293
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 31, 1993
20
TIME: Commencing at 9:15 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
294
1 A P P E A R A N C E S
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
(Appearances continued on following page.)
25
295
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 USA
7
8 INDEX
DIRECT EXAMINATION BY MS. STINSON...............296
9 CROSS EXAMINATION BY MR. BURGESS................315
10 EXHIBITS
11
JOHNS' EXHIBIT No. 20..........................315
12
13
14
15
16
17
18
19
20
21
22
23
24
25
296
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:
6 Q. Ms. Johns, yesterday or the day before we spoke
7 about Exhibit 12 which is a memo to you from Jose Alvarez.
8 Would you read into the record the last comment on
9 the page, I believe it's number 5.
10 A. On the first page?
11 Q. Yes.
12 A. "One interesting point you should check because of
13 its potential implications for the future of the EAA, I
14 understand that most, if not all, vegetable growers are
15 also cane growers. The sugar program provides a steady
16 income that allows them to survive in bad years while
17 waiting for more favorable market conditions for
18 vegetables.".
19 Q. Do you have a handwritten comment beside that?
20 A. Yes, I do.
21 Q. What is that?
22 A. "Take this into consideration.".
23 Q. Are you planning to take that into consideration in
24 your 20-year analysis?
25 A. Yes.
297
1 Q. How?
2 A. I haven't completely thought it through yet so I
3 can't tell you exactly how I would do it.
4 Q. Give me some ideas about how you might do it, the
5 possibilities.
6 A. At the minimum, we would verbally discuss it when
7 talking about the effects to vegetable growers.
8 Q. You mean just in a narrative part of your report?
9 A. Yes.
10 Q. In what other ways might you handle that issue?
11 A. I don't know yet.
12 Q. In looking at land going out of production for
13 vegetables, will you take into consideration yield risk?
14 MR. NETTLETON: Objection. Asked and answered.
15 BY THE WITNESS:
16 A. Yes.
17 BY MS. STINSON:
18 Q. How?
19 A. Looking at or using the data from the previous five
20 years on yield per acre, taking into account the percent of
21 planting acres harvested.
22 Q. You are going to have to continue that thought.
23 Explain to me how that takes into consideration yield risk.
24 A. Yield risk would be embedded in percent of planted
25 acres harvested and the average yield over the five-year
298
1 period for the purposes of evaluating changes in land use.
2 Q. If the yield in, say, a five-year time period
3 ranges vastly from a very small yield to a very big yield,
4 is it reasonable to simply consider the average yield for
5 those five years?
6 A. Yes.
7 Q. If in that five-year period the average yield may
8 produce a positive return but say two or three of the five
9 years produce a negative return, would you have to or do
10 you intend to make an allowance for the cost of borrowing
11 working capital for the losing years?
12 MR. NETTLETON: Object to the form.
13 BY THE WITNESS:
14 A. It might be something necessary to do.
15 BY MS. STINSON:
16 Q. Do you plan to do that?
17 A. If it's necessary.
18 Q. You haven't made that determination yet?
19 A. For the 20-year forecast, no.
20 Q. Did you do that in the 10-year forecast?
21 A. Okay. Would you repeat the question.
22 (Whereupon, the pertinent portion of the Record was
23 read back by the Court Reporter.)
24 MR. NETTLETON: Object to the form.
25 BY THE WITNESS:
299
1 A. (Continuing) I would have to say no.
2 BY MS. STINSON:
3 Q. If land goes out of production under your analysis
4 for vegetables, what happens to it?
5 A. You're referring to the 10-year study we did?
6 Q. First let's talk about the 10-year, yes.
7 A. If vegetable land goes out of production, assumed
8 in the report was that it stayed idle, indirectly assumed
9 that.
10 Q. What will you do with it in the 20-year study?
11 A. I don't know yet.
12 Q. What are the possibilities for your assumptions
13 regarding what happens to land that goes out of production
14 for vegetables for your 20-year study?
15 A. It depends on why it goes out of production. If it
16 goes out -- if vegetables go out of production because it's
17 no longer profitable, the land could get planted into sugar
18 cane if that is profitable, and if neither one of those are
19 profitable then it would go into another use, if that use
20 were profitable or if the land can support that use.
21 Q. But you did not do that analysis for the 10-year
22 forecast?
23 A. For the 10-year forecast for vegetables, the only
24 possible land use I can think of at the moment is
25 converting it to sugar cane land. But we did not do that
300
1 in the 10-year study. That would have only applied to, I
2 believe, celery acreage going out of production later in
3 the forecast period.
4 Q. Why did you not do it in the 10-year but you might
5 do it in the 20-year?
6 A. Under the 20-year, land may go out of production
7 during the second 10-year period because of a thinner soil;
8 however, it may be possible to use the land for cow-calf
9 operations.
10 Q. Let me stop you there for a minute.
11 Under the scenario where land goes out of
12 production due to it no longer being profitable to produce
13 celery or corn or whatever, a vegetable, in the 10-year
14 analysis you had that land remain idle; right?
15 A. It wasn't a lot of land but it was the celery land
16 later in the forecast period and we did not look at what
17 would happen to the land if it went out of celery
18 production for that relatively small amount of acreage.
19 Q. But for the 20-year study you are telling me that
20 if land goes out of production for vegetables due to it no
21 longer being profitable to produce vegetables, you may look
22 at the possibility of that land being used for another crop
23 or another purpose; correct?
24 MR. SAXE: Objection to form.
25 BY THE WITNESS:
301
1 A. Yes.
2 BY MS. STINSON:
3 Q. And my question is why might you do it for the
4 20-year period when you didn't do it for the 10-year
5 period?
6 MR. NETTLETON: Objection. Asked and answered.
7 MR. SAXE: Objection. Asked and answered.
8 BY THE WITNESS:
9 A. We did do it for the 10-year period when we were
10 looking at sugar cane. That land, when that land went out
11 of production we looked at other possible uses, okay, and
12 that's described in the report.
13 BY MS. STINSON:
14 Q. My specific question is, though, vegetable land.
15 A. You are referring specifically to vegetables.
16 Q. Right.
17 A. Okay. The celery land, we did not look at the
18 positive impacts of that land in an alternate use but that
19 would only be -- the only possible alternate use I can
20 think of at the moment is to plant it into sugar cane.
21 Q. I understand that, and I understand you didn't do
22 it in the 10-year study. You told me you might look at
23 those alternate uses, the alternate use of sugar cane in
24 your 20-year study and I'm only trying to figure out why
25 now you may do it.
302
1 MR. NETTLETON: Object to the form.
2 BY THE WITNESS:
3 A. In the study we were looking at all the different
4 possible impacts from the Act and Settlement Agreement and
5 we concentrated on many issues. That particular issue in
6 terms of celery when it is -- was forecasted to go out of
7 production under the baseline and what would happen to that
8 particular land was not addressed in the study.
9 BY MS. STINSON:
10 Q. I'm sorry, I still don't have an answer that I
11 understand to the question: Why did you not look at
12 alternate uses in the 10-year study of vegetable land that
13 goes out of production due to it no longer being profitable
14 but you do plan to do that in the 20-year study?
15 MR. SAXE: Objection to form.
16 MR. NETTLETON: Object to the form.
17 MR. SAXE: Mischaracterizing.
18 MR. NETTLETON: She's already answered the first
19 part of that question and the second part of the
20 question she's repeated and says she doesn't know if
21 she's going to do it or not, and you're asking her why
22 she might do something. It's very speculative.
23 BY THE WITNESS:
24 A. We will look at it in the 20-year evaluation.
25 BY MS. STINSON:
303
1 Q. What difference is there between the 20-year and
2 the 10-year evaluation that makes you look at that question
3 again about whether you should consider alternate uses of
4 vegetable land that goes out of production due to it no
5 longer being profitable?
6 MR. NETTLETON: Object to the form.
7 BY THE WITNESS:
8 A. That issue during the 10-year study has a
9 relatively minor effect on the impacts, so we didn't spend
10 a lot of time looking at it. In the 20-year evaluation,
11 that may very well become a larger issue that needs to be
12 addressed.
13 BY MS. STINSON:
14 Q. In performing economic impact assessments, are
15 there techniques which should be used in order to analyze
16 uncertainty in the future scenarios?
17 A. Could you repeat the question one more time.
18 (Whereupon, the pertinent portion of the Record was
19 read back by the Court Reporter.)
20 BY THE WITNESS:
21 A. Yes.
22 MR. SAXE: Objection to form.
23 A. If you are doing an economic impact assessment on
24 an individual farm, the economic impact that you are
25 looking at is the impact to that individual farm owner, the
304
1 owner of that farm. And in that case you would want to
2 incorporate uncertainty via -- I think I know what you are
3 getting at -- via a stochastic analysis. But when you are
4 looking at changes in land use, you do not have to do a
5 stochastic analysis.
6 BY MS. STINSON:
7 Q. Well, I think my question is broader than that.
8 If, in looking at whether land will stay in production, you
9 are not sure about, say, the price supports or changes that
10 may occur, are there certain techniques that you, as an
11 economist, will use to make your projections in light of
12 that uncertainty?
13 MR. SAXE: Objection to form. Vague.
14 Do you want an answer specifically about
15 uncertainties in a federal price support program?
16 MS. STINSON: No.
17 MR. SAXE: Or any kind of uncertainty?
18 MS. STINSON: That's just an example.
19 MR. NETTLETON: Read back the question, please.
20 (Whereupon, the pertinent portion of the Record was
21 read back by the Court Reporter.)
22 BY THE WITNESS:
23 A. In the 10-year analysis, what the grower -- what we
24 have, whoever owns the land at the time is doing is --
25 Okay, there's an issue regarding whether or not
305
1 land --
2 I'm sorry, I just don't understand the question. I
3 just can't respond to it very well the way it's worded.
4 BY MS. STINSON:
5 Q. In your 20-year analysis, are you making any
6 assumptions with respect to whether BMPs will decrease
7 yield of either sugar, vegetables or sod?
8 MR. NETTLETON: Objection. Asked and answered.
9 BY THE WITNESS:
10 A. Just for clarity, could you repeat the question.
11 (Whereupon, the pertinent portion of the Record was
12 read back by the Court Reporter.)
13 A. Not at this time.
14 BY MS. STINSON:
15 Q. Might you make such assumptions and you just don't
16 know yet?
17 MR. NETTLETON: Objection. Calls for
18 speculation.
19 BY THE WITNESS:
20 A. I just don't know yet. It's hard to tell you
21 what I'm going to do on the 20-year analysis when we
22 haven't completed the 20-year analysis.
23 BY MS. STINSON:
24 Q. Well, part of my questioning is to try to figure
25 out what part of your 20-year analysis you may have made
306
1 decisions on so far, so if it's something that you are
2 still considering but just haven't decided yet, you know,
3 just tell me that, that's fine.
4 Have you made any assumptions with respect to
5 whether BMPs will cause an increase in yield risk?
6 A. We have not made any assumptions at this time.
7 Q. Is that something, again, that you are looking at
8 but just haven't come to a conclusion yet?
9 A. Yes.
10 Q. Have you at this point determined what effect or
11 role rice production will have in your analysis?
12 MR. NETTLETON: Object to the form.
13 BY THE WITNESS:
14 A. Which analysis?
15 BY MS. STINSON:
16 Q. (Continuing) Your 20-year analysis.
17 A. That will be a BMP that we consider, that we
18 incorporate into the analysis just as we did in the 10-year
19 analysis.
20 Q. Can you tell me specifically how it will be
21 incorporated?
22 A. Very similarly to what we did in the 10-year
23 analysis.
24 Q. In your 20-year analysis is it true that you intend
25 to make a projection of the number of acres of land going
307
1 out of production by crop by yield belt?
2 A. For sugar cane, yes.
3 Q. What about for vegetables?
4 A. Vegetables are not stratified by yield belt.
5 Q. Will you make a determination for vegetables by
6 crop and by soil type?
7 A. We intend to.
8 Q. And you currently have data on how much sugar cane
9 is grown per yield belt; correct?
10 A. Yes.
11 Q. And you currently have data on what types of
12 vegetables are grown by soil type; is that correct?
13 A. Yes.
14 Q. But it's true that you have not yet made the
15 calculations of how much sugar is grown per yield belt; is
16 that correct?
17 A. Did you say calculations?
18 Q. Right.
19 A. In belt five we have made such calculations.
20 Q. Is that the only belt in which you have?
21 A. Yes. As far as I can recall.
22 Q. For vegetables, have you made any calculations to
23 determine how many acres of what vegetables are grown per
24 soil type?
25 A. No.
308
1 Q. Is that something you will need to do to come to
2 your conclusions in your 20-year study?
3 A. At this time, yes.
4 Q. In your 20-year study you plan to make projections
5 based on two different assumptions with respect to the
6 depth of soil necessary to grow sugar cane; correct?
7 A. Yes.
8 Q. Do you plan to make two different assumptions with
9 respect to the soil depth necessary to grow vegetables?
10 A. I don't know if we will use two, but yes, we have
11 to -- we will be looking at that.
12 Q. Well, it's my understanding that, specifically for
13 sugar, that you are going to use two different depths; is
14 that correct?
15 A. At this time, yes.
16 Q. Are you telling me that you don't know for
17 vegetables whether you plan to use two different depths?
18 A. Correct. I don't know for sure yet.
19 Q. What about sod, do you plan to use two different
20 depths of soil for sod?
21 A. I don't know yet.
22 Q. And for the sugar, you don't know what two depths
23 you are going to use; correct?
24 A. Correct.
25 MR. SAXE: Objection. Asked and answered.
309
1 BY MS. STINSON:
2 Q. For your 20-year projection you plan to use either
3 two or three different assumptions with respect to future
4 sugar prices; correct?
5 A. Correct.
6 Q. One being a constant and then one or both of either
7 a higher or lower number?
8 A. As we sit here, that's what we're thinking of
9 doing, but we may not do it.
10 Q. You may not even do two, is that what you are
11 saying?
12 A. We will probably do two.
13 Q. And at this time you have not yet decided, other
14 than constant, what other sugar price or prices you may use
15 in your 20-year study?
16 A. That's correct.
17 Q. Do you plan to use two or more different scenarios
18 regarding future vegetable prices?
19 A. I don't know.
20 Q. With respect to soil depth, in addition to
21 determining or selecting two different depths at which land
22 will go out of production for sugar, you intend to consider
23 increased cost of production at some soil depth; correct?
24 A. Correct.
25 Q. Will you do that at two different soil depths or
310
1 one; do you know?
2 A. I don't know.
3 Q. And am I correct that you also don't know what
4 additional costs you will be using?
5 A. I don't know.
6 Q. In your 20-year analysis, do you know what
7 assumption you will be making with respect to a
8 productivity increase for sugar?
9 A. I don't know what the specific assumption would be.
10 Q. Do you know whether you will be using some sort of
11 increasing trend in productivity?
12 A. We might, if it's -- if we feel it's appropriate.
13 Q. But you don't at this point know whether you will?
14 A. Correct.
15 Q. With respect to the yield per acre of sugar cane,
16 tons per acre, do you know what assumption you will be
17 using for your 20-year projections?
18 A. No.
19 Q. Do you know at this point what assumptions you will
20 use to project the costs of production and processing
21 sugar?
22 A. No.
23 Q. Do you know whether you will be using an inflation
24 rate per component of cost or you will simply be doing some
25 sort of general trend based on past overall costs?
311
1 MR. NETTLETON: Object to the form.
2 BY THE WITNESS:
3 A. We don't know. I don't know yet.
4 BY MS. STINSON:
5 Q. With respect to vegetables, do you know what
6 assumptions you will be using with respect to productivity,
7 whether it will decrease, increase or stay the same?
8 A. You are referring to the 20-year evaluation --
9 Q. Right.
10 A. -- that we haven't completed yet?
11 Q. Correct.
12 A. I don't know.
13 Q. Do you know what assumptions you will be using with
14 respect to the future cost of producing vegetables for your
15 20-year study?
16 A. No, we haven't made a final decision.
17 Q. Have you made a decision regarding what assumptions
18 you will make with respect to the future price of
19 vegetables in your 20-year study?
20 A. We haven't finalized that either.
21 Q. In your 20-year study, you are looking at the
22 possibility of sugar cane land being converted to cow-calf
23 operations on land that goes out of production due to soil
24 depth; correct?
25 A. We're looking at that possibility.
312
1 Q. Have you yet made a decision on how to use that
2 possibility?
3 A. No.
4 Q. Have you completed any portion of your 20-year
5 study?
6 MR. NETTLETON: Object to the form.
7 BY THE WITNESS:
8 A. I don't understand the question. I don't know what
9 you mean by "portion."
10 BY MS. STINSON:
11 Q. Have you completed any tables you intend to use in
12 your 20-year study?
13 A. No.
14 Q. Have you completed any narrative portion of your
15 20-year study?
16 A. No.
17 Q. Well, who in addition to yourself personally will
18 be working on completing the 20-year study?
19 MR. NETTLETON: Asked and answered.
20 BY THE WITNESS:
21 A. No one else.
22 Chris Meline is available if I need any minor
23 things completed, but I'm going to be responsible for doing
24 the study.
25 BY MS. STINSON:
313
1 Q. Can you list for me what tasks you must complete to
2 finish your 20-year study?
3 MR. NETTLETON: Object to the form.
4 BY THE WITNESS:
5 A. Completing the modeling, finalizing the projections
6 and the assumptions used and the data used, determining the
7 job -- determining the change in production, the change in
8 jobs, earnings, sales and taxes, and reporting the results.
9 BY MS. STINSON:
10 Q. Tell me what you mean by "completing the modeling."
11 A. Well, if you remember from the other day, there is
12 a -- we got -- we received a request to link all the tables
13 in the contract completion report within the Lotus 1-2-3
14 spreadsheet so that you can change assumptions relatively
15 easily and the calculations would allow one to -- you can
16 quickly calculate the impacts more quickly than currently
17 exists.
18 Q. Are you personally doing the modeling, working on
19 the computer model?
20 A. Yes.
21 Q. How much time do you anticipate it will take to
22 complete the modeling?
23 A. Three or four days maybe.
24 Q. Is there additional data that you need to gather to
25 complete your 20-year study that you have not yet compiled?
314
1 A. There may be a little bit of data regarding the
2 cost of managing soil subsidence.
3 Q. Where do you plan to get that data?
4 MR. SAXE: Objection to form.
5 A. At this time I'm searching for a company that would
6 rent out services to dig canals through the rocks.
7 Q. Any other source?
8 A. Not at this time, no.
9 Q. Any other data that you still need to compile?
10 A. Not at this time.
11 Q. Are you saying there might be but you just don't
12 know yet?
13 MR. SAXE: Objection to form.
14 BY THE WITNESS:
15 A. I'm saying at this time that's all the data we need
16 to collect.
17 BY MS. STINSON:
18 Q. Well, when you say "this time," are you
19 qualifying that by saying you might need to get more data
20 but you are just not sure?
21 MR. SAXE: Objection to form.
22 BY THE WITNESS:
23 A. I'm saying that at this time we have practically
24 all the data we need. Now, if tomorrow or the next day
25 something comes up and we feel we need to collect
315
1 additional data, then we will.
2 MS. STINSON: I don't have any other questions.
3 Can we go off the record, though?
4 MR. NETTLETON: Sure.
5 (Whereupon, a discussion was held off the record.)
6 (Whereupon, a brief recess was taken.)
7 CROSS EXAMINATION
8 BY MR. BURGESS:
9 MR. BURGESS: Mark this, please, as Exhibit 20.
10 (Whereupon, Johns Exhibit No. 20 was marked for
11 identification by the Court Reporter.)
12 Q. Dr. Johns, for the record, I represent the Florida
13 Sugar Cane League, Inc., United States Sugar Corporation
14 and New Hope South, Inc., and, similar to Donna Stinson, if
15 you don't understand any of my questions, I'd ask you to
16 ask me to rephrase so I have the opportunity to do that,
17 otherwise I'll assume that you understood the question I
18 asked; okay?
19 A. Yes, okay.
20 Q. Let me show you what we've marked as Exhibit 20 for
21 identification and ask you if you can identify that
22 document.
23 A. Yes.
24 Q. What is it?
25 A. It's a memorandum from me to Sally Kennedy dated
316
1 December 24, 1992.
2 Q. Could you turn to page 3 of that document.
3 Paragraph 3 starting with "Debt:" is where I'm referring
4 you to; okay.
5 What assumption with respect to long-term debt did
6 you make in your 10-year study?
7 A. Could you define "long-term debt"?
8 Q. Debt on land.
9 A. We didn't need to make any assumptions on debt on
10 land.
11 Q. Do you anticipate making any assumptions concerning
12 debt on land for your 20-year study?
13 A. No.
14 Q. The last sentence in paragraph 3 says, "Public
15 information on farm debt in the EAA is not available at
16 this time."
17 What would you do with that information if it was
18 available?
19 A. We would try to say something about the likelihood
20 of one owner selling his land to someone else.
21 Q. Would knowledge of long-term debt in the EAA have
22 any effect on your conclusions with respect to when your
23 model farms exit production?
24 A. It would not make a difference.
25 Q. And the reason it would not make a difference is
317
1 what?
2 A. Because if a particular owner of a farm could not
3 pay the long-term debt, that would not necessarily cause
4 land to leave production.
5 Q. Did I ask you what you would do with long-term debt
6 information if you had it for your 20-year study? Did I
7 ask you that, do you recall?
8 A. I don't recall.
9 Q. Assume for the purposes of this question that you
10 had knowledge with respect to a range of long-term debt of
11 the farmers in the EAA, what would you do with that
12 information in your 20-year analysis?
13 MR. NETTLETON: Object to the form.
14 BY THE WITNESS:
15 A. Probably nothing.
16 BY MR. BURGESS:
17 Q. Again, because in your opinion it's not important
18 for determining when land leaves production?
19 A. Correct, if you are talking about land debt, yes.
20 Q. It makes no difference as to when your model farms
21 exit production?
22 A. Correct.
23 Q. The next paragraph on Exhibit 20 titled "Income
24 Taxes," in the response portion you begin "We agree that
25 income taxes are a significant element in the accumulation
318
1 of cash over time," and the last sentence says "The
2 inclusion of income taxes in our analysis would not change
3 the results."
4 What are your plans with respect to including or
5 not including income taxes in your 20-year analysis?
6 A. Income taxes, the consideration of income taxes has
7 always been included in our analysis and they will be
8 included in the 20-year analysis just as they have been
9 included in the 10-year analysis.
10 Q. How did you include them in your 10-year analysis?
11 A. They are included as a cost of production.
12 Q. What did you mean by the last sentence in paragraph
13 4, "The inclusion of income taxes in our analysis would not
14 change the results"?
15 A. There I'm inferring to the fact that we didn't
16 specifically subtract it from our spreadsheets in the
17 appendices.
18 Q. Do you anticipate that you will subtract them from
19 your spreadsheet in the appendices in your 20-year study?
20 A. I don't know.
21 Q. Are you considering that issue for the 20-year
22 study?
23 A. Yes. But it would not nec -- it's not going to
24 change the results whether I subtract them out or not.
25 Q. The next page, page 4 under item number 6, "Price
319
1 Policy." Under response there's a sentence which reads,
2 "However, recent progress on the NAFTA and the potential
3 for it to affect future prices will be evaluated during the
4 20-year forecast."
5 How are you evaluating that in the 20-year
6 forecast?
7 A. At the time this memo was written was
8 December 24, and any progress that had been made in the
9 NAFTA agreement would be considered in the analysis. So we
10 have looked at the current agreement that they have with
11 NAFTA that isn't final yet and we have looked at it and we
12 will make a decision whether or not it has the potential to
13 affect future prices.
14 Q. So the consideration of NAFTA in the 20-year study
15 will be reflected in your pricing scenarios?
16 A. Yes.
17 Q. Will it be reflected in any other way?
18 A. Not that I can think of at the moment.
19 Q. The pricing scenarios that you've testified you are
20 considering, will you apply those pricing scenarios across
21 the entire 20-year study time period or only to the second
22 10 years of the 20-year period?
23 A. I don't know yet.
24 Q. Is it, therefore, conceivable that, with respect to
25 your 20-year study, you may maintain the pricing
320
1 assumptions from your first 10-year study and only apply
2 these new pricing assumptions to the second 10-year period?
3 MR. NETTLETON: Object to the form.
4 BY THE WITNESS:
5 A. I don't know if that's a possibility or not, I
6 can't tell you.
7 BY MR. BURGESS:
8 Q. In any event, you'll make that decision before
9 April 15?
10 A. Yes.
11 Q. Number 7 titled "Price Level" talks in terms of
12 integration of mills and growers and in your response, the
13 next to the last sentence reads, "We do not intend to
14 change our methodology on this issue."
15 Does "this issue" refer to integration of mills and
16 growers?
17 A. No, the issue refers to the calculation of maximum
18 sugar cane price.
19 Q. Do you intend to calculate maximum sugar cane price
20 for your 20-year study in the same way as it was calculated
21 in the 10-year study?
22 A. We intend to use the concept of maximum sugar cane
23 price but I can't tell you at this time exactly how we're
24 going to calculate it.
25 Q. Do you intend to calculate a maximum sugar cane
321
1 price only for the second 10-year period or do you intend
2 to calculate an applicable price for a 20-year time price?
3 A. I can't tell you.
4 Q. You calculated in your 10-year study a maximum
5 sugar cane price; is that correct?
6 A. Yes.
7 Q. Do you know whether you intend to use that same
8 price for your 20-year study?
9 A. I don't know.
10 Q. Do you know whether the price that you may
11 calculate for your 20-year study will be a price that you
12 apply to the entire 20-year horizon or just to the second
13 10 years of the 20-year study?
14 MR. NETTLETON: Object to the form. By "price"
15 you mean their maximum price?
16 MR. BURGESS: Yes, the maximum sugar cane price.
17 BY THE WITNESS:
18 A. I'm sorry, I don't understand the question. You
19 need to be more specific.
20 BY MR. BURGESS:
21 Q. Well, it really has to do I guess more with
22 conceptually the 20-year study versus the 10-year study.
23 Are you revisiting the entirety of your 10-year study?
24 A. We're revisiting certain -- yes, I guess you could
25 say that.
322
1 Q. Have you made any decisions as you sit here today
2 with respect to what portions of the 10-year study will
3 remain exactly as they are and which ones might change?
4 A. We haven't made that decision.
5 Q. With respect to your calculation of a maximum sugar
6 cane price, you do intend to calculate one for the 20-year
7 study?
8 A. Yes.
9 Q. And it might be the same one as in your 10-year
10 study?
11 A. You mean one or ones? You mean the concept, the
12 methodology?
13 Q. Yes.
14 A. We intend to calculate that in the 20-year study.
15 Q. Do you intend to apply the results of that
16 calculation to the 20-year time period or just to the
17 second 10-year time period for which it has not yet been
18 calculated?
19 MR. NETTLETON: Object to the form.
20 BY THE WITNESS:
21 A. I don't know.
22 BY MR. BURGESS:
23 Q. Did you understand the question?
24 A. I'm not sure.
25 Q. Paragraph 7 also talks about integration of mills
323
1 and growers. Do you anticipate that your assumptions with
2 respect to integration of mills and growers made in your
3 10-year study will carry over and be the same assumptions
4 in your 20-year study?
5 A. Your question is very broad but I'll go ahead and
6 answer it.
7 We don't intend to change anything regarding what
8 we did with regard to integration of mills.
9 Q. Except you do intend to apply the results of the
10 integration of the mills and growers over a 20-year time
11 period; is that correct?
12 MR. NETTLETON: Object to the form.
13 BY THE WITNESS:
14 A. I don't understand the question.
15 BY MR. BURGESS:
16 Q. You do intend to examine the returns to mills, or,
17 I'm sorry, the returns to growers over a 20-year time
18 period; do you not?
19 A. We do intend to examine the residual returns to
20 land and risk over the 20-year period.
21 Q. And you intend to apply the same assumptions with
22 respect to vertical integration of mills and growers to
23 that examination over a 20-year period that you applied to
24 a 10-year period; is that your testimony?
25 MR. NETTLETON: Object to the form.
324
1 BY THE WITNESS:
2 A. The Hazen and Sawyer analysis does not rest on
3 whether the mills -- whether or not the mills are
4 integrated, that's on page 4 of this memo.
5 BY MR. BURGESS:
6 Q. I understand that that's your opinion but I'm
7 asking you whether or not you intend to make the same
8 assumptions in your 20-year study with respect to whether
9 or not the mills are integrated --
10 MR. SAXE: Objection. Asked and answered.
11 Q. -- in your 10-year study?
12 BY THE WITNESS:
13 A. I don't need to make that assumption, it's
14 irrelevant.
15 BY MR. BURGESS:
16 Q. Do you assume any level of integration between
17 mills and growers in your 10-year study?
18 A. No.
19 Q. Number 8 refers to mill efficiency, bottom of page
20 4. And the top of page 5 in your response, second line
21 starts "However," or a sentence in the second line begins
22 "However, the way in which mill efficiency is expected to
23 increase in the future, the impact on milling costs and
24 increases in the cost-efficiency of milling and sugar cane
25 production deserves further evaluation."
325
1 Are you evaluating those items with respect to your
2 20-year analysis?
3 A. Yes.
4 Q. Have you reached any preliminary or final
5 conclusions with respect to how you are going to treat them
6 in your 20-year analysis?
7 A. No.
8 Q. The last sentence says, "The issue of changes in
9 mill efficiency and changes in costs of milling and
10 production will be addressed more thoroughly in the 20-year
11 analysis of economic impacts."
12 Do you have any preliminary opinions with respect
13 to those changes?
14 A. The only preliminary work --
15 I don't have any final conclusions or opinions.
16 We've been looking at the information and examining it.
17 Q. Are you examining that with respect to the entire
18 20-year period or only the second 10 years of the 20-year
19 period?
20 A. We've been looking at it with a possi --
21 We've been looking at the information with respect
22 to how to forecast it during the entire 20-year period.
23 Q. Is it possible that conclusions in your 10-year
24 report with respect to mill efficiency may change in this
25 20-year analysis as a result of your looking at the entire
326
1 period?
2 A. It may change.
3 Q. For that initial 10-year period?
4 A. Correct.
5 It might.
6 Q. How did you calculate mill efficiency trend?
7 A. Okay, to the best of my recollection, we took the
8 pounds of raw sugar per ton of sugar cane, a time series of
9 that, and we calculated the percent change in that from
10 year to year. Then we averaged that and got an average of
11 2 percent increase in efficiency.
12 Q. With respect to your time series, do you recall
13 what time series you used?
14 A. The beginning point was probably '64 to the
15 present.
16 Q. And at that time when you calculated that time
17 series, did you examine alternate time series, an alternate
18 period of record, if you will?
19 A. Not that I recall.
20 Q. And have you since examined an alternate period of
21 record?
22 A. Yes.
23 Q. And is that the '77 and '92 you testified about
24 yesterday?
25 A. Yes.
327
1 Q. Other than those two periods of record, have you
2 done the calculation using other periods of record?
3 A. Not that I recall.
4 Q. Have you decided whether you are going to use the
5 '64 to '92 or the 1977 to 1992 period of record in your
6 20-year analysis?
7 A. The only reason I picked that first date was
8 because I wanted all the mills to be in place as they
9 currently are and apparently I must have thought that
10 occurred in 1964, but since then I have information that
11 says that it occurred in '77, so we're going to continue
12 using the '77 to '92.
13 Q. Okay, which is different than what's in your
14 10-year period, 10-year report?
15 A. Correct. As far as I can remember.
16 Q. Have you quantified the change in the trend
17 resulting from the different periods of record?
18 A. I'm sorry, would you -- I don't understand the
19 question.
20 Q. Have you determined what change, if any, there is
21 in mill efficiency trends between using the period of
22 record 1964 to 1992 and 1977 to 1992?
23 A. No, I never calculated that.
24 Q. Well, how, if at all, will using the '77 to '92
25 time period change the results from the 10-year study?
328
1 A. I don't know.
2 Q. Are you examining whether it might?
3 A. I haven't cared about it, but I'm sure that
4 ultimately when we do the entire study, if there's a
5 change, we'll note that change in the results.
6 Q. Your next paragraph, number 9, under "Farm
7 Management," and your response, second sentence, "Their
8 most useful observation was the approach of replacing 10
9 percent of the machinery per year instead of our method
10 which assumes that all machinery is purchased at the
11 beginning of the forecast period. This change will have
12 little, if any, effect on our results."
13 Have you evaluated whether changing their approach
14 of replacing 10 percent of this machinery per year instead
15 of your method will have little, if any, effect over the
16 20-year period?
17 A. No, I have not.
18 Q. Are you going to do that?
19 A. I don't know.
20 Q. What assumptions will you make for your 20-year
21 study concerning replacement of machinery?
22 A. I don't know.
23 Q. What are you considering?
24 A. Lately, throughout the 20-year evaluation -- at
25 this time we have not changed what we did in the 20-year --
329
1 in the 10-year evaluation.
2 Q. With respect to the machinery compliment?
3 A. The depreciation of farm machinery.
4 Q. Is that something you are considering as you do
5 this 20-year study?
6 A. We haven't considered it yet -- I mean --
7 I'm sorry, I don't understand the question.
8 Q. Have you made a decision that with respect to your
9 20-year analysis you will use the same approach with
10 respect to the machinery compliment that you utilized for
11 the 10-year study?
12 A. We haven't made that decision yet.
13 Q. Number 10, "Model Farms." The last two sentences
14 under your response say, "This information was not
15 available during our study. We intend to use this
16 information in the 20-year forecast."
17 What information are you referring to there?
18 A. At the time of the meeting we had with Jim
19 Richardson, he informed us that the USDA had recently
20 available data on the cost of production by farm size in
21 the Everglades agricultural area, so we, during when I
22 wrote this letter, I meant that if we could get such
23 information, we would use it in the 20-year forecast.
24 Q. Were you able to get such information?
25 A. No, we were not.
330
1 Q. Did you try?
2 A. Yes.
3 Q. What did you do?
4 A. I called USDA and talked to Annette Clausen and she
5 told me that that data was not available.
6 Q. Number 11 addresses the issue of BMPs and under
7 your response you say, "We will consider any additional
8 information on BMPs that was not available during the study
9 when we evaluate the impacts of the 20-year period."
10 I believe yesterday you testified that, with
11 respect to BMPs, you would consider the Brown & Caldwell
12 report; is that correct?
13 A. Yes.
14 Q. In your reexamination of BMPs, are you going to
15 re-examine costs for BMPs for the entire 20-year horizon or
16 only the second 10 years of the 20-year period?
17 A. We would consider it for the entire 20-year
18 horizon, and the only reason why we're doing this
19 reconsideration of the first 10 years is to be consistent
20 with the first and the second 10-year period.
21 Q. And is it your testimony that you intend to use the
22 cost figures from the Brown & Caldwell report?
23 A. At this time, yes.
24 Q. Are you aware of whether or not the growers in the
25 EAA dispute the cost figures in the Brown & Caldwell
331
1 report?
2 A. I'm not specifically aware of it, no.
3 Q. Yesterday I believe you testified that you do not
4 intend to talk to the growers with respect to cost figures
5 for BMPs. Assuming that several, if not all, growers in
6 the EAA dispute the cost figures in the Brown & Caldwell
7 report, would you consider changing your decision not to
8 talk to them?
9 MR. NETTLETON: Object to the form.
10 MR. SAXE: Objection to form.
11 BY THE WITNESS:
12 A. Could you restate the question more specifically?
13 BY MR. BURGESS:
14 Q. Do you recall your testimony yesterday that you do
15 not intend to talk to the growers about the cost figures in
16 the Brown & Caldwell report?
17 A. Yes.
18 Q. Assuming that growers in the EAA dispute the cost
19 figures in the Brown & Caldwell report, which you've
20 testified to, you were not aware that they did or didn't,
21 but assuming for purposes of my question that they did,
22 would you reconsider your decision not to talk to them
23 about BMP costs in the Brown & Caldwell report?
24 MR. NETTLETON: Object to the form.
25 BY THE WITNESS:
332
1 A. Yes, I could reconsider.
2 BY MR. BURGESS:
3 Q. Do you know how the cost figures for the BMPs
4 contained in the Brown & Caldwell report compare to those
5 that you assumed for your 10-year report?
6 A. For the sugar cane the costs are pretty consistent
7 when you look at Brown & Caldwell's 45 percent reduction in
8 phosphorus, so we're consistent with that there as far as I
9 can tell from reading the report.
10 Q. Are you --
11 A. (Continuing) For --
12 Q. I'm sorry?
13 A. For vegetables, we appear to be consistent for the
14 45 percent reduction except our banding costs are higher
15 than theirs, and sod, we were told by the District that
16 they probably wouldn't need to implement the BMPs, so we do
17 not have costs of sod production -- I mean, I'm sorry, the
18 costs of BMPs in sod production in the 10-year report.
19 Q. Do you know how your numbers compare with Brown &
20 Caldwell's for any of the other scenarios besides the 45
21 percent reduction?
22 A. In the 10-year report we looked at the growers
23 implementing the cell of BMPs that matches -- that pretty
24 closest matches, as far as I can understand from the
25 report, the 45 percent reduction in phosphorus.
333
1 Q. For your 20-year forecast, are you re-evaluating
2 both the price received for raw sugar by the mill and the
3 price received by the model farms in your 10-year report?
4 A. Are we re-evaluating it?
5 Q. Are you evaluating it for your 20-year study?
6 A. I don't understand the question.
7 Q. In your 10-year report did you consider prices
8 received for raw sugar by the mill?
9 A. Yes.
10 Q. And are you going to consider prices received by
11 the mill for your 20-year study?
12 A. Yes.
13 Q. Do you know how, if at all, the prices in your
14 10-year study will differ from those for your 20-year
15 study?
16 A. I don't know.
17 Q. Are you considering changing the price contained in
18 your 10-year report for the first 10 years of your 20-year
19 analysis?
20 A. I'm evaluating whether it should be changed, if at
21 all.
22 Q. Is that something you'll decide on finally by April
23 15?
24 A. Yes, I believe so.
25 Q. You testified, I believe it was on Monday, with
334
1 respect to transmittal of draft copies of your 10-year
2 analysis and you said, I believe, anyone who provided key
3 information was sent a draft of the report.
4 Were you speaking in terms of the draft that was
5 made public two weeks before the final edition of the
6 10-year report or were you testifying concerning a draft of
7 the draft?
8 Do you recall that testimony at all?
9 A. Yes.
10 Q. Do you know whether you were testifying about the
11 draft that was made public two weeks before the final or
12 was it an earlier edition or version of the draft?
13 A. I believe I was referring to the final report and
14 the contract completion report and perhaps, but I don't
15 remember, the draft report.
16 Q. There was a draft edition of the 10-year study that
17 was made public approximately two weeks before it became
18 final; is that correct?
19 A. Yes.
20 Q. Do you know whether that draft, before it became
21 public, was sent to anyone for review and comment?
22 MR. SAXE: Objetion to form.
23 Counsel, what do you mean "before it became
24 public"?
25 MR. BURGESS: Before it was released to the South
335
1 Florida Water Management District in draft form two
2 weeks before it was final.
3 MR. SAXE: Objection to form.
4 BY THE WITNESS:
5 A. As far as I remember, I submitted it to the
6 District before I submitted it to anyone else.
7 BY MR. BURGESS:
8 Q. I believe you also testified on Monday with respect
9 to survey results of businesses in the EAA and, if I recall
10 your testimony, you said that you would be using these
11 survey results of businesses in your 20-year analysis.
12 Have you, in fact, sent out surveys to suppliers
13 with respect to your 20-year study?
14 MR. NETTLETON: Object to the form.
15 BY THE WITNESS:
16 A. I don't understand the question.
17 BY MR. BURGESS:
18 Q. Do you recall testifying about surveys that were
19 sent to businesses in the EAA?
20 A. Yes.
21 Q. Did you, in fact, do that for your 10-year study?
22 A. Yes.
23 Q. Have you made an additional effort to send out
24 additional surveys with respect to your 20-year study?
25 A. No.
336
1 Q. Did you incorporate the results of the surveys in
2 your 10-year study?
3 MR. BURGESS: Let me withdraw the question.
4 Q. Did you consider the results from the surveys for
5 your 10-year study?
6 A. Yes.
7 Q. And are you doing anything with those same survey
8 results in connection with your 20-year study?
9 A. Yes.
10 Q. What are you doing?
11 A. The same that we did in the 10-year report.
12 Q. How are you considering them?
13 A. In the 10-year report we used the information
14 specifically to determine the origin of, or the living --
15 where the employees live.
16 Q. And that is the same or similar information that
17 you are going to consider in your 20-year report?
18 A. Yes.
19 Q. And you are not using those in any other manner for
20 your 20-year report?
21 A. Not that I know of at the moment.
22 Q. With respect to supplies or labor or materials or
23 any conclusions?
24 A. Not at the moment, not as I sit here, but it could
25 change.
337
1 Q. I believe also on Monday you testified that you did
2 not consider time series of vegetable costs of production
3 in the 10-year study. Do you know whether you are going to
4 consider that in your 20-year study?
5 A. Yes, we are considering it.
6 Q. And are you examining that for the entire 20-year
7 period?
8 A. I don't understand the question.
9 Q. Your testimony is that you didn't consider time
10 series of vegetable cost of production for the initial
11 10-year study, and I'm asking you: With respect to the
12 20-year study, you are only going to examine that for the
13 second 10 years of the entire 20-year study or for the
14 entire 20-year horizon?
15 A. We will be looking at it in terms of making
16 decisions regarding how costs change over the entire
17 20-year horizon.
18 Q. Do you have any preliminary or final opinions with
19 respect to how those costs change over the 20-year horizon?
20 A. No.
21 Q. Why didn't you consider that in your 10-year study?
22 A. I was not aware of, at the time, that there was a
23 consistent time series of costs of production and...
24 Q. When did you become aware and do you have the data
25 now?
338
1 A. I have the data now. I began --
2 When did I become aware? Probably a month or so
3 ago, that it was a consistent time series.
4 Q. Where did you get the data from?
5 A. IFAS.
6 Q. How will looking at vegetable costs of production
7 in this time series manner affect any conclusions regarding
8 vegetables contained in your 10-year report?
9 A. In my 10 -- you mean in relationship to the 10-year
10 report?
11 Q. Yes.
12 A. It will either justify our assumptions of how costs
13 increase over time or it won't.
14 Q. What information did you ask Ellen Wine to supply
15 to you in connection with your 20-year study on vegetables?
16 A. I asked her to review the contract completion
17 report, which is the 10-year evaluation, to review what we
18 did in terms of vegetable production. I asked her to
19 review that, provide comments to me, provide alternate
20 information that we could use, and I also asked her to
21 provide me with some more detail on the table of revenues
22 and costs that she provided the Everglades Funding Council.
23 Q. When did you ask her for this?
24 A. A month and a half ago maybe. I'm estimating.
25 Q. Have you had any conversations with her in those
339
1 six weeks?
2 A. Yes.
3 Q. And what were the substance of those conversations?
4 A. First I called to ask if she received the package,
5 and then we talked about that she said she would look at
6 the report and she would provide me with the backup
7 information for the cost and revenue table she gave us.
8 And we agreed on a date when she would provide that
9 information to me.
10 Q. What was that date?
11 A. I think it was like a week and a half after she
12 received it, maybe two weeks after she received the request
13 from me, at least.
14 Q. Did you receive anything from her?
15 A. No.
16 Q. Have you talked to her again to follow up to your
17 request?
18 A. No.
19 Q. You testified on Tuesday that you did not analyze
20 the economic impact of changes in land ownership for your
21 10-year study. Are there, in your opinion, any economic
22 impacts associated with changes in land ownership?
23 MR. NETTLETON: Object to form.
24 BY THE WITNESS:
25 A. To the owner there is or to the bank or whoever
340
1 is left with the land. To an individual person.
2 BY MR. BURGESS:
3 Q. What are those economic impacts?
4 MR. NETTLETON: Object to the form.
5 BY THE WITNESS:
6 A. In the report we talk about the income lost by
7 growers in the Everglades agricultural area because of the
8 certain aspects of the Act and Settlement Agreement, so to
9 that extent we've considered the economic impacts to the
10 owners.
11 BY MR. BURGESS:
12 Q. Do you quantify that lost income?
13 A. Yes.
14 Q. Any other impact associated with changes of
15 ownership?
16 A. No, not that I recall at the moment.
17 Q. Again, on Tuesday you testified with respect to
18 your 10-year study that it did not include seasonal farm
19 workers or H2A workers which harvest vegetables, rice or
20 sod. Why weren't those workers considered in the 10-year
21 study?
22 A. Would you repeat the question, the beginning of it
23 especially.
24 Q. My recollection is --
25 Let me start from the beginning.
341
1 Did you include seasonal farm workers or H2A
2 workers that harvest vegetables, rice or sod in your
3 10-year study?
4 A. Yes.
5 Q. You included those numbers as --
6 A. The full-time equivalent jobs include those
7 employees.
8 Q. What assumptions, if any, will change from your
9 10-year study to your 20-year consideration relative to
10 seasonal farm workers or H2A workers?
11 A. I don't know.
12 Q. What is under consideration?
13 A. Nothing at the moment.
14 Q. Do you anticipate utilizing FTEs in your 20-year
15 study as you did in your 10-year study?
16 A. Yes.
17 Q. I believe you also testified on Tuesday that
18 towards the end of your 10-year analysis, completion of
19 your 10-year analysis, you received field data for 140
20 plots but that you didn't have a chance to look at it at
21 that time. Who did you get that information from?
22 A. I believe it was Peterson Consulting.
23 Q. Are you considering that information relative to
24 your 20-year study?
25 A. Yes.
342
1 Q. How are you considering it?
2 A. I'm looking at the actual data determining yield
3 per acre and fallow land.
4 Q. Do you know how, if at all, you'll incorporate that
5 information into your 20-year study?
6 A. No.
7 Q. Assume for purposes of my question that growers in
8 the EAA were subject to ad valorem taxation in addition to
9 the 25, 50 or $100 per acre assessment scenario. Would
10 that fact have any effects on your conclusions relative to
11 when land leaves production?
12 A. Could you repeat the question again.
13 MR. BURGESS: Can you read it back.
14 (Whereupon, the pertinent portion of the Record was
15 read back by the Court Reporter.)
16 BY THE WITNESS:
17 A. (Continuing) I don't understand the question.
18 BY MR. BURGESS:
19 Q. You testified earlier this week that you didn't
20 analyze a possible increase in ad valorem taxation on the
21 EAA; is that correct?
22 A. Correct. We did not analyze an increase in ad
23 valorem.
24 Q. Right.
25 A. If it increased. We looked at the current tax rate
343
1 on property.
2 Q. What effect would an increase in ad valorem
3 taxation have on the conclusions contained in your 10-year
4 analysis?
5 A. It would increase the costs of production depending
6 on -- no, it wouldn't necessarily -- yes, it would. It
7 would increase the costs higher than they are now because
8 the tax rate would go up so -- but, I don't know, it may
9 not have an impact. I don't know. I'd have to think --
10 I'd really have to think about that. It's a very open
11 question.
12 I don't know if they would go up or not.
13 Q. If what would go up; costs of production?
14 A. Right.
15 Q. Do you have any opinions --
16 A. (Continuing) They may not have any effect and it
17 may, I'd have to think it through. We weren't asked to
18 look at an increase in ad valorem taxes.
19 Q. I understand that.
20 I'm asking you to consider for purposes of my
21 question, in other words, assume an increase in ad valorem
22 taxation. Do you have any opinions as to whether any
23 conclusions reached in your 10-year report will change as a
24 result of that assumption?
25 A. I don't know if the results would change or not,
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1 you need to be more specific, that's a very broad question
2 you've asked.
3 Q. Let me try and do that for you.
4 Assuming a scenario where there was an increase in
5 ad valorem taxation in addition to your 25, 50 and $100
6 assessments, do you have any opinions as to whether or not
7 more jobs would be lost than the amount of jobs that you
8 calculated for your 10-year study?
9 A. As I sit here thinking about it, I don't think it
10 would have an effect at this time.
11 Q. With respect to jobs or with respect to any
12 conclusions in your report?
13 A. With respect to any conclusions in the report.
14 Q. What is the basis for that opinion?
15 A. Because the taxes paid are based on the value of --
16 I'm sorry, are based on the calculated net returns to land
17 that the Palm Beach County property appraiser makes. When
18 he deducts that assessment or whatever costs of production
19 that those growers face, that lowers the assessed value of
20 the land, so it may not matter what that -- in fact, it
21 doesn't sound to me like it would matter what that property
22 tax rate was because the taxes would adjust in response to
23 the lower net income of the farm.
24 Q. Do you know whether the contract you entered into
25 with the District for litigation support was included among
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1 the documents that you provided in response to
2 Miss Stinson's notice of production?
3 A. I don't believe it was. I don't know.
4 MR. BURGESS: Do you know whether it was withheld
5 or just not --
6 MR. NETTLETON: It wasn't produced because it
7 wasn't requested. It's not being withheld under any
8 privilege or anything. I would imagine you may already
9 have it anyway through your other production avenues.
10 BY MR. BURGESS:
11 Q. I recall testimony yesterday where you said that
12 you were re-evaluating some assumptions in the 10-year
13 study based upon information received since the first
14 report. You have just identified this morning one of those
15 instances, I think, which dealt with information you
16 received for 140 or so plots in the EAA.
17 My question is: What other information have you
18 received since the first report and what assumptions are
19 you re-evaluating in light of that information?
20 MR. NETTLETON: Object to the form.
21 BY THE WITNESS:
22 A. The March or -- I'm sorry, the June 1992 Sugar and
23 Sweetener Situation and Outlook Yearbook, the data in there
24 and the information in there.
25 We're re-evaluating more closely the issue of soil
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1 subsidence using the reports that we already did have
2 in-house and also interviews with George Snyder at IFAS.
3 BY MR. BURGESS:
4 Q. Were those reports you had in-house but hadn't
5 considered?
6 A. We had considered them for the 10-year and now
7 we're reconsidering them for the 20-year.
8 There's a FAPRI report that was provided to us by
9 Jim Richardson that has some data in it that we may use.
10 Could you repeat the question again to make sure
11 I'm complete.
12 Q. Yes. I recall your testimony that you're
13 re-evaluating some assumptions in your 10-year study based
14 upon information that you have received since the first
15 report.
16 So my question is really two questions, and that is:
17 What information have you received since the first report
18 and what assumptions are you re-evaluating in light of that
19 information?
20 MR. SAXE: Objection to form.
21 MR. BURGESS: Compound; right?
22 MR. SAXE: Yes, how did you guess?
23 BY THE WITNESS:
24 A. There's the data from IFAS, the reports from IFAS
25 that report the costs of vegetable production in the EAA
347
1 each year. There's a couple of reports on cow-calf
2 operations in Florida.
3 That's the meat of it that I can come up with that
4 we collected since then.
5 Q. What assumptions in your 10-year study are you
6 reassessing in light of the sugar and sweetener outlook
7 report?
8 A. Changes in the cost of milling and producing sugar
9 cane and raw sugar over time. I think that's about it.
10 Q. Are you reexamining those costs for the entire
11 20-year period?
12 A. Yes.
13 Q. I think we've discussed soil subsidence.
14 The FAPRI, what does FAPRI stand for?
15 A. Can I have a pen so I can write it out so I can get
16 the words in right order.
17 I believe it stands for Food and Agricultural
18 Policy Research Institute.
19 Q. What results from your 10-year study are you
20 reassessing in view of that report?
21 A. The price of raw sugar. The forecast. They
22 forecast the price of raw sugar, I think it was over the
23 next 10 years.
24 Q. Do you know how their forecast compares to your
25 forecast contained in your first 10-year report?
348
1 A. I don't remember. I mean I don't know.
2 Q. What assumptions from your 10-year study are you
3 re-evaluating in view of the IFAS vegetable reports?
4 A. The cost of producing vegetables in the EAA, how
5 they change over time.
6 Q. What assumptions are you reconsidering in view of
7 the cow-calf reports?
8 A. As the soil gets thinner and thinner so that you
9 can't grow vegetables or sugar cane, cow-calf operation may
10 be a viable alternate use of the land, so we're trying to
11 evaluate whether or not it is a viable alternate use of the
12 land.
13 Q. And that is only with respect to lands on which you
14 cannot grow sugar cane?
15 A. And vegetables, yes.
16 Q. And vegetables.
17 Do you know whether those reports were produced?
18 A. Yes, they were.
19 Q. Are there any assumptions in your 10-year study
20 which you are reassessing or re-evaluating irrespective of
21 information that has been received since the first report?
22 A. I don't believe so, no, as far as I can recall.
23 Q. Will your examination of these various pricing
24 assumptions and cost assumptions include an examination of
25 your final conclusions in your 10-year report with respect
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1 to changes in jobs, sales, earnings and land leaving
2 production?
3 A. I need you to either repeat the question, I don't
4 understand it.
5 Q. Assuming that there are changes in your 10-year
6 assumptions regarding costs of producing and milling raw
7 sugar, and the price of raw sugar over time, and the costs
8 of producing vegetables that you've just testified to,
9 assuming that there are changes in those --
10 A. Okay.
11 Q. -- will those changes carry through to the results
12 which you reported in your 10-year analysis with respect to
13 jobs, sales, earnings and acreages out of production in the
14 EAA?
15 MR. SAXE: Object to form.
16 MR. NETTLETON: Same objection.
17 BY THE WITNESS:
18 A. I don't understand the question.
19 MR. NETTLETON: Are you asking her whether she's
20 going to go back and amend her 10-year report?
21 BY MR. BURGESS:
22 Q. What effect, what effects do you anticipate from
23 this reexamination -- from the reexamination of these
24 various assumptions?
25 A. You want to know if I think the economic impacts
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1 will change due to this?
2 Q. Yes.
3 A. Is that what you are asking me.
4 Q. Right.
5 A. I don't know if they will or not.
6 Q. From your 10-year study?
7 A. Exactly, from the first 10 years.
8 Q. When will you reach that decision?
9 A. By April 31st -- 30th. April 30th. It's an
10 approximate date. I may reach it sooner.
11 Q. You've testified with respect to soil subsidence
12 and potential effects on yields and cost of production.
13 Have you evaluated the effects of soil subsidence, if any,
14 on the market value of the land?
15 A. Your question is: Have I evaluated the impact of
16 soil subsidence on the market value of the land?
17 Q. Yes.
18 A. No, I have not.
19 Q. Will you do that in connection with your 20-year
20 study?
21 A. I don't know.
22 Q. What assumptions, if any, have you made with
23 respect to mechanization for your 20-year analysis, harvest
24 mechanization?
25 A. They haven't changed from the 10-year evaluation.
351
1 Q. Do you anticipate that they will remain the same
2 for the 20-year analysis?
3 A. I anticipate that it will remain the same at this
4 time.
5 Q. Are you examining whether any relationships exist
6 between mechanization and soil subsidence?
7 A. Not at the moment.
8 Q. Do you plan to for the 20-year study?
9 A. I don't know.
10 Q. Do you have any opinions as to whether harvest
11 methods and soil subsidence relate at all to sugar cane
12 yield?
13 MR. SAXE: Objection to form.
14 BY THE WITNESS:
15 A. (No response.)
16 BY MR. BURGESS:
17 Q. Let me ask it this way: Your discussions earlier,
18 your testimony earlier with respect to soil subsidence
19 talked in terms of the land becoming too thin to grow sugar
20 cane, and my question is whether it matters at all whether
21 you harvest that cane by hand or machine as to whether or
22 not it's too thin to grow sugar cane?
23 A. Matter in what sense?
24 Q. In the sense whether you could conceivably, you
25 could plant and grow cane on a certain depth of soil if you
352
1 are going to harvest it by hand but you couldn't do that if
2 you are going to harvest it by machine.
3 MR. NETTLETON: I'll just object generally to the
4 subject matter. She's not being offered in this area
5 of expertise. I mean I can let her answer to the
6 extent she understands the question.
7 MR. BURGESS: She's testified she's going to
8 continue her assumptions in her 20-year study with
9 respect to the assumptions she's made in the 10-year
10 study, and she's also testified in her 20-year study
11 that she may be having land go out of production
12 because it reached a certain depth of soil.
13 I'm asking her whether she's examined any
14 relationships or interrelationships between depth of
15 soil and method of harvesting and whether she plans to.
16 BY THE WITNESS:
17 A. I have not looked at it and I don't know if I will
18 or not.
19 BY MR. BURGESS:
20 Q. Have you attempted to talk to any representatives
21 from industry with respect to soil subsidence?
22 A. If someone will talk to me, I'll be happy to
23 listen.
24 Q. Have you attempted to contact anyone from any other
25 growers to discuss soil subsidence issues?
353
1 A. We did contact them --
2 Q. Who did --
3 A. -- during the 10-year evaluation.
4 Q. Who did you contact and when?
5 A. Representatives of the Sugar Cane League, the
6 cooperative, South Bay Growers. That was an issue that we
7 asked about.
8 Q. Since your completion of your 10-year report and
9 your decision to examine the issue of soil subsidence over
10 a 20-year horizon, have you attempted to contact anyone
11 from industry on this subject?
12 A. No.
13 I'm happy for them to call me if they want to talk
14 about it.
15 MR. BURGESS: Off the record.
16 (Whereupon, a discussion was held off the record.)
17 MS. STINSON: I'm ordering a copy of the
18 deposition, the three days. And an ASCII disks.
19 (Whereupon, a brief recess was taken.)
20 BY MR. BURGESS:
21 Q. With respect to your contract completion report in
22 October of 1992, various of the tables contained in chapter
23 5 on vegetables cite to data sources as including the
24 Institute of Food and Agricultural Sciences Production
25 Costs for Collected Florida Vegetables, 1991 to 1992. I
354
1 show you the document, although it's not an exhibit, and
2 I've tabbed chapter 5.
3 My question is simply whether you've had
4 discussions with anyone at IFAS since the completion report
5 regarding your use of their information and the conclusions