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
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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.
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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.
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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.
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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?
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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 a