1 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 ) 5 ) FLORIDA SUGAR CANE LEAGUE, INC., ) 6 UNITED STATES SUGAR CORPORATION ) and NEW HOPE SOUTH, INC., ) 7 ) and ) 8 ) FLORIDA FRUIT AND VEGETABLE ) 9 ASSOCIATION, LEWIS POPE FARMS ) W.E. SCHLECHTER & SONS, INC., and) 10 HUNDLEY FARMS, INC., ) ) 11 Petitioners, ) ) 12 v. ) ) 13 SOUTH FLORIDA WATER MANAGEMENT ) DISTRICT, ) 14 ) Respondent, ) 15 ) and ) 16 ) MICCOSUKEE TRIBE OF INDIANS OF ) 17 FLORIDA, the UNITED STATES OF ) AMERICA, FLORIDA DEPARTMENT ) 18 OF ENVIRONMENTAL REGULATION, and ) FLORIDA WILDLIFE FEDERATION, ) 19 ) Intervenors. ) 20 21 ---------------------------------------------------- ORAL DEPOSITION OF LONNIE L. JONES, Ph.D., VOLUME I 22 TAKEN ON MARCH 3, 1993 ---------------------------------------------------- 23 24 25 PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 2 1 A P P E A R A N C E S: 2 MS. DONNA H. STINSON Hopping, Boyd, Green & Sams 3 123 South Calhoun Street P. O. Box 6526 4 Tallahasee, Florida 32301 5 COUNSEL FOR SUGAR CANE GROWERS COOPERATIVE OF FLORIDA, ET AL. 6 7 8 MR. RICK J. BURGESS Peeples, Earl & Blank 9 One Biscayne Tower Suite 3636 10 Two South Biscayne Boulevard Miami, Florida 33131 11 COUNSEL FOR FLORIDA SUGAR CANE 12 LEAGUE, INC. 13 14 15 MR. KEITH E. SAXE United States Department of Justice 16 Environmental & Natural Resources Division General Litigation Section 17 601 Pennsylvania Avenue NW Room 879 18 Washington, D.C. 20004 19 COUNSEL FOR UNITED STATES OF AMERICA 20 21 22 23 24 25 PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 3 1 T A B L E O F C O N T E N T S 2 PAGE 3 AGREEMENTS OF COUNSEL. . . . . . . . . . . . . 6 4 EXAMINATION OF LONNIE L. JONES, Ph.D., VOLUME I 5 BY MS. STINSON . . . . . . . . . . . . . . 9 6 WITNESS' SIGNATURE PAGE. . . . . . . . . . . . 184 7 CORRECTION SHEET . . . . . . . . . . . . . . . 185 8 REPORTER'S CERTIFICATE . . . . . . . . . . . . 187 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 4 1 E X H I B I T S 2 NO. DESCRIPTION PAGE 3 1 Memorandum to G. Johns from R. Lacewell dtd 5/21/92 . . . . . . . . . . . . . . 4 2 Memorandum to G. Johns from R. Lacewell, 5 L. Jones and T. Ozuna dtd 6/3/92 . . . . 51 6 3 Letter to G. Johns from Peterson Consulting dtd 7/31/92 . . . . . . . . . . . . . . 7 4 Handwritten Notes - 20-Year Analysis . . 8 5 Handwritten Notes . . . . . . . . . . . 9 6 Memorandum to K. Saxe from L. Jones 10 dtd 10/23/92 . . . . . . . . . . . . . . 52 11 7 Memorandum to K. Saxe from L. Jones and R. Lacewell dtd 8/28/92 . . . . . . . . 54 12 8 Memorandum to K. Saxe from L. Jones 13 dtd 8/4/92 . . . . . . . . . . . . . . . 65 14 8-A Memorandum to K. Saxe from L. Jones. . . 266 15 9 Handwritten Notes to S. Ponzoli . . . . 16 10 Fax to S. Ponzoli dtd 1/22/93 . . . . . 17 11 Florida Sugar Cane League Summary of Hazen & Sawyer's Potential Economic 18 Impacts Analysis . . . . . . . . . . . . 19 12 Economic Effects of the SWIM Plan on Sugarcane Production in the Everglades 20 Agricultural Area of Florida . . . . . . 98 21 13 Memorandum to K. Saxe from R. Lacewell dtd 6/16/92. . . . . . . . . . . . . . . 22 14 Letter to R. Rosenberg from I. Hirschhorn 23 dtd 5/21/92 . . . . . . . . . . . . . . 94 24 25 PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 5 1 E X H I B I T S 2 NO. DESCRIPTION PAGE 3 15 Florida Sugar Cane League Summary of Hazen & Sawyer's Potential . . . . . . . 104 4 16 Notes . . . . . . . . . . . . . . . . . 141 5 17 Letter to G. Johns from L. Jones . . . . 147 6 18 Agricultural Property Tax Assessment in 7 the EAA . . . . . . . . . . . . . . . . 155 8 19 Review of World Price Situation. . . . . 159 9 20 Review of World Price Situation. . . . . 10 21 Letter to G. Johns to Peterson Consulting dtd 7/31/92 . . . . . . . . . . . . . . 11 22 Debt . . . . . . . . . . . . . . . . . . 12 23 The Validity of Benefits Transfers: 13 The Case of the Florida Everglades . . . 14 24 Issues Related to the Profitability of Farming in the EAA Draft 6/15/92 . . . . 15 25 Memorandum to K. Saxe from T. Ozuna 16 dtd 7/30/92 . . . . . . . . . . . . . . 17 18 19 20 21 22 23 24 25 PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 6 1 A G R E E M E N T S 2 DEPOSITION AND ANSWERS of LONNIE L. JONES, 3 Ph.D., VOLUME I, who resides in Bryan, 4 Brazos County, Texas, taken herein by Counsel for 5 PETITIONERS, before Lori A. Belvin, a Certified 6 Shorthand Reporter and Notary Public in and for the 7 State of Texas, on March 3, 1993, between the hours 8 of 9:00 A.M. to 6:00 P.M. at the Hilton Hotel, 9 Board Room, located at 801 University Drive East, 10 College Station, Brazos County, Texas, pursuant to 11 NOTICE and the following stipulations and 12 agreements: 13 IT WAS AGREED by and between counsel for the 14 Petitioners and Respondent, in the above-numbered 15 and styled cause, that all formalities are 16 specifically waived and that the oral deposition of 17 LONNIE L. JONES, Ph.D., VOLUME I, may be taken 18 herein forthwith before Lori A. Belvin, a Certified 19 Shorthand Reporter and Notary Public in and for the 20 State of Texas, said deposition being taken with the 21 same force and effect as though all the requirements 22 of the statutes and rules had been fully complied 23 with. 24 IT WAS FURTHER AGREED that no objections need be 25 made by any party at the time of taking said PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 7 1 deposition, except objections as to the form of the 2 question or the responsiveness of the answer, which 3 if not made during the deposition are waived; but if 4 and when said deposition, or any portion thereof, is 5 offered in evidence on the trial of this cause by 6 any party hereto, it shall be subject to any and all 7 other legal objections, such objections to be made 8 at the time of the tender, the same as though the 9 witness were on the stand personally testifying. 10 IT WAS FURTHER AGREED that the witness shall 11 sign the deposition transcript before any notary 12 public or official authorized to administer oaths; 13 and, at such time, the witness has the privilege of 14 reading over said transcript and making any 15 corrections that he finds to be necessary such 16 corrections to be made in accordance with the Rules 17 of Civil Procedure. 18 IT WAS FURTHER AGREED that in the event the 19 original deposition transcript is not signed by the 20 witness within 20 days of receipt and filed at the 21 time of trial or any hearing, that the original or a 22 certified copy of said transcript may be filed in 23 court and used herein as though the witness had 24 signed said original transcript. 25 IT WAS FURTHER AGREED that after said deposition PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 8 1 transcript has been returned to the deposition 2 officer along with changes, if any, made by the 3 witness in accordance with the Rules of Civil 4 Procedure, that the original deposition transcript, 5 together with copies of all exhibits, will be 6 delivered to MS. DONNA H. STINSON for safekeeping 7 and use in trial. 8 IT WAS FURTHER AGREED that after said deposition 9 transcript has been returned to counsel in 10 accordance with these stipulations and agreements, 11 it will be treated by the parties hereto and may be 12 used herein with the same force and effect as though 13 all statutes and rules relating to the taking and 14 returning into court of depositions had been fully 15 complied with. 16 * * * * * 17 18 19 20 21 22 23 24 25 PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 9 1 P R O C E E D I N G S 2 * * * 3 THE REPORTER: Ladies and gentlemen, 4 we're back on the record. 5 * * * 6 LONNIE L. JONES, Ph.D., 7 having been first duly cautioned and sworn upon 8 his oath to tell the truth, the whole truth 9 and nothing but the truth, testified as follows, 10 to wit: 11 * * * 12 E X A M I N A T I O N 13 * * * 14 BY MS. STINSON: 15 Q. Would you please state your name and 16 address. 17 A. My name is Lonnie Jones. I live at 18 6866 Morgan Road, Bryan, Texas. 19 Q. That's your home address? 20 A. Yes. 21 Q. What's your business address? 22 A. Department of Agricultural Economics, 23 Texas A & M University, College Station, Texas. 24 Q. And how long have you been at Texas A & M? 25 A. About 25 years. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 10 1 Q. What is your position there? 2 A. I'm a professor of Agricultural Economics. 3 Q. During that 25 years or so, have you had 4 intervening positions as well as visiting positions 5 elsewhere? 6 A. Yes, one. In 1979, I moved to Austin and 7 worked for about two years with the State Property 8 Tax Boards. At the time I went there, it was called 9 the School Tax Assessment Practices Board. The name 10 was later changed to the State Property Tax Board. 11 This was an interagency agreement between 12 Texas A & M University and that State agency, which 13 I was, in effect, rented out to go over there and 14 work. I was still paid by Texas A & M. 15 Q. Within the field of agricultural economics, 16 do you have any particular subspecialties? 17 A. I specialize in what is known as resource 18 economics and economic impact analysis. 19 Q. What is resource economics? 20 A. Resource economics deals with the economic 21 decisions related to management of natural and human 22 resources. 23 Q. You have been retained, isn't it true, by 24 the U.S. Department of Justice with regard to what 25 I'll call the Everglades litigation? PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 11 1 A. Yes, I've been retained by the U.S. 2 Department of Justice to assist them with the 3 Everglades cleanup and restoration project, I think, 4 usually referred to as the SWIM project. 5 Q. When were you retained? 6 A. I can't remember the exact date. It was 7 when the -- it was in the spring of 1992 when they 8 first contacted me. 9 Q. Who contacted you? 10 A. Mr. Keith Saxe and Mr. Bob Rosenberg. 11 Q. Do you know why you were contacted? 12 A. I'm not exactly sure of what the chain of 13 events were that led to them acquiring my name. 14 Q. What have you been retained to do? 15 A. They have asked me to assist them with 16 evaluating the work that's being done for the 17 South Florida Water Management District relating to 18 the SWIM plan in the area of secondary impacts of 19 the plan. 20 Q. You say "evaluating the work being done for 21 the Water Management District." What work is that? 22 A. Initially the request was to review and 23 evaluate the work being done by Hazen & Sawyer, the 24 contractor to the South Florida Water Management 25 District, with a request to be sure that the work PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 12 1 was complete, that all data was considered and it 2 was a state-of-the-art analysis or economic impact. 3 Q. What did you do beginning in the spring of 4 '92 to carry out your duties? 5 A. The first thing we did was to receive some 6 documents of the SWIM plan, as well as some other 7 documents, and to review those to begin to try to 8 understand the problem, the issues involved in it. 9 Q. And then what? 10 A. I guess the next step is we met with 11 Hazen & Sawyer -- Dr. Grace Johns with 12 Hazen & Sawyer. 13 Q. Do you remember when you did that? 14 A. The first meeting? 15 Q. Yes. 16 A. I don't have an exact recollection of the 17 date. It was probably in -- I'm going to say in 18 April or May of 1992. 19 Q. Who met with her? 20 A. Dr. Ron Lacewell was at that meeting, 21 Dr. Dan Bromley, and me. That's -- and the 22 Hazen & Sawyer's staff. Those are the only ones I 23 recall in the meeting. 24 Q. What was the purpose -- 25 A. Excuse me. Mr. Saxe was there. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 13 1 Q. What was the purpose of that meeting? 2 A. It was basically to gather information from 3 Dr. Johns as to her methodology and approach on 4 conducting the impact analysis. 5 Q. Did you provide any information to her or 6 suggestions on approach? 7 A. At that meeting I didn't provide any 8 information. There may have been suggestions that 9 came up in the normal course of discussion. 10 Q. At that point, where was she in terms of 11 developing the study, in the very preliminary stages 12 or what? 13 A. Fairly preliminary. I think she had sent 14 out a questionnaire to the producers in the area. 15 She was working on a questionnaire to some of the 16 other Ag-related industries in the EAA, suppliers of 17 inputs to farmers. 18 She was still -- I don't think there was 19 anything at that time firm or set in concrete as to 20 the terms of her overall methodology. She was still 21 looking at a lot of different factors in terms of 22 the appropriate approach in handling those. 23 Q. Had she selected the FLIPSIM model at that 24 time to use? 25 A. I don't really recall whether she had or PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 14 1 she was in the process of acquiring it at that first 2 meeting. 3 Q. Did you talk with her about the use of 4 FLIPSIM, whether that was a good approach or not? 5 A. I didn't. Personally I don't recall 6 discussing with her whether or not to use FLIPSIM. 7 We talked more in terms of the basic 8 methodology or the study than we did for any 9 particular tools of analysis. 10 Q. Did you discuss with her the concept of 11 discussing model size farms? 12 A. Model size? 13 Q. Or model farms. Excuse me. 14 A. I believe at that time, she did tell us 15 that she was planning to look at a stratification of 16 the EAA into belts, which basically run north to 17 south through the EAA, and to stratify the EAA by 18 yield belts. 19 A. Did you comment on her decision to do that? 20 A. I may have. I don't -- it seemed like a 21 good idea to me at the time. 22 Q. Do you still believe that that's a good 23 idea, good approach? 24 A. Yes. 25 Q. After meeting with Hazen & Sawyer in April PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 15 1 or May, what did you then do? 2 A. There was a meeting in the funding council 3 somewhere about that same time. As a matter of 4 fact, I can't tell you today precisely whether -- 5 which came first, the Hazen & Sawyer meeting or the 6 funding council meeting. I'd have to look at some 7 records for that. 8 But about that same time, there was a 9 meeting of the funding council. Mr. Saxe asked -- 10 that, as I recall, his request was that either 11 Dr. Lacewell or I come to that funding council 12 meeting because they were going to discuss 13 Hazen & Sawyer's ongoing work; and I was available, 14 so I attended the meeting. 15 Q. What was discussed at that meeting, and did 16 you make any presentation? 17 A. No, I did not. 18 Q. You just listened in? 19 A. Yes. 20 Q. What was discussed at that meeting? 21 Q. There was -- they discussed -- Dr. Johns 22 gave a presentation at that time of her general 23 approach to the economic impact model. There was 24 discussion by the board and other members, funding 25 council and other members, other people that were PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 16 1 there. 2 At that time, she also presented a request 3 and a proposal to extend the study to look into the 4 benefits of the Everglades; and that request for an 5 extension was subsequently approved by the funding 6 council. 7 Q. That was a proposal which came from 8 Hazen & Sawyer? 9 A. Yes. 10 Q. What was the rationale for that, that she 11 expressed at the meeting? 12 A. I don't recall. 13 Q. Was an entity or individual mentioned who 14 would do that part of the study? 15 A. I don't remember any entity being mentioned 16 at that funding council meeting. 17 Q. Do you know who, in fact, did that study? 18 A. It was subcontracted, as I understand, to 19 the National -- let me get this name right. NRDA, 20 National Resource Damage Associates, or a title to 21 that effect. 22 It was actually done by Dr. Hanneman and 23 another -- and doctor -- well, I know this 24 gentleman. I've drawn a blank on his name. 25 Q. If you think about it later, tell me. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 17 1 A. Okay. 2 Q. Are these people in California; is that 3 correct? 4 A. Yes. 5 Q. Do you know how it came to be that those 6 folks were selected? 7 A. No, I don't know that, the process that 8 Hazen & Sawyer used in selecting them. 9 Q. Did you have any interaction with those 10 people in doing the benefits part of the analysis? 11 A. No, I didn't. 12 Q. Did anyone, to your knowledge, on behalf of 13 the U.S. Department of Justice? 14 A. I can't -- I'm not absolutely certain of 15 this, but I think that Dr. Teofilo Ozuna, who was 16 also retained by the Justice Department, may have 17 interacted with them either during the process of 18 the study or immediately after that. I'm not sure 19 if they had published their draft report at the time 20 the he first interacted with them; but I think that 21 he did, at some point, communicate with them 22 directly. 23 Q. So you went to a meeting with 24 Hazen & Sawyer and you went to a funding council 25 meeting and listened in and then what? PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 18 1 A. Well, there followed some interaction with 2 Grace Johns; and some questions that she would have 3 concerning some particular variables. I did some 4 work at the request of Counsel, also, to provide the 5 Justice Department some information on some of the 6 issues and variables that were being considered in 7 the overall analysis. 8 Q. What variables did Hazen & Sawyer have 9 questions about that you had input into? 10 A. Two that I recall. The first one she was 11 wrestling with, the problem of identifying the 12 impacts -- secondary impacts that would rest 13 specifically with the EAA, the immediate local area, 14 as opposed to those that might leak out or reside in 15 a more remote area, such as, maybe another part of 16 Florida or somewhere else because of either the 17 expenditure of consumer's income or the purchase of 18 inputs that are not sold locally. 19 We had done and recently -- I say 20 recently -- within the last two years, had been 21 involved in working with the Texas Attorney 22 General's office in a case between -- it was a 23 lawsuit between the State of Texas and New Mexico, 24 water allocation between New Mexico and Texas on the 25 Pecos River. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 19 1 I had done some work at that time to look 2 at how much of the secondary impacts from New Mexico 3 might flow back to Texas as opposed to how much will 4 be contained locally and compared to how much may go 5 somewhere else. 6 And she asked me if I would send her 7 whatever material I had done there in that study, 8 and I did send that to her. 9 Q. Was that material used by her, do you know, 10 in her report? 11 A. In reviewing her report, I have not found 12 any indication that it was used directly. 13 Q. When you say, "she was struggling with the 14 issue of secondary impacts in the EAA as opposed to 15 elsewhere," when you say "EAA," do you include all 16 of Palm Beach County? 17 A. I would, yes. 18 Q. That was one of the questions. You said 19 there were a couple that -- do you recall? 20 A. At a later date, she was, also, concerned 21 about looking at a scenario projection assuming that 22 farmers in the -- that the federal support program 23 for sugar was eliminated. 24 And specifically what she wanted to look at 25 was what would happen -- what would be the price of PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 20 1 sugar in the United States if all industrialized 2 countries in the world went to a free market and a 3 free trade relationship rather than the relationship 4 that exists at the present. 5 Q. And did you provide any input 6 on that question? 7 A. She asked me if I would review what 8 literature I had or could obtain, and see if I could 9 draw together some speculation as to what that price 10 level might be. And I did that, and I communicated 11 that to her in writing. 12 Q. What were your conclusions in that regard? 13 A. After reviewing several reports, different 14 people -- professionals who had attempted to project 15 that scenario, the -- well, the conclusion -- do you 16 mean in terms of -- I'm not quite -- 17 Q. Either a general or specific conclusion 18 about the effect on the price or the effect on -- 19 A. Okay. Well, the general conclusion, as far 20 as price is concerned, is that I think my statement 21 to her was that it would appear from the review of 22 these studies that the price of sugar in the 23 United States would probably reach an equilibrium at 24 some point in the future between 14 and 16 cents per 25 pound. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 21 1 Q. You say you communicated that to 2 Grace Johns in writing. Was that by a report or 3 letter? 4 A. It was a memo with a -- it was a long memo. 5 Q. And when was that, more or less? 6 A. I would say that was probably in the month 7 of June 1992. That's as close as I can get. 8 Q. Do you recall what literature you reviewed 9 to come to that conclusion? 10 A. Yes. There was a study done in 1995 -- 11 Q. '85? 12 A. '85. I'm sorry. -- (continuing) by 13 Ron Knutson and Andy Schmitz and I think it's 14 John Earley that projected an estimate. 15 There were other studies that were studied 16 by Gordon Rausser which they looked at the sugar 17 program. 18 There was a report from the Sugar & 19 Sweetner Division of the ERS, U.S. Department of 20 Agriculture. 21 Q. Do you recall what edition of the 22 Sugar & Sweetner Report? 23 A. No. It was not a part of their normal 24 series. This was a special report, and I'm not 25 exactly -- I don't recall exactly what the title of PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 22 1 it was, but it was done by Peter Buzzanell and 2 Ron Lord. 3 Then there was a Ph.D. dissertation 4 recently out of Purdue by a Mr. Greer, who had also 5 looked at liberalization of trade in sugar. 6 MS. STINSON: Keith, I have been 7 through these documents and the 8 reports he's mentioned, I recollect. 9 I do not recollect seeing the memo he 10 has referred to. 11 MR. SAXE: So far as I know, it 12 should have been produced. 13 MS. STINSON: If it wasn't, we 14 can -- 15 MR. SAXE: I don't have a 16 privileged list in front of me to 17 consult; but I don't, at this point, 18 recall having withheld the document. 19 I don't -- I really can't, you 20 know, tell you. We could follow up on 21 it. If you want to take a break, I 22 could call back and see. 23 MS. STINSON: Well, maybe at noon 24 or something, we can do that. 25 MR. SAXE: Sure. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 23 1 Q. (By Ms. Stinson) Were there any other 2 variables that you provided input to Grace Johns, to 3 your knowledge, or to your recollection? 4 A. I talked to her on a number of occasions 5 about selection of a model for estimating secondary 6 impacts, for estimating indirect and indecent 7 impacts. 8 Q. What was your input into that discussion? 9 A. Well, I basically asked her what she had 10 been looking at and what she had available and what 11 she was going to use. 12 Q. And what did she determine to use? 13 A. She selected the RIMSII model from the 14 Bureau of Economic Analysis, U.S. Department of 15 Commerce. 16 Q. Do you have an opinion as to whether that's 17 the appropriate model to use? 18 A. I think it is appropriate, yes. 19 Q. Do you believe the multipliers that she 20 selected from that analysis were appropriate? 21 A. I had reviewed the RIMS printout, and I 22 think she picked the right ones. 23 Q. Anything else? 24 MR. SAXE: Objection to form. 25 Q. (By Ms. Stinson) You can answer anyway. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 24 1 MR. SAXE: If you understand the 2 question, you can answer it. 3 A. I assume you're asking me if there was 4 anything else that we talked about that I had input 5 on on the analysis? 6 Q. (By Ms. Stinson) Right. 7 A. Those were the three things that are -- or 8 however many there were -- that I remember 9 specifically talking with her about. There were a 10 number of, I guess, other things that we talked 11 about, in general, along with other participants; 12 but I don't know that I would say that I have any 13 particular specific input into those. 14 Q. Let me back up a minute. Have you ever 15 testified as an expert witness? 16 A. Yes. 17 Q. Can you tell me the circumstances? 18 A. I most recently testified in hearings 19 before the Texas Water Commission on behalf of a 20 company; the name is TexCor, Incorporated. 21 Q. What was your testimony? 22 A. My testimony related to the economic 23 impacts of NORM, N-O-R-M, which stands for Naturally 24 Occurring Radioactive Material, a disposal facility 25 that was proposed to be located at Brackettville, PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 25 1 Texas in Kinney County, Texas; and I was testifying 2 as to the economic impacts of that facility on the 3 City of Brackettville in Kinney County. 4 Q. Was it TexCor who wanted to put the 5 facility in? 6 A. Yes. 7 Q. Was that a judicial-type proceeding or more 8 of a legislative-type? 9 A. It would be judicial. As I understand it, 10 there had been a challenge filed by a local group 11 of -- I think it's called CARE, Communities Against 12 Radioactive Environments and -- 13 Q. Were you qualified as an expert witness? 14 MR. SAXE: Objection to form. 15 Q. (By Ms. Stinson) If you know what I mean 16 by that. 17 A. The way this transpired was that we had 18 done a study for TexCor in 1988 for another purpose. 19 It was for their purpose of acquiring a permit 20 through the -- at that time, the Texas Department of 21 Health. The jurisdiction for this type facility was 22 later transferred to the Texas Water Commission and 23 we had done that study for them and given it to them 24 and, I presume, they had used it in their normal 25 course of acquiring a permit. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 26 1 Then later in 1992 -- and this is winter 2 and early spring of 1992 -- they contacted me again 3 and this challenge had been and requested I testify. 4 Q. Was it a proceeding where you were on the 5 stand and lawyers asked you questions, that type of 6 proceeding? 7 A. It was in the Brackettville Community 8 Center, and there were two attorneys -- no, four 9 attorneys for the CARE group and then TexCor had an 10 attorney from Austin. 11 Q. And in your testimony on the stand, was 12 there was an exchange where they went through your 13 qualifications and then one of the lawyers said, "I 14 proffer him as an expert witness," something to that 15 extent? 16 A. Yes. 17 Q. In what field were you proffered as an 18 expert? 19 A. Economic impact analysis. 20 Q. And were you accepted as an expert in that 21 field? 22 A. Yes. 23 Q. Have you done any other testimony in 24 judicial-type proceedings? 25 MR. SAXE: Objection to form. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 27 1 Counsel, I'm not sure whether the 2 witness understands what you mean by 3 "judicial-type proceedings." 4 MS. STINSON: He can tell me if 5 he doesn't understand the question. 6 A. Well, there was a follow-up, a second 7 hearing related to this same subject in Austin. 8 Again, attorneys were there for both sides. 9 There was cross-examination and so forth. I think 10 that's all related to that case. 11 Several years ago, we did a study of the 12 economic impacts of land subsidence in the Houston, 13 Harris County and Galveston area. Following the 14 publication of that study -- and that study was -- 15 it was a part of my normal activities of Texas A & M 16 University. 17 But following the publication of that, 18 there was a lawsuit that was filed by -- I think it 19 was a class-action suit -- by a group of homeowners. 20 It was filed against Friendswood Development 21 Corporation, which is -- they're a developer in the 22 Harris area -- for negligence in the development of 23 some certain subdivisions there. And I was asked to 24 testify in court in Houston as to the economic 25 impacts. Again, I was offered as an expert witness PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 28 1 there. 2 Q. (By Ms. Stinson) Tell me a little bit 3 about that study. What were you looking at? 4 A. The land subsidence study? 5 Q. Yes. 6 A. The problem there is one of -- it was a 7 problem of overdrafting in an underground reservoir, 8 water, pumping water. That whole area -- the whole 9 coastline of Texas, in fact, is underlying by -- 10 it's very nice aquifer. It has good clean water. 11 You an use it right out of the ground without having 12 to treat it. Add a little chlorine, I guess, is 13 what they do. 14 The aquifer is unique in the sense that 15 it's -- as you look at it vertically through the 16 aquifer, you have a layer of sand and then you'll 17 have a layer of clay, a clay lens that runs 18 throughout the aquifer. This all, I understand, is 19 from the USGS people that I was working with. 20 The problem that they had -- and this goes 21 back to -- I guess it was first noticed back in the 22 40's -- is as they draw water out of this aquifer, 23 if you draw down -- as long as you're drawing water 24 and drying out the sand part of the formation, you 25 don't have much of a problem. But once you draw PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 29 1 water past this clay lens and allow it to dry, it's 2 a very elastic soil and it collapses. 3 So what was happening was they were 4 overdrafting the aquifer, drawing the water table 5 down, as these clay lenses collapsed, because of the 6 overburden of the soil and surface on top, they were 7 sinking. 8 And there had been some homes that were 9 built there that were -- wound up in the Galveston 10 Bay, offshore; and someone said in violation of 11 Coast Guard regulations, they weren't equipped to 12 navigate the Trinity Bay. 13 But this was happening throughout the area; 14 and so we got involved in it to take a look at what 15 the -- this is what the resource economists call an 16 "externality." In other words, you're performing 17 some certain activity; and that activity is imposing 18 a cost on another party or another factor. 19 We went in there to look at what the 20 magnitude of the externalities were, what were the 21 external costs related to this pumping. 22 We estimated those and then we compared the 23 total cost -- the direct cost of pumping water, 24 added to that the external costs from the loss of 25 use of property and we compared that to the cost of PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 30 1 surface water, which directly was more expensive; 2 but we found that if you quantify it and added the 3 external costs to the direct pumping costs, then 4 they far exceeded the alternatives, source of 5 surface water. 6 Now, that's the study. The suit, of 7 course, is something else. 8 Q. But did your testimony in that suit relate 9 to your work on that study? 10 A. Yes. 11 Q. Is anything in that study transferable or 12 relevant to your work on the Everglades? 13 A. There are no numbers or values or estimates 14 that I would say are directly transferable. I would 15 say that in terms of general concept, that there is 16 a theoretical or conceptual transference, in that, 17 not unlike the Houston area, it would appear that 18 there is a problem of externality apparent in the 19 case relating to the Everglades. 20 Q. What is that relevance of that 21 relationship? 22 A. As I understand it from the biologists and 23 the soil scientists and other who have put together 24 the foregoing documents that I have studied, that 25 the problem in the Everglades, in relationship to PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 31 1 agriculture, is one of a pollution runoff or, in 2 particular, phosphorus runoff from the farming area 3 into the Everglades, which is changing the ecosystem 4 of the Everglades. And that, we would call in 5 economics, resource economics, an externality. 6 Q. Well, in your work on the Everglades, have 7 you looked at quantifying the externality involved 8 there? 9 A. No, I have not. 10 Q. But that essentially is what you did in the 11 Galveston study, correct? 12 A. Yes. 13 Q. Has anyone, to your knowledge, quantified 14 the externalities that you've mentioned in the 15 Everglades? 16 A. I believe that was the attempt of the South 17 Florida Water Management District of what they had 18 in mind when they approved the extension requested 19 by Hazen & Sawyer for the well, let me back up here 20 a minute. 21 That would be a part of that process of 22 quantifying externalities with the -- what they did 23 in terms of trying to estimate the value of the 24 Everglades. 25 Q. Are you referring to the so-called benefits PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 32 1 report? 2 A. Yes. That, I wouldn't -- I wouldn't say 3 that that is a complete answer to that question, but 4 that would be a part of the process of getting 5 there. 6 Q. Has anyone, to your knowledge, done a 7 complete analysis of the quantification of the 8 externalities in the Everglades? 9 A. Not to my knowledge, no. 10 MR. SAXE: Counsel, it's 10:00. I'd 11 like to take a short break. 12 (WHEREUPON, a recess was taken.) 13 Q. (By Ms. Stinson) I had just asked you 14 about the analysis of the externalities in the 15 Everglades. To your knowledge, is anyone now doing 16 a complete quantification of the externalities 17 related to pollution runoff into the Everglades? 18 A. Do you mean an economic quantification? 19 Q. Yes. Yes. 20 A. I don't know of anyone at this point in 21 time who is trying to estimate the dollar value or 22 the dollar loss of the Everglades ecosystem from 23 this specific action, from this specific case that's 24 covered by the SWIM plan. 25 Q. You qualify that somewhat. Do you know PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 33 1 anyone who is doing some kind of economic analysis 2 or quantification? 3 A. No. 4 Q. What was the purpose for your work 5 regarding the externalities of soil subsidence in 6 the Houston/Galveston area? 7 A. It was a purpose that's consistent with the 8 mission of Texas A & M University and the Texas 9 Agricultural Experiment Station and, that is, to 10 conduct research and provide information on issues 11 and problems to assist decision-makers throughout 12 the State. 13 Q. When you say "assist decision-makers," in 14 what regard, assist them to do what? What was the 15 decision that needed to be made? 16 A. This was a perceived problem by a number of 17 people. We -- it was actually -- the project was 18 actually funded by the Texas Water Resources 19 Institute, which specifically funds research and 20 education and is oriented toward water problems in 21 the State of Texas. 22 And it had, through whatever communication 23 channels, had been listed as a top priority research 24 project by that institute. We submitted a project 25 proposal to them to attempt to quantify those PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 34 1 externalities and do the comparison, as I testified 2 to earlier; and that project was approved and -- 3 Q. Well, was there some -- you mentioned that 4 you were comparing the cost of surface water to the 5 cost of pumping out the ground water and launching 6 houses. 7 Was there some public policy decision that 8 needed to be made in that regard that your research 9 was designed to assist? 10 A. Yes, in the case of as in most 11 externalities. 12 Q. I guess my question is: What is the public 13 policy decision that needed to be made in that 14 instance? 15 A. Well, let me answer that by telling you 16 what subsequently was made. 17 Q. All right. 18 A. Following the work that we did, as well as 19 a lot of work done by others, the Texas legislature 20 created what is called the Harris/Galveston 21 Subsidence Control District, and they're empowered 22 to monitor and approve permits for wells into the 23 aquifer, to manage well spacing, and a number of 24 other -- to tax, and a number of other 25 administrative authorities in order to stop the PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 35 1 problem. 2 Q. Was there also a provision made for 3 developing surface water, supplies of water to 4 alleviate the problem? 5 A. That has been done, yes. They are now 6 using surface water from several available sources, 7 sources which were and have been available for some 8 time. 9 Q. To -- in those types of public policy 10 decisions, as to, I guess, allocation or use of 11 resources, as a resource economist, is it important 12 to understand the costs and the externalities and 13 benefits of those actions? 14 A. In this particular case, I think it was 15 helpful in the Houston case to be able to show that 16 it was less expensive to the area in general, the 17 water users in general, to use the available surface 18 water that was already available in the area and to 19 reduce pumping to a level that would not mine the 20 aquifer; and in doing so, it gave the legislature 21 some information that they could use in a decision 22 as to whether or not public policy needed to be 23 created to handle this problem. 24 Q. You've responded by saying that in this 25 instance it was important to consider the costs and PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 36 1 externalities. Would you not agree, you as a 2 resource economist, for public policy 3 decision-makers that that is generally a good thing 4 to consider? 5 MR. SAXE: Objection form. 6 Counsel, I think you've truncated a 7 fairly extensive and qualified answer 8 with a very oversimplified restatement 9 of the witness' testimony. 10 Q. (By Ms. Stinson) You can answer my 11 question. 12 A. I guess my opinion would be that it 13 depends. It depends primarily upon whether or not 14 there exists legislation or any policy from whatever 15 source that is paying attention to the problem. 16 In the Texas case, in the subsidence case 17 in Houston, there was no vehicle by which 18 individuals that are -- that were pumping water and 19 mining the aquifer could be -- there was no way the 20 problem could be addressed. 21 We had, in the Houston area, I think there 22 was something like 800 municipal urban water 23 districts, each of which had the right under Texas 24 law -- and Texas has the full capture law, unlike a 25 lot of other states. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 37 1 There was nothing to prevent these people 2 from drilling a well or you or me, to go into the 3 area and drill a well, pump as much water as we 4 wanted to, do with it as we wished. 5 Now, so that we had no -- there was no 6 jurisdiction here to direct individuals in their 7 operations and the problem was continuing. Some of 8 the areas have subsided as much as 9 feet since 9 1945. 10 So in that case, it was a total lack of any 11 kind of law or legislation in order to direct the 12 problem. Now, what do you do in that case? Well, 13 one of the things you can do is to take a look at 14 the alternatives, what are the costs of the 15 alternatives. If we allow it to continue and the 16 subsidence continues, then we're going to have this 17 stream of damages into the future. 18 We can compare that with the cost of the 19 alternative, which is to bring in the more expensive 20 surface water. It's more expensive because it has 21 to be treated extensively, and look at what is our 22 least cost alternative for supplying water to this 23 area. That's what we did, and it was then 24 subsequently used in creating a vehicle by which 25 ground water withdrawal could be managed. So I PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 38 1 guess that's why I think it depends. It depends on 2 what exists in terms of law. 3 Q. Can you give me instances of when it would 4 not be wise for public policy-makers to consider the 5 externalities and costs of alternative ways of 6 proceeding? 7 A. Well, I guess I would say that it is always 8 at some point important to consider all of the 9 costs. I would assume that in passing a law, 10 legislature would do that. 11 Q. You give our legislature a lot of credit. 12 MR. SAXE: Objection to form. 13 MS. STINSON: Editorial comment. 14 Excuse me. 15 Q. (By Ms. Stinson) You mentioned your work 16 on the New Mexico/Texas dispute involving the Pecos 17 River. Did you testify regarding that information 18 at any point? 19 A. No. I was -- there was an out-of-court 20 settlement before I was asked to testify. 21 Q. Other than the instances you've talked to 22 me about regarding the work for TexCor and the work 23 on the soil subsidence, have you in any other 24 instances given testimony? 25 A. I think that's it. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 39 1 Q. We got in the middle of your discussion in 2 your involvement with the Hazen & Sawyer report. 3 You were telling me about issues that you had had 4 input on. We had gotten up to, I think, when 5 Hazen & Sawyer was developing a draft report and you 6 have described to me those issues on which you had 7 had input. 8 Can you tell me just generally next, or 9 throughout the development of that report, what your 10 input was, what involvement you had with 11 Hazen & Sawyer? 12 MR. SAXE: Objection to form. 13 Counsel, that's an extremely broad 14 question. 15 MS. STINSON: Well, let's take it 16 through the time frame. 17 Q. (By Ms. Stinson) Do you know when the 18 first draft report was issued? 19 A. I think it was toward the end of June. 20 Q. Were there preliminary drafts that you 21 reviewed and commented on? 22 A. Could you be more specific in terms of 23 preliminary drafts? 24 Q. There is actually a semi-official document, 25 as I understand, called the "draft final report." PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 40 1 Were there any editions, either partial 2 pieces of the report or a more preliminary draft 3 than that, which you reviewed? 4 A. In terms of reports, I recall a draft 5 report -- it's called a final report -- and then a 6 completion report. 7 Q. Are those the only reports that you 8 actually reviewed? I mean, my question is pretty 9 simple. Did you get any pre-publication either 10 chapters or sections or, in fact, an entire report 11 from Hazen & Sawyer that you looked at? 12 A. Not that I recall. 13 Q. Did you review the draft final report after 14 it was issued in June and make comments on that? 15 A. Yes. 16 Q. And did you make written comments? 17 A. Yes. 18 Q. To whom were those given? 19 A. They were sent to Dr. Grace Johns. 20 Q. Did you have any interaction with 21 Grace Johns with regard to your comments? 22 A. If memory serves me correct, I think there 23 was one meeting after that draft report. 24 Q. And before the final report? 25 A. I think that's correct. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 41 1 Q. Other than meetings, did you have telephone 2 conversations with Grace Johns regarding that? 3 A. I think there were some, yes. 4 Q. What was the purpose or subject of the 5 meeting that you had between the time of the draft 6 final and the final report? 7 A. The best I recall, it was just to go over 8 the draft to look at the methodology, the 9 assumptions and so forth; but mainly to get an 10 explanation and information from her. 11 Q. Did you -- strike that. 12 Did you notice any information or 13 explanation in the final report based upon what you 14 had commented on or you had had input on? 15 MR. SAXE: Objection to form. I don't 16 understand the question. 17 If you understand, you may answer 18 it. 19 A. Well, I think I understand. I think you're 20 asking me if anything that I told her in our meeting 21 subsequent to the draft report showed up in the 22 final report? 23 Q. (By Ms. Stinson) Right. 24 A. Nothing specific, except for one thing. 25 There was question in my mind as to how they had PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 42 1 handled property tax estimates through the -- using 2 the FLIPSIM model that they used. And I asked to 3 check that, and I think there was a change made 4 subsequent to that. 5 MR. SAXE: Excuse me. Could you read 6 that back. 7 (WHEREUPON, the requested 8 portion of the record was read 9 by the court reporter.) 10 Q. (By Ms. Stinson) Who was at this meeting 11 you mentioned? 12 A. It would have been Dr. Lacewell, I believe, 13 and Mr. Saxe and me. 14 Q. And the Hazen & Sawyer people? 15 A. Yeah. I think Chris Moline and Grace. 16 Q. Subsequent to the issuance of the final 17 report, did you have any input or interaction with 18 Hazen & Sawyer between that time and the time of the 19 so-called contract completion report? 20 A. I attended the funding -- well, let's see. 21 There were two things. There was a 22 workshop. I don't remember the exact date on one 23 day; and the next day, she gave her report to the 24 funding council in West Palm Beach. I attended that 25 meeting. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 43 1 Q. The workshop and the funding council 2 meeting? 3 A. Yes. 4 Q. Do you recall what month that was? 5 A. It must have been July or August. Perhaps 6 it was August. 7 Q. What was the topic of discussion at the 8 funding council, at that meeting? 9 A. She was presenting the results of her 10 analysis. 11 Q. The workshop was before the meeting? 12 A. Yes. 13 Q. And what was the purpose of the workshop? 14 A. I don't know what the stated purpose was, 15 except to present the results of the report. 16 Q. Were you invited to the workshop? 17 A. Yes. 18 Q. By Hazen & Sawyer? 19 A. I'm not sure how the invitation came about. 20 I was asked by the Justice Department's Counsel to 21 attend. 22 Q. Who all was at that meeting, the workshop? 23 A. I'm having trouble distinguishing between 24 the workshop and the funding council because there 25 was a large group in both. There was a staff of the PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 44 1 South Florida Water -- some of the staff of the 2 South Florida Water Management District was there. 3 There was some representatives, I think, from the 4 sugar industry and from the vegetable industry, 5 unless I'm confusing it with the funding council. 6 I'll have to tell you. I'm not real clear 7 as to who was at each one. 8 Q. All right. Was there any other interaction 9 with Hazen & Sawyer prior to issuance of the 10 so-called completion report? 11 A. No. 12 Q. And subsequent to the project completion 13 report -- 14 MS. SAXE: Object to form. 15 Counsel, I don't think there is a 16 project completion report. 17 MR. BURGESS: Contract. 18 MR. SAXE: Contract completion 19 report, is that what you're referring 20 to? 21 Q. (By Ms. Stinson) Excuse me. Contract 22 completion report. Did you understand me to mean 23 the contract completion report? 24 A. Yes, yes. 25 Q. Subsequent to the contract completion PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 45 1 report, what interaction or involvement have you had 2 with Hazen & Sawyer? 3 A. There have been some phone conversations 4 and there was two meetings. 5 Q. When were the phone calls? Have there been 6 a series of them over the months? 7 A. There have been probably -- yeah, three or 8 four, maybe a half a dozen over the time frame since 9 that contract completion report was submitted to the 10 board. 11 Q. What two meetings? 12 A. Well, there's been more than two meetings. 13 MR. SAXE: Excuse me. Was your 14 question, meetings before the contract 15 completion report and after the final 16 report or just -- 17 Q. (By Ms. Stinson) My question now relates 18 to the time period subsequent to submission of the 19 contract completion report. That's as you 20 understood it; is that correct, Dr. Jones? 21 A. I think so. 22 Q. The meetings. 23 A. We met with Dr. Johns at her offices in -- 24 I think it was in early January. 25 Q. Who's "we"? PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 46 1 A. Dr. Lacewell and Dr. Bill Boggess and me. 2 Q. What was the purpose of that meeting? 3 A. The purpose of the meeting was to discuss 4 the criticisms that had been raised specifically by 5 Dr. Polopolus and Dr. Richardson concerning her 6 study. 7 Q. Who called the meeting? 8 A. Well, let me just tell you my best 9 recollection of the scenario. 10 Q. Okay. 11 A. There had been an attempt by the board, or 12 a request by the board, to have a meeting of all of 13 the economists involved in this economic impact 14 evaluation of the SWIM plan. And there had been a 15 meeting scheduled, and then it was canceled. 16 Q. When was it scheduled for? 17 A. I think the first one was very early 18 January. 19 Q. Okay. 20 A. And that meeting was canceled. And then 21 the decision was made that we would meet with -- I 22 guess, then I was asked to meet with Hazen & Sawyer, 23 individually, just us, not with any other 24 participants from any other -- from the sugar 25 industry. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 47 1 Q. Were there participants from the Water 2 Management District? 3 A. Not in this first meeting. 4 Q. Do you know why the meeting of all the 5 economists was canceled? 6 A. I don't really have any specific 7 knowledge. It's my understanding that Dr. Polopolus 8 was unavailable and presumably Dr. Richardson, too. 9 Q. So you met in January then with the 10 Hazen & Sawyer folks privately, individually? 11 A. (Witness nods head.) 12 Q. And the purpose was to discuss the 13 criticisms by Polopolus and Richardson? 14 A. Yes. 15 Q. Did you provide to Hazen & Sawyer any 16 written documents at that time or comments? 17 A. No. 18 Q. What other meetings have you had with 19 Hazen & Sawyer? 20 A. There was one other -- there was another 21 meeting that we had following a meeting that she had 22 with Polopolus and Richardson, and we wanted to meet 23 with her to just find out if -- what differences or 24 similarities of methodology and so forth they had 25 discussed. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 48 1 Q. So you had a meeting with her prior to her 2 meeting with Polopolus and Richardson; is that 3 correct? 4 A. Right. 5 Q. And then did you meet with her and 6 Polopolus and Richardson, all of you together? 7 A. No. No, we didn't. 8 Q. But then you met with her again after she 9 met with Polopolus and Richardson? 10 A. That's correct. 11 Q. And what was the subject or topic of that 12 meeting? 13 A. Well, as I said, we wanted to find out what 14 had been -- what they had discussed in terms of any 15 differences in the methodology model, assumptions 16 and so forth, that might have led to, you know, the 17 big differences in estimates that they got or had 18 been reported. 19 Q. And can you tell me the substance of that 20 discussion that you had with Hazen & Sawyer? You 21 told me the general scope of the discussion, but can 22 you tell me the substance of what you learned about 23 their meeting with Polopolus and Richardson? 24 A. Yes. They had, as I understand it, a 25 detailed discussion of the differences between their PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 49 1 approaches. 2 Q. Were those differences resolved? 3 A. It's my understanding that they -- that not 4 all of them were. 5 Q. Did Grace Johns indicate that as a result 6 of her meeting with Polopolus and Richardson, she 7 would change anything in her approach or 8 methodology? 9 A. You mean in her studies she had already 10 finished, or -- I don't think she had an opportunity 11 or was contracted to go back and change the study 12 that she had completed. 13 Q. How about, would she have changed? Did she 14 indicate to you that some of the criticism would 15 have caused her to change her report if she had the 16 opportunity? 17 A. I don't recall her saying that, no. 18 Q. You are aware, are you not, that -- well, 19 let me not get to that yet. 20 What other meetings have you had with 21 Hazen & Sawyer? 22 A. I attended the economists' meeting that was 23 sponsored by the board, and I think that was on 24 February the 10th. I attended part of it. 25 Q. Anything else? PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 50 1 A. I think that's it. I think I have spoken 2 to them since then. 3 Q. That was my question. Have you had any 4 conversations with Hazen & Sawyer since then? 5 A. (Witness shakes head.) 6 Q. Are you planning to meet with Grace Johns 7 next Monday? 8 A. Yes. 9 Q. You are aware currently, are you not, that 10 Hazen & Sawyer is working on a 20-year projection of 11 the economic effects? 12 A. (Witness nods head.) 13 Q. You have to answer out audibly. 14 A. Oh, I'm sorry. Yes. Yes, I am. 15 Q. When did you learn that that study was 16 being undertaken by Hazen & Sawyer? 17 A. That was, I guess -- I don't recall 18 exactly. 19 Q. Do you recall whether you learned of that 20 20-year study in one of your meeting with 21 Hazen & Sawyer or through some other means? 22 A. No. It was through some other means. I 23 think it was the general grapevine, sometime prior 24 to the economists' meeting we had on February the 25 10th. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 51 1 Q. Let me go through some documents here. Let 2 me show you what's already been marked as part of 3 Lacewell Deposition Exhibit 1 and ask you whether 4 you had any input into that document. 5 A. I don't recognize this document. I don't 6 think I had any part in it. 7 Q. Okay. That's easy. This one, though, has 8 your name on it. 9 A. That could mean something. 10 Q. Exhibit 2, can you tell me how that 11 document was developed and what it is? 12 A. I don't know what the correct answer is 13 here. I haven't seen this document for a long time, 14 and I don't have a great deal of specific 15 recollection of it; but I think it is a collection 16 of thoughts by Dr. Lacewell, Dr. Ozuna, and myself 17 as suggestions of factors, variables and so forth 18 that Grace Johns might consider in her study. 19 My part of this would probably go into the 20 secondary impact estimates. 21 Q. Let me show you what was marked as 22 Deposition Exhibit 6 and ask you to identify that 23 and the circumstances under which it was prepared. 24 A. This is a document that Mr. Saxe asked me 25 to prepare. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 52 1 Q. For what purpose did you prepare that? Do 2 you know? 3 A. As I recall, this was soon following the 4 presentation by Dr. Polopolus -- well, actually both 5 Grace Johns and Leo Polopolus at the funding council 6 meeting -- and he had asked me to take a look at the 7 two estimates and do some comparison to see if we 8 could reconcile the two or determine what the 9 differences were. 10 Q. Let me take a look at that. 11 A. (Witness complies.) 12 Q. Did you discuss these comments with 13 Dr. Polopolus? Did you talk to him about where he 14 got the information? 15 A. No. 16 Q. With regard to the question of whether one 17 should look at FTE's or individuals, do you have any 18 information which would indicate one way or another 19 whether there are more individuals working than 20 there are FTE's, i.e., whether there are a lot of 21 part-time jobs? 22 A. I have looked at the -- some of the data on 23 that, and it does appear that there are a number of 24 part-time workers in the EAA. 25 Q. What data would -- have you looked at on PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 53 1 that? 2 A. Some of the Florida agricultural statistics 3 that show employees -- the employee pattern within 4 the EAA. 5 Q. Are those statistics maintained by the 6 Department of Agriculture or for the Department of 7 Agriculture? Who do you know specifically -- if you 8 can tell me specifically what document you looked 9 at. 10 A. It was a part of the periodical report of, 11 I believe, it's the Florida Department of Employment 12 and Employment Security if -- I think that's the 13 name of the agency. 14 Q. Department of Labor and Employment 15 Security, does that sound right? 16 A. That could be it. 17 Q. Have you at any time discussed with 18 Dr. Polopolus the comments that you make in 19 Exhibit 6? 20 A. No. 21 Q. Have you discussed with Grace Johns the 22 substance of the comments that you make in 23 Exhibit 6? 24 A. Those specific comments, not to my 25 recollection. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 54 1 Q. Let me show you Exhibit 7. I have here a 2 copy of Dr. Luke's report if that will help. 3 A. This, again, is comments on a document that 4 is questioned by Justice Counsel to compare -- 5 Q. Let me refer you specifically to No. 4 on 6 Page 2, "Jurisdiction - Specific Impacts." It says, 7 "This comment is rooted in the modeling psyche of 8 Liestritz." What does that mean? 9 A. Could I refer to the comment? 10 Q. Sure. Sure. This is not a memory test. 11 A. Wait a minute. I've got to get on the 12 right -- okay. 13 The comment by Dr. Luke to which my comment 14 refers -- I'm sorry. This is actually -- this 15 document, I believe, is prepared by Dr. Luke and 16 Dr. Leistritz. 17 But relating to "Jurisdiction - Specific 18 Impacts," the statement that "This comment is rooted 19 in the modeling psyche of Leistritz," simply 20 suggests that this is the kind of work that 21 Dr. Leistritz has done a great deal of over the 22 years, and, that is, estimating jurisdiction 23 specific impacts in a modeling format. 24 Q. Do you have any opinion as to whether or 25 not that would be helpful information in an economic PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 55 1 impact assessment? 2 A. Well, that's very difficult to answer. It 3 may be depending upon the purpose for which you're 4 doing the study. For one purpose, it may be useful; 5 for another purpose, it may not be particularly 6 useful. 7 Q. Well, what do you understand the purpose of 8 the Hazen & Sawyer study to be? 9 A. The purpose of the Hazen & Study, as is 10 reported in the request of the RFP, or the Request 11 For Proposal, stated is doing an economic impact 12 analysis. 13 I think it specifically talks about the 14 impacts on employment and personal income within the 15 impact area. 16 Q. For that purpose, do you believe it would 17 be important to look at the jurisdiction specific 18 impacts? 19 A. Well, this comment by Dr. Luke and 20 Leistritz specifically mentions, for example, 21 individual towns and school districts and a number 22 of impacts that, in my opinion, appear to go well 23 beyond what was asked for by the South Florida 24 Management District in its request for proposal that 25 was eventually awarded to Hazen & Sawyer. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 56 1 Q. Well, let me back up then. With regard to 2 the public policy issues that the water management 3 district must deal with, do you think it would be 4 helpful or important to look at jurisdiction, 5 jurisdictional specific impacts? 6 A. Well, I'm really not prepared to comment on 7 the issues that the board looks at beyond what 8 they're doing in the economic impact analysis in the 9 SWIM plan; and in which case, I would go to what 10 they requested. 11 Q. You have no opinion as to what the board 12 should look at in terms of evaluating the economic 13 effects of the SWIM plan? 14 A. None. Other than what's called for by their 15 own rules and regulations. 16 Q. What rules and regulations are you 17 referring to? 18 A. Well, as I understand it, the SWIM plan, 19 and against the board who's implementing the SWIM 20 plan, has no direct obligation to do an economic 21 impact analysis. 22 It is an economic impact analysis that the 23 board asked for. And as Hazen started to do the 24 economic impact analysis, the board prepared the 25 request for proposals; and I haven't looked at PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 57 1 beyond what they requested to be done as to try to 2 draw any kind of conclusion as to what they should 3 be doing. 4 Q. The last sentence of Point 4 on Exhibit 7 5 states, "This could be interpreted as a criticism of 6 the board from myopia, but not of Hazen & Sawyer." 7 Would you agree or disagree or have an 8 opinion regarding whether that's a valid criticism 9 of the board for myopia? 10 A. I'm not making that criticism. 11 Q. Do you have any opinion whether that 12 criticism is valid or not? 13 A. No, not really. 14 MR. SAXE: Counsel, I'm ready for a 15 five-minute break, five-minute 16 bathroom break. 17 (WHEREUPON, a recess was taken.) 18 Q. (By Ms. Stinson) Still on Point 4 here of 19 Exhibit 7. Would you agree that if there are 20 significant economic effects in terms of secondary 21 effects on unemployment and other induced effects, 22 that they would occur primarily within the EAA 23 area, specifically in the small towns surrounding 24 that -- such as, Belle Glade as opposed to Palm 25 Beach County as a whole? PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 58 1 A. Well, that's a very broad question. We're 2 talking about a wide variety of impacts, a wide 3 variety of towns; and I just don't have the -- 4 haven't done the analysis really to be able to 5 answer that question. 6 Q. You don't feel you can say just generally 7 without specifics -- 8 A. Oh, no. 9 Q. -- what the primary effects would be in 10 those towns? 11 A. No. 12 MR. SAXE: Objection. 13 Counsel, was your question about 14 primary effects, or did you say 15 indirect and induced and unemployment 16 effects? 17 MS. STINSON: I meant primary -- 18 MR. SAXE: If you'll just clarify 19 your question, and the witness, I'm 20 sure, will answer it. 21 Q. (By Ms. Stinson) In a more generic sense, 22 the most substantial effect would be felt in the 23 small towns around the EAA? 24 A. I don't think you can conclude that in 25 general. We've been involved in studies that show PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 59 1 that people may commute long distances, operators 2 may purchase inputs from outside the region; and, in 3 particular, in this case, we have the Palm Beach -- 4 West Palm Beach City in near proximity to some very 5 small towns. I would think the likelihood of a very 6 significant amount of the money that's paid for 7 jobs, direct payments from the Ag industry and the 8 EAA, would be spent in West Palm Beach. 9 Q. Are you telling me that you don't have any 10 information that would answer that question one way 11 or the other? 12 A. At this point in time, that's correct. 13 Q. Are you in the process of gathering any 14 information that would answer that question? 15 A. No, I'm not. 16 Q. Let me ask you to turn to Page 3 and look 17 at Point 8. 18 A. (Witness complies.) 19 Q. Well let me back up to 4. This is one that 20 was punted to you by Dr. Lacewell. The comment in 21 parenthesis, "See list of citations. I notice they 22 left out those done in Texas. Oh, well." 23 What are you referring to? 24 A. I've worked with Dr. Luke and Leistritz in 25 the past on some studies in Texas, as well as PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 60 1 elsewhere. I just happen to -- when I went through 2 the references, I just had a special eye appeal for 3 any of those that we did in Texas. It has no 4 particular meaning one way or the other. 5 Q. Okay. No. 8, the statement, "I have done 6 enough analysis of the Palm Beach general economy to 7 know that it is robust and adding significant jobs 8 each year through normal growth." 9 What analysis have you done of the Palm 10 Beach County economy? 11 A. I acquired and analyzed the data on 12 employment and personal income, as well as some 13 other factors that's reported annually by the Bureau 14 of Economic Analysis, U.S. Department of Commerce. 15 Q. For what period of time did you look at 16 that information? 17 A. I would have to look at that. I don't 18 recall exactly. I think I went back 10 years. 19 Q. Up till what date? Do you recall? 20 A. The most recent that I had for Palm Beach 21 County -- I think it was 1991. I could be wrong. 22 It could have been 1990, but it was the most recent 23 report issued by the BEA. 24 Q. Did you look at any jurisdiction specific 25 information? PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 61 1 A. I looked at -- yes, at Palm Beach County 2 and Hendry County. 3 Q. But it gets no more specific than 4 county-wide? 5 A. That's right. The BEA data is -- the basic 6 building block is the county. 7 Q. Does that data show what types of jobs are 8 added each year through normal growth? 9 A. I would have to refer back to the document 10 to recall exactly what is on the BEA. I believe it 11 does show jobs by what's called major divisions of 12 the standard industrial classification code, and it 13 may, also, show -- no. 14 I started to say something, and I don't 15 think I'm right. I believe these do show job growth 16 by major division, but I don't recall exactly. I 17 know it does show total employment and so forth. 18 Q. Other than looking at that information, 19 have you had any other analysis or additional 20 analysis of the Palm Beach general economy? 21 A. That was my primary source. It's one 22 that's widely used and accepted in looking at area 23 economic growth, and so I looked to it first. I did 24 contact the Florida Department of Statistics Panel, 25 the census data for the State, and got information PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 62 1 on Palm Beach County and Hendry County. And that, I 2 think is it. 3 Q. Point 9, the comment, "They are trying to 4 link SWIM costs to Everglade benefit savings or 5 enhancement as if this were a BC analysis. It is 6 not. They may or may not know the significance or 7 the difference." Explain that to me. 8 A. I'll need to consult this again. Okay. 9 I believe they are talking about the 10 Economic Benefits Report, Dr. Luke and Leistritz 11 were. And in that comment, they talk about 12 comparing the economic benefits from avoidance of 13 wetland losses to the economic impact costs of the 14 SWIM plan. 15 I took that statement to mean that they 16 were suggesting some comparison of the benefits and 17 costs of the SWIM plan, as we would do in a benefit 18 cost analysis. That benefit cost analysis, to the 19 best of my knowledge, was not asked for by the South 20 Florida Water Management District. 21 Q. Do you believe it would be, from a public 22 policy standpoint, wise for the board to look at a 23 benefit cost analysis? 24 A. It's my understanding that the public 25 policy is already in place. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 63 1 Q. What's that understanding based on? 2 A. What I have read in the Marjory Stoneman 3 Douglas Act and the settlement agreement between the 4 U.S. and South Florida Water Management District. 5 Q. Do you consider yourself an expert at 6 analyzing the non-market benefits or the -- I guess 7 market benefits of the wetlands' loss scenarios? 8 A. I have done some studies on the valuation 9 of non-market goods. 10 Q. What studies have you done? 11 A. I did a study of the -- valuing the bay and 12 estuaries on the Texas Gulf Coast, specifically a 13 study of the Matagorda Bay, which was a non-market 14 valuation study. 15 Q. How did you perform that study? 16 A. We used what we called a "travel cost" 17 model. 18 Q. Did you do surveys? Were surveys a part of 19 that study? 20 A. Yes. 21 Q. When was that? 22 A. The survey was done in 1986. We finished -- 23 we completed the valuation portion of that study for 24 the selected bay and estuaries in -- it was either 25 late '89 or early 1990. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 64 1 Q. With regard to the Everglades issues, have 2 you analyzed or do you intend to analyze in any way 3 the benefits report or the benefits analysis? 4 A. I've not been asked to do that, no. 5 Q. The study you did on the bays and 6 estuaries, has that been published? 7 A. Yes, it is in a Ph.D. dissertation by 8 Dr. Teofilo Ozuna There are some subsequent journal 9 articles that have come from his dissertation. 10 Q. What was your involvement in his 11 dissertation? 12 A. I was his major advisor, and I was project 13 leader on the project for collecting the -- 14 conducting the survey and collecting the data. 15 Q. We'll put that back into the pile 16 (indicating documents). 17 A. Both of them? 18 Q. Well, that one, too. 19 A. This one, in particular? 20 Q. Let me show you Exhibit 8 and ask you to 21 identify that. 22 A. Okay. This is mine. It's a document that 23 I was asked by Mr. Saxe to prepare. There is -- 24 something happened on the last page. I don't know. 25 Maybe this was just faxed at a reduced -- because I PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 65 1 didn't recognize it at first because it's a 2 different type style or size anyway and so -- 3 Q. But it is, in fact, part of the document? 4 A. To the best of my recollection. Without 5 looking at the original document, I will -- I think 6 that's the appropriate last page. 7 MR. SAXE: What exhibit number is 8 this? 8? 9 MS. STINSON: Yes. 10 Q. (By Ms. Stinson) What does that document 11 address? 12 A. It basically addresses the U.S. sugar 13 program and the development of sugar acreage in 14 production in Florida and some of the current 15 characteristics of the sugar industry. 16 Q. What research did you do in developing that 17 document? 18 A. It was primarily a review of literature. 19 Q. Do you recall what literature? 20 A. I relied on the U.S. Sugar & Sweetner 21 Report. There are issues and some other documents 22 that I mentioned earlier that relate to the program, 23 operation of the U.S. sugar support program quota 24 system and price supports. 25 Q. Did you discuss this document, or have it PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 66 1 reviewed at all by Dr. Gardner? 2 A. I think he has seen it. 3 Q. Has he made any comments to you on it? 4 A. To the best of my recollection, the only 5 comment is a verbal one, in which he said he had 6 read it and he didn't have any major disagreements. 7 Q. Did he have any minor disagreements? 8 A. He didn't mention them if he did. 9 Q. Prior to doing work on this -- prior to 10 working on the Everglades Restoration Project, did 11 you have any experience or background in involvement 12 with the sugar industry or sugar policy? 13 A. No. No specific involvement. 14 Q. You said that a little bit with a qualifier 15 What involvement, generally? 16 A. Well, I guess when you're an agricultural 17 economist, then you're aware of the various policies 18 and so forth that affect all U.S. commodities; and 19 so I did have some general knowledge of the Florida 20 sugar industry and the whole U.S. sugar industry. 21 Q. And prior to doing your work on that on 22 Exhibit 8, had you done any research or study of the 23 sugar policy? 24 A. No, I have not. 25 MR. SAXE: Counsel, if I could take PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 67 1 a look at it when you're done. I see 2 there is some red -- it looks like 3 scratched-out annotation on the 4 boarder of the first page and some 5 other marks in the margin of the 6 document and in some of the text. 7 MS. STINSON: The red is mine. 8 MR. SAXE: Is that the case on 9 any of these other exhibits? Because 10 if so, I think we need to go on record 11 as saying, not all the annotations on 12 the documents as entered into the 13 record were on the documents as 14 produced. 15 MS. STINSON: I mean, anything in 16 red on any of these documents is mine. 17 If it's not in red, it was on there 18 originally, I think. 19 We can redact that for 20 copying purposes. I don't have any 21 problems with that. 22 MR. SAXE: I don't know that it's 23 really going to be necessary to do 24 that. Although, I don't know that the 25 color distinction is going to show up PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 68 1 on any photocopies. I'm just entering 2 on the record that there are additions 3 made to the document by Counsel after 4 they were produced that don't belong 5 to the creator of the document. 6 MS. STINSON: Okay. 7 MR. SAXE: Although they are nice 8 embellishments, I have to admit. 9 Q. (By Ms. Stinson) Dr. Jones, you indicate in 10 this document that the Florida Sugar industry has 11 expanded in the face of a declining national market. 12 The national market continues to exceed the national 13 production, does it not? 14 MR. SAXE: Objection to form. 15 Is that a quotation from the document? 16 MS. STINSON: No. That's a question. 17 Q. (By Ms. Stinson) Does the national 18 consumer demand exceed the U.S. production? 19 A. Yes. 20 Q. So although demand has declined, it still 21 exceeds domestic production; is that correct? 22 A. Well, what has happened over the last 23 several years, is that the capital consumption of 24 sugar has fallen fairly steady at some period of 25 time. It's leveled out. And I think may have PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 69 1 increased within the last year or two, but over this 2 period the trend's been downward. The total 3 production has, also, fallen; and at the same time, 4 production has been increasing throughout this same 5 period, primarily in Florida. So that's the basis 6 of that statement. 7 Q. But, nonetheless, the demand still exceeds 8 the production in the United States for sugar? 9 A. At this point in time, yes, it does. 10 Q. Would you agree that the so-called world 11 sugar price is affected by market control of other 12 countries? 13 A. I would say that the world sugar price is 14 affected by market control of other countries and 15 market control within the United States. It's 16 affected by market control in all countries, not 17 just other countries. 18 Q. The comment is make on Page 5 that, "The 19 very existence of the Florida sugar industry is 20 dependent upon price supports and subsidies." 21 Is that your opinion? 22 MR. SAXE: May I see the document, 23 please. 24 MS. STINSON: (Complies with 25 document.) It's the very first line. PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 70 1 MR. SAXE: Oh, thank you. 2 A. Yes, that's my statement. 3 Q. (By Ms. Stinson) Is that your opinion? 4 A. Yes, it is. I think the Florida sugar 5 industry is very dependent upon price supports and 6 subsidies. 7 Q. Is that true of other agricultural crops as 8 well in the United States. 9 A. Not to the extent that it is in the case of 10 sugar. 11 Q. In that statement, are you're referring to 12 any subsidies other than agricultural subsidies? 13 A. I'm referring to subsidies to the sugar 14 industry and specifically to the sugar program which 15 imposes quotas on imports from other countries and 16 by doing so, supports the price of sugar to U.S. 17 consumers at levels above the world price and, 18 consequently, constitutes the subsidy to the sugar 19 industry. 20 Q. But you're not referring to any other types 21 of indirect subsidies? 22 A. There are a number of other subsidies that 23 exist; but in this particular statement, I'm 24 referring just to price supports and subsidies. 25 Q. Okay. Now, you indicate that, in your PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 71 1 opinion, there are no other crops in the 2 United States that are as dependent on the 3 subsidies. Am I rephrasing you correctly? 4 A. Are you reading from your document? 5 Q. No. I'm trying to repeat what you told me 6 a minute ago. 7 A. Yes, that's a fair characterization of what 8 I said. 9 Q. On Page 5, you have a chart which 10 has "deficiency payments," and other things. And for 11 other crops -- and I notice a deficiency payment of 12 a little over $200 an acre for rice. Would that not 13 constitute a subsidy, a crop that's equally 14 dependent on subsidies as sugar? 15 A. Equally dependent? 16 Q. Or more dependent? 17 A. Not according to my analysis. 18 Q. Can you explain that to me? 19 A. In the programs like the one for rice, and 20 for most other crops, the amount of subsidy is 21 rather apparent. It is the payment, the deficiency 22 payment that comes in a check to producers form the 23 U.S. Treasury. 24 In the case of sugar, the subsidy is not 25 quite so apparent because it comes to the sugar PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 72 1 growers from -- through the market because of the 2 higher price. And the $200 per acre is not as high 3 as the subsidy that sugar growers receive through 4 that price support by my estimate or by the estimate 5 of a number of other professional economists. 6 Q. You're not looking at it on a per acre 7 basis then; is that correct? 8 A. Yes, I am. 9 Q. You're saying that on a per acre basis 10 sugar receives more than $200 worth of benefits from 11 subsidies? 12 A. Yes, I am. 13 Q. What is the figure of subsidies per acre 14 received by sugar? 15 A. Well, for the Florida sugar industry, I 16 have estimated the total subsidy -- now, this would 17 include some things other than the price support. 18 Q. What things? 19 A. Like the Central and South Florida Flood 20 Control Project, the South Florida Water Management 21 District assessment-- differential assessment fees, 22 the local government taxes based on productivity 23 rather than market value. 24 When you take all of those into account, my 25 estimate is that those subsidies translate into a PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 73 1 per acre estimate of what I have estimated in this 2 document that I sent to Mr. Saxe of $878 per acre. 3 Q. Well, let's take a -- you didn't consider 4 other subsidies to these other crops? 5 A. That's true. I didn't. That's right. 6 Q. If you look at the subsidy per acre, not 7 counting the price support subsidy -- 8 A. Just from the price support program? Is 9 that what you'd like for me to do? 10 Q. Right. Tell me that. 11 A. My estimate is that -- this comes to about 12 $258 million per year, and if we use the acreage 13 of -- let's say, use the Sugar & Sweetner Report 14 acreage of 428,000 acres. 15 Q. You're talking just about Florida then? 16 A. Yes. 17 Q. The subsidy that's going to Florida and the 18 benefit in Florida? 19 A. Right. So that's 258 million divided by 20 428,000. That comes to -- 21 Q. Have you got a calculator? 22 A. -- some amount. 23 MR. SAXE: Off the record. 24 (WHEREUPON, there was discussion 25 off the record.) PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 74 1 A. That's right at $600 an acre. It's $602 an 2 acre, to be specific. 3 Q. (By Ms. Stinson) Does that figure represent 4 the difference between the world price and the U.S. 5 price for sugar? 6 A. Not the current world price. 7 Q. What world price? 8 A. This is the difference between the U.S. 9 supported price and the world price that's estimated 10 or projected by several different economists that 11 would exist if the industrialized nations, primarily 12 the European economic community and the U.S., as 13 well as some others, liberalized their trade and 14 went to a free trade policy. 15 That price comes, as I say, comes in around 16 14 to 16 cents per pound. If you look at that 17 compared to the recent prices of U.S. supported 18 prices, 21 to 23 cents per pound, I think what I 19 finally used in making this estimate was a 20 difference of 7 cents per pound. 21 Now, that difference is not as great as the 22 difference between the U.S. support price and the 23 actual world price in recent years. That difference 24 has been much greater. But I believe in an earlier 25 question you asked me about that, and I think that PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 75 1 lower price is affected by the U.S. sugar policy 2 which imposes quotas and does not allow countries 3 such as the Caribbean countries, Mexico and others, 4 to import more than just a certain amount of sugar 5 to the U.S. So the price in those countries are 6 depressed by the U.S. sugar program. 7 So what we'd expect to happen, if these 8 countries liberalize their trade, is that the world 9 price would rise. And so that's the difference that 10 I used was a 7 cents' difference between the support 11 price and what is projected to be the world price in 12 the case of free trade. 13 Q. And your conclusions regarding that world 14 price are in a document, a memo that you sent to 15 Grace Johns? 16 A. Yes. 17 Q. As you told me earlier? 18 A. Uh-huh. 19 Q. Was this document presented to anyone 20 either verbally, through a report, or in writing to 21 anyone other than Counsel? 22 A. Not that I recall. 23 MR. SAXE: What was the question? 24 Presented other than verbally or in a 25 report? I'm sorry. I didn't hear PARLIAMENTARY REPORTING OF FLORIDA, INC. 800-521-9125 76 1 you. 2 Q. (By Ms. Stinson) Was it presented either 3 in writing or verbally to anyone other than Counsel? 4 MR. SAXE: Thank you. 5 A. Not that I recall. Not by me. Let me 6 clarify this. I gave this document to Counsel. He 7 subsequently, I believe, shared it with a gentleman 8 in Florida; and we had some conversations concerning 9 it. 10 Q. (By Ms. Stinson) Who did you have 11 conversations with concerning that? 12 A. Well, again, I can't recall his name. 13 Q. What is he? 14 A. He lives in Tallahassee. He's a citizen in 15 Tallahassee. He chaired the session that I recently 16 attended at the Everglades Coalition Parks. What's 17 his name? Mr. Parks. 18 Q. Paul Parks? 19 A. I believe that's right. 20 Q. Other than that, Counsel asked you to 21 prepare this. Do you know the purpose for which 22 this document was intended or why you prepared it? 23 A. No. Let me also add something. I just -- 24 my memory just came back a little bit. I believe 25 this document was also sent to Dr. Bruce Gardner by PARLIAMENTARY REPORTING OF FLORIDA, INC.