert what,
11 Counsel?
12 BY MS. STINSON:
13 Q. Gross acres to harvested acres or harvested acres
14 to gross acres?
15 A. We did calculations to convert cost per harvested
16 acre to cost per gross acre.
17 Q. What did you do?
18 A. We took the cost per harvested acre and multiplied
19 it by .75, I'm pretty sure that's what we did.
20 Q. Why by .75?
21 A. That's the amount of land in actual sugar cane
22 production.
23 Q. Well, based on what, what's the source of?
24 A. That comes from a report by Jose Alvarez.
25 Q. What report?
171
1 A. Cost and Returns to Sugar Cane Production on Muck
2 Soils in the EAA.
3 Q. Again, on this page, you talk about opportunity
4 costs. Is that the same 8 percent that we discussed a
5 minute ago?
6 A. So we're on the second paragraph of page 4-11; is
7 that what you are referring to?
8 Q. Yes.
9 MR. SAXE: You are referring to the second
10 paragraph, the reference to opportunity cost on the
11 third line down.
12 MS. STINSON: Yes. And the reference in the next
13 to the last line of the first paragraph.
14 BY THE WITNESS:
15 A. The depreciations and returns to investment that's
16 referred to in the second paragraph were amortized at 8
17 percent annual interest.
18 In other words, if you read that sentence,
19 depreciations and returns to the investment is the 1994
20 purchase price of the farm machinery compliment amortized
21 the 8 percent annual interest estimated over the estimated
22 economic life of the machinery.
23 BY MS. STINSON:
24 Q. In the first paragraph you indicate, well, the end
25 of the sentence says "...and still cover its cash
172
1 depreciation and opportunity costs."
2 "Opportunity costs" is what?
3 A. Well, it has the same definition but I'm not
4 exactly sure what percent was used on that.
5 Q. Is there anything that would tell me what percent
6 you used on that?
7 MR. NETTLETON: Object to the form.
8 BY THE WITNESS:
9 A. Okay, I'm going from the best memory I can possibly
10 muster up here. If you turn to table 4-5 right before page
11 4-7 and you look under fixed, says "Interest."
12 If I remember correctly, I'm trying to remember as
13 best I can, it seems to me at this time that that is
14 represented as the opportunity cost either per ton or per
15 pound of raw sugar.
16 BY MS. STINSON:
17 Q. And is that based on an 8 percent figure?
18 A. That is based on whatever USDA based it on.
19 Q. From the report cited on that table?
20 A. Yes.
21 Q. You have a land value on page 4-11, third
22 paragraph, of 2,856 per acre. How does that compare to the
23 county's appraised value; do you know?
24 A. I don't remember at this time.
25 Q. At the bottom of page 4-11 you say that "The
173
1 average trend in raw sugar recovered is 2 percent per year
2 since 1964."
3 How did you calculate that 2 percent?
4 A. We calculated the percent change in recovery
5 between the current year and the previous year and then we
6 averaged those percentages over the period since 1964 and
7 the average percent was a 2-percent increase per year.
8 Q. So you took what percent difference from, say, '64
9 to '65 and --
10 A. '65 to '64 and '66 to '65.
11 Q. And then arranged all those percentages?
12 A. Yes, if I remember correctly, that's what we did.
13 Q. On page 4-12 you discuss price increases,
14 inflation, expected increases in inflation.
15 What is the source of the assumptions regarding
16 inflation?
17 A. Well, right here it's inflation and the cost of
18 increasing productivity at the mill. Inflation and the
19 cost of increasing productivity is estimated using the
20 10-year average of producer prices for all commodities as
21 reported in the Florida statistical abstract, 1991.
22 Q. The price increase of 1.7 percent per year referred
23 to on page 4-12, what is the source of that or how did you
24 compute that?
25 A. For each year of the forecast period we took the
174
1 revenue received by the mill and subtracted off the costs.
2 We took that net and converted it to dollars per ton of
3 sugar cane. Then we looked at how much that maximum sugar
4 cane price, which is what that is, increases. We looked at
5 how it increases from year to year and found it increased
6 by 1.7 percent per year.
7 Q. Is that based on historical information or your
8 projection?
9 A. If I remember correctly, it was a projection based
10 on the increases in the recovery rate and increases in
11 inflation at the mill.
12 Q. On page 4-13 you talk about baseline projections.
13 Under the baseline projection does any land leave
14 production during your 10-year forecast?
15 A. Which baseline projection are you referring to?
16 Q. I guess scenario two which is discussed on 4-13.
17 A. Under scenario two practically all of the land, or
18 a good portion of the land, or most of the land would leave
19 production with the liberalization of sugar prices.
20 Q. Without --
21 A. (Continuing) The sugar market, I'm sorry, I'm
22 getting sloppy here.
23 With the liberalization of the sugar market as
24 described on page 4-13, we find that the residual returns
25 to land and risk of all eight model farms are negative.
175
1 From that we can infer that sugar cane production is no
2 longer profitable in the EAA. Land would leave production.
3 Q. Under scenario one have you, under your baseline
4 projection, does any land leave production in the baseline?
5 A. You are referring specifically to sugar cane?
6 Q. Yes.
7 A. Under the baseline, my best recollection is that no
8 land leaves production under the baseline.
9 Q. What about vegetables?
10 A. Under the vegetables, one of the crops does leave
11 production under the baseline.
12 Q. Is that as shown in a chart or table somewhere?
13 A. I know it's described in the report under baseline
14 economic projections for vegetables.
15 Q. What about sod?
16 A. To the best of my recollection, sod does not leave
17 production under the baseline.
18 Q. On page 5-1 you indicate that individual farms grow
19 a variety of vegetables.
20 Have you analyzed a scenario where individual farms
21 grow both vegetable -- sugar cane and corn?
22 A. No, I don't believe we have, if I recall correctly.
23 Q. Do you know what determines whether fallow sugar
24 cane land would be planted in corn?
25 A. I don't understand the question.
176
1 Q. Do you know whether some fallow cane land is
2 planted in corn, whether that's a standard --
3 A. Yes.
4 Q. -- practice?
5 A. Yes, it is, some of it is.
6 Q. Do you know why some is and some isn't; what makes
7 the determination -- what affects the determination as to
8 whether to plant fallow sugar cane land in corn?
9 MR. NETTLETON: Object to the form.
10 BY THE WITNESS:
11 A. I don't understand the question really.
12 Let me see. Land would be planted to corn if the
13 owner of the land wanted it planted to corn.
14 BY MS. STINSON:
15 Q. Do you know what would affect his wanting to plant
16 it in corn or not, is that anything you looked at in your
17 economic analysis?
18 MR. NETTLETON: Object to the form.
19 BY THE WITNESS:
20 A. It probably came up but I don't recall exactly.
21 BY MS. STINSON:
22 Q. Do you know how much or what percentage of the land
23 planted in vegetables is owned by sugar cane producers?
24 A. Not off the top of my head, but I could figure it
25 out.
177
1 Q. Do you have the information that would allow you to
2 figure that out or is it contained in the report?
3 A. It may not be in the report but we do have the
4 property ownership records and so, for example, my
5 understanding is that U.S. Sugar -- or South Bay Growers is
6 a subsidiary of U.S. Sugar, and South Bay Growers grows
7 vegetables, so if you know how much land is owned by South
8 Bay Growers, there's a connection there between sugar cane
9 and vegetables.
10 Q. Is that property ownership information something
11 you have produced to us?
12 A. Yes.
13 Q. On page 6-1 you discuss the production of sod and
14 you have, in the last paragraph, some cost and profit
15 figures.
16 Do you have information on the price history of
17 sod, is that contained in the report?
18 A. I may not. I don't remember if we put it in the
19 report.
20 Q. Would that be in some information you have provided
21 to us?
22 A. Yes. We -- it probably is because there's two
23 sources, one is the information provided by the sod company
24 and the other is the information in the census publication,
25 a Florida agriculture census information which we provided
178
1 to you all.
2 Q. Is that the source of your information on sod
3 prices?
4 A. Yes.
5 There's also probably a spreadsheet that you all
6 have that calculates sod prices.
7 Q. Would that include assumptions about the price of
8 sod in the future and the cost of production of sod in the
9 future?
10 A. Would what include?
11 Q. The spreadsheet.
12 A. Yes, it includes our calculations.
13 In here we don't say what we used for the price of
14 sod (perusing)?
15 I don't see it there. I recall something like 7
16 cents a square foot but, you know, I'm willing to help you
17 out on where that came from.
18 Q. On page 7-1 you discuss the factors for measuring
19 economic contribution. Have you projected the change in
20 the number of firms or owners in the EAA by type that would
21 result from the economic impacts?
22 MR. SAXE: Object to the form.
23 MR. NETTLETON: Could you read back the
24 question, please.
25 (Whereupon, the pertinent portion of the Record was
179
1 read back by the Court Reporter.)
2 MS. STINSON: Let me scratch that one.
3 BY MS. STINSON:
4 Q. Have you projected the change in the number or type
5 of businesses, business firms in the EAA?
6 MR. SAXE: Object to the form. Is there more to
7 the question?
8 MS. STINSON: Not now.
9 BY THE WITNESS:
10 A. The number of business entities. You want to know
11 if we forecasted a change in the number of business
12 entities?
13 BY MS. STINSON:
14 Q. Right.
15 In the types you have forecasted, you have loss of
16 retail jobs. Did you determine whether there will be a
17 change in the number of types of businesses?
18 A. No, not that I recall.
19 Q. Have you projected, as a result of the impact, any
20 change in public facility and service costs?
21 MR. SAXE: Object to the form.
22 BY THE WITNESS:
23 A. You mean like change in the cost of running schools
24 and waste water treatment plants, things like that?
25 BY MS. STINSON:
180
1 Q. Correct.
2 A. No, we didn't look at the changes in the cost of
3 operating waste water treatment plants or public schools.
4 Q. Have you considered any change as a result of the
5 impact in property values for non-agricultural land?
6 A. Well, we looked at the change in property values
7 for agricultural land and mills and I believe -- that's
8 probably it. I mean in terms of the value of a business in
9 Belle Glade, no, we didn't look at that, you know, that
10 land that that business is on.
11 Q. You indicated a little bit ago that you used the, I
12 believe the area of Palm Beach County because that's what
13 you had RIMS multipliers for.
14 Is it possible to construct multipliers for the
15 region, the geographic region of the EAA?
16 MR. SAXE: Object to the form. I think you are
17 mischaracterizing the earlier testimony of the witness.
18 BY THE WITNESS:
19 A. You probably could theoretically and practically.
20 BY MS. STINSON:
21 Q. Let me back up. On page 7-3 you talk about job
22 loss and that they are measured in FTE units.
23 MR. BURGESS: What page is that, Counsel?
24 MS. STINSON: 7-3.
25 BY MS. STINSON:
181
1 Q. Have you made any estimate of how many jobs as
2 opposed to FTEs that would convert into?
3 MR. NETTLETON: Object to the form.
4 BY THE WITNESS:
5 A. FTEs, as you call it, stands for full-time
6 equivalent, so it is a real job. We didn't spend much time
7 on it but we attempted to convert that to both full-time
8 and part-time employees.
9 BY MS. STINSON:
10 Q. Did you do that? Is there a figure which would
11 include that?
12 A. Not in this report. I think -- let me see if I can
13 remember.
14 It would be in Chapter 11 if we did it. I know we
15 talked about it to the governing board, but this 1.5 that
16 we used as a factor is just an estimate, is an estimate.
17 Q. Did you do any analysis to arrive at that estimate?
18 A. Yes, we did an analysis.
19 Q. What did you do?
20 A. Well, in looking at, you know, overall, and talking
21 to people and looking at, you know, different pieces of
22 data, maybe at most perhaps 50 percent, you know, of the
23 jobs are part time but that's probably on the high side.
24 Q. Is --
25 A. (Continuing) So then you just figure out the factor
182
1 from there mathematically. You take the number of
2 full-time equivalent jobs and multiply it by the factor
3 that converts full-time equivalent jobs into full-time and
4 part-time equivalent jobs.
5 Q. Can you tell me specifically what data or
6 information you used to come up with that factor?
7 A. I don't remember exactly.
8 Q. On page 7-4 at the very bottom you indicate that 50
9 percent of the depreciation of mill equipment is an upper
10 bound I believe that you indicate that could need to be
11 replaced each year.
12 What is the basis for that figure?
13 A. That's, if I recall correctly, just an estimate.
14 I'm not sure what the basis of it was that we used for
15 that, if there is any basis at all.
16 Q. On page 7-5 you discuss the impact of long-term and
17 intermediate debt and discuss banks possibly foreclosing.
18 If a bank forecloses and the property remains in
19 the hands of the lender, the bank, what is your assumption
20 with regard to production?
21 A. Is that the bank --
22 MR. SAXE: Object to the form: What do you mean by
23 "with regard to production"?
24 MS. STINSON: Whether the land would remain in
25 production.
183
1 BY THE WITNESS:
2 A. The bank would rent -- I'm sorry, the bank would
3 hire a manager to keep it operating or would put the land
4 up for sale and sell it.
5 BY MS. STINSON:
6 Q. If they cannot sell it, is it your assumption that
7 they would then operate it, they would hire a manager and
8 keep the land in production?
9 A. If they could make any money doing that, they
10 would.
11 Q. Have you prepared any scenarios to look at the
12 impact if it is necessary to make larger STAs than the
13 35,000 acres currently assumed?
14 A. No, we only looked at a STA size of 35,000 acres,
15 no more, no less.
16 (Whereupon, a brief recess was taken.)
17 BY MS. STINSON:
18 Q. On page 8-7 --
19 A. I don't have 8-7. Oh, wait a minute, I'm sorry.
20 8-7.
21 Q. Found it?
22 A. Yes.
23 Q. The $358 million cost of the STAs is what year
24 dollars?
25 A. Current dollars I believe.
184
1 Q. "Current" being '92, at the time?
2 A. Yes, they're the estimates from the District as of
3 March '92, thereabouts.
4 Q. And are the District's estimates found in a table
5 or somewhere in your report?
6 A. On table 8-8 the "total" column, that's the
7 estimate of everything except the purchase price of the
8 land. So the purchase price of the land is 358 minus $242
9 million
10 Q. And what is the source of that, is that from the
11 SWIM Plan?
12 A. It is from the District. It was provided to us by
13 the District. And these numbers may show up in the SWIM
14 Plan. I'm not sure if they do or not.
15 Q. Do you know whether there are any firms located
16 within the EAA that are capable of doing the engineering,
17 design and construction management for the STAs?
18 A. No, I don't know of any in the EAA.
19 Q. Do you know whether there are any firms in the EAA
20 that are capable of doing the construction work required
21 for the STAs?
22 A. I don't recall. I knew it at one time, I don't
23 remember now.
24 Q. How did you know it? What information did you look
25 at?
185
1 A. The Dun & Bradstreet information on individual
2 businesses in the EAA.
3 Q. That would be your source of information for
4 determining whether there were any firms capable of
5 handling the construction work?
6 A. Yes. In the EAA.
7 Q. Right.
8 Do you know whether there are any workers in the
9 EAA that have the skills necessary for the skilled jobs on
10 the STA projects?
11 MR. SAXE: Objection. Asked and answered.
12 MR. NETTLETON: Same objection.
13 BY THE WITNESS:
14 A. Could you ask the question again.
15 BY MS. STINSON:
16 Q. On page 8-7 you indicate that about 257 of the jobs
17 require skilled workers and then you name them.
18 Do you know what number of those 257 jobs could be
19 filled by workers within the EAA?
20 A. No, not at this time.
21 Q. Did you at some time?
22 A. I may have, I don't recall.
23 Q. Do you have any information that would be a source
24 for an answer to that question?
25 A. If you knew -- when you know what kind of
186
1 businesses or what the exact businesses are in the EAA and
2 the kind of people that they hire, then you can get an idea
3 of whether or not any of those jobs that currently exist in
4 the EAA have the same -- are filled by people who could
5 also fill the jobs required to construct the STAs.
6 So you could know that from the business
7 information from Dun & Bradstreet, the phone directory,
8 that sort of thing, and the survey of businesses in the
9 EAA.
10 Q. That you did?
11 A. Yes.
12 Q. Did you look at what materials and equipment
13 necessary to construct the STAs could be purchased within
14 the EAA?
15 A. I don't believe we did.
16 Q. On page 8-8 you state that "It is expected that the
17 STAs will be financed with money generated within Florida."
18 What is the basis for that statement?
19 A. What is the basis for that statement?
20 Q. Correct.
21 A. In other words, the money that is used to
22 finance -- to pay for the STAs will come from residents and
23 businesses within the State of Florida.
24 Q. Why do you assume that?
25 A. Well, at the time, since we were looking at the
187
1 assessments and since the District, you know, there is a
2 revenue source from the District which is our property
3 taxes, and then you have maybe the state contributing, it
4 was just an expectation that the best expectation we had at
5 the time that most of the money would come from within
6 Florida, but we weren't saying that that was written in
7 stone or anything, we just had to make an assumption about
8 where the money was going to come from.
9 Q. So that statement is based on the assumption that
10 the money to finance the STAs would come from state
11 revenues, Water Management District, ad valorem taxes and
12 some kind of assessment on the agricultural interests, is
13 that --
14 A. And/or any of that, yes. A combination.
15 Q. What effect, if any, does this assumption have on
16 your analysis?
17 A. I don't really remember at this time.
18 Q. Well, as an economist, what effect could that have
19 or where would that fit into an economic impact analysis?
20 A. If you were doing an estimate of how being taxed
21 affects the economy, then you would want to make -- would
22 need to make an assumption of where the money came from.
23 We looked at growers, farm land in the EAA. You might also
24 want to look at the taxes paid by residents in Florida,
25 part of the taxes that would go toward part of the
188
1 construction of the STAs.
2 Q. The assessments that you evaluated were 10, 25 and
3 100, is that correct, dollars per acre?
4 A. Yes.
5 Q. Would the $100 per acre assessment cover the cost
6 of the STAs?
7 A. I don't know.
8 Q. Did you make any assumptions with regard to whether
9 any of those levels of assessments would cover the entire
10 cost of implementing the Marjorie Stoneman Douglas Act or
11 the Settlement Agreement?
12 A. No. We looked specifically -- the District asked
13 us to look at those assessment levels specifically on the
14 land in the Everglades -- in the regulated portion of the
15 Everglades agricultural area.
16 They did not ask us to look at the impact of taxes
17 or assessments paid by anyone outside of that area.
18 Q. You would agree, would you not, that the $25 an
19 acre assessment would not cover the costs of the STAs?
20 A. I really don't know. I do not know.
21 Q. Well, assume with me, if you will, that it would
22 not and that additional funds would be necessary to
23 construct the STAs. Would one source of those additional
24 funds be the Water Management District's ad valorem
25 taxation?
189
1 MR. SAXE: Object to the form.
2 MR. NETTLETON: Same objection.
3 BY THE WITNESS:
4 A. I suppose they could use the ad valorem property
5 tax base.
6 BY MS. STINSON:
7 Q. And that's, in fact, one of the sources that you
8 considered in your statement that it is expected STAs will
9 be financed with money generated within Florida; correct?
10 MR. SAXE: Object to the form.
11 BY THE WITNESS:
12 A. That's a possibility.
13 BY MS. STINSON:
14 Q. If there was an increase in ad valorem taxation to
15 finance the STAs that would be imposed upon owners within
16 the EAA as well as outside the EAA; correct?
17 MR. SAXE: Object to the form.
18 BY THE WITNESS:
19 A. Would you please repeat the question, I don't
20 understand it.
21 BY MS. STINSON:
22 Q. If one of the sources to finance the STA -- or
23 scratch that.
24 Assume that one of the sources to finance the STA
25 is ad valorem taxes of the Water Management District, that
190
1 tax is imposed upon the EAA property as well as property in
2 Dade, Broward and other counties within the Water
3 Management District; correct?
4 MR. SAXE: To form.
5 MR. NETTLETON: Object to the form.
6 BY THE WITNESS:
7 A. My understanding is that it is.
8 BY MS. STINSON:
9 Q. But you did not analyze the effect of an increase
10 in ad valorem taxation, possible increase on the EAA; is
11 that correct?
12 A. That's correct.
13 Q. Now, you indicated a minute ago that the District
14 wanted you to look at the effect on the regulated portion
15 of the EAA, correct, the effect of these 10, 25 and $100
16 per acre assessments?
17 A. Correct.
18 Q. But your report looks at the effect on the entire
19 geographic area of Palm Beach County and the regulated
20 portion of the EAA; correct?
21 A. And the area affected by the raw sugar mills.
22 Q. Nothing in your report or your analysis states how
23 many jobs and what monetary impact there will be only
24 within the regulated portion of the EAA; is that correct?
25 A. That's included in our numbers, but we did not
191
1 separate those out.
2 Q. On page 8-8 the third paragraph down, you indicate
3 that certain percentages of materials for the construction
4 of the STAs would be purchased within Palm Beach County.
5 What is the source for your estimates in that
6 paragraph?
7 A. Hazen and Sawyer has environmental and civil
8 engineers and structural engineers, so I assigned that,
9 made that assignment to one of our engineers to determine
10 as best as he could, based on the expertise of Hazen and
11 Sawyer and our knowledge of where you buy all this stuff at
12 about, from a reasonable, you know, what reasonably could
13 you expect to purchase within Florida and outside of
14 Florida, within Palm Beach County and outside of Palm Beach
15 County.
16 Q. What engineer?
17 A. Steve Ivanic.
18 Q. Do you know what he looked at to come up with these
19 percentages?
20 A. He looked at our own jobs that we do, our
21 construction management jobs, our design jobs.
22 He may have used any type of reference material
23 that engineers use, like R.S. Means 1992 and just the
24 experience of Hazen and Sawyer employees. The engineers at
25 Hazen and Sawyer.
192
1 We design civil engineering projects and
2 environmental engineering projects and we do the project
3 management, we do the job bids, so a lot of that is just
4 in-house information.
5 Q. Is there any kind of data, backup data that is in
6 the report or that you have provided to us that would
7 support these numbers?
8 A. There might be, in the file that had information on
9 who builds the STAs, you know, the number of employees that
10 build the STAs, that sort of thing, it might be in there.
11 Q. But you are not sure?
12 A. I'm not sure.
13 Q. You indicate that annual operation and maintenance
14 of the STAs will create 50 full-time equivalent jobs.
15 Do you make any assumption with regard to where
16 those people will live?
17 A. No. Not that I recall.
18 Q. Do you make any assumption with regard to where
19 the construction workers for the STAs will live?
20 A. Well, we say that it is expected that most jobs
21 will be filled by south Florida residents and also, if I
22 recall correctly, the District communicated to me that they
23 would require that the firms who design and construct the
24 project be located in the local area.
25 Q. Do you have any documentation to indicate that
193
1 they would require that?
2 A. I may have, I don't remember.
3 Q. If you did, what would it be?
4 A. I'm trying to remember. I'm trying to think
5 back.
6 It could be in a Telcom. I don't really remember
7 where it could be, to be honest with you.
8 Q. But the basis for your assumption is something
9 you were told by the District; is that correct?
10 A. Yes.
11 Q. Page 9-4, the paragraph, the next to the last
12 paragraph that begins "The highest net returns," you
13 indicate that one-half of the acreage in the final sugar
14 cane ratoon will be successively (sic) replanted to sugar
15 cane and the other half will be planted to rice.
16 What is the basis for that statement?
17 A. The proportion of the land in the last ratoon
18 that's successfully replanted to rice -- I mean to sugar
19 cane, in my best recollection, comes from the IFAS report
20 called Costs and Returns to Sugar Cane Production on Muck
21 Soils in the EAA. So the other half of the land in that
22 final ratoon would ordinarily be left fallow, but now that
23 we're looking at BMPs, one option is for rice to be grown
24 on that fallow land, so that is the basis for this
25 statement.
194
1 Q. Do you know whether there are any hindrances
2 within the federal rice program to the addition of acres to
3 be planted in rice in the EAA?
4 MR. NETTLETON: Object to the form.
5 BY MS. STINSON:
6 Q. Are there any barriers to the production of
7 rice?
8 MR. NETTLETON: Object to the form.
9 MR. SAXE: Object to the form.
10 BY THE WITNESS:
11 A. Could you be more specific?
12 BY MS. STINSON:
13 Q. Are you familiar with the federal policy with
14 regard to rice?
15 MR. NETTLETON: Object to the form.
16 MR. SAXE: Object to the form.
17 MR. NETTLETON: Is that the federal rice policy?
18 BY MS. STINSON:
19 Q. You can answer anyway.
20 A. Yes, I am familiar with the rice policy.
21 Q. Is there anything in that rice policy which would
22 affect a grower's ability to plant land in rice and sell it
23 of course, I mean anybody can plant it?
24 MR. NETTLETON: Object to the form.
25 MR. SAXE: Objection to form.
195
1 BY THE WITNESS:
2 A. Not that I recall. We definitely looked at that
3 issue and we didn't find any reason why the grower could
4 not join the rice program.
5 BY MS. STINSON:
6 Q. Did you look at what effect it would have on the
7 rice program if there were additional acres planted in
8 rice?
9 MR. SAXE: Objection to form.
10 BY THE WITNESS:
11 A. No, I didn't. We mentioned something about how it
12 would affect -- if all those acres that we look at actually
13 were planted in rice, we looked at well, how would that
14 affect the U.S. price of rice --
15 BY MS. STINSON:
16 Q. "You" is --
17 A. -- or the market price of rice, and that would have
18 an effect on how the sugar program operated.
19 Q. You did look at that?
20 A. We looked at -- I mean we looked at it but we
21 didn't use it in this report. In other words, we didn't
22 say that they couldn't grow it, grow the rice because of
23 anything that -- any changes to the sugar program. In
24 other words, the sugar program operates as it's always
25 operated.
196
1 Q. Rice program?
2 A. Rice program, excuse me.
3 Q. When you looked at it, did you reach any
4 conclusions about what effect there would be from planting
5 these acres in rice?
6 A. Could you restate the question, I don't understand
7 the question.
8 Q. The answer you just gave me said you looked at the
9 effect of rice, the price of rice if these acres in the EAA
10 were planted in rice; correct?
11 A. Yes.
12 Q. You looked at it. What conclusions did you draw?
13 A. I'm trying to recall.
14 I don't really recall at the moment what
15 conclusions we drew on that.
16 Q. Is there any information in your report or which
17 you have given me which would describe what you found or
18 what you concluded?
19 A. Yes. On page 9-7, third paragraph. It says: All
20 sugar cane farms are assumed to grow rice on 12-1/2 percent
21 of their gross farm acreage, this implies that if an
22 additional 58,000 acres of rice will be grown in the EAA,
23 U.S. rice supply will increase by 3 percent.
24 In reality not all farms may need to grow rice
25 because they may be able to meet the requirements of the
197
1 Act by implementing other types of BMPs. And there's
2 probably more somewhere else."
3 Q. That did not answer my question as to what effect
4 on the rice program there would be from planting additional
5 acres of rice in the EAA.
6 MR. SAXE: Objection to form, Counsel.
7 What do you mean "effect on the rice program"?
8 MS. STINSON: My question stands.
9 BY THE WITNESS:
10 A. My recollection is that we did not foresee any
11 change in the rice program due to these farmers growing
12 rice.
13 BY MS. STINSON:
14 Q. Other than the narrative which you read me from
15 9-7, is there anything in your report or that you have
16 provided which would support the answer you just gave me?
17 A. I would recommend reading page 9-7 through 9-9.
18 Q. Is there anything --
19 A. (Continuing) And reading the cite, footnote 49.
20 Q. In terms, however, of your analysis that led you to
21 the conclusion that there would be no effect, is there
22 anything which describes how you reached that conclusion?
23 You indicate on 9-7 that if these acres were
24 planted, rice supply would increase by 3 percent, but is
25 there anything that follows that through and says but this
198
1 3 percent would have no effect on the U.S. rice program or
2 rice policy?
3 MR. SAXE: Objection. Asked and answered.
4 BY THE WITNESS:
5 A. That's not -- we didn't write that in here, no.
6 BY MS. STINSON:
7 Q. Do you know whether there is sufficient milling
8 capacity within the area to handle 58,000 additional acres
9 of rice?
10 A. I don't know if there is or not.
11 Q. Did you look at that question?
12 A. We know it's an issue but we were not able to
13 answer that question.
14 Q. Table 9-1 sets forth the revenues and costs for
15 rice; correct?
16 MR. NETTLETON: I'm sorry, Counsel, what page?
17 MS. STINSON: It's table 9-1 right after page 9-10.
18 BY MS. STINSON:
19 Q. Is that correct?
20 A. Read that question again or what was the
21 question again.
22 (Whereupon, the pertinent portion of the Record was
23 read back by the Court Reporter.)
24 A. (Continuing) Yes, in 1992.
25 Q. The yield per harvested acre is from what source?
199
1 A. Jose Alvarez, IFAS, it was the Cost and Returns to
2 Rice Production in the EAA.
3 Q. In projecting the costs and revenues, I believe on
4 page 9-9 you indicate that you inflate the cost by 3.5
5 percent per year or over one year for 1994 projections.
6 How did you arrive at that figure, the 3.5?
7 A. I'll give you the best answer I can recall.
8 The 3.5 was the actual inflation in '83 and then
9 the 1.5 is the average inflation over the last ten years,
10 something like that.
11 Q. Is there any information, any disk or spreadsheet
12 that would set out your projections for rice production?
13 A. I would look at what we used for inflation for the
14 sugar cane cost numbers. I don't really recall anything
15 else.
16 Q. On page 9-10 you indicate that IFAS studies have
17 shown that, et cetera, the normal crop yield per acre can
18 be achieved with substantially less phosphorus applied.
19 A. Where are you reading from?
20 Q. Page 9-10 under BMPs for vegetables.
21 A. What line? Do you want to read it again.
22 Q. The seventh line down in the fertilization
23 practices.
24 A. Okay, I read the sentence I believe you read. What
25 was the question?
200
1 Q. The question is: Have you discussed with vegetable
2 growers whether they agree with that statement?
3 A. I don't recall.
4 Q. Do you know whether growers agree or disagree with
5 that statement?
6 A. I don't recall.
7 Q. On page 9-11, the paragraph that begins "Celery and
8 lettuce," next to the last paragraph.
9 A. Okay.
10 Q. You discuss the cumulative effect of the BMPs'
11 increasing yield risks. Did you factor yield risk into
12 your analysis?
13 A. You mean from the BMPs specifically?
14 Q. Right.
15 A. Obviously, since that's what we're talking about.
16 We considered yield risk and we took it very
17 seriously and we have designed the BMPs in this report that
18 we looked at such that you would put in enough effort to
19 minimize, if not completely eliminate, yield risk.
20 Q. How do you put in enough effort to minimize or
21 eliminate yield risk?
22 A. You have more effort put into managing water
23 tables.
24 Q. How is that reflected in your analysis?
25 A. Under our assumptions and our discussion of BMPs
201
1 and their costs toward the beginning of the chapter 9.
2 Q. Well, in the bottom line, what effect in your
3 calculations or economic analysis have you used to describe
4 the efforts that would be needed -- that needed to minimize
5 the yield risk?
6 MR. SAXE: Objection to form.
7 BY MS. STINSON:
8 Q. You say better management of water table. How does
9 that translate into your calculations?
10 A. It translates into the cost per acre to implement
11 BMPs.
12 Q. In what way? What, in labor or machinery, did you
13 increase --
14 A. Mostly in labor.
15 Q. Did you make a specific calculation which would
16 increase labor cost to better manage water tables?
17 A. Those would be in the estimates of the BMP costs.
18 Q. How did you come up with those figures?
19 Specifically how did you factor in minimization of yield
20 risk into your calculations?
21 A. Through the way in which the BMPs are implemented.
22 Q. That's a generalization. Tell me now specifically
23 in what way --
24 MR. SAXE: Objection to form.
25 BY MS. STINSON:
202
1 Q. -- BMPs are implemented?
2 MR. SAXE: Which BMPs are you talking about, the
3 example given by the deponent of water table
4 management?
5 BY THE WITNESS:
6 A. On page 9-5 through the top of 9-7 we talk about
7 the grower, growers would implement the BMPs and we took
8 very seriously the issue of yield risk from water table
9 management.
10 So in our conversations with Professor Del Botcher
11 we put in as much labor and materials and overhead as we
12 could to minimize yield risk as we saw -- as Del Botcher
13 saw it, using the best available information.
14 BY MS. STINSON:
15 Q. Can you tell me, though, if you were not taking so
16 seriously yield risks how the numbers would be different --
17 MR. NETTLETON: Object.
18 MR. SAXE: Object.
19 BY MS. STINSON:
20 Q. -- did you increase the labor costs that were given
21 to you somewhere by a factor; how did you reach the
22 numbers?
23 MR. NETTLETON: Objection to form.
24 MR. SAXE: Objection to form.
25 BY THE WITNESS:
203
1 A. We didn't specifically net out any cost within and
2 without minimizing yield risk. The whole point was to try
3 to minimize yield risk so we didn't look at it with and
4 without minimizing yield risk.
5 BY MS. STINSON:
6 Q. On page 9-12, the next to the last paragraph, about
7 the middle of the paragraph, you indicate an amount that
8 the sugar mill can afford to pay the growers. Have you
9 provided your calculations in which you arrived at that
10 figure?
11 MR. NETTLETON: Which figure are you referring to?
12 MS. STINSON: The figure indicated in that
13 paragraph of $18 per acre.
14 MR. NETTLETON: Object to the form.
15 BY THE WITNESS:
16 A. Ask the question again.
17 BY MS. STINSON:
18 Q. Have you provided to us, or is it in the report
19 somewhere, how that $18 is calculated?
20 A. Yes. Right after we say it, $18 an acre, it is
21 based on 1990 depreciation per ton of cane as reported by
22 USDA of 84 cents. This depreciation is multiplied by the
23 average yield in tons per gross acre in yield belt five
24 over the past 10 years of 21 to obtain the $18 per acre.
25 That's right in that same paragraph on page 9-12.
204
1 Q. In the last paragraph you indicated federal, state
2 and real estate taxes have not been deducted. The real
3 estate taxes are based on average profitability and that it
4 is assumed that taxes will adjust each year so that the
5 farm can pay its taxes and still remain in business.
6 Have you done calculations to determine exactly
7 what the relationship is between profitability and real
8 estate taxes?
9 A. Throughout -- since I've been a consultant.
10 Q. To lead you to the conclusion that you make in the
11 last paragraph on page 9-12, have you done such
12 calculations?
13 MR. NETTLETON: Object to the form.
14 BY THE WITNESS:
15 A. We may have done -- we may have calculated the
16 taxes every year. We probably did in the study.
17 BY MS. STINSON:
18 Q. Where would that calculation appear? And I was
19 talking just now about real estate taxes, not the federal
20 and state income taxes.
21 A. On table 4-6, after page 4-12, real estate taxes
22 are the second to the last line from the bottom.
23 Q. Is there a disk that you provided us with a
24 spreadsheet that would show actually how those figures were
25 calculated?
205
1 A. I don't remember.
2 Q. Can you tell us how those were calculated?
3 A. I'm trying to remember. The real estate taxes are
4 calculated as explained on page 4-10 underneath section
5 4.9, that whole paragraph. And so those are -- must be in
6 and probably are in and more than likely are in the
7 spreadsheets that we've given you.
8 Q. On page 9-14, the last paragraph, you refer to
9 making estimations using the RIMS II multipliers to
10 determine the indirect and induced economic impacts of
11 BMPs.
12 Can you tell me or is there something that will
13 tell me specifically which RIMS II multipliers were used?
14 MR. NETTLETON: Object to the form.
15 BY THE WITNESS:
16 A. The sweet corn production multipliers are on page
17 8-3 under vegetables, is the industry classification. The
18 rice multipliers are on page 19-15 under rice milling.
19 BY MS. STINSON:
20 Q. Page 9-16, you have a figure in the first paragraph
21 at the end of $492,000 lost real estate tax revenue.
22 Is there something that will show me how you
23 arrived at that figure?
24 A. Yes.
25 Q. What is that?
206
1 A. Turn the page to table 9-5. There's a spreadsheet
2 that has -- one spreadsheet has the summary tables for each
3 of the aspects of the Act and Settlement Agreement that we
4 looked at.
5 If you look under, on table 9-5, if you look under
6 the total change in property taxes, in 1994 you'll see
7 $492,000. That cell should tell you how we calculated that
8 number. Or at least the cells above it. Well, the whole
9 thing, that cell and whatever cell it leads you to will
10 tell you how we calculated that number.
11 Q. I'm sorry, I don't know what you mean by "cell"?
12 A. Okay. The spreadsheet that corresponds to this
13 table.
14 Q. Right?
15 A. Each of these numbers are in a cell.
16 Q. Okay. Something on a disk you have provided to us?
17 A. Yes. Yes. And that cell has an equation in it,
18 for the $492,000 it has an equation. That equation also
19 refers to other cells in the spreadsheet, so you go to
20 those cells. And those cells have equations that indicate
21 other numbers. And so you can figure out how we calculated
22 that cell based on what is in it.
23 MR. SAXE: How far are you going to go?
24 MS. STINSON: You mean before lunch?
25 MR. SAXE: Before lunch.
207
1 MS. STINSON: This much (indicating). In fact,
2 this much. It's time for lunch.
3 (Whereupon, at 12:10 p.m. a luncheon recess was
4 taken, after which the proceedings resumed.)
5 o0o
6
7 A F T E R N O O N S E S S I O N
8 1:20 o'clock p.m.
9 GRACE JOHNS, Ph.D.
10 was called as a witness and, having been previously duly
11 sworn, was examined and testified further as follows:
12 DIRECT EXAMINATION
13 BY MS. STINSON: (Continued)
14 Q. Let me cover a couple of things I made notes of
15 last night before I forget.
16 You indicated that you had worked on, I think,
17 three separate solid waste proposals in south Florida,
18 costed them out or something, is that correct?, in your own
19 work other than on this project, you worked on some
20 projects for solid waste facilities or solid waste funding
21 mechanisms?
22 A. I can clarify that for you.
23 Q. Okay, please do.
24 A. I worked on one study for the Solid Waste Authority
25 of Palm Beach County and I looked at the financial and
208
1 economic feasibility of implementing volume-based systems
2 to finance solid waste management services in Palm Beach
3 County.
4 Q. When was that work?
5 A. That was, I think began in about November of '91
6 and ended in February of '92.
7 Q. Was there a report you submitted to the Solid Waste
8 Authority?
9 A. Yes.
10 Q. Were there similar projects to different entities?
11 A. There was a project for Broward County that looked
12 at the feasibility of re-using the waste water generated in
13 Broward County.
14 Q. And tell me when that was.
15 A. That was July of '91, thereabouts, to about October
16 of '91, thereabouts.
17 Q. And again, did you submit some kind of report to
18 Broward County?
19 A. Yes.
20 Q. And was there another project you worked on
21 involving solid waste, for a municipality perhaps?
22 A. In south Florida you are referring to; right?
23 Q. Yes.
24 A. There was a re-use feasibility study we did for
25 south Broward County, water re-use.
209
1 Q. And when was that?
2 A. About October of 1990 to about March of 1991.
3 Q. And what entity did you do that for?
4 A. City of Hollywood.
5 Q. Did you submit a report?
6 A. Yes.
7 Q. Since you began work on the project we've been
8 discussing here involving the Everglades in, what, January
9 of 1992, is that approximately correct?
10 A. We began work, it was either late January or early
11 February of '92.
12 Q. Have you worked on any other projects?
13 A. Yes.
14 Q. What other projects?
15 A. Well, let me just tell you, I recently put together a
16 presentation for the State of South Carolina. They are
17 educating their commissioners and solid waste staff in all
18 of South Carolina regarding managing solid waste and on, I
19 believe it's April 9, I'm to go on television, certain
20 educational channel, to talk about financing solid waste
21 programs, .where it will be, I'm told it will be watched by
22 about 500 people in South Carolina.
23 Q. And how long have you worked on that?
24 A. I think I started about a week ago, a week or so
25 ago on that one. I just finished developing the overheads
210
1 that will be used for the presentation.
2 Q. Other than that, have you worked on any other
3 projects since you began or since January or February of
4 '92?
5 A. I looked at a report that we did through our
6 Raleigh office having to do with the most financially
7 desirable ways of managing solid waste at the Fort Bragg
8 military installation.
9 Q. When did you --
10 A. (Continuing) I reviewed it and I did some of the
11 analysis work.
12 Q. When did you do that?
13 A. In about November, I'm guessing here, thereabouts.
14 Q. Can you approximate for me how much time you spent
15 doing that?
16 A. Not too much, a couple days. Maybe three days.
17 Q. Anything else?
18 A. For the City of North Miami Beach, I calculated the
19 assessments to charge to houses, to homes, owners in a
20 residential neighborhood in North Miami Beach.
21 Q. Assessments for what?
22 A. Neighborhood improvements.
23 Q. And when did you do that?
24 A. About October, November, something like that.
25 Q. How much time did you spend on that?
211
1 A. Probably not even a week.
2 Maybe a week and a half, something like that.
3 Q. Anything else?
4 A. At the moment, I don't recall if -- there has been
5 no significant project other than this one that I can
6 recall.
7 Q. Have you or has Hazen and Sawyer been asked to look
8 at, in any way, how the SWIM Plan or the Marjorie Stoneman
9 Douglas Act and Settlement Agreement could or should be
10 funded?
11 A. No, we've not been asked to do that.
12 Q. Do you know whether anyone has been asked to do
13 that?
14 A. I don't know.
15 Q. You are currently working on a 20-year analysis;
16 correct?
17 A. Yes.
18 Q. And you began work on that approximately January
19 '93; is that correct?
20 A. Yes. Thereabouts.
21 Q. Well, have you submitted any reports with your
22 20-year analysis?
23 A. No.
24 Q. Have you submitted any drafts?
25 A. No.
212
1 Q. Do you have a contract for the 20-year analysis?
2 A. Yes, I'm pretty sure we've gotten that by now.
3 Q. Do you know when you got that?
4 A. Not exactly, no.
5 Q. I asked because I don't believe it's in the
6 documents you produced to me. Did you get it within the
7 last couple of weeks, to your knowledge?
8 A. I don't remember when I received it. If I received
9 it, it would have been in the files that we gave you, I
10 believe, unless it only got put in our bookkeeping files,
11 so you may or may not have that contract, and I don't
12 remember when we received it exactly. It was sometime
13 after January, if I recall correctly.
14 Q. Under that contract can you describe for me what
15 the scope of work is?
16 A. It's to conduct a 20-year evaluation looking at
17 soil subsidence and U.S. government policy with respect to
18 sugar cane -- sugar, raw sugar. And then another part of
19 that contract was meetings with economists which we
20 conducted January and February? Yes, February.
21 Q. What is the total dollar amount for the contract,
22 the 20-year analysis?
23 A. I'm trying to remember.
24 Q. You can give me a ballpark.
25 A. It's funny, I can't remember. It's about 25 maybe
213
1 at the most. I can't remember what it is.
2 Q. Who is working on that besides yourself?
3 A. I'm basically the only one working on it. I get
4 maybe a little bit of advice and perhaps I ask some
5 questions to Chris Meline.
6 Q. Do you have any subcontractors?
7 A. No.
8 Q. In the contract or in your scope of work are the
9 issues of soil subsidence and U.S. policies specifically
10 enumerated?
11 A. Could you repeat the question again, I'm sorry.
12 Q. In your scope of work for the 20-year analysis, are
13 the two issues of soil subsidence and U.S. policy
14 specifically set forth?
15 A. Yes.
16 Q. Are there any other issues such as those which are
17 specifically set forth for you to consider in your 20-year
18 analysis?
19 A. There might be. I don't remember. Those were the
20 two primary things.
21 (Whereupon, a brief recess was taken.)
22 BY MS. STINSON:
23 Q. Since you began work on your 20-year analysis, just
24 procedurally, what have you done?
25 A. I evaluated the information in the most recent USDA
214
1 sugar and sweetener outlook publication, I believe it was
2 the June or July of '92.
3 Q. Is that something that you had not had a chance to
4 evaluate in your 10-year report?
5 A. Yes.
6 Q. What else?
7 A. I began looking at the issue of soil subsidence and
8 looking, reexamining NAFTA, GATT and U.S. sugar policy.
9 Q. Let's start with soil subsidence. Why was the
10 issue of soil subsidence particularly earmarked for
11 re-analysis in your 20-year work?
12 A. Well, not necessarily re-analysis but in the
13 10-year evaluation we felt it was, given the available
14 information, that land would remain in production. In
15 other words, land would not go out of production due to
16 soil subsidence, in other words, the soil being too thin.
17 So we figured we were pretty safe the first 10
18 years. When we go to look at the second 10-year period,
19 that was an issue, given the available information. So
20 we're looking at that more closely to see what available
21 information is out there and how can we use that in our
22 evaluation.
23 Q. And similarly, the question of U.S. policy and
24 NAFTA and GATT, why was that earmarked for a closer look in
25 your 20-year study?
215
1 MR. NETTLETON: Object to the form.
2 BY THE WITNESS:
3 A. NAFTA and GATT are pretty dynamic, they haven't
4 been passed yet. So we were going to re-look at it if
5 something substantive had come from the NAFTA and GATT
6 negotiations, and any changes in U.S. price policy that
7 might have occurred between the time we did the report and
8 the present.
9 BY MS. STINSON:
10 Q. I'll come back to those.
11 Were those two issues, soil subsidence and U.S.
12 policy, issues that you had identified that needed closer
13 scrutiny or that the District had asked you to take a look
14 at?
15 A. I had identified, if I recall correctly, I had
16 identified those.
17 Q. Let me show you a document and ask whether that
18 document reflects what your current scope of work is under
19 your 20-year contract.
20 A. Some of these do reflect what we do, had intended
21 to do under the contract that we're discussing, the 20-year
22 contract.
23 Q. Some but not all?
24 A. Yes.
25 Q. What are you not doing under your 20-year contract?
216
1 A. Whichever one does not have the C-4157 underneath
2 it. So the issue number one, re-visit with model farm
3 sizes, we would not do that under this contract, but some
4 of it we did do. Like we did check out the USDA data on
5 economies of size.
6 On 2.1.3 where it says "Revenues and costs for
7 vegetables - contact E. Wine regarding that," doesn't have
8 a C-4157 next to it, but we did contact her.
9 2.1.6, U.S. price policy, it says "Likely scenarios
10 of raw sugar prices over next 20 years." That one doesn't
11 have C-4157 next to it but we will be looking at that.
12 2.1.7, economies of size - re-visit cost
13 differences among farm sizes using possible available new
14 data from IFAS; we did do that.
15 2.1.8, converting FTEs to people or comparing FTEs
16 to current FTEs. That doesn't have a C-4157 next to it and
17 we have not looked at that.
18 Number 4, prepare BMP economic projections.
19 4.1, re-visit adoption of rice production in yield
20 belts one and two. We haven't done that yet. It doesn't
21 have C-4157 next to it and we haven't looked at that.
22 4.2, re-visit need to update BMP costs. That does
23 not have a C-4157 next to it and we have not looked at
24 that.
25 Number 9, present study results to professors at
217
1 University of Florida Food and Resource Economics
2 Department. That does not have a C-4157 next to it and we
3 are not doing that.
4 11, presentation of response to Florida Sugar
5 League comments at governing board workshop. That does not
6 have a C-4157 next to it and we are not doing that, at
7 least under this contract.
8 And then 12, governing board workshop presentation
9 of results of 20-year forecast. That does not have a
10 C-4157 and we are not doing that under this contract.
11 MS. STINSON: Let's have this marked as an exhibit.
12 (Whereupon, Johns' Exhibit No. 16 was marked for
13 identification by the Court Reporter.)
14 BY MS. STINSON:
15 Q. On the last one you indicated "Governing board
16 workshop presentation of results."
17 You are not doing that under this contract; is that
18 correct?
19 A. That's correct.
20 Q. You don't plan to give the results of your 20-year
21 analysis to the governing board?
22 A. Not at the moment.
23 Q. You say that as though it may actually happen.
24 A. In other words, we don't have a contract for it.
25 I'm referring to what is under the contract right now and
218
1 that's not under the contract right now.
2 Q. Are there things, items of work which are not on
3 Exhibit 16 but which you are doing under the 20-year
4 contract?
5 A. Well, we're -- you know that amended contract, this
6 actually is being amended and under that there is an item
7 of presentation of the results but I don't believe it says
8 specifically who we would be presenting the results to.
9 Q. So the Exhibit 16, which is a memo from you to the
10 District on January 8, resulted in an actual contract;
11 correct?
12 A. Yes.
13 Q. And then subsequently that contract has been
14 amended?
15 A. Yes.
16 Q. And what did the amendment change?
17 MR. NETTLETON: Object to the form.
18 BY MS. STINSON:
19 Q. Change, delete, add to from the 20-year?
20 A. What we discussed yesterday, the modeling, making
21 the model easier to update and change around.
22 Q. Is there anything else in the amendment?
23 A. That and this meeting thing, the meeting, budget
24 set aside to present the results.
25 Q. Anything else?
219
1 A. Oh, and a $100 per acre assessment.
2 Q. Well, on Exhibit 16 you have an item, prepare
3 assessment economic projections for a $10, 25 and $100
4 assessment; but you are telling me under the 20-year
5 contract you weren't looking at all three of those but then
6 it's been amended?
7 A. When we had that meeting, we had decided at that
8 time just to do the 10 and the 25 and then we added in the
9 budget to do the hundred under the amendment.
10 Q. When you say you "had that meeting," did you have a
11 meeting on or about or shortly before January 8, the date
12 of Exhibit 16?
13 A. Yes.
14 Q. And this exhibit is the result of that meeting; is
15 that correct?
16 A. I had -- I had prepared that for the meeting.
17 Q. I see.
18 When was it determined to add back in the look at
19 the hundred dollar assessment.
20 A. Roughly a month ago.
21 Q. Who told you to add it back in or did you ask that
22 it be added back in?
23 A. If I remember correctly, I was asked to add it back
24 in.
25 Q. By whom?
220
1 A. Sally Kennedy.
2 Q. Do you know, did she give you a reason?
3 A. No.
4 Q. Did you discuss with her why she wanted it back in?
5 A. No.
6 Q. When it was not funded as part of the 20-year
7 contract, did you discuss or did she tell you why she
8 didn't want to put it in?
9 A. No.
10 We discussed, it might have been --
11 I'm trying to recall from the meeting. It was a
12 matter of the budget limitations in terms of discussing
13 what we wanted to do versus the budget that we had, that
14 might have had something to do with it.
15 Q. Other than what we're calling the 20-year contract
16 and the amendment to the 20-year contract, do you or Hazen
17 and Sawyer have any active contracts with the South Florida
18 Water Management District?
19 A. Yes.
20 Q. What?
21 A. The contract to provide this deposition, to show up
22 for this deposition and any litigation support.
23 Q. When did you enter into that contract?
24 A. I'm guessing around October.
25 Q. Any other contracts?
221
1 A. No. That I have or that Hazen and Sawyer has?
2 Q. Both.
3 A. Hazen and Sawyer has a contract, if I'm remembering
4 as best as I can, and I haven't been updated on this, but
5 we do have a contract with the District on an unrelated --
6 what I think is an unrelated matter.
7 Q. What is that?
8 A. It has to do with the Okeechobee field pumping
9 station. I'm not familiar with the project.
10 Q. Is it an engineering type contract?
11 A. Yes.
12 Q. The items with C-4157 generally on this, on Exhibit
13 16, are ones you are doing; is that correct?
14 A. May I look at it again just to make sure?
15 Q. (Handing.)
16 MR. SAXE: I'm going to object on asked and
17 answered grounds, I think you asked that question and
18 then the deponent went through item by item and
19 specified.
20 BY THE WITNESS:
21 A. That's about right.
22 BY MS. STINSON:
23 Q. You gave me some exceptions when you were going
24 through, but as a general rule --
25 A. Yes.
222
1 Q. -- you are doing this, the C-4157 items?
2 A. At this time, yes.
3 Q. As a general matter, are you beginning with your
4 conclusions in the 10-year study and just carrying them
5 forward or going another 20 years out -- I mean 10 years
6 out, or are you starting from scratch and doing a 20-year
7 analysis?
8 A. We're re-evaluating some of the assumptions in the
9 10-year based on additional information that we received
10 after completing the contract completion report.
11 But basically it's an extension of the 10-year to
12 the 20-year except if we find anything, any new information
13 that would cause us to change the first 10 years.
14 Q. Do you have a target contract completion date?
15 A. It's -- I believe it's the end of April.
16 Q. Is there a date by which you are supposed to submit
17 a draft report?
18 A. From my understanding, it would be the middle of
19 the month. Middle of April.
20 Q. Are these dates an extension of what was originally
21 agreed to?
22 A. Yes.
23 Q. What was the original date?
24 A. The contract, the report would be produced by the
25 end of March.
223
1 Q. With a draft March 15?
2 A. Yes.
3 Q. Did you request an extension?
4 A. Well, when Sandy -- when Sally called me and wanted
5 all this added to the contract, then, yes, I asked for a
6 contract extension.
7 Q. Is that contract extension part of the amendment?
8 A. Yes, as far as I know.
9 Q. During the course of your work on the 20-year
10 study, have you met with economists retained by the Justice
11 Department?
12 A. Yes.
13 Q. With whom have you met?
14 A. Lonnie Jones, Ron Lacewell and Bill Boggess.
15 Q. In one meeting, or separately?
16 A. One meeting.
17 Q. When did you meet with them?
18 A. Early March, thereabouts.
19 Q. What was the purpose of that meeting?
20 A. They wanted, they were interested in what I was
21 doing for the 20-year evaluation, what assumptions I was
22 making and, you know, the data that I was using.
23 Q. Did you contact them or they contacted you?
24 A. They contacted me.
25 Q. Did you share with them the data and assumptions
224
1 you were using?
2 A. yes, I showed them what I was using, what I was
3 evaluating.
4 Q. Did you provide them with copies of reports or
5 data?
6 A. I don't think so. I doubt it.
7 Q. Did they provide any suggestions or comments on the
8 work you were doing?
9 A. Yes. They gave me their impressions and how they
10 would do it, that sort of thing.
11 Q. Are you providing two economic impact scenarios
12 which indicate the range of likely impacts?
13 A. Yes.
14 Q. What are those two scenarios?
15 A. I haven't finalized them yet.
16 Q. Tell me generally or as specifically as you can to
17 this point what they are and what would they indicate.
18 A. The first would be the scenarios regarding soil
19 subsidence, so we'll do two scenarios with respect to how
20 long can you continue to farm -- excuse me, at what -- what
21 is the minimum soil subsidence level or thickness that you
22 can farm on.
23 Q. For each type of crop?
24 A. Yes. There would be two scenarios. So there's a
25 debate about whether, you know, you can farm on a certain
225
1 thickness of soil, organic soil, so we'll do a range on
2 that.
3 Q. So you'd do like an 8-inch and a 12-inch or
4 something on that order?
5 A. Yes.
6 Q. Do you know at this point what the two depths of
7 soil will be that you will use?
8 A. No, I haven't finalized it.
9 Q. What is your best estimate at this point as to what
10 those numbers will be or what those numbers will be close
11 to?
12 A. It will be in the range of under a foot.
13 Q. Both numbers?
14 A. Maybe. I don't know for sure.
15 Q. You have prepared, have you not, already some
16 spreadsheets regarding different levels of soil subsidence
17 and the effect?
18 A. Yes.
19 Q. What assumptions have you plugged into those
20 spreadsheets?
21 A. The rate at which the soil subsides at different
22 water table levels, the rate of subsidence by crop, the
23 average depth or the average thickness of the soil in each
24 part of the EAA.
25 Q. Meaning each yield belt or is it divided some other
226
1 way?
2 A. Well, at this point it hasn't been divided into
3 yield belts but they sort of match the yield belts so there
4 are certain sections of the EAA that have been identified
5 as an area that has a very -- a certain depth -- certain
6 thickness, a certain thickness.
7 Q. Does the document I'm showing you reflect those
8 spreadsheets regarding soil subsidence?
9 A. Yes.
10 MS. STINSON: Let's have that marked as 17.
11 (Whereupon, Johns' Exhibit No. 17 was marked for
12 identification by the Court Reporter.)
13 MR. NETTLETON: For the record, I notice there's
14 some handwriting on Exhibit No. 17. Have we identified
15 that for the record?
16 MS. STINSON: Sure, I'm not finished with that,
17 I'll get back to that.
18 BY MS. STINSON:
19 Q. Other than arriving at a minimum depth which can be
20 farmed for a particular crop, will you be considering
21 differences in yield or cost of production as affected by
22 soil depth?
23 A. Yes.
24 Q. Do you have any data on that subject?
25 A. A little bit but not a whole lot.
227
1 Q. What do you have on that subject?
2 A. We just have information on what you would have to
3 do as the soil got thinner.
4 Q. From whom did you get that information?
5 A. George Snyder at IFAS.
6 A. May I say something?
7 Q. Sure.
8 A. This isn't final or anything (indicating Exhibit
9 17).
10 Q. Okay.
11 I'll ask you some more questions about that.
12 The document that I'm showing you now, does that
13 contain your notes of the information provided to you by
14 George Snyder on soil subsidence?
15 A. These are my notes. I'm trying to figure out if
16 they represent the same thing.
17 What was the question? Did you ask me a question?
18 Q. Yes. Do those notes represent the information you
19 obtained from George Snyder on soil subsidence?
20 A. Okay, these notes (indicating) represent a meeting
21 I had with him, these two pages. These are my notes taken
22 from the reports that I used.
23 Q. On soil subsidence?
24 A. Yes.
25 MS. STINSON: Let's mark them 18-A and B.
228
1 (Whereupon, Johns' Exhibit No. 18-A was marked for
2 identification by the Court Reporter.)
3 (Whereupon, Johns' Exhibit No. 18-B was marked for
4 identification by the Court Reporter.)
5 BY MS. STINSON:
6 Q. For the record, is it correct that 18-A is your
7 notes of the meeting and 18-B is your notes from looking at
8 the literature, the reports?
9 A. Yes.
10 Q. Is there any other information that you have
11 regarding soil subsidence other than, well, your meeting
12 with George Snyder and the reports you've reviewed
13 reflected in Exhibit 18-B?
14 A. I don't understand the question.
15 Q. What sources of information are you using to look
16 at the effect of soil subsidence?
17 A. The 1988 Soil Subsidence Study and the report by
18 George Snyder.
19 Q. Are those two different things?
20 A. Yes.
21 And, let's see, there's some other reports.
22 Subsidence Related to Land Use in the EAA, 1979, by
23 Professor Shih at IFAS, and the conversation with him,
24 George, and to the best of my knowledge, that's all of it.
25 Q. On Exhibit 17 can you just explain to me what these
229
1 tables represent?
2 A. The first table is called the EAA rate of soil
3 subsidence and it indicates the rate of subsidence in
4 inches per year for three water table levels, 1 foot, 2
5 feet, 3 feet, and for each type of crop, sugar cane,
6 vegetables and sod.
7 Q. Are those numbers directly out of some report or
8 are those numbers that you've calculated or gotten from
9 discussions?
10 A. They came from reports.
11 Q. From the reports you just mentioned?
12 A. Yes.
13 Q. What is the next table?
14 A. The next table indicates the minimum depth to water
15 table found from maximum yields and quality in inches and
16 it indicates for each type of crop the water, the minimum
17 water table needed for maximum yields and quality.
18 Q. And from where is that information?
19 A. Those numbers were inferred from the reports.
20 Q. Those same reports?
21 A. Yes.
22 Q. You say "inferred." Is it --
23 A. I took them out of the reports.
24 Q. Directly?
25 A. Directly. As directly as I could.
230
1 The next table is the percent of soil in each yield
2 belt by soil type and the typical soil depth in inches for
3 each type of soil.
4 Now, the typical soil depth in inches comes from
5 the Palm Beach County Subsidence Study. The percent of
6 soil in each yield belt by soil type, those numbers are
7 placeholders, those haven't been calculated yet, the
8 numbers that you see in there.
9 Q. How are you going to calculate those?
10 A. We intend to calculate those with the map in the
11 soil subsidence study.
12 Q. And just overlay that with the yield belts
13 essentially?
14 A. Possibly.
15 Q. What other way would you do that?
16 A. There are other ways you could do it but I haven't
17 finalized the best way to do it. I don't know all the
18 different ways you might be able to do it.
19 The next table is land leaves production when depth
20 equals big D. Those numbers in there. And that's the
21 depth for each type of crop. Those numbers were not taken
22 from anywhere. Those are placeholders. Those have to be
23 filled in.
24 Q. That's where you are going to have a range?
25 A. Yes.
231
1 Q. Are you seeking additional information to help you
2 decide what to fill in for that range?
3 A. We have actually sought information to help us
4 identify the range. Now whether or not we seek more
5 information, I don't know yet.
6 Q. You have sought. Have you received information you
7 have sought?
8 A. Yes. Yes. I haven't looked at it at all.
9 Q. What is that information?
10 A. Well, it's the experiences of George Snyder, you
11 know, his opinion and the opinion of Frank Coale and that's
12 all I can recall at the moment.
13 Q. Has George Snyder given you an opinion as to at
14 what depth soil would leave production, I mean land would
15 leave production?
16 A. Can I look at this one?
17 Q. Sure.
18 A. Well, he thinks that it won't -- you won't be able
19 to grow under 6 inches, if I remember correctly.
20 Q. For what crop is that?
21 A. Sugar cane.
22 Q. Does he have opinions for other crops?
23 A. No.
24 For the vegetables, we'll have to look into that
25 some more.
232
1 Q. How are you going to look into that?
2 A. Talk to different agronomists in the EAA, see what
3 their opinions are. As far as we can tell, there's no
4 study that will tell you exactly how you grow sugar cane or
5 vegetables or sod when you've only got -- when you've got,
6 you know, 10 inches of soil.
7 So it's a matter of trying to get an opinion from,
8 you know, agronomists in the area.
9 Q. Have you identified agronomists you are going to
10 talk to?
11 A. Well, I can think of Tom Scheuneman over at IFAS.
12 Q. Anyone else?
13 A. That's all I can think of at the moment.
14 Q. Is there any additional information which you
15 intend to use for your range at which sugar cane cannot be
16 produced other than George Snyder's opinion of 6 inches?
17 A. I don't know at this time.
18 Q. Is there anybody in particular you intend to seek
19 advice from on that issue?
20 A. No, not at the moment.
21 Q. You mentioned you sought an opinion from Frank
22 Coale. Who is he?
23 A. Yes.
24 He is, if I recall correctly, a soil scientist at
25 IFAS. Or an agronomist. He might be an agronomist.
233
1 Q. But he's at IFAS?
2 A. Yes.
3 Q. Did he have any opinion as to what depth was
4 necessary to grow various crops?
5 A. I don't remember.
6 Q. Would you have notes of your conversation with him
7 anywhere?
8 A. Yes. We produced them for you.
9 Q. Did you meet with him or you talked to him on the
10 phone?
11 A. I talked to him on the phone.
12 Q. Did you speak with Tony Shih --
13 A. Shih.
14 Q. -- about the issue of soil subsidence?
15 A. Yes.
16 Q. Other than reviewing his papers, have you discussed
17 with him his opinion as to what depth is necessary to grow
18 sugar or vegetable crops?
19 A. I don't remember if I did or not but I haven't
20 received any of his opinion except for what was in his
21 reports.
22 Q. Have you requested him to send you something?
23 A. He sent us some reports which we produced for you.
24 Q. But other than that, I thought you said you hadn't
25 received his opinion, is that --
234
1 A. Exactly. I didn't ask him his opinion over the
2 phone. I don't remember asking. I might have, but as far
3 as I remember, I don't have an opinion from him.
4 Q. Did you speak with a David Legg about the issue of
5 soil subsidence?
6 A. Yes.
7 Q. Did he provide you any opinions with respect to the
8 depth necessary?
9 A. I don't remember.
10 Q. Did he provide you any opinions with respect to the
11 effect on cost of production or yield due to depth of soil?
12 A. I don't remember the conversation.
13 Q. Is what I'm showing you a record, notes of your
14 conversation with him?
15 A. Yes, this somewhat reflects, as much as I can read
16 of it, because it's cut off.
17 Q. We got it from you.
18 A. This is what it looked like when you got it --
19 Q. Yes.
20 A. Oh. Ours looks like the whole thing.
21 Q. Right. I figured it's the copy person.
22 A. Yes, these are notes that I wrote down as I was
23 talking to him.
24 Q. Does that refresh your recollection as to what you
25 talked about?
235
1 A. I don't recall the entire conversation. The only
2 way I recall it at all is because I'm looking at the record
3 of telephone conversation and these are the notes that I
4 wrote down.
5 Q. Interpret your notes for me, if you will. Tell me
6 what they reflect you talked about.
7 A. Well, I must have asked him is 6 inches economical,
8 can you economically grow in 6 inches.
9 Apparently, maybe he replied at 6 inches you can
10 still grow cane but yields would fall off and management
11 problems would increase.
12 But from his conversation, there was nothing there
13 that we could use, and, if so, and if I did decide to use
14 it, I'd call him back and confirm any of these notes. But
15 after the conversation with him, I didn't feel like I knew
16 any more than before I had the conversation.
17 Q. I think we only got through the first page of
18 Exhibit 17. Let's go back to Exhibit 17.
19 A. Now, each of the tables represents a crop. Sugar
20 cane is one, celery is another, lettuce is another table,
21 sweet corn is another table and sod is another table. So
22 I'll just go over the one sugar cane table and the rest of
23 them are similar except they apply to celery. If you have
24 any questions, fine.
25 Sugar cane, we're going to say that the water table
236
1 is 18 inches and there are four main types of soil in the
2 EAA that were classified in 1988, so that's what each of
3 the four columns represent is a soil type, Tory, Pahokee,
4 Lauderhill and Dania. These numbers in each cell are the
5 thickness of the organic soil.
6 Q. Currently?
7 A. In 1988. Well, the first line would be in 1988.
8 Q. Okay. Oh. Do you have the dates written down?
9 A. Yes. That's year, is the second column.
10 Q. I see. Okay.
11 A. So we take from the first page whatever the data
12 that we have to estimate the rate of soil subsidence. So
13 if you look at the first page where it says "EAA rate of
14 soil subsidence," if you look at 18 inches, would be
15 between 1 inch and 2 inches, then the rate of subsidence
16 is, I extrapolated the number between .46 and .98.
17 Q. Just on a straight line?
18 A. Yes.
19 And then subtracted off those inches each year from
20 this until it gets to the point, if the water table gets
21 even shallower the rate changes. But basically we just
22 subtract off the rate of soil subsidence and what's in each
23 cell is the thickness of the soil in that area, so it goes
24 from 1988 to 2013.
25 Q. Okay.
237
1 A. Then the table below the sugar cane table on this
2 page, it's called soil subsidence study, soil type in 1988.
3 So in 1988 it shows, for each of the different types of
4 muck soil, the acres that represent -- that are that type
5 of soil and the percent of total acres that are that type
6 of soil.
7 Q. And for each it would be for that crop, so page 2
8 you are looking at is sugar, right, is that --
9 A. Well, it's the same. It doesn't matter what crop
10 it's in, it's the total amount of soil of that type.
11 So each of these tables underneath the big table,
12 these little tables underneath the big table are the same,
13 they're identical from one page to the next; okay.
14 Q. Do we know how much sugar cane is grown in each
15 type of soil?
16 A. No, not at this time.
17 Q. Is that information that you need to do your
18 analysis?
19 A. Yes.
20 Q. You have not yet obtained that?
21 A. We have not yet calculated it. We have the
22 information.
23 Q. That information, the source of that information
24 being what?
25 A. The soil subsidence study, the map, and the Palm
238
1 Beach County property appraiser's records.
2 Q. The ownership?
3 A. Ownership, yes. The yield belt.
4 Okay. There's a table in the report that tells you
5 how much acreage of sugar cane is in each yield belt. And
6 we also have the map of the soil types. And we also have a
7 map of the yield belts. So we use the soil type map and
8 overlay on that the yield belt map and calculate the
9 percent of each soil type within the yield belt; okay.
10 Q. Okay.
11 A. Then we have to figure out in that location is
12 sugar cane grown on it or not. And from there we can use
13 our GIS maps of the property appraiser's office records for
14 1990.
15 Q. How do you figure out where the, say for example in
16 yield belt five, sugar cane is grown? If yield belt five
17 has two different kinds of soil in it, how are you going to
18 tell how much of the sugar cane land in yield belt five is
19 on each different type of soil?
20 A. From the Palm Beach County property appraiser's
21 property records, they indicate what crop was grown on that
22 land in 1991 or '90 and -- I think it was '91, and we would
23 use those, that information.
24 Q. You have that information?
25 A. Yes.
239
1 Q. Have you produced to us that information?
2 A. Yes.
3 Q. Is that on a disk, do you believe or...
4 A. Should be on a disk -- yes, it's all on a disk,
5 yes.
6 Q. So you've explained to me the tables on Exhibit 17?
7 A. Yes.
8 Q. What information do you have regarding either
9 decreased yield numbers or increased cost of production
10 figures as they relate to depth of soil?
11 A. At this time, we have very little information on
12 those two and all we have is what you have right here in
13 your exhibits (indicating).
14 Q. Exhibits 18-A and B?
15 A. This exhibit.
16 Q. 18-A, your meeting with George Snyder?
17 A. Yes.
18 Q. Let's look at that.
19 A. And whatever is in these two soil subsidence
20 studies.
21 Q. That are referenced on Exhibit 17?
22 A. Yes.
23 Q. Did you, looking at Exhibit 18-A, did you obtain
24 from George Snyder any specific dollar figures?
25 A. No.
240
1 Q. Did you obtain from him any specific yield figures?
2 A. No.
3 Q. Do you plan to come up with specific dollar figures
4 and yield figures?
5 A. Yes.
6 Q. How?
7 A. I don't know exactly how but we'll do a sensitivity
8 analysis on it if we feel that we can't come up with
9 anything that has much backup.
10 Q. Have you come up with any preliminary estimates of
11 either increased costs of production or decreased yield as
12 affected by soil depth?
13 A. No.
14 Q. What information will you be using to come up with
15 the numbers you plan to come up with?
16 A. I don't know at this time.
17 Q. I sort of want to say give me a hint, you know.
18 What is going to happen to increase the cost of production?
19 A. Okay. They would have to dig canals into the rock
20 for drainage, they would have to be a little more careful
21 with their drainage. Drainage would become -- would
22 require more management than is going on right now. You
23 would have to add more fertilizer. And that's it on that.
24 Q. Fertilizer containing phosphorus?
25 A. No. Both sulphur and micro nutrients. That would
241
1 take care of the costs. So it's a matter of estimating
2 those costs.
3 Q. Do you know at what soil depth canals would have to
4 be dug into rock?
5 MR. NETTLETON: Object to the form.
6 BY THE WITNESS:
7 A. I don't understand the question.
8 BY MS. STINSON:
9 Q. Well, at some point, as the soil subsides, one of
10 the increased costs is that you have to dig the canals into
11 rock instead of just having them in muck; is that correct?
12 A. Correct.
13 Q. At what point does one have to do that?
14 A. According to George, 1 foot. If you get to
15 1 foot, thereabouts, 1 foot of soil, you would start to dig
16 into the rock.
17 Q. And do you have any idea how you will estimate the
18 additional costs of having to dig into rock?
19 A. I only have an idea at this point.
20 Q. Which is?
21 A. One is to get the cost of the machinery required to
22 dig into the rock.
23 Q. The purchase price?
24 A. The purchase price, or the rental. If you rented
25 the machinery, how much you would have to pay to rent the
242
1 machinery. We were looking into that.
2 Q. Okay.
3 A. The idea is to come up with the capital cost per
4 acre per year including labor and fuel and then the
5 additional cost of fertilizing, which we could probably
6 take from IFAS' Costs and Returns to Sugar Cane Production
7 on Muck Soils, and then the additional cost of water
8 control, you would supposedly have more frequent drainage
9 and irrigation, so that might increase the cost of water
10 control.
11 Q. How would you determine, first of all, how much
12 more frequent the drainage and irrigation would have to be,
13 and secondly, the cost of doing that?
14 A. I don't really know how much more frequent the
15 drainage and irrigation would be, that's one of the reasons
16 why it would be difficult to estimate the cost. That's
17 what we're working on right now.
18 Q. Would the cost be additional equipment of some sort
19 or additional labor or both?
20 A. Mostly additional labor.
21 Q. What about yield effects?
22 A. As far as we can tell, there is no information that
23 we've been able to find on how, when you get the thinner
24 and thinner soil, your yield, what happens to your yield.
25 We have not found any information on that.
243
1 Q. What assumptions will you make with regard to
2 yield?
3 A. We'll try to get as much expert opinion as we can
4 and that probably, we'd probably do a range if we didn't
5 feel real comfortable with what is known about yield
6 effects from very thin muck soil.
7 Q. From whom do you plan to get expert opinions?
8 A. Anyone in IFAS who thinks they know. George
9 Snyder, Tom Scheuneman, anyone at IFAS who's an expert in
10 agronomy or soil science who can provide an opinion.
11 Q. Have you discussed that question with George
12 Snyder.
13 A. I don't remember if I have or not. I was mostly
14 concerned with these other issues that we've been talking
15 about, and I don't remember if we talked about what he felt
16 the yield effect would be.
17 Q. "Other issues" being the cost issues?
18 A. Yes.
19 Q. You were about to say something?
20 A. Well, I was sort of hoping there was a thickness of
21 the soil which would make it physically impossible to grow
22 cane and he believes it's 6 inches, so, that's what we know
23 so far.
24 I should correct that a bit. He gave me -- he told
25 me that you could grow any crop on just about anything. I
244
1 think, you know, many of us know that. It depends on how
2 much it costs.
3 But what I meant by "physical," is under current,
4 basic current farming practices, what is the thinnest you
5 can grow the cane on before you have to go into hydroponics
6 or more capital intensive ways of growing the crop.
7 Q. Do you have similar information for other crops,
8 the vegetables and sod? First of all, any opinions or
9 information with respect to what the minimum number depth
10 is to grow?
11 A. I don't know it off the top of my head. I'd have
12 to review these two soil subsidence articles. I was -- am
13 mostly concerned at the moment about doing it for sugar
14 cane, but we do not have information organized for
15 vegetables.
16 Q. What about sod?
17 A. Same with sod.
18 Q. Have you discussed it with anybody, have you gotten
19 any preliminary opinions from any experts?
20 A. No.
21 Q. What about with respect to the costs, any increased
22 costs with producing vegetables or sod at decreasing soil
23 depths?
24 A. We don't have any information organized at this
25 time on that.
245
1 Q. Other than reviewing the two articles referenced on
2 Exhibit 17, what do you plan to do to obtain information or
3 opinions on that?
4 A. Continue talking to people at IFAS, professionals
5 at IFAS. Because there's not a study that really addresses
6 this issue, it's very difficult to come up with backup that
7 we need to do the analysis.
8 So we're going to try to find anyone, agronomists,
9 soil scientists at IFAS who maybe we haven't found yet who
10 maybe can give us some insight, and if we don't do very
11 well in that area, and if it turns out that no one has an
12 opinion or no one really knows, then we'll have to do some
13 type of sensitivity analysis on that.
14 That would be the two scenarios. That's why the
15 soil subsidence assumptions are important, because there's
16 not a whole lot of backup at this time on what happens as
17 the soil gets thinner and thinner and thinner.
18 Now it's really only a problem for the southern
19 portion of the yield belts. If you look on these tables
20 you'll find that you don't really get problematic, problems
21 until you hit the more southern portions of the Everglades
22 agricultural area.
23 Q. We began all this discussion I think when I asked
24 you about the two different scenarios you were going to
25 look at and you said soil subsidence. Are you saying the
246
1 two different soil subsidence scenarios are two different
2 numbers you picked for the minimum depth?
3 A. Yes.
4 Q. At this point you don't have those two numbers in
5 mind?
6 A. Exactly. I haven't finalized it yet.
7 Q. Are there different scenarios on other issues?
8 A. Raw sugar prices. Two scenarios on those.
9 Q. Let's go into that. What two different scenarios?
10 A. One will probably be constant raw sugar price
11 and the other, I haven't decided.
12 Q. What will the other be based on?
13 A. A likely -- well, I'm not really sure at this point
14 what it will be based on.
15 Q. What are the factors which could affect the other
16 scenario? Are we talking about GATT and NAFTA or what are
17 we talking about?
18 A. GATT and NAFTA is one thing, because we really
19 don't have agreements on GATT and NAFTA.
20 What it really boils down to, the U.S. price
21 policy. Will the United States increase their support of
22 the raw sugar price. In other words, will the raw sugar
23 price fall, will it be higher or lower than a constant
24 level.
25 So we have one scenario with the constant level and
247
1 the next question is, you know, if the United States
2 decides to maintain, in other words, if the United States
3 decides to provide more protection to all sugar cane and
4 sugar beet growers in the United States, and they would
5 then increase the supported price of raw sugar, so the raw
6 sugar price would be higher than what it is now.
7 But if they decide that they don't want to support
8 the price of raw sugar any more, in other words, they don't
9 want to support the sugar cane growers, then they will let
10 the price fall. And basically that would begin to cause
11 the elimination of the sugar program and support for those
12 farmers, so that that's the issue.
13 Q. On the issue of raw sugar prices, are you going to
14 have only two scenarios, a constant and one other?
15 A. At this time, yes.
16 Q. But you don't know whether the other is going to be
17 higher or lower than the constant?
18 A. Correct.
19 Q. What do you intend to do to make that
20 determination?
21 A. Well, probably what I'll wind up doing is two
22 additional scenarios other than the constant one, a higher
23 price and a lower price.
24 Q. And to come up with what those prices may be, what
25 will you do and what will you consider?
248
1 A. Talking to people at USDA who are familiar with
2 thinking in Congress regarding supporting raw sugar
3 production in the United States.
4 Q. Who would that be?
5 A. I don't know at this time.
6 Q. You don't have any names?
7 A. Well, I have some names but I don't -- well, for
8 example, Peter Buznell, talk to him.
9 Q. What other names do you have?
10 A. That's about it at the moment.
11 Q. In addition to talking to people at USDA, what do
12 you plan to do?
13 A. That's it.
14 Q. Do you plan to develop any scenarios in which GATT
15 or NAFTA play a role?
16 A. That would be imbedded in one of the scenarios,
17 yes.
18 Q. And your source of information for deciding is
19 going to be discussions with experts at USDA?
20 A. Yes.
21 Q. I may have asked this or you may have said, but
22 have you talked to Peter Buznell yet?
23 A. I actually did have a conversation with him but it
24 was very short and I don't remember exactly what it was.
25 Q. In addition to the soil subsidence scenarios and
249
1 the raw sugar price scenarios, are there any other issues
2 on which you will develop different scenarios?
3 A. That's it at this time. Those are the two
4 scenarios.
5 Q. When you met with Drs. Jones, Lacewell and Boggess
6 you indicated that they made comments on some of the work
7 you were doing.
8 What specific assumptions or data did you discuss
9 with them?
10 A. The data in the USDA Situation and Outlook Report.
11 I think it was June 1992.
12 Q. Any other data or information?
13 A. I don't remember that meeting real, real well, but
14 I told them, you know, what I was looking at. That I was
15 looking at, you know, the recovery rates of raw sugar, soil
16 subsidence. I showed them this.
17 Q. Exhibit 17?
18 A. I believe I showed them this (indicating 17). Yes,
19 I just showed them what I was doing.
20 Q. You indicated they made comments and suggestions
21 about how they might proceed.
22 A. Um hum.
23 Q. Well, with regard to recovery rates, what comments
24 did they make or suggestions?
25 A. Well, I think they had some discussion on the cost
250
1 of milling per pound of raw sugar and how, you know, they
2 were looking at the data or they wanted to look at the data
3 or what have you to try to get a handle, you know,
4 historically what's been happening and what's going on now.
5 Some of their comments were very helpful, you know;
6 others of them were, you know, not as helpful.
7 Q. What comments did you find helpful?
8 A. Just looking at different aspects of the mill.
9 Changes in technology. Just mostly the approach, the
10 methodology.
11 Q. Well, what --
12 A. (Continuing) I don't remember exactly every little
13 detail. But it was -- it's nothing that a good
14 agricultural economist wouldn't have talked about.
15 Q. Did they suggest any specific changes in technology
16 in milling that they were aware of or might be on the
17 horizon?
18 A. No.
19 Q. Did they point you in the direction of any sources
20 for information?
21 A. Not that I recall.
22 (Whereupon, a brief recess was taken.)
23 BY MS. STINSON:
24 Q. Before the break we were talking about recovery
25 rates and your discussion with the federally-retained
251
1 economists.
2 On Exhibit 16 I notice that you plan to re-visit
3 the assumptions of mill and sugar cane efficiencies and
4 cost efficiencies. Is that something you are doing?
5 A. Yes.
6 Q. Would that include looking at recovery rates?
7 A. Yes.
8 Q. Well, let's find out where you are in that process.
9 Have you looked at your assumptions with regard to
10 mill and sugar cane production efficiencies and cost
11 efficiencies?
12 A. Yes.
13 Q. What have you looked at?
14 A. The data in the USDA outlook and situation report,
15 which I believe is July 1992 or June 1992, and looking at
16 how the cost per acre and the cost per ton of raw sugar had
17 changed over time.
18 Q. Did you have that information but for the most
19 recent year when you did your 10-year study?
20 A. No.
21 Excuse me, which information are you referring to?
22 Q. The cost information that you just said you got out
23 of or were looking at in June or July 1992?
24 MR. SAXE: Objection to form. Asked and answered.
25 BY THE WITNESS:
252
1 A. We didn't have it at the time we did the study, the
2 10-year study. Or, it was -- our -- we had finished the
3 evaluation by the time that publication came out.
4 BY MS. STINSON:
5 Q. Okay. But I'm saying that, weren't there prior
6 reports with that information, they just weren't as
7 current?
8 A. My understanding was that that report, the July
9 report, was the first time that the data had been presented
10 in a consistent format and was being presented by the USDA
11 as a comparable time series.
12 MS. STINSON: Let's mark this one.
13 (Whereupon, Johns' Exhibit No. 19 was marked for
14 identification by the Court Reporter.)
15 BY MS. STINSON:
16 Q. Let me show you what's been marked as Exhibit 19
17 and ask you what that is.
18 A. These are notes regarding the evaluation of
19 information in the Sugar and Sweetener Situation and
20 Outlook Yearbook, June 1992.
21 Q. Did you prepare those notes for some presentation
22 you gave somewhere?
23 A. Yes. I prepared them for the meeting of economists
24 that we had that Ron was at and a number of agricultural
25 economists were at, at the District offices.
253
1 Q. But that document was not handed out at that
2 meeting; was it?
3 A. No. There was another document that was handed out
4 which we went over in the meeting.
5 Q. Why did you choose not to hand out Exhibit 19?
6 A. We never got to it. We -- I had produced it in
7 case we started talking about that issue, these particular
8 issues, but we never, by the time the meeting was over, we
9 hadn't begun talking about them, so they didn't get
10 discussed.
11 Q. Had you presented them before that meeting to
12 people at the Water Management District?
13 A. I might have faxed it to Carl Woehelke, I don't
14 recall if I did or not.
15 Q. Other than the production of your documents as part
16 of this deposition and perhaps faxing it to Carl Woehelke,
17 have you provided that document to anyone else?
18 A. I might have given it to Bill Boggess at the
19 meeting that we had with the Justice economists earlier
20 this month.
21 Q. With Drs. Boggess, Lacewell and Jones?
22 A. Yes.
23 Q. Did you receive any kind of instruction or request
24 from the District not to discuss that document or go into
25 it at the meeting of economists?
254
1 A. No.
2 Q. There's a page entitled "Sugar recovery from sugar
3 cane" in which you indicate a statistically significant
4 upward trend.
5 What years did you use to develop that trend?
6 A. 1977 to 1990.
7 Q. Were those the same years that you used in your
8 10-year report?
9 A. In the 10-year report I may have used 1964 to 1990.
10 Q. Why did you change to use the years '77 to '90?
11 A. The criteria has always been to begin the
12 evaluation of the data from the time when the seven sugar
13 mills, and only those sugar mills, were producing sugar,
14 and if I started the trending at '64 in that evaluation,
15 which -- I may have started at '64 or '77, I can't recall
16 which, but if I did choose '64, it was because the
17 information I had led me to believe that the seven sugar
18 mills were those seven sugar mills beginning in 1964 as
19 opposed to 1977.
20 Q. Did you at some point learn that the seven sugar
21 mills have been there only since 1977?
22 A. Yes. This is as much, to the best of my
23 recollection, as I can make.
24 Q. Your comment that there is a statistically
25 significant upward trend, what do you mean by
255
1 "statistically significant"?
2 A. That the behavior of the data, if you estimate a
3 regression equation, the behavior of the data is such that,
4 from a statistical standpoint, there is a trend in the data
5 over time.
6 Q. Is there a particular confidence level which you
7 consider statistically significant?
8 A. Yes.
9 Q. What is that?
10 A. I believe it's alpha equals .05.
11 Q. And do you know what confidence level your data
12 shed in the trend you calculated?
13 A. Well, if I look at it from alpha equals .05, then I
14 cannot reject the hypothesis that there is a statistically
15 significant upward trend.
16 Q. Are you saying that the confidence level of your
17 data exceeded that .05 number?
18 MR. NETTLETON: Object to the form.
19 BY THE WITNESS:
20 A. I would say that in this case, for the sugar
21 recovery from sugar cane, that it did --
22 I don't really understand the question, I'm sorry.
23 I shouldn't even try to answer it. I don't understand the
24 question.
25 BY MS. STINSON:
256
1 Q. Looking at the analysis you applied to determine
2 your trend, can you tell me that that -- well, you tell me
3 the trend is statistically significant and that
4 statistically significant means something equal to or
5 greater than a .05 confidence level; correct?
6 MR. SAXE: Objection to form.
7 BY MS. STINSON:
8 Q. Or is that not correct?
9 A. That's not correct.
10 Q. Explain it to me.
11 A. It would be a 95 percent confidence interval.
12 Q. And the data, your analysis of the data in
13 developing the trend showed at least a 95 percent
14 confidence interval; is that what you are telling me or can
15 you not put it that way?
16 A. That's not -- no, you can't put it that way in
17 statistics.
18 Q. In developing the trend, did you look at any other
19 variables or outside influences that might affect the data?
20 A. Not that I recall.
21 Q. Did you try any other data forms, for example a log
22 form?
23 A. To date have I?
24 Q. Right.
25 A. Not that I recall.
257
1 Q. Do you plan to?
2 A. I may.
3 Q. The 2.47 star, is that a 2-1/2 percent increase
4 per year, is that what that --
5 A. No.
6 Q. What is 2.47, what is that figure?
7 A. I need to make sure I get the units right.
8 It's probably pounds of raw sugar per year
9 increase.
10 Q. Do you know what percentage?
11 A. I don't recall it, no, not from this equation, I
12 don't recall it.
13 Q. On the previous page you've got a bullet saying
14 "Current and future variety research will concentrate on
15 sugar content to a greater extent on higher yields."
16 Explain that to me.
17 A. It's supposed to read, there's a word missing:
18 That current and future variety research will concentrate
19 on sugar content to a greater extent than on higher yields.
20 So in other words, the varietal research going on
21 at Canal Point is concentrating on increasing the sugar
22 content of the cane as opposed to increasing the tons of
23 sugar cane harvested per acre.
24 Q. And what is the basis for that statement?
25 MR. NETTLETON: Objection. Asked and answered.
258
1 BY THE WITNESS:
2 A. The meeting that I had with Barry Glaz at USDA at
3 Canal Point.
4 BY MS. STINSON:
5 Q. The first bullet says "A declining .2 percent
6 trend likely caused by lower quality land entering
7 production."
8 What is the source of that statement?
9 A. The declining trend. The declining trend was
10 estimated statistically, and then --
11 Q. Based on what?
12 A. The yield per acre, annual yield per acre data,
13 annual tons per acre data.
14 Q. Found in?
15 A. Found in -- well, there's a number of sources for
16 that data, but it might have come from the USDA Situation
17 and Outlook Yearbook, June 1992. You can also get that
18 data from the U.S. Sugar statistical compendium from USDA.
19 Now, the lower quality land entering production,
20 you had an increase in the acres planted to sugar cane over
21 the years, and many of that -- some of that land, the new
22 land has been sand land, so the land that has been going
23 into production, the new land, is thought to be of lower
24 quality than the land initially in production. "Quality"
25 meaning tons per acre.
259
1 Q. Who provided you that information or what is the
2 source?
3 A. That information probably comes from the USDA
4 Situation and Outlook Yearbook, June 1992.
5 Now, this is a thought; okay.
6 Q. What is a thought?
7 A. A thought is a, something that I wrote down based
8 on the information that I had available.
9 Q. A thought as opposed to, what?
10 A. Well, I'm not sure if it's going to get used in the
11 report. That's what I mean.
12 Q. Is the downward trend statistically significant?
13 A. I'm not -- I don't remember exactly. It might be
14 (perusing document).
15 It's not a very --
16 Q. Do you have a graph in there?
17 A. (Continuing) I don't remember.
18 Q. Do you recall what years you used to calculate that
19 trend?
20 A. No.
21 Q. Do you have any opinions as to whether the trend
22 will continue in the future?
23 A. No.
24 Q. Will you be using that trend in your 20-year
25 analysis?
260
1 A. I don't know.
2 MR. SAXE: Objection. Asked and answered.
3 BY THE WITNESS:
4 A. (Continuing) I don't know.
5 BY MS. STINSON:
6 Q. Do you plan to use the increasing trend in recovery
7 rate in your 20-year analysis?
8 A. Probably.
9 Q. Why would you use the increasing trend in recovery
10 rate but you don't know whether you are going to use the
11 decreasing trend in yield?
12 MR. NETTLETON: Object to the form.
13 MR. SAXE: Objection to form.
14 BY THE WITNESS:
15 A. Because at this time, sitting here, I don't recall
16 if it was a statistically significant trend and I haven't
17 gotten to a point where I am examining that data close
18 enough to make a decision.
19 BY MS. STINSON:
20 Q. The next page is entitled "Cost of producing sugar
21 cane in Florida," and I believe there's a graph to go along
22 with that page; am I correct?
23 A. That appears so, that they reflect the same data.
24 It appears that way at this point.
25 Q. Tell me, the second line says "Nominal costs '81 to
261
1 '90." What does that mean?
2 A. That means we used the actual costs as reported in
3 USDA, which represents nominal costs to estimate this
4 regression equation, that's the third bullet.
5 Q. Define for me "nominal costs."
6 A. Nominal costs include general inflation from year
7 to year.
8 Q. And what did you calculate using those nominal
9 costs?
10 A. I used it to estimate this equation below it.
11 Q. Explain that to me.
12 A. Okay. This says that the cost per harvested acre
13 of sugar cane is equal to 781 plus.
14 Q. Dollars?
15 A. Yes, per acre. $781 plus 9.16 times the year.
16 Q. What's the 9.16?
17 A. 9.16 is the increase in the cost per acre of sugar
18 cane each year. The increase in the nominal cost.
19 Q. Is that gross acre or harvested acre?
20 A. Harvested acre.
21 Q. Is that trend statistically significant?
22 A. Yes. According to the bullet underneath it.
23 Q. Will you be using that trend, do you intend to use
24 that trend in your 20-year analysis?
25 A. I intend to consider it but I don't really know if
262
1 it will actually get used.
2 Q. If it is a statistically significant trend in cost
3 of producing, why would you not use it?
4 MR. SAXE: Objection to form.
5 BY THE WITNESS:
6 A. Well, if there's any other information to improve
7 the costs from year to year, then that would get
8 incorporated also.
9 BY MS. STINSON:
10 Q. Do you have any such information?
11 A. Not that I recall.
12 Q. Are you seeking out such information?
13 A. Well, I just want to make sure it's consistent with
14 the information that we used in the report and any other
15 information that we have in-house.
16 Q. The information you used in the 10-year report?
17 A. Yes.
18 It may very well get used.
19 Q. The information, this information about the
20 increase of cost, is that also found in the July or June
21 '92 yearbook?
22 A. Yes.
23 Q. Would you consider that to be the best available
24 current information?
25 A. Yes.
263
1 Q. Did you look at any other independent or any
2 independent variables in looking at the increase in costs,
3 outside variables other than just the time?
4 A. Not that I recall.
5 Q. Did you try any other data forms?
6 A. Not that I recall.
7 Q. The 9.16 year is $9.16?
8 A. Yes.
9 Q. Now, on the cost of producing sugar cane you have a
10 percentage, the average cost increase is 1.1 percent per
11 year; right?
12 A. That's what that says.
13 Q. On the page about sugar recovery you do not have a
14 percent.
15 A. It might be this one on here (perusing exhibit).
16 I guess I don't. It's not on there. It's not
17 anywhere.
18 Q. Do you know what it is?
19 A. I don't recall it.
20 Q. There's a page entitled "Cost of processing sugar
21 cane in Florida" also on Exhibit 19. Is that information
22 similarly from the June or July yearbook?
23 A. Yes, I believe so.
24 Q. And have you again calculated any trend with
25 respect to the cost of processing sugar cane?
264
1 A. Yes.
2 Q. And what is that trend?
3 A. On this page it says that the cents per pound of
4 raw sugar produced is equal to 7.52 minus the quantity .13
5 times time.
6 Q. Is that a statistically significant trend?
7 A. Yes.
8 Q. Do you intend to use that trend in your 20-year
9 analysis?
10 A. I do not know yet.
11 Q. What factors may affect your decision to use that
12 trend?
13 A. I don't have anything in mind right now.
14 Q. Can you tell me why you've used the years '81 to
15 '90 instead of '77 to '90?
16 A. That's the beginning of the cost data which is
17 considered to be consistent with the data in subsequent
18 years. In other words, if you go back before 1982 or
19 before 1981, the data either doesn't exist or it's not
20 consistent, it wasn't consistently estimated or determined.
21 Q. Your bullet on the reasons for the cost reduction,
22 what is the source for that information?
23 MR. SAXE: Would you read back the question,
24 please.
25 (Whereupon, the pertinent portion of the Record was
265
1 read back by the Court Reporter.)
2 BY THE WITNESS:
3 A. The first two pieces of information are from USDA
4 Sugar and Sweetener Situation and Outlook, June.
5 BY MS. STINSON:
6 Q. Can we just call it the sugar yearbook?
7 A. The sugar yearbook.
8 Q. Okay.
9 A. The third one, I don't recall exactly where it came
10 from at this time.
11 Q. Is that something you've calculated, that increased
12 sugar production more than offset cost increases?
13 A. I might have. I don't remember exactly.
14 Q. The graph entitled "Residual returns to land and
15 risk," what are the numbers you plotted on that graph from?
16 A. USDA Sugar and Sweetener Situation Outlook
17 Yearbook, June 1992.
18 Q. Are those numbers in there directly or did you have
19 to do some calculations to come up with those numbers?
20 A. I believe I calculated them based on the
21 information in the yearbook.
22 Q. How did you calculate them?
23 A. Using the cost of production and processing data in
24 the yearbook and the price of raw sugar.
25 Q. Which is also in the yearbook?
266
1 A. Yes.
2 Q. Do those figures include the cost of
3 transportation?
4 A. What kind of transportation are you referring to?
5 Q. To the refineries.
6 A. Yes, I believe so.
7 Q. Do they account for the, this may be the same
8 question but I'm not sure, the cost of transportation to
9 the markets?
10 A. You mean from the refinery to the end user?
11 Q. Right.
12 A. I don't think so.
13 Q. When you take the raw sugar price that you used for
14 determining the returns, is that the price paid to the
15 mill?
16 A. Yes, it's the price paid to the raw sugar mill.
17 Q. And is that figure in that yearbook directly or did
18 you calculate it?
19 A. I used the number 14 contract price for raw sugar
20 in New York.
21 Q. Do you know whether that price is paid at the mill?
22 A. I am told that it is a very good approximation of
23 what the mill receives for the raw sugar.
24 Q. Who tells you that?
25 A. One of the -- I talked to a gentleman at the
267
1 Savannah refinery in Georgia.
2 Q. And what did he tell you?
3 A. I was asking him some questions to try to determine
4 the FOB price at the raw sugar mills, and he told me that
5 the number 14 contract price is a real good estimate of
6 what they receive.
7 Q. Did you speak with anyone else about that?
8 A. I spoke with Tom Scheuneman because I wanted to
9 know his source of information from the Palm Beach County
10 Cooperative Extension Service that reports the revenue from
11 sugar cane -- from raw sugar, excuse me, in Palm Beach
12 County, and I also talked with him.
13 Q. And what did he tell you?
14 A. He told me that he received it from a -- the
15 information from a mill in the EAA.
16 Q. Did you compare that information to the information
17 you used in this graph regarding price of sugar?
18 A. Yes, I did.
19 Q. And how did they compare?
20 A. They were a little bit different.
21 Q. Which was lower?
22 A. I don't recall exactly.
23 Q. When you spoke to the gentleman in Savannah, did
24 you ask him specifically whether any transportation costs
25 should be subtracted from the number 14 market price?
268
1 A. Yes.
2 Q. What was his response?
3 A. Okay. He said that the number 14 raw sugar
4 contract price includes the transportation costs; so in
5 other words, you would take the raw sugar price and
6 subtract out the cost of transporting it from the mill to
7 the refinery.
8 I'm trying to recall as best I can from the
9 conversation.
10 So in other words, the price that the mill -- the
11 end result was that he said that the price, the raw sugar
12 number 14 contract price is what the mill is paid for the
13 sugar cane and the mill is responsible, the raw sugar mill
14 is responsible for transporting that cane or that sugar to
15 the refinery.
16 Q. So did you then include the cost of transportation
17 in your cost figures that you used in the graph called
18 "Residual returns"?
19 MR. SAXE: Objection. Asked and answered.
20 BY THE WITNESS:
21 A. Yes, the cost of transportation was deducted.
22 BY MS. STINSON:
23 Q. Is that figure specifically found in the sugar
24 yearbook?
25 A. Yes.
269
1 Q. Do you know how many cents per pound it is?
2 A. Not off the top of my head.
3 Q. But somewhere the statistics are given which show
4 how much it costs the mill to transport a pound of sugar to
5 the market?
6 MR. NETTLETON: Object to the form.
7 BY THE WITNESS:
8 A. Could you repeat that again.
9 BY MS. STINSON:
10 Q. You indicated that the mill is responsible for
11 paying the cost of transporting the sugar to the market;
12 correct? Is that a misstatement?
13 A. Yes, that's my understanding at this point.
14 Q. And is there a figure in the sugar yearbook which
15 says what that cost is?
16 A. It's embedded in the marketing costs of the cost
17 numbers reported by USDA.
18 Q. What is the basis for that statement?
19 A. Ron Lord at USDA.
20 Q. When did you discuss that issue with Ron Lord?
21 A. On two occasions. One I recall was during the
22 10-year evaluation and the second occasion was earlier this
23 year.
24 Q. Did you specifically ask him that question about
25 who pays for the shipping and is it found in the USDA
270
1 numbers somewhere?
2 A. Yes.
3 Q. And his response is the mill does and it's in the
4 marking costs?
5 A. He says the transportation costs are in the
6 marketing costs.
7 MR. SAXE: Counsel, for the record, for
8 clarification, you've used transportation to market in
9 this colloquy to refer ambiguously either to
10 transportation from the mill to the refinery or from
11 the refinery to the end users, and now I'm not sure
12 whether we're jumping back and forth because the
13 deponent indicated that she did not understand that the
14 costs of transportation from refinery to end users was
15 included in cost figures.
16 So when you say "to market," do you mean from the
17 mill to the refinery?
18 MS. STINSON: I'll he let you clarify that with her
19 on cross. I mean I think she's answered my questions.
20 BY MS. STINSON:
21 Q. The exhibit we were just looking at, I believe
22 number 19, deals only with sugar production; correct?
23 A. Yes.
24 Q. Do you have similar information for vegetables and
25 sod?
271
1 A. What do you mean by similar?
2 Q. Cost of production, historical prices, the
3 information that's reflected in Exhibit 19.
4 A. We have costs information, yes.
5 Q. What is the source of that information?
6 A. IFAS.
7 Q. Are you looking at anything different from what you
8 looked at in your 10-year report?
9 A. Well, I am prepared to begin looking at the changes
10 in the cost of producing vegetables in the EAA over, I
11 believe, the last 10 years. There's actually a gap in the
12 data. There's a two-year gap in the data.
13 Q. When?
14 A. I think it's like '86 and '87, something like that.
15 Q. Is that not something you looked at in the 10-year
16 study?
17 A. That's correct. We did not look at a time series
18 of the vegetable costs of production data.
19 Q. And you say you are now prepared to begin looking?
20 A. Yes, the data is on a spreadsheet. I believe you
21 all have it. Yes, you should have it. We produced it for
22 you.
23 Q. Just for our own purposes, is that such a
24 spreadsheet for lettuce?
25 A. Yes, that's one of them. That's the lettuce.
272
1 Looks like it.
2 Q. And the source of your data for the cost of
3 producing vegetables is IFAS?
4 A. Yes.
5 Q. Is there a publication?
6 A. There are several publications.
7 Q. Do you intend, also, to look at the returns for
8 vegetables and sod historically?
9 A. For vegetables perhaps. For sod, we don't have any
10 historical cost data to look at.
11 Q. What about not just costs but revenues?
12 A. We've looked at the historical revenues from
13 vegetables.
14 Q. Did you do that as part of your 20-year report -- I
15 mean 10-year report?
16 A. Yes.
17 Q. Will you take a fresh look at that for your 20-year
18 report?
19 A. I'll probably review it just to make sure
20 everything's consistent with everything else we're doing on
21 this 20-year evaluation.
22 Q. Here's a printout from a disk you provided entitled
23 "From South Bay Growers, Ellen Wine, W i n e, 1992, typical
24 large vegetable farm operating results per acre."
25 Do you plan to use that information in your 20-year
273
1 analysis?
2 A. I don't know. I've contacted Ellen Wine formally
3 and asked her to provide me with information on -- a
4 itemization of her sales information, her cost of sales
5 during this time period, but she hasn't responded yet.
6 Q. If that is not from Ellen Wine, what is it then?
7 A. It is Ellen Wine's. Ellen Wine gave this to the
8 Everglades Funding Council and the District gave it to
9 me -- actually I asked for it, because, you know, Ellen was
10 saying at the board meetings that we underestimated or our
11 costs are too low.
12 So I opened up a line of communication with her to
13 please provide some -- to talk to us so that perhaps we
14 could -- she could tell us why she thinks our costs are so
15 low.
16 And so this is the only thing she's provided us or
17 provided the funding council or anybody. This the first
18 income and cost information that we've received from the
19 growers in the EAA, so --
20 Q. Have you asked for additional information from her?
21 A. I asked her to review the report and respond to it
22 and respond to it in terms of what she thinks we should
23 change in terms of the cost of production especially.
24 Q. And you have not yet had a response?
25 A. No, I have not.
274
1 Q. When do you --
2 A. I expected one a couple weeks ago.
3 Q. Have you contacted her to ask her why you have not
4 received that information?
5 A. The first time I did and I haven't contacted her
6 since the second agreed upon date.
7 Q. On Exhibit 16 under I guess 2.0, you have prepared
8 two scenarios of assumptions. Is that what we've already
9 talked about regarding soil subsidence and U.S. policy?
10 A. Yes.
11 Q. Are there any other assumptions on which you plan
12 to prepare more than one scenario?
13 A. Not at this time.
14 Q. Do you plan to conduct sensitivity analyses with
15 any of your assumptions?
16 MR. NETTLETON: Objection. Asked and answered.
17 BY THE WITNESS:
18 A. Well, there may -- the different scenarios --
19 At this time, I don't know if we will or not.
20 BY MS. STINSON:
21 Q. Do you at this time have any plans to do a
22 sensitivity analysis involving your assumptions or
23 variables of cost of production of sugar cane, for example?
24 A. Could you repeat the question again, the beginning
25 of it.
275
1 (Whereupon, the pertinent portion of the Record was
2 read back by the Court Reporter.)
3 A. (Continuing) No, I don't have any intentions of
4 doing that at this moment.
5 Q. Under .3.1, you have "Re-visit the impact of lower
6 cane available on maximum sugar cane price."
7 What does that mean?
8 A. In the report we look at the impact of lower
9 quantities of cane going through some of the mills and the
10 impact on income to those mills.
11 Q. Would that impact the price received or the cost of
12 production per pound or both?
13 A. It was done in this report to address the impact of
14 the STAs, so we haven't revisited it yet, that's one thing
15 we haven't done yet.
16 Q. Do you plan to do that?
17 A. I'll plan to re-visit it.
18 Q. The impact of the STAs being less sugar produced;
19 is that correct?
20 A. On that acre, on that 35,000 acres, yes.
21 Q. Right, so no sugar produced on that 35,000 acres?
22 A. Right.
23 Q. And the effect of that lower amount of sugar on the
24 mills --
25 A. Profit --
276
1 Q. -- would be what; profit?
2 A. Income. Well, yes, income. Revenue. Their
3 revenue and their change in costs.
4 Q. Will you be re-visiting the issue of the effect of
5 implementation of BMPs?
6 A. Could you restate that. I don't understand the
7 question.
8 Q. Well, your 10-year analysis, in your 10-year
9 analysis you use costs and effects of implementation of
10 BMPs in determining the result; correct?
11 A. Yes.
12 Q. Do you intend to re-visit the information you used
13 in your 10-year report?
14 A. Not our estimates of BMP costs that we did, but,
15 you know, there's a Brown & Caldwell study of BMP costs out
16 there and I had asked the District if they wanted me to
17 continue using the BMP costs that we have in the 10-year
18 report or if they want us to use the, one of the phosphorus
19 reduction options in the Brown & Caldwell study on the
20 costs of the BMPs.
21 That study was ongoing while we were doing this
22 study and now it's come out. I believe it's a final report
23 now. And in there they estimate the costs of BMPs.
24 Q. So what did the District tell you to do?
25 A. They said they wanted me to use the Brown &
277
1 Caldwell costs.
2 Q. Did they tell you which scenario, which level of
3 phosphorus reduction?
4 A. I believe it was a 25 percent level. It was the
5 mid-level that the Brown & Caldwell study reported on. I
6 believe that's a 25 percent reduction.
7 Q. Would that be for each crop?
8 A. Yes.
9 Q. Do you plan to look behind the Brown & Caldwell
10 information in any way, discuss it with the growers, for
11 example?
12 MR. SAXE: Objection to form.
13 BY THE WITNESS:
14 A. Well, we did talk to the project manager of the
15 Brown & Caldwell study but we don't intend to talk to the
16 growers about it.
17 BY MS. STINSON:
18 Q. Do you intend to use the figures directly from the
19 Brown & Caldwell report?
20 A. Probably.
21 Q. In doing your analysis, essentially there are two
22 levels, are there not, the first being a determination of
23 land going out of production, and the second being the
24 determination of what secondary effects that will have?
25 A. Could you repeat that.
278
1 Q. Probably not. Let me try it again.
2 Does your analysis include two levels, let's say
3 farm level and then a community level look at the impact?
4 A. I'll clarify that for you.
5 Q. Please.
6 A. We looked at how the STAs and the BMPs and the
7 assessments would affect agricultural production in the
8 EAA. Then we looked at how the change in that agricultural
9 production changes jobs, sales, earnings and tax revenues
10 in the EAA and Palm Beach County as a whole and, in
11 addition to that, all of the State of Florida.
12 Q. In your focus in the 20-year study, or your
13 analysis in the 20-year study of soil subsidence and U.S.
14 sugar policy, those two items affect the first step, the
15 agricultural production; correct?
16 A. Yes, they affect agricultural production, or could
17 affect it.
18 Q. Is there anything that you plan to re-visit or
19 change in looking at a 20-year analysis that would affect
20 the way you've done what I'll call the community analysis,
21 the impact on jobs, sales, earnings and tax revenues?
22 A. At this time, as I sit here, we're going to do it
23 in the same manner as we did in this study, in the 10-year
24 study. In other words, we're going to look at the change
25 in agricultural production in the EAA due to the STAs, the
279
1 BMPs and the assessments, and from that change in
2 agricultural production we will then estimate the change in
3 jobs, sales, earnings and tax revenues.
4 Q. And to do that, do you plan to use the same data
5 that you used in your 10-year project?
6 A. Yes.
7 MR. SAXE: Objection to form.
8 BY THE WITNESS:
9 A. I believe so.
10 BY MS. STINSON:
11 Q. Just out of curiosity, why are the items that you
12 are doing marked C-4517?
13 A. That's the contract number. That's the District's
14 contract number for this contract.
15 Q. For your 20-year contract?
16 A. Yes.
17 Q. When you did the 10-year analysis, in looking at
18 the effect on agricultural production, you used a computer
19 model called FLIPSIM; correct?
20 A. That was one of the models we used, yes.
21 Q. What other models did you use?
22 A. Well, we used our own spreadsheet models. We used
23 the spreadsheet analysis.
24 Q. How did the spreadsheet analysis fit in with the
25 FLIPSIM in the 10-year analysis?
280
1 A. Well, there's part of the FLIPSIM model that looks
2 at the change -- there's sort of an accounting model, it's
3 like a spreadsheet model. In fact, you can reproduce it on
4 a spreadsheet model. But it takes all the costs and prices
5 and yields and it calculates the total revenue and itemizes
6 the total costs. And it does that every year of the
7 10-year period based on the information we give it on
8 inflation rates and anything that changes from year to
9 year. We just plug in the input data and then it goes
10 through and calculates revenues and costs over the 10-year
11 period.
12 We took that, the output file of that, that 10-year
13 revenue and cost compilation and we transferred it to an
14 Excel spreadsheet. Then we divided by the total acres to
15 get the cost per acre and the revenues per acre and the
16 residual returns to land and risk.
17 Q. Do you plan to use the same methodology in your
18 20-year analysis?
19 A. The same methodology as what I just told you about?
20 Q. Do you plan to use FLIPSIM in your 20-year
21 analysis?
22 A. No.
23 Q. How do you plan to determine the effect on
24 agricultural production for your 20-year analysis?
25 A. We're going to do it all on spreadsheets.
281
1 Q. Why?
2 A. Because it's easier to do it on spreadsheets.
3 Q. So why did you do it on FLIPSIM to begin with?
4 A. Well, we thought it would be easier to do it on
5 FLIPSIM, but then after using FLIPSIM we decided it would
6 be easier to do it on spreadsheets.
7 Q. Do you plan to divide up or segregate the EAA into
8 sections, for example yield belts, to determine the
9 effects?
10 A. Yes.
11 Q. Do you plan to have a draft, do you expect to have
12 a draft submitted to the District by April 15?
13 MR. SAXE: Objection to form. Draft of what?
14 MS. STINSON: Your 20-year analysis.
15 BY MS. STINSON:
16 Q. You knew that?
17 A. Yes.
18 Yes, I expect to.
19 MS. STINSON: Off the record.
20 (Discussion off the record.)
21 BY MS. STINSON:
22 Q. Let me show you what I believe we talked about
23 yesterday, notes of a conversation with Ron Lord; is that
24 correct?
25 A. Yes.
282
1 Q. That you had in February of this year?
2 A. Yes.
3 Q. Did you discuss the effect of sugar policy on raw
4 sugar price with Ron Lord?
5 A. In this conversation?
6 Q. First of all, in this conversation, yes.
7 A. Yes, it looks like I did.
8 Q. Did you discuss that issue with him at any other
9 time?
10 A. Yes, I'm sure I've talked to him about it on and
11 off over the last year.
12 Q. Has Ron Lord provided you any opinions with respect
13 to the future of raw sugar prices as affected by U.S. sugar
14 policy?
15 A. I don't know if you'd call them his opinions, it's
16 perhaps his recommendation or --
17 Q. That will do --
18 A. -- or in terms of what we should do in terms of
19 forecasting raw sugar prices over a 10- and a 20-year
20 period.
21 Q. What were his recommendations or what are his
22 recommendations?
23 A. Well, he's always been pretty happy with the
24 constant price scenario, and then you can come up -- and
25 I'm trying to paraphrase from him, you can come up with
283
1 reasons why the price would be a little bit higher or the
2 price would be a little bit lower.
3 So he tries to give more of a background. In other
4 words, he doesn't really tell me exactly what to do, he
5 tries to give me a background, a frame of reference of why
6 prices would be higher, lower or constant.
7 Q. What would cause the prices to be higher?
8 A. If the government increases the price that they
9 want to keep supported. In other words, if they increase
10 the U.S. raw sugar price.
11 Q. Did he suggest to you any reason that might happen,
12 did he think that that was a real possibility?
13 MR. SAXE: Objection to form. Compound.
14 BY THE WITNESS:
15 A. It's a possibility. And he believes it's a
16 possibility.
17 BY MS. STINSON:
18 Q. Did he make any comments with respect to whether
19 it's a realistic possibility or a likely possibility?
20 A. He didn't provide any probabilities of any
21 particular prices being realized over the next 10 or 20
22 years.
23 Q. What did he say with respect to reasons the price
24 might go down?
25 A. I don't believe he's ever addressed that.
284
1 Q. You don't recall having spoken with him about the
2 possibility of raw sugar prices going down?
3 A. I may have asked him but he didn't ask me directly.
4 Sometimes when you ask him a question, he'll try to give
5 you background, which is actually very valuable, and he
6 won't actually give you a straight -- you know, he won't
7 necessarily directly answer a question like that.
8 Q. Did Ron Lord suggest any recommendations or give
9 any opinions with respect to the effect of GATT or NAFTA?
10 A. We talked about GATT and NAFTA.
11 Q. Do you recall what he said about GATT and NAFTA?
12 A. Well, first of all, it's difficult -- well, this is
13 sort of paraphrasing him. They haven't been finalized and
14 it's not clear whether they will be and in what form they
15 will ultimately be finalized in.
16 And I don't recall his exact opinion but I -- I can
17 only tell you we talked about it at this point.
18 Q. You indicated a little bit ago that you did talk
19 with Ron Lord about transportation costs and that he
20 indicated they were included within marketing costs; is
21 that correct?
22 A. Transportation from the raw sugar mill to the raw
23 sugar refinery is included in the marketing costs of the
24 USDA data.
25 Q. But the price for the, whatever it is, number 14
285
1 market, is a New York price; is it not?
2 MR. SAXE: Objection to form.
3 MR. NETTLETON: Objection to form.
4 BY THE WITNESS:
5 A. What do you mean by "New York price"?
6 BY MS. STINSON:
7 Q. Well, let me ask you: What does the number 14
8 market price represent?
9 A. That is the price of raw sugar received in New
10 York, all duties paid, all fees and duties paid.
11 Q. Let me ask you again to look at your notes with Ron
12 Lord and ask you whether he didn't indicate that that price
13 is, in fact, some 2 cents higher than what the mill would
14 receive.
15 A. He -- I talked to him many times about this and my
16 conclusion is he doesn't know really what it costs to ship
17 sugar from the EAA to other markets, and I have not seen
18 any information, published information on that.
19 Q. Did he, however, suggest to you in the telephone
20 conversation in February that a 2 cent figure is a good
21 estimate?
22 A. No, he never said any figure on that, on that
23 transportation costs per pound, he never said any of them
24 were a good estimate.
25 Q. Do you --
286
1 A. (Continuing) He's thinking that maybe the
2 transportation costs from EAA to New York is 2 cents a
3 pound, but he -- I've been talking to him about this a
4 couple of times this year and I've decided that -- he never
5 admitted he did know and I don't think he does know what
6 the transportation cost is. He says maybe it's 2 cents a
7 pound.
8 Q. Well, in looking at the price received for raw
9 sugar at the mill, have you concluded that no costs for
10 transportation to market should be subtracted?
11 A. At this time, I have.
12 Well, let me clarify that. In our 10-year study,
13 it appears that we subtracted transportation costs out
14 twice.
15 Q. In what way?
16 A. We subtract --
17 We subtracted them out to get the FOB price --
18 No, wait, I don't think we did subtract them twice.
19 I take that back. I haven't finalized my opinion on that.
20 Q. What is the name of the person you spoke with at
21 the Savannah refinery?
22 A. I don't recall it off the top of my head. I have a
23 -- it was in the contracts department of the Savannah
24 refinery, I believe.
25 Q. Would you have a telephone note of when you spoke
287
1 with him?
2 A. (Perusing.)
3 Q. I'm not suggesting that it would be in there.
4 A. Oh, in here.
5 Yes, I have a telephone note.
6 Q. Do you recall approximately when you spoke with
7 him?
8 A. About a week or so ago, couple weeks ago.
9 Q. As between vegetable production and sugar
10 production, which is more labor intensive?
11 A. If I recall correctly off the RIMS --
12 Wait, what do you mean by "labor intensive"?
13 Q. Which uses more labor?
14 A. Per acre, say?
15 Q. Per acre.
16 A. Or per million dollars of sales, is that what you
17 mean?
18 Q. Well, let's try per acre first, do you know?
19 A. Which is more labor intensive, vegetables or raw
20 sugar, including the production and processing.
21 I would say you could use -- compare the
22 multipliers, the employment multipliers, to determine what
23 that is, and if I recall correctly, the vegetable is more
24 labor intensive than the sugar production, if I recall
25 correctly.
288
1 But you can check in the report, in the contract
2 completion report and compare the employment multipliers
3 for raw sugar versus vegetables.
4 Q. The multiplier for sugar would include both
5 production and processing; is that correct?
6 A. Yes.
7 Q. In your 20-year analysis, do you plan to look at
8 any shifts in cropping patterns?
9 A. What do you mean by "shifts in" --
10 Q. A change from one crop to another as a result of
11 the impact.
12 MR. NETTLETON: Object to the form.
13 BY THE WITNESS:
14 A. The impact of what?
15 BY MS. STINSON:
16 Q. The Act and Settlement Agreement.
17 A. Yes, we plan to consider it. We always have
18 considered it.
19 Q. If your analysis -- well, let me back up.
20 In your analysis you show land going out of
21 production if costs of production exceed revenues; correct?
22 A. We show land going out of production when marginal
23 revenue is less than marginal cost.
24 Q. If you show land going out of production for one
25 type of crop, say celery, will your analysis consider
289
1 whether that land can still be in production in another
2 type of crop?
3 A. Yes, we did consider it.
4 Q. And do you plan to do that in your 20-year
5 analysis?
6 A. Yes.
7 Q. How?
8 A. The same way we did it in this analysis, the
9 10-year analysis.
10 Now, if your specific reference is to vegetables,
11 if vegetables go out of production, we have that -- the
12 only time vegetables go out of production in our analysis
13 is -- I guess celery goes out in the baseline -- but, in
14 answering your question, we do consider it and we look at
15 other alternative agricultural uses of the land.
16 Q. In the event your analysis shows sugar cane land
17 going out of production beyond the 35,000 acres actually
18 required for the STA, do you plan to look at alternative
19 uses for that land and, if so, what alternative uses?
20 A. We have looked at alternative uses and have found
21 that they were not physically or economically feasible.
22 The only economical agricultural use we hadn't looked at in
23 the 10-year was cow-calf operations.
24 Q. Do you plan to look at that in your 20-year
25 analysis.
290
1 A. Yes, and the only reason why it's appropriate is
2 because of the issue of soil subsidence.
3 Q. What do you mean by that?
4 A. Under the Act and the Settlement Agreement, if you
5 can't grow sugar on the land, you sure can't grow cows and
6 calves on the land.
7 Q. Why?
8 A. Because the profitability is not high enough.
9 Sugar cane is the highest and best use of the land. If you
10 can't grow the highest and best use of the land with an
11 assessment, then you can't grow anything else.
12 So we tried to look, okay, well, what could you do
13 on that land that has higher value than sugar cane, and we
14 did look at possibilities but they're just not technically
15 feasible to do on that land, or like urban development
16 issues aren't likely to occur.
17 So we looked at all the different types of land
18 uses that were appropriate during the 10-year study.
19 Q. And in the 20-year study you plan to additionally
20 look at cow-calf, on what, on land that would go out of
21 production because of soil subsidence?
22 A. Yes.
23 Q. Not because of the effect of implementation of the
24 Settlement Agreement and Act?
25 A. Correct.
291
1 Q. What information do you have on that issue?
2 A. We have costs -- we have cost and returns to
3 cow-calf operations in Florida.
4 Q. What is the source of that information?
5 A. It was some -- I haven't actually reviewed the
6 reports yet. I have them. But I haven't reviewed them and
7 I don't remember the author's name.
8 Q. Are they IFAS reports --
9 A. Yes. I believe so.
10 Q. -- in looking at the possibility of using land?
11 (Whereupon, a brief recess was taken.)
12 MS. STINSON: We'll adjourn now and start at 9
13 o'clock tomorrow.
14 (Whereupon, the deposition was concluded at 5:30
15 p.m.)
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292
1 STATE OF FLORIDA
2 COUNTY OF BROWARD
3 I, ELLEN N. COHEN, Registered Professional Reporter
4 of Parliamentary Reporting and Notary Public, State of
5 Florida at Large,
6 DO HEREBY CERTIFY that the foregoing deposition was
7 taken before me at the time and place stated herein; that I
8 administered unto the deponent their oath to testify to the
9 truth, the whole truth, and nothing but the truth; that
10 said deponent was there and then orally examined and
11 testified as herein set forth; that I reported said
12 examination and testimony stenographically, and that this
13 transcript of deposition constitutes a true and correct
14 transcription of the shorthand report of said deposition.
15 I FURTHER CERTIFY that I am neither related to nor
16 employed by any counsel or party to the cause pending, nor
17 interested in the event thereof.
18 IN WITNESS WHEREOF, I have hereunto affixed my hand
19 and official seal this 6th day of April 1993, at Broward
20 County, Florida.
21 ______________________________
22 ELLEN N. COHEN
23 Notary Public, State of Florida
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