0001
01 DIVISION OF ADMINISTRATIVE HEARINGS
01 DEPARTMENT OF ADMINISTRATION, STATE OF FLORIDA
02
02 SUGAR CANE GROWERS COOPERATIVE OF )
03 FLORIDA, a Florida agricultural )
03 cooperative marketing association; ROTH )
04 FARMS, INC.; AND WEDGWORTH FARMS, INC., )
04 )
05 and )
05 )
06 FLORIDA SUGAR CANE LEAGUE, INC.; UNITED )
06 STATES SUGAR CORPORATION; AND NEW HOPE )
07 SOUTH, INC., )
07 )
08 and )
08 )
09 FLORIDA FRUIT AND VEGETABLE ASSOCIATION,)
09 LEWIS POPE FARMS, W.E. SCHLECHTER & )
10 SONS, INC., and HUNDLEY FARMS, INC., )
10 Petitioners, )
11 )
11 vs. )CASE NOS. 92-3038
12 ) 92-3039
12 SOUTH FLORIDA WATER MANAGEMENT DISTRICT ) 92-3040
13 an Agency of the State of Florida, )
13 )
14 Respondent, )
14 )
15 and )
15 )
16 THE UNITED STATES OF AMERICA, )
16 MICCOSUKEE TRIBE OF INDIANS, the )
17 FLORIDA DEPARTMENT OF ENVIRONMENTAL )
17 REGULATION, the FLORIDA WILDLIFE )
18 FEDERATION, et al )
18 )
19 Respondent-Intervenors )
19
20
20
21 **************************************
21
22 DEPOSITION OF F. LARRY LEISTRITZ
22
23 **************************************
23
24 VOLUME I
0002
01 On the 8th day of February, A.D., 1993, between
02 the hours of 9:10 A.M. and 12:30 P.M. and 1:50 P.M. and
03 5:30 P.M. in the offices of the United States Attorney's
04 Office, 816 Congress Avenue, Suite 650, Austin, Texas,
05 before me, DOTTIE NORMAN, a Certified Shorthand Reporter
06 in and for the State of Texas, appeared F. LARRY
07 LEISTRITZ, who, being by me first duly sworn, gave his
08 oral deposition at the instance of the United States of
09 America in said cause.
10 This deposition is being taken in accordance
11 with the Federal Rules of Civil Procedure.
12 ************
0003
01 APPEARANCES
01
02 For the Sugar Cane Growers Cooperative of Florida,
02 a Florida agricultural cooperative marketing
03 association; Roth Farms, Inc.,; and Wedgworth Farms, Inc.:
03
04 HOPPING, BOYD, GREEN & SAMS
04 By: DONNA STINSON
05 Post Office Box 6526
05 Tallahassee, FL 32314
06
06 For The United States of America:
07 By: ROBERT ROSENBERG
07 Assistant United States Attorney
08 Southern District of Florida
08 155 South Miami Avenue
09 Miami, Florida 33130
09
10 -and-
10
11 KEITH E. SAXE
11 U.S. Department of Justice
12 Environmental and Natural Resources
12 Division
13 P.O. Box 663
13 Washington, D.C. 20044-0663
14
14
15 Also Present: Lonnie Jones
15 Ron Luke (until lunch recess only)
16
16
17
17
18 INDEX
18
19 Page
19 Direct Examination by Mr. Rosenberg 6
20
20
21
21
0004
01 EXHIBITS
01 Page
02 Deposition Exhibit No. 1 8
02 Personal Resume of F. Larry Leistritz
03
03 Deposition Exhibit No. 2 21
04 Letter dated 2-3-93
04 to Rosenberg from Leistritz
05
05 Deposition Exhibit No. 3 41
06 Memorandum dated 8-19-92
06 to Leistritz from Luke
07
07 Deposition Exhibit No. 4 51
08 Letter dated 10-13-92
08 to Luke from Leistritz
09 with Enclosures
09
10 Deposition Exhibit No. 5 53
10 Facing Economic Adversity: Experiences
11 of Displaced Farm Families in North Dakota
11
12 Deposition Exhibit No. 6 68
12 The Consequences of the Farm Crisis
13 for Rural Communities
13
14 Deposition Exhibit No. 7 82
14 Economic Impact of Leafy Spurge
15
15 Deposition Exhibit No. 8 106
16 Economic Impacts of New and Expanding
16 Firms in the Upper Great Plains
17
17 Deposition Exhibit No. 9 111
18 Socioeconomic Impact of the Conservation
18 Reserve Program in North Dakota
19
19 Deposition Exhibit No. 10 114
20 Landowner Characteristics and the Economic
20 Impact of the Conservation Reserve Program
21 in North Dakota
21
22 Deposition Exhibit No. 11 140
22 Rural Environments
23
23 Deposition Exhibit No. 12 152
24 The Economic Contribution of the Sugarbeet
24 Industry of Eastern North Dakota and Minnesota
25
25
0005
01 Deposition Exhibit No. 13 157
01 Contribution of Public Land Grazing
02 to the North Dakota Economy
02
03 Deposition Exhibit No. 14 159
03 Developing Economic-Demographic Assessment
04 Models for Substate Areas
04
05 Deposition Exhibit No. 15 197
05 Task Description
06
06 Deposition Exhibit No. 16 207
07 Memorandum dated 7-1-92
07 to Rhoads from Johns
08
08 Deposition Exhibit No. 17 209
09 Handwritten Notes
09
10 Deposition Exhibit No. 18 211
10 Handwritten Notes
11
11 Deposition Exhibit No. 19 212
12 Handwritten Notes
12
13 Deposition Exhibit No. 20 212
13 EAA Poverty Profile
14
14 Deposition Exhibit No. 21 214
15 Sugarcane Outline Labor Market
15
16 Deposition Exhibit No. 22 215
16 EAA Farm Worker Profile
17
17 Deposition Exhibit No. 23 216
18 Handwritten Notes titled
18 "Everglades Report"
0006
01 F. LARRY LEISTRITZ,
02 the witness hereinbefore named, being first duly cautioned
03 and sworn to testify the truth, the whole truth and
04 nothing but the truth, testified as follows:
05 DIRECT EXAMINATION
06 QUESTIONS BY MR. ROSENBERG:
07 Q. Professor Leistritz, I'm Robert Rosenberg. I'm
08 an Assistant United States Attorney. I will be taking
09 your deposition today and tomorrow also.
10 Let me talk to you about a couple of
11 matters first. If you can't answer a question because I
12 haven't formed it properly or spoken too quickly, it
13 doesn't make sense to you, please tell me. I'll try to
14 repeat or reconstruct the question as needed.
15 A. Yes.
16 Q. If you don't know something in response to a
17 question, it's permissible to say, "I don't know. I don't
18 know that."
19 We're here not to trick you, but we are
20 here to seek information.
21 A. Yes.
22 Q. And I'll try to be as direct as possible in my
23 questions. I'm not an economist and so I would be asking
24 you to define terms. Sometimes expert witnesses throw
25 jargon around.
0007
01 A. Yes.
02 Q. Somebody is going to read this deposition, and
03 that person may not be an economist. So I may ask you, if
04 you could, to define some terms. That would be helpful I
05 think.
06 A. Yes.
07 (At this time there was a brief discussion
08 off the record.)
09 QUESTIONS BY MR. ROSENBERG:
10 Q. If you want a break for one reason or another,
11 just tell me.
12 A. Okay.
13 Q. We'll try to be fairly liberal with breaks
14 here. Just say so. I will ask, however, that when you
15 answer questions you answer verbally.
16 A. Yes.
17 Q. Nods and uh-huhs and things like that can't be
18 picked up. If you are referring to a document -- and I'll
19 try to do the same thing -- refer to it by the exhibit
20 number as opposed to this or that, things like that.
21 Sir, do you have your curriculum vitae with
22 you? Did you bring a curriculum vitae?
23 A. I did not bring -- I do not have an extra copy.
24 Q. Let me go through that with you. Allow me to do
25 this if I can. Let me hand you this.
0008
01 A. Yes.
02 Q. And I think we may want to mark that as an
03 exhibit. That is a little thicker than the document your
04 counsel gave you.
05 A. Right.
06 Q. That appears to me to be a curriculum vitae
07 together with a collection of publications, list of
08 publications.
09 A. Yes.
10 Q. Would you look that over for me and tell me if
11 that is complete.
12 A. Uh-huh.
13 (The instrument referred to was here marked
14 as Deposition Exhibit No. 1 for identification.)
15 THE WITNESS: Yes, sir. The document
16 labeled Exhibit 1 is complete as of August 1992. There
17 might be a few more publications that have occurred since
18 then.
19 QUESTIONS BY MR. ROSENBERG:
20 Q. Okay. My understanding is that you have at
21 least 250 publications.
22 A. Something on that order.
23 Q. Am I right?
24 A. Yes.
25 Q. When we talk about publications, just for my
0009
01 reference, does that include studies you have undertaken
02 or research projects you have undertaken?
03 A. Yes.
04 Q. And impact statements you have done?
05 A. Yes, uh-huh.
06 Q. So the 250 documents would include every
07 document you have generated whether it's a book, an
08 article, impact statement or study report?
09 A. The attempt was to list all of those here, that
10 is research reports, books, journal articles and the
11 like.
12 Q. Okay. Would you state for me your educational
13 background starting with your high school, please?
14 A. Okay. Yes. I graduated from Rushville Public
15 High School in Nebraska in 1963. I received my Bachelor's
16 degree in Agricultural Economics at the University of
17 Nebraska-Lincoln in 1967; Master's degree in Agricultural
18 Economics, University of Nebraska, 1968; and completed my
19 Ph.D. at the University of Nebraska in 1970.
20 Q. At any time did you undertake any other
21 training, whether it's reflected in your academic
22 credentials or not, that bears in any way on the work you
23 have done in the present case?
24 A. In terms of formal training, classes?
25 Q. Or seminars or conferences or other matters, any
0010
01 training sessions.
02 A. Okay. We have, of course, participated in a
03 great variety of scientific conferences both in the U.S.
04 and abroad but no essentially formal training programs as
05 such.
06 Q. Did any of those -- did any of those conferences
07 concern economic impacts regarding water resources?
08 A. Certainly. Yes.
09 Q. Which ones?
10 A. Oh -- well, many of our scientific conferences
11 will cover -- will cover a broad range of topics. Like
12 our annual conferences of our Agricultural Economics
13 Association will typically have -- will have within them
14 special sessions or symposia dealing with such topics as
15 water resource projects or community impacts and that sort
16 of thing.
17 Another association that I've been active
18 in in recent years is the International Association for
19 Impact Assessment. And, again, these conferences, which
20 are a multiday affair, will have -- will have within them
21 then special sessions on perhaps economic impacts or
22 alternative ways of measuring economic impacts, community
23 impacts of natural resource development and the like.
24 Q. Are these people presenting papers? Is that
25 what is happening?
0011
01 A. Yes, that's a very typical format. There are
02 some variations. Sometimes they are termed symposia or
03 round tables or whatever. It's basically presentation of
04 papers, that sort of thing.
05 Q. But those aren't actual training sessions?
06 A. Right.
07 Q. Those are simply a gathering of --
08 A. Yes, and reporting.
09 Q. -- people like you?
10 A. Yes, uh-huh, people like myself reporting on
11 things that they have been doing.
12 Q. Would you describe for me your employment
13 history in chronological order starting from your
14 undergraduate days?
15 A. Okay. Yes. As an undergraduate, I was employed
16 on an hourly basis in the Department of Economics, in the
17 Department of Agricultural Economics. As a graduate
18 student, I also was employed by the Nebraska Agricultural
19 Experiment Station as a graduate research assistant.
20 During that period of time, I worked on a study of the
21 Nebraska land market. And we -- it's had about three
22 different publications resulting from that work.
23 Q. Do me a favor. Give me years when you say this
24 or ranges of years.
25 A. Yes. This was -- graduate school was 1967 to
0012
01 1970. Okay. In 1970 I joined the faculty at North Dakota
02 State University in the Department of Agricultural
03 Economics. I have been a faculty member at North Dakota
04 State University ever since. This included one year when
05 I was on leave and spent 1978-79 as a visiting -- as a
06 visiting professor at Texas A&M University. I also,
07 during the period 1975 to 1978, was on loan on a half-time
08 basis from the university to our state legislative
09 counsel, the legislative research --
10 Q. State of North Dakota?
11 A. State of North Dakota, yes. So I guess those
12 would be -- also during the period 1979 to 1982 at North
13 Dakota State University I was attached on a half-time
14 basis to our University Office of -- Office of Research
15 Administration and had the title Director of Sponsored
16 Programs during that period.
17 Q. What did that mean?
18 A. Grants and contracts. We were essentially
19 trying to establish a grant and contract office there at
20 the school, provide information to people who are working
21 on grant proposals and that sort of thing. But
22 essentially from 1970 up to date I've been a faculty
23 member there in agricultural economics at North Dakota
24 State University.
25 Q. So on one side your formal employment has been
0013
01 as a professor or as a teacher --
02 A. Uh-huh.
03 Q. -- at North Dakota State?
04 A. Uh-huh.
05 Q. Have you had other employment, that is contract
06 employment, project employment in that period?
07 A. Yes. In fact, we've engaged in quite a wide
08 variety of grant and contract research. Most --
09 Q. When you say "we," I'm not sure who the we is.
10 A. I have been engaged in quite a variety of grant
11 and contract research, often in association with other
12 faculty members and also generally -- many of these
13 projects would involve other individuals who did a lot of
14 the work. I would sometimes call them research assistants
15 and the like. I guess that over the -- over the 22 years
16 that I've been at North Dakota State University, I have
17 acted as project leader or project director, some such
18 title, for grant and contract projects something in excess
19 of three million dollars.
20 Q. How many projects was that?
21 A. Okay. I would have to go back and count.
22 Q. You can -- a round figure will do.
23 A. 30 or more.
24 Q. When you were working with these projects, was
25 that actual hands-on work or were you simply the
0014
01 coordinator several levels above the project?
02 A. Much of it we could say -- we could say most of
03 it would be actual hands-on work.
04 Q. And what -- what types of projects were these?
05 A. Okay. Again covering quite a range of subject
06 matter, but generally relating to economic impacts or
07 economic implications of different kinds of research
08 development alternatives including water projects,
09 including projects where we looked at the "economic
10 contribution" or economic impact of different industries
11 in the state or the region such as the sugarbeet industry
12 in the Red River Valley of North Dakota, Minnesota, the
13 potato industry in the Red River Valley and so on. The
14 general theme then would be economic impacts really,
15 economic including fiscal impacts of natural resource.
16 MR. SAXE: Off the record for a minute.
17 (At this time there was a brief discussion
18 off the record, during which time Ron Luke entered the
19 room.)
20 QUESTIONS BY MR. ROSENBERG:
21 Q. So these 30 or so projects were in the nature of
22 economic impact projects?
23 A. Right.
24 Q. Economic impact assessments?
25 A. Right. And most -- the result of most of those
0015
01 was one or more research reports. So as you look through
02 the list of research reports, you get a pretty good idea
03 of the subject matter of these projects.
04 Q. I looked at one called leafy spurge.
05 A. Yes.
06 Q. Is that in there?
07 A. Yes. Uh-huh.
08 Q. What is that leafy spurge thing about?
09 A. Leafy spurge is a perennial weed, a noxious
10 weed, which is widespread in the Northern Plains Region of
11 the U.S. and into Canada. It is a serious economic
12 problem for people that raise cattle in North Dakota,
13 Montana and some of the adjacent states.
14 The plant -- it spreads both by seed and by
15 rhizomes. It will form virtually a mono-cultural
16 community or stand. Cattle won't eat it. In fact, in
17 quantities it's poisonous to cattle.
18 Anyway, we were asked to take -- to
19 basically make an assessment of the economic impact of
20 leafy spurge to the livestock industry.
21 Q. You did that?
22 A. Yes, we did that.
23 Q. I asked you a question earlier -- I asked you a
24 question: Is there any other training that bears on the
25 work you have done in this case?
0016
01 You told me about the seminars. Let me be
02 more specific.
03 Was there any other specific training,
04 other than your academic training, that bears in any way
05 on the work you have done in this case, anything you can
06 point to specifically?
07 A. In terms -- I don't --
08 Q. In terms of a postgraduate course of some sort
09 or postdoctoral course, in terms of an extended seminar
10 where the subject matter was such that it was useful in
11 this case?
12 A. I wouldn't identify -- I don't think I can
13 identify specific formal courses. We have obviously
14 prepared several books, some of which have been -- some of
15 which are used as texts for some of the courses that you
16 are talking about.
17 Q. Have you ever had a Florida study or Florida
18 case that you worked on?
19 A. No. This is the first one.
20 Q. Are you familiar with the Florida State
21 requirements, whether statutory or regulation requirements
22 in Florida?
23 MS. STINSON: I object to the form;
24 overbroad.
25 MR. ROSENBERG: Let me back up.
0017
01 QUESTIONS BY MR. ROSENBERG:
02 Q. Regarding economic impact statements, economic
03 impact studies, are you familiar with Florida statutory or
04 Florida regulatory requirements?
05 A. This is a topic that we're planning to pursue
06 further. I have not had -- I have not had opportunity to
07 study -- study the Florida regulatory requirements and so
08 on in detail at this point.
09 Q. When are you planning this? Where does this fit
10 in?
11 A. Okay. As our study progresses here over the
12 next few months basically, we would, of course, be
13 examining the Florida requirements and so on in additional
14 detail.
15 Q. Are you familiar with Florida water law
16 requirements, statutory or regulatory?
17 A. No, not in any detail.
18 Q. Is this the first contact you have had with an
19 economic impact study or statement in the State of
20 Florida?
21 A. Yes.
22 Q. Have you ever taught any courses that relate to
23 your work in this case?
24 A. Yes. I have taught on several occasions a
25 course in what we have termed socioeconomic impact
0018
01 assessment where we cover economic impacts, demographic
02 impacts, public service effects, fiscal impacts, and
03 including also mitigation measures and this sort of
04 thing.
05 Q. Let me back up.
06 The term "socioeconomic impact" -- would
07 you define that for me?
08 A. Yes. The socioeconomic impact studies are
09 generally regarded as including some or all of the
10 following components: Economic impacts, which have
11 generally been the effects of a particular action or
12 policy or program on --
13 Q. Or stimulus of any sort?
14 A. Stimulus on employment and on levels of business
15 activity in different economic sectors, for instance,
16 changes in retail, in the sales volume in the retail trade
17 sector, or changes in the level of income and activity in
18 the construction sector. So that would be the economic
19 impacts.
20 Demographic impacts would be a second major
21 component of many of these studies. This has basically
22 been changes in the number and composition of the
23 population of a given area, be it a state, a county, a
24 town.
25 Public service impacts, that is changes in
0019
01 demands for different kinds of public services --
02 Q. Is this a third phase?
03 A. That would be a third phase, would be the public
04 services: education, healthcare and the like.
05 Fiscal impacts, basically then changes in
06 costs and revenues of governmental units, would be --
07 Q. Is this another phase, the fourth phase?
08 A. Would be the fourth phase.
09 So we said economic, demographic, public
10 service, fiscal. I guess the last phase which is often
11 addressed is the "social impacts". And the latter
12 component would be -- would be one that I have not dealt
13 with to any great extent.
14 Q. Tell me if I have it right.
15 A socioeconomic impact takes -- the first
16 part or first phase is economic impact, and that is a
17 direct impact of the stimulus, indirect impact of the
18 stimulus --
19 A. Yes, uh-huh.
20 Q. -- and the induced impact of the stimulus?
21 A. Right.
22 Q. And that would be the economic impact assessment
23 part of this thing?
24 A. Right. Uh-huh.
25 Q. The second phase -- not necessarily related to
0020
01 the first, is it -- is a demographic study? Is that
02 true?
03 A. Right. Yeah.
04 Q. A third phase would be -- well, fiscal is the
05 fourth phase.
06 A. So the public services I guess.
07 Q. The public service sector is the third phase?
08 A. Uh-huh.
09 Q. Is this sequential?
10 A. Very often -- we often think of the economic
11 changes as often being a stimulus then to changes in
12 population, for instance, with expanded economic activity
13 creating more jobs and leading to an inmigration of
14 population or conversely, for instance, if you were
15 looking at a situation of, say, closing a military base,
16 with the closing of the base then there are secondary
17 impacts leading to reduced business activity, reduced
18 employment which might be seen as likely to lead to the
19 outmigration of a portion of a population.
20 Q. You are in a demographic stage right now.
21 A. So we often see the demographic impacts as being
22 at least in part affected by, driven by economic changes.
23 The changes in population then are typically one of the
24 major factors that are seen as causing changes in public
25 service requirements, people moving in bringing children
0021
01 that need to go to school. And the changes in public
02 service demands, requirements then are one of the major
03 factors that lead to the change -- well, that affect the
04 costs and revenues of governmental units, public service
05 requirements affecting then the costs for the
06 jurisdictions that need to provide the services.
07 Q. So my question was: Are these sequential? And
08 I think you are telling me the answer --
09 A. I'm saying the answer is generally yes in large
10 measure.
11 Q. And they would all flow from that first economic
12 impact statement, either demographics or the public
13 sector, fiscal?
14 A. Uh-huh. The economic changes would be seen as
15 affecting the demographic, the public service and the
16 fiscal, yes.
17 Q. In this case I have here -- I'm sorry -- a
18 letter of February 3rd from you to me.
19 A. Right, saying here are a lot of documents.
20 Q. Is that your letter to me, February 3rd?
21 A. Yes.
22 (The instrument referred to was here marked
23 as Deposition Exhibit No. 2 for identification.)
24 QUESTIONS BY MR. ROSENBERG:
25 Q. Do you recall what documents you sent with
0022
01 that?
02 A. Yes. You had sent a list, basically pages
03 copied out of my vitae, where you had checked off
04 documents that you wanted us to -- of which you wanted us
05 to provide a copy. And I believe the set of documents
06 that I sent to you then was essentially everything you had
07 marked, I think, with possibly -- I believe there was one
08 or possibly two documents I couldn't immediately put my
09 fingers on. But it was essentially then a couple of
10 books, a number of research reports, and quite a number of
11 journal articles, book chapters and the like.
12 MS. STINSON: For the record, I asked him
13 to do it directly to save the day's mailing time.
14 (At this time there was a brief discussion
15 off the record.)
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Have you ever conducted a cost/benefit study?
18 A. Not a formal cost/benefit study per se.
19 Q. What types of cost/benefit studies have you
20 conducted?
21 A. Okay. Certainly many of the studies that we
22 have been involved in would include -- would include some
23 of the elements that are often included in a cost/benefit
24 study. And certainly some of these economic impact
25 assessments would fall under that category.
0023
01 Q. What are these elements?
02 A. Okay. Well, for instance, the benefits to
03 different groups, different economic sectors from -- well,
04 looking, for instance, at some of this work with the leafy
05 spurge and so on, we are looking at the cost to the
06 livestock growers from expanded leafy spurge infestations.
07 And then the people who were sponsoring the study,
08 basically the USDA group that are involved in different
09 programs to control noxious weeds, would be looking at the
10 costs of the weed infestations to the stockmen. That could
11 also be looked at as a benefit from a more effective weed
12 control program. Similarly then we were looking at also
13 the effects for other sectors of the state economy.
14 Q. Let me back up.
15 When economists refer to cost/benefit
16 studies, that term means something to them.
17 A. Yes.
18 Q. What does that mean to you?
19 A. Okay. Cost/benefit studies typically are an
20 attempt to make as comprehensive as possible an assessment
21 or a statement of the costs of a particular action and the
22 benefits, including non -- including what are often termed
23 non-market benefits or costs. And then basically --
24 basically also identify those groups that would be -- that
25 would be experiencing the costs or receiving the
0024
01 benefits. And, of course, then the -- what I would see as
02 one of the hallmarks of a cost/benefit study, as I
03 understand it, is the effort to come up with a formal
04 cost/benefit ratio which is then an effort to -- through
05 this cost/benefit ratio to determine whether the project
06 should be seen as desirable or undesirable.
07 Q. If I understand your testimony, you have never
08 directly done a cost/benefit study; am I correct?
09 A. We have never done a -- I have never done a
10 study where we attempted to ultimately come up with a
11 final cost/benefit ratio for a project.
12 Q. Instead, in some of your economic impact studies
13 you have shown where there would be benefits to certain --
14 A. Right.
15 Q. Certain entities?
16 A. Right, and costs to certain entities.
17 Q. When a cost/benefit study is conducted, does it
18 list benefits to other sectors in the economy or in
19 society?
20 A. Okay. There are different -- there are
21 different viewpoints about the appropriateness of
22 including "secondary benefits," for instance. And
23 different -- so there are -- there are different
24 viewpoints whether the secondary benefits to other sectors
25 should be included and in what way.
0025
01 Q. When you did your studies, did you -- even
02 though they weren't formal, they were informal, did you in
03 your economic impact studies relate to these other
04 sectors?
05 A. Yes. Well, I think the issue associated with
06 this "secondary impacts" or "secondary benefits" has to do
07 with basically the area -- well, one could say has to do
08 with one's accounting stance. That is to say if a
09 particular action is to be taken -- let's say in the
10 Austin, Texas area we're going to build a water project or
11 something of that nature. Okay. This will have -- there
12 will be direct effects in terms of additional employment
13 and so on. There will also be secondary effects.
14 The debate, as I understand it, about
15 whether to include -- whether and in what way to include
16 secondary benefits has to do with whether the secondary
17 effects of building the project in the Austin, Texas area
18 is really just a transference of activity that otherwise
19 would occur somewhere else. Okay. And if, on the other
20 hand, the -- so if the question relates to the
21 desirability of investing, say, Federal funds to build a
22 project in the Austin, Texas area versus using those funds
23 for some other purpose or building something in Florida,
24 then one can say perhaps -- one can argue that some of
25 these secondary effects are sort of a wash.
0026
01 On the other hand, if the objective is to
02 try to identify what will be the effects of building the
03 project for the communities nearer where the project is
04 built, then very definitely the secondary effects are just
05 as relevant as the direct effects in terms of trying to
06 describe what's the change in employment, what's the
07 change in population, public services and so on.
08 Q. I was going to ask you. Would you define
09 "secondary effects" for me. That's one of those terms
10 economists know what it means. Other people like me may
11 not.
12 A. It's also possible -- good to define these
13 terms.
14 If we were thinking about a water project
15 or something like this, we might talk about the direct
16 effects basically involving the people actually employed
17 building the facilities, the companies that -- the
18 expenditures made directly by the project proponent to
19 local firms for supplies, materials and the like.
20 Q. Those are direct effects?
21 A. Direct effects, also sometimes referred to as
22 first-round effects. Okay.
23 Then the secondary effects are those that
24 result from subsequent rounds of spending. For instance,
25 we said that the people employed directly on the project
0027
01 and their wages and so on -- that would be part of the
02 first round or direct effects. Okay. These construction
03 workers then spend part of their income at local stores or
04 for lodging at local motels and so on. So then the
05 additional receipts by the motel owners, the shopkeepers
06 and so on -- that would be part of the secondary effects.
07 Q. Is that the same as an indirect effect?
08 A. Yes. Indirect or secondary are --
09 Q. Synonymous?
10 A. -- used pretty much synonymously.
11 Q. Then what is an induced effect?
12 A. Some would use secondary and indirect
13 synonymously. To some, when the term "induced" is used,
14 the meaning there or the distinction is that the induced
15 effects are those that flow from the -- from people
16 spending their additional income, additional spending by
17 households as distinguished from indirect effects that
18 would flow from the expenditures of a project for supplies
19 and materials and the like.
20 Q. Give me an example in the instance you are
21 telling us about the project that comes here, the laborers
22 get some money.
23 A. Right.
24 Q. What is the induced effect, for example?
25 A. The induced effects would come both from the
0028
01 laborers spending their additional income and also the
02 shopkeepers, the motel owners and so on that we referred
03 to as a result of selling more goods in the shop, as a
04 result of having higher occupancy in the motel. Part of
05 that additional revenue becomes income to the proprietor
06 or income to people that work in these establishments.
07 They, in turn, then will typically spend some of their
08 additional income locally for goods, services and the
09 like.
10 The distinction is perhaps most important
11 when one gets into the actual -- what one might say the
12 mechanics of estimating the impacts or estimating the size
13 of the "multiplier effect" through such devices as
14 input/output models and so on. There are -- multipliers
15 have been computed either -- both alternatively including
16 and excluding the "induced effects".
17 Fundamentally you get different numbers,
18 different multipliers, depending on whether you include or
19 exclude the induced effects.
20 Q. In your answer -- tell me if I got it right. I
21 may not. You use a term "spent locally".
22 A. Yes.
23 Q. Now, is there a component in this system here of
24 geographic area?
25 A. Okay. When we refer to expenditures made
0029
01 locally, what we're really referring to is we -- as we
02 attempt to assess the impact of a project, it is important
03 early on to identify basically the bounds of the study
04 area, the area of interest or whatever term we might be
05 using. Region of influence is a term that's also
06 sometimes used. Then expenditures within this region of
07 influence study area or whatever are typically referred to
08 as local expenditures. Essentially, we have divided the
09 world into the region of interest and the rest of the
10 world.
11 Q. How is that done?
12 A. Okay. Well, there are at least I think two
13 answers to the question. One depends on essentially the
14 objectives or the impetus for the study. If, for
15 instance, one of the concerns was to somehow measure the
16 impacts, the costs and benefits, if you will, for, let's
17 say, the state, the State of Florida, the State of Texas,
18 then you would be concerned about all expenditures that
19 were made within the state.
20 Very typically, though, if the -- and this
21 is often done. Okay. Very typically, if the interest is
22 primarily in trying to measure the impacts on those
23 communities that would -- that would somehow be directly
24 affected by the project, then the study area or region of
25 influence would be defined based on several criteria, one
0030
01 being where will the people that actually are working on
02 the project likely live, where are those communities where
03 the people will live.
04 Another factor and also an important factor
05 may be regional trade patterns. Okay. For instance,
06 while the people actually working on the project may live
07 in several small communities near the project site, they
08 may do a great -- the regional trade patterns may suggest
09 that they will do a great deal of their shopping and so on
10 in a more distant sort of regional trade center.
11 In this case, at least for some purposes,
12 one might wish to include the relevant regional trade
13 center in one's analysis, at least for some purposes.
14 Q. Those are two of the criteria.
15 A. Yes.
16 Q. Are there other criteria for selecting the
17 geographic area?
18 A. Yeah. There are certainly a wide range of
19 criteria. One of the others that come to mind include
20 political jurisdictions, for instance, that is -- you
21 know, our states tend to be divided up into counties. We
22 also have municipalities. We have school districts and
23 sometimes special districts. And these different units
24 then have various kinds of responsibilities.
25 So another kind of a pragmatic but
0031
01 nonetheless relevant issue is basically certain kinds of
02 data are available only at certain jurisdictional levels.
03 For instance, some kinds of information are available at
04 the county level, not readily available for subcounty
05 areas. And so defining the study area then becomes --
06 becomes one of the -- one of the important things that the
07 analyst or the team of analysts need to do. It's not --
08 it's not a, you know, simple, easy, one-criteria, you
09 know, you look at the county where the thing is located,
10 but rather one needs to kind of balance a number of
11 considerations in trying to settle on the study area.
12 And, again, for some -- one may define a
13 study area for purposes of community impacts, but at the
14 same time some calculations might be made to show some
15 effects -- some of the economic effects or likely tax
16 revenue effects or whatever at the level of the state, for
17 instance.
18 Q. Does that mean you would have different areas?
19 Some would be larger and some smaller? One would be a
20 fiscal impact area? One would be a social impact area?
21 One would be a demographic impact area?
22 A. Certainly it might be very relevant to talk
23 about more than one geographical level of analysis, that
24 perhaps much of one's community level analysis, public
25 services, fiscal, demographic might focus on a relatively
0032
01 restricted area where most of the -- where most of the
02 project-related people might be expected to live, where
03 their kids might go to school and so on, but one might
04 also -- it might also appear relevant to do -- to look at
05 some perhaps broader economic, demographic, fiscal
06 dimensions for a larger area, perhaps even as large as the
07 state. That is providing estimates that we think that the
08 project will totally lead to this level of additional
09 employment, this level of additional income, this level of
10 additional tax revenues and so on for the state.
11 Q. Is it important to set this geographic area
12 early in your study, to set it late in your study? When
13 in your study is it set?
14 A. Normally defining the study area is something
15 that would be an issue quite early in the study.
16 Q. Sir, have you ever been a litigation expert in a
17 case?
18 A. Yes.
19 Q. Have you ever testified in court?
20 A. Yes.
21 Q. And what's the most recent case you testified
22 in?
23 A. The most recent case I testified in I guess was
24 -- must have been about 1988 or '89. It was a -- it had
25 to do -- it was a tax case in Federal court in Grand
0033
01 Forks, North Dakota.
02 Q. What was briefly the substance of that case?
03 You told me it was a tax case.
04 A. The substance, as best I can relate it -- okay.
05 During the late '70s and early 1980s, we had a series of
06 large power plant construction projects in West Central
07 North Dakota. Several large power plant facilities,
08 coal-burning power plants were built very much like some
09 of the lignite-fired facilities here in Texas.
10 The point at issue was that the gentleman
11 who was involved in the case then maintained a permanent
12 residence in Eastern North Dakota. His wife, family lived
13 there. He was employed pretty much continuously for a
14 number of years working on several of these power plant
15 construction projects out in the western part of the state
16 200 and some miles away. And so the issue then was
17 whether he could -- whether he could deduct his expenses
18 for living away from home, living out there in the coal
19 fields while he worked on those projects.
20 And basically then some of the -- some of
21 the points of issue were --
22 Q. Let me ask you this: What was your role as a
23 witness in this case?
24 A. My role was to basically relate then the history
25 of the development of the several construction projects
0034
01 and including basically questions of was there a
02 reasonable expectation of how long these construction
03 projects would continue, of whether there was likely to be
04 subsequent projects after the initial one and so on. So
05 that was -- I was providing I guess you could say that
06 kind of background.
07 Q. Who were you employed by in that case?
08 A. I was testifying on behalf of the Department of
09 Justice.
10 Q. United States Department of Justice?
11 A. Uh-huh.
12 Q. Have you ever testified in any other case?
13 A. Other cases? There were I believe two -- there
14 were two related cases in this whole tax business, as I
15 recall. The first one was probably 1986 and the second
16 one in 1988.
17 Q. And your role in these cases was to be the
18 historical expert; am I correct?
19 A. In large measure, yes.
20 Q. Have you ever testified in a case other than
21 being an historical expert?
22 A. I don't recall. I don't think so.
23 Q. Okay. Other than the tax cases, have you ever
24 been deposed?
25 A. No.
0035
01 Q. Aside from those cases that went to court, have
02 you ever been hired as a consultant in cases that were
03 being litigated but didn't testify in court?
04 A. Well, let me see. I have worked with RPC on one
05 some years ago, the first-use tax case. Would that --
06 Q. You have got to answer my questions. You can't
07 ask her.
08 A. Okay. Yes. About 10 years ago I was a
09 consultant for RPC. And this was a case called Louisiana
10 First-use Tax Case. It had to do with the State of
11 Louisiana imposing a tax on -- it was natural gas being
12 produced in the Outer Continental Shelf. This I don't
13 believe went to court. Certainly I was not involved in
14 testifying.
15 Q. What was your role as a consultant?
16 A. I was part of the RPC team that was basically
17 examining the impact of -- impact of OCS gas development
18 on Louisiana and Louisiana communities.
19 Q. What was your specific role?
20 A. I was involved in helping to assess then the
21 economic and fiscal impacts of OCS energy development on
22 the State of Louisiana.
23 Q. Does RPC stand for something or is it just
24 called RPC?
25 A. Research and Planning Consultants.
0036
01 Q. But everybody calls it RPC?
02 A. Uh-huh.
03 Q. And you have had an association with them for
04 how long, sir?
05 A. Since 1979.
06 MR. ROSENBERG: In the deposition -- after
07 we've been taking the deposition, somebody came in. He's
08 not identified on the record. I'm going to ask him to
09 identify himself so we know on the record who is here.
10 MS. STINSON: I'll identify him. It's Ron
11 Luke just sitting in.
12 QUESTIONS BY MR. ROSENBERG:
13 Q. Sir, to your understanding, what connection does
14 Ron Luke have with RPC?
15 A. Ron Luke is the president of RPC.
16 Q. Okay. And RPC is your present employer in this
17 case?
18 A. Yes.
19 Q. You are doing work for RPC now?
20 A. Right.
21 Q. Have you ever had a prior case that has involved
22 the same issues as are present in this case: SWIM plans,
23 water resources, matters such as that?
24 A. Not a legal case, no.
25 Q. Or as a consultant? Have you ever worked as a
0037
01 consultant on a case that has involved the same issues
02 that are present in this case?
03 MS. STINSON: I object to the form. I
04 request clarification.
05 When you say "case," do you mean a matter
06 in litigation or a research project or either?
07 MR. ROSENBERG: Let me see if I can
08 reconstruct it.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. Have you ever worked on a matter, whether it's
11 been a case -- have you ever worked on a matter that's
12 been a case, a litigation case that's involved the same
13 issues as are present in this case?
14 A. I think I should answer yes, and then I would
15 say that, for instance, the Louisiana first-use tax case
16 involved some of the same kind of issues, that is
17 community impacts of particular kinds of development
18 activities or options and essentially distribution of the
19 costs and benefits and this sort of thing. And certainly
20 many of our other projects then have dealt with similar
21 kinds of issues, again attempting to assess economic,
22 demographic, and fiscal impacts of different kinds of
23 development or resource management activities or
24 alternatives.
25 Q. Have you ever worked on a case or a study in
0038
01 which the stimulus was a SWIM plan or the effect of water
02 resources?
03 A. Yes, several of our studies have involved water
04 resources in one way or another.
05 Q. You say "our studies".
06 A. Studies that I have worked on.
07 Q. What are they?
08 A. Okay. Starting maybe chronologically back about
09 20 years ago, I was part of a team that undertook a -- I
10 guess we could say a major study to examine the potential
11 effects of weather modification in North Dakota, that is
12 effects of added rainfall.
13 Okay. Subsequent work then involving
14 development of energy resources in the Northern Great
15 Plains. We had about a three-year project in the late
16 1970s, the title of which was I believe "Water as a
17 Parameter in the Development of Energy Resources in the
18 Northern Great Plains."
19 I think it would have been just slightly
20 subsequent to that study I worked on a project with the
21 Harza engineering firm out of Chicago which was basically
22 looking then at the issue of water resource demands
23 related to development of energy resources in the
24 multistate area of the Dakotas, Montana and Wyoming.
25 So those would be -- those would be some
0039
01 specific studies that I can point to.
02 Q. What do those studies have in common with the
03 study regarding the EAA, as you understand it?
04 A. Okay. What I guess -- what they generally have
05 in common with the study of the EAA then is basically the
06 issue -- important issues include the issues of both sort
07 of direct farm level effects and also community level
08 impacts of alternative natural resource, in this case
09 water resource management options. And so that while the
10 setting is different, many of the same tools, techniques
11 and so on are relevant whether one is looking at the
12 community impacts of water management in Florida or
13 community impacts of water resource development in the
14 Northern Great Plains. The same kind of issues and the
15 same kind of tools become -- tools as in input/output
16 models, demographic projection techniques, fiscal analysis
17 and the like.
18 Q. Now, in these water studies or any of your
19 studies, whether in cases or academic studies, have you
20 ever used or have they ever involved the FLIPSIM model?
21 A. F-L-I-P-S-I-M. That's an acronym, FLIPSIM.
22 Q. Have any of these studies or cases ever --
23 A. No.
24 Q. Sir, you are the author of -- I should say:
25 What is your relationship with this book, "Impact of
0040
01 Growth"?
02 A. "Impact of Growth." Yes. I was one of the
03 three authors of the book that you are holding there.
04 And, essentially, I was responsible for one chapter there
05 which I can identify for you.
06 MR. ROSENBERG: Off the record.
07 (At this time there was a brief discussion
08 off the record.)
09 QUESTIONS BY MR. ROSENBERG:
10 Q. Do you know, without me showing you the book,
11 what chapter you wrote on?
12 A. It was basically a chapter on impact models.
13 Q. Chapter 2 is entitled "Selection of Economic/
14 Demographic Models."
15 A. Yes.
16 Q. Chapter 3 is entitled "Public Service Impacts."
17 Chapter 4 is entitled "Social Impacts." Chapter 5 is
18 "Fiscal Impacts."
19 A. Selection of the models was the chapter that I
20 was involved in.
21 Q. 2?
22 A. Uh-huh.
23 Q. Would you consider this book authoritative on
24 the other chapters also?
25 A. I would think so, yes.
0041
01 (An instrument was here marked as
02 Deposition Exhibit No. 3 for identification.)
03 QUESTIONS BY MR. ROSENBERG:
04 Q. Sir, I'm showing you Exhibit 3. And that is a
05 memorandum to you. Am I correct?
06 A. Yes.
07 Q. Are you familiar with that?
08 A. To me from Ron.
09 Q. Let me ask you a couple of questions, please.
10 A. Yes.
11 Q. What is a SEARS?
12 A. Okay. The SEARS model -- don't you love these
13 acronyms -- is a socioeconomic impact assessment model
14 which was developed basically by myself and -- well,
15 primary developers were myself and Dr. Steve Murdock at
16 Texas A&M University. The acronym stands for
17 Socioeconomic Assessment of Repository Siting because the
18 major impetus for developing the SEARS model was a
19 long-term contract that we had at that time with the U.S.
20 Department of Energy relative to their attempts to site a
21 geological repository for high-level radioactive wastes.
22 Okay. The SEARS model in, you know, different variations
23 has been used by myself and others at North Dakota State
24 University, by Dr. Murdock and his group at Texas A&M
25 University. It has also been used by RPC on several
0042
01 studies.
02 Q. Is it being used in the present matter?
03 A. Not the SEARS model per se. The SEARS model,
04 however, basically -- we would be using similar types of
05 techniques, input/output models, demographic forecasting
06 methods in the present matter, not the SEARS model per se.
07 Q. So what model are you using in this case in
08 place of SEARS?
09 A. Okay. What we are using for the economic -- for
10 the economic assessment is the RIMS input/output model
11 developed by the U.S. Department of Commerce. And then
12 for our demographic work we rely heavily on demographic
13 forecasting models that have been developed at the Bureau
14 of Economic and Business Research at the University of
15 Florida. We're also then -- we will be doing public
16 service and fiscal analysis using -- well, not -- I'm
17 trying to think of the best way to say this. Not using a
18 formally identified named model, but, in fact, using what
19 we regard as sort of standard procedures for that type of
20 assessment.
21 Q. Okay. In the assessment you are making now in
22 this case -- excuse me. Let me withdraw that and give you
23 this question.
24 When you run the SEARS model, how do you
25 get direct impacts into the SEARS model? Where do you get
0043
01 the direct impacts from?
02 A. Okay. One way of answering that is to say that
03 clearly -- with the SEARS model or with any similar model
04 that I'm aware of, it's -- it is imperative to have some
05 detailed information about the project, the proposed
06 action, as it were, which generally is obtained from the
07 proponent.
08 What kind of information are we talking
09 about?
10 Employment, how many people are employed in
11 different phases of the project and perhaps what's the
12 duration of employment, short-term construction people
13 versus more permanent employees, sometimes information
14 about skill levels and so on, especially as it might
15 relate to whether the jobs can be filled out of a local
16 labor pool or whether a large portion of the work force
17 have to be inmigrants.
18 Another important dimension is the
19 expenditures that are going to be generated by the
20 project, what kind of purchases of goods and services,
21 supplies and materials and so on.
22 Q. Let me back up for a second here.
23 In what you are doing in this case, where
24 did you get the direct impacts?
25 A. Okay. At this point -- at this point that
0044
01 analysis is still going on. But essentially we'll -- the
02 process will be that based on the SWIM plan and different
03 alternative scenarios that might be developed consistent
04 with the SWIM plan we would then, relative to best
05 management practices, known as BMPs, relative to number,
06 size and location of stormwater treatment areas, known as
07 STAs, and some of these other things, then the first step
08 in the analysis would be a -- what we might call a
09 farm level analysis using -- presumably using the FLIPSIM
10 model.
11 Q. That's what I'm getting it. When you say this
12 analysis is going on, are you now using a FLIPSIM model to
13 construct the direct, indirect and induced impacts?
14 A. Not as yet. And there has been -- there has
15 been some uncertainty about I guess the relative roles of
16 some of the different parties here relative to the
17 farm level analysis, FLIPSIM and the like.
18 Q. I don't know what that means. What are you
19 getting at?
20 A. Okay. I or the RPC team has not as yet been
21 doing analysis with the FLIPSIM model. It may develop
22 that we will be -- that we will be responsible for doing
23 some of this analysis. That's -- I guess up to this point
24 it has not been clear what our responsibility might be
25 relative to doing the analysis of that level. But the --
0045
01 but if I might say then, the FLIPSIM analysis is one step.
02 And then subsequent to the FLIPSIM analysis, regardless of
03 whether we are responsible for doing it or whether someone
04 else -- whether we obtain FLIPSIM results from another
05 entity, then the analysis goes on downstream with economic
06 impacts and the like.
07 Q. Well, what's the problem? I'm not sure I follow
08 you. You say you are not doing the analysis or you are
09 going to or you are getting information from another
10 entity. I'm not sure I'm completely following you here.
11 A. Okay.
12 MS. STINSON: May I confer with my client?
13 MR. ROSENBERG: Let's go off the record.
14 (At this time there was a brief discussion
15 off the record.)
16 THE WITNESS: Okay. The question was:
17 What about FLIPSIM?
18 And the answer is yes. We intend to use
19 the FLIPSIM model for the farm level -- assessment of the
20 farm level impacts which then become input to subsequent
21 steps of the process. We have obtained a copy of the
22 FLIPSIM model and so on.
23 QUESTIONS BY MR. ROSENBERG:
24 Q. When was that done? When did you get a copy of
25 the FLIPSIM model?
0046
01 A. Okay. We, in this case being RPC -- I cannot
02 say with -- it seems to me that it's been -- it's been
03 perhaps a month or more ago. I cannot say for certain
04 exactly when --
05 Q. Last six weeks or so?
06 A. I can't say for sure. I think it might have
07 even been a bit longer ago than that.
08 Q. Earlier in questioning here I asked you to go
09 through levels of impacts. I asked you if these were
10 sequential.
11 Do you recall that?
12 A. Uh-huh.
13 Q. And I want you to help me out because I'm not
14 sure I understand.
15 You were talking about fiscal impacts or
16 social impacts or public impacts.
17 Now, in order to get to that, you have to
18 get to direct impacts. Am I right?
19 A. Yes.
20 Q. Where did you get the information for direct
21 impacts if you haven't been using the FLIPSIM model?
22 A. In our earlier work, we had essentially taken
23 the FLIPSIM derived results from the Hazen and Sawyer
24 report. And basically then we were using those as the
25 basis for opinions about economic, demographic, public
0047
01 service effects. So we were basically in the earlier work
02 using the Hazen and Sawyer results as a starting point.
03 Q. You say "in the earlier work". That's in
04 comparison to what? Is there later work?
05 A. Okay. The work that RPC had been asked to do
06 and which I have been asked to help in was in -- well, the
07 first two phases were -- one back in August, we reviewed
08 the two Hazen and Sawyer documents and prepared an
09 analysis of those two documents.
10 Then during the period September, October,
11 we prepared basically some opinions relative to community
12 impacts. And it was in preparing those opinions for the
13 date of August -- October 26th sticks in my mind as a date
14 when certain opinions needed to be delivered. We were
15 basically using the Hazen and Sawyer report and the
16 FLIPSIM results and so on from that report as our starting
17 point in a sense.
18 Okay. It has -- subsequent to that work
19 then, it has seemed to us that perhaps we would need --
20 more analysis would be needed, including analysis of
21 additional scenarios, analysis over a longer time frame
22 and so on which would involve then the need to do analysis
23 with the FLIPSIM model itself.
24 Q. So you are going to go back to the point of
25 beginning and reconstruct the whole project? Is that what
0048
01 I hear?
02 A. Not per se, but it seems to us that probably
03 there will be a need to use the FLIPSIM model to analyze
04 some alternative scenarios, perhaps both alternative
05 without-project scenarios and also then project
06 scenarios. So it will require some analysis or better
07 definition of direct impacts followed then by the analysis
08 of secondary impacts -- economic, demographic and the
09 like.
10 Q. Let me ask you this: The memo in front of you
11 is August 1992.
12 A. Uh-huh.
13 Q. We're already in February of '93. Is that memo
14 correct that -- it says that "There seems to be general
15 agreement that FLIPSIM should be used for the farm level
16 analysis."
17 Is that your understanding?
18 A. The question, as I understand it, is: Is there
19 agreement that FLIPSIM is an appropriate tool to use for
20 the farm level analysis?
21 Yes. That's -- I would agree with that.
22 Q. Okay. When did you first know that? Did you
23 know that in August of 1992?
24 A. The question, as I understand it, is at what
25 point did we determine that we believed FLIPSIM was an
0049
01 appropriate tool to use for farm level analysis.
02 Yeah, I would say that's -- August of '92
03 would be an appropriate date to identify -- as identifying
04 when we thought FLIPSIM would be an appropriate tool.
05 Q. Why didn't you get it in August of '92?
06 A. Perhaps one -- at least one way to answer that
07 question would be that at that point in August I think
08 about all we had been requested to do or at least all I
09 had been requested to do was to basically review the two
10 draft documents from Hazen and Sawyer. So it had not at
11 that point been determined whether we would be -- would be
12 asked to do any further analysis besides just reviewing
13 the documents.
14 Q. When did you think you would need FLIPSIM for
15 further analysis?
16 A. Again, I would -- in terms of identifying a
17 date, I would say perhaps November, based on -- again, our
18 work has been conducted in a series of phases. And so
19 during September, October we were basically -- basically
20 then engaged in developing -- developing opinions about
21 community impacts. So I guess it was after that. At
22 around about the latter stages of that work would have
23 been when we probably identified the need for additional
24 -- the fact that additional FLIPSIM-type analysis would be
25 desirable.
0050
01 Q. Okay. Why didn't you then obtain a copy of
02 FLIPSIM in November?
03 A. One response to that question would be that
04 basically -- with the way that the work of the RPC team
05 has been structured, basically Dr. Luke has been the
06 person responsible for obtaining copies of models and that
07 sort of thing. So one way of responding to the question
08 is I personally was not kind of directly involved in
09 discussions relative to obtain a copy of FLIPSIM.
10 Q. Even though you weren't directly involved, do
11 you know why FLIPSIM didn't come in November or it wasn't
12 obtained in November and only came -- was only obtained
13 recently?
14 A. I can't -- I don't -- I'm not sure that I feel
15 comfortable with commenting on exactly when FLIPSIM was
16 obtained. I simply don't know exactly when RPC did obtain
17 a copy of FLIPSIM.
18 Q. I'm not asking for a specific date. I'm asking
19 why there was a delay in obtaining FLIPSIM and what the
20 problem was.
21 A. Okay.
22 MS. STINSON: I object to the form.
23 You can answer if you can.
24 QUESTIONS BY MR. ROSENBERG:
25 Q. The question is: What was the delay in
0051
01 obtaining FLIPSIM?
02 A. To the best of my understanding, one delay was
03 occasioned because basically when a copy of FLIPSIM was
04 requested from Texas A&M University, I believe that the
05 response was negative, as I understood it. And I'm not --
06 I'm not totally -- I'm not totally informed about the
07 different discussions that occurred between that --
08 between that point and ultimately obtaining a copy. Dr.
09 Luke I think could probably address some of that much more
10 effectively in his deposition.
11 (At this time a brief recess was taken,
12 during which time an instrument was here marked as
13 Deposition Exhibit No. 4 for identification.)
14 QUESTIONS BY MR. ROSENBERG:
15 Q. I hand you a copy of Exhibit 4. Tell me what
16 that is.
17 A. Okay. These -- Exhibit 4 is a letter from
18 myself to Dr. Ron Luke dated October 13. And it says,
19 "Enclosed are the Table of Contents for two edited books
20 dealing with economic adjustment, closure, dislocation, et
21 cetera."
22 These were two documents that I had
23 identified as being possibly useful resource materials for
24 our project because, as I indicated, they did deal with
25 economic -- well, basically impacts of economic decline,
0052
01 closure of facilities and those kinds of topics.
02 Q. Now, one of those attachments is "Economic
03 Adjustment and Conversion of Defense Industries"?
04 A. Yes.
05 Q. Am I correct?
06 A. Uh-huh.
07 Q. Okay. Can you tell me whether the Department of
08 Defense uses economic impact analysis in its decisions to
09 close a base or facility?
10 A. Okay. The answer is yes, that the Department of
11 Defense, in the process of decision-making relative to
12 base closings, does routinely undertake studies of
13 economic, fiscal and other related impacts of such a
14 closure decision. And what I would -- what I'm less clear
15 on is exactly what role economic impacts play relative to
16 other considerations in the decision process. But
17 economic and fiscal impact studies are undertaken
18 routinely by the defense department. They have an office
19 which used to be and maybe still is called the Office of
20 Economic Adjustment within DOD which is involved in those
21 kind of activities.
22 Q. Do they conduct the economic impact analysis
23 before or after they decide to close the base?
24 A. That is a point on which I am less clear as to
25 just the timing of the studies relative to the decisions
0053
01 and announcements of those decisions and so on.
02 Q. And what effect, if any, does the economic
03 impact analysis have on closing a base?
04 A. Okay. That is -- that is a question that I
05 don't really feel well-prepared to answer. Again, we know
06 that -- we know that those kinds of studies are done. But
07 what the role of economic and other impacts is in closure
08 decisions as opposed to -- as opposed to community
09 adjustment, once a closure decision has been made, I don't
10 -- I don't really know the answer to that.
11 (An instrument was here marked as
12 Deposition Exhibit No. 5 for identification.)
13 QUESTIONS BY MR. ROSENBERG:
14 Q. Let me give you a copy of proposed Government
15 Exhibit 5. Can you tell me what it is?
16 A. Yes. Exhibit 5 is a copy of a research report
17 published in 1989 titled "Facing Economic Adversity:
18 Experiences of Displaced Farm Families in North Dakota."
19 And this report then summarizes findings from a statewide
20 survey of farm families who had left farming during the
21 mid 1980s. And this was a study I believe of -- it was
22 well over 100 farm families that we contacted. And we
23 were basically asking them questions about the whole
24 process of leaving farming, had they relocated, what were
25 they doing now and these kinds of questions.
0054
01 Q. Professor Leistritz, let me back up. You again
02 said "we".
03 A. Okay. There are four names on the report. I
04 was the project director, project leader. Three other
05 people worked closely with me in doing a lot of the work.
06 I also list them on the report.
07 Q. Did you conduct the study?
08 A. Yes.
09 Q. You were intimately involved with the study, its
10 purposes, its direction?
11 A. Yes.
12 Q. From what you know in that study, can you relate
13 to me the similarities and differences between the farmers
14 in the EAA and those in the study group?
15 A. Okay. Yeah, probably more -- a lot of
16 differences probably because most of the people that we
17 had contacted here -- okay. These were folks who were
18 independent farm operators operating what, by Florida
19 standards, would be relatively small farms, relatively
20 little hired labor and so on. And these people then also
21 -- perhaps a salient characteristic, compared to what we
22 understand about many of the farm workers in Florida,
23 these people were relatively well-educated. Almost all of
24 the operators and their spouses were high school
25 graduates.
0055
01 Q. "These people" being the people in the study
02 group?
03 A. The people in our North Dakota study group.
04 Q. Okay.
05 A. And a good many -- I would say close to half had
06 some sort of post-secondary education. Perhaps as a result
07 of this we found then that their experience in finding
08 alternative employment had been relatively favorable.
09 Very few were unemployed at the time of the study and most
10 of them reported a relatively short job search to find
11 alternative employment. These were some of the findings.
12 Q. Are there any other similarities or differences
13 between the farmers in the EAA and those in your study
14 group?
15 MS. STINSON: Object to form.
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Do you know of any other similarities or
18 differences between the study group farmers and the
19 farmers of EAA?
20 MS. STINSON: Object to form still, but you
21 can answer.
22 THE WITNESS: Well, I would say probably
23 substantial differences. One, again, based on
24 considerable differences in the type of agriculture that
25 these farm and ranch operators that we had studied in
0056
01 North Dakota tend to be then what we would term family
02 farmers. They are operating as, in a sense, independent
03 entrepreneurs using a combination of owned and rented
04 land, again relatively little hired labor as such. So
05 there was not in this area a large sort of agricultural
06 worker population. There was not a substantial seasonal
07 worker population. So those would be just some
08 differences that kind of come to mind.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. Have you ever been to the EAA?
11 A. Yes.
12 Q. When?
13 A. Early September 1992.
14 Q. How long were you there?
15 A. Just one day.
16 Q. And what time did you arrive and what time did
17 you leave?
18 A. We must have arrived like at 9:00 o'clock in the
19 morning and left probably about 4:00 o'clock in the
20 afternoon.
21 Q. And where did you go?
22 A. Okay. We went basically to the co-op sugar
23 plant near Belle Glade.
24 Q. And did you spend all of your time in the sugar
25 plant?
0057
01 A. Spent essentially all of our time in the sugar
02 plant and going to and fro.
03 Q. Is that out to lunch and back? Does to and fro
04 mean out to lunch and back?
05 A. Well, from West Palm Beach to the plant and
06 returning and so on.
07 Q. And who did you meet with at that meeting?
08 A. Okay. There was a room full of people, but
09 basically most of them were officials of the sugar co-op.
10 Q. Did you take notes in that meeting?
11 A. Not probably very well-organized ones.
12 Q. What was the purpose of the meeting?
13 A. The purpose of the meeting really was to talk
14 about what the RPC group might do relative to analyzing
15 community impacts and related issues relative to the SWIM
16 plan.
17 Q. In your trip to the EAA -- that's your only trip
18 to the EAA, right?
19 A. Uh-huh.
20 Q. Did you do anything to fly over the EAA, walk
21 through the EAA?
22 A. No.
23 Q. Drive through the EAA?
24 A. We drove -- we drove basically from West Palm
25 Beach to the plant, but we did not try to -- we did not
0058
01 try to do sort of a circuit of the area or whatever.
02 Q. You drove from the airport to the plant, went to
03 lunch, back to the plant and back to the airport?
04 A. That's essentially correct, yes.
05 Q. And have the only farmers you have met in the
06 EAA been those farmers you met at that meeting?
07 A. Yes.
08 Q. Can you tell me whether in your view the
09 structure of the EAA, the farming structure of the EAA is
10 different than the farming structure of the study group in
11 North Dakota?
12 A. Substantially, yes.
13 Q. What is the difference?
14 A. Basically that within EAA there are a number of
15 very, very large corporate farming entities which do not
16 really have counterparts in our part of the country. That
17 would be probably the single most important difference.
18 A second difference, which again relates to
19 the type of crops and so on, would be the extensive use of
20 seasonal hired labor by many of the farms in the EAA which
21 again has very little counterpart in our type of
22 agriculture I guess.
23 Q. Would it be fair to say that the EAA farming is
24 substantially agribusiness-type farming?
25 A. I would not -- I would agree with that
0059
01 assessment.
02 Q. Now, in your North Dakota study, does it show
03 that any farmers went bankrupt?
04 A. Yes. These -- the people involved in our study
05 had basically left farming because of financial
06 adversity. A certain segment of those had gone through
07 bankruptcy. As I recall, it would have been less than 20
08 percent that had actually gone through bankruptcy. But
09 they had essentially liquidated most or all of their
10 assets as they left farming.
11 Q. Okay. What happened to the land that they
12 farmed on after they went into bankruptcy?
13 A. Okay. I suspect -- I think the question you are
14 trying to ask is was the land -- did the land continue to
15 be farmed or did it stand idle.
16 Q. Was the land still in production after that?
17 A. Yes. With -- almost without exception, the land
18 stayed in production.
19 Q. It was taken over by somebody else?
20 A. Yes, uh-huh.
21 Q. The next farmer?
22 A. Right.
23 Q. Somebody else took over the land and the land
24 stayed in production?
25 A. Uh-huh.
0060
01 Q. The farmer who had previously farmed the land,
02 he went into bankruptcy or he left the land or went into
03 the city, and the land continued to produce?
04 A. Yes.
05 Q. Am I correct?
06 A. That has been the pattern not only in our state
07 but apparently throughout the Upper Midwest during what's
08 often termed the farm crisis of the 1980s, exactly.
09 Q. In North Dakota in your study of those farmers
10 that went bankruptcy, left the land, the land stayed in
11 production, is that land still producing the same amount
12 and mix of crops that it was when the previous farmer was
13 farming it, the now bankrupt farmer?
14 A. The general answer -- general answer is -- we
15 think the answer is yes. There probably has not been a
16 major change in mix of crops and so on. One thing that
17 has occurred in that part of the country -- one thing that
18 occurred in that part of the country during the same time
19 period was a government land retirement program called
20 Conservation Reserve Program. And something -- in some
21 counties, more than 10 percent of the cropland has been
22 enrolled into this Conservation Reserve Program.
23 Q. Is that what I would call a soil bank or is that
24 what you would call -- or 20 years ago we called a soil
25 bank?
0061
01 A. Exactly, like a 10-year contract to take the
02 crop out of crop production.
03 Q. That would be the least productive land somebody
04 has?
05 A. Uh-huh.
06 Q. But if land would be productive or more than
07 margin productive, it would stay in production. If it was
08 less than margin productive, it would be put in a soil
09 bank. Am I right?
10 A. Right. Essentially the question -- the question
11 did farm bankruptcies lead to substantial acreages
12 standing idle for substantial periods of time, the answer
13 would be no.
14 Q. And would you say that is a general rule of
15 farming that even though a farmer went bankrupt if the
16 land is productive it would be taken over by somebody else
17 and they would produce in that way?
18 A. If -- if the -- to respond to your question, if
19 the -- what we might say the fundamental economics of
20 producing the particular crop are still favorable, which
21 is to say then that the producer can expect -- can
22 reasonably expect to cover their variable costs of
23 production which in a longer term planning horizon would
24 include capital replacement, machinery and the like, then
25 one could expect that the land would stay in production,
0062
01 albeit being operated by someone else.
02 Certainly, by the same token, when the
03 costs and returns from producing a particular type of crop
04 become unfavorable, that is producers can no longer
05 anticipate covering their costs, this would suggest a need
06 to either change crops or in -- in some cases certainly we
07 have substantial history in the United States of land
08 going out of crop production, whether it be returning to
09 grassland in some parts of the Great Plains or whether it
10 be returning to forests in some of the -- for instance,
11 Northern Minnesota, which I'm kind of familiar with
12 because it's very close to where we live, there are
13 substantial acreages that at one time were farmed and they
14 have basically gone back to trees. And in many cases the
15 land is owned by the county based on the previous owner
16 didn't pay his taxes.
17 So one I think needs to distinguish between
18 the situation of the economics producing a crop being
19 unfavorable versus the situation of a particular operator
20 finding themselves with an untenable debt load and that
21 sort of thing.
22 Q. When new farmers take over the land of the
23 bankrupt farmer, are they more efficient? Or what is it
24 that makes their farm or farming practices successful as
25 opposed to these bankrupt farmers?
0063
01 A. Okay. Reflecting on what we've seen in the
02 Upper Midwest, it -- in the farm surveys we've done, the
03 major factor that -- the major factor that was associated
04 with success or lack thereof during the 1980s was the --
05 basically the operator's debt load at the beginning of the
06 period. So that many of the -- apparently many of the
07 operators who took over land that was relinquished by
08 someone who was going out of farming -- often the person
09 who took that over was able to -- was able to farm the
10 land without major additional investments in machinery,
11 without incurring substantial additional debt and that
12 sort of thing.
13 In our work, we were not able to identify
14 any major differences in production efficiency, management
15 efficiency or, for that matter, in the general types of
16 crops raised and that sort of thing.
17 Another thing, of course, that might be a
18 factor for the individual who is taking over the land
19 might be the -- well, for want of a better term, the cost
20 basis that they might have in the property, that is land
21 -- it was not uncommon in the Upper Midwest during sort of
22 the depths of the farm crisis for land to be selling at
23 little more than half of what it had sold for a few years
24 before.
25 Likewise -- likewise, farm -- used farm
0064
01 machinery that was sold when farms were liquidated was
02 probably being sold at only a fraction of its new cost
03 which might have been only a relatively few years before.
04 So that would -- that would have some influence on the new
05 operator's -- well, for want of a better term, their cost
06 basis in the operation.
07 Q. If we could relate this to the EAA or focus on
08 the EAA. If a farmer in EAA would go bankrupt because he
09 was overextended like many of the farmers in North Dakota
10 -- say he's an independent grower. To your understanding,
11 who would be likely to take his land over?
12 A. I think that's a topic that -- I don't -- at
13 this point I guess I feel -- I don't feel I know the
14 answer to that question. That's one of the areas we need
15 to explore.
16 Q. Let me back up. Would you expect that that
17 farmer's land would be taken over by another farmer?
18 A. Really, there are -- it seems to me there are
19 two logical possibilities. One is that -- one is that the
20 land would be taken over by another farmer, another
21 farming operation, whether it be an independent grower or
22 one of the larger entities. That would be one possibility
23 with the land remaining in production.
24 The other possibility would be that if, in
25 fact, the combination of circumstances were such that the
0065
01 crop -- in this case sugar cane -- is no longer profitable
02 on that land, then the possibilities are either an
03 alternative crop which might have different input
04 requirements, labor requirements and so on or, in the
05 extreme, another possibility is for the land to go out of
06 production.
07 Q. In the case I have just given you, if the farmer
08 who owned the land went out of farming because he
09 overextended himself, would you expect his land to be
10 taken over by another farmer?
11 A. Okay. That would -- okay. If we're assuming
12 then that there has not been a major change in the cost of
13 return situation for the crop, that we're merely in a
14 situation where an isolated -- an isolated situation where
15 a grower has overextended himself and cannot -- cannot
16 service his debt or whatever, then it would seemingly be
17 logical that the land might then be operated by another
18 farmer. That would be -- that would be a logical
19 consequence.
20 Q. Okay. Now, in your study, in your experience,
21 would you expect that that next farmer, the farmer taking
22 over, would be a larger farmer because it would be easier
23 for him to make it financially?
24 A. That would seem to be consistent with the
25 experience certainly through much of agriculture over the
0066
01 last decade or so.
02 Q. Is it consistent with your understanding of what
03 has been happening in the EAA?
04 A. Yeah. That would also seem -- with a trend
05 towards somewhat fewer and larger operations, I would say
06 so, yes.
07 Q. Now, if the farmer went bankrupt and left
08 farming, would you employ a multiplier against his loss of
09 production and include it as an economic impact?
10 A. That would depend -- that would depend on what
11 the analysis would suggest about whether the land remains
12 in production or goes out of production.
13 Q. If the land would remain in production, then
14 what would you do?
15 A. Okay. Then we might -- in the situation where
16 -- then we would want to look at the organization --
17 basically the production organization before and after the
18 change, that is is the land being taken over by a larger
19 farming operation. And then the major part of the
20 analysis, as I would see it, would be looking then at the
21 expenditure pattern of the larger farming operation versus
22 the smaller one both in terms of how the expenditures are
23 distributed by sector where -- a sector is one of the
24 economist's terms for a group of similar economic units,
25 the household sector, retail sector. Okay. Another
0067
01 consideration being whether there seemed likely to be a
02 difference in the geographical expenditure pattern of the
03 hypothesized smaller independent producer versus the large
04 agribusiness unit that might be taking over the land, that
05 is do these larger units tend to bypass local suppliers
06 and so on. So those would be some of the considerations,
07 some of the factors to be addressed in the analysis.
08 Q. Would you expect if in the EAA a larger
09 agribusiness-type farmer took over one of these farms, an
10 overextended farmer, that the economic impact of that
11 might well be positive for the EAA?
12 A. I guess I would say that that's -- that might be
13 termed an emperical question. That's the sort of thing
14 that we would hope to determine in the course of analysis:
15 What would be the net -- what would be the net effect if,
16 in fact, one of the results of some of these scenarios is
17 increasing concentration of production into fewer and
18 larger units?
19 I would also say that in terms of the
20 literature on this topic, there perhaps is less than a
21 clear consensus about the impacts of the change in farming
22 structure towards fewer and larger units.
23 Q. Have you studied that in the present case?
24 A. That's one of the topics we'll very likely be
25 addressing. We have not -- we have not -- we have only
0068
01 begun analysis in that direction.
02 Q. Okay. You tell me again we. Who is the "we"?
03 Is that you yourself or is it somebody else?
04 A. Myself and the RPC team.
05 Q. But that is something you will be looking into?
06 A. Sure.
07 Q. But you haven't yet?
08 A. Right.
09 (An instrument was here marked as
10 Deposition Exhibit No. 6 for identification.)
11 QUESTIONS BY MR. ROSENBERG:
12 Q. Can you identify that for me, please?
13 A. Yes. Exhibit 6, an article authored by myself
14 and one, two, three, four, five others, including Dr.
15 Steve Murdock at Texas A&M University. This is one of the
16 products of a multiyear study that we undertook back in
17 the mid 1980s basically examining community impacts of the
18 farm crisis, displacement of farmers and the like.
19 Q. Can I have you turn to page 128? That's Table
20 2.
21 A. 128, Table 2. Yes.
22 Q. Can you tell me what that table stands for, what
23 principles come from this table, if any?
24 A. Okay. Yeah. The table that we're addressing
25 summarizes results from two different surveys. We did --
0069
01 we did a survey of a cross-section of producers in North
02 Dakota and in Texas who were at the time of the survey
03 currently operating farms. And so then these individuals
04 represented a broad cross-section in terms of age,
05 experience, size of farm and, among other things, their
06 financial structure, their debt load and so on.
07 Q. The title is "Adjustments Made in the Farm
08 Operation of Former Farmers and Current Farmers
09 Experiencing Varying Levels of Financial Stress (Percent
10 Making Adjustment);" am I right?
11 A. Yeah, uh-huh.
12 Q. Now, tell me what is happening, what this table
13 shows.
14 A. Okay. In general terms, what we were finding
15 here was that those operators who had relatively high debt
16 loads were more likely to be reporting that they had made
17 a number of different kinds of adjustments in their
18 farming operation such as postponed capital purchases.
19 For those producers with no debt, only about -- well,
20 about half of those who had no debt said that they had
21 postponed capital purchases during the -- I believe it was
22 like a -- the past two years sticks in my mind as the
23 relevant time period whereas 89 percent of those who had a
24 debt-to-asset ratio of 70 percent or more reported
25 postponing capital purchases.
0070
01 Okay. Another example, renegotiated loans
02 to reduce principal, only five percent of those who
03 currently reported no debt, but 52 percent of those in the
04 highest debt category.
05 So essentially the overall finding was that
06 -- perhaps not a very surprising one -- was that those who
07 were relatively highly leveraged were more likely to have
08 engaged in quite a variety of farm adjustments that were
09 aimed at either changing their financial structure or
10 reducing their risk.
11 For instance, began using crop insurance,
12 46 percent of those in the highest debt category versus
13 only 16 percent of those with no debt.
14 Q. Okay. Now, tell me if I have it right. Could
15 the table stand for this principle: Farmers will make
16 adjustments when faced with financial crises? Is that
17 what is happening?
18 A. That would be a conclusion that would not be
19 inconsistent with what we were reporting in the table,
20 yes.
21 Q. And what you have done in the table is list a
22 number of the adjustments that farmers, in fact, do make?
23 A. Uh-huh.
24 Q. Am I right?
25 A. Uh-huh.
0071
01 Q. Okay. Now, would you expect that to be a common
02 principle throughout farming that farmers that are faced
03 with crises will make adjustments, and these are common
04 adjustments to make?
05 A. Yeah. I would agree with that statement.
06 Farmers -- perhaps farmers will attempt certainly to make
07 adjustments. Clearly from that -- the group in this table
08 labeled former producers then, former farmers suggest that
09 in some cases, despite -- despite whatever efforts at
10 adjustment, there were a group of our producers who were
11 unable to stay on the farm.
12 Q. Would increased debt be one of those matters
13 that would cause, in your terms, financial stress?
14 A. Increased debt.
15 Q. Or high debt?
16 A. Right. The -- yes. And I might say in our --
17 in our article here and elsewhere, we had generally
18 defined financial stress as including difficulty in
19 meeting debt service obligations, that is difficulty in
20 making principal and interest payments. So, yes,
21 generally those with higher debt loads were more likely to
22 experience financial stress so we find.
23 Q. Well, under your definition then, anybody who
24 has a debt load of any sort could be facing stress in
25 meeting that debt. The higher it is, perhaps the greater
0072
01 the stress, but even if it's lower there would still be
02 some stress. Am I correct in that?
03 A. I guess what we were -- okay. Maybe I didn't --
04 maybe I didn't make myself sufficiently clear in what I
05 said before. We were defining financial stress
06 essentially as inability to meet debt service requirements
07 and so on. But, in any event then, the response would be
08 that generally the finding has been those with -- those
09 with higher -- those with high debt loads were most likely
10 to experience financial stress.
11 Q. You used the term "inability". Can I substitute
12 the term "difficulty"?
13 A. Okay.
14 Q. Would that be fair?
15 A. It's probably not unreasonable, yeah.
16 Q. Okay. Are you familiar with the
17 Polopolous/Richardson model along these lines or the
18 points they looked at in terms of whether the Hazen and
19 Sawyer work was sufficient?
20 A. I have seen brief summaries of the Polopolous
21 and Richardson work only.
22 Q. Okay. One of the items that Polopolous and
23 Richardson criticize Hazen and Sawyer for -- tell me if
24 I am correct -- is debt.
25 A. Okay.
0073
01 Q. Or the absence of debt in her model. Am I
02 right?
03 A. Uh-huh.
04 Q. Now, in your Table 2 here you talk about
05 adjustments, that farmers who have difficulties will make
06 adjustments in order to service debt.
07 A. Uh-huh.
08 Q. Did you see anything in any of the Polopolous/
09 Richardson model or criticism to talk about adjustments
10 that farmers could make to meet debt servicing?
11 A. The answer is no. But, again, I would point out
12 that I have seen only brief summaries of the Polopolous
13 and Richardson work, essentially copies of -- primarily
14 copies of view graphs and the like.
15 Q. Copies of?
16 A. View graphs, transparencies from presentations
17 that were made.
18 Q. Let me ask you this: What is the relevance
19 within the context of the EAA which is largely
20 agribusinesses as you have just told me -- what are the
21 consequences of the shift of debt load where the -- let me
22 withdraw the question. It's not properly constructed
23 here.
24 Does it matter in your view whether the
25 farmers who are in this debt situation or agribusiness or
0074
01 mom and pop or smaller farmers -- let me ask the question
02 a different way.
03 Wouldn't agribusiness be better equipped to
04 meet financial stress points as opposed to a smaller or
05 mom and pop farmer?
06 A. Well, the question --
07 Q. Would they have more options open to them, a
08 longer time period to make adjustments?
09 MS. STINSON: Object to form.
10 THE WITNESS: I guess my response would be
11 that -- well, certainly the question is calling for an
12 opinion. It seems to me one might need to know more about
13 the specifics of the organization of either the -- you
14 know, the large agribusiness unit or the independent
15 proprietor farm situation. And one can -- one can point,
16 for instance, to an agribusiness firm as potentially
17 having greater total resources and perhaps having some
18 additional options. Thereby one can also point to how the
19 flexibility of the traditional family farm in American
20 agriculture where the operator and family provide much of
21 the labor and are, to some extent, able to adjust to tough
22 times by voting themselves a lower wage during tough
23 times. So I don't think that -- I don't think that there
24 is a simple yes or no answer that I could support from my
25 knowledge of the literature.
0075
01 QUESTIONS BY MR. ROSENBERG:
02 Q. What kind of additional information would you
03 need?
04 A. I think perhaps for -- for both types of units
05 it would be important to know, for instance, about their
06 overall financial resources, about where the -- for
07 instance, with the agribusiness firm, is the sugar
08 business their only business or is this -- is this just
09 one of their enterprises, are they vertically integrated
10 in one way or another. So these would be -- these would
11 be at least some of the things that I think would be
12 important to know, their cost structure and -- the cost
13 structure, including what costs are -- what costs are
14 deferrable in the short run and that sort of thing.
15 Q. In Exhibit 6 -- look back at your table.
16 Did you use any multipliers to estimate the
17 secondary impacts of farmers going out of business?
18 A. In --
19 Q. In the whole study.
20 A. In the whole -- in the whole study -- in the
21 whole study we did do some of that. And what we -- yeah,
22 kind of along the lines of what I had talked about
23 earlier, assuming that the land is staying in production
24 but that the -- that the mix of expenditures is different
25 with larger farming operations versus smaller ones and
0076
01 what did that mean then for community level impacts and
02 the like.
03 Q. Tell me what the methodology was again. I'm
04 sorry. I'm not fully understanding.
05 A. Okay. We were -- the basic method was an
06 input/output model, not totally -- not unlike the RIMS
07 model. And basically then the approach to the multiplier
08 analysis was assuming that the result of displacement of
09 farm families was that the land stayed in production, that
10 the net effect then was fewer and commensurately larger
11 farm units basically farming the same land. Okay. So the
12 impacts in this case were coming from a change in the mix
13 of expenditures. That is the expenditure pattern for the
14 larger farm unit was somewhat different than that for the
15 smaller farm unit and so on.
16 Q. What did the secondary impact analysis show?
17 A. In general, the secondary impact analysis then
18 indicated -- indicated economic, demographic, public
19 service effects for small farm-dependent communities.
20 That is to say with farm families being displaced, with a
21 substantial segment of those relocating from where they
22 had been living to the state's -- either to the state's
23 larger cities or relocating out of state, this then had --
24 this had ramifications for the retail businesses in these
25 smaller communities where the primary economic base is
0077
01 farming. It also had ramifications for school enrollments
02 and this sort of thing.
03 Q. What specifically was found, though?
04 A. Well, basically that there were substantial
05 negative impacts on the retail businesses in these smaller
06 towns, substantial reductions in school enrollments. One
07 thing that had -- one thing that was important in
08 conditioning a lot of these impacts was the age structure
09 of the farm operators that were leaving farming. That is
10 to say these were predominantly people in their 30s or
11 early 40s. These, of course, tend to be folks who have
12 school-age kids and that sort of thing. So that although
13 a county might be losing only hypothetically five percent
14 of its farm families through this displacement process,
15 this could also -- those families leaving might also
16 represent 15 or 20 percent of the school-age children in
17 the farm population because of the -- because the
18 displacement process was not neutral with respect to age
19 and that sort of thing.
20 Q. If the farm stays in production, taxes would
21 still be on the farm. The succeeding farm may be more
22 productive.
23 A. Another thing that was --
24 Q. Am I correct?
25 A. Well, I guess from the work that we had done --
0078
01 the work we did would not support really a conclusion that
02 the succeeding operation was fundamentally more or less
03 productive. It wouldn't support the conclusion that in
04 those circumstances that we had in that setting the land
05 -- the land was almost always staying in production with
06 the exception of that that went into the government
07 retirement program, but that's kind of a separate issue.
08 Q. If the succeeding farm was a larger farm or
09 larger business or larger entity, why wouldn't there be
10 greater economies of scale and therefore greater
11 productivity?
12 A. Generally speaking, the literature would suggest
13 -- would suggest at least some economies of scale in the
14 -- in the range which we're talking about. I would say,
15 though, that, you know, going back to your question of
16 what impacts did we see, a lot of the -- a lot of the
17 impacts had to do with -- well, farm operator displacement
18 leading to outmigration leading then basically to a
19 depopulation of these -- of these farm-dependent
20 communities.
21 Q. Let me --
22 A. And a migration which was -- migration which was
23 heavily skewed towards younger families in the area so
24 that the effects on some of the public services and so on
25 would be sort of disproportionate.
0079
01 Q. Let me back up for a second.
02 Would you not expect that the succeeding
03 farm that takes over the land of the bankrupt farmer, if
04 it were a larger entity, would be more productive because
05 of the economies of scale?
06 A. Okay. Again, while we haven't had the
07 opportunity to assess that issue from the EAA standpoint
08 in great detail, but generally -- but generally in
09 agriculture one does see the phenomena of economies of
10 scale or economies of size some would say up to at least
11 our larger farming units. And so -- and to the extent
12 then that the resources through some process are -- come
13 to be organized into fewer and larger producing units,
14 this has -- this has generally been associated with lower
15 production costs per unit of output.
16 Q. And greater productivity also?
17 A. Which you -- okay. The two are not necessarily
18 saying the same thing. Well, one way of defining
19 productivity perhaps is output per unit of -- input to
20 output per dollar of cost. Another way -- we need to
21 decide how we're defining productivity.
22 Are we talking about yield per acre or are
23 we talking about production efficiency in terms of cost
24 per unit of output?
25 Q. I don't know if there are two or three of those
0080
01 options there.
02 A. Right.
03 Q. Under all of those options, wouldn't you expect
04 greater productivity because of the economies of scale for
05 the bigger farmer and greater cost efficiency?
06 A. I would say that looking at the EAA specifically
07 that would be -- that would be a question that should be
08 addressed in the analysis per se so that we probably don't
09 have all the -- all the information to draw a conclusion
10 at this point. But generally that -- the conclusion that
11 through much of -- through much of agriculture we do have
12 economies of size at least up to -- through most of the
13 size range of units seems to be supported by the
14 literature, by studies and so on.
15 Q. Let me ask you this. I want to go back slightly
16 to your book, Impact of Growth. I understand the process
17 -- and tell me if I have it right -- is to create a
18 baseline --
19 A. Yes.
20 Q. -- regarding what these 30-year-old farmers
21 would do in North Dakota, how many would leave the farm
22 anyhow. You would create a baseline regarding what the
23 trends were. Then you would add to that baseline
24 something else where you put debt in there, and you would
25 have a baseline without debt and a baseline with debt.
0081
01 Would you do that?
02 A. Well --
03 Q. Because there are some folks that are going to
04 leave the farm anyhow because of one reason or another.
05 It may be that they simply can't be productive with or
06 without debt.
07 A. Let's --
08 MS. STINSON: Object to the form.
09 You can answer if you can. But if you
10 can't --
11 QUESTIONS BY MR. ROSENBERG:
12 Q. Do you want me to reconstruct that for you?
13 A. The general -- let me -- let me agree with your
14 statement that the general approach to an impact
15 assessment is typically to -- first develop a baseline.
16 This is also sometimes described as a projection of the
17 future without the proposed action. Here is what we think
18 the future looks like based on -- based on the past trends
19 and patterns that we see emerging and so on. And then
20 that baseline projection, as it were, serves as a basis
21 for comparison when one does projections of the effect of
22 the project, the action, whatever.
23 Q. Did you do a baseline when you did your study in
24 Exhibit 6?
25 A. Okay. The short answer is no. That was a --
0082
01 Q. Okay.
02 (An instrument was here marked as
03 Deposition Exhibit No. 7 for identification.)
04 QUESTIONS BY MR. ROSENBERG:
05 Q. This is my favorite.
06 A. "Economic Impact of Leafy Spurge."
07 Q. Did you do that study?
08 A. Yes.
09 Q. And what sort of study was that?
10 A. Okay. The objective of the study was to
11 evaluate the economic impact of the infestations of leafy
12 spurge, a perennial weed, on livestock producers and on
13 the rural economy in North Dakota.
14 Q. What was the purpose of the study?
15 A. The purpose -- the purpose was really to be able
16 to provide to policymakers and other interested parties an
17 estimate of how important the leafy spurge problem was in
18 the state. A secondary -- secondary purpose, I guess, was
19 to provide an attempt at quantifying not only the impact
20 to livestock producers but also to quantify how important
21 is this to the rest of the state economy, to retail
22 businesses in farm-dependent communities and the like.
23 Q. Who were you doing the project for? Who
24 commissioned the project?
25 A. The project was commissioned by the U.S.
0083
01 Department of Agriculture, specifically the Animal and
02 Plant Health Inspection Service better known as APHIS,
03 A-P-H-I-S, of USDA. This group has been engaged for a
04 number of years in research on control of leafy spurge as
05 well as other undesirable and noxious plants, animals,
06 screw worm flies and the like.
07 Q. You did that economic study for them?
08 A. Yes.
09 Q. Is this a socioeconomic study?
10 A. I would -- I would term it as -- really as just
11 an economic study. We did not get into many of these
12 other dimensions that we talked about earlier, the
13 population effects, community services and so on.
14 Q. Is that because of what the purpose of what the
15 study was to be used for?
16 A. In part or -- yeah, what the study was to be
17 used for, what people thought, what people felt were the
18 major questions or issues, as it were.
19 Q. Let me ask you about a couple of quotes here.
20 Let me point that out to you so you can follow it. Right
21 here.
22 MS. STINSON: We're on exhibit --
23 QUESTIONS BY MR. ROSENBERG:
24 Q. We're on Exhibit 7.
25 A. You have a different --
0084
01 Q. What do you have there?
02 A. I have "Economic Impact of Leafy Spurge."
03 (At this time there was a brief discussion
04 off the record.)
05 QUESTIONS BY MR. ROSENBERG:
06 Q. We're done with the leafy spurge. I have asked
07 you those questions. My notes got attached to the wrong
08 exhibit. I'll just back up.
09 MR. SAXE: The leafy spurge exhibit was --
10 excuse me.
11 MS. STINSON: Exhibit 7.
12 MR. SAXE: Exhibit 7?
13 MR. ROSENBERG: Right.
14 QUESTIONS BY MR. ROSENBERG:
15 Q. Let me back up, though.
16 You testified -- and tell me if I have it
17 right -- that there may be community impacts without land
18 going out of production?
19 A. Yes.
20 Q. Okay. And there may be these impacts if there
21 is a changing pattern of ownership succession?
22 A. Uh-huh.
23 Q. In this case, small operators would be taken
24 over by agribusiness. Is that true?
25 A. Is what true?
0085
01 Q. I'm just going through your testimony before the
02 break.
03 Is my summary true?
04 A. That that kind of a change in the structure of
05 agriculture ownership and control could have community
06 impacts even if no land leaves production. And, yes, that
07 represents --
08 Q. And is one reason for that because the
09 agribusiness people have different purchasing practices?
10 A. Yes.
11 Q. Different employment practices? Different ways
12 of doing business?
13 A. That could be one factor, yes.
14 Q. Okay. What sort of information would you need in
15 order to complete this assessment for the EAA?
16 A. Okay.
17 MS. STINSON: Excuse me. Objection to
18 form. I ask for clarification.
19 This assessment being?
20 MR. ROSENBERG: The assessment of community
21 impacts without land going out of production. He
22 testified before the break -- and again I just asked him:
23 Could there be community impacts without land going out of
24 production?
25 QUESTIONS BY MR. ROSENBERG:
0086
01 Q. And so my question is: In order to assess these
02 community impacts without land going out of production,
03 what sort of information do you need to make this
04 assessment?
05 MR. ROSENBERG: Do you still have an
06 objection?
07 MS. STINSON: No, not to that last
08 question.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. What sort of information do you need to assess
11 this?
12 A. One would need information about basically --
13 one would need information about the expenditure patterns,
14 labor use and so on by the type of farms that are
15 disappearing from the scene and also the same -- the same
16 kind of information about the kind of farm that we would
17 have after the restructuring so that one could make some
18 assessments about changes in agricultural labor use and
19 also in the pattern of expenditures by the two kinds of
20 farms.
21 Q. Do you have this sort of information now?
22 A. No. That's one of the things that we will be
23 obtaining as part of our analysis.
24 Q. How are you going to obtain that information?
25 A. Okay. Basically from public sources.
0087
01 Q. And what specifically are you going to get from
02 public sources that will enable you to conduct your
03 assessment?
04 A. Okay. Well, basically production practices,
05 expenditure patterns, labor use. Sources that I would
06 think that we would look at would include USDA
07 information, also some of the reports by the IFAS of the
08 University of Florida and so forth. Those would be some
09 of the sources we would want to look at.
10 Q. Have you started this information gathering
11 practice yet?
12 A. Yes.
13 Q. And what have you secured so far?
14 A. We certainly have obtained a large collection of
15 materials from IFAS, also from USDA.
16 Q. Specifically telling you what?
17 A. Well, a variety of information about, you know,
18 the budgets from IFAS, budgets meaning a summary of costs
19 and returns for producing different kinds of crops,
20 information from USDA describing really the structure of
21 the sugar industry in Florida and so on.
22 Q. What about purchasing patterns of small farmers
23 and big farmers? Do you have that information?
24 A. Not as yet.
25 Q. Is that available from public sources?
0088
01 A. To some extent. We believe we can get some
02 information from public sources that will bear on that.
03 Q. What about information regarding farm financial
04 characteristics? Is that available from public sources?
05 A. Again, that's available, as I understand it, to
06 some extent. And, again, that's one of the things that
07 we're looking into with respect to information that USDA
08 may have collected, also other sources as well.
09 Q. You say it's available to some extent. To what
10 extent is it available? Do you know?
11 A. I guess that's what we're still trying to
12 determine, what degree of detail and so on.
13 Q. Would you also need to know for this assessment
14 of community impacts without land going out of production
15 debt characteristics of the bigger farms and the smaller
16 farms?
17 A. That would be desirable.
18 Q. Where would you get that information?
19 A. Well, again, some of that information is
20 collected by USDA, for instance, in their farm costs and
21 return surveys and also in their work on sugar production
22 costs and so on.
23 Q. Let me back up.
24 You would need information on farm
25 financial characteristics, debt, investments and
0089
01 integration of the operation, wouldn't you?
02 A. Those would be -- that would be the kind of
03 information that would be quite desirable, yes.
04 Q. What if that information is not -- what if the
05 public data on that is not complete or is insufficient?
06 What would you do then?
07 MS. STINSON: Object to form.
08 MR. SAXE: Grounds?
09 MS. STINSON: Calls for speculation.
10 QUESTIONS BY MR. ROSENBERG:
11 Q. You are an analyst. You make assessments.
12 What would you do if in making your
13 analysis the public data on the subject matter you are
14 writing on is insufficient?
15 A. There are, of course, you know -- with almost
16 any kind of data there are degrees of adequacy or
17 whatever. One source that -- one source that many
18 analysts use when hard, quantitative, published data is
19 not readily available is essentially obtaining information
20 or estimates from "industry experts," people who are
21 supposed to be knowledgeable about the industry. And
22 there are different ways of approaching this.
23 One approach that we have used in some of
24 our previous studies is one that's called a Delphi process
25 where -- which is a process for trying to get a consensus
0090
01 of "expert opinion". So these are -- these are some of
02 the approaches that one can use.
03 Q. Is that what an economist would do if he was
04 going to give an opinion on something? He would go to
05 other economists and get their opinion as opposed to
06 getting hard evidence or evidence that he can substantiate?
07 MS. STINSON: Object to form.
08 THE WITNESS: To respond to that question,
09 there is probably quite a continuum in hardness of data or
10 information. But certainly in trying to obtain a
11 consensus of opinion from people who are "knowledgeable
12 about an industry" is a time-honored approach when, in
13 fact, it is not possible or not deemed feasible to, for
14 instance, conduct a census or a survey or audit or
15 whatever.
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Let me ask you two questions.
18 No. 1, don't you, as an economist, want to
19 check information for accuracy?
20 A. Oh, yes.
21 Q. How could you check this information for accuracy?
22 A. Again, the -- a process like this Delphi
23 technique that I was alluding to is supposed to -- well,
24 is regarded as having a sort of some internal consistency
25 checks, that is to say because you're obtaining
0091
01 information not from one person who is supposed to know
02 something about the topic but, in fact, you're obtaining
03 information from several and attempting to reach
04 consensus.
05 Another approach --
06 Q. But none of those sources are primary sources.
07 Am I correct?
08 MS. STINSON: Object. I think you cut him
09 off in the answer.
10 MR. ROSENBERG: I didn't think he was being
11 responsive to my question.
12 QUESTIONS BY MR. ROSENBERG:
13 Q. If you want to go through that and give me the
14 balance of your answer --
15 A. Well, of course, we're speaking in somewhat
16 general terms here, I guess. I would say that the kind of
17 industry -- industry experts, as it were, that one might
18 consult could include both -- could include individuals
19 who have primary data.
20 Another approach that is often used in
21 situations where there is -- where there is some degree of
22 uncertainty about a particular variable or parameter or
23 whatever is one that is known as sensitivity analysis.
24 That is where one with one's models or whatever looks at
25 basically multiple scenarios and, in fact, looks at what
0092
01 is the effect of varying a particular parameter. Maybe to
02 follow your example, it might be debt structure. How
03 sensitive are the results to the initial debt structure
04 that's assumed would be the sort of question that one can
05 subject to a sensitivity analysis.
06 Q. When we start talking about sensitivity
07 analysis, aren't we talking about getting information
08 that's either anecdotal or not from a primary source or
09 incapable of being a check for accuracy?
10 MS. STINSON: Object to form.
11 THE WITNESS: Well --
12 QUESTIONS BY MR. ROSENBERG:
13 Q. Let's break it up.
14 Isn't the information received anecdotal?
15 A. I suspect -- I'm trying to think of the best way
16 to articulate. I suppose that one could define any
17 information that doesn't come from a primary source as in
18 some sense anecdotal or -- well, I guess there are, you
19 know -- again, there is kind of a continuum in how hard
20 information might be or --
21 Q. How would you check it for accuracy? How would
22 you check the information for accuracy? Isn't that a
23 problem?
24 MS. STINSON: I think asked and answered.
25 MR. ROSENBERG: He's shaking his head, but
0093
01 he's not answering.
02 THE WITNESS: Well, there are, as I say,
03 probably, you know, a number of different ways of trying
04 to assure reliability, let's say, of information. And one
05 approach is to -- one approach is what some people in the
06 social sciences I guess have termed triangulation, that is
07 obtaining information from multiple sources and seeing if,
08 in fact, the information obtained from multiple sources or
09 multiple methods is -- appears to be consistent. Okay.
10 So -- and I think that's really what -- really what I'm
11 talking about here is for perhaps kinds of information
12 that are not -- not readily obtainable from standard
13 published sources like censuses or government reports.
14 One -- some alternatives include consulting
15 people who are knowledgeable about the industry and, you
16 know, probably consulting multiple knowledgeable observers
17 to see if one doesn't get some consensus at least about
18 ranges of values and that sort of thing.
19 QUESTIONS BY MR. ROSENBERG:
20 Q. Now, when you go to these people who are
21 knowledgeable about the industry, wouldn't you exclude
22 those people with either financial interests or
23 involvement in the industry?
24 A. Well, depending on how one defines involvement,
25 you could wrap -- one could be in a situation of excluding
0094
01 most of the people who know very much about the industry
02 possibly.
03 Q. Isn't that exactly the situation we have here?
04 MS. STINSON: Object to form.
05 QUESTIONS BY MR. ROSENBERG:
06 Q. That there are no sources for the information
07 other than a survey of the industry people themselves?
08 A. Again, I would say that, you know, there are
09 multiple, multiple sources which differ I guess in the
10 degree of primariness of the information. And one -- you
11 know, at one extreme one can think of, you know, being in
12 a position of obtaining detailed financial records from
13 every sugar-producing business in the EAA and one can
14 think about moving along a continuum from that --
15 Q. Can you name these sources for me? Can you tell
16 me who they are?
17 A. In terms of specific --
18 Q. You said there were a number of sources. I'm
19 asking you to identify them for me.
20 A. Okay. I would certainly identify the types of
21 -- types of entities that --
22 Q. I'm asking for exactly the sources, though.
23 You said there were a number of sources. I'm asking you:
24 What sources? Who are they?
25 A. I would not feel comfortable identifying
0095
01 specific individuals, although there are some specific
02 individuals that I have already talked to. In general
03 terms, I can certainly suggest some of the kinds of people
04 that would logically be --
05 Q. I want to know --
06 A. -- appropriate candidates.
07 Q. -- specifically who you have talked to and what
08 information they have provided.
09 A. Okay. Well, again, in terms of specific
10 individuals that we -- that I have talked to, that would
11 include individuals at IFAS, particularly David Mulkey who
12 discussed some of the previous economic impact studies
13 that they had been involved in, including people at USDA
14 like Annette Claussen.
15 But certainly in terms of people that we
16 would be potentially contacting to get some of the kinds
17 of information that we've been discussing in the last
18 little bit, it would be a -- you know, a much broader
19 group of people than the ones that we've talked to to date
20 certainly.
21 Q. What information has Annette Claussen given
22 you?
23 A. Okay. She had -- she or people in her office
24 had sent us, you know, some of their -- some of their
25 published material, information they had published about
0096
01 sugar production costs and the like. I would have to go
02 and -- I can't right now testify to how many separate
03 documents and so on.
04 Q. Other than Annette Claussen and David Mulkey,
05 have you talked to anybody else to secure information on
06 farm financial characteristics, debt, investments,
07 integration of operation?
08 A. Okay. Another individual that I talked to early
09 on is a Dr. Jim Johnson who is within the USDA. His -- he
10 is the person that is essentially in charge of the group
11 that conducts what is called the farm costs and returns
12 surveys. This is, I believe, at this point an annual
13 survey that USDA conducts.
14 Q. Is the information you received from Johnson,
15 Claussen and Mulkey sufficient for you to conduct a
16 community impacts analysis?
17 MS. STINSON: Object to form.
18 THE WITNESS: I guess the answer would be
19 that the information we have obtained to date is certainly
20 not everything that we would like to have as the basis for
21 an impact analysis.
22 QUESTIONS BY MR. ROSENBERG:
23 Q. Wouldn't it be fair to say that the information
24 from Johnson and Claussen and Mulkey is insufficient for
25 what you need to do to conduct a community impacts
0097
01 analysis?
02 A. I would prefer to use the term less than what we
03 would ideally like to have. Again, there are kind of
04 degrees of sufficiency or lack thereof.
05 Q. Does the Department of Agriculture distinguish
06 purchasing patterns by farm size?
07 A. Not in detail in their farm cost return
08 surveys.
09 Q. Does IFAS distinguish producing patterns by farm
10 size?
11 A. Not in detail, at least in the materials I have
12 seen to date.
13 Q. Do any of your sources that you have collected
14 today distinguish purchasing patterns by farm size?
15 A. Not in any -- not in detail.
16 Q. What else are you going to do then if you can't
17 get the information from either IFAS or USDA or Johnson to
18 gather sufficient information to make an analysis of the
19 community impacts?
20 A. Well, of course, the questions about purchasing
21 patterns of alternative farm sizes and so on is only one
22 dimension of the whole, questions about direct and
23 secondary impacts. And as we move along with the study, I
24 guess, you know, in general we'll see what -- see what the
25 options appear to be for information on a number of
0098
01 different dimensions that seem to be important.
02 Q. When did you start this information gathering
03 process?
04 A. I guess you could say we started -- we started
05 back in September.
06 Q. And what other steps do you intend to take to
07 get more information?
08 A. Well, I guess in the first place, I would say,
09 too, that I'm only -- I'm only one of a team of people
10 working on the project. And so in terms of what I'll be
11 asked to do versus what other people involved in the
12 project may be doing is a question of -- I don't know
13 exactly how that will all -- will all shake out.
14 Q. What does that mean? I didn't understand your
15 statement.
16 A. Okay. In other words, you were asking what
17 steps I intended to take to get more information. And I
18 was -- I was commenting I'm not sure to what extent I'll
19 be responsible for gathering some of this information
20 versus other folks that are working on the project.
21 Q. Are you the person that's going to make the
22 analysis?
23 A. I'll be one of the people responsible for the
24 analysis, yes.
25 Q. Won't you have a hand in deciding what
0099
01 information should be collected?
02 A. Certainly.
03 Q. And who is going to collect it?
04 A. Certainly.
05 Q. So you would know that, wouldn't you?
06 A. I will have a hand in that decision, as you say,
07 yes.
08 Q. And haven't you been meeting with the rest of
09 your team from time to time regarding this?
10 A. Sure.
11 Q. And is it your testimony that you don't know what
12 additional steps are being taken now to gather further
13 information?
14 A. I probably should not -- well, I can certainly
15 say, you know, in general terms that we're, you know,
16 working with people who are familiar with the industry,
17 you know, to get information of a variety of types.
18 Q. But, specifically, who are you going to get the
19 information from? Who are you working with and who are
20 you going to get the information from? Who are they going
21 to get the information from?
22 A. I suppose one response, perhaps the most
23 appropriate response at this point would be that, you
24 know, we're not -- I'm not certain in detail what entity
25 or individual will be able to provide what specific
0100
01 information. At the same time, we've -- from experience,
02 working on similar projects in the past, we have -- I have
03 some ideas about the type of individuals who are usually
04 able to provide different types of information.
05 Q. Excuse me. But you have had six months to do
06 this. And you have had this information for awhile. You
07 haven't obtained that information. Am I correct?
08 A. We haven't obtained all the information that we
09 are hoping to obtain. That's right.
10 Q. Is it not true that you are at an impasse at
11 this point absent a survey of the industry itself?
12 A. I would not agree with that.
13 Q. Have you secured information from the industry?
14 A. Not -- no.
15 Q. Has anybody on your team secured information
16 from the industry?
17 A. Okay. I'm not sure how to respond to the
18 question. If we define information, you know, very
19 broadly, then the answer has to be that certainly we have
20 obtained some information of a general nature --
21 Q. Relevant to conducting a community impacts
22 analysis. Have you received that information or any
23 information relative to that from the industry?
24 A. Not -- I guess the answer is probably no from
25 the standpoint of detailed information on some of the
0101
01 things we've been talking about.
02 Q. And without getting that information from the
03 industry, are you now at an impasse?
04 A. I would not -- no, I don't feel that we're at an
05 impasse.
06 Q. What else are you going to do then to get
07 information specifically?
08 A. Okay. I would say basically much of the type of
09 information that one -- that one might need here could be
10 obtained from individuals who are -- who are familiar with
11 the industry. I think, for instance, of --
12 Q. Why haven't you done it already?
13 MS. STINSON: Excuse me. Let him finish.
14 THE WITNESS: The examples that come to
15 mind might be, for instance, University of Florida
16 extension people who work with the industry. People who
17 are perhaps -- another example might be people who are
18 involved in the farm credit business. You know, the farm
19 credit services office that services that region would be
20 examples.
21 As to why haven't we done some of these
22 things as yet, in part because of the -- basically
23 scheduling of the work and the need for decisions by
24 people, including people in the plan organization, about
25 what they might wish us to do, I guess.
0102
01 QUESTIONS BY MR. ROSENBERG:
02 Q. Let me back up for a second.
03 You are a professional economic analyst.
04 A. Yes.
05 Q. And you know that you are going to do a
06 community impacts statement.
07 A. Uh-huh.
08 Q. You know the information that's needed to do
09 that.
10 A. In general terms, yes.
11 Q. And you knew early on that you were going to do
12 a community impact statement because it's part of a
13 socioeconomic statement. Am I right?
14 A. I would say that the scope -- the scope of what
15 -- the scope of what we or I have been expected to do has
16 been something that's been evolving. So it wasn't
17 necessarily clear to me back in, say -- on the 15th of
18 September, 1992 it wasn't clear to me the extent of what
19 the client would want us to do over the sweep of the
20 project.
21 Q. When was it made clear to you that you were
22 going to do a community impacts statement?
23 A. That's a -- that's -- I would say that's a good
24 question. Perhaps late November, early December would be
25 a time frame at which we -- I came to understand that we
0103
01 were probably going to be doing some additional work over
02 and above the work that we had done for our preliminary
03 opinions that were delivered at the end of October.
04 Q. Do you presently have specific plans to seek
05 specific information from specific sources for a community
06 impacts statement?
07 A. I would answer that by saying I think those
08 plans are still -- are still being developed.
09 Q. Is the answer to the question then no?
10 A. Okay. We do not -- we have not at least
11 completed our plan of what information would be gathered
12 from whom.
13 Q. If land stays in production, isn't the change in
14 purchasing pattern the key direct effect?
15 A. That would be -- that would be one -- certainly
16 one of the key direct effects that one would look at from
17 the standpoint of evaluating economic impact. Certainly
18 there may be -- there may be other effects that many
19 people would suggest are not -- are not irrelevant. For
20 instance, this whole -- the whole hypothesized process of
21 current -- current operators being displaced and the
22 industry being restructured into fewer and larger units is
23 one that, at least in my experience, many observers and
24 interested parties would say was an important direct
25 effect and issue of concern, irrespective of the net --
0104
01 kind of net economic impact as measured by the traditional
02 indicators of secondary business activity and the like.
03 But certainly then -- I would agree, though, that the
04 expenditure patterns, purchasing patterns and the like
05 would be one of the -- one important item.
06 Q. What are the others?
07 A. Okay. What are the others for economic impact?
08 Well, I guess you could say --
09 MS. STINSON: Excuse me. Let me ask for a
10 clarification.
11 Are you talking about your original
12 question if land stays in production what the important
13 factors are?
14 MR. ROSENBERG: If the land stays in
15 production, I asked him: Isn't the change in purchasing
16 patterns the key direct effect?
17 He answered the question saying that -- he
18 acknowledged that, yes, it is a key direct effect but
19 there are others.
20 MS. STINSON: Okay.
21 QUESTIONS BY MR. ROSENBERG:
22 Q. My question is: What are the others?
23 A. Well, one dimension -- and, of course, I would
24 say, too, that we would certainly not -- we're not
25 agreeing or disagreeing with the premise about whether or
0105
01 not -- whether or not how much land stays in production.
02 That would be one of the items to be addressed in the
03 analysis. But leaving that aside -- leaving that issue
04 aside for a moment, to get to your question of what other
05 factors are important, well, for instance, the change in
06 -- if land stays in production but there is a substantial
07 change in net returns from sugar production either because
08 of -- well, because of BMPs or assessments for financing
09 STAs or the like, that change in -- that change in net
10 returns can have an impact irrespective of a change in
11 ownership pattern, expenditure pattern and the like.
12 Similarly --
13 Q. What if the land is not in the EAA?
14 A. If land --
15 Q. Is not in the EAA. There are no BMPs or STAs.
16 Let's move those out.
17 MS. STINSON: I object to form. I don't
18 know what you are asking. I'm sorry.
19 MR. ROSENBERG: My question is: What are
20 some of the other key direct effects? Or if land stays in
21 production, I asked him: Isn't the purchasing pattern the
22 key direct effect?
23 He said, "No, there are others."
24 He proceeded to answer the question by
25 saying if there are BMPs and STAs, and I'm saying assuming
0106
01 the land is not in the EAA.
02 THE WITNESS: I'm confused -- I'm still
03 confused by the question. But another direct effect that
04 might be an issue would be, for instance -- I guess in a
05 broad sense this could be under expenditure patterns, but
06 certainly if there is a change in production practices and
07 so on or cropping patterns that leads to a substantial
08 change in labor use, okay, even though the land stays in
09 production, that -- that could potentially be an important
10 direct effect.
11 QUESTIONS BY MR. ROSENBERG:
12 Q. And have you secured information regarding those
13 direct effects for your community impacts study?
14 A. Some of our -- the information from some of the
15 published IFAS reports has information about labor use for
16 different major crops, vegetables versus sugar cane and
17 that sort of thing.
18 (At this time a lunch recess was taken,
19 after which time an instrument was here marked as
20 Deposition Exhibit No. 8 for identification.)
21 QUESTIONS BY MR. ROSENBERG:
22 Q. Professor Leistritz, could you identify Exhibit
23 No. 8 for me, please.
24 A. Yes. This is an article that I wrote. The
25 title is "Economic Impacts of New and Expanding Firms in
0107
01 the Upper Great Plains."
02 Q. Can you in a couple of sentences tell me what
03 this article is generally about?
04 A. What it's generally about, we had done a survey
05 of firms that met a criteria of either being new within
06 the last 10 years or having expanded by a certain amount.
07 In this case, employment had expanded by at least 10
08 percent over the last 10 years. And then we were
09 examining some questions about what type of firms had the
10 greatest economic impact on the area as measured by a
11 couple of criteria, one being the number of jobs they
12 created, another being the proportion of their
13 expenditures that were made within the state in this
14 case.
15 Q. Let me -- I'm going to read something into the
16 record, but I want to direct your attention to it and I'm
17 pointing to it. Okay?
18 A. Uh-huh.
19 Q. You said this in your article. "Recent analyses
20 clearly indicate that the industries which have
21 traditionally been the mainstays of the rural economy, for
22 example, agriculture" -- and a couple of others -- "may
23 not be major sources of future employment growth."
24 That's your statement, isn't it?
25 A. Yes.
0108
01 Q. And is that still your position today?
02 A. Okay. This was kind of a general introductory
03 statement to the article and really reflecting then kind
04 of a look across rural America very broadly, also citing
05 then -- basically two sources that we cited. One was a
06 fellow named Pulver. The other was a report by another
07 person and I which is essentially a bibliography of kind
08 of a broad range of studies. It's a very general
09 statement, I guess.
10 Q. Do you still stand by it?
11 A. Certainly in that context.
12 Q. "Recent analyses indicate that the industries
13 which have traditionally been the mainstays of the rural
14 economy, that is agricultural, may not be major sources of
15 future employment growth."
16 That's still a true statement?
17 A. May not be major sources of future employment
18 growth. I think that some of those words need to be
19 emphasized. In other words, the trend in agriculture
20 around the country has been for quite a number of years
21 one of essentially mechanization, fewer actual workers
22 employed directly on the farms and ranches.
23 Q. And the next sentence that greater growth
24 potential -- service industries would have greater growth
25 potential in those areas which have been traditionally
0109
01 rural.
02 Is that right?
03 A. Okay. The sentence actually reads, "Therefore,
04 some observers suggest that rural areas seeking economic
05 growth or revitalization will probably have to give
06 greater attention to the development of sectors with
07 greater growth potential such as service-producing
08 industries or high technology manufacturing," and so on.
09 Q. Do you still agree with that statement?
10 A. Again, realizing the context that we're
11 basically saying some observers suggest or have suggested
12 that. As you go on in the article, you will see that we
13 find that in the region we were studying, manufacturing is
14 still kind of a predominant source of new growth for the
15 communities.
16 Q. Now, in this study that we're talking about
17 here, Exhibit 8, this was an economic impact study, was it
18 not?
19 A. We were addressing the economic impact of
20 different types of new firms, yes.
21 Q. This was not a socioeconomic impact study?
22 A. Right.
23 Q. It was limited to economic impacts?
24 A. Yeah. And limited further -- we really had, as
25 I said, two measures of economic impact, one, total jobs
0110
01 created and the other the percentage of expenditures made
02 within the state.
03 Q. So, in this study -- is it also true that a
04 socioeconomic impact study depends on the purpose of the
05 study, and the purpose of this study was limited?
06 A. Uh-huh.
07 Q. Did this study also have a baseline in it?
08 A. No.
09 Q. And do you conduct economic impact assessments
10 without baselines?
11 A. Well, the term "economic impact study" can cover
12 a relatively broad range of analyses. Economic impact per
13 se is generally -- is a term which generally refers to
14 measuring -- measuring economic change. So while we could
15 appropriately I think describe this as a study that looked
16 at economic impacts, in this case economic impacts of new
17 firms, we were not doing baseline and impact projections
18 in the same way that you and I have used the term earlier
19 -- terms earlier today.
20 Q. I'm not fully understanding you. Maybe --
21 earlier we discussed this book, "Impact of Growth."
22 A. Uh-huh.
23 Q. And in the book they talk about the approach.
24 A. Uh-huh.
25 Q. And the approach -- Step 1 is to procure
0111
01 pertinent information. Step 2 is prepare --
02 A. Uh-huh.
03 Q. -- baseline conditions. Three is predict future
04 baseline conditions without project.
05 I thought those were the three first steps
06 you take on an economic impact study.
07 And this was a study where you didn't take
08 those steps; am I right?
09 A. Okay. This was a study where we didn't take
10 those steps. And, instead, in this study we were
11 comparing different types of firms relative to see what
12 their relative economic impact would be based on a couple
13 of criteria that we had outlined.
14 Q. So, again, the type of study you conduct depends
15 on the purpose of the study?
16 A. Yeah.
17 Q. And the directions you were given in order to
18 conduct that study. Am I right?
19 A. I would agree with that as a general statement.
20 Q. Okay.
21 (An instrument was here marked as
22 Deposition Exhibit No. 9 for identification.)
23 QUESTIONS BY MR. ROSENBERG:
24 Q. Can you identify Exhibit No. 9 for me, please?
25 A. Yes. It's an article that I wrote along with
0112
01 four other people, the title "Socioeconomic Impact of the
02 Conservation Reserve Program in North Dakota."
03 Q. Now, let me have you turn to page 55.
04 A. Okay.
05 Q. Excuse me. Page 54. Page 54. The paragraph is
06 entitled Procedures.
07 A. Uh-huh.
08 Q. And it says this: "The study had two major
09 phases. First, a statewide survey of CRP participants was
10 conducted to determine selected characteristics."
11 Is that correct?
12 A. Uh-huh.
13 Q. That's the first procedure.
14 Now, on the next page, page 55, this
15 statement is made: "An important prerequisite to
16 estimating these indirect effects was estimating the
17 direct effects of program participation on farm
18 expenditures and income."
19 A. Uh-huh.
20 Q. Am I correct?
21 A. Uh-huh.
22 Q. "Sectors expected to experience direct effects
23 were as follows." And you list a couple.
24 A. Yes.
25 Q. Let's look at that as a whole for a second.
0113
01 Isn't this what Hazen and Sawyer did in
02 their study?
03 A. Okay. I think the --
04 Q. I'll focus you on the sentence -- on the first
05 sentence, "An important prerequisite to estimating these
06 indirect effects was estimating direct effects of program
07 participation on farm expenditures and income."
08 A. Yes.
09 Q. Isn't this what Hazen and Sawyer did?
10 A. This was -- the Hazen and Sawyer study was
11 basically looking at the farm level impact or, as you say,
12 looking at the direct effects of the proposed program
13 plans, et cetera, on farm expenditures and income.
14 Q. At least --
15 A. That was the thrust of their study.
16 Q. Okay. Now, in your -- on page 60 -- let me have
17 you turn to page 60. There is a paragraph which is above
18 the word Note.
19 A. Yes.
20 Q. Okay. And you say this or the article says
21 this. Excuse me. "Other socioeconomic effects of the
22 program that could be addressed by future research include
23 the possible role of the program in enabling farmers and
24 ranchers to shift to different occupations or residences."
25 A. Yes.
0114
01 Q. So even this article, which is a socioeconomic
02 impact, doesn't address all of the socioeconomic effects
03 of the program?
04 A. Correct.
05 Q. And is that again because that went beyond the
06 purpose of the study or the directions to conduct the
07 study?
08 A. Yes. I would not disagree with that.
09 (An instrument was here marked as
10 Deposition Exhibit No. 10 for identification.)
11 QUESTIONS BY MR. ROSENBERG:
12 Q. Professor Leistritz, could I have you identify
13 Exhibit 10, please?
14 A. Exhibit 10, an article I wrote along with four
15 other persons titled "Landowner Characteristics and the
16 Economic Impact of the Conservation Reserve Program in
17 North Dakota."
18 Q. Earlier we discussed maybe part of this or my
19 understanding that the Conservation Reserve Program is a
20 soil bank program.
21 A. Yes, long-term cropland retirement.
22 Q. How do farmers decide to sign up for CRP? What
23 is the key factor?
24 A. Okay. The Conservation Reserve Program that
25 we're talking about in this article was -- is a voluntary
0115
01 program. So essentially landowners -- landowners were
02 seemingly making the decision to participate based on
03 whether they felt it would be advantageous to them
04 monetarily in considering risk and things like that. They
05 would participate in the program if in their judgment it
06 would be to their advantage to do so.
07 Q. In terms of returns to land, if they could make
08 a greater return from their land by farming it, they would
09 not go in the program?
10 A. That would be the general conclusion. One might
11 consider, of course, that with the program the landowner's
12 return is pretty much assured whereas if he elects to stay
13 out of the program and farm, the risk associated with
14 potential crop failure or things like that could be
15 greater. But basically -- basically I would agree with
16 your statement that the major factor would be whether the
17 landowner felt that he would have a better return by
18 participating in the program versus staying out.
19 Q. And on page 495, you make this statement. Let
20 me read it. It is the first full paragraph, the second
21 sentence. "Rational farmers enroll their least productive
22 land in the CRP."
23 A. Uh-huh.
24 Q. Right? And that's essentially what you just
25 said in answer to my question?
0116
01 A. Yeah.
02 Q. The next sentence says, "This allows more
03 management and capital to be employed on the remaining
04 acres, which may increase production on those acres."
05 Do you still stand by that statement?
06 A. That sentence, however, needs to be I think read
07 in the context of the one which follows.
08 Q. Okay.
09 A. The sentence which follows says, "However, one
10 could also assume that rational farmers were producing at
11 their optimum level before entry into the program, in
12 which case no increase in inputs on other acres would be
13 justified."
14 Essentially what we were attempting to say
15 there was that there are perhaps alternative or competing
16 hypotheses about this question of how does enrolling some
17 land in the CRP affect the way that the remaining land is
18 managed. And we were trying to present sort of
19 alternative hypotheses in that regard.
20 Q. What does optimum level mean in the sense you
21 have it here?
22 A. Okay. What -- reflecting back to the sentence
23 that talked about "this allows more management and capital
24 to be employed on the remaining acres," and how might this
25 be translated. For instance, the level of variable
0117
01 inputs like fertilizer, the number of cultivations and so
02 on for a crop would be -- is how this application of
03 management and capital to the land really occurs.
04 So in terms of what's the effect of
05 enrolling some of the acres in CRP, one hypothesis might
06 be that the farmer can then apply more fertilizer, more
07 management, do more cultivating, et cetera, of the
08 remaining acres, but the alternative hypothesis would be
09 if the farmer were a good manager, rational individual, et
10 cetera, he would have already been -- one could assume
11 that he would already be fertilizing his acres at the
12 profit maximizing level, so then there would be no point
13 in making a change.
14 Q. Or else there would be no point in having more
15 management and capital to be employed on the remaining
16 acres because they are already at the maximum level, too?
17 A. Right. Uh-huh.
18 Q. Now, this was an economic impact assessment you
19 were doing, this paper?
20 A. Yeah. We said that we were addressing the
21 economic impact of the program.
22 Q. This was not a socioeconomic impact?
23 A. Right.
24 Q. In your economic impact assessment, you
25 calculate at page 497 -- let me point to you the
0118
01 paragraph. It reads, "Total CPR-related potential
02 employment reduction was estimated to be 2,416 jobs
03 statewide." Okay?
04 A. Yes.
05 Q. How did you calculate that figure? And were
06 those full-time or part-time jobs?
07 A. Okay. Those would be full-time -- those would
08 be estimated full-time equivalent jobs. How that was
09 calculated -- our method for calculating those impacts was
10 through use of an input/output model. Basically from our
11 survey of the CRP participants, we obtained information on
12 how the land had been used, that is what crops had been
13 enrolled and so on. And then we looked at -- we had
14 information from our extension specialists on the costs of
15 producing the different crops in the different areas of
16 the state. So this allowed us then to estimate the direct
17 effects, the reduction in expenditure for seed and fuel
18 and fertilizer and so on that would result from
19 participation.
20 Then the input/output model was used to
21 estimate the secondary and total impacts resulting from
22 those direct effects. The input/output model then gave us
23 estimates of changes in business volume by sector like for
24 retail trade sector, the finance, insurance and real
25 estate sector and so on. Okay.
0119
01 Then we had assembled historical data and
02 computed trends in the output per worker in each sector.
03 For instance, we might have concluded from the data that
04 we had drawn together that the retail trade sector in
05 recent years had required about $100,000 of retail trade
06 volume to support one full-time equivalent worker. Okay.
07 Applying those co-efficients, essentially output per worker,
08 to the estimated changes in output of the different
09 sectors then gave us estimates of changes in employment
10 for the different sectors.
11 Q. So you are pretty comfortable with this figure
12 of 2,416 jobs?
13 A. I'm not -- I'm not real sure about the last 16.
14 Q. With the methodology?
15 A. Yes.
16 Q. But the methodology --
17 A. General approach that's frequently used.
18 Q. And it is premised on the survey you did of
19 those people involved in the CRP program. Am I not
20 correct?
21 A. One -- yes, one of the important data sources
22 was the survey we did of people who participated in CRP.
23 Q. In fact, that was a basic source for the rest of
24 this program?
25 A. That was one of the key information sources.
0120
01 Q. And that is really the traditional way that you
02 would conduct this sort of assessment. You get basic
03 information from those primary sources. Am I not
04 correct?
05 A. But I think that we need to understand, too,
06 that not -- that the survey was not the only source of
07 information used nor was it necessary to obtain, for
08 instance -- there are typically alternative sources to
09 obtain particular information.
10 In this case, we did a survey of producers
11 in part because some of the information we wanted to
12 obtain was information about what factors did you consider
13 in deciding to participate, what do you think you will do
14 with the land when the program -- you know, the contract
15 is over. Some of this information about individual
16 considerations and intentions we felt could certainly best
17 be obtained from the producers.
18 We also asked them information about the
19 use of the land prior to enrollment. It seemed -- it is
20 likely that we could have obtained estimates of the use of
21 CRP land prior to enrollment, that is how much was in
22 wheat, how much was in barley, from other sources such as
23 the agricultural stabilization and conservation.
24 We did not, interestingly, ask the
25 producers about how much did they spend per acre in their
0121
01 farming of the land prior to enrollment. We felt that we
02 had data from what we would call a secondary source, the
03 published crop and livestock budgets from our extension
04 service that we felt was probably more reliable than
05 asking -- asking producers to try to recall their costs --
06 what their costs per acre might be.
07 So, in short, we obtained some of the
08 information we needed for the study from a survey, but we
09 obtained -- we obtained some of it from other sources.
10 And, in fact, in studies like this, the question of from
11 what sources will it be most efficacious to obtain what
12 kinds of data is a -- typically is a judgment call. There
13 isn't -- there isn't a black and white, information can
14 only come from a survey of producers, there are no other
15 alternatives.
16 Q. Is it true that if the producers have the
17 information and nobody else has it, they are the only
18 source for that information?
19 MS. STINSON: I object to the form.
20 QUESTIONS BY MR. ROSENBERG:
21 Q. Isn't that not true?
22 A. If --
23 Q. Producers have the information. Am I correct?
24 A. What information are --
25 MS. STINSON: Object to the form.
0122
01 THE WITNESS: I guess I would have to ask:
02 What information are we talking about now?
03 QUESTIONS BY MR. ROSENBERG:
04 Q. The basic information you are asking about
05 regarding the CRP program and what their costs were or
06 what other elements of their farming program was. They
07 would have the best information of that, wouldn't they?
08 MS. STINSON: Object to form.
09 THE WITNESS: As I indicated before, for
10 some of the information such as cost per acre for
11 producing the different crops in the different areas of
12 the state, it was our judgment that the information that
13 we could obtain from the extension service about typical
14 costs and returns would be more reliable than the
15 information that we might assemble by -- from a survey of
16 producers.
17 On the other hand, we felt that the
18 producers would be the best -- would be the best source
19 for some other kinds of information like factors they
20 considered in deciding to participate, what they thought
21 they might do with the land when the contract was over and
22 the acreage of different crops that had been grown on the
23 land in the last year that they produced.
24 But, again, I would say that generally --
25 generally there are -- generally there are multiple
0123
01 sources for arriving at reasonable estimates of the
02 factors that are, you know, important factors in an impact
03 study.
04 For instance, in reflecting to a little of
05 our conversation this morning when we were talking about
06 the expenditure patterns of farms of different sizes, one
07 source clearly is to go to the farms, the buyers of goods,
08 you know, inputs and so on and ask them about their
09 expenditure patterns. Another source for arriving at the
10 same information would be to talk to local dealers and
11 suppliers, that is the farm supply dealers in the area to
12 find out which farmers -- which farmers get their supplies
13 from local outlets versus other sources.
14 QUESTIONS BY MR. ROSENBERG:
15 Q. Which is more likely to produce the most accurate
16 information on farmers' spending patterns? The producer
17 interview or Delphi?
18 MS. STINSON: Object to form.
19 THE WITNESS: I think that's a -- that
20 might be a difficult question to answer. In the general,
21 that is it might -- it might depend on the resources
22 available for both kinds of study.
23 Do we -- if we are doing an interview, do
24 we do it in a setting where producers are able to consult
25 their records and so on or, on the other hand, who might
0124
01 be involved in the -- if one were doing a Delphi process,
02 who might be involved in that, what is their level of
03 knowledge and so on.
04 So I think it's perhaps not -- I would say
05 that in my opinion there isn't an easy yes or no answer,
06 one or the other answer.
07 QUESTIONS BY MR. ROSENBERG:
08 Q. Tell me if I understand right.
09 In your view, interviewing the farmer would
10 not be more accurate than using a Delphi?
11 MS. STINSON: Object to form. I don't
12 think that accurately reflects his testimony.
13 QUESTIONS BY MR. ROSENBERG:
14 Q. Tell me if I'm wrong.
15 A. I would say again that one would have to more
16 carefully specify what would be involved in either the
17 interviewing process or the Delphi process.
18 Q. Let me -- let's back up for a second.
19 The producer has accurate information on
20 what he spends and does, does he not?
21 A. The general answer should be yes. However, it's
22 important to qualify that while the producer must have
23 accurate information about -- should have accurate
24 information about what he has spent, for instance, should
25 be able to at the end of the year add up the fuel bills
0125
01 and decide how many thousand dollars were spent for fuel,
02 trying to -- some producers will not have records that are
03 sufficient to allow a highly accurate allocation of those
04 expenditures, for instance, among crops or among
05 enterprises.
06 Think about the producer who is growing,
07 you know, three different crops. Think about sugar cane,
08 sod and vegetables. Okay. The producer may or may not
09 have records that will allow one to readily, easily say
10 that so many thousand dollars of fuel were spent in the
11 sugar cane, so much for the vegetables and so much for the
12 sod. These are the kind of issues that people get into
13 when they do -- when they do surveys to try to determine
14 production costs.
15 Then another issue that can be -- that can
16 be of concern in doing surveys is whether the -- say that
17 we're doing a survey and we're asking the producers about
18 their expenditures, their production costs for the last
19 year. An issue may be whether last year was a typical
20 year.
21 We were doing some work with our sugarbeet
22 growers a few years ago. Anyway, that particular year
23 turned out not to be a very typical one. They lost --
24 many of them had to replant their beets three different
25 times, as I recall.
0126
01 So these are important issues that come up
02 when --
03 Q. Professor Leistritz, are you aware that farmers
04 file tax returns?
05 A. Yes. I am aware of that.
06 Q. And in their tax returns they list their costs?
07 A. Uh-huh.
08 Q. Their cost of fertilizer and cost of fuel,
09 things like that?
10 A. Uh-huh.
11 Q. Wouldn't they be the best source of those
12 costs?
13 A. As I was alluding to earlier, the tax return --
14 the tax return can be a starting point, but, for instance,
15 again, if you have the tax return and the expenses are
16 itemized for fuel, fertilizer and so on, that does not --
17 that does not -- that gives an estimate -- that gives a
18 report of total expenditure. That does not, however, mean
19 that it will be easy to unequivocally allocate those costs
20 among enterprises if a farm has more than one enterprise.
21 Okay?
22 Another issue can be, depending on the
23 accounting system, changes in inventory. That is to say,
24 did we start the year with our fuel tank full or empty?
25 And, in fact, some -- when I used to teach
0127
01 farm management, we used to sometimes talk about how
02 buying supplies before the end of the -- deciding whether
03 to buy the supplies before the end of the year or after
04 the beginning of the next year could be a tax management
05 strategy for farmers to look at. So it isn't as simple
06 and unequivocal as it might seem at first observation.
07 Q. Would you really expect people who are
08 agribusiness members of the co-op or members of the league
09 in the EAA not to have accurate records of what they farm
10 and what the cost is of their farming operations?
11 MS. STINSON: Object to the form. I don't
12 believe that accurately characterizes his answer.
13 MR. ROSENBERG: I'm asking the question.
14 And I'll ask the court reporter to repeat it, if you
15 could, please.
16 THE REPORTER: "Would you really expect
17 people who are agribusiness members of the co-op or
18 members of the league in the EAA not to have accurate
19 records of what they farm and what the cost is of their
20 farming operations?"
21 THE WITNESS: As a general question, would
22 I expect or not expect these people to have accurate
23 records, one would expect them to -- I would expect them
24 to have accurate records that would be suitable for the
25 purposes for which they are intended, for instance, tax
0128
01 accounting in terms of whether that information would be
02 readily -- could be readily put into the form that one
03 might -- one might ideally desire. For some of the impact
04 analyses we've been alluding to, I don't think that's
05 necessarily a forgone conclusion at all.
06 And -- but, you know, I would certainly not
07 disagree with the premise that, yes, every producer in EAA
08 is probably obligated to file a tax return. So they will
09 certainly be expected to have tax returns. Most of them
10 or a substantial percentage at least need to have period
11 discussions with creditors so that they will probably have
12 -- a substantial proportion will have reasonably current
13 balance sheets.
14 QUESTIONS BY MR. ROSENBERG:
15 Q. Do you expect that these people from time to
16 time go to banks for loans and have to fill out
17 applications for loans --
18 A. That was --
19 Q. -- and make financial statements for loans?
20 A. Uh-huh. That was what I was trying to say when
21 I said that many of them, since they are dealing with
22 creditors from time to time, would need balance sheets and
23 similar financial statements, yes.
24 Q. And would you expect that the lending officers
25 would analyze the situation, cost and farming situation of
0129
01 the farmers before they issued a loan?
02 A. It would seem consistent with what I understand
03 to be prudent lending practice, yes.
04 Q. And wouldn't the analysis that you undertake be
05 a fairly similar analysis, that is analyzing raw primary
06 data or collected primary data in order to use that data
07 in some model you are using?
08 A. I'm not sure I fully understand the question you
09 are asking.
10 Q. All right. Your role is that of an analyst,
11 isn't it?
12 A. Yes.
13 Q. And you, as an analyst, collect data.
14 A. Uh-huh.
15 Q. And you collect primary data?
16 A. Sometimes, yes.
17 Q. And you collect data that has been sectioned or
18 labeled.
19 A. Uh-huh.
20 Q. And you analyze that data.
21 A. Uh-huh.
22 Q. When you analyze that data, you then put that
23 data in a model someplace.
24 A. Yes.
25 Q. And a banker analyzes data, too. Instead of
0130
01 putting it in a model, he decides whether it meets his
02 loan criteria. Is that not true?
03 A. That's one thing that should be pointed out, I
04 think, is that whereas the -- for instance, the banker is
05 interested in analyzing this information one farming unit
06 at a time to decide whether this specific farming
07 operation is a good risk for a loan, our interest -- our
08 interest would really not be in having information
09 farming unit by farming unit. We're not interested in one
10 particular farming unit. We would be interested in both
11 -- what one might call -- well, we would be interested in
12 knowing the profile for the EAA farms which includes
13 knowing both -- something about typical -- typical farm
14 units and also perhaps the degree of range of different,
15 you know, financial and operational parameters. But we
16 don't -- we would not be interested in knowing that the
17 Anderson farm has two million total assets and 1.5 million
18 in debts whereas the Jones farm has substantially
19 different numbers.
20 We would be interested in -- be interested
21 in sort of a statistical description of the EAA farms or
22 different strata of those farms.
23 Q. And for those items that are necessary for your
24 statistical description, wouldn't the best place to go
25 would be a survey of the individual farms?
0131
01 MS. STINSON: Objection. Asked and
02 answered.
03 QUESTIONS BY MR. ROSENBERG:
04 Q. You can answer.
05 A. The question, as I understand it, is wouldn't
06 the best source of this data be a survey of the individual
07 farms. And I guess the -- the answer to that question
08 might be a function of what criteria we use to define --
09 to define best.
10 Q. The absence of all other information.
11 A. Okay. I would -- I guess I would not -- I would
12 disagree that there is -- that there are no other sources,
13 there is no other information. Again -- again, while one
14 source of financial information is to go to the producers,
15 another source and one which is, you know, I think
16 commonly used in agricultural studies is the ag lending
17 community, not that one goes -- not that a researcher goes
18 to a lender to ask for -- whatever the right term would be
19 -- confidential financial information about a specific
20 farming operation, but, rather, lenders can often provide
21 information generally about the financial profile,
22 financial situation and so on of their customers.
23 Q. Do you know of any lender who issues a loan
24 based on Delphi?
25 MS. STINSON: Object.
0132
01 QUESTIONS BY MR. ROSENBERG:
02 Q. What is your answer?
03 A. I think my answer would be that I'm not -- I'm
04 having a little trouble understanding the relevance of the
05 question in that the lender -- the lender is concerned
06 about -- the lender is concerned about analyzing farming
07 operations one specific farming operation at a time and
08 essentially making an up or down decision for each
09 individual operation.
10 However, I do think -- it's my
11 understanding that lenders often use various kinds of
12 rules of thumb in evaluating -- in evaluating a farming
13 operation, looking at some of the different ratios, be it
14 the debt-to-asset ratio, the current ratio, and various
15 cost factors and so on. And to some extent, these rules
16 of thumb, if you will, that would -- that are being used
17 in these kinds of analyses, represent some -- some effort
18 at a professional judgment to say when a situation is
19 risky or when it is sufficiently sound to go ahead with
20 the loan.
21 I doubt that many -- I doubt that many
22 lenders would describe what they do as being a "Delphi
23 process," but certainly -- certainly judgment, including
24 some effort to find a consensus of judgment to interpret
25 financial indicators and so on, I think is a common
0133
01 factor.
02 Q. Would you expect if you receive information from
03 these lenders that they would have the information
04 arranged to indicate farm size differences?
05 A. That would -- that -- I would think that would
06 depend in part on the question -- on the question that was
07 asked to the lender, in other words, what do we ask --
08 what do we ask them for. If we ask them to give us
09 information, their best estimates based on some farm size
10 categories, then I would think that they would attempt to
11 do that.
12 Q. Is what you are saying to me that the precision
13 of the questions of the analyst to the source is what is
14 critical?
15 MS. STINSON: Object to the question.
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Is that true? Is the precision of the questions
18 of the analyst critical?
19 A. I would certainly say that the precision or the
20 nature of the question is important in conditioning the
21 type of information that you are likely to be able to
22 elicit, yes.
23 Q. So an analyst who would ask precise questions to
24 a primary source, a farmer, could get information from the
25 farmer straight out, could he not?
0134
01 MS. STINSON: Object to the question.
02 Let me --
03 MR. ROSENBERG: We're going to be here all
04 day on this subject matter. If we're going to be here
05 seven days, we're going to deal with it because he's
06 dancing around the floor here and I think everybody knows
07 it.
08 MS. STINSON: I don't think he's dancing at
09 all. I think he's giving you very straightforward
10 questions (sic). I think we're absolutely wasting time.
11 You have asked and gotten the same answer about a dozen
12 times, and pretty soon I will instruct him not to answer
13 because we're absolutely wasting everybody's time. He has
14 indicated to you sources of information, and you keep
15 trying to get him to say that he needs tax information.
16 He keeps telling you he doesn't need that information.
17 And that's the bottom line.
18 MR. ROSENBERG: He hasn't indicated to me
19 specific sources. What he has indicated is that they have
20 gone to various sources and it's incomplete. And I have
21 asked him what other specific sources he has. He hasn't
22 given me those specific sources. If he would do that, the
23 questioning might go on to a different subject matter.
24 MS. STINSON: I don't know that you have
25 asked him that question directly. Maybe if you try that
0135
01 directly, he will give you a direct answer of what sources
02 for particular information that he thinks he needs to do
03 his study.
04 QUESTIONS BY MR. ROSENBERG:
05 Q. Okay. What sources -- specific sources would
06 you get purchasing pattern information from other than
07 those sources that you have already contacted?
08 A. Okay. For purchasing pattern information -- and
09 I believe we're relating here to differences in purchasing
10 patterns by large integrated farming units versus smaller
11 independent operations -- the major source in addition to
12 producers that I would see for that information would be
13 local suppliers. That is instead of asking the buyers,
14 the farmers where do you buy your fuel and your fertilizer
15 and your seed and so on, one can go to the businesses in
16 the study area that supply these inputs and ask them what
17 -- you know, "What kind of farmers buy from you?"
18 One can also suggest that given -- there
19 are probably many kinds of inputs that we would find that
20 are not available throughout much -- within the EAA. So
21 that's going to -- those inputs large farms and small
22 farms are going to be acquiring elsewhere. But for input
23 purchase patterns then, I would say that suppliers would
24 be -- suppliers would be the alternative source.
25 And one advantage of talking to suppliers
0136
01 is there are probably quite a few -- there are fewer
02 suppliers typically than there are farmers.
03 Q. Have you done that? Have you gone to suppliers
04 for information regarding purchasing patterns?
05 A. Yes, in some of our work -- in some of our work
06 in the Midwest.
07 Q. Which suppliers have you gone to?
08 A. We have done -- we have done more than one study
09 where we went to -- well, farm co-ops, also farm machinery
10 dealers and suppliers of those kinds asking them about
11 their customer base and that sort of thing.
12 Q. In general, what has been U.S. agriculture's
13 history or the history of U.S. agriculture with retiring
14 land and reducing production? That is if you retire land,
15 does it reduce production or increase production of
16 remaining land?
17 A. I guess in response I would say this is probably
18 -- this is clearly a relatively broad question. If I
19 understand the question correctly, you are saying what has
20 been the general experience then with land retirement
21 programs in terms of their effect on production --
22 Q. Reducing production.
23 A. Or on the production of the remaining land.
24 My sense -- and, again, I would reiterate
25 that it is a broad question. My sense would be that the
0137
01 general experience has been that typically the land that
02 -- the land that has been retired in land retirement
03 programs has tended to be the less productive land within
04 a farming unit or eligible area or whatever and that
05 probably the experience on balance has been that the
06 management of remaining land has perhaps tended to be more
07 intensive, that is more -- the previously cited more
08 application of capital and management to the remaining
09 acres.
10 Again -- again, I would re-emphasize that
11 we're talking about a rather broad question here. That
12 would be my -- what I just responded would be my sense of
13 the literature overall. But it's certainly -- that's an
14 extensive literature covering probably a wide array of
15 specific types of programs and situations.
16 Q. CRP and soil bank removed land from farming?
17 A. Right.
18 Q. As a result of that, did the production on the
19 remaining acres of land that were farmed then go up, stay
20 the same or go down?
21 MS. STINSON: Excuse me. Are you talking
22 about a particular area or a time frame?
23 MR. ROSENBERG: I'm talking about
24 historically.
25 QUESTIONS BY MR. ROSENBERG:
0138
01 Q. Historically we've had these programs to take
02 land out of production. Am I correct?
03 A. Historically, there have been -- yeah, there
04 have been quite a variety of programs, some involving
05 taking land out of production for a short time period like
06 one crop year -- these sometimes go by different names --
07 others that retire land for a longer time period. And the
08 soil bank and CRP are examples of the latter.
09 I'm frankly not aware of studies that have
10 -- that have attempted to answer that question certainly
11 on a programwide -- on a programwide basis. I believe
12 that we -- that there have been studies that looked at
13 these issues on an area specific basis. And I'm
14 relatively certain that at least some of those found that
15 one result was more intensive management of remaining
16 acres. But I would be hard pressed to give you specific
17 citations. I would have to -- I would have to go and see
18 if I couldn't find the citations.
19 Q. Do you know whether there are national
20 statistics that show the relationship between land in
21 production and the total value of agricultural output?
22 A. Okay. At that level, certainly the answer is
23 yes. There are statistics. And, in general, what those
24 statistics would say is that we have over time been able
25 to produce -- produce in an increasing value of ag output
0139
01 from a stable or decreasing number of acres. So from a --
02 at that level of analysis, certainly we have seen a trend
03 of agriculture producing a growing output from a stable or
04 declining -- somewhat declining land base.
05 Q. If all farm sizes have the same purchasing
06 pattern, would economic impact change with a change in
07 farm structure?
08 MS. STINSON: Object to the form.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. Do you want me to repeat it?
11 A. The question, as I understand it, is that we
12 have -- we assume a change in farm structure, for
13 instance, fewer and larger units. There are no other
14 changes like land going out of production. Okay. And
15 we're saying is there -- would there be a measurable
16 change, a major change in economic impact from a change in
17 farm structure if purchasing patterns are the same.
18 I think my answer to that generally would
19 be that it would seem then that there would not be a major
20 economic impact per se if, in fact, our expenditures --
21 expenditures per acre both total and distribution are
22 staying the same and acreage is staying the same, then
23 there wouldn't be -- there wouldn't really be a change to
24 stimulate a major economic impact.
25 (An instrument was here marked as
0140
01 Deposition Exhibit No. 11 for identification.)
02 QUESTIONS BY MR. ROSENBERG:
03 Q. I ask you to identify Exhibit 11.
04 A. A chapter from a book. The title of the chapter
05 is "Rural Environments." There are three other authors
06 besides myself.
07 Q. When was this chapter written?
08 A. This chapter, I would say without referring to
09 my notes, probably about 1988 or '89.
10 Q. Let me direct you to page 116.
11 A. 116.
12 Q. And I'm going to read a sentence in the middle
13 of the lower paragraph. I should say bottom paragraph.
14 It starts, "To the degree that soil erosion
15 is primarily a problem because of off-site costs (in
16 response to which farmers cannot be expected to conserve
17 because the long-term productivity benefits of
18 conservation are small), research should shift to a more
19 macro level to determine the degree to which farmers'
20 incentive structures and resource management behaviors are
21 congruent with the public's (or nonfarmers') interest in
22 clean, navigable waters; and if it is clear that there is
23 a lack of congruence between farmer behavior and the
24 public interest, soil conservation policy would need to
25 shift toward mandatory regulation to protect the societal
0141
01 interest in having safe, clean water."
02 Directing your attention to that, is that
03 still your view today?
04 A. I think that sentence probably -- it's a rather
05 long and complex sentence, I must confess. I think
06 perhaps that sentence needs to be considered in a little
07 broader context. Basically what we're talking about is
08 decisions that farmers make in managing their land or
09 their resources which in some cases may impose off-site
10 costs or what some economists lovingly term externalities.
11 Okay.
12 So we have the farmer, land manager making
13 decisions that may impose off-site costs or internal costs
14 on others, people downstream in this case. And so in a
15 general context -- typically, society has had at least two
16 different kinds of responses to situations like this. One
17 is regulation. Another is -- well, one approach is some
18 sort of mandatory, regulatory program. Another approach
19 is some sort of voluntary program where individuals are
20 induced -- we have regulations where people are required
21 to change their behavior. We have other situations where
22 -- you know, the more voluntary program where people are
23 induced to change their behavior, the Conservation Reserve
24 Program being an example of the latter where people are --
25 people were voluntarily persuaded to take their land,
0142
01 marginal cropland, and put it into other use.
02 Or, on the other hand, we have many
03 examples of regulatory approaches relative to, for
04 instance, regulation of air emissions, water emissions and
05 so on from industrial plants. I guess my answer would be
06 that clearly there are, you know, strong cases that can be
07 made -- one can talk about pluses and minuses to both
08 kinds of approaches. There are things to be -- positive
09 and negative things to be said about both mandatory
10 regulatory programs and the more voluntary type of
11 program.
12 Q. I'll ask my question. The quote I read to you,
13 does that reflect your views today?
14 A. I think the statement, as it reads, may be -- I
15 would say is a bit narrow. I think that one needs to --
16 one needs to recognize that both -- that there are things
17 to be said for both the voluntary inducement approach and
18 the more mandatory, regulatory approach. I don't think
19 that either alternative should be rejected out of hand.
20 It depends on a number of factors that policymakers need
21 to consider, I guess.
22 Q. And I conclude then from what you said that the
23 quote does not reflect your views today?
24 MS. STINSON: Asked and answered.
25 Dr. Leistritz, if you believe you have
0143
01 already answered that question, you can say so.
02 THE WITNESS: Well --
03 MR. ROSENBERG: You are prompting the
04 witness. Yes or no would be an appropriate response.
05 Either it reflects his views today or it doesn't reflect
06 his views today. That's all I'm asking for.
07 THE WITNESS: Okay. I guess given yes or
08 no, I would say no, that it's too narrow.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. What is an externality?
11 A. Okay. Broadly defined, externalities are
12 typically defined by economists to basically represent a
13 situation where the actions of one party confer either a
14 cost or a benefit to other parties, the critical thing
15 here being that the party of the first part, so to speak
16 -- think about the farmer whose field is eroding. Okay.
17 His actions are imposing some costs on others who happen
18 to be downstream, downwind, and the farmer isn't -- those
19 costs are not really being reflected in the farmer's cost
20 function and his decision process.
21 The same thing can occur with external
22 benefits. Heck. Let me think of a good example. Where a
23 particular activity -- we've often thought that public
24 education had some -- you know, some external benefit
25 properties and so, hence, one of the rationales for public
0144
01 support of primary, secondary and higher education.
02 Is that responsive to your question?
03 Q. What is a positive externality?
04 A. Okay. A positive externality then is where the
05 action of -- action of the individual in question confers
06 benefits to others and -- okay. Think about our farmer.
07 And this farmer now --
08 Q. You have just answered the question. You are
09 not being responsive at this point, and I'm going to cut
10 you off because you have answered my question. I asked
11 you for a definition of a positive externality, and you
12 defined it.
13 A. Okay.
14 Q. What is a negative externality?
15 A. A negative externality then is where the actions
16 of one individual then confer -- basically confer costs or
17 cause damages to others as in the people downstream from
18 the eroding fields.
19 Q. Is phosphorus runoff from farms to others
20 downstream a negative externality?
21 A. To the extent that the others downstream feel
22 that the nutrient runoff is imposing costs or damages to
23 them, then that would meet the definition of a negative
24 externality.
25 Q. Going back to your quote on page 116, if farmers
0145
01 would show evidence of not coming forward to conform to
02 society's goals or to eliminate a negative externality,
03 what actions would be appropriate for society to take?
04 MS. STINSON: Object to form. I think
05 that's beyond his expertise and beyond the scope of his
06 testimony.
07 MR. ROSENBERG: He has a quote here. I
08 asked him to the degree of soil erosion, and he talks
09 about protecting societal interests in having safe, clean
10 water. I asked if it reflects his views today, and he
11 said no. So I'm now giving him a chance to tell me in
12 this fact situation what -- how narrow the view is or how
13 much the view has changed.
14 MS. STINSON: I think you are asking him to
15 make a public policy conclusion which he is not being
16 offered as a witness to do. He's being offered as a
17 witness in this proceeding to provide testimony on
18 economic analysis.
19 MR. ROSENBERG: I simply want to know his
20 view or his bias here, and I think the question is
21 directed to that. If farmers show evidence of not coming
22 forward to conform to society's goals or to eliminate any
23 negative externality, what actions would be appropriate
24 for society to take?
25 I don't think he needs to give me specific
0146
01 actions. I simply want to know his views in the area.
02 THE WITNESS: I would respond to the
03 question very much as we talked a few minutes ago that
04 there generically are kind of two approaches for society
05 to take, one the regulatory or mandatory control approach
06 and the other being -- okay, where some sort of a
07 regulation is established relative to emissions or
08 relative to practices, you know, can't spray closer than
09 so far from the water, whatever.
10 The other approach is -- generically is the
11 voluntary program which usually involves some form of
12 public incentive or subsidy, for instance, Federal cost
13 sharing of certain kinds of conservation practices which
14 makes the conservation practice more attractive to the
15 farmer than it would otherwise be. And so basically the
16 incentive -- incentive-type program, which also tend to be
17 voluntary-type programs, are one option; regulatory-type
18 programs which usually have a -- sort of basically are
19 distinguished by a mandatory control feature being the
20 other broad form. These are the two things that come to
21 my mind.
22 QUESTIONS BY MR. ROSENBERG:
23 Q. If it's a regulatory program, that has the
24 effect of internalizing the cost.
25 A. Right.
0147
01 Q. Am I correct?
02 A. Uh-huh. That's the intent, yes.
03 Q. If it is the other program, it has the effect of
04 sharing the cost or externalizing the cost?
05 A. That is okay. The second approach that you --
06 that you referred to being one that often involves cost
07 sharing or incentives to induce, for instance, landowners
08 to apply certain kinds of practices which are -- which are
09 intended to have the effect of reducing whatever external
10 problem we're concerned about or conversely if a -- if we
11 think certain kinds of activities have external benefits
12 and should be encouraged, a public incentive or subsidy
13 can have the effect of encouraging those activities by
14 making them more attractive to the landowner.
15 So I guess I'm not quite -- I'm having a
16 little trouble with the semantics of internalizing or
17 externalizing.
18 Q. The first option internalizes the cost. The
19 second option -- and let me restructure the question a
20 little bit for you.
21 What is the rationale for externalizing the
22 cost or having a public subsidy to cure a negative
23 externality?
24 A. Okay. The rationale for having a public subsidy
25 to cure a negative externality is that -- going to our
0148
01 upstream/downstream case, the folks -- it would be in the
02 interest of the folks downstream to have the people
03 upstream change their practices and if, you know, one --
04 one option for doing that is to essentially cost share
05 with them. Again, some of these discussions lead
06 themselves into discussion -- discussions or allusions to
07 property rights and who has a right to do what with their
08 property and this sort of thing.
09 But, again, sort of from a public policy
10 standpoint, there are different ways of trying to achieve
11 some of these things, a regulatory approach versus a cost
12 sharing kind of approach. And the fact that we have both
13 kinds of programs being used in our society suggests that
14 probably there are some positive things to be said about
15 the merits of each one.
16 Q. Okay. That's what I want -- I want to pursue
17 with you, that is the rationale of public subsidies to
18 cure negative externalities.
19 MS. STINSON: I am going to object. I
20 think that's beyond the scope of what he's here for. He
21 will not be giving opinions regarding the public policy
22 determinants but merely the economic analysis. It's
23 beyond the scope of his expertise as he's being presented
24 here today. I object to any further line of questioning
25 on that.
0149
01 MR. ROSENBERG: You are directing him not
02 to answer?
03 MS. STINSON: I think we're wasting a lot
04 of time. He told you what the two types are. And I think
05 he has indicated that he's not the person to say why you
06 choose one or the other. I think that's the bottom line.
07 MR. ROSENBERG: I'm not asking him to choose
08 one or the other. I'm asking him to define terms. I want
09 to know his position on some of these issues. If you are
10 directing him not to answer, that's all right. I just
11 simply want the transcript marked and we'll just take it
12 up.
13 MS. STINSON: He has defined the term --
14 the last question you asked him is: Why would you use one
15 or the other?
16 That's where I think his expertise ends.
17 That's for the public policy.
18 MR. ROSENBERG: Let me put my next question
19 in the record. You can direct him to answer it or not to
20 answer it.
21 QUESTIONS BY MR. ROSENBERG:
22 Q. If in a hypothetical situation a farm upstream
23 from me was dumping poison in a creek, would that be a
24 situation where I should pay for the stopping of the
25 poison dumping?
0150
01 MS. STINSON: Objection to form. Objection
02 to -- I think it calls for speculation and it is not
03 designed to seek relevant information in this case.
04 MR. ROSENBERG: Let me reconstruct the
05 question so I get past the formal objection.
06 QUESTIONS BY MR. ROSENBERG:
07 Q. If neighbors are dumping upstream from me, if
08 there would be the regulatory option, then he would be
09 told to stop dumping.
10 A. Uh-huh.
11 Q. If it would be the other option, I would be
12 forced to pay money to have him stop dumping. Am I
13 correct?
14 A. Yeah. Uh-huh.
15 Q. Do you favor one of those over the other in
16 terms of your personal views in the example I have just
17 given you?
18 MS. STINSON: Objection to the question. I
19 don't think we'll get to a question that I think he can
20 answer. So at this point, I'll instruct him not to
21 answer. I think it's just way beyond his expertise and
22 relevance to his testimony.
23 MR. ROSENBERG: I'm asking his bias here.
24 That's the whole point. I want to know if he's biased
25 against or for public subsidies. That's what I'm asking
0151
01 him. You are translating the question to something else.
02 MS. STINSON: Maybe that -- I don't object
03 to you asking if he favors one or the other.
04 MR. ROSENBERG: That's precisely what I
05 just asked him.
06 MS. STINSON: Well, I think the example was
07 a limiting factor. But if you want to ask him generally
08 whether he favors one or the other, I have no objection.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. I would like my example answered, and then I'll
11 ask you if you favor one over the other.
12 MS. STINSON: Dr. Leistritz, if you can
13 answer, given the example --
14 THE WITNESS: Okay. As I understand the
15 example -- okay. The people upstream who are dumping are
16 probably all -- are probably violating one or more rules
17 about discharge of noxious materials into public
18 waterways so that in that case it would seem likely that a
19 mandatory -- mandatory regulatory approach would kick in.
20 I guess philosophically I would say that it
21 seems to me that there are probably good and reasonable
22 reasons why we have both types of approaches. We have
23 regulatory approaches which are applied in some kinds of
24 cases. We have incentive cost-sharing types of approaches
25 that are applied in others both to -- well, in each case
0152
01 to cause behavior modification, although in some cases
02 it's to reduce external costs and in other cases probably
03 to promote what we regard as some external benefits.
04 From a -- as a general answer, it seems to
05 me that there probably is room in our public policy for
06 both kinds of approaches.
07 (An instrument was here marked as
08 Deposition Exhibit No. 12 for identification.)
09 QUESTIONS BY MR. ROSENBERG:
10 Q. Professor Leistritz, can you identify Exhibit
11 12?
12 A. Yes. Exhibit 12, a report titled "The Economic
13 Contribution of the Sugarbeet Industry of Eastern North
14 Dakota and Minnesota," authored by another gentleman and
15 myself in 1988.
16 Q. Okay. What is this document about?
17 A. What is the document about?
18 Basically, we had estimated the economic
19 impact or economic contribution of the sugarbeet industry
20 in this Red River Valley area of Eastern North Dakota,
21 Northwestern Minnesota. The primary indicators we used --
22 the basic method involved use of an input/output model.
23 And so we were estimating then the amount -- the business
24 volume by sector and the total employment that could be
25 attributed to the sugarbeet production and processing in
0153
01 the Red River Valley.
02 Q. I think we can ask a series of questions here
03 with almost one- or two-word answers.
04 Did you use FLIPSIM in conducting this
05 survey?
06 A. No.
07 Q. Have you ever used FLIPSIM in conducting any of
08 your surveys?
09 A. No.
10 Q. What method was used to get direct impacts in
11 this survey?
12 A. Two methods to get the direct impacts. For the
13 farm production expenditures, we used information from our
14 extension service on costs per acre for producing beets.
15 For the factory, the sugarbeet processing plant operating
16 expenditures for labor, materials, supplies and so on, we
17 got that information from a survey of the plants. Okay?
18 Q. Now, did you, in effect, use a spreadsheet
19 method of doing this survey?
20 A. I'm not --
21 Q. What model did you use, if any, in doing the
22 survey?
23 A. Well, to do the survey --
24 Q. When I say "the survey," I'm sorry. I withdraw.
25 To do the study. What model did you use to
0154
01 do the study? Was it a spreadsheet?
02 A. A spreadsheet type of program would be used to
03 aggregate or analyze the survey data to come up with the
04 total direct impacts. Okay. It would not require a
05 spreadsheet per se. You do it with a pencil and paper and
06 a calculator. Once the direct impact estimates had been
07 developed, we used an input/output model to estimate the
08 total impacts.
09 Q. Did you follow the method you described in the
10 book "Impact of Growth"?
11 A. Okay. We did not -- we did not do a baseline --
12 because it's an industry in place, we were not doing sort
13 of a baseline and impact scenarios. We also did not
14 basically look at like alternative futures for the
15 industry. We were doing a snapshot. In this case, we had
16 been asked to and we attempted to do a snapshot of a
17 particular point in time, in this case 1988.
18 Q. Do you consider the study to be a completed
19 study?
20 A. Yeah, based on the objectives that had been
21 outlined and the questions that we set out to answer, we
22 felt like we had addressed those questions.
23 Q. Did you address impact on schools and cities in
24 the study?
25 A. No.
0155
01 Q. In terms of what you did in this study, are you
02 able to compare that to what Hazen and Sawyer did with
03 its study regarding the district's direction for its EAA
04 study? Let me reconstruct that because I can see where
05 there would be an objection.
06 In terms of your study, are you able to
07 compare what you did in your study, your completed study,
08 to what Hazen and Sawyer did in their study?
09 A. I'm not quite sure I understand the question you
10 are asking.
11 Q. I believe you told me that you followed the
12 directions that you were given in doing your study. And
13 you answered the question that the people who gave you
14 directions wanted answered.
15 A. Uh-huh.
16 Q. Now, did Hazen and Sawyer -- are you able to
17 say in their study that they followed directions and that
18 they answered the questions that people making the
19 directions to them wanted answered?
20 A. Okay. I guess I would respond to that by
21 saying, A, I'm not aware in any detail what -- what -- to
22 use your words, what the people that directed Hazen and
23 Sawyer and their efforts -- what were the questions that
24 they wanted answered.
25 Q. I don't want to get into their mind. Hazen and
0156
01 Sawyer were given certain directions. They prepared a
02 document in response to those directions.
03 Is what Hazen and Sawyer did in responding
04 to the directions they were given the same as what you did
05 to respond to the directions you were given for this
06 study? Am I losing you?
07 MS. STINSON: You are losing me. I think
08 he indicated he didn't know what directions specifically
09 Hazen and Sawyer were given.
10 QUESTIONS BY MR. ROSENBERG:
11 Q. Is that your answer? You don't know what Hazen
12 and Sawyer --
13 A. Uh-huh.
14 Q. So you are then unable to compare what you did
15 compared to your directions as to what Hazen and Sawyer
16 did compared to their directions? Am I correct?
17 A. Uh-huh.
18 Q. So you have not read the -- would I be correct
19 to say that you have not read the Request for Proposals
20 that the district issued regarding the analysis of the
21 economic impact implementation of the Marjory Stoneman
22 Douglas Everglades Restoration Act and the U.S. versus
23 South Florida Water Management District Settlement
24 Agreement? You have not read that Request for Proposals?
25 A. I can't say positively that I have or have not
0157
01 read that Request for Proposals. Just looking at the
02 thickness of the document, my sense is I probably have not
03 read it.
04 Q. Do you recall having -- I'm showing you a copy
05 of the Request for Proposals, am I not?
06 A. I don't believe I have read that.
07 Q. Okay.
08 A. I would say in general that probably the
09 questions that we were trying to address in the sugarbeet
10 study were perhaps a somewhat different set of questions
11 based on a somewhat different, you know, moment in time
12 and set of issues compared to what Hazen and Sawyer were
13 addressing.
14 (An instrument was here marked as
15 Deposition Exhibit No. 13 for identification.)
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Let me show you Exhibit 13 and ask you if you
18 can identify it for us.
19 A. Exhibit 13 is a report titled "Contribution of
20 Public Land Grazing to the North Dakota Economy,"
21 authored by another gentleman and myself in 1992.
22 Q. Okay. Can you just quickly summarize that?
23 A. Yes. The objective here was not a great deal
24 different than the objective in the sugarbeet study. We
25 were asked to estimate the economic impact or economic
0158
01 contribution of the public land grazing industry in North
02 Dakota, that is the livestock producers who use public
03 lands. We were estimating the contribution of that
04 industry to the state economy.
05 Q. Would I be correct to say that you did not use
06 FLIPSIM in doing this?
07 A. That's right, yes.
08 Q. What method did you use to get direct
09 contributions here?
10 A. Okay. The method to get direct contributions
11 was first to estimate the magnitude of the public land
12 livestock grazing industry. We did this by first doing an
13 inventory of the public land that is grazed and then
14 estimating the number of livestock that would be supported
15 by that -- by that grazing.
16 We then -- we then went to our extension
17 service and their most recent -- what they call a budget
18 model for cow/calf production in the state -- the budget
19 is the summary of costs and returns from cow/calf
20 production -- and use that then to estimate the direct
21 impacts or the expenditures that would be associated with
22 this -- this many thousand additional calves and so on.
23 Then we used our input/output model to estimate -- having
24 estimated the direct impacts with this budget model,
25 basically a spreadsheet approach, then we used our
0159
01 input/output model to estimate the total impacts.
02 Q. So would it be fair to say it was a spreadsheet
03 approach and then you used an input/output model?
04 A. Yes.
05 Q. In doing this study, did you estimate the impact
06 on schools, cities, counties?
07 A. No.
08 (An instrument was here marked as
09 Deposition Exhibit No. 14 for identification.)
10 QUESTIONS BY MR. ROSENBERG:
11 Q. Let me show you Exhibit 14 and ask if you can
12 identify it.
13 A. Yes. Exhibit 14, an article titled "Developing
14 Economic Demographic Assessment Models for Substate Areas,
15 written by myself and two other gentlemen. This was
16 published in the Impact Assessment Bulletin, a journal, in
17 1990.
18 Q. Let me ask you to turn to page 63.
19 In the Summary and Conclusions part, I want
20 to read you the second to last sentence and I want to know
21 if this is still your view.
22 What was the date? This was in 1990?
23 A. 1990.
24 Q. "The evaluation also indicates, however, that
25 the projections were less accurate for the smallest and
0160
01 most rapidly growing areas, a problem common to most
02 methods for small-area projection."
03 Is that still your view?
04 A. Yes.
05 Q. Now, would I -- don't put it away. Would it be
06 fair to say that the smaller the area to be analyzed the
07 less accurate the analysis?
08 A. For most of the techniques with which I'm
09 familiar for doing economic and demographic projections,
10 the consensus of experience has been that projections will
11 tend to be less accurate the smaller the area and also the
12 more rapidly the area is changing.
13 Q. So if I would -- can I then -- let me withdraw
14 that.
15 If the EAA were sectioned off, made
16 smaller, compartmentalized, would the analysis of the
17 smaller sections within the EAA be less accurate than a
18 two- or three-county region projection?
19 A. Yeah. Let me answer the question, but let me
20 also -- okay. In general, experience seems to indicate
21 that projections will be less -- it is more difficult to
22 make accurate projections the smaller the area. So it
23 would fundamentally be more difficult to make accurate
24 projections of a certain level of accuracy for an EAA
25 versus for a three- or four-county area, perhaps more
0161
01 difficult to make projections of a certain level of
02 accuracy for that three- or four-county area as compared
03 to the State of Florida and so on.
04 The other thing that needs to be
05 considered, though, is the -- there is not -- in addition
06 to accuracy, we have to be concerned about the usefulness
07 of the projections to various kinds of decision makers.
08 And so while it would be -- while it's easier to do
09 an "accurate" projection for the state of Florida
10 compared to the town of Belle Glade, the projection for
11 the State of Florida may be of only limited usefulness to
12 the school planner in Belle Glade.
13 So from one standpoint, ever since -- ever
14 since folks I think have started trying to do these kinds
15 of impact projections, there has been the ongoing
16 discussion about it's hard to make accurate projections
17 for real small areas, but, on the other hand, decision
18 makers need projections at the level of their
19 jurisdiction, their school district, their town, et
20 cetera. And so that's kind of one of those -- one of the
21 fundamental challenges in this type of study.
22 Q. Am I correct to conclude from what you are
23 saying that the projection for the EAA would be more
24 accurate -- two-county area of the EAA would be more
25 accurate than any smaller subsection of that area?
0162
01 A. That would be -- that would be the general
02 expectation, yes.
03 Q. Now, in the studies that I have given you that
04 we've looked at, the last several exhibits, I asked you if
05 you did FLIPSIM. And you told me you didn't use FLIPSIM
06 for any of them. Am I right?
07 A. Uh-huh. Okay.
08 Q. Would I be correct to conclude that it's not
09 necessary to use FLIPSIM for economic impact analysis?
10 A. As a general proposition, yes, certainly.
11 Q. I want to go back and tie this matter up.
12 If you define an area such as the EAA that
13 is not congruent with county lines, it splashes over
14 county lines, does this increase or decrease accuracy in
15 terms of making the project smaller or larger?
16 What effect does it have when you have a
17 project that crosses county lines?
18 A. Okay. If one has a project such that the study
19 area doesn't conveniently -- crossing county lines is
20 probably not the biggest problem. The big problem is
21 where your study area takes in only a portion of this
22 county and then a portion of this other county because so
23 much of our secondary data is available only at a --
24 typically only at a county level. For instance, the
25 annual employment and income series from the Bureau of
0163
01 Economic Analysis of the Department of Commerce -- these
02 are reported at a county level.
03 Fortunately, some of the basic census
04 information, the population counts and so on, are
05 available at the subcounty level from tapes. And so that
06 is an outlet. Fundamentally, it would be very nice if all
07 projects conform nicely to study areas that would fall in
08 county boundaries.
09 (At this time a brief recess was taken.)
10 QUESTIONS BY MR. ROSENBERG:
11 Q. Regarding your assignment in this case, what's
12 the date that you were first contacted? You can just
13 give me the month.
14 A. It would have been latter part of July, 1992.
15 Q. Was the contact in writing or by telephone?
16 A. Initially by telephone.
17 Q. Who contacted you?
18 A. Dr. Ron Luke.
19 Q. Was it later confirmed in writing?
20 A. I'm sure it was, yes.
21 Q. What do you understand your role is?
22 A. To provide advice with regard to the economic,
23 demographic, public service and fiscal analysis in the
24 project.
25 Q. Would you repeat that for me, please.
0164
01 A. Provide RPC with advice and guidance relative to
02 the economic, demographic and to some extent public
03 service and fiscal analysis portions of the project.
04 Q. Were you to make periodic reports?
05 A. Yes. The answer is yes. It's not a schedule
06 of, for instance, providing a report every week or every
07 two weeks. Rather, as there are some things substantive
08 to report or deliver, I report or deliver it.
09 Q. Did you make reports?
10 A. Yes. I provided information to Dr. Luke and his
11 colleagues on a number of occasions since the project
12 began.
13 Q. How many reports did you make regarding the
14 project?
15 A. I'm -- this is strictly an estimate. I would
16 say I have made -- I have provided at least 10 substantive
17 reports.
18 Q. In any of these reports did you finish any
19 segment of the project you were assigned?
20 A. I think the answer should be yes. The project
21 has been in segments. The first segment was to review the
22 two Hazen and Sawyer documents. The second was provide
23 -- well, developing material leading up to our opinions
24 that were delivered in late October. There were also
25 interim components, everything from developing --
0165
01 developing work plans and the like. So the answer would
02 be yes. I have completed some of the things that I was
03 assigned.
04 Q. Including an opinion, a preliminary opinion in
05 October?
06 A. Yes.
07 Q. What did that preliminary opinion concern?
08 A. Okay. This was basically -- the document that
09 was delivered by RPC summarized our opinions concerning
10 the impacts of the -- of the project and our views
11 regarding the adequacy of the analysis, the studies that
12 had been done to date.
13 Q. Were these opinions authored by you personally?
14 A. Basically by myself and Dr. Luke.
15 Q. Were these --
16 A. In collaboration.
17 Q. Were the reports that you submitted, 10
18 substantive reports, authored by you?
19 A. Yes.
20 Q. Were the 10 reports and the opinion in October
21 -- were they part of the package of documents that were
22 turned over to the government?
23 A. Okay. When I referred to different reports I
24 had made, many of these were, for instance, letters by
25 myself to Dr. Luke, that sort of thing. So I don't know
0166
01 whether all of those materials -- I would doubt that all
02 of those materials were part of the package, but I don't
03 know that for sure. Many of the things that I would have
04 delivered to Ron would have been subsequently incorporated
05 into, for instance, his review document that we delivered
06 in August relative to the two Hazen and Sawyer reports.
07 Q. Who did you deliver it to?
08 MS. STINSON: Excuse me. I believe we have
09 provided to you all nonprivileged correspondence and any
10 piece of paper that was generated as a part of this
11 project.
12 MR. ROSENBERG: I didn't see anything
13 entitled opinion unless -- I have seen documents, but I
14 don't know anything that's been entitled opinion or
15 entitled --
16 MS. STINSON: There was, I believe, one
17 that I sent you separate from the other documents a week
18 or so later.
19 Do you recall that, Keith?
20 Off the record.
21 (At this time there was a brief discussion
22 off the record.)
23 MR. ROSENBERG: I think we better go on the
24 record.
25 You showed me a document. I only saw the
0167
01 date dated October 23rd. I have not received a copy of
02 that document. I do not have a copy. I have an October
03 2nd document. But those are just entitled "Thoughts on
04 the Economic Aspects of the SWIM Plan Challenge." I do
05 not have, to the best of my knowledge, a document dated
06 October 23rd.
07 Let me just take a look at the face sheet.
08 I won't look at your document. I just want to look at the
09 title of it. If you want, I'll cover it up here.
10 I don't recall having seen this document
11 from looking at its title. And let me show it to Keith
12 and Professor Jones.
13 Do you recall -- just look at the title --
14 having seen that document?
15 MR. JONES: I don't believe I have seen
16 that.
17 MR. SAXE: No, I don't recognize that.
18 MS. STINSON: Let me take a look. It may
19 be something that I have pulled as privileged, but let's
20 see what we can do. Let me ask.
21 (At this time there was a brief discussion
22 off the record.)
23 MS. STINSON: I didn't bring my privileged
24 things with me. I'll tell you what we can do. I think
25 it's probably on my privilege list which is why I had not
0168
01 produced it. But I'm willing to produce it at this time
02 if we can get a copy made here and then you can have it
03 overnight and talk about it tomorrow.
04 MR. ROSENBERG: All right. Do you have
05 your privilege list with you?
06 MS. STINSON: No, I don't.
07 MR. ROSENBERG: I wonder if you can get it
08 faxed to you.
09 MS. STINSON: Probably.
10 You know you have seen this, have you not,
11 comments -- the August comments? I'm pretty sure you got
12 that.
13 MR. ROSENBERG: Yes. I don't want to look
14 at your notes. I'm not doing that. I think we've seen
15 that.
16 MR. SAXE: We have seen a document that
17 looks like that superficially. I don't know if the date
18 is exactly the same, the graph, that kind of thing.
19 That was a publicly produced document,
20 correct?
21 MS. STINSON: I think it was handed out.
22 I'm not -- I wasn't around, so I can't be sure of that. I
23 haven't asked. The substance of that was presented.
24 QUESTIONS BY MR. ROSENBERG:
25 Q. Now, let me step back for a second.
0169
01 The 10 substantive reports that you
02 produced -- are those segregated someplace? Can those be
03 produced so that your lawyer can take a look at those and
04 determine whether they have been submitted or not? I
05 don't know what they are, what dates are on them. I don't
06 know if they are part of something else. I don't know if
07 they are separately designated, but I would like to see
08 them.
09 MS. STINSON: Off the record again.
10 (At this time there was a brief discussion
11 off the record.)
12 MR. ROSENBERG: Let's go back on the record.
13 During the time we were off the record, I
14 asked counsel about those 10 substantive reports. I asked
15 her to ask the witness whether he had those compiled
16 separately someplace. My understanding is that he does.
17 And I would ask counsel to ask the witness to deliver
18 those to her so we could determine whether those were
19 turned over to us or not. At this point we can't tell
20 because we don't know what dates are on them and I don't
21 know that they are separately marked as report. It may be
22 that we have some or all or parts of them, but there is no
23 way to know at this point.
24 THE WITNESS: They are basically in the
25 form of letters and memos.
0170
01 MR. ROSENBERG: We have plenty of those,
02 but those which are of the status of reports may be far
03 different from others.
04 MS. STINSON: Off the record again.
05 (At this time there was a brief discussion
06 off the record.)
07 MR. ROSENBERG: What we had turned over to
08 us is dated October 23rd, 1992, a draft statement of
09 opinions for October 26, 1992. I would certainly like to
10 look it over before I start asking him opinion questions
11 now. What we may do is ask him other questions and maybe
12 come back to that --
13 MS. STINSON: That's fine.
14 MR. ROSENBERG: -- tomorrow.
15 Let me pursue this matter of documents.
16 Counsel stated that she sent to Keith Saxe
17 a copy of her list of privileged documents.
18 MS. STINSON: I think I mailed it Friday.
19 You wouldn't have gotten it before you left. I think it
20 went out.
21 MR. ROSENBERG: Perhaps during a break I
22 would suggest call your office, if that's possible, and
23 have them fax it here to the U.S. Attorneys Office. Maybe
24 that would expedite matters.
25 MS. STINSON: Off the record.
0171
01 (At this time there was a brief discussion
02 off the record.)
03 MR. ROSENBERG: Here is the problem.
04 Exhibit 4 is a letter covering two publications. Okay.
05 Now, while that may be a form of report in the witness'
06 contemplation, what we mean by report is something
07 different. It has some analysis, some statement. That is
08 simply a cover letter.
09 THE WITNESS: Well then, in that context, I
10 probably haven't produced -- I haven't probably produced
11 anything from my own individual efforts that you would
12 then describe as a report.
13 QUESTIONS BY MR. ROSENBERG:
14 Q. What about the memorandum that you spoke about
15 earlier? You said some of these may be in memorandum form
16 and some may be in letter form.
17 Would those memorandum be in the nature of
18 a report? The problem is counsel should probably look
19 those over to decide what they are before -- you know,
20 we're just speculating about what we don't know.
21 I propose to move on in answering my
22 questions and come back to some of these points later. I
23 want to take advantage of whatever time we have left.
24 Can we do that?
25 A. Yeah.
0172
01 Q. Was there a precise subject matter that was
02 designated to you that was going to be your area of
03 responsibility, a precise subject matter?
04 A. No. Basically, Ron and I had talked about who
05 would do what. And my responsibilities were relatively
06 broad relating to, as we mentioned before, economic,
07 demographic, public service, fiscal effects, and also
08 including identifying -- identifying studies of facility
09 closures from other settings. So, yeah, my role, as I
10 understood it, was to be relatively broad in advising and
11 assisting Dr. Luke and his colleagues in the study.
12 Q. Were you to oversee others?
13 A. To some extent, yes.
14 Q. Who were the other parties in this group
15 effort?
16 A. Okay.
17 Q. The other persons in this group effort.
18 A. There are several people who work for Ron at RPC
19 who have been involved in different aspects of the
20 project. And I can name some of them for you, if you
21 wish.
22 Q. Please.
23 A. Okay. Kimberly Manley, Jeanne Werner, Melissa
24 Cox, who is no longer at RPC, and Jeff Tomlinson, who has
25 recently joined RPC, are four who have -- basically from
0173
01 time to time I have conferred with them about data needs
02 and so on.
03 Q. What about Ann --
04 A. Ann Orzech --
05 Q. -- Orzech?
06 A. -- would be another.
07 Q. Anyone else in the group?
08 A. Those are the main people with whom I have
09 interacted.
10 Q. Were they given specific jobs to do or specific
11 areas to cover?
12 A. Yes, at least to some extent. And I'm -- I
13 would not be -- I may not be totally cognizant of who was
14 given what assignments. But, yes, I do know that specific
15 people were assigned to specific tasks.
16 Q. To the extent of your knowledge, what was Ann
17 Orzech's tasks?
18 A. Ann Orzech's tasks have been primarily related
19 to public service and fiscal analysis, that is the tax
20 assessment tapes, the -- well, costs and revenues of local
21 jurisdictions, that sort of thing.
22 Q. Okay. What were Kim Manley's tasks?
23 A. Okay. Kim, as I understand it, is kind of a
24 general assistant at the office there, so she has been
25 collecting data from a variety of sources to develop the
0174
01 area profile and so on.
02 Q. What were Jeanne Werner's tasks?
03 A. Jeanne Werner -- her main task related to the --
04 well, related to the topic of the employability of EAA
05 agricultural workers should some of these scenarios result
06 in significant displacement of workers.
07 Q. What were Melissa Cox's tasks?
08 A. While she was at RPC, which was a relatively
09 brief period, my understanding was that she was supposed
10 to be kind of the overall day-to-day project manager,
11 coordinator.
12 Q. Okay. What were or are Jeff Tominson's tasks?
13 A. It's my understanding that Jeff is supposed to
14 do what Melissa used to do.
15 Q. All right. So he's a substitute for her?
16 A. Uh-huh.
17 Q. What substantive tasks did Ron Luke have?
18 A. Well, Dr. Luke, of course, has overall direction
19 of the project, overall charge of preparing the things
20 that have been delivered to date. In addition, he's
21 taking a lead in the sort of public policy analysis,
22 public policy dimension.
23 Q. Okay. Dr. Luke is a Ph.D?
24 A. Yes.
25 Q. Ann Orzech is a Ph.D?
0175
01 A. I believe not.
02 Q. She's an economist?
03 A. Yes, uh-huh.
04 Q. Is Jeff Tomlinson an economist?
05 A. Yes, that's my understanding.
06 Q. Is he a Ph.D?
07 A. No.
08 Q. Was Melissa Cox an economist?
09 A. That's my understanding.
10 Q. Okay. When we say "economist," that means at
11 least she has a Master's degree in economics?
12 A. I believe that's right.
13 Q. Jeff Tomlinson has a Master's degree in
14 economics?
15 A. I can't say for sure.
16 Q. To the best of your knowledge?
17 A. I only met Jeff for the first time yesterday.
18 Q. Does Ann Orzech, to the best of your knowledge,
19 have at least a Master's degree?
20 A. Yes.
21 Q. Does Jeanne Werner have a Master's degree in
22 economics, to the best of your knowledge?
23 A. I don't know.
24 Q. Kim Manley
25 A. Kim Manley, no.
0176
01 Q. Does she have an economics degree at all?
02 A. Bachelor's in economics from Texas A&M, as I
03 recall.
04 Q. The analytical work as opposed to the hunting
05 and gathering work -- can I separate those two out, the
06 analytical work as opposed to the hunting and gathering?
07 A. Yeah.
08 Q. Dr. Luke was to do analytical work. Am I
09 correct?
10 A. Yeah.
11 Q. Ann Orzech was to do analytical work?
12 A. Right.
13 Q. You are to do analytical work?
14 A. Yep.
15 Q. Am I correct?
16 A. Yep.
17 Q. Was Kim Manley to do analytical work or hunting
18 and gathering?
19 A. I think she would appropriately be classified
20 largely as hunter and gatherer.
21 Q. What about Jeanne Werner?
22 A. Jeanne was expected to do analytical work.
23 Q. Melissa Cox?
24 A. Melissa would have been involved in both.
25 Q. Jeff Tomlinson therefore is also involved in
0177
01 both?
02 A. Right. That's my understanding.
03 Q. Regarding the analytical work, has -- have any
04 members of the team completed analytical work on any
05 aspect of the project?
06 MS. STINSON: Are you asking the project as
07 it is defined today?
08 MR. ROSENBERG: Let's back up then.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. The project apparently has had -- it has changed
11 from time to time. So there was an initial contract with
12 a set of tasks.
13 A. Right.
14 Q. And then that initial contract was expanded. Am
15 I correct?
16 A. Yes.
17 Q. With a further set of tasks?
18 A. Yes.
19 Q. Has it been further expanded beyond that? I
20 mean, we're going to talk about that in a second. Just
21 for outline sake, has it been expanded again a second
22 time?
23 A. I would say there have been at least two
24 expansions.
25 Q. Okay. Regarding the initial contract and the
0178
01 obligations in that contract, what was to be done within
02 the initial contract?
03 A. Some of this might be better addressed by Dr.
04 Luke. And I would --
05 Q. To your understanding, what was to be done?
06 A. I can report my understanding, but this is --
07 this is probably second- or third-hand information.
08 My understanding is that the first contract
09 was basically simply to review the two documents, the
10 Hazen -- the two Hazen and Sawyer reports. And so work
11 under that contract was completed in August.
12 Q. That's done.
13 Now, the first expansion, what was that to
14 include?
15 A. The first expansion was basically to do -- to do
16 some preliminary analysis taking Hazen and Sawyer and
17 Polopolous/Richardson as points of departure in a sense.
18 And this was work that was to be done during September,
19 October, and leading up to basically this statement of
20 opinions that -- yes.
21 Q. So was the work that was included in the first
22 expansion completed?
23 A. That's my understanding, yes.
24 Q. And so the October 23rd memorandum is the
25 document that signifies completion of the first
0179
01 expansion?
02 A. That's my understanding, yes.
03 Q. After the first expansion, there was a second
04 expansion?
05 A. Yes.
06 Q. What was encompassed within the contract
07 regarding the second expansion?
08 A. I have not seen a contract, so I can only speak
09 in kind of general terms.
10 Q. To the best of your knowledge, what did that
11 second expansion do?
12 A. The second expansion is really to do a community
13 impact assessment for the communities in the study area.
14 Q. So that is a socioeconomic assessment?
15 A. Uh-huh.
16 Q. Was essentially what that second expansion was
17 to do?
18 A. Right.
19 Q. Okay. Now, have any of the tasks relating to
20 the second expansion -- have any of those tasks been
21 completed?
22 A. Okay. I think the answer to that needs to be
23 no. That is there is not -- there is not a component that
24 we would say is completed, done and not subject to further
25 analysis. Okay?
0180
01 Q. Now, within those components, have any of the
02 tasks been done? That is all of the information has been
03 gathered in Subject Matter A, all of the information has
04 been gathered in Subject Matter B simply awaiting analysis
05 perhaps?
06 A. We believe that our -- that our area profile has
07 essentially been completed or largely completed.
08 Q. So would it be fair to say then that the hunting
09 and gathering function of the group is over?
10 A. Rather than saying over, I would prefer to say
11 probably substantially completed.
12 Q. Now --
13 A. There will be some additional information
14 collection and refinement and enhancement over time
15 certainly.
16 Q. What presently remains to be done in terms of
17 the hunting and gathering function?
18 A. Okay. One area probably for -- where there is
19 some additional data, data collection, hunting and
20 gathering is likely to be in the farm level analysis where
21 it now appears that we will be doing some -- doing some
22 analyses with this FLIPSIM model which will require a
23 certain amount of data collection.
24 Another area where we are still needing
25 information is a better description of the -- of the STA,
0181
01 stormwater treatment area construction phase of the
02 project, that is expenditures, employment and the like.
03 A third area may be some better definition
04 of the BMPs and how they are to be handled.
05 Q. Okay. Let me go to the first area that you
06 talked about, and that was the FLIPSIM model.
07 A. Uh-huh.
08 Q. Are these models separate or different from that
09 which was done by either Hazen and Sawyer or Polopolous
10 and Richardson? Are these in separate areas, different
11 areas?
12 MS. STINSON: Excuse me. Clarification.
13 Is the model different or is --
14 MR. ROSENBERG: Well, let's back up.
15 QUESTIONS BY MR. ROSENBERG:
16 Q. Hazen and Sawyer did a -- tell me if I have it
17 right -- direct impact study, indirect impact study,
18 economic analysis.
19 A. Uh-huh.
20 Q. Richardson and Polopolous -- they then said
21 Hazen and Sawyer's work was deficient in one tool or
22 another or three areas, right?
23 A. Yeah.
24 Q. And then you started off from that. That was
25 your point of departure you just told me. Am I right?
0182
01 A. Uh-huh.
02 Q. The work that you are going to do on FLIPSIM, is
03 that going to be a repeat of what either Hazen and Sawyer
04 or Richardson did or is it going to be a different, a
05 discrete area?
06 A. It would be -- we would not be repeating the
07 analysis that they have done. We would be -- whatever
08 FLIPSIM analysis we do would be additional scenarios or
09 modified scenarios rather than a repetition of what they
10 have done, to the best of my knowledge.
11 One thing that -- one thing that makes it a
12 little hard for me to specify totally what we'll be doing
13 in that area is that I'm aware that Hazen and Sawyer is
14 doing this -- is currently working on a second study, a
15 20-year study.
16 We would -- we are hoping to learn more
17 about that they are doing in that study so that we won't
18 -- that whatever we do doesn't end up being just a
19 duplication of what they are doing.
20 Q. Now, what are the scenarios that you are going
21 to model with FLIPSIM?
22 A. Okay. Well, I guess the best answer to that
23 question is that we have not -- we have not fully
24 specified those scenarios as yet.
25 Q. Okay. So am I to understand that what the
0183
01 current state of the second expanded contract is using
02 FLIPSIM for certain scenarios which are as yet
03 unspecified?
04 A. Right.
05 Q. Gathering information on STAs, cost, matters
06 such as that which you would then write about, but you
07 don't have that information yet, so you are waiting for
08 that information to come in?
09 A. Right.
10 Q. You are waiting for BMP information to come in?
11 A. Right.
12 Q. Who is going to supply the BMP information? Who
13 are you waiting for that information to be supplied by?
14 A. I guess I'm not sure I know the answer to that
15 question. That is I'm not sure if that's something that
16 would be coming from the district, if that's something
17 that comes -- that will be part of the current Hazen and
18 Sawyer study. I guess I have to say I don't know the
19 answer to that question for sure.
20 Q. What type of information are you expecting on
21 BMPs?
22 A. Okay. I guess that -- well, as I understand it,
23 what the -- in large measure, what BMPs have been agreed
24 to, how it is envisioned that these will be implemented.
25 And I guess -- I think we have decided, but a question --
0184
01 another question is whether the BMPs are part of -- are to
02 be considered part of the baseline for the study or
03 whether -- a question that had been before us was whether
04 the BMPs should be considered as part of the baseline for
05 the study or as part of the alternative scenarios. So
06 those are some of the -- those are some of the questions.
07 Q. You have gotten me confused. Let me tell you
08 what my confusion is and I'll ask a question.
09 Hazen and Sawyer ran a baseline.
10 A. Yes.
11 Q. Then ran a baseline with BMPs.
12 A. Yes.
13 Q. Then ran one with BMPs and STAs, and then ran
14 one with assessments, right?
15 A. Uh-huh.
16 Q. You are not going to duplicate any of that.
17 Are you -- what then are you doing with the
18 BMP information? If you are not going to duplicate what
19 Hazen and Sawyer did, where does what you want fit in
20 someplace?
21 A. Okay. I guess that -- I guess again some of
22 these questions might be better directed to Dr. Luke
23 because he's been in charge of sort of the day-to-day
24 communications with the different entities in Florida.
25 But I guess it's my understanding that
0185
01 perhaps the Hazen and Sawyer analysis may not be the --
02 may not be the final word on BMPs I guess. And I guess
03 then -- I guess the other question is: Are the BMPs part
04 of the baseline or are they part of an alternative
05 scenario?
06 This is a -- this I believe is a relatively
07 minor point but one that we ultimately need to decide.
08 Q. Let me tell you what my confusion is.
09 If that's true, that's just a question of
10 what line you put BMPs on or your restructuring what we
11 already have. What I understood you to say earlier was
12 that you were waiting for information on BMPs. That's not
13 a restructuring. That is getting additional data.
14 You understand?
15 A. Uh-huh.
16 Q. So I -- I'm not sure whether what you are doing
17 is restructuring something or gathering BMP information
18 and then putting it in someplace. And I don't know where
19 that would go in unless you are going to substitute a
20 couple of numbers on a line.
21 A. Yeah. I guess the short answer is I'm not sure
22 exactly the status of the BMP analysis. I'm not totally
23 clear on that.
24 Q. Or whether it's structural or substantive --
25 A. Right.
0186
01 Q. -- at this point? Okay.
02 Now, when do you expect a final opinion to
03 be rendered by RPC regarding the expanded -- second
04 contract expansion?
05 A. I don't -- I don't believe I am in a good
06 position to answer that question. That would be much
07 better directed to Dr. Luke.
08 Q. Are there tentative or interim opinions
09 subsequent to October 23rd, 1992 which, after all, was
10 four months ago?
11 A. Three months ago.
12 Q. Three months ago. I'm sorry. If we sit here
13 any longer today, it will be four months ago.
14 A. I'm not aware of other subsequent formal
15 documents on a par with the October 26th document.
16 Q. What about informal opinions? After this
17 document, there have been meetings and discussions. Have
18 there been any informal opinions?
19 MS. STINSON: Are you talking about
20 meetings between counsel and --
21 MR. ROSENBERG: No. No.
22 QUESTIONS BY MR. ROSENBERG:
23 Q. RPC, as I understand it, has its own internal
24 meetings sometimes and people either send each other
25 faxes, get on the phone together, correspond together or
0187
01 otherwise meet from time to time. And they meet from time
02 to time and discuss the flow of the project.
03 A. Uh-huh.
04 Q. And they have met since October 23rd, 1992.
05 A. Yes.
06 Q. Okay. Are there subsequent opinions, while not
07 in final form, are tentative opinions that have been more
08 or less set?
09 A. I don't -- there are not -- there are not
10 definite opinions or topics that come to mind in that
11 regard.
12 Q. So it would be fair to say that this document as
13 of October 23rd reflects your latest thinking?
14 A. That was -- yeah, that was our last -- our most
15 recent attempt to pull together our thinking and analysis,
16 yes.
17 Q. There has been no opinion, final or tentative,
18 regarding community impacts as of this point? Am I
19 correct?
20 A. Right.
21 Q. Okay. Starting with the date you were retained
22 in this matter, how many hours have you spent on this
23 case?
24 A. Oh, my.
25 Q. Let me back up.
0188
01 Do you keep time records?
02 A. Yes.
03 Q. Do time records accurately reflect how many
04 hours?
05 A. Yeah.
06 Q. Can you give us a rough idea now approximately
07 how many hours you have put in on this case?
08 A. Okay. I would say between 100 and 200. I would
09 have to go back and actually check my records.
10 Q. Since last July?
11 A. Yes.
12 Q. When you keep your time records, do you also
13 make progress notes?
14 A. Sure.
15 Q. Have those been turned over to counsel and
16 turned over to us or have you retained those?
17 A. Well, I guess it depends on what you define as
18 progress notes. As I had something that was ready to --
19 ready to turn over to Ron, I was sending --
20 Q. You sent it off?
21 A. Right. You should have -- I guess the answer is
22 you should have copies of essentially everything.
23 Q. Okay. Now, you say 100 hours or so you put in
24 the project?
25 A. I was estimating between 100 and 200.
0189
01 Q. Estimates are fine. I'm not going to hold you
02 to an exact figure.
03 Tell me the way in which you spent those
04 hundred hours. Were you reading journals? Were you doing
05 a literature survey? Were you -- what were you doing?
06 A. Okay. Starting back in July, early August,
07 reviewing the two Hazen and Sawyer documents. We also did
08 some literature search at that time finding some of the
09 sources that were cited in the Hazen and Sawyer reports
10 and related documents.
11 In early September, when we started the
12 second phase of the work, my first task, I guess, was
13 essentially developing a work plan for Ron, for Dr. Luke,
14 of major tasks to be completed in September and October.
15 Then I did some substantial hunting and
16 gathering work and interacted with some of the RPC group
17 about best places to pursue hunting and gathering. I was
18 -- had some primary responsibility for evaluating
19 essentially some of the economic and demographic impact
20 dimensions of the -- implications, I guess you could say,
21 of the Hazen and Sawyer and Polopolous and Richardson
22 results.
23 Q. You completed those tasks?
24 A. Yes. This was leading up to the October 26th
25 milestone.
0190
01 Q. Okay. Did you read any depositions or
02 interrogatories or pleadings in the case?
03 A. I don't remember reading depositions. I read --
04 I read a couple of documents which I think would be what
05 you are describing as pleadings and a good deal of other
06 sort of background papers and literature relative to the
07 case.
08 Q. Do you recall which studies you looked at
09 regarding the tasks you had in this case?
10 A. Oh, well, some substantive things that we have
11 examined would include several economic impact studies
12 prepared by --
13 Q. You say "we" again.
14 A. Things I have looked at would include several
15 economic impact studies prepared by IFAS, one on the
16 impact of the dairy (sic) rules in Okeechobee County.
17 There were several IFAS studies that I looked at primarily
18 to ascertain the approach that they had been -- that they
19 had been using.
20 We did some reading --
21 Q. Do you recall what those studies were, who
22 authored those studies?
23 A. The primary author was -- the author who was
24 common to almost all of them was David Mulkey,
25 M-u-l-k-e-y. And some other things that we spent some
0191
01 time looking at included reports and other documentation
02 of the RIMS model and also some reports prepared by the
03 Bureau of Economic and Business Research at University of
04 Florida relative to their population -- their population
05 projections, employment projections and population
06 projection methods.
07 So those would be some substantive things,
08 also some background -- some background information on the
09 Florida sugar industry, particularly some -- well,
10 particularly one or more reports by the sugar group at
11 USDA and also several reports, several short reports from
12 IFAS that provided background on sugar policies, sugar
13 industry and so on.
14 Q. Did you seek or receive or look at any materials
15 from the sugar league?
16 A. To the best of my recollection, very little
17 material from the sugar league. I do think I recall a
18 very short document of only maybe two to four pages that I
19 think came -- was a product of the sugar league.
20 Q. Do you recall what that document was?
21 A. Not -- it seems to me it was kind of some
22 general background information, but I don't -- I don't
23 recall with much clarity exactly the focus of that
24 document.
25 Q. Did you look at any other economic impact
0192
01 studies other than the Mulkey study?
02 A. Some other economic impact studies that we
03 looked at included -- included Department of Defense base
04 closing studies. The most recent of those was a study of
05 the impact of closing the -- I forget the name of it.
06 It's an air base just north of Champaign, Illinois.
07 MS. STINSON: Chanute.
08 THE WITNESS: Chanute. And the interest
09 there was basically topics addressed, issues addressed in
10 recent studies that involve closing, shutdown,
11 downsizing-type things.
12 QUESTIONS BY MR. ROSENBERG:
13 Q. Other than those studies, were there any other
14 studies produced in Florida or by the water district or
15 otherwise related to sugar?
16 A. The ones I have mentioned are the ones that come
17 -- that come readily to mind.
18 MS. STINSON: Counsel, we have produced a
19 bibliography that was developed by RPC in conjunction with
20 this which should include all of the information.
21 MR. ROSENBERG: As far as the witness is
22 concerned, he's only familiar with the documents he has
23 given me, not necessarily -- there may be other people at
24 RPC that looked at other things.
25 MS. STINSON: Right.
0193
01 QUESTIONS BY MR. ROSENBERG:
02 Q. What you are telling me is what you looked at.
03 A. Another thing that I would add to the list would
04 be a bulletin prepared at Texas A&M University by Dr.
05 Richardson and others, vintage about 1986, which was a
06 description discussion of the FLIPSIM model.
07 Q. I asked you if you visited the scene. You told
08 me you had a meeting at the sugar house one time.
09 Am I correct?
10 A. Uh-huh.
11 Q. Okay. Have you had any meetings with any other
12 third parties involved here, that is people from the area,
13 suppliers?
14 A. No.
15 Q. Business people in the area, people like that?
16 A. No, except to the extent that the meeting that
17 we had at the sugar plant -- I'm not absolutely positive
18 of the affiliation of everybody who was in that meeting
19 room. But aside from that meeting, the answer would be
20 no.
21 Q. And the date of that meeting? Do you recall?
22 A. The first week of September.
23 Q. Were there notes taken of that meeting?
24 A. I'm sure that the answer is yes, but --
25 Q. Is there a sign-in sheet passed around at that
0194
01 meeting?
02 A. I believe there was.
03 Q. Have you sent out any questionnaires to
04 anybody --
05 A. No.
06 Q. -- in this case? Did anybody do so at your
07 direction?
08 A. No.
09 Q. Within your group, what was the protocol?
10 Everybody was going around doing their task and they would
11 report back to Ron Luke? Was this like spokes in a wheel
12 and he was at the hub of the wheel?
13 A. Yeah, that pretty well describes it, I think.
14 Q. Would you interact, say, with Ann Orzech and not
15 necessarily with Ron Luke on certain matters? Would that
16 be common? Was that done?
17 A. Ann Orzech, for instance, and I interacted on
18 the phone now and then, talked about what we were doing
19 and planning to do. I think it would be reasonable to
20 describe those conversations as ones where probably no
21 financial decisions were made because Dr. Luke is kind of
22 -- is kind of the boss.
23 Q. He has final editorial control over everything?
24 A. Yeah. I would say that's a fair statement.
25 Q. Is your compensation in this case based on an
0195
01 hourly fee?
02 A. Yes.
03 Q. Has it changed at any point in this case?
04 A. No.
05 Q. What is that hourly fee?
06 A. $90 an hour.
07 Q. Have there been any other assistants in this
08 case other than Kim, Jeanne, Melissa, Jeff, Ann, you and
09 Dr. Luke? Anybody else working on this case other than
10 those people?
11 A. I am not aware of others who have played -- who
12 have played a major role. But understanding that since
13 I'm based quite a ways from here, it's quite possible that
14 there may be other RPC staff who have had certain limited
15 assignments.
16 Q. Would it be common or was it the practice for
17 reports from other people, Ann Orzech or others, to be
18 circulated to everybody in the group for comment?
19 A. I couldn't -- I couldn't say whether it was
20 common for the reports to be circulated to everybody in
21 the group. Certainly -- I received copies of many of the
22 things that Ann might be doing and I think some of the
23 things that other people might be doing.
24 Q. Did -- were you ever contacted directly by any
25 attorney or by members of the co-op?
0196
01 A. Not -- okay. I have talked with Mr. Wedgworth
02 on the phone both one on one and in a three -- sort of a
03 conference call with Ron. But I think the -- I think the
04 answer would basically be no. That is any communication I
05 had with people from the sugar co-op would be as part of
06 some larger dialogue that Dr. Luke would have been
07 involved in.
08 Q. Were those communications in writing?
09 A. I just -- I only remember like one -- I think
10 one telephone conversation with Mr. Wedgworth that Ron
11 wouldn't have been directly involved in.
12 Q. Did that have to do with your hunting and
13 gathering function?
14 A. Yes, I guess, who to contact for certain kinds
15 of data.
16 Q. Can you tell me when any future report or future
17 opinion is due from you or from RPC?
18 A. No. I think that's a question probably better
19 addressed by Dr. Luke because he's more privy to the
20 schedule at this point.
21 Q. Do you know that there is a schedule of dates to
22 get reports in?
23 A. I'm not sure the current -- what the current
24 status would be of the -- of our contract schedule.
25 Q. Is there anybody in RPC now who has questionnaires
0197
01 out that you know of?
02 A. Not that I know of.
03 (An instrument was here marked as
04 Deposition Exhibit No. 15 for identification.)
05 QUESTIONS BY MR. ROSENBERG:
06 Q. Can you tell me what Exhibit 15 is?
07 A. Okay. Exhibit 15 is basically a work plan that
08 I prepared for Dr. Luke during -- I guess it would have
09 been the first week of September, this last fall. And
10 this was sort of the first step of our -- of our -- what
11 we might call second-phase analysis leading up to our
12 analysis -- to our opinions then in October.
13 Q. Okay. In paragraph under Economic Impacts --
14 see Task 2, the second paragraph -- it says, "For our
15 initial work, that is toward developing impact estimates
16 for the October 26 report, we will likely be forced to use
17 arbitrary assumptions regarding these factors."
18 What are you talking about here?
19 A. Okay. That sentence goes back to -- the first
20 sentence of the paragraph says, "A major issue is how to
21 deal with leakages of expenditures from the EAA to the
22 major urban centers that surround it."
23 Q. What does that mean?
24 A. Okay. That means that if our focus of our
25 analysis is to be on a study area which is basically the
0198
01 EAA plus the communities like Belle Glade and Clewiston
02 that are immediately dependent on the agriculture of the
03 EAA, then multipliers that have been estimated for, let's
04 say, Palm Beach County as a whole would probably overstate
05 the impacts of the EAA in a major way since, for instance,
06 the farms located in EAA in many cases are likely to have
07 to purchase some types of supplies, materials and so on
08 from somewhere in the Palm Beach metro area, that is
09 outside the study area. And, similarly, many of the
10 people residing in the EAA probably do a significant
11 portion of their shopping in the West Palm Beach trade --
12 you know, shopping centers and so on as opposed to doing
13 that shopping in the EAA towns.
14 Q. Like buying a car in Palm Beach?
15 A. Right. Exactly. Exactly. And so the question
16 then was to estimate the levels of expenditures within the
17 EAA by farms of different sizes relative to -- relative to
18 expenditures that might be made outside the EAA.
19 Q. Let me read the whole paragraph into the
20 record. I'm sorry.
21 The paragraph reads, "A major issue is how
22 to deal with leakages of expenditures from the EAA to the
23 major urban centers that surround it. A related question
24 is how to estimate the relative levels of expenditures
25 within the EAA by farms of different sizes. For our
0199
01 initial work (i.e., toward developing impact estimates for
02 the October 26 report), we will likely be forced to use
03 arbitrary assumptions regarding these factors. However,
04 these assumptions could be refined in subsequent work."
05 A. Uh-huh.
06 Q. Okay?
07 A. Yeah.
08 Q. So the first sentence there is that you
09 recognize -- tell me if I have it right -- that there is a
10 problem with expenditures that people in the EAA make in
11 Palm Beach or elsewhere.
12 A. Uh-huh.
13 Q. Okay. What is the second sentence?
14 "A related question is how to estimate the
15 relative levels of expenditures within the EAA by farms of
16 different sizes."
17 What are you talking about there?
18 A. Okay. That is do the big, integrated farms buy
19 more of their inputs from outside the EAA versus smaller
20 -- smaller farms that might get more of their inputs from
21 suppliers within the study area.
22 What we ultimately did in our work for the
23 -- for the October 26th part was we basically -- in order
24 to approximate multipliers that would be -- that we felt
25 would be more appropriate for the study area than the Palm
0200
01 Beach County multiplier, we basically looked at
02 multipliers for Okeechobee County. This seemed a county
03 for which we had information available which seemed
04 analogous in terms of the nature of the economic base, the
05 size of trade centers involved and so on. It seemed
06 analogous to our study area.
07 We did not for the October 26th analysis
08 attempt to estimate the differences in levels of
09 expenditures by farms of different sizes. We essentially
10 took the Hazen and Sawyer and Polopolous/Richardson
11 results as two -- as two alternative levels of direct
12 impacts and then, as I say, attempted to apply multipliers
13 that we thought would be -- well, probably a better
14 reflection of multipliers for the EAA study area as
15 opposed to Palm Beach County multipliers.
16 Q. Why wouldn't RIMS cover all of these
17 assumptions? Why wouldn't RIMS cover the leakage problem
18 or the expenditure problem? Why wouldn't RIMS have
19 contemplated these problems within it?
20 A. Okay. Well, one issue with respect to RIMS is
21 that RIMS is set up on a county basis. And the reason
22 RIMS is set up on a county basis is because much of the
23 secondary data the Department of Commerce uses to
24 construct RIMS and similar models is reported, is
25 available on a county basis. So RIMS multipliers can be
0201
01 obtained for a county or a grouping of counties or a
02 state, but it's got to be a county or combination of
03 counties. Okay.
04 With respect to different expenditure
05 patterns by different sizes of farms, let's say -- okay,
06 RIMS, in the way that it aggregates data, would take --
07 would take all sugar farms plus some other farms that --
08 you know, based on the crops they produce would take all
09 of these farms and essentially aggregate them together
10 into a -- into one sector. Okay. And so therefore there
11 would not be the distinction if there are some differences
12 in expenditure patterns between large sugar farms and
13 small sugar farms. That is -- that is kind of lost in the
14 model-building process.
15 As to why it's set up that way, a simple
16 answer would be because models, by their very nature, have
17 to be -- have to in various ways simplify or abstract from
18 reality. And people who work with models like these
19 input/output models have discerned over time that one --
20 that one seemingly logical way to organize the information
21 is by -- is by the primary type of product that the firm
22 produces which is the basis for the Standard Industrial
23 Classification Code, better known as SIC Code, by which
24 firms can be classified. So I don't know if that's more
25 than you wanted to know.
0202
01 Q. Let's go back to the sentence. "A related
02 question is how to estimate the relative levels of
03 expenditures within the EAA by farms of different sizes."
04 Did you ever determine that?
05 A. We did -- as it happened, we did not try to
06 address that issue within that early phase of the work.
07 Q. As of today, have you determined that?
08 A. We have not -- we don't feel we have the answer
09 to that question yet.
10 Q. What will you need in order to answer that
11 question?
12 A. I would say at this point probably be relying
13 primarily on information from suppliers within the EAA.
14 Q. I have a feeling we've been through this
15 before.
16 A. Yeah, we have. I would say that suppliers would
17 be the primary source of information for that one.
18 Q. Have you developed any tentative opinions
19 regarding the estimate of relative level of expenditures
20 by farms of different sizes?
21 A. No.
22 Q. Okay. Now, the next sentence talks about
23 arbitrary assumptions. What are you talking about there?
24 Forced to use arbitrary assumptions?
25 A. Well, in the event -- I guess the de facto
0203
01 assumption was that -- was that the farms of different
02 sizes have similar expenditure patterns. We did not try
03 to estimate differential expenditure patterns for farms of
04 different sizes. I guess that would be an example of an
05 arbitrary assumption. Until we had some sort of data or
06 information to support a different assumption, we assumed
07 that they were, you know, similar.
08 Q. Can you tell me what all -- can you tell me all
09 of the arbitrary assumptions that you used?
10 A. Probably not, but implicitly or explicitly, the
11 number of suppositions in any study like this is
12 substantial. And --
13 Q. But there is no -- you couldn't list those for
14 me or even if you looked at your opinion like tomorrow
15 tell me which of those assumptions are arbitrary
16 assumptions?
17 A. Probably -- one might also comment that there
18 are probably degrees of arbitrariness.
19 MR. SAXE: Off the record.
20 (At this time there was a brief discussion
21 off the record.)
22 QUESTIONS BY MR. ROSENBERG:
23 Q. Now, last sentence says, "However, these
24 assumptions could be refined in subsequent work."
25 A. Right.
0204
01 Q. Again, which assumptions and were they refined?
02 A. Okay.
03 Q. How can you tell me which assumptions -- you say
04 these suppositions could be refined.
05 Which ones?
06 A. Okay. Well, for instance, taking -- taking the
07 estimates of leakages of expenditures from the EAA and
08 whether the percentage of the expenditures made outside
09 the EAA differs by the size of farm, that would be -- that
10 would be something then that we would be trying -- that we
11 would be trying to refine in this phase of the project
12 that we're working on now.
13 Q. Have you refined any of the arbitrary
14 assumptions you were talking about?
15 A. I wouldn't say that we have developed kind of a
16 final -- I don't think of areas where we have developed
17 final opinions at this point.
18 Q. Have you tentatively refined any of these
19 assumptions?
20 A. No.
21 Q. In the upper right corner here there is a note.
22 I can't read the note. Would you tell me what that is?
23 MS. STINSON: I can read it. "Sugar cane
24 work papers."
25 QUESTIONS BY MR. ROSENBERG:
0205
01 Q. Did you put that on the document?
02 A. No.
03 Q. Do you know how it was placed on the document or
04 who placed it on the document?
05 A. I assume that --
06 Q. That would be a yes or no answer.
07 A. The right answer is no. I don't know who put it
08 on there or why except it wasn't me. It's not my
09 writing.
10 Q. Now, I don't want to beat this to death, but I
11 want to ask another question.
12 You said you would go to suppliers. But
13 the suppliers that you would go to you haven't yet gone to
14 then, I gather?
15 A. Right.
16 Q. They wouldn't know the purchase patterns of
17 farmers they don't supply, would they?
18 A. Yes. That would be correct.
19 Q. You could only find out perhaps half of what you
20 want to know regarding the purchase patterns of the
21 farmers they supply, that suppliers supply? If a supplier
22 is in Baton Rouge, Louisiana, you wouldn't know?
23 A. Okay. But suppliers within the EAA will be able
24 to tell us with some clarity which farms or which types of
25 farms are coming to them for supplies versus which ones
0206
01 don't deal with the local dealer.
02 Q. So they would tell you which farms buy outside
03 the regions -- outside the region?
04 A. That would be -- that's my assumption at this
05 point.
06 Q. On the last page at the bottom it says,
07 "Optional Survey of Farms and Mills."
08 What is that talking about?
09 A. Okay. At the early stage in the project there
10 was some -- there had been some discussion, some
11 contemplation about the idea of -- the possibility of some
12 sort of a survey to get information from selected farms
13 and mills about expenditure patterns, about some of the
14 characteristics of their work force and -- well, those are
15 two items that --
16 Q. Did you do that?
17 A. We did not do that.
18 Q. Do you contemplate that you are going to do
19 that?
20 A. I don't -- I don't believe we're considering
21 doing that at this time.
22 Q. What would you learn from a survey of the farms
23 and mills?
24 A. Okay. As we mentioned before, some of the
25 things that I think were in mind at that time included
0207
01 information about expenditures and information about the
02 mine and mill work force including information about their
03 background, education, age, a variety of things that might
04 be seen as having some influence on employability.
05 Q. And you say there are other sources you can use
06 for all of those, to find out all of that information?
07 A. There are alternative sources which we think we
08 can -- which would be accurate.
09 Q. But to date you have not done that?
10 A. We have certainly not completed that as yet.
11 Q. Do you have any time -- can you tell me how soon
12 you anticipate completing that?
13 A. Oh, I would think our -- I think we would be
14 hoping to have those tasks substantially completed within
15 the next six weeks to two months. That's an estimate.
16 MR. SAXE: Could you mark that answer,
17 please?
18 (An instrument was here marked as
19 Deposition Exhibit No. 16 for identification.)
20 QUESTIONS BY MR. ROSENBERG:
21 Q. I show you Exhibit 16. Could you identify it,
22 please?
23 A. Okay.
24 Q. Can you identify what that is?
25 A. Well, what it is is a memorandum from Grace
0208
01 Johns, principal economist, project manager with Hazen and
02 Sawyer, to a P. B. Rhoads, Director, Office of
03 Environmental Restoration, South Florida Water Management
04 District.
05 Q. Have you ever seen this document before?
06 A. I'm not sure that I have. I wouldn't swear that
07 I haven't, but it does not look extremely familiar to me.
08 Q. You don't recall reviewing it?
09 A. I believe that the -- I believe the document we
10 reviewed would have been one which perhaps came after this
11 one which would incorporate -- I suspect that much of the
12 information, perhaps almost all of the information in this
13 document may have been in the draft final report that we
14 did review.
15 Q. There are a number of margin notes here, for
16 example, on page DLL 0001232.
17 Do you know who placed the margin notes in
18 the document?
19 A. DLL 00 --
20 Q. Just for an example, DLL 0001232. Do you know
21 who placed the margin notes there?
22 MS. STINSON: Excuse me. Are you talking
23 about circles around things?
24 QUESTIONS BY MR. ROSENBERG:
25 Q. Circles.
0209
01 A. No.
02 Q. What about on the following page? There is --
03 it looks like a margin note of 146 million. Do you know
04 who placed that there?
05 A. No. I don't.
06 Q. On page DLL 1226, do you know who placed the
07 margin notes, circles, underlines, question marks or other
08 matters?
09 A. No.
10 Q. Okay. So it would be fair to say that you don't
11 recall personally reading this or reviewing it or making
12 notes on it?
13 A. No.
14 Q. Am I correct?
15 A. That's correct.
16 Q. Okay.
17 (An instrument was here marked as
18 Deposition Exhibit No. 17 for identification.)
19 QUESTIONS BY MR. ROSENBERG:
20 Q. I have given you a copy of Deposition Exhibit
21 17.
22 A. Yes.
23 Q. Do you know whose notes these are?
24 A. No.
25 Q. Have you ever seen these notes before?
0210
01 A. I don't believe so.
02 Q. These notes were in the file of documents that
03 was given to us.
04 Was that your file of documents?
05 A. I don't -- no, these would not be -- these would
06 not be my notes. They are not -- they are not my
07 handwriting, and I don't recall having seen these
08 particular notes before.
09 Q. So you would not know why there are stars in the
10 margins --
11 A. No.
12 Q. -- at certain places here?
13 A. No.
14 Q. Are you familiar with Dr. Luke's handwriting?
15 A. Not very extensively. Most of the material that
16 I get from Ron is typed.
17 Q. Now, this document was in the -- as I say, the
18 batch of documents that was delivered to us.
19 In that batch of documents -- was that
20 batch of documents the same for you and for Dr. Luke?
21 MS. STINSON: Yes. I can -- as I said, the
22 batch of documents was compiled by Dr. Luke gathering it
23 from everybody and produced in one to make sure he had a
24 complete set.
25 QUESTIONS BY MR. ROSENBERG:
0211
01 Q. So this document may never have been in the
02 witness' files?
03 MS. STINSON: Correct.
04 THE WITNESS: Correct.
05 MR. ROSENBERG: It could have been somebody
06 else, some other person?
07 MS. STINSON: Correct.
08 THE WITNESS: Correct.
09 QUESTIONS BY MR. ROSENBERG:
10 Q. And you have never seen this before, have no
11 idea what this document is?
12 A. That's -- exactly. To the best of my knowledge,
13 I have never seen this particular set of notes before.
14 (An instrument was here marked as
15 Deposition Exhibit No. 18 for identification.)
16 QUESTIONS BY MR. ROSENBERG:
17 Q. I'm showing you Exhibit 18. Can you tell me if
18 you have ever seen this before?
19 A. I don't believe so.
20 Q. Do you know who authored this document?
21 A. No, I don't.
22 Q. It appears to me to be in a different
23 handwriting or printing than Exhibit 17.
24 Was this document ever circulated to you?
25 A. I don't believe so.
0212
01 (An instrument was here marked as
02 Deposition Exhibit No. 19 for identification.)
03 QUESTIONS BY MR. ROSENBERG:
04 Q. I'm showing you Document 19. This is another
05 document of handwritten notes.
06 A. Yeah.
07 Q. And at least to my uneducated eye it looks like
08 yet a different writing or printing than Exhibits 17 or
09 18.
10 Have you ever seen this document before?
11 A. I don't believe so.
12 Q. Do you know why it was in the -- excuse me. Let
13 me withdraw that.
14 Was this document ever circulated to you?
15 Do you know that?
16 A. I don't remember receiving that document, at
17 least not in that form.
18 (An instrument was here marked as
19 Deposition Exhibit No. 20 for identification.)
20 QUESTIONS BY MR. ROSENBERG:
21 Q. I'm showing you Deposition Exhibit 20. Have you
22 ever seen this document before?
23 A. I think I probably have seen this one.
24 Q. Who authored this? There is a second page to it
25 also.
0213
01 A. Uh-huh.
02 Q. Do you know who authored this document?
03 A. No.
04 Q. Do you know what it stands for?
05 A. Okay. It's an attempt -- it's clearly an
06 attempt to summarize the number of people in these
07 counties that fall into the "poverty" category based on
08 income.
09 Q. Whose task was it to do this work?
10 A. Well, it -- this certainly would be part of the
11 information that might be relevant for our general profile
12 of the area. It also might -- might have seemed relevant
13 to some of the analysis of the labor force and their
14 employment, re-employment prospects. So it would -- I
15 would say with high probability it was one of the people
16 in the RPC office, perhaps Jeanne Werner or Melissa Cox.
17 But that's speculation on my part because I do not
18 definitively know who did it.
19 Q. But you recall having seen it?
20 A. I believe so. It looks familiar.
21 Q. And do you know why it was circulated to you?
22 A. I guess I don't -- I don't think there was a
23 specific reason for circulating it to me except that as we
24 -- as we got components to the state of being, you know,
25 semi-finished, we were trying to circulate -- circulate
0214
01 them to each other as just part of the general information
02 exchange.
03 Q. What do you mean by "semi-finished"?
04 A. In this case, typed as opposed to handwritten.
05 Q. Look at page two, please. That looks like
06 something that has been printed or printed out or perhaps
07 that's -- it looks like it's part of a table.
08 Do you know what page two is related to?
09 A. Not really. If you are asking could that have
10 come out of some other report, the answer is I don't
11 know.
12 Q. Have you ever seen page two before?
13 A. I'm not certain.
14 (An instrument was here marked as
15 Deposition Exhibit No. 21 for identification.)
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Let me show you Exhibit 21.
18 A. Yes.
19 Q. Have you ever seen this before?
20 A. Yes, I think almost certainly.
21 Q. What context did you see it?
22 A. Okay. I believe that this was an outline -- an
23 outline I believe prepared by Jeanne Werner outlining
24 basically what she intended to do with respect to the
25 labor market employability component of the work.
0215
01 Q. And do you know when she did that?
02 A. It would have I think probably have been in
03 September, very early October.
04 Q. Was this -- was the task that this outline
05 represents completed?
06 A. A good deal of work was done on this objective.
07 I don't -- I couldn't swear whether or not every item
08 represented by that outline was completed.
09 Q. Have you ever seen a more current version of
10 this outline or of a document produced from it?
11 A. I don't believe so. No. I don't think I have
12 seen another outline and I have not seen a -- I have not
13 seen a document that specifically addressed that outline.
14 (An instrument was here marked as
15 Deposition Exhibit No. 22 for identification.)
16 QUESTIONS BY MR. ROSENBERG:
17 Q. Let me back up for a second.
18 Going back to Exhibit 21, have any of these
19 tables or graphs been produced?
20 A. I can't say for sure. It seems to me that I
21 have seen -- I have seen drafts of some tables that would
22 cover some of those topics, but I can't --
23 Q. Let me turn your attention to Exhibit 22 and ask
24 you: What is it?
25 A. Okay. EAA -- the title is EAA Farm Worker
0216
01 Profile. I feel comfortable that I have seen -- have seen
02 this or a draft of this. And I think -- I'm sure it was
03 prepared by Jeanne Werner as part of this labor market,
04 farm worker dimension.
05 Q. If you look through the document, on page two
06 and page three you will see margin notes. Do you know
07 whose margin notes they are?
08 A. No, I don't. Not mine.
09 Q. Have you seen a more current version of this EAA
10 Farm Worker Profile?
11 A. I can't say for sure.
12 Q. How does this document relate to your specific
13 tasks?
14 A. I would say only tangentially because the work
15 I'm involved in would be estimating changes in employment
16 of farm workers as well as changes in job opportunities in
17 other sectors of the economy. What Jeanne was working on
18 here was really characterizing the farm labor force with a
19 view toward having some opinions about potential for
20 re-employability.
21 Q. That's not something that you were doing?
22 A. This was not something that I was going to be
23 directly involved in, right.
24 (An instrument was here marked as
25 Deposition Exhibit No. 23 for identification.)
0217
01 QUESTIONS BY MR. ROSENBERG:
02 Q. Let me show you Exhibit 23.
03 Do you recognize those notes?
04 A. Yes.
05 Q. Whose notes are they?
06 A. Those are mine.
07 Q. When were they taken?
08 A. That is my first -- okay. What is this?
09 Okay. I think these were notes that I made
10 at a meeting -- at a meeting with Melissa Cox and Jeanne
11 Werner primarily which we held that meeting in early
12 October at the RPC offices here in Austin. And the
13 attempt here was a first -- a first draft of an outline
14 for our October 26th report, that is what should we be
15 including. And, of course, then you see some marginal
16 notes about, you know, Jeanne, Melissa, Jeanne and so on.
17 This was relating to who is going to -- who is going to be
18 working on these components.
19 Q. Is there a more final version of this document?
20 A. I don't -- I don't know for sure. I don't -- I
21 don't recall really ever that the -- I don't recall this
22 outline ever getting more formalized and typed up and so
23 on. I guess the answer is probably not.
24 Q. The outline starts off -- it says under 1, Study
25 Area Profile.
0218
01 A. Uh-huh.
02 Q. "A, define study area, show map of three
03 counties, EAA, and our study area which may be same as
04 EAA, but probably not."
05 A. Uh-huh.
06 Q. Tell me what that means.
07 A. Okay. It was my view that our study area should
08 probably encompass the EAA but very likely should include
09 communities that might be technically outside the
10 regulated area but located in close proximity such that
11 they have a high economic dependence on the agriculture of
12 EAA. I believe Clewiston falls into that category among
13 others.
14 So that was the -- that was the meaning of
15 the cryptic comment about our study area which may be
16 same as EAA but probably not.
17 The other factor that would be of
18 importance in defining our study area is in order to be
19 able to have any kind of meaningful description of the
20 study area, our study area would need to follow the
21 boundaries of the census subcounty divisions. I'm trying
22 to think that's what they call them. Let me see. CCDs?
23 Well, anyway, these are the subcounty --
24 subcounty units that the census uses. In order to, for
25 instance, make a statement about what the population of
0219
01 the study area was in 1990, we would need to define our
02 study area to follow -- to follow census subcounty lines
03 which, of course, will not correspond precisely to the
04 boundaries of the EAA-regulated areas.
05 So my thought was that our study area would
06 be defined to encompass the EAA plus those nearby
07 communities dependent on the EAA and following census
08 lines so that we could use the census tapes to help
09 develop our area profiles.
10 Q. What three counties were you talking about?
11 A. The three counties that we're talking parts I
12 guess of Palm Beach, Hendry and Glades, the three
13 counties, show map of three counties.
14 Q. And what -- tell me if I have it right.
15 What you are really talking about are the
16 socioeconomic impacts on those areas outside of the EAA?
17 A. As well as -- well --
18 Q. As well as the direct impacts?
19 A. Well, the --
20 MS. STINSON: You have got me -- I'm
21 sorry. I'm confused.
22 QUESTIONS BY MR. ROSENBERG:
23 Q. You have a three-county area that you are
24 studying.
25 And you are doing that regarding
0220
01 socioeconomic impacts?
02 A. Yeah.
03 Q. Essentially in your -- in your outline impacts
04 may be three, four and five on public welfare, fiscal and
05 things like that. That's beyond the economic impacts that
06 are solely within the EAA.
07 A. Okay. Yeah. I guess what you are saying is the
08 direct impacts in some sense can be described as being
09 confined to the EAA in the sense that they -- they occur
10 or affect the farms in the EAA. The study area would be
11 -- would be defined to include also those communities
12 adjacent to the EAA that are economically dependent on the
13 EAA agriculture. And the meaning of that whole comment
14 there was we needed to develop a map to show the counties,
15 the EAA, and how our study area relates to the EAA and the
16 county boundaries and so on.
17 Q. Was there agreement on what the study area was
18 to include?
19 A. Yes. I think that's -- I think so. Uh-huh.
20 Q. Was there ever a dispute about whether certain
21 counties or certain cities were within that?
22 A. I don't -- I don't remember any specific
23 debate. It seemed -- it seemed that there was general
24 consensus in philosophy. And I guess the point of the
25 note was we need to -- we need to get beyond philosophy
0221
01 and actually sit down and draw the map and map it out.
02 (At this time there was a brief discussion
03 off the record, and the deposition was recessed until
04 February 9, 1993 at 9:00 a.m.)
05 *********************************************************
0222
01 CORRECTIONS TO THE DEPOSITION OF
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02 F. LARRY LEISTRITZ
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0223
01 I, F. LARRY LEISTRITZ, hereby
01
02 certify that I have read the foregoing deposition
02
03 and that this deposition, together with my corrections, is
03
04 a true record of my testimony given at this deposition.
04
05
05
06
06
07
07 _________________________________
08 F. LARRY LEISTRITZ
08
09
09
10
10 Subscribed and sworn to before me
11
11 on this the _________day of ____________________,
12
12 A.D., 1993.
13
13
14 ________________________________
14 Notary Public in and for
15 the State of Texas
15 Expiration Date: _______________
16
16
17
17
18
18
19
19
0224
01 STATE OF TEXAS
02 COUNTY OF TRAVIS
03 I, DOTTIE NORMAN, a Certified Shorthand
04 Reporter in and for the State of Texas, hereby certify
05 that the matters set forth in the caption to the foregoing
06 deposition are true and correct; that the witness,
07 F. LARRY LEISTRITZ, appeared before me at the time and
08 place set forth; that said witness was first duly sworn
09 by me to tell the truth, the whole truth and nothing but
10 the truth, and thereupon proceeded to testify in said cause;
11 that the questions of counsel and the answers of said
12 witness were taken down in shorthand by me and thereafter
13 reduced to typewriting under my direction, and the
14 foregoing pages comprise a true, complete and correct
15 transcript of the testimony given and the proceedings had
16 during the taking of said deposition.
17 WITNESS MY HAND AND SEAL of office, this
18 the 18th day of February, A.D., 1993.
19
20
21
21
22
22
23 1806 Toro Canyon ____________________________
23 Austin, Texas 78746 DOTTIE NORMAN
24 Job #494 CSR No. 2283
24 Expiration Date: 12-31-94
25
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