DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF ADMINISTRATION, STATE OF FLORIDA
SUGAR CANE GROWERS COOPERATIVE OF CASE NOS. 92-3038
FLORIDA, a Florida agricultural 92-3039
cooperative marketing association; ROTH 92-3040
FARMS, INC.; and WEDGWORTH FARMS. INC.,
and
FLORIDA SUGAR CANE LEAGUE, INC.; and
UNITED STATES SUGAR CORPORATION,
and
FLORIDA FRUIT AND VEGETABLE ASSOCIATION,
LEWIS POPE FARMS, W. E. SCHLECHTER &
SONS, INC., and HUNDLEY FARMS, INC.,
Petitioners
vs.
SOUTH FLORIDA WATER MANAGMENT DISTRICT,
an Agency of the State of Florida,
Respondent,
and
THE UNITED STATES OF AMERICA,
MICCOSUKEE TRIBE OF INDIANS, THE
FLORIDA DEPARTMENT OF ENVIRONMENTAL
PROTECTION, THE FLORIDA WILDLIFE
FEDERATION, THE FLORIDA AUDUDON SOCIETY
and THE SIERRA CLUB,
Respondent-Intervenors.
_________________________________________/
DEPOSITION OF: DR. F. LARRY LEISTRITZ
TAKEN: March 16, 1994
VOLUME 3
Accurate Stenotype Reporters, Inc.
DEPOSITION OF: DR. F. LARRY LEISTRITZ
TAKEN AT THE INSTANCE OF: United States of America
Respondent-Intervenor
DATE: Wednesday, March 16, 1994
TIME: Commenced at 8:00 a.m.
Concluded at 2:10 p.m.
LOCATION: 315 South Calhoun Street
Tallahassee, Florida
REPORTED BY: ANITA M. PEKEROL, CCR, RPR,
CP, CM. Notary Public in
and for the State of
Florida at Large.
APPEARANCES:
REPRESENTING THE PETITIONERS SUGAR CANE GROWERS
COOPERATIVE OF FLORIDA, Florida agricultural
cooperative marketing association; ROTH FARMS,
INC. and WEDGEWORTH FARMS, INC.:
CAROLYN S. RAEPPLE, ESQUIRE
Hopping, Boyd, Green & Sams
123 South Calhoun Street
Post Office Box 6526
Tallahassee, Florida 32314
REPRESENTING RESPONDENT-INTERVENOR UNITED STATES
OF AMERICA:
KEITH E. SAXE, ESQUIRE
United States Department of Justice
601 Pennsylvania Avenue Northwest
Room 879
Post Office Box 663
Washington, D.C. 20044
ALSO PRESENT:
Lonnie L. Jones, Ph.D.
Ronald D. Lacewell
Accurate Stenotype Reporters, Inc.
I_N_D_E_X _ _ _ _ _
WITNESS PAGE _______ ____
F._LARRY_LEISTRITZ __ _____ _________
Direct Examination by Mr. Saxe 214
CERTIFICATE_OF_REPORTER 363 ___________ __ ________
E_X_H_I_B_I_T_S _ _ _ _ _ _ _ _
DEPOSITION_EXHIBITS: __________ ________
NUMBER DESCRIPTION PAGE ______ ___________ ____
13 Format for a table 283
14 Memorandum from Ann Orzech to
Eric Schubert, 7-28-93 285
15 Handwritten memorandum from Ann
Orzech to Eric Schubert, 7-28-93 287
16 Handwritten notes, 7-30-83 289
17 The Agricultural Crisis as it
Affects Rural Communites, by Gerald A.
Doeksens 296
18 Curriculum vitae of F. Larry Leistritz 347
19 Adequacy of the SWIM Plan's Cost
Benefit Analysis 357
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1 (VOLUME 3)
2
3 P_R_O_C_E_E_D_I_N_G_S _ _ _ _ _ _ _ _ _ _ _
4 - - -
5 The following deposition of DR. F. LARRY
6 LEISTRITZ was taken on oral examination, pursuant to
7 notice, for purposes of discovery, for use as evidence,
8 and for such other uses and purposes as may be permitted
9 by the applicable and governing rules. Reading and
10 signing is not waived.
11 - - -
12 Thereupon,
13 DR. F. LARRY LEISTRITZ
14 having been previously duly sworn, was examined and
15 testified further as follows:
16 DIRECT EXAMINATION (Continued)
17 BY MR. SAXE:
18 Q Good morning, Professor Leistritz. We're
19 in day two of the continued deposition. The same rules
20 apply today as yesterday.
21 In your testimony yesterday, we talked at
22 one point about the public facilities and services
23 impact analysis that might have been done by RPC.
24 I believe, if I recall correctly, you
25 indicated that except to the extent of your work on
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1 things like the function for deriving changes in
2 population from job changes, that you didn't have any
3 involvement in the analysis that RPC might have done
4 about public services and facilities impacts; is that
5 correct?
6 A Yes.
7 Q I believe you, also, indicated that you
8 didn't have any opinions about whatever methodology they
9 ultimately used in any such analysis; is that correct?
10 A That's correct.
11 Q And that you had not reviewed results of
12 analysis that they might rely upon at trial; is that
13 correct?
14 A Not at this point. I have not yet been
15 asked to review the public service and fiscal impact
16 results.
17 Q And you did not have any opinions on
18 whether or not any conclusions that might have been
19 reached were sound or unsound; is that correct?
20 A That's correct.
21 Q With respect to population impact
22 assessment, and by that I mean inmigration and
23 outmigration from and to the EAA caused by
24 implementation of the SWIM Plan or alternatives, you,
25 also, indicated that you had limited involvement in some
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1 of the component pieces of that analysis?
2 A Yes.
3 Q And you indicated, I believe, that you had
4 a role in determining the distribution of employment
5 impacts from STA construction between local and
6 non-local workers?
7 A Yes.
8 Q That you had had some obvious role in the
9 determination of the relationship between jobs and
10 population loss insofar as the function was concerned?
11 A Yes.
12 Q And that you had had some involvement in
13 the choice of RIMS multipliers for the secondary
14 employment impact; is that correct?
15 A Yes.
16 Q But is it correct that you did not have any
17 other involvement in whatever methodology RPC may be
18 using for estimating population impacts from the SWIM
19 Plan or alternatives?
20 A I think that is correct. I have not looked
21 at their spread sheet model that has been assembled. I
22 have not reviewed that in its entirety. What you
23 summarized, I think, sounds to me, essentially, correct,
24 yes.
25 Q Do you have any other opinions about the
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1 methodology that may be being used by RPC to estimate
2 population impacts?
3 A The question is beyond the dimensions that
4 we have already covered.
5 Q And, again, those would be the leakage from
6 the STA construction issue, the function for determining
7 changes in population from changes in jobs and the
8 choices of the RIMS multipliers for secondary employment
9 impacts?
10 A Those were my major areas where I was
11 involved, so those would be the areas where I would have
12 a basis for having opinions, yes.
13 Q And are you familiar with the methodologies
14 that are being used by RPC in actual analysis that
15 they're doing on population impacts?
16 A I have had the opportunity to review
17 different memorandums that outline some dimensions of
18 what they were doing. Some of those were things that we
19 identified as exhibits yesterday. So, to that extent,
20 to the extent that I have had an opportunity to review
21 some of the dimensions, I probably have opinions about
22 the appropriateness of what is being proposed.
23 On the other hand, I have not seen the
24 final model in its entirety.
25 Q Just referring, then, specifically, to
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1 those exhibits that fit that category, looking at
2 Exhibit Number 2, if you would --
3 A Okay.
4 Q -- that is your February 6th memo to Ron
5 Luke --
6 A Sure.
7 Q -- the section on local employment and
8 construction of STAs --
9 A Exactly.
10 Q -- and the selection of multipliers for EAA
11 analysis --
12 A Yes.
13 Q -- does that describe all of your opinions
14 concerning those two issues as they would relate to
15 RPC's analysis of population impacts?
16 A I would say that summarizes my opinions on
17 those two issues, yes.
18 Q As far as the function for evaluating
19 changes in population based on changes in employment, if
20 you would look at Exhibit 11 --
21 A Yes.
22 Q -- does the first page of Exhibit 11
23 express your views on the function that was referred to
24 by you in the third, fourth, fifth, sixth, seventh,
25 eighth, through the end of this document on Exhibit 11?
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1 A Yes.
2 Q Did you submit any other information to
3 RPC, either in writing or orally, on the issue of the
4 function that is referenced in Exhibit 11?
5 A Not that I recall, no.
6 Q Going back to the population impact
7 assessment that RPC may be doing, the three elements
8 that you were involved in, then, were the leakage on STA
9 construction, the population jobs function and the
10 choice of the RIMS multipliers, correct?
11 A Correct.
12 Q And those are referenced in Exhibit 2 and
13 Exhibit 11?
14 A Correct.
15 Q To your knowledge, are there any other
16 materials that you have provided to RPC, either written
17 or non-written, that provide information about your work
18 on those areas of their analysis?
19 A No.
20 Q And that would include any materials that
21 would discuss your opinions concerning those aspects of
22 the analysis?
23 A Perhaps I should make sure that I properly
24 understand the question. Over time, for instance, I
25 have provided to RPC copies of many articles, references
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1 and the like which bear on the issues that we have just
2 discussed; selection of multipliers, local versus
3 non-local employment, relationship between job loss and
4 population change. Many of those or some of those, of
5 course, are referenced in these documents. But I think
6 these exhibits that we have mentioned really summarize
7 the work, the opinions and so on specific to this
8 situation.
9 Q With respect to the issue of population
10 migration response in a declining area or where there
11 are employment impacts, yesterday we discussed Exhibit
12 Number 10, your article with Alan Schuler on threshold
13 population levels?
14 A Yes.
15 Q Are there other articles that you have
16 identified or provided to RPC that pertain to this issue
17 in particular?
18 A The population change relative to
19 employment change. For instance, the Exhibit 11
20 memorandum then references three other documents, each
21 of which attempts to be a rather extensive review of the
22 literature relative to economic demographic models,
23 relative to socioeconomic resource impact development.
24 And third is a book dealing with farm financial crisis.
25 Basically, impacts of responses to the farm economic
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1 situation in the midwest.
2 These works and works referenced and
3 reviewed in them represent a relatively large body of
4 literature dealing, generally, with the topic of the
5 relationship between employment change, and population
6 change and these kinds of issues.
7 Q Would the article by Gerald Doeksen,
8 D-O-E-K-S-E-N, titled The Agricultural Crisis as it
9 Affects Rural Communities, be included within that set
10 of materials?
11 A That would, I'm 99 percent certain, be one
12 of the works that would have been referenced, probably
13 in the Murdock and Leistritz book. That would be an
14 example of the kind of articles that were reviewed and
15 referenced in some of those works.
16 Q Another article that has been provided with
17 your production was by Janet Ayres, A-Y-R-E-S, yourself
18 and Kenneth Stone, titled Rural Retail Business
19 Survival: Implications for Community Developers.
20 Would that be another article that you have
21 identified or provided to RPC on this issue?
22 A Yes. And that was included, I'm sure, in
23 our document production.
24 Q Yes, it was.
25 Another article that was included in the
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1 production was by yourself and a number of other
2 authors, and it is titled Revitalizing the Retail Trade
3 Sector in Rural Communities: Experiences of Thirteen
4 North Dakota Towns.
5 Would that be another one of these
6 articles?
7 A Yes.
8 Q Are there any other articles that are, in
9 your mind, of special significance in relation to an
10 effort to estimate population impacts in the EAA from
11 the implementation of the SWIM Plan or alternatives?
12 A I guess the three that I referenced in
13 Exhibit 11 represented my view of some salient works.
14 Q And there are no others that come to mind
15 as particularly significant? Let me rephrase that.
16 You have indicated that those referenced
17 works in Exhibit 11 anthologize or, to some extent,
18 reference other works. But besides the ones that we
19 have named here today, are there any that you would
20 characterize as particularly relevant to the analysis of
21 the EAA population impacts?
22 A I don't believe so, no.
23 Q In addition to Exhibit 11, are there any
24 other memoranda or conversations that reflect your
25 opinions in this area of population migration response,
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1 other than the articles that we have just described?
2 A I don't believe so.
3 Q On the issue of critical minimum market
4 sizes for retail and consumer service establishments,
5 Exhibit 10 is your article on threshold population
6 levels?
7 A Right.
8 Q Are there any other materials that you have
9 provided to RPC or identified for RPC, specifically,
10 relevant to this aspect of RPC's analysis?
11 A Earlier in the project, we had talked about
12 gathering data on sales per retail establishment,
13 basically, from the Florida Statistical Abstract and the
14 Census of Retailers, as another item of information for
15 possible use in the analysis.
16 MR. SAXE: Could you read that answer back,
17 please?
18 (Requested portion read.)
19 BY MR. SAXE:
20 Q When you say we talked about gathering
21 data, who had those discussions?
22 A Okay. These were discussions between
23 myself, Eric Schubert and -- myself and Eric Schubert,
24 primarily.
25 Q All right.
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1 A On or about July of 1993.
2 Q And was data gathered on sales per
3 establishment?
4 A That's my understanding, yes. That's my
5 understanding, that data was gathered on sales per
6 establishment.
7 Q Did you gather that data?
8 A No.
9 Q It was gathered by RPC?
10 A That was my understanding.
11 Q Do you have an understanding of who at RPC
12 was involved in that?
13 A Eric Schubert, and possibly others.
14 Q What was your understanding about the use
15 to be made of that data?
16 A We had, basically, not discussed all
17 dimensions in the analysis in great detail.
18 Q What was your understanding, based on the
19 discussions that you did have?
20 A The thought was that if our impact analysis
21 included, for instance, estimates of changes in sales
22 volumes, then the sales per establishment might be of
23 interest in regard to estimating the numbers of
24 businesses that might be lost. That was the rationale
25 for suggesting that that would be a useful piece of
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1 information for Mr. Schubert to gather.
2 Q Did you express the opinion that it would
3 be a useful piece of information for Mr. Schubert to
4 gather?
5 A Yes.
6 Q You had indicated in your testimony
7 yesterday, when we were talking about the business
8 impact analysis that may be performed or may have been
9 performed by RPC, that you had given verbal comments to
10 Dr. Luke and Dr. Schubert, and interview notes after
11 your EAA trip; is that correct?
12 A Yes.
13 Q Would this, also, be additional information
14 that you gave to Dr. Schubert --
15 A Yes, sure.
16 Q -- in that area?
17 A Yes.
18 Q You indicated that, otherwise, you had only
19 worked on the function for deriving business impacts
20 from employment impacts, correct?
21 A Okay.
22 Q Are there any other areas of the business
23 impact analysis work that RPC might have done or be
24 doing that you have interacted with?
25 A Not really. Those are, really, the major
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1 things.
2 Q Beyond your conversation with Dr. Schubert
3 before data might have been gathered on sales per
4 establishment, did you have any subsequent exchanges or
5 interactions with RPC on this issue?
6 A I think I'll ask you to repeat the
7 question, sir.
8 Q Besides the conversation that you just
9 referred to with Dr. Schubert about gathering data on
10 sales per establishment from the Florida Statistical
11 Abstract and the Census of Retailers, which, as I
12 understand it, was before any such data might have been
13 collected; is that correct?
14 A That is a difficult question, in the sense
15 that our work on the project has been marked by some
16 starts and stops. We started probably in September of
17 '92, as I recall. Some analysis was done in late '92.
18 In fact, we were meeting about a year ago in regard to
19 deposition. We stopped for a number of months, and then
20 started, essentially, again, in the summer of '93, with
21 some additional analysis.
22 So, certain data were collected, I'm sure,
23 in the fall of '92. Updated and additional information
24 would have been collected in the summer of '93.
25 Q So, then, in fact, I believe you indicated
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1 that you had had conversation with Dr. Schubert around
2 the summer of '93 or July of '93?
3 A Yes.
4 Q So, at that point, did you understand that
5 some data may have been collected on sales per
6 establishment from those sources, the Florida
7 Statistical Abstract and the Census of Retailers?
8 A My recollection on those particular data
9 was that those were data that were yet to be collected.
10 Drawn together, as it were.
11 Q Were to be collected. In other words, had
12 not yet been collected?
13 A That's my recollection.
14 Q And then you, also, indicated that you
15 think that some further collection or some initial
16 collection was done by somebody at RPC after that
17 conversation?
18 A I believe I should say that I really don't
19 know. Really, in terms of meeting with Mr. Schubert in
20 July of '93, we discussed quite a range of data items.
21 We made extensive lists of things that were to be done,
22 checked on and the like. I cannot really say with
23 certainty what the disposition was of all of those
24 items.
25 Q Do you have any further understanding or
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1 information about the collection of this data, other
2 than what you have just indicated to me arose in your
3 July '93 conversation with Dr. Schubert?
4 A In general, it is my understanding that,
5 basically, the impact analysis did not really pursue
6 that particular approach, that particular data set or
7 approach. And that, in turn, is based on the type of
8 information that is available. The information
9 available from the RIMS multiplier analysis did not
10 really lend itself to the sales per establishment
11 approach to changes in numbers of businesses.
12 Q Now, the RIMS multipliers would have been
13 used to derive the predicate changes in employment from
14 the implementation of the SWIM Plan, correct?
15 A Yes.
16 Q The data on sales per establishment, I
17 believe you indicated, would have been used or was
18 discussed for its potential to be used in determining
19 business impacts?
20 A Yes.
21 Q By that, is it correct to say changes in
22 the number of businesses because of implementation of
23 the SWIM Plan?
24 A Yes.
25 Q So, when you say that in your understanding
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1 this type of data on sales by establishment from the
2 Florida Statistical Abstract and the Census of Retailers
3 was not used in the methodology employed or being
4 employed by RPC, do you mean not used for business
5 impact analysis?
6 A Yes. At the point where we talked about
7 gathering sales per establishment, this would be prior
8 to final decisions about a number of dimensions of the
9 impact analysis, the multipliers to be used and the
10 like. And depending on the decisions made with regard
11 to one stage of the analysis, then that logically
12 affects the approaches that may be relevant at
13 subsequent stages.
14 MR. SAXE: Could you read that answer back,
15 please?
16 (Requested portion read.)
17 BY MR. SAXE:
18 Q Can you elaborate on that for me?
19 A Well, I guess I'm not quite sure what the
20 question is.
21 Q Okay, let's take it maybe one step at a
22 time.
23 In your understanding, the data on sales by
24 establishment, that you discussed with Dr. Schubert in
25 July of '93, has not formed any part of the analysis,
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1 the methodology being used in the analysis, by RPC?
2 A Yes, I believe that is correct.
3 Q Why is that the case? Let me rephrase
4 that.
5 Why do you understand that no use is being
6 made of this type of data in their analysis?
7 A Because of the nature of information, the
8 aggregate nature of information, that is obtained from
9 the RIMS multiplier system really would not lend itself
10 to using the sales per establishment data.
11 Q When you say would not lend itself, what
12 does that mean?
13 A Would not be compatible or congruent.
14 Would not be compatible or congruent with using sales
15 per establishment data to try to estimate number of
16 business closings.
17 Q Let me clarify. Did you express any
18 opinions to RPC, either in writing or orally, about what
19 methodologies should or should not be used in estimating
20 business impacts in the EAA?
21 A I think what I might have expressed might
22 have been in the form of data sources to explore, and
23 alternatives that might be considered.
24 Q And what were those opinions?
25 A They would be summarized in some of the
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1 memoranda, I guess. As I said, lists of data sources to
2 explore, things like that.
3 Q Have we reviewed those as exhibits?
4 A I think we have.
5 Q In the deposition today and yesterday?
6 A To a large extent, I think.
7 Q Could you just draw my attention to which
8 ones describe your opinions about the appropriate
9 sources of data and methodologies for business impact
10 analysis?
11 A As I say, in some of the conversations and
12 memoranda, we had lists of data sources to explore, that
13 sort of thing. I don't know that those really
14 constitute opinions about business impact. We may be
15 having a problem with semantics here.
16 Q Would the selection of data sources for use
17 in analysis be part of the methodology for performing an
18 analysis, in your opinion?
19 A Yes.
20 Q Can you refer me to specific documents that
21 would discuss that aspect of the methodology for
22 business impact analysis?
23 A Once again, I would say that my comments or
24 input on business impact analysis could probably best be
25 described as a few suggestions about possible data
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1 sources to explore, or the possible alternatives that
2 might be considered, as opposed to laying out a proposed
3 methodology.
4 Q So, would it be safe to say that these were
5 fairly preliminary discussions?
6 A Yes. That would be a very good
7 characterization.
8 Q These were back in around the summer of
9 last year?
10 A Yes.
11 Q Do you have any opinions about the
12 methodology that RPC should have used in doing business
13 impact analysis?
14 A I guess I'm not quite sure I understand the
15 question.
16 Q Do you have any opinions about whatever
17 methodology RPC may have been or are using to do
18 business impact analysis?
19 A Well, I think the memo item Exhibit 11
20 really represents opinion about the relationship that
21 they developed relating to job change, business change.
22 And it is my opinion that that is consistent with the
23 literature in the area.
24 Q If this question is asked and answered,
25 forgive me, I don't intend to. But have you provided
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1 any other opinions to RPC about the appropriate
2 methodology for the business impact analysis, other than
3 the preliminary suggestion of data sources to explore,
4 the conversation with Dr. Schubert in July about
5 gathering data on sales per establishment and what is in
6 Exhibit 11?
7 A We had, also, discussed the notes from
8 interviews conducted in the EAA. And I think that would
9 summarize my input in that area.
10 Q Do you know what methodology RPC is using
11 to estimate business impact in the EAA?
12 A Well, if we're defining business impact in
13 this case as the number of businesses that might close,
14 then it is my understanding that the material in Exhibit
15 11 would summarize what they're doing.
16 Q Have you reviewed other material that
17 references or contains RPC's analysis of business
18 impacts, other than that referenced in Exhibit 11?
19 A I don't believe so.
20 Q Have you had other conversations with RPC
21 about the results of their business impact analysis?
22 A No.
23 Q Do you know what conclusions RPC may have
24 reached about business impacts in the EAA in terms of
25 quantities?
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1 A No.
2 Q Do you have any opinions about any
3 conclusions that they might have reached, whether
4 they're correct or not?
5 A I think I'll ask you to restate the
6 question.
7 Q Well, you have indicated that you don't
8 know what business impacts that they have come up with;
9 is that true?
10 A Right.
11 Q So, then, it stands to reason that you
12 don't have any opinions about whether their conclusions
13 are sound or not in that regard?
14 A Since I don't know what the conclusions
15 are, it would probably be premature for me to have an
16 opinion about their soundness.
17 Could I propose a two-minute break? Long
18 enough to get another cup of coffee?
19 MR. SAXE: Certainly.
20 (Brief pause.)
21 MR. SAXE: Back on the record.
22 BY MR. SAXE:
23 Q With respect to property value impact
24 analysis, you worked on the function that you understand
25 is being used to determine property value impacts based
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1 on changes in employment?
2 A Yes.
3 Q Is that function all that is required for
4 deriving property value impacts, in your opinion?
5 A I guess as I indicated in Exhibit 11, it
6 seems to me that the function is a reasonable approach
7 to relating changes in employment to changes in property
8 values.
9 Q How does one calculate the changes in
10 property value using that function? Does the function
11 yield a dollar number change in property values when you
12 plug in the change in employment?
13 A The application, as I understand it, is
14 illustrated in the tables that are included as part of
15 Exhibit 11. And as we see then at the top of each
16 column, there is percent of jobs lost. And then as we
17 track that down, we see, in the next to the last item in
18 the column, the proportion of assessed valuation
19 remaining, et cetera.
20 Q So, would it be correct to say that the
21 function yields a percentage or a proportion change?
22 A Yes.
23 Q And then that proportion change is
24 multiplied by some multiplier to get the actual dollar
25 change?
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1 A That's my understanding, yes.
2 Q What is the multiplier that it is
3 multiplied with?
4 A And, again, this could best be termed, I
5 think, speculation. My assumption or speculation is
6 that this percentage would be multiplied by a value
7 which represents the baseline property valuation, to
8 which then the property valuation corresponds to zero
9 percent job loss.
10 Q When you prefaced your answer with
11 reference to speculation, by that do you mean that you
12 don't know for a fact just how RPC may be using this
13 function to actually calculate?
14 A I have not reviewed the model in its
15 entirety, so I do not know for a fact just exactly how
16 this function is applied within the overall modeling
17 system.
18 Q So, then, you don't have an opinion about
19 any methodology that RPC may be using beyond the actual
20 derivation of the function itself; is that correct?
21 A Yes. At this point in time, I don't feel I
22 have the basis to have an opinion beyond that.
23 Q And you don't have an opinion, therefore,
24 about their application of the full methodology for
25 calculating property value impacts?
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1 A Right.
2 Q Then it is, also, true, is it not, that you
3 don't have an opinion about any results that they may
4 have obtained by applying the methodology?
5 A Correct.
6 Q Changes in local tax or local tax impact
7 analysis that RPC may be performing, I believe you
8 indicated yesterday that you have not had any
9 involvement in that analysis?
10 A Right.
11 Q Do you have any opinions about local tax
12 impact analysis that you have provided to RPC, either in
13 writing or orally?
14 A No.
15 Q Do you know whether RPC is doing social
16 impact analysis involving other elements, like crime and
17 domestic violence?
18 A I don't know to what extent they're
19 pursuing those areas.
20 Q Have you had any involvement in any
21 analysis of crime impacts?
22 A No.
23 Q By RPC?
24 A No.
25 Q So, you don't know whether they're
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1 performing any empirical analysis of crime impacts?
2 A No, I don't know.
3 Q Do you have any opinions about
4 methodologies or a methodology that should be used to
5 analyze crime impacts in the EAA?
6 A No.
7 Q How about domestic violence impacts?
8 A No.
9 Q No opinions?
10 A No opinions.
11 Q Same for self-esteem impacts?
12 A Right, no opinions.
13 Q How about family impacts?
14 A No, no opinions.
15 Q Is it correct that you have been involved
16 in some study of farmer bankruptcies in the midwest?
17 A Yes.
18 Q Could you tell me something about those?
19 A In North Dakota, I was in charge of,
20 project leader, for two studies of people leaving
21 farming during the 1980s. We did a survey of people
22 leaving farming in 1986, and a second one in 1989. And
23 these represented interviews with well over 200
24 households who had left farming, all of whom had left
25 farming within five years before the time that we did
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1 the interviews.
2 Some percentage of those, as I recall,
3 between 10 and 20 percent, had actually gone through
4 bankruptcy procedures. But, in any event, they all
5 could be characterized as people who left farming for
6 reasons other than retirement during this period of the
7 1980s.
8 Q And this was in a particular area in the
9 midwest?
10 A North Dakota.
11 Q Have you had any discussions with RPC about
12 the analysis that you performed concerning the
13 bankruptcies during that period in North Dakota?
14 A Yes.
15 Q Okay.
16 A In general terms, I am sure I provided the
17 RPC with copies of the two research reports and at least
18 one journal article summarizing the findings from those
19 studies. For that matter, the book, the Farm Financial
20 Crisis, that is referenced in one of the exhibits
21 contains a good deal of information from those studies.
22 So, I related to them the general findings
23 and, as I recall, we discussed, in general terms, to
24 what extent those findings might be applicable to the
25 situation in the EAA.
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1 Q You did discuss to what extent those
2 findings might be applicable to the situation in the
3 EAA?
4 A In a general way.
5 Q What did you indicate in those discussions?
6 A Well, I think that one area that we
7 discussed was that the type of farming would be
8 substantially different in this area of North Dakota
9 where those studies had been done, compared to the EAA.
10 And I guess my opinion was that that would limit the
11 direct applicability of our study findings to the EAA
12 situation.
13 Q In your opinion, notwithstanding
14 limitations, do your North Dakota studies from the
15 surveys in '86 and '89 provide some basis for drawing
16 inferences about social impacts that may result in the
17 EAA from implementation of the SWIM Plan alternatives?
18 A They certainly could be one of the things
19 considered, among others, in drawing such inferences.
20 Q Do you have any opinions about any
21 functional relationship between crime and economic
22 impact?
23 A No. Analysis of crime rates and so on has
24 not been something where I have really done previous
25 work. It is not an area where I would feel that I had
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1 the background to express an opinion.
2 Q Do you have any opinion about any
3 functional relationship between domestic violence and
4 economic impacts?
5 A I would make the same response. That is
6 not an area where I feel that I have the background to
7 formulate an opinion.
8 Q And the same would be true, I take it, of
9 self-esteem and the family?
10 A Yes.
11 Q And yet, you do indicate that the North
12 Dakota studies from the '80s that you discussed with RPC
13 might be used as some basis for inference about social
14 impacts in the EAA, correct?
15 A Again, analysis of social impacts is not
16 really my area, but based on methods that are used for
17 assessing impacts in other dimensions, it would seem
18 that one fundamental approach is often to examine
19 experience in what might seem, in the broad sense, to be
20 analogous cases or situations.
21 So, in that sense, then our North Dakota
22 study could be considered along with other studies
23 involving economic decline, economic restructuring and
24 the like as input to someone's effort to formulate
25 opinions with regard to the dimensions that you are
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1 talking about.
2 Q Is the key to the suitability of studies
3 like your North Dakota studies as a basis for inference
4 about social impacts in the EAA, the degree of
5 similarity between the conditions in the two areas?
6 A I would think that would be a major factor.
7 Q And you did indicate that because the type
8 of farming is different between the two areas, that
9 would limit the suitability of the North Dakota studies
10 as a basis for inference on social impacts in the EAA?
11 A Although I'm not attempting to formulate
12 opinions about social impacts, it would seem to me that
13 the degree of similarity or difference between the
14 areas, the type of farming, the characteristics of the
15 people involved and so on, would be major factors
16 affecting the applicability, "the transferability" of
17 findings.
18 Q Besides the opinion that I think you
19 indicated that you had expressed in conversations with
20 RPC about that limitation, namely, the differences in
21 the types of farming, did you express any other
22 opinions, that you recall, about the use of your North
23 Dakota studies as a basis for inference on social
24 impacts in the EAA?
25 A I think we pretty well covered it.
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1 Q Were there particular categories of social
2 impact that were discussed or analyzed in the North
3 Dakota studies that we have been talking about?
4 A We asked the respondents about a variety of
5 experiences that they might or might not have
6 experienced within the past. I believe it was the past
7 two years. And the list was lengthy. It was things
8 like have you been divorced, or have you -- it was a
9 long list. The summarization of those studies is
10 included in my documents somewhere, so rather than try
11 to recall a lot of specifics, if this is important, we
12 can probably find one of the documents that summarizes
13 what we did.
14 I would not characterize what we did as a
15 social impact analysis, per se.
16 Q Then would it be safe to say that you
17 didn't quantify social impacts in any way?
18 A Right.
19 Q Was it a qualitative analysis of social
20 impacts?
21 A I guess, again, I would not characterize it
22 as a social impact analysis, per se. What we did was
23 quantitative, in the sense of we were doing a survey, so
24 that in terms of things like have you been divorced, et
25 cetera, have you gone through bankruptcy, and all of
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1 these different things, the report then summarizes that
2 "X" percent of respondents said, yes, they had gone
3 through bankruptcy and the rest hadn't. This many had
4 been divorced and this many hadn't.
5 Q So, it was quantitative, not just with
6 respect to the antecedent conditions or the causes, but,
7 also, with respect to some consequences you did, in
8 fact, quantify divorce rates?
9 A Yes.
10 Q Were the samples of interviewees
11 statistically designed to be representative samples or
12 anything like that?
13 A That was the effort, yes.
14 Q To your recollection, I understand that is
15 not something that you necessarily referred to for
16 purposes of this deposition, but besides divorce rates,
17 did you quantify anything else in the way of consequent
18 conditions to the economic distress that these
19 interviewees went through?
20 A We, basically, quantified a good deal of
21 information in terms of what were they doing at present.
22 Were they employed? In what type of occupation or
23 industry? What was their income for the last year?
24 Information about assets, and debts and this sort of
25 thing. So, we were, basically, quantifying what their
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1 present situation might be in a number of dimensions.
2 Q Employment, income, assets and debts,
3 although those certainly sound socioeconomic, they sound
4 more, in a sense, economic than social. With respect to
5 the social categories that I named, of crime, domestic
6 violence, self-esteem, family, you mentioned divorce
7 statistics that you provided. Were there any other
8 purely social findings that were quantified in the
9 analysis, that you recall?
10 A As I mentioned before, it wasn't really
11 geared as, primarily, a social analysis. Some of the
12 indicators might be of some interest to people doing
13 social impact work, but we had not set out to do a
14 "social impact analysis" in that study.
15 Q So, then, it would be safe to say that you
16 didn't derive any conclusions about a functional
17 relationship between divorce and economic impact?
18 A Right. I did not.
19 Q But the data and the tabulation of the
20 data, in your view, might be used by someone undertaking
21 such an analysis of a relationship between divorce and
22 economic impact?
23 A Again, this area of social effects is not
24 one where I, normally, formulate opinions, et cetera.
25 It seems to me at least conceivable that some of the
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1 findings from studies like the ones that I have
2 described to you, the two that we did in North Dakota,
3 could be used, along with other information, by
4 individuals seeking to formulate opinions about
5 relationship of economic restructuring, economic
6 distress and divorce.
7 Q Other than the references to the literature
8 on population migration response in a declining area,
9 and the material that is discussed in Exhibit 11, did
10 you apprise RPC of any opinions or pertinent
11 information, in your view, from your research showing a
12 decline in rural communities?
13 A Not that I recall.
14 Q I would like to go back for a minute to a
15 topic that we discussed at some length yesterday; the
16 criteria and other methodology that RPC may be using for
17 determining when agricultural land comes out of
18 production. We had had some fairly extensive discussion
19 about Exhibit 2. If you would, take a look at that
20 exhibit, again.
21 A All right. Agricultural land, et cetera.
22 Q Other than the information and opinions
23 that may be provided in the agricultural land section of
24 this memorandum, did you provide any other input to RPC
25 in their formulation of the methodology with respect to
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1 when land comes out of production?
2 A No.
3 Q Did you give them any input that may not
4 have been in writing? Significant input in conversation
5 that would supplement this memo?
6 A Not that I recall.
7 Q And this would include the sub-issue of the
8 grower's subsidy from the mill?
9 A Yes.
10 Q On the issue of the allocation of STA
11 construction impacts and operation impacts between local
12 and non-local workers, is it correct to refer to that as
13 leakage, just as shorthand? Let me rephrase that. Is
14 that what you understand is being referred to in
15 references that RPC might make to the term "leakage"?
16 A My feeling is probably not. That probably,
17 as I understand it, the most common use of the term
18 "leakage" in these kinds of analyses often relates to
19 the expenditures which occur outside of the local study
20 area, such as purchases made outside of the EAA, in the
21 surrounding urban areas and that sort of thing.
22 The question of percentage of STA
23 construction workers who might be from outside of the
24 EAA would be related to the "leakage" phenomena, in the
25 sense that those STA workers who live outside of the EAA
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1 area would probably, normally, be expected to spend a
2 large part of their income outside of the EAA area, as
3 well.
4 Q So, then, it would be correct to say that
5 the allocation of STA construction and operation impacts
6 from implementation of the SWIM Plan in the EAA would be
7 one aspect of leakage, but leakage could include many
8 other aspects?
9 A Yes, yes.
10 Q Focusing on the allocation between local
11 and non-local workers of STA construction and operation
12 impacts, again, in Exhibit 2, there is a section that we
13 discussed yesterday at some length; the local employment
14 in construction of STAs?
15 A Yes.
16 Q This section pertains to the determination
17 of the appropriate distribution of those impacts between
18 local and non-local workers; is that correct?
19 A Yes.
20 Q Did you provide any other input to RPC on
21 this issue?
22 A No. I think this summarizes my input to
23 them on this issue.
24 Q So, you didn't provide anything? If you
25 might have had a conversation with RPC, in addition to
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1 this physical memo, it wouldn't have provided any
2 significant additional information?
3 A Right.
4 Q Or any significant inconsistent
5 information?
6 A That would be my feeling, yes.
7 Q Did you recommend a ratio to be used in
8 allocating the STA construction and operation impacts
9 between local versus non-local workers in this memo?
10 A Those percentages, I guess, would be
11 interpreted as a ratio between local and non-local
12 workers.
13 Q This section of the memo, as we discussed
14 yesterday, breaks down a local versus non-local worker
15 origin percentage into three different categories?
16 A Yes.
17 Q Do you know if RPC did an analysis of STA
18 operation and construction impacts that was so broken
19 down into those different categories?
20 A I don't know.
21 Q Can you do that with using the RIMS
22 multipliers that you referenced yesterday in exhibit --
23 I'm not sure of the exhibit number. Let me find that.
24 Let me rephrase the question while I look for an
25 exhibit.
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1 Can you break down the economic impacts of
2 STA construction and operation into three different
3 categories of skill and function, as you do in this
4 memo, when you are using the RIMS multipliers?
5 A It seems to me that breaking down the
6 local, non-local worker percentages by type of worker is
7 not inconsistent with the use of the RIMS multipliers in
8 the economic impact analysis.
9 Q Professor Leistritz, looking at Exhibit 4,
10 on the second page of this exhibit and the third page,
11 there were a number of references to RIMS II
12 multipliers; is that correct?
13 A Yes.
14 Q And one of them that you had indicated
15 would be the RIMS II multipliers for construction of
16 STAs, correct?
17 A Correct.
18 Q And that's the one referenced as 11.0703?
19 A Right.
20 Q Another one that you indicated would be the
21 multiplier for STA operation, correct?
22 A 12.0213.
23 Q Very good. If you would, tell me how would
24 you distribute the STA construction impacts between
25 local and non-local workers in the three different
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1 categories that are referenced in your memo in Exhibit
2 2, using the RIMS II multiplier?
3 A In general, my answer would be that there
4 would be several steps in the economic impact analysis.
5 That the assessment of local and non-local split on
6 numbers of workers would be an early step. There would
7 be some subsequent steps prior to application of the
8 RIMS multipliers. And one of those steps in between
9 would be some assumptions or estimates of leakage. That
10 is, how much of the expenditures for payrolls and that
11 sort of thing would we estimate would be retained within
12 the EAA that would be related, of course, to our
13 assumptions about the split of the workers.
14 MR. SAXE: Can we take a three-minute
15 break?
16 MS. RAEPPLE: Fine with me.
17 (Brief recess.)
18 BY MR. SAXE:
19 Q Professor Leistritz, in this memorandum,
20 Exhibit 2, the local employment in construction of STAs,
21 do you make a recommendation of a 50-50 ratio for
22 distributing the economic impacts of STA construction
23 and operation between local and non-local workers?
24 A The short answer is, no.
25 Q Just using one number, rather than broken
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1 down into the three different categories, would a 50-50
2 ratio for that distribution be the appropriate one, in
3 your opinion?
4 A I guess I would not offer an opinion
5 whether a 50-50 ratio would or would not be appropriate
6 without having perhaps more information.
7 Q In this section of the memo, is your
8 recommendation, effectively, with respect to
9 engineering, design and construction employment impacts,
10 that the ratio be one-to-nine?
11 A Right.
12 Q And with respect to skilled construction,
13 it would be two-to-eight?
14 A Right.
15 Q And with respect to unskilled, it would be
16 four-to-six?
17 A That's what we suggested in the memo.
18 Q Can you point to me any document that shows
19 the skill level data that you used in doing your
20 allocation?
21 A This was really based on information from
22 various interviews and, also, information with regard to
23 experience and other types of water and energy related
24 construction projects, as referenced in the couple of
25 sources that we cite there.
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1 Q In fact, we did have some discussion about
2 this yesterday?
3 A Right.
4 Q If I am recalling, that first sentence in
5 this section refers to analysis of secondary data, and
6 then interviews and we had some extended discussion
7 about that?
8 A Yes, we did.
9 Q On the secondary data, you had indicated
10 yesterday that there was information on skills,
11 occupations and educational levels that were available
12 through the U. S. Census and the Florida Job Service?
13 A Yes.
14 Q Did you do any analysis of that data that
15 formed a part of your identification or derivation of
16 these local, non-local ratios?
17 A In terms of a quantitative analysis, a
18 formula, something of this nature, no.
19 Q Could you describe for me what was done
20 using that data?
21 A Okay.
22 Q Could you first tell me, specifically,
23 whether the data that you used would be found in any of
24 the document and disk production in some form?
25 A I think the data, the census and the Job
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1 Service information, is undoubtedly or very likely to be
2 included among the documents produced by RPC, probably
3 in the form of memos and short tables.
4 Q Would that be the form that it came from
5 the U. S. Census Bureau and the Florida Job Service in?
6 A To the best of my recollection, from the
7 census, it would be information compiled from census
8 volumes or tapes. From the Job Service, it would
9 probably be a combination of statistics and perhaps
10 notes on interviews with Job Service personnel.
11 Q So, then, there is some processed form in
12 which the source data from the U. S. Census Bureau and
13 the source data from the Florida Job Service was
14 provided to you?
15 A Yes.
16 Q And those would be documents; is that
17 correct?
18 A That RPC produced sometime ago, I would
19 imagine.
20 Q When you say sometime ago, would it have
21 been before your deposition a year ago?
22 A Quite likely.
23 Q Can you describe it for me?
24 A Okay.
25 Q By this, I mean, the form in which it came
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1 to you?
2 A My recollection is that the census and Job
3 Service information was summarized in memos and in short
4 tables, showing, for instance, breakdown of the labor
5 force by occupation and this sort of thing.
6 Q Give me some other sorts of things?
7 A I believe I recall a memo, which one of Dr.
8 Luke's colleagues had prepared, which represented a
9 summarization of her interview with the local Job
10 Service office, I believe, in Belle Glade, where they
11 had commented on the skills of the work force,
12 employment, unemployment and related issues.
13 Q There are two breakdowns that you can give
14 me. One, you were describing the different ways in
15 which the data was broken down. I think you indicated
16 that it was broken down by -- what was it? Do you
17 remember the one type of breakdown that you just
18 testified to?
19 A Oh, I said the occupational breakdown of
20 the labor force.
21 Q And then the other, I was actually asking a
22 follow-up on that. I was asking you how else was the
23 data summarized, reported or broken down, besides
24 occupation?
25 A I am reasonably certain that another
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1 breakdown would be educational level, educational
2 attainment, for the population or the work force.
3 Q And the skills; is that correct?
4 A Yes.
5 Q You testified to this yesterday?
6 A Yes.
7 Q You referred to a memo that had been done
8 by one of Dr. Luke's colleagues?
9 A Yes.
10 Q Based on interviews with Florida Job
11 Service?
12 A That's my recollection.
13 Q Do you remember who that was?
14 A My recollection is that Jean Warner was the
15 person who had done the interview and the memo.
16 Q Any others that you recall in the way of
17 analysis of secondary data in forming these conclusions?
18 A Those are the salient things.
19 Q Does the Bureau of Economic Analysis give
20 any guidance to users about adjustments for workers
21 living outside of the impact area?
22 A I am not familiar with guidelines that they
23 may provide.
24 Q We touched on this yesterday, but I don't
25 think I asked you this question. Let me ask it to you
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1 now.
2 The number that you selected for STA
3 engineering, design and construction management, that 10
4 percent might be expected to come from the EAA, would it
5 be fair to say that that 10 percent number suggests that
6 there are very few, or one-in-10 engineers, who would be
7 required for STA construction that know anything about
8 digging canals?
9 A That would not be my interpretation. What
10 these percentages are intended to represent is an
11 estimate of the jobs of this category, engineering,
12 design and construction management category, in the STA
13 development, which would likely be filled by people
14 residing within the EAA, as opposed to residing outside
15 of the EAA.
16 A factor that seemed important for this
17 class of workers was, again, based on interviews there
18 in the region. It was my understanding that most of the
19 types of engineering firms, construction firms, that
20 might likely be involved in EAA development, it appeared
21 that most of those firms would be headquartered outside
22 of the EAA.
23 Since, again, experience with other types
24 of projects would suggest that most of the engineering,
25 design and management people involved in a project are
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1 likely to be long-term employees of the company that is
2 undertaking it, as opposed to people that are hired,
3 specifically, for the project, that was the basis for
4 the estimate of only one in 10 of this category of
5 workers being EAA residents.
6 Q Where would the construction firms that are
7 outside of the EAA likely be headquartered?
8 A Elsewhere in Palm Beach County, or in
9 adjacent counties, as I understand it. And perhaps more
10 widely. But it was my impression that quite a number of
11 these firms were headquartered elsewhere in Palm Beach
12 County, as well as the adjacent counties.
13 Q Thank you.
14 We had started off on leakage, and we got
15 into the subspecies of the 50-50 or other allocation
16 between local and non-local?
17 A Right.
18 Q You, also, indicated that there were other
19 census in which leakage might apply in the analysis that
20 RPC might be doing?
21 A Yes.
22 Q What other kinds of leakage?
23 A A one-dimensional leakage, as we referred
24 to, is if a substantial part of the workers live outside
25 of the EAA, then it would probably be estimated that
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1 relatively little of their income would be spent within
2 the EAA.
3 A second factor for those who do live
4 within the EAA is that their consumer expenditures will
5 likely occur within the EAA. But it may be that a
6 portion of their expenditures go to retail outlets,
7 shopping centers and the like outside of the EAA.
8 And yet another dimension of leakage would
9 be looking at the expenditures of the firms, be it
10 construction firms, mills and so on. The person of
11 their expenditures for inputs, and services and the
12 like, which go to recipients outside of the EAA, that
13 would be another component of the leakage.
14 Q Is there an increasing number of EAA
15 workers living outside of the EAA?
16 A In some of the interviews summarized in the
17 one exhibit, I was being told that there were a
18 substantial and perhaps increasing number of EAA workers
19 who lived outside of the EAA.
20 Q Is it true that the definition of leakage
21 depends upon where one draws the boundaries for the
22 study area; is that correct?
23 A Absolutely.
24 Q So, to the extent that EAA leakage involves
25 exchange with Palm Beach County and other adjacent
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1 counties, if one drew the study area around those
2 adjacent counties, instead, the leakage is not existent,
3 at least with respect to that?
4 A Yes. If the study area boundaries the EAA,
5 then the expenditures to other parts of Palm Beach
6 County, et cetera, are leakages. If you draw the
7 boundary to include all of Palm Beach County, then those
8 expenditures to the rest of Palm Beach County, which had
9 been leakages, are now no longer leakages because, by
10 definition, leakages are those expenditures that go
11 outside of the study area.
12 Q So, there is no internal leakage?
13 A So, the larger you draw the study area, the
14 less the leakage, other things equal.
15 Q Does the determination of a significant
16 amount of leakage suggest that the study area is more
17 properly drawn broader than it has been for a given
18 study?
19 A I believe that is not an unreasonable
20 statement. Another approach to this issue is that it is
21 not uncommon in impact studies to have multiple levels
22 of analysis. Perhaps local impact analysis, focusing on
23 an immediate area of communities which seem to bear the
24 brunt of the impacts. And then perhaps a more extensive
25 regional analysis, where the regional study area or
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1 analysis area is drawn more broadly to capture much of
2 the leakages that are identified as occurring from the
3 local study area.
4 Q Other than your input to RPC on the
5 distribution of STA construction and operation impacts
6 between local and non-local workers, did you provide any
7 other input to RPC on the broader topic of leakage in
8 their economic analysis?
9 A In one of these exhibits that we were
10 looking at yesterday, we talked about at least the
11 concept of doing the analysis at three different levels;
12 our local impact area, a regional analysis and the State
13 level impact. That would be the other significant input
14 that would come to mind.
15 Q Any others that come to mind?
16 A Not really, no.
17 Q Let me see, just for accuracy, if I can
18 find where you were discussing that. If you could take
19 a look through the exhibits.
20 A Actually, it looks like it is good old
21 Exhibit 2. And it is the page after the page that we
22 were just talking about.
23 Q All right.
24 A And it is the first full paragraph. It was
25 determined that three different levels of analysis would
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1 be appropriate.
2 Q I'm sorry if I asked you this question
3 yesterday. Excuse the repeat. Is RPC, to your
4 knowledge, analyzing impacts at those three different
5 levels; state, regional and local?
6 A I cannot say for sure.
7 Q In your opinion, is that the appropriate
8 methodology to use to address this leakage phenomenon
9 that inheres in the local impact assessment?
10 A Yes, I think so.
11 Q Referring back to the Federal principles
12 and guidelines that we had some reference to yesterday,
13 the principles and guidelines identified various
14 different levels of geographic focus for economic impact
15 assessment; is that correct?
16 A Yes.
17 Q What is meant by in NED?
18 A National Economic Development. There are
19 multiple accounts referred to in the principles and
20 guidelines. NED is the National Economic Development
21 account.
22 Q In your opinion, does addressing the
23 economic impact for the SWIM Plan at the State and EAA
24 level only satisfy the NED account aspect or requirement
25 of the principles and guidelines?
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1 A I don't know if I have enough information
2 to offer an opinion on that at this point.
3 Q In your literature, I believe it is in what
4 is marked as Exhibit 10, your threshold population level
5 article, you describe a phenomenon in the first
6 paragraph of increasing tendency for rural residents to
7 bypass nearby small towns for shopping centers, and
8 discount stores and larger trade centers?
9 A Yes.
10 Q Is there a trend in EAA residents bypassing
11 EAA cities to shop in larger trade centers?
12 A I have not had access to detailed retail
13 sales data by community to really give me a basis to
14 offer an opinion on that question.
15 Q Do you recall if that topic came up during
16 the interviews, of which you took notes, reflected in
17 Exhibit 3?
18 A My recollection was that one or more of the
19 people that I talked to discussed, for instance,
20 relatively limited retail, a relatively limited retail
21 sector in Belle Glade, and the impression that many
22 people went to the shopping centers of West Palm Beach
23 urban area for a substantial amount of their shopping.
24 Again, this was non-quantitative types of comments.
25 Q To your knowledge, are you aware of any
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1 factors that would distinguish the EAA from the North
2 Dakota areas that are referenced in the threshold
3 population article, in Exhibit 10, as far as this
4 phenomenon of bypassing local cities for remote larger
5 trade centers is concerned?
6 A Yes.
7 Q What would those be?
8 A Some factors that come to mind are factors
9 that distinguish the EAA study area from the North
10 Dakota and adjacent states that we referred to in the
11 article.
12 Q With respect to this type of leakage?
13 A With respect to this type of leakage.
14 Some things that come to mind, that I think
15 were mentioned in some of the interviews, was that on
16 the one hand, a certain portion of the EAA population
17 being seen as having limited mobility, hence, more
18 likely to purchase locally. And I believe these H2A
19 workers were mentioned in that regard. That they were a
20 major source of support for local businesses, because
21 they didn't in many cases have automobiles and so on, so
22 they couldn't go running off to West Palm Beach.
23 And on the other hand, also, discussion
24 about the fact of a significant portion of the EAA
25 people currently working in the EAA in the sugar
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1 industry, apparently, living outside of the EAA, in the
2 western suburbs. Wellington was a place that was
3 mentioned as a place of residence for a number of these
4 people.
5 And probably the general differences --
6 well, I'll just leave it there, as a couple of
7 differences.
8 Q Are H2A workers included in RPC's
9 employment and earning impact projections?
10 A That's a good question. I cannot say
11 without having a chance to study their analysis in its
12 entirety.
13 Q Should H2A workers be included in RPC's
14 employment impact projections?
15 A I don't think I would offer an opinion on
16 that without understanding the full context.
17 Q Would you have an opinion about whether H2A
18 workers should be included in RPC's earnings impact
19 projections?
20 A I don't think I would offer an opinion at
21 this time.
22 Q How about fiscal impact projections?
23 A Again, I don't feel that I have information
24 necessary to offer an opinion at this time.
25 Q Would that, also, be the case for
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1 demographic and social impact analysis that RPC might
2 be doing?
3 A Yes.
4 Q I had been asking you about inputs or
5 submittals that you might have made to RPC on the
6 broader issue of leakage, and you pointed me, again, to
7 Exhibit Number 2. Are there any other inputs that you
8 can think of?
9 A Not that I can think of right now.
10 Q Back to the documents.
11 A All right.
12 Q What is Exhibit Number 3? We haven't
13 gotten there yet, but we will get to that document.
14 Those are the handwritten interview notes and things?
15 A Yes.
16 Q Would you refer, please, to Exhibit Number
17 11?
18 A All right.
19 Q This exhibit deals with the memo to you
20 from Dr. Schubert concerning the proposed function and
21 your memo back concerning that function?
22 A Yes. Right.
23 Q It is correct, is it not, that population
24 decline begins immediately with the loss of a job, the
25 first job, by application of this function? Is that
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1 correct?
2 A That's the way it appears, yes.
3 Q In your previous models, did you make this
4 same assumption about an immediate population impact
5 from a very low level of employment impact?
6 A As I can recall, I have done a number of
7 these analyses using various types of models and
8 systems. In some of the analyses that we have done, I
9 think we have had a direct correspondence, as is shown
10 here. In others, as I recall, we allowed for a
11 fluctuation in, essentially, unemployment to occur;
12 which would probably mean that job loss would have to
13 reach a certain threshold, if you will, before migration
14 occurred.
15 Q Do you, usually, assume that there would be
16 some such threshold of unemployment before migration
17 occurs in the analyses that you have performed?
18 A We certainly have done it both ways. I
19 think one factor to be considered is what is the
20 baseline situation? I think both approaches have
21 considerable precedent in the literature.
22 Q With respect to the analyses that you have
23 done, as opposed to the literature on the topic, though,
24 have your analyses, usually, provided for some threshold
25 of unemployment before outmigration occurs?
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1 A As I say, we have done analyses and used
2 models that did both. We have used some models that had
3 unemployment threshold built in. We have used other
4 modeling systems that really did not have the
5 unemployment threshold. And population change,
6 essentially, was related to job change, from job one on.
7 Q Can an unemployment threshold of this sort
8 be provided for in an exponential function, or does that
9 require a quadratic function, or some other --
10 A I don't think I have an opinion on that,
11 without more information.
12 Q Which method would be most common in terms
13 of either providing an unemployment threshold, versus
14 assuming an immediate outmigration response, to a low
15 level of unemployment?
16 A I really believe an answer on that question
17 might require somebody to actually do a review of the
18 literature. And we have done some of those reviews in
19 the past, but that was probably several years ago, so I
20 don't think I have enough information to really offer an
21 opinion about what is most common.
22 Q How about in power generating plant models?
23 A Certainly, in some of the modeling that we
24 had done with regard to power plant construction, we did
25 a number of analyses, including some in North Dakota and
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1 some in Texas, using a particular type of modeling
2 system which has been sometimes referred to as the
3 T-A-M-S model, TAMS, or SEARS, S-E-A-R-S. And those
4 models incorporated an unemployment threshold.
5 So, probably quantitatively, in terms of
6 the total number of impact studies that I have been
7 involved in, the majority probably used that modeling
8 system. So, by definition, the majority would
9 incorporate an unemployment threshold.
10 Q Is there a model known by the acronym of
11 RED?
12 A Yes.
13 Q Does it incorporate an unemployment
14 threshold?
15 A Yes. The RED model was the basis for the
16 TAMS and the SEARS.
17 Q How about the REAP model, is that another
18 such model?
19 A That might, also, be viewed as a different
20 name for the RED model.
21 Q So, again, it would include an unemployment
22 threshold?
23 A Yes.
24 Q It sounds like these models are rather
25 incestuous.
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1 A Yes.
2 Q How do factors such as unemployment
3 insurance affect the decision whether to migrate from
4 the EAA in the face of unemployment?
5 A I don't think I have an opinion on that,
6 without more information.
7 Q Do you know whether the availability and
8 possible effect on outmigration of unemployment
9 insurance is considered in the RPC model?
10 A I don't know.
11 Q Was it discussed at all in model
12 construction, so far as you are aware?
13 A I was not party to discussions where that
14 was a major topic.
15 Q Did you make any account for unemployment
16 insurance in previous models or previous analyses that
17 you have done?
18 A To the best of my recollection, that was
19 not a major issue that we dealt with in those efforts.
20 Q How about other public assistance programs?
21 A Not really.
22 Q Would you consider unemployment
23 compensation to be a transfer payment, to the extent
24 that it is provided through EAA unemployed workers
25 living there?
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1 A I think it would be properly termed a
2 transfer payment.
3 Q Would funds transferred through such
4 transfer payments likely be spent within the EAA?
5 A At least to some extent, subject to the
6 same leakage phenomena that we discussed earlier.
7 Q Does outmigration occur symmetrically with
8 inmigration?
9 A I guess I'll ask you to repeat the
10 question, or tell me what symmetrically means.
11 Q Okay, I'll repeat it first. Does
12 outmigration occur symmetrically with inmigration?
13 A Then I guess I'll ask you to tell me what
14 symmetrically means in this context.
15 Q All right. Is there a common relationship
16 between outmigration and inmigration?
17 A I'm not sure if that question lends itself
18 well to a yes or no answer. I will say, yes. And then
19 say that to the extent of my understanding of the
20 literature, basically, literature on migration indicates
21 that outmigrants and inmigrants tended to share a
22 considerable number of characteristics, basically, with
23 migration being selective towards the certain age
24 groups, higher educational levels and the like.
25 The younger portion of the work force,
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1 typically, being more mobile. Generally, the more
2 highly-educated portion of the work force would be more
3 mobile.
4 Q I think I'm going in a different direction.
5 Let me rephrase the question.
6 Is there, usually, some creation of new
7 jobs associated with periods when there are losses of
8 existing jobs in a given area?
9 A I think I'll ask you to maybe clarify that
10 question a little bit.
11 Q That's okay. I'm not sure I will do that,
12 so we'll move on.
13 I am showing you what has been marked for
14 identification as Exhibit Number 12. Could you please
15 identify that, for the record?
16 A Yes, this is a handwritten memo to Eric,
17 referring to Eric Schubert, from Larry, myself.
18 Subject, data on sales per establishment. It is a
19 one-page memo, and then there are a collection of
20 attachments which, apparently, at least in someone's
21 view, bears some relationship to each other, I guess.
22 Q Do they bear any relationship to each
23 other, in your opinion?
24 A I think it was perhaps a collection of
25 notes and information that Mr. Schubert had put
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1 together, all relating in some way to data for
2 information relating to the EAA analysis.
3 Q Well, that is a relationship.
4 A Yes.
5 Q On the first page it has a sequence number
6 at the bottom, DLL 5167.
7 A Okay.
8 Q This is a memo from you to Dr. Schubert; is
9 that correct?
10 A Yes.
11 Q The first sentence says, "As we've
12 discussed, it would be helpful to have data on the
13 average sales per establishment for the major industry
14 aggregations represented by the RIMS 39 sector model
15 (see attached table)."
16 Was this the discussion of --
17 A Sales per establishment. Sales per
18 establishment that we related to a bit earlier today.
19 Q So, so far as you know, this was abandoned
20 from the standpoint of the methodology?
21 A I don't know for sure, but quite possibly.
22 Q But you had indicated that there were some
23 incompatibilities between the RIMS and such an approach?
24 A Potentially, yes.
25 Q On the second page, could you describe for
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1 me what these are, please?
2 A This is a list of the RIMS 39 sector, the
3 "RIMS 39 sector model", which is the broad industrial
4 categories included within RIMS. And many of those are
5 broken down for their more detailed model into -- well,
6 construction, for instance, here they have new
7 construction, maintenance and repair construction. That
8 other table that we looked at a little earlier today had
9 new construction broken down into a whole number of
10 categories. And, likewise, maintenance and repair
11 construction was broken down into a whole number of
12 categories.
13 Q I believe you indicated in your testimony
14 earlier that, to your knowledge, the particular rows,
15 not columns, but the particular industrial
16 classifications of the RIMS two multipliers that you
17 selected were the same that Hazen & Sawyer selected?
18 A That's my understanding.
19 Q The difference being Hendry County versus
20 Palm Beach County?
21 A Correct.
22 Q But, otherwise, they should be the same?
23 A That's my understanding, yes.
24 Q Would it be correct, then, that you did not
25 use these 39 sector multipliers?
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1 A Correct.
2 Q And why did you not?
3 A The reason that we did not use 39 sector
4 multipliers was because it was felt that the more
5 detailed breakdown would provide more accurate analysis.
6 Q The next page, DLL 5169, is this a work
7 table for what we looked at in another exhibit?
8 A Yes.
9 Q I guess that was Exhibit Number 2, this
10 information here?
11 A Yes. We would have to compare the numbers,
12 but that's what it should be, yes.
13 Q If you would, look at page DLL 5172, and
14 just take a look at that page.
15 A Maybe 62?
16 Q No. The DLL number. There are two sets of
17 numbers there.
18 A All right, 72, I've got it.
19 Q Thank you.
20 A My first comment is, these are not my
21 notes.
22 Q Could you identify for me whose notes they
23 are?
24 A Not with any degree of certainty. I could
25 speculate, but I don't know whose notes they are.
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1 Q Whose notes do you think they are?
2 A I would speculate that they might be Mr.
3 Schubert's notes.
4 Q There is a reference at the top. It says,
5 "Florida statistical" -- by abbreviation, does this look
6 like "Florida statistical abstract," and an arrow to the
7 right, and then, "Sales/firm ratio may be there to help
8 RPC to estimate loss."
9 Does that look right?
10 A Yes.
11 Q How would you understand that statement?
12 What does that mean to you?
13 A I think that probably that is Mr.
14 Schubert's understanding of, essentially, the comment
15 from the first page about maybe we could gather together
16 the information on average sales per firm. And one
17 source, the first source to look at, might be the
18 Florida Statistical Abstract.
19 Q Further down there is a reference, kind of
20 in the middle of the page. It looks like it says,
21 "Black woman," underlined, and then there is a number of
22 sentences.
23 A Yes.
24 Q Would you read the second line into the
25 record?
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1 A Okay. The second line, the one that begins
2 with "business"?
3 Q Yes.
4 A "Businesses already leaving the area,
5 (i.e., gas stations closings)."
6 Q Does this sentence have any significance,
7 in your view?
8 A Again, I think that was this gentleman's
9 notes from -- I was probably relating to him what I had
10 been told in an interview with a woman named Cartheda
11 Conchella, I believe is the pronunciation of the name.
12 She was introduced to me as an individual
13 who was to be described a