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Official Web Site of the State of Florida
STATE OF FLORIDA WEB SITE
Every year, we send an assortment of well-educated men and women to Florida’s State Capitol to represent us. They speak for us, act on our behalf, educate themselves about importatnt issues, learn how to work together and try to execute productive resolutions. If they like the job, they run for re-election. Sometimes, their reasons for being there differ from those given to their constituents prior to Election Day; their actions become inconsistent with their promises while questions about their legislative intentions are buried in a blizzard of platitudes. When this occurs, its usually a good time to consider “changing the guard”.

Official Seal of the State of Florida
STATE OF FLORIDA
To be effective, politicians must master a spectrum of communication skills. The art of defining an issue and exhorting the need for a piece of palliative legislation in the same breath is known as “spin”. Depending on how its utilized, “spin” can be either a tool or a weapon; it can rally support for a good cause or create just enough confusion to allow a fox into the henhouse.

Statehouse Representative George Moraitis
REP. GEORGE MORAITIS
In order to determine whether or not your representatives still speak for you, you must examine their work product. To properly diagnose or “unspin” an issue, simply read the actual legislation. If you don’t have the time or patience to peruse the dry legislative text, review an authoritative summary. Corresponding with your representatives is another alternative to directly examining legislative content. Every year, legislation affecting Galt Mile residents oozes out of Tallahassee, often unnoticed. The issues surrounding that legislation will be explained in this section. Before next year’s legislative session, the articles will be relegated to the site’s Tallahassee Archives, setting the stage for the new session. Email, write, FAX or telephone your Statehouse Representative and your Senator with the specific obstacles that any issue or legislative effort hold for you. To find all the contact information for the Galt Mile’s political representatives in Tallahassee or elsewhere, go to the Report Card.

Florida Senator Gary Farmer
SENATOR GARY FARMER
Georgetown Historian Carroll Quigley
GEORGETOWN HISTORIAN
CARROLL QUIGLEY
Galt Mile Residents are currently represented by George Moraitis in the Florida Statehouse and Gary Farmer in the Florida Senate. Notwithstanding their official “party” affiliations, their primary responsibility is to YOU. They are obligated to exercise their voting power and influence the outcomes of certain issues based upon the feedback they recieve from their constituents - US. If they don't - as exclaimed by Georgetown University Professor Carroll Quigley while considering the virtues of Democracy - we can “Throw the rascals out.”

Florida Senate Florida House After familiarizing ourselves with the legislative land mines planted during the annual session and unifying behind issues that benefit the entire neighborhood, we can send our political representatives in Tallahassee a clear and unconflicted wish list. Furthering their constituents' agenda will have a far greater impact on their future political ascendency than their party affiliations - or ours. This pro-active formula also shields our community from the paralysis of partisan gridlock that might otherwise belabor efforts to enact favorable legislation. By sending a few strategically timed emails, we can thwart bills conceived to abridge our rights, erode home rule and drain association budgets. Not a bad day's work!

Dolphin Sculpture at Entrance to the State Capitol Complex
DOLPHIN SCULPTURE AT ENTRANCE TO THE STATE CAPITOL COMPLEX

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2006

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2006 Articles

The Happy Ombudsman

Regency South President Garland Warren Gives FEMA a Clinic

2/2006 Legislative Update - Ellyn Bogdanoff

Condo Killer - Round III - Third Bite at the Apple

Condo Killer Legislative Contacts

3/2006 Legislative Update - Ellyn Bogdanoff

Community Association Day - 2006

4/2006 Legislative Update - Ellyn Bogdanoff

Galt Mile Insurance Crisis

5/2006 Legislative Update - Ellyn Bogdanoff

Help Enact HB 391

Strange Bedfellows

Hurricane Preparedness Sales Tax Holiday

Senator Jeffrey Atwater - 2006

Ellyn Bogdanoff - June 2006 Legislative Update

Governor Pulls the Plug

Association Insurance Alert

Questionable Insurance Payment Delays

Ellyn Bogdanoff Insurance Fix

Florida Property and Casualty Insurance Reform Committee

Ellyn Bogdanoff Insurance Conference

Other Issues

New Fire Safety Mandate



Beach Renourishment Project



Cleveland Clinic Emergency Room



City of Fort Lauderdale Page



Budget Crisis Page



Broward County Business



AEDs - Sudden Cardiac Arrest (SCA)



32nd Street Alley



Fort Lauderdale/Galt Mile Crime Statistics




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2006 Legislative Session



The Happy Ombudsman

Florida Condominium Ombudsman Virgil Rizzo
CONDO OMBUDSMAN
VIRGIL RIZZO
January 2, 2006 - During the 2004 Legislative session, a few Miami Legislators with designs on creating an assortment of condominium related business opportunities for certain constituent-donors, created a confusing rationale for reincarnating the
Condominium Ombudsman. Claiming that the Department of Business and Professional Regulation’s (DBPR) Division of Land Sales, Condominiums and Mobile Homes was so devastatingly inept – bordering on criminal negligence – they insisted that an Ombudsman would somehow accomplish what the Division could not. The Ombudsman’s Office mirrors some of the duties and responsibilities of the Division, sowing the seeds of a redundant agency. Condo owners now have two bureaucracies for the price of two.

Department of Business and Professional Regulation’s Division of Florida Land Sales, Condominiums, and Mobile Homes Designed as a support agency, the Division was originally conceived to protect Condominium purchasers from attempts by devious developers to retain control of the Board for nefarious purposes. To preclude developers from continuously influencing Association policy through the use of “shill” candidates, regulations governing the behavior of condominium board volunteers were instituted. Under their mandate, the Division launched thousands of Condominium Associations throughout the State into unencumbered self-governance. Not conceived to police the behavior of unit owners, the Division was never appropriated the extensive financial resources required to settle arguments between feuding neighbors. Several intransigent owners, frustrated with the compromise consequent to condominium living, approached a few legislators with some novel ideas about “correcting” the problems they had with their respective Associations. The legislators saw an opportunity to kill two birds with one stone. Always on the lookout for a viable new re-election platform plank, they set out to “liberate condo owners” from their yoke of oppression. While accomplishing this noble rescue, they could simultaneously square some of their outstanding election “commitments”.

A Miami union that had fallen on hard times, Local 11 of SEIU, was desperately seeking new sources of revenue. Their National Union was built on organizing Building Service Employees. As new building management technologies lessened the demand for labor, the number of dues-paying members dwindled. Millions of apartment dwellers, long beholding to landlords for their residence needs, turned to new housing strategies – co-ops and condos. These vertical communities not only offered an appreciating asset, but also afforded them greater control over their home environment. Whereas the union could influence a landlord to cooperate, they were precluded from going into private homes to insist that the housekeeper pay union dues. The hybrid nature of these vertical communities imbues an Association of homeowners with employer status. To engineer access into this fertile new arena, Local 11 had to devise a marketing strategy designed to create a need for their “services”. They needed an abusive employer from whom they could protect hapless hirelings.

State Condo Ombusdman Virgil Rizzo, SEIU Local 11 Deputy Director Hiram Ruiz, State Representative Julio Robaina, and State Condominium Advisory Council Vice-Chair Mark Benson
PARTNERS
OMBUDSMAN VIRGIL RIZZO, SEIU LOCAL 11 Deputy Director HIRAM RUIZ
AND STATE REPRESENTATIVE JULIO ROBAINA (AT PODIUM IN SEIU T-Shirt)
This created a dilemma. In apartment buildings, organizers could appeal to the tenants to pressure their landlord into unionizing the residence. Apprehension about potential negative publicity was often enough to elicit the landlord’s cooperation. Unlike apartment buildings, the employers in Condominiums are the homeowners. Unions foraging for replacement income faced the awkward task of convincing homeowners that their employees needed protection from them. If they could isolate those residents that serve on the Association’s volunteer board from the residents that elected them, they would have a viable straw dog. They could assert that while homeowners are fair, their boards aren’t.

Condo owners didn’t buy it. While some Associations evidenced the deficiencies sought by the union, the vast majority of elected volunteers comprising condo boards have proven responsive to the owners’ interests. These amateur democracies have been so successful that condos have surpassed single family homes in popularity throughout South Florida. The prospect of relinquishing control of their homes to an outside business interest conflicts with the reason that many homeowners originally opted for the representational self-governance inherent in condo living. To adequately support their “unfair employer” scenario, the union needed deeper divisions within the Associations and enough dissention to create an intolerable work environment. They allied themselves with groups of disgruntled condo owners with little in common save their disappointment with some rule or decision made by their respective Associations. They also invested in several legislative prospects campaigning for State office. By sponsoring harsh regulations designed to wrest control of Associations from elected homeowners and otherwise disrupt Association operations, the legislators will have satisfied those campaign “investments”.

Representative Julio Robaina, Condo Killer Bill Sponsor
REP. JULIO ROBAINA
When Virgil Rizzo showed up to work and requested his operating capital, the Division gave him a $103,000 initial budget - which included his $65,000 salary. Annualized, he will receive $177,000 and a fully-equipped Tallahassee office location. Section 718.5012, F.S., of the Condominium Act describes the Ombudsman’s duties and responsibilities. He is supposed “... to act as liaison...”, “... to assist ...parties to understand...”, “To monitor and review ...”, “To make recommendations...”, “To provide resources to assist ...” and “To encourage and facilitate...” Created to truncate litigation by promoting enlightened communications and education, his office would receive the modest capitalization adherent to accomplishing these functions. The legislators who promoted the revival of his office went ballistic.

Senator Walter Campbell Adresses Condo Owners
SENATOR WALTER CAMPBELL
EXPLAINS SB 1184 TO GALT MILE
OFFICIALS VISITING TALLAHASSEE
He wasn’t accorded the sweeping police powers his supporters envisioned. “He needs subpoena powers,” exclaimed Miami Representative Julio Robaina, author of several ill-fated legislative attempts to hyper-regulate condominiums. Every piece of legislation in Tallahassee is subjected to several questions expressly designed to ascertain whether the legislation is consonant with the Governor’s commitment to smaller, more efficient government. Determining taxpayer cost and whether a bill increases or decreases governmental regulation helps lawmakers gauge Administration support for their bills. A House of Representatives Staff Analysis revealed the cost of Robaina’s bill, including investigating “violations of the statute and rules by individual owners,” to be exorbitant. In addition to being unacceptably expensive, the Condo Killer bills aspired to heavily regulate how people live in their homes – a double whammy in Tallahassee. They died in committee. By attaching the remnant “Ombudsman provision” language to Senator Walter “Skip” Campbell’s well-supported Senate Bill 1184 (a bill that otherwise helped condo owners) during the 2005 session’s finale, Representative Robaina managed to backdoor the redundant entity. However, no funding was appropriated for the controversial office. In a “Wag the Dog” moment, the same Legislators who neglected to appropriate funds for the Ombudsman angrily claimed that the funding inadequacies were part of some conspiracy organized by the “status quo”.

River Reach Condominium
RIVER REACH CONDOMINIUM
Upon enactment, Governor Bush asked the Legislation’s Senate sponsor to recommend a candidate for the Ombudsman position. Senator Campbell recalled a physician and attorney whom his law firm had hired right out of law school to analyze medical malpractice issues. Occupied with a full plate, the Governor hastily assigned Dr. Virgil Rizzo to the post. He realized that he might have acted precipitously when several dozen of Dr. Rizzo’s neighbors at the River Reach Condominium organized a press conference wherein they described him as a “disruptive” individual unfit to lead the state’s condo mediation efforts. Evidently, Dr. Rizzo had been waging a war against his own Association for some years, as part of which they are suing him for libel.

River Reach Condominium Residents Confront Representative Robaina
RIVER REACH Condominium Residents Confront
Representative ROBAINA about his Controversial Bill
Since then, Rizzo has graced the media with an assortment of colorful recommendations and opinions. During a February Town Hall Meeting in Plantation, the “neutral” Ombudsman said, “I need money and personnel... to put the handcuffs on the bad people.” When interviewed by a Sun-Sentinel editorial board member, he stated that because condo owners rarely read their condo docs, he would recommend that the Legislature create “a uniform set of covenants, by-laws and procedures for everything.” His new Condo Docs would be applicable to every Association, notwithstanding its size or composition. When the interviewer pointed out that six-unit condominiums face different issues, problems and obstacles than Associations comprised of hundreds of units, he responded enigmatically, “There isn’t any difference between the large ones and the small ones.”

In June, he proposed a formal set of recommendations for enactment by the Legislature. They included reinstatement of almost every provision excised by the House committees reviewing Representative Julio Robaina’s failed Condo Killer legislation. He recommended removing an association’s right to self-determination with regard to financial reporting, election procedures, contracts and term limits. He again requested the expensive police powers repeatedly denied him by the legislature. In August, Dr. Rizzo stated regret at being precluded from “taking a baseball bat” to association members that file liens to protect the members’ assets. To clarify his authority, he asked Florida Attorney General Charlie Crist if “the Condominium Ombudsman has the authority to impose a civil penalty individually against any officer or board member who willfully and knowingly violates… an order of the Ombudsman.” On September 22nd, the AG responded, “The statute specifically states that it is the intent of the Legislature that the ombudsman act as a neutral resource for the rights and responsibilities of unit owners, associations, and board members. While the statutes provide for the ombudsman to make recommendations and assist condominium owners and boards, they do not authorize the ombudsman to issue orders or impose penalties or to initiate legal actions…”

Florida Condominium Ombudsman Virgil Rizzo
CONDO OMBUDSMAN VIRGIL RIZZO IN HIS OFFICE
To herald in the Holiday Season, Dr. Rizzo seems to have stepped up the immoderate rhetoric. Associations recovering from Hurricane Wilma reopened an ongoing debate about the advantages and disadvantages of fully or partially funding reserves in view of anticipated stiff emergency assessments. Homeowners in Associations with adequate reserves weren’t hit nearly as hard as those whose survival is contingent on special assessments. In some cases, the availability of reserve funds served as the determining factor between recovery and a red tag. As if to punctuate his litany of pronouncements prejudicial against board volunteers, instead of weighing in based on which proposal would best address the needs of the homeowner, he stated, “I’m against reserves, it puts money into coffers that directors can [illegally] get into.” It is remarkable that the man charged by the State to be a neutral, unbiased resource freely expresses such rank prejudice.

In a blatant effort to promote a private anti-Association political organization, the Ombudsman misled hundreds of condo owners attempting to get information from his web site. Homeowners investigating the Ombudsman’s new official web site (www.myflcondo.org) were offered a list of resources, ostensibly to help them investigate the factual basis for decisions involving condos. Of great interest to many homeowners is the Condominium Act, Chapter 718 of the Florida Statutes, which contains the laws governing condominiums. When they clicked on a link labeled “Florida Condominium Act, Chapter 718, Florida Statutes”, instead of going to the official State of Florida web site containing the Florida Statutes, they were diverted to the web site for “The Cyber Citizens for Justice”.

This is a private self-interest group comprised of a few hundred disgruntled homeowners with virulent anti-Association leanings. Their political agenda includes support for the Condo Killer bills and other legislation that erodes self-governance for Association members. Upon being surreptitiously redirected to the CCFJ web site, an admonishment appeared, “This is the Condo Act, very hard to read and quite boring.” Hundreds of homeowners, angered by a “bait and switch” tactic being practiced at an official State web site, protested to the Governor, DBPR, legislators and other elected officials. Within hours of the scam’s disclosure, the good doctor – one of the St. Augustine-based organization’s original members – swapped out the bogus link and replaced it with one that correctly connected people to the official Florida Senate web site that offers the Statutes. When appointed to the Ombudsman seat, he appropriately severed membership in organizations whose political bias calls his neutrality into question. He has, however, appointed another CCFJ member as an election monitor, a service for which he recently charged an Association $3000 to perform.

To sum up Dr. Rizzo’s dream community as per his statements and actions during the past year, there would be no “naïve” elected volunteers to represent the owners. Decisions and rules would instead filter down from Tallahassee, presumably his office. As he described, the rules would be the same for every Association, large or small, timeshare or standard. In view of his demonstrated antipathy to condo owners governing themselves, it isn’t clear how an Association should contend with an issue not addressed in his one-size-fits-all regulations. Since Associations would be precluded from establishing reserves, all expenses will be addressed through special assessments – “pay as you go.” Deadbeats will sidestep collection enforcement since no Association will be permitted to lien a scofflaw’s unit for not paying their fair share. Other Association members will then have the option of paying the deadbeat’s debt or doing without the service, repair or improvement for which the assessment was levied. For a percentage of the Association’s labor budget – paid through employees as dues – a union official will decide who fills what position in your building and how much you will pay them. Life will be a continuous celebration of the joys of public housing.

In early December he exclaimed that Association members needn’t focus on legal justifications prior to acting. In contravention of his mandate to examine the source of a conflict and recommend a resolution based on an objective application of the law, he proclaimed, “The most important issue before a condominium is whether the people are happy, not what’s legally correct or what the attorneys think is legally correct.” This statement is particularly confusing when juxtaposed with the long list of onerous condo regulations either recommended or supported by Dr. Rizzo. If the Ombudsman discards a legal basis for judgments, his subjective opinion will remain as the single critical guideline for decisions, recommendations and actions. Since the conflicts he is charged with resolving arise from differences in what makes people happy, how else will the Ombudsman decide which people deserve “happiness”? While our Ombudsman isn’t the first public official to recommend substituting his opinions for legal parameters, his characterization of replacing the law with “happiness” is colorfully unique – a nice touch! Virgil, we wish you happiness, too.

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Garland Gives FEMA a Clinic

January 7, 2006 - On Wednesday, January 4th, President Garland Warren of Regency South Condominium on Galt Ocean Drive perused his copy of the Sun-Sentinel. While reviewing his daily paper, he noticed an article that widened his eyes. A headline read, “FEMA changes policy, allows condo boards to seek hurricane aid”. The article stated, “The Federal Emergency Management Agency is taking applications from condo associations needing financial assistance to repair roofs and other commonly owned property destroyed or damaged by Hurricane Wilma, reversing an earlier refusal to offer such aid.” Garland smiled. The article continued, “But the application deadline is midnight Thursday night.” Garland cancelled his Thursday appointments. He would be busy.

FEMA Early Thursday morning, Garland went to the Small Business Administration office at 300 NW 1st Avenue in Fort Lauderdale, just off Broward Boulevard. When Garland explained his intention to apply for a low-interest loan to local FEMA representatives, they looked at him as if he had two heads. They informed him that the assistance he described didn’t exist. He showed them a copy of the article that he wisely brought with him. After some head-scratching, the supervisor contacted his Orlando Sub-Regional Office and FEMA headquarters in Tallahassee for clarification. Not surprisingly, Tallahassee FEMA officials were similarly perplexed. The local FEMA supervisor drew their attention to the newspaper article explaining the benefit. Apparently, Garland noticed only one other Association applicant attempting to navigate the FEMA condo maze. Finally, they conceded that condominiums are eligible to apply for Small Business Administration (SBA) loan assistance through FEMA.

Small Business Administration Consistent with typical FEMA surgical efficiency, they were unable to locate the proper format to create a case number. As such, the methodology ultimately deployed required Garland to open a case using his personal social security number. Once in possession of the case number, he approached SBA to apply for assistance for Regency South. They gave him the application papers which he will complete and return. “I still can’t get over that no one in FEMA was aware of their own regulations,” said Garland.

Federal Emergency Management Agency (FEMA) regulations have long precluded corporations from applying for assistance. Since the October 24th inception date for Hurricane Wilma applications, thousands of Associations applying for AID have already been denied adherent to this policy. Several weeks ago, FEMA adapted their policy to accommodate Associations, which are non-profit corporate entities. FEMA policy makers failed to alert federal, state and local FEMA operatives to this change. NOT to worry. Garland did it. He force fed the information through the FEMA chain of command as far as Tallahassee.

Evidently, FEMA computers haven’t as yet been programmed to accept applications from Associations. Jim Homstad, Orlando-based spokesman for FEMA, explained, “An elected member of an association’s board must apply on behalf of the association. If qualified, associations would be referred to the Small Business Administration for low-interest loans.” The loans could provide relief to condo owners from potentially huge one-time special assessments addressing storm damage. Homstad also recommended that individual condo owners with uninsured damage to their interior property, such as furniture and carpeting, should also apply. He suggested that homeowners should apply whether or not they wanted loan money. He elaborated, “Just because you apply doesn’t mean you have to take the loan, but if you don’t apply you may not be eligible for any government money.” Associations that qualify will be directed to the Small Business Administration, where they will be considered for low-interest loans.

It suddenly dawned on the FEMA think tank that if FEMA officials weren’t aware of this benefit, neither were the thousands of Associations and individual unit owners throughout the state whose experience didn’t include reading the morning paper. On Friday morning, January 6th (the day after the application deadline), SBA - which makes loans to businesses, including associations - announced a deadline extension of seven additional days for condominium and homeowner associations. The Federal Emergency Management Agency - which provides grants to individuals, including unit owners - has extended the time individuals can apply for grants until Thursday, January 19th. SBA spokesperson Gus Fernandez in Atlanta stated, “The SBA, aware that all federal agencies haven’t been providing the same information to callers, will accept loan applications if they’re accompanied by a letter of explanation. The letter should indicate that they received the wrong information from another source and request consideration for their late presentation of the application.” Explaining the reason for the extension, FEMA federal coordinating officer Justin DeMello said, “We want to make sure that every Floridian has had the opportunity to apply and receive the assistance for which he or she is eligible. Don’t prejudge yourself, call and apply by January 19th.”

Applications for SBA loans can be mailed to the SBA’s Texas office - National Processing and Disbursement Center - at 14925 Kingsport Road, Fort Worth, TX 76155. The SBA has set a July 24th deadline for aid to offset the loss of business revenues because of Hurricane Wilma. Fernandez said, “The deadline is later because businesses need time to show the loss of revenue.” Despite the SBA’s approval of 588 loans worth $33.5 million in Florida for Wilma recovery to date, they strongly recommend that condos and homeowner associations also apply to banks and alternate funding sources. After enduring a three to four month processing period for the 2.687% loan money, an application denial could send applicants back to the drawing board. Taking advantage of alternate funding sources could help avert the consequences attendant to putting all of one’s eggs in SBA's basket.

Regency South Condominium The types of AID available are rental assistance, repair grants, small business loans and temporary housing placement. People without insurance or whose losses are not completely addressed by private coverage or other aid programs are eligible for the assistance. However, insurance deductibles are not covered. Individuals and business owners who are ineligible for a FEMA grant may apply for a U.S. Small Business Administration loan to cover disaster-related losses. Unlike FEMA grants, loans from the SBA must be repaid. The first step in applying for aid is to register with FEMA. To apply for a FEMA grant or SBA loan, visit www.fema.gov or call 800-621-3362. The telephone number for the SBA Customer Service Center is 1-800-659-2955 and their web site is www.sba.gov.

The negligible turnout by Associations is understandable given the repeated denials for aid to Association applicants in the past. Fortunately, when the Regency South President realized the nature of the opportunity being offered, he set aside his doubt and decided to go for it. While the outcome will remain cloudy throughout the processing period, if successful, Garland Warren will have spread a painful assessment over a convenient repayment timetable. While demonstrating to his Regency South neighbors that his selection as President was no mistake, Garland Warren also drew a road map for neighboring Galt Mile associations facing similar financial strain. Interested Associations need only follow his lead. Eligible unit owners can apply for available grant money. The clock, however, is ticking...

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From the Office of Representative Ellyn Bogdanoff

February 2006 Update

February 14, 2006 - On February 6th, Florida District 91 Representative Ellyn Setnor Bogdanoff released her latest “Legislative Update”. She reviews some legislative tactics being explored to address the deteriorating insurance dilemma faced by Floridians. At a previous meeting with Galt Mile officials, Ellyn was alerted to the depth of concern exhibited by constituent Associations and their member residents about spiraling insurance costs. In response, she committed herself to investigating possible resolutions and keeping us informed about relevant legislative actions. In addition to addressing important issues, this newsletter evidences Ellyn’s habit - peculiar for a politician - of keeping her word. It reads as follows: - [editor]

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
Session is almost here. There are so many critical issues that we will need to deal with over the next 60 days. I know taxes and insurance are on the minds of many. I and several legislators with an interest or expertise in insurance matters met with Florida’s Chief Financial Officer, Tom Gallagher this week. We listened to some of his plans to make insurance more affordable and accessible and he asked for our ideas. It was a very productive meeting. One key proposal is to advocate for a national disaster fund. Dozens of states experienced a declared “national disaster” in the last two years, which engages a large percentage of our federal elected officials to bring this issue to the forefront.

Citizens Property Insurance Corp. Two weeks ago, I presented a proposal to the insurance committee regarding Citizens Property Insurance. Although Citizens was originally created as a temporary solution, I am recommending that it become a permanent option in Florida, but have recommended many changes to its structure. The changes will assure residents access to insurance, while encouraging the private insurance companies to do business here despite their exposure to hurricane losses. The proposal is too long and detailed for this article, but I am happy to talk to anyone who might have an interest. I will be sure to keep you posted on our progress.

Florida’s Chief Financial Officer, Tom Gallagher
Florida CFO TOM GALLAGHER
Our ever increasing property taxes will be discussed extensively this session as well. There are many proposals floating and I am working with another member on a unique approach that will hopefully not only solve the portability issue but also address the tax disparity recognized by many neighbors. This is a challenging problem, but we must take a holistic approach to solving it. We are looking at limiting property taxes across the board and possibly replacing it with a more equitable tax.

Representative Bogdanoff offers a Pipeline to Tallahassee
REPRESENTATIVE BOGDANOFF
A PIPELINE TO TALLAHASSEE
Education continues to be the number one concern throughout the state and we will be working on middle and high school reform, in addition to many other educational issues. I am a member of the PreK – 12 Committee and for the last year I have done extensive research on bullying in our schools. There have been many articles and tragedies lately and I filed HB 535, which is a culmination of all of our research and input from parents, students, teachers, and administrators. It was recently noted by Bully Police USA, a national grassroots advocacy organization, that if this bill passes, it will be endorsed as their model legislation, and the best in the nation. Idaho has already taken our language and has filed it as a bill for their next legislative session. This is something that will make us all proud. You can view this bill on my webpage at myfloridahouse.gov. Let me know what you think.

Click Here to the Florida House of Representatives
CLICK TO FLORIDA HOUSE
These are just a few of the many issues we will debate this year. I have always emailed home each week, giving folks the inside scoop on what is happening in Tallahassee, and providing updates on what important legislation is making its way through the process. If you want to be added to my email list, just send me a note at ellynb@bellsouth.net.

I can’t believe this will be my third session. I am truly enjoying the process and serving the citizens of District 91. Again, thank you for your confidence in me. Do not hesitate to contact me, Gerard or Aaron at (954) 762-3757 if we can be of service.

Until next time...

Ellyn


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Condo Killer - Round III

Third Bite at the Apple

Click Here to the Florida House of Representatives March 5, 2006 - “Its déjà vu all over again…” Mr. Berra’s famous observation aptly describes the most recent legislative effort to transfer control of condominiums from the people that own them to a governmental bureaucracy in Tallahassee. During the past two years, a cabal comprised of a local union, a group of disgruntled condo owners and some legislators hoping to cash in on controlling condo operations has repeatedly attempted to pass legislation terribly destructive to condo owners. In 2004, Miami Representative Julio Robaina sponsored the first Condo Killer bill - HB 1223 - which he publicly described as the “Peoples Bill”. Once condo owners read the actual text, they buried their representatives, Senators and the Governor in a blizzard of angry emails, letters and phone calls opposing the legislation. The bill was an ill conceived, poorly drafted monument to ineptitude. Through a series of harsh regulations, it sought to alter the current condo system into one more consistent with public housing... and pass its $multi-million costs to the homeowners. As the bill was vetted in the legislature’s Committee Process, its glaring deficiencies came to light. Unsurprisingly, it went down in flames.

Representative Julio Robaina
REPRESENTATIVE
JULIO ROBAINA
In 2005, the legislation was reincarnated (HB 1229) by the same cast of characters. This time, they took some precautions prior to plowing the faulty bill through the legislature. They mischaracterized their handiwork to their fellow legislators, stating that the vast majority of condo owners supported their onerous regulations. Decisions about funding reserves or who could serve on a condo’s board were too important to be left to “naïve” homeowners. In fact, one provision that dictated how many months an owner had to spend in the building annually before qualifying as a board candidate rendered every time-share condominium owner in the State ineligible to serve on their own boards. The bill mandated how Associations should allocate their parking spaces. It created different classes of condo owners within an individual Association, each subject to a different set of rules, obviating the constitutional guarantee of equal protection under the law.

Representative Rene Garcia
REPRESENTATIVE
RENE GARCIA
When fellow legislators asked the sponsors why their bills were so vehemently opposed by condo owners, they exclaimed that condo owners were being misled by their attorneys. Asserting that the average condo owner was too simple-minded to understand the bill text, they proclaimed that condo attorneys throughout Florida, attempting to sabotage the bill, brainwashed their condo clients into fomenting mindless opposition. Inasmuch, they demanded that the myriad objections to their heavy-handed regulations be summarily dismissed – ignored. The hundreds of condo owners that flooded Tallahassee last March during the Community Association Day event gave lie to the assertion that they supported the legislation. After the House staff’s analysis of the bill confirmed its opponents’ trepidations, the legislation was withdrawn by its sponsor. Legislators who took campaign contributions from a union supporting the disruptive legislation promised to their benefactors that they would return next year for another bite at the apple.

Representative Juan Zapata
REPRESENTATIVE
JUAN ZAPATA
On February 21st, Miami Representative Rene Garcia, a new player in this group of Miami Representatives who, strangely enough, have few or no condos in their home districts, sponsored House Bill 1227 (HB 1227), this year’s version of the “Condo Killer” legislation. Co-sponsoring the bill, however, is one of the original legislation’s sponsors, Miami Representative Juan Zapata. It appears that the vested interests behind the twice-defeated bills assembled every provision that was excised by various legislative committees as “unacceptable” and rolled them into one legislative “weapon of mass destruction” - HB 1227.

The public face of the coalition is a small collection of disgruntled condo owners whose unifying ideology is dissatisfaction with decisions made by their respective Boards. In response, the “Cyber Citizens for Justice” adopted a scorched earth policy; if they couldn’t control their condos, nobody would. Their intention is to dismantle the Condominium system in Florida. Their methodology is to regulate it into oblivion. Consistent with their previous ill-fated legislative attempts, the bill is designed to relieve homeowners of the responsibility for controlling their own homes. Decisions currently made by homeowners will instead be made by legislators in Tallahassee or an Ombudsman with overt ties to the “Cybers” and the legislators. This truckload of heavy-handed regulations will effectively disable condominium operations and skyrocket maintenance expenses. Its primary political objective, however, is to obliterate self-governance.


HB 1227 - Attack on Condos

The bill is a stew of badly written and often incomprehensible provisions apparently created in retaliation for alleged anecdotal injustices. It aspires to prevent an Association from enforcing its own rules. For instance, it requires the board to notify anyone who is subject to an enforcement action by certified mail. The violator “shall have 30 days in which to respond in writing. If no response is provided and the violation continues or is repeated, the Association may then proceed” with enforcement.

If your neighbor parks in your space or leaves garbage in the hallway, the Association may only act to curb the abuse after the 30th day. However, if the transgressor parks elsewhere or properly disposes of the garbage on the 29th day, the clock starts again. Another certified letter must be sent and the parking space is lost for another month. This applies to every Association rule or regulation. During the past few years, surveys universally demonstrate that the overwhelming majority of condo owners expect their boards to fully enforce their rules and documents. With no recourse to abusive neighbors playing loud music at 2 AM, allowing unauthorized persons to occupy their unit or taking their dog for a swim in the pool, this provision alone will make living in a condominium intolerable. Ramifications of this regulation aren’t subtle. It’s a huge loophole with one objective, to make Association rules unenforceable.

Another “Association Killer” provision states that, “a lien may not be filed on a condominium parcel until 30 days after the date a notice of intent to file a lien has been served on the owner of the condominium parcel by certified mail or by personal service” of process. By simply refusing any certified mail from the Association, a scofflaw’s unit remains immune to a deserved lien. This regulation will serve to make assessments voluntary. When scofflaws avoid paying their fair share, the expense falls to their neighbors or the Association does without the service, improvement, repair, etc. for which the assessment was levied. The only protection condo owners have against having to pay for a scofflaw’s indebtedness is its right to file a lien against the scofflaws unit. This provision doesn’t cure the loss of someone’s home to a minor indebtedness; it simply allows deadbeats to force their neighbors to pay their bills. Incredibly, the bill adds fuel to the fire by stating that “associations will no longer be able to accelerate assessments for a delinquent owner until a lien has been filed.” This gift to chronically delinquent owners places the additional financial strain on every owner that pays on time.

With regard to assessments, the bill mandates, “that a payment schedule be provided for special assessments with due regard to the financial burden of the assessment on the unit owner. Special assessment funds must be isolated from all other association funds.” Optimally, Associations would have to arrange special payment plans to fit each owner’s individual budgetary constraints. If, however, an owner considers the financial burden too onerous, either the Association can increase everyone else’s assessment or again, do without the service, improvement, repair, etc. for which the assessment is being considered. Irresponsible owners could sidestep their fair share by simply characterizing an assessment as a “financial burden.”

HB 1227 is peppered with provisions that interfere with an Association’s ability to govern itself. The bill requires, “When a unit owner files a written inquiry by certified mail with the Board, the Board must now respond in writing by certified mail, return receipt requested.” To prevent an abusive owner from repeatedly requesting the same documents or harassing the Association’s office with nuisance requests, current law affords an Association the right to regulate the manner and frequency of responding to capricious inquiries. While owners could still make as many requests as desired, an Association could opt to answer one during any 30 day period. The next one would be answered in the following 30 days. This discourages abusive owners from using nuisance requests to capriciously waste Association resources and harass Board volunteers. This amendment expressly removes the ability of a Board to adopt reasonable rules and regulations regarding the frequency and manner of responding to unit owner inquiries within a 30-day time period, inviting repeated abuse and hiking administrative costs.

When the United States Congress first voted down the “term limits” legislation, they characterized the concept as “the dumbing down of the Congress”; ridiculing the notion that control of the country should be left to the most inexperienced Congresspersons available! HB 1227 states, “A unit owner may not serve as a director for more than 2 terms or longer than 4 years. A member may not serve as an officer for more than 1 term.” The Florida legislators who designed this provision voted themselves an EIGHT YEAR TERM LIMIT a few years ago. Last year, these same legislators co-sponsored a bill to extend that to 12 years - claiming that their constituents had a right to elect the best qualified candidate. Clearly, the sponsors feel that living in a condominium makes that right superfluous. Convincing qualified people to volunteer service on a Board is difficult under the best conditions. After a few years, smaller Associations will be unable to fill their boards. A few years later, larger Associations will face the same dilemma.

These provisions demonstrate the serious disconnect exhibited by Garcia and Zapata with the realities of condo living. They unhesitatingly open Board volunteers to abuse while simultaneously eliminating eligibility for the best qualified and most experienced candidates. While they strenuously exclaim that term limits shouldn’t prevent THEIR constituents from repeatedly returning them to office, they demand that Condo boards be constituted through some eerie statutory version of musical chairs. Condo owners don’t want Tallahassee mandating that Association members “take turns” governing their homes, they want the right to elect the best qualified candidates willing to assume the responsibility.

There are a series of provisions that serve no apparent purpose other than to hike maintenance costs. Financial reporting requirements (i.e. to have your financial statements compiled, reviewed or audited) could not be waived for more than 2 consecutive years. Ordinarily, an Association may decide to pay an accountant for providing these services in order to allay concerns about the sufficiency of financial reports or when applying for financing. Forcing Associations to spend thousands of dollars for no reason is insipid. For smaller Associations, this groundless expense will force the elimination or postponement of some important repair or improvement. Another confusing provision requires that, “all notices of proposed amendments to the declaration be sent to unit owners by certified mail, return receipt requested.” When owners live out of the country it is often not possible to send them certified mail. By law, they will remain uninformed of upcoming votes on important issues. Moreover, unless they are expecting it, many people refuse certified mail when delivery is attempted. In addition to effectively lessening the number of owners apprised about new amendments, this will create another pointless expense.

HB 1227 removes the ability of an association to opt out of statutory election procedures. Under current law, smaller condominiums are able to streamline procedures in their bylaws for election of directors and notice for the annual meeting rather than use the more complicated and costly statutory procedures appropriate for larger Associations. This pointless additional expense will divert funds from needed improvements or seriously add to maintenance costs. Inexplicably, the bill also expressly forbids an association from printing the candidate information sheet on both sides of the paper to reduce costs!

A “twilight zone” provision would allow boards to only enter into bulk cable contracts for basic service and nothing else. Right now boards can negotiate for premium channels, security cameras and in-house channels as part of their cable contract. If this bill passes, that will no longer be an option. Every resident will have to pay $15 to $30 per month extra for the premium channels currently included in their maintenance for 50 cents. Also, they would have to pay extra for their “in house” channel. A related provision would prohibit the association from entering into service contracts for terms in excess of three years. Our five-year cable TV contracts have kept prices down. Shortening the terms of fixed-price utility contracts will proportionately hasten price increases. Why shouldn’t owners have the right to make these decisions? Do these legislators own cable television stock?

Another strange regulation prevents residents with disabilities from parking in a handicap parking space, even with the proper disability parking tags. Parking regulations and spot assignments are ordinarily constrained by an Association’s size, premises layout, space positions and space availability. Notwithstanding these factors, the bill demands that Associations provide parking spaces for guests with disabilities. In a cynical twist, disabled residents are specifically precluded from parking in these spaces!

Not surprisingly, the bill seeks to imbue the Condominium Ombudsman with the authority to operate independently of the Department of Business and Professional Regulation, eliminating the only statutory oversight constraining the Ombudsman’s behavior. It expands the Ombudsman’s powers to include the ability to “command” meetings between the board and unit owners without the approval or control of the Department. At the Ombudsman’s discretion, the Division will “pursue enforcement action in circuit court on behalf of a class of unit owners, LESSEES or PURCHASERS for declaratory relief, injunctive relief, or restitution against any developer, association officer or member of the Board or its assignees or agents”. In addition to giving the Ombudsman absolute power over 1.1 million condo owners; it enables him to represent lessees and potential purchasers despite their lack of standing in the Association. This is the third time that these legislators have attempted to morph the Condo Ombudsman into an omnipotent hired gun. No one may question or interfere with the Ombudsman’s appointment of an election monitor. Many of the 43 Associations for which the Ombudsman has already provided election oversight have questioned the qualifications of monitors selected by Dr. Rizzo and the exorbitant fees that were assessed. Although the bill requires the Department to pay all of the Ombudsman’s expenses, “all revenues collected for the office by the department shall be deposited in a separate fund or account from which the department may not use or divert the revenues.” Since the Ombudsman’s expenses will paid with taxpayer dollars, the huge fees collected from Associations in connection with the Ombudsman’s services (the necessity for which is determined solely by the Ombudsman) will accrue to a slush fund to be used as he sees fit.

HB 1227 creates a new 718.1223 – Protection Against Abuse. The Division of Florida Land Sales must immediately investigate all complains of abuse. The “ringer” here is contained in the Statute’s definition of abuse. It is defined as “any willful act or threatened act by a member of the board of directors of a condominium association or any member of a committee or subcommittee appointed by the board and any employee, volunteer or agent purporting to act on behalf of the board or any officer, director, employee or agent of the management company acting on behalf of a condominium association who denies OR IS LIKELY TO DENY a condominium unit owner or DWELLER any of the rights and protections afforded to the unit owner or dweller under applicable state and federal laws, administrative rules and the governing documents.” The Division is required to act against any volunteer or employee that incurs the ire of anyone in the building. No committed abuse is required to trigger an investigation, just the suspicion that an abuse may be in the offing. Enigmatically, this provision allows lessees and visitors (dwellers?) to also initiate actions against any employee, Association volunteer or Association member that so much as looks at them. Lessees could bring actions against owners in retaliation for complaining about their noisy parties at 2 AM. A paranoid visitor could bring an action against an employee for asking which unit they are visiting. In another effort to discourage board participation, this rule imbues visitors and lessees with greater standing than elected members of an Association’s Board.

HB 1227 Bill Information Links

  • Click Here to access the HB 1227 web page on the Florida House of Representatives web site.
  • Click Here to the bill text for HB 1227 in PDF form (Uses the Adobe Reader) on the Florida House of Representatives web site.
  • Click Here to the bill text for HB 1227 in HTML form (Uses your browser to view an ordinary web page) the Florida Senate web site.
  • Click Here to the identical sister bill in the Florida Senate, SB 2570 on the Florida Senate web site.
  • Click Here to the bill text for SB 2570 on the Florida Senate web site.


Beating Back a Bad Bill

Representative Juan Zapata
REP JUAN ZAPATA
The sponsors of this bill are not simply “out of touch” with the needs of condo owners. When the original “Condo Killer” bills were offered a few years back, it was widely believed that the original sponsors were simply unfamiliar with the problems faced by condo owners and the destructive regulations that comprised their bills were generally regarded as “unintended consequences”. During the past few years, the deficits in their legislation were questioned and eviscerated by every examining legislative committee. Committee members and bill supporters received thousands of objections to the baseless regulations that sought to drain Association resources while punishing owners and Association volunteers. Despite having been made aware of the adverse consequences their bills portended, sponsors steadfastly refused to adjust the legislation so that it accomplished their stated objectives without injuring everyone.
Zapata continues to remain conveniently out of touch with the real problems facing condo owners.

WIOD 610 First News In a recent WIOD radio broadcast, interviewer Brian Freeman asked Zapata, “What are the top three things that are in the bill here that you feel are the most important items?” Zapata responded, “Well, obviously, you know, in one of the bills where we put term limits, we talk about their being requirements of reserve in the budget, because many times the board basically decide not to have reserves in the budget, and then what happens if people get hit with these huge special assessments, they can’t afford their property, they’re forced to sell, or they have a lien placed on their property.” Obviously, Mr. Zapata is thoroughly unfamiliar with condo law. Condo boards don’t decide whether or not reserves are waived. That is determined by a vote of the full Association membership. Many of Zapata’s responses to Freeman’s questions revealed similar disconnects with the issues he is claiming to ameliorate. If Zapata harbored the slightest real concerns about condo owners, he would have at least educated himself about their problems.

Interviewer Brian Freeman
INTERVIEWER
BRIAN FREEMAN
The Miami legislators that annually promote these skewed bills are beneficiaries of contributions and campaign support from a union with a vested interest in dismantling stable Condominium Associations. SEIU Local 11 in Miami has been waging a campaign to replace lost income by penetrating the Condominium market. Composed primarily of Building Service Employees, they’ve lost much of their dues-paying membership to recent advances in technology. To help achieve their goals, they invested in the election campaigns of some local Statehouse Representatives. To formulate a rationale for these sordid regulations, they enlisted the aid of a small group of radical, yet vociferous, disgruntled condo owners called the “Cyber-Citizens for Justice” to “plead” for the legislative “reforms” that they intended to ram through.

Elan at Calusa Condominium
ELAN AT CALUSA CONDOMINIUM
Not surprisingly, Mr. Zapata has an additional personal agenda. Juan C. Zapata neglected to pay monthly maintenance for his unit at Elan at Calusa Condominium in Miami from June through October, 1989, in the amount of $181. His Association, fulfilling its fiduciary responsibility to protect its members from having to “carry” those who don’t pay their obligations, took action. Perhaps he felt that he was entitled to special treatment because he serves in the Florida Statehouse. His Association did not. He claimed that the Association was sending his bills to the wrong address. Is it possible he forgot that he owned a condominium for five months until they filed the lien?

Representative Zapata might have found a more appropriate way to exact revenge on his Association for expecting him to pay his bills. To dismantle the entire Condominium Association system in the State of Florida and place 1.1 million condo owners at risk is a severe response to an embarrassment that he brought on himself. Enlisting the aid of his friends in the legislature to accomplish payback is an abject abuse of his position and the power that accompanies it.

The bill’s proponents are relying heavily on the prospect that condo owners won’t sustain an effective opposition to this damaging intrusion of Government into their homes. In actuality, thousands of condo owners are again responding to this insidious strategy to sabotage the condominium system and usurp the constitutionally and contractually guaranteed right of homeowners to govern themselves.

Community Association Leadership Lobby (CALL)
COMMUNITY ASSOCIATION
LEADERSHIP LOBBY (CALL)
Fortunately, the Community Association Leadership Lobby (CALL) is spearheading opposition to this egregious abrogation of our rights. The vocal opposition is again claiming that they represent the interests of condo owners. To send a clear message to our public policy makers that the vast majority of condo owners do not want to see their homes regulated like public housing, they have organized another Community Association Day event. On March 15th, hundreds of condo owners from across the State will converge on Tallahassee to oppose these destructive regulations. CALL has chartered a plane to help transport Broward homeowners to the State Capitol. If requested, they will also help arrange lodging. Other groups located around the State will be driving and/or taking buses to the event. CALL will again be arranging a catered lunch, inviting key speakers to address the group, having introductions made on the House or Senate floor and arranging meetings with legislators in Chambers.

Coalition of Community Associations (COCA)
COALITION OF COMMUNITY ASSOCIATIONS (COCA)
This year, Galt Mile representatives will be joined by COCA (the Coalition of Community Associations), the GSAC (Gulf Shore Association of Condominiums), the SCCA (Space Coast Condominium Association), OCHAA (Orange County Homeowners Association Alliance), and a newly formed coalition of mobile home park owners (among others). There was never a greater need for a strong showing on CA Day. It was recently disclosed that the cabal of legislators trying to gain control over Associations is planning three other bills injurious to Association members. In the offing are an anti-foreclosure bill and a construction defect bill which will destroy decades-old statutory warranties on condominium construction. To defeat these bills, we need to demonstrate that these self-serving politicians do not represent our interests, as they so claim. In addition to securing the support of our representatives, we must also demonstrate the depth of our concern to the Governor and legislators throughout the capitol.


Join Us!

Stop this bill from becoming law!
WE MUST ACT BEFORE
HB 1227 BECOMES LAW
There are a host of excellent reasons to attend this event. If you object to government dictating how people should live within their homes, please inform your representatives. The one-size-fits-all regulations contained in these bills are consistent with the Ombudsman's stated intention to do away with Condominium Documents shaped by the homeowners that must live according to their tenets. Instead, rules would filter down from a bureaucracy in Tallahassee. Since this bill removes the only existing oversight of the Ombudsman's activities and behavior, it leaves his office with unquestioned power over how 1.1 million condo owners behave in their homes. To function fairly and properly, democratic institutions such as community associations (or the legislature!) must balance the needs of the individual with the needs of the Association. There is no question that that every democratic institution benefits from regulations that effectively fine tune that delicate balance. This bill does the opposite. For the benefit of condo owners from Missouri, the "Show Me" State, Click Here to access links to the actual bills and the legislative text. Every condo owner has a serious stake in this issue. For information about participating in the Community Association Day event in Tallahassee on March 15th, call (954) 987-7550 ext. 5237 or email CMURPHY@becker-poliakoff.com.

Click Here to access a Registration Form from CALL. The Registration Form contains the planned Agenda and pertinent travel info. While you may print and mail in your the completed Registration, since time is short, calling (954) 987-7550 ext. 5237 would probably be preferable. Click Here see additional information relevent to community associations on the CALL web site.

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Legislative Contacts
House Bill 1227 Senate Bill 2570

HB 1227 and SB 2570, the “Condo Killer” bills sponsored by Representative Rene Garcia and Representative Juan Zapata in the Statehouse and Senator Alex Diaz de la Portilla in the Florida Senate, have been assigned for vetting by several committees in each House. These committees review the legislation in a search for consequences not revealed by the bills’ sponsors.

In the Florida Statehouse, HB 1227 is scheduled to appear before the Civil Justice Committee, the Business Regulation Committee, the State Administration Appropriations Committee and the Justice Council. Its sister bill in the Florida Senate, SB 2570, has been referred to the Committee on Regulated Industries, the Committee on Community Affairs, the Committee on Governmental Oversight and Productivity and the Committee on Judiciary. The legislators that sit on each of these committees review thousands of bills every session. Except for high profile bills or legislation with which they are directly involved (e.i. as a sponsor), the input they receive about the bills they review comes from two sources, the bill's sponsors (who present the legislation in positive light) and Florida voters. If the legislation receives support from constituents, the committee members will vote affirmatively. Conversely, if Florida voters disparage the legislation, they will likewise oppose its passage!

Please take a moment to participate in the legislative process. Call, send a letter or an email to the legislators sitting on the committees responsible for reviewing the “Condo Killer” bills. During the past two years, similar bills were defeated because concerned and angry condo owners from across the State sent correspondences opposing the bills to their legislators, the bills' sponsors, the Governor and the legislators vetting the bills in committee. They didn't want vested interests in Tallahassee assuming control of their homes while claiming that condo owners are “too naive to govern themselves.” For those of you unfamiliar with the infamous “Condo Killer” bills, Click Here for a summary of the bills' provisions.

Chairman Pio Ieraci of the Galt Mile Community Association explained, “Its difficult to believe that civil servants in Tallahasseee would usurp our right to govern ourselves... until you read the bill!” Send an email, a letter or make a call to the Governor, Galt Mile Statehouse Representative Ellyn Bogdanoff and Galt Mile Senator Jeffrey Atwater asking them to vehemently oppose this legislation. Also, send emails to House Bill 1227 sponsors Representatives Rene Garcia and Juan Zapata and Senate Bill 2570 sponsor Alex Diaz de la Portilla to impart your opinion of their handiwork. The appropriate Subject Line is automatically filled in when you click on the email links below. Click on the Legislator’s or the Governor’s name to access their respective web pages.

The greatest opportunity to defeat bad legislation occurs while the bills are in committee. We have posted the contact information of the members of the vetting committees below. Call, write or email these legislators with your concerns about the bill. The message should be brief and clearly express your opposition to its passing. Click Here for the Statehouse and Click Here for the Senate to access the contact info for these Committee members.

Short for time? If you prefer, you can send one email to everyone listed above. Since the Subject Line is already completed, simply Click Here, say your piece and send it off!


Florida House of Representatives
Legislative Committees Reviewing HB 1227

HB 1227 will be vetted by the Civil Justice Committee, the Business Regulation Committee, the State Administration Appropriations Committee and the Justice Council. The members contact info is as follows:


Civil Justice Committee

Short for time? If you prefer, you can send one email to everyone listed above. Since the Subject Line is already completed, simply Click Here, say your piece and send it off!


Florida Senate
Legislative Committees Reviewing SB 2570

SB 2570 will be vetted by the Committee on Regulated Industries, the Committee on Community Affairs, the Committee on Governmental Oversight and Productivity and the Committee on Judiciary. The members contact info is as follows:


Committee on Regulated Industries

Short for time? If you prefer, you can send one email to everyone listed above. Since the Subject Line is already completed, simply Click Here, say your piece and send it off!

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From the Office of Representative Ellyn Bogdanoff

March 2006 Update - “It’s that Time Again!”

Click Here to the Florida House of Representatives
CLICK TO FLORIDA HOUSE
March 10, 2006 - On March 4th, Florida District 91 Representative
Ellyn Setnor Bogdanoff sent constituents participating in her “Legislative Update” email program one last correspondence before leaving for the Tallahassee mixmaster. She reviews some some of the unexpected obstacles her Direct Ship Wine bill is already facing. A bill classified as a benchmark template for the entire nation, her anti-bullying educational legislation has already been filed. Some other legislative targets in Ellyn’s 2006 session agenda include Budget issues, the DNA bill, and improving the Department of Motor Vehicles. Of course, she will also be confronted with supporting legislation that specifically improves life for her constituents and, conversely, be called upon to oppose bills bent on doing the opposite. In addition, this newsletter reminds us that she also has a family which, somehow, she manages to nurture while performing her annual legislative tightwire walk. Her last pre-session message reads as follows: - [editor]

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
I wanted to drop you a quick note and let you now that tomorrow afternoon I am heading to Tallahassee to prepare for the 2006 Legislative Session. I feel like we lost a month because of Wilma and even though I feel prepared, March snuck up on me. We are forwarding our phones, and both Aaron and Gerard will be with me. If you need to reach us, we forwarded our phones. As always, email is the quickest way to reach us, so please stay in touch.

Representative Bogdanoff is sponsoring a bill which authorizes direct shipment of wine for personal consumption into this state, House Bill 535
"FREE THE GRAPE"
I filed most of my bills early this year and feel like we got a good head start. So far the feedback has been great. I am a bit frustrated with the Direct Ship Wine bill (HB 247 CS) though and the press it has been receiving. As many of you know, I have been working on this issue for over 2 years. I filed a bill my first two years because like many of you, I strongly believe in the free market. The distributors successfully held off our efforts until of course, the Supreme Court ruled. Now everyone has come to the table to work out a compromise. I know I have discussed the particulars before so I won’t get into detail, but when I read in the newspapers that I am trying to restrict the market I go nuts. Where have they been for 2 years?

Department of Business and Professional Regulation’s Division of Alcoholic Beverages and Tobacco web page discussing Wine Shipment into Florida The papers are now focused on the limitations we placed in the bill so that we could gain the support in the House. Would I like a bill with no restrictions, you bet, but that is not the political reality. Some feel that since the Court ruled, we don’t need a law, but many wineries are reluctant to ship on the basis of some verbiage on the DBPR website. They want to see the regulation through statute. Besides, there is always the possibility that some forces will work to shut off direct ship in state to cure the constitutional violation. That has always been my concern. Based on my two years of working on this issue, I don’t think it is a far fetched possibility. If we work with all of the stakeholders and craft a compromise that everyone can live with, then hopefully that issue goes away.

Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco
ALCOHOL, BEVERAGES
& TOBACCO DIVISION
ENFORCEMENT
Here is the reality...if my version of the bill passes, over 95% of the product throughout the United States will be available to the Florida consumer. This is a huge benefit. Alcohol is a regulated product. It always has been, so to simply allow shipping without guidelines is contrary to what we have always believed is important. With statutory regulation, we are assured greater protections for underage drinking and assured that we will collect taxes. Anyone in this industry is used to working with regulation. We didn’t go overboard. I believe less is more, but after everyone had their say on what needed to be included, we came out with a good bill. This is a great free market issue. I wish we could simply free all of the grapes, but if I have learned anything over the past two sessions, good public policy takes time and when you consider all stakeholders, no one gets everything they want. If that happens, you know you’ve done well!

Click Here to the Bully Police web site
CLICK TO THE BULLY POLICE USA WEB SITE
I’ll be working on tons of education issues. We announced the anti-bullying bill (HB 535) last Thursday. I don’t know if I mentioned it before, but it was written up by Bully Police USA, a grassroots organization established to promote legislation and awareness on this issue, that if passed will be the endorsed legislation and the best in the country. I read in the paper today that 160,000 kids each day in Florida skip school because of bullying...wow.

Budget issues, the DNA bill (HB 61 CS), and improving the Department of Motor Vehicles (HB 267 CS) are just a few of the additional items we will also try to accomplish over the next 60 days. I will write to you once a week as I have in the past to keep you up to date on what is happening and to get your feedback on important issues that pop up.

Representative Bogdanoff offers a Pipeline to Tallahassee
REPRESENTATIVE BOGDANOFF
A PIPELINE TO TALLAHASSEE
For those of you who are new to our email family, welcome. As a Representative in the Florida House, I will do my best to take the mystery out of what happens in Tallahassee. Sometimes the sound bite you read in the newspaper only tells a little bit of the entire story. I try to highlight one big issue each week, but sometimes things are happening so fast it is hard to just pick one.

My kids are home on break. They came in last night and then I head out Sunday. I guess I will have to wait until they get back to Tallahassee to spend time with them. As always, I am looking forward to opening day. Adam Hasner and I delivered our gift of lunch boxes to the House members a couple of weeks ago. With the new lobby bill, they will need something to tote around their own bottle of water when they attend receptions. I sure hope the local organizations who visit us don’t cancel their receptions this year. We may not be able to eat or drink with them, but we can stop by and visit. Sometimes it is our only opportunity to meet with the individuals and businesses that make up the membership of the organizations that have issues before us. Most hire lobbyists to advocate on their behalf...doctors, dentists, small business, child advocates etc..., but it is important for us to hear from the members too. Many did cancel, which is unfortunate.

Oh well, time to clean off my desk and pack the rest of my things. Again, thank you for your great feedback over the last 2 years. I can’t believe this will be my third session...time flies when you are having a blast.

Until next time...

Ellyn
Ellyn Bogdanoff
Member of the Florida House of Representatives
District 91

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Community Association Day - 2006

Condo Owners Fight for Rights in Tallahassee

Condo Owners Converge on the State Capitol to Fight Damaging Legislation
CONDO OWNERS CONVERGE ON TALLAHASSEE
March 23, 2006 - During the past two years, a cabal of strange bedfellows comprised of a local union seeking to break into the Condo market, a radical group of disgruntled condo owners and some legislators hoping to cash in on controlling condo operations has repeatedly attempted to pass legislation “spun” by proponents as “the people’s bill”, promising “empowerment” to condo owners.
Representative Juan Zapata
REPRESENTATIVE
JUAN ZAPATA
On February 21st, Miami Representatives
Rene Garcia and Juan Zapata, members of a group of Miami legislators who, strangely enough, have few or no condos in their home districts, sponsored House Bill 1227, this year’s version of the Condo Killer legislation. This bill is a 48 page stew of poorly drafted and often incomprehensible provisions that divest condominium owners of the right to govern themselves. It contains a broad spectrum of damaging regulations that, for example, make rules unenforceable, skyrocket maintenance expenses, encourage harassment of Association volunteers and employees, make assessments uncollectible and impart unprecedented new prosecutorial powers to the Condominium Ombudsman. In an eerie “Twilight Zone” moment, the bill elevates the status of lessees and guests to a superior standing than that of owner-members.

Representative Rene Garcia
REPRESENTATIVE
RENE GARCIA
Fortunately, the Community Association Leadership Lobby (CALL) is spearheading opposition to this egregious abrogation of our rights. The vocal opposition is cynically claiming that they represent the interests of condo owners. To send a clear message to our public policy makers that the vast majority of condo owners do not want to see their homes regulated like public housing, they organized another Community Association Day event. On March 15th, hundreds of homeowners from across the State interrupted their busy schedules to converge on Tallahassee in opposition to these destructive regulations. To help moderate the per person cost of the trip, CALL chartered a plane to help transport Broward homeowners to the State Capitol. The Galt Mile Community Association joined with the GSAC (Gulf Shore Association of Condominiums), the SCCA (Space Coast Condominium Association), OCHAA (Orange County Homeowners Association Alliance), and a newly formed coalition of mobile home park owners (among others) to pro-actively oppose this legislation that seriously threatens to destabilize the Condominium system in Florida.

Condo Residents enter Capitol to Meet with Legislators
CONDO RESIDENTS ENTER CAPITOL
At the crack of dawn on March 15th, a contingent of Galt Mile residents met at Terminal 1 of the Fort Lauderdale-Hollywood International Airport. Regency Tower President Dott Nicholson-Brown arrived at the Airport with neighbors Eric Peter Berkowitz, James Rigney and Riviera President Ellen O’Neill, driven by Jim Rigney’s wife, Carole. At about the same time, Southpoint President Marty Glazer pulled up to the terminal with wife Shelley. They were joined by Ocean Club’s Rose Guttman and Galt Ocean Club President Pio Ieraci to board the flight to Tallahassee.

Senator Jeffrey Atwater Greets Galt Residents
SEN. JEFFREY ATWATER GREETS GALT RESIDENTS
Condo owners from across Broward County were buzzing with expectations surrounding the reason for their early morning confluence. While waiting to board the plane, Coral Springs resident Dr. Dan Mason of Country Club Towers summed up the rationale for the second Community Association Day event in as many years, “We need to let our legislators know that we are capable of governing ourselves and that this trend to heavily regulate how people live in their homes hurts every homeowner.” Upon arriving in Tallahassee, the Broward homeowners continued to the Capitol to meet with counterparts from all over Florida. After reviewing a carefully prepared activity schedule at a preliminary meeting in the Capitol building, several hundred homeowners from the Gulf Shore, the Galt Mile, the Space Coast, Coral Springs, Tamarac, Orange County, Naples and elsewhere endeavored to first meet with their local representatives to communicate their concerns and enlist their support.

Senator Jeffrey Atwater surrounded by - from left - Jim Rigney, Marty and Shelley Glazer, Ellen O'Neill, Dott Nicholson-Brown, Rose Guttman, Eric Berkowitz and Pio Ieraci
SENATOR JEFFREY ATWATER WITH (From Left) JIM
RIGNEY, MARTY AND SHELLEY GLAZER, ELLEN O'NEILL
DOTT NICHOLSON-BROWN, ROSE GUTTMAN
ERIC BERKOWITZ AND PIO IERACI
Benefiting from last year’s experience, the well organized event allowed Galt Mile participants to effectively direct their efforts. At an 11:15 AM meeting with Senator Jeffrey Atwater, Pio Ieraci and Eric Berkowitz read provisions from HB 1227 and SB 2570 to the Senator who commented, “It sounds like the same attack on condo owners that was attempted last year!” Southpoint’s Marty Glazer angrily exclaimed to Atwater that while condos desperately need emergency assistance with hurricane response and skyrocketing insurance costs, these legislators are seeking to repay a campaign debt to a Miami-based union “at the expense of 1.1 million condo owners.” After acknowledging that the provisions contained in the legislation clearly trampled homeowner rights, the Senator agreed to help oppose the bills. His assistance is particularly appreciated since he is a strong candidate for Senate President.

Senator Walter “Skip” Campbell addresses Condo Residents
SENATOR WALTER CAMPBELL
ADDRESSES CONDO RESIDENTS
At noon, homeowners were invited to the Leon County Civic Center to have lunch and hear a cross section of State public policy makers address a host of problems facing condo and coop owners. Senator Walter “Skip” Campbell expressed his concerns about Tallahassee usurping self-governance. A candidate for Attorney General, Campbell exclaimed that he would continue the policies of current Attorney General and gubernatorial candidate Charlie Crist.
Florida Department of Financial Services Chief of Staff Lisa Miller
FDFS CHIEF OF STAFF LISA MILLER
Responding to an earlier inquiry from Condo Ombudsman Virgil Rizzo about his police powers, Crist told Rizzo that “The statute specifically states that it is the intent of the Legislature that the ombudsman act as a neutral resource for the rights and responsibilities of unit owners, associations, and board members.” The bill removes any constraints on the Ombudsman’s office, creating a state-sponsored prosecutor financed with taxpayer dollars and in control of a self-directed slush fund. Inconceivably, the Condo killer bill makes it an actionable offense to even question the Ombudsman. Condo guru Pete Dunbar discussed the deductible issue on window and door replacements. Florida has seen almost every windstorm carrier head for the border, leaving homeowners at the mercy of high-cost insurers “of last resort”. Carriers have notified officials that they would only consider “new construction standards” as insurable entities if they were to return to Florida.” That means any “grandfathered” non-compliant construction wouldn’t be considered for coverage. Old windows and doors that fail to pass current building codes would strap their owners with statutory premium expenses that exceed their estimated replacement cost.
Senator Walter “Skip” Campbell addresses Condo Residents
PETER DUNBAR: INSURANCE COs
DEMAND COMPLIANT CONSTRUCTION
Dunbar served as general counsel for Florida CFO Tom Gallagher’s Division of Financial Services. Dunbar chaired Gallagher's Task Force on Policyholder Services and Relations to Citizens Property Insurance Corporation, charged with making recommendations to Citizens Property Insurance Corporation for improving customer service and returning policies to the private insurance market. Florida Chief Financial Officer Tom Gallagher’s Chief of Staff Lisa Miller seconded Dunbar’s conclusions about the threatened insurance nightmare.

Other State officials spoke at a meeting in the House Chambers, expressing dismay that homeowners have to expend resources opposing these clearly damaging bills while confronted with other significant issues. In addition to Senator Skip Campbell, Pete Dunbar and Lisa Miller, homeowners elicited support from Senator Jeff Atwater, Representative Mary Brandenburg, Representative Matt Meadows, House Majority Leader Andy Gardiner, Representative Franklin Sands, Senator Bill Posey, Representative Carl Domino and Molly Foley-Healy from CAI National,

Regency Tower President Dott Nicholson-Brown elicits Zapata Meeting
DOTT NICHOLSON-BROWN SETS
MEETING WITH SURPRISED ZAPATA
Representative Ellyn Bogdanoff
REP. ELLYN BOGDANOFF
Later in the afternoon, we met with District 91 Representative Ellyn Bogdanoff who also committed herself to oppose this legislation. After completing our initial goal of educating our local representatives and aligning their support, we considered the unlikely prospect of arranging an impromptu meeting with the bill’s sponsors, Representatives Rene Garcia and Juan Zapata. Evidently, they were avoiding contact with anyone participating in this organized opposition to their bill. Upon arriving at Representative Garcia’s office, his Secretary notified us that he wasn’t available. Undiscouraged, the Galt Mile group trudged to Representative Zapata’s office. His secretary also claimed that not only was he unavailable, but that he would be unavailable for the rest of the day. Disappointed at having been deterred, as our contingent prepared to leave, we noticed that someone was missing. Not to be denied, Dott Nicholson-Brown slipped past the secretary and into Zapata’s private office. Moments later, she rejoined the group, announcing that, “We have two minutes!” While we questioned Representative Zapata about his motives for sponsoring such a bad piece of legislation, he had occasion to ask Regency Tower resident Jim Rigney what he didn’t like about the bill. Jim growled back, “Everything... there’s nothing good about it.” Sarcastically, Zapata retorted, “Please, say what you think” to which Rigney reconfirmed, “I did!”

Marty Glazer and Eric Berkowitz discuss the legislation’s adverse consequences with bill co-sponsor Juan Zapata
SOUTHPOINT PRESIDENT MARTY GLAZER AND
REGENCY TOWER'S ERIC BERKOWITZ
EXPLAIN BILL CONSEQUENCES TO ZAPATA
After discussing the bill’s adverse consequences, Zapata admitted that the bill was fraught with terrible deficiencies. When asked to explain the reason for a provision that makes enforcing Association rules impossible, Zapata characterized his legislation as, “a work in progress.” Acknowledging that we offered legitimate objections to his legislation, Zapata challenged us, asking that we send him “a comprehensive constructive criticism of his bill as opposed to a blanket condemnation.” Presidents Council Chair Pio Ieraci accepted the challenge, agreeing to critique the bill’s 48 pages of badly drafted provisions. The response will be composed by the Galt Mile Community Association’s Board of Directors and forwarded to Mr. Zapata, who promised to take our concerns into consideration as the bill passes through the committee process. Input received from concerned Galt residents will provide additional building blocks when composing the final response to Representative Zapata. Shortly after the bill was initially filed, its provisions were summarized on the Galt Mile web site. When complete. the detailed bill analysis will also be published on the Galt Mile web site.

Presidents Council Chair Pio Ieraci agrees to critique admittedly flawed legislation’s for bill co-sponsor Juan Zapata
PIO IERACI AGREES TO CRITIQUE ZAPATA BILL
Depending on Zapata to correct this bill is, at best, a dubious aspiration. Despite the past failures of this bill’s previous incarnations, Zapata knows that it only has to be passed once to transfigure the Condominium system into public housing. To prevent this from happening, normally passive condo owners need to contact members of the committees considering the bill as well as its sister bill in the Senate, SB 2570.
Senator Alex Diaz de la Portilla - Sponsor of Condo Killer Senate Bill 2570
ALEX DIAZ DE LA PORTILLA
Condo Killer Senate Sponsor
Not surprisingly, SB 2570 is being sponsored by Senator Alex Diaz de la Portilla - another Miami legislator! When the bills are assigned to their respective vetting committees, the contact information of every committee member will be posted on the Galt Mile web site. As they wend their way through the committee review process, the bills’ progress will be followed on the Galt Mile web site as well.

House Majority Leader Andy Gardiner Speaks to Condo Owners in House Chamber
HOUSE MAJORITY LEADER ANDY GARDINER
SPEAKS TO CONDO OWNERS IN HOUSE CHAMBER
On several occasions, the promulgators of these bills have characterized condo owners as “naïve”. Our Ombudsman (to whom these bills impart unquestioned authority over 1.1 million condo owners) has credited this “naivety” for his recommendation that Tallahassee create “a uniform set of covenants, by-laws and procedures for everything” to replace the Condominium Documents of every Association in Florida. When a member of the Sun-Sentinel’s editorial board stated that a 6-unit condominium faces different issues, problems and obstacles than an Association of 600 units, the Ombudsman enigmatically responded, “There isn’t any difference between the large ones and the small ones.” The bills’ supporters have blamed the overwhelming opposition to their legislation by condo owners on their “naivety”. It has become clear that their strategy relies heavily on this conclusion, intimating that condo owners are incapable of ascertaining what is beneficial to them. They are also counting on the fact that most condo owners are unfamiliar with the legislative process.

Senator Bill Posey Discusses His Condo Bill at Press Conference
SENATOR BILL POSEY DISCUSSES
HIS PRO-CONDOMINIUM BILL SB 2530
People living in condominiums or cooperative units, like most homeowners, just want to go about their business. They have little reason to suspect an attack on their rights simply because they decided to buy a condominium or coop. This simple fact has made them particularly vulnerable to legislative ambushes designed to place the resources of over a million homeowners under the control of a few legislators and their supporters. The bills’ sponsors are banking on three assumptions. Many people harbor such an innate disinterest in politics that they would blindly accept the sponsors’ characterization of the legislation as “for their benefit.” Secondly, they expect that most homeowners will surmise that since the bills damage millions of their fellow Association members, opposition to the legislation will not require their participation – let George do it! They are also counting on the general misconception that legislators will automatically review the legislation, come to the conclusion that it will hurt millions of homeowners and angrily vote against its inherent injustices. If homeowners threatened with losing control of their homes neglect to defend their rights, neither will their legislators!

Representative Franklin Sands Speaks to Group in House Chamber
REP. FRANKLIN SANDS IN HOUSE CHAMBER
Legislators do not have time to read the myriad bills they are expected to vote on, much less investigate their ramifications. With the exception of a few high profile issues and legislation with which they are directly involved, they generally take direction from the support or opposition demonstrated by constituents when determining how to cast their votes. Without grass roots opposition, campaigns such as the one underwriting the “Condo Killer” bills are usually successful. During the past few legislative sessions, the universal opposition to these bills by condo owners was successfully expressed through the thousands of emails, telephone calls and letters to legislators and the Governor. The bills’ supporters are confident that this “survival instinct” will ebb with time and their efforts to turn condos into public housing will ultimately be rewarded.

Dolphin Sculpture at Capitol
DOLPHIN SCULPTURE AT CAPITOL
Association members, still preoccupied with recovering from the effects of Hurricane Wilma, are looking to Tallahassee for changes in the law to better protect themselves from future catastrophes and/or recover when hit by disaster. In view of the billions of dollars lost to the recent storms, insurance companies have universally abandoned the Florida market, confronting millions of homeowners with huge premium increases or no coverage. These critical issues, having thus far defied resolution, must be addressed even as homeowners are still repairing their devastated homes. There is little the average homeowner can contribute to the fiscal engineering required to re-balance Florida’s decimated risk pool and re-establish a competitive insurance market. However, there is something every homeowner can do to defeat the political machinations behind these “Condo Killer” bills.

Galt Residents in House Chamber
REGENCY TOWER PRESIDENT DOTT NICHOLSON-BROWN
AND NEIGHBORS JIM RIGNEY AND ERIC BERKOWITZ
SURROUND RIVIERA PRESIDENT ELLEN O'NEILL
Please take a few moments to send an email to your Statehouse Representative, your State Senator and/or the Governor to alert them to your concern. In addition, you can express your objections to the committee members currently considering the bills as well as the bill’s sponsors. Click Here to access the contact info for these politicians.
Dolphin Sculpture at Capitol
Welcome to TALLAHASSEE
For those of you with moral objections to harboring a computer (hi Mom!), please pick up the phone and tell the legislator’s office representative that you oppose passage of the bills. Many legislators either have local or toll-free numbers. No phone? Send a letter asking that they oppose the bills. Click Here to access links to the actual bills.

Alternatively, consider how many of your neighbors would have purchased their units if warned that some Tallahassee-based bureaucracy would decide what they needed, when they needed it and how much money they must spend. Absent the right of homeowners to effectively govern themselves, the popularity of shared common expense communities would plummet, followed by unit values. If we fail to let our representatives know that we object to being precluded from governing ourselves, these other issues will shrink to little more than academic exercises. We will no longer have the ability to address the problems we face. Instead, we will receive instructions from Tallahassee – quickly followed by an invoice, payable on receipt!

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From the Office of Representative Ellyn Bogdanoff

April 2006 Update - Weeks 3 & 4 in Tallahassee

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
April 2, 2006 - On March 31st, Florida District 91 Representative
Ellyn Setnor Bogdanoff updated constituents participating in her “Legislative Update” email program with a review of the first month’s progress. The House passed a major education reform package, both houses passed Joint and Several liability and the Finance and Tax committee passed an additional sales tax holiday saving shoppers up to $5000. The Sales Tax Holiday was one response to the flood of tax dollars currently awash in the Capitol. Our Representative also touches on the progress of her Direct Ship Wine bill, her anti-bullying bill, the DNA bill, her Guardianship bill and her Department of Motor Vehicles bill. Of greater direct relevance to Galt Mile constituents are her comments concerning the insurance crisis that threatens every Barrier Island homeowner with a personal financial dilemma. Read on: - [editor]

Click Here to the Florida House of Representatives
CLICK TO FLORIDA HOUSE
The third and fourth weeks are behind us and it was very busy in Tallahassee. Sorry I missed last week. I just simply ran out of time. Although many groups cancelled their events, several advocacy groups still made it to the Capitol. I met up with my friend that I told you about last week. I had not seen her since high school. She looked the same to me. We didn’t get much time to chat but promised to stay in touch.

The major education reform package passed the House. The debate went on for several hours. Interesting that most of the debate had little to do with the actual bill. The School Districts supported the changes. Middle School students will need 12 courses to be promoted to High School covering Math, Science, English, and Social Studies. We added a credit in the arts and PE in 6th grade. High School students will have required courses, but also have the opportunity to focus on an area of interest by majoring in a variety of subjects. The Senate has not passed its version of the A++ yet, but hopefully soon.

Joint and Several liability passed both the House and Senate.

The House budget is virtually done this year. We have quite a bit of extra money. The challenge is spending it where it is needed but not on recurring issues. Much of the extra money is a windfall due to the Hurricane. If we fund programs that depend on continued funding, we may have to cut off what we started. That is dangerous. Education should get more and that is a good thing.

I know we will look to give some of it back, after all; it is the taxpayer’s money. The Finance and Tax committee passed an additional sales tax holiday which will allow for folks to purchase items up to $5000. Many feel that we obtained the funds through sales tax and it should be returned in the same manner. This is one of many proposals.

I have a few projects in the budget to help with Hurricane damage and senior services. We have to watch those carefully. With the extra money, we should be able to take care of some of these issues since they are one shot deals.

The negotiations with the Senate begin soon.

Click Here to the Bully Police web site
CLICK TO THE BULLY POLICE USA WEB SITE
My biggest issue these past two weeks was the Anti-Bullying bill. It passed out of its second committee, but not without a great deal of debate. I really believe this bill is so misunderstood. Mrs. Johnston testified as did one of her son’s friends. They were all wearing shirts that said “Jeff's Bill” and support HB 535. It was difficult to hold back the tears. Looking in the audience, there weren’t many dry eyes. The young people who spoke were so articulate. I received a beautiful thank you from one of the young men who opposed the bill. He was impressed with the process and wrote to let me know that even though he would rather see changes to the bill, ultimately he believes that HB 535 will have a positive impact on kids. Now that was impressive...I think he has a future in politics :)

Like many of you, I am worried about the insurance issues and continue to receive a great deal of emails. I am not sure if we will get done what we need to this year. There is no easy fix to the windstorm crisis. We must figure out how to bring back the private insurance market. The state was a good stop gap, but we don’t belong in the insurance business. I am still working my proposal. There is no doubt that insurance will go up, but we need to find a long term solution to bring in additional carriers who will share the risk…okay, let me throw it out there and get your feedback.

Citizens Property Insurance Corp. What do you think about allowing carriers to come into the state and charge a rate they believe they need to survive say, on the first 200,000 to 300,000 of coverage? This is called “open rating.” The risk is that companies will come in and at first, charge high prices. The theory is that eventually, other carriers will see opportunity and the market will control prices. In other words, let the “free market” work. Right now, some of us are facing up to 70% increases in our insurance costs. I am not sure it could get much worse. But if we don’t do something, even if it is painful in the short term, we will never solve the problem in the long run. The state can always step in...the challenge is to figure out how we let the insurance market take over. Statistics show that if we had a major storm through a highly populated area, the state would not have the money to pay the losses. Citizens, Florida’s insurance company, will be the largest carrier in the state within the year if something dramatic does not change.

Representative Bogdanoff offers a Pipeline to Tallahassee
REPRESENTATIVE BOGDANOFF
A PIPELINE TO TALLAHASSEE
Currently, one aspect of the proposal moving through the House is to cap Citizens at 1 million in coverage. Ummm...Broward had 338,586 losses, of which only 4,782 claims were a total loss for a total of over 3 billion in claims. Remember, Wilma was considered a Category 1 or 2. I am not convinced this cap proposal solves the problem. Open rating has not been popular because it allows the companies to charge any premium, but if they want to write business they have to price it so that they can sell policies. Maybe we let Citizens compete for awhile, charging actuarial sound premiums so we can compare the market prices. Maybe we just try it in one county. I think it is an idea worth discussing. Okay, that is my insurance rant for today. I will keep you posted on our progress.

The wine bill was up in the Senate this past Monday. They have two versions and both passed???? The negotiations continue.

We met with the Supreme Court on Wednesday for a Breakfast reception.

My DMV, Guardianship, and DNA bills hit the floor next week.

I am glad I came home this weekend. The weather is incredible. Last weekend, my husband and I walked to Riverwalk and enjoyed the afternoon at Fiesta Fort Lauderdale. I haven’t done something like that in a long time. This week, I made it home on Friday and had a chance to catch up on some work at home. It is amazing how much mail piles up in a week. Tomorrow is our event at Southside School. That should be fun and it is for a great cause. Thanks for listening and let me know what you think about the insurance issue.

Until next time...

Ellyn
Ellyn Bogdanoff
Member of the Florida House of Representatives
District 91

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Galt Mile Insurance Threat

Associations - Comply or PAY!

Hurricanes Precipitate Insurance Threat April 10, 2006 - When Katrina, Jeanne, Frances and the other intemperate ladies ran rampant through the State, it marked the beginning of a two-year controversy over how Associations should respond to the prospect of recurring catastrophes. Along with factoring repair costs into condo budgets, Association members had to protect their units and the structure that housed them. The damage caused by Hurricane Wilma clearly corroborated that every breach to exterior doors and windows was a potential flashpoint for much more extensive damage. Even after witnessing the disastrous effects of inadequate protection, some associations nursed a controversy over the necessity of protecting every exposure in every unit. Recent insurance developments should quickly bring that controversy to a close!

Florida Chief Financial Officer Tom Gallagher
Florida CFO TOM GALLAGHER
Following the 2004 hurricane season, the Florida Legislature prepared itself for a frontal assault by the insurance industry. While closing ranks around
Tom Gallagher, chief of the State’s insurance unit, they nibbled around the edges of what was predicted to be a recurring catastrophe. The devastating 2004 hurricane season wasn’t simply a statistical anomaly, but a whole new ballgame. Despite the Governor’s call for a special legislative session to size up the problem and formulate some response, Tallahassee could only come up with “suggestions”. Politicians cursed with survival instincts felt there were too many variables to take definitive actions. After all, weather prognosticators don’t have a sterling record for accuracy.

Citizens Property Insurance Corp. While anticipating an attempt by the insurance industry to rectify the fiscal imbalance caused by the storms, State officials considered two possible scenarios. If the past season was a “glitch”, Tallahassee would have to guard against the industry overreacting with sky-high premiums and punitive deductibles. If the storms were, in fact, a taste of the future, they would have to scrap the actuarial basis for the regulations governing premiums, deductibles, renewals, etc. and start from scratch. Florida CFO Tom Gallagher announced that multiple deductibles were “fundamentally unfair and unjustifiable” given the absence of proof that the storms would be repeated. The insurance industry presented fiscal justification for permanent premium and deductible increases if these disasters proved to be recurrent. Attempting to contain the growing controversy, the legislature enacted regulations allowing each Association to play “weatherperson”. House Bill 9-A gave Associations the choice of selecting a single expensive deductible or multiple less expensive deductibles. If the past year proved unique, multiple, less expensive deductibles would save money in the face of a single storm. If the future brought several hurricanes, the single larger deductible better protected the Association’s budget. Tallahassee settled on adopting a “wait and see” strategy before committing further political capitol.

House Speaker Alan Bense, Senate President Tom Lee and Governor Jeb Bush
HOUSE SPEAKER ALAN BENSE, SENATE
PRESIDENT TOM LEE AND GOV. JEB BUSH
Senate President Tom Lee and House Speaker Alan Bense created the Joint Select Committee on Hurricane Insurance, whose mandate included, “Further study of the issue of multiple deductibles; including analysis of the effect on premiums, particularly for condominium associations.” The Committee’s full mandate charged it with “studying aspects of the residential insurance market in light of the potential $20 billion in losses from the 2004 storms which has provided a serious challenge to maintaining a viable private sector market and to keeping premium increases to a bare minimum.” In addition to multiple deductibles, the Committee made recommendations “on the appropriate level of the retention rate and evaluation of options for ensuring proper funding of the Florida Hurricane Catastrophe Fund.” They also explored “options to reduce the size of Citizens Property Insurance Corporation, our state insurer of last resort, while providing coverage at a fair price to homeowners who have no other option for coverage.” These assignments later proved prophetic. The Committee’s final report touched on every designated issue, leaving room for negotiations to proceed. Existing legislation containing “sacred cow regulations” would be re-examined in an attempt to arrive at an acceptable compromise.

Florida Hurricane Catastrophe Fund While development of an official policy was placed on hold, State officials would recommend that Florida residents do their best to protect themselves. The Governor stressed the importance of retrofitting older buildings with adequate protection from storms. The Hurricane Insurance Package (Senate Bill 1486, House Bill 1939, House Bill 9-A) passed on May 6, 2005 by the legislature included a provision that was designed to encourage Floridians to voluntarily comply with current building codes. It states, “By the 2006-2007 fiscal year, the Department of Community Affairs shall develop a low-interest loan program for homeowners and mobile home owners to retrofit their homes with fixtures or apply construction techniques that have been demonstrated to reduce the amount of damage or loss due to a hurricane.” To further ease the way toward voluntary compliance, the state launched the Florida Wind Insurance Wind Incentives Web Site to allow “Florida homeowners and builders to search for wind insurance incentives that are available for building features that reduce damage during high wind events like hurricanes. Building features that reduce wind damage include improved roof shingles, strong roof decks, hurricane clips/straps, impact resistant glazing or shutter protection for windows, roof shape and other construction techniques.” Until the State had hard evidence of redundant catastrophes, they would limit their response to suggestions and recommendations.

2005 actualized the insurance industry's worst fears. Rita, and finally Wilma, heralded a mass exodus of carriers from the Florida market. By early August, Safeco and Nationwide joined seven other carriers in leaving the State. Nationwide, Florida’s 4th largest carrier, withdrew from the “new policies” market despite receiving a green light from the State to hike rates by 21% on homes and 25% on mobile homes. The shoe dropped with a vengeance. Even hard-liner Gallagher conceded that Florida homeowners faced an insurance crisis. The previously inconceivable prospect of Citizens insuring every homeowner in Florida started to assume frightening proportions. The insurance statutes would need surgery to attract carriers back to Florida. The follow-up legislative insurance negotiations clarified the need for two major statutory adjustments. Rate regulations would require re-engineering to allow the industry to float back into fiscal balance. Secondly, covered structures would have to comply with current building codes. These non-negotiable, bottom line requirements filtered up from the industry’s re-insurance partners. Without their cooperation, even well-oiled insurance icons such as Allstate and State Farm cannot adequately mitigate catastrophic risk.

Attorney General Charlie Crist
ATTORNEY GENERAL
CHARLIE CRIST
Unfortunately, Gallagher’s “timing” was awful. The Florida CFO had announced his candidacy for the gubernatorial race. If he was perceived as spearheading huge premium hikes for homeowners and eliminating grandfathered exemptions to code compliance, other gubernatorial candidates such as Florida Attorney General Charlie Crist would benefit from an insurmountable advantage. Gallagher decided to let the free market take the heat. Given the highly publicized absence of a competitive insurance market in the State, Gallagher could survive a rate hike. He would have the carriers, not the State, demand that customers comply with building codes as prerequisite to being “insurable”. It didn’t take long for this plan to pan out.

QBE Insurance In early 2006, Galt Mile Associations braced themselves for large rate hikes commensurate with recent experience. Even after Southern Family requested a “non-rating” from A.M.Best in early 2005, they still had one rated carrier, Australia’s QBE. Every Insurance Committee on the Galt Mile realized that since becoming the only game in town, QBE wielded the keys to the kingdom. Acutely aware of this vulnerability, the Galt Mile Community Association carefully monitored insurance communications between QBE and its member Associations. Associations expanded hurricane building repair projects to include improvements required to bring their protective “skins” into compliance with building codes. They investigated upgrades to roofs, windows, doors and garage doors as specifically recommended by the Joint Select Committee on Hurricane Insurance in their final report. They couldn’t ignore the handwriting on the wall.

Associations under Financial Pressure In late March, the other shoe dropped. Associations along the Barrier Island received notification from lone rated carrier QBE that after May, no windstorm policies would be renewed. They explained that their re-insurers were intent on reducing their high-risk exposure. They estimated their maximum future capacity for this class of exposure to be roughly 25% of their existing customers. Three out of four customers would be left without a rated carrier – period.

GMCA Presidents Council Investigates Alternatives
COVERAGE CRISIS - GMCA PRESIDENTS COUNCIL
INVESTIGATES INSURANCE ALTERNATIVES
QBE further explained that the buildings included in the fortunate 25% would have to meet current code standards for “new building” construction. Grandfathered exemptions, while legal, would guarantee ineligibility for coverage. Non-compliant roofs, windows, exterior doors and garage doors threaten Associations with a quadrupling or quintupling of insurance premium costs when sought from non-rated carriers. The more severe deductible requirements of non-rated carriers will also add $millions to the amount that owners must pony up before triggering benefits. In a triple whammy, the increased maintenance expense will serve to substantially lower unit values. Galt Mile owners are facing possible maintenance increases of 50% to 90%, depending primarily on the “insurability” of their buildings. At the April 3rd GMCA Presidents Council meeting, member Associations overwhelmingly supported the Council’s recommendation that every member bring itself into full compliance.

Associations walking a tightrope Since some Associations wouldn’t be able to achieve the necessary compliance in time to be eligible for reasonable coverage, the Galt Mile Community Association is investigating alternatives. While their premium and maintenance costs would still explode, ineligible Associations may find refuge in the creation of a new Galt Mile Insurance Captive. An Insurance Captive is an insurance company that provides insurance to and is controlled by its owners. This version of self-insurance takes advantage of language in the Condominium Act (Chapter 718 of the Florida Statutes) that financially supports its formation.

A long-simmering debate in some Associations over the cost effectiveness of adequate storm protection is now academic. Residents of non-compliant buildings stand to pay more in insurance expenses than the cost of bringing their buildings into compliance. Simply put, the additional maintenance assessed to each owner coupled with the commensurate loss of unit value would exceed the cost of installing impact windows or shutters. The substantial increase in insurance premiums facing non-compliant Associations would also have paid for a compliant roof - several times over. However, once Associations suffering from non-compliant construction elements bring themselves up to code, insurance costs would accordingly abate.

As Murphy’s Law would have it, legislation devoted to emasculating an Association’s ability to cope with this - or any other - problem, the “Condo Killer” bills, is being simultaneously circulated in Tallahassee. While members of our insurance committees shed their “Clark Kent” secret identities and work to guide us through this crisis... the rest of us can at least see to it that their efforts aren’t undermined by enactment of legislation designed to dismantle the Condominium system across Florida. Click Here to read about the “Condo Killer” bills. Click Here to read what you can do to protect your right to self-governance. While contacting the legislators reviewing these damaging bills in Committee, you might suggest that the bills' supporters spend their time helping homeowners secure affordable insurance instead of usurping their right to govern themselves!

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From the Office of Representative Ellyn Bogdanoff

May 2006 Update - Weeks 5 & 6 in Tallahassee

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
April 30, 2006 - Our District 91 Statehouse Representative
Ellyn Setnor Bogdanoff sent an update to constituents participating in her “Legislative Update” email program on April 15th. The House and Senate passed her Guardianship bill, placing its enactment into the hands of the Governor. Her Direct Ship Wine bill and her anti-bullying bill were still under Committee scrutiny while the DNA bill reached the House Floor. Ellyn speaks to the Wilma-driven proliferation of greenbacks washing through the Capitol and the effect that the fiscal abundance has on legislators. The tension created by differing opinions over whether they should return it, sock it away for a rainy day, hold bread and circus style "Tax Holidays" or use it to address some of the fallout from the deteriorating windstorm insurance crisis will set the tone for their Budget package. Ms. Bogdanoff also offers a funding suggestion for the RTA (Regional Transportation Authority) - parent of the Tri-Rail. Her concept centers on using the some of the resources generated by the gas tax in conjunction with Federal matching funds to build an efficient public transit system. Sound interesting? Read on: - [editor]

Hi again...

First, let me thank you for the incredible feedback on the survey results. I have printed and saved all of your comments. I think there are some great ideas for our book next year…100 Ideas for Florida’s Future. I really appreciate the effort.

Representative Bogdanoff offers a Pipeline to Tallahassee
REPRESENTATIVE BOGDANOFF
A PIPELINE TO TALLAHASSEE
We are headed back on Monday to finish the last three weeks of session. Things will begin to pick up speed so keep your eyes and ears open. The House met this past Monday and Tuesday, but the Senate took off the entire week. I figured I would wait and combine week 5 and the two days in week 6 before writing. We had back to back meetings the two days this past week and pushed a lot bills through the system. It was a nice break. Things get tense toward the end of session. Going home for a few days to celebrate the holidays helps.

Click Here to the Florida House of Representatives
CLICK TO FLORIDA HOUSE
Budget conference starts this week and now that the state has estimated another billion in revenue, the negotiations should be more interesting. This huge increase from last year's budget is in large part is due to the Hurricane and hopefully, this won't happen again. We need to save a large portion of the increase for a rainy day and make sure that the extra money is not spent on recurring expenses. There are still so many different ideas out there on how to spend it, but I hope we figure out how to return a large portion of it to the citizens in an equitable manner.

Representative Bogdanoff offers DNA bill to Ascertain Guilt or Innocence
REPRESENTATIVE BOGDANOFF'S DNA BILL
WILL HELP ASCERTAIN GUILT OR INNOCENCE
I just got notice that my Wine Bill and the Anti-Bully Bill are each on the agenda for their last stop before they go to the House Floor. Both have been much more controversial than I expected. I have written extensively about both of these bills before so I won't get into detail, but hopefully both pass and then we have to wait and see what the Senate does. The DNA bill is on the Floor as well. We will be amending it to deal with the concerns raised by the changes made to it in committee.

The Guardianship bill that I have been working on for three years passed off the House Floor last week. It is a technical fix to the Guardianship law, but will hopefully protect a lot of people who are losing their trust funds due to fraud or undue influence. The Senate passed it as well, so it is off the Governor for his signature.

Click to RTA Web Site There is a new (old) issue on the horizon and I would like to get your feedback. The RTA (Regional Transportation Authority) is looking for a dedicated funding source. I have argued in the past that with all of the new tax money generated over the years that the County could use a portion of the gas tax to draw down matching federal dollars. The money will be used for building transportation systems to ease the congestion. Many of you know the Tri-Rail, which is an RTA service. I have talked with a number of folks who are experts in this funding area, and they believe using the gas tax can work and we would not compromise local road projects if we were to do it. The RTA has dismissed that option and each year comes to Tallahassee with a new proposal. They have not been successful. This year the RTA has a new proposal, and we are being asked to vote on a bill that will give each county an option to place a tax proposal on the ballot. The proposal adds $2 to each rental car fee. There seems to be a great deal of interest growing among the members because most feel it will not burden the local taxpayers.

Click to TriRail Site There is also the position that transportation is a need like any other and should compete for existing tax dollars. I receive hundreds of emails from folks who are trapped in their homes because of rising property taxes and it seems counterintuitive to talk about a tax increase, yet at the same time work to reduce the property tax burden. Well, what are your thoughts on this? Do we potentially add another tax or do we encourage the County to use gas tax money? I think the bill comes up for a vote this week in committee. This may not be a good time to ask the question. Like many of you, I just sent a check to the IRS... boy, I feel lighter!!! I may not have been very objective in my presentation, but I think you get the point... if you think it is a good idea, please let me know. If not, I want to know that too. What do you think the solution is to fixing the traffic problems, assuming we cannot stop the inevitable growth?

No solid solutions on the insurance issue yet. I will keep you posted, but I think we will have a new state pie soon. Next week should provide for some interesting comments.

I think that is it for now. It is 3:30 on Saturday and I have a few hours of daylight left to do something fun. Maybe I’ll pick the weeds out of my front yard? :)

Have a wonderful Passover and a very Happy Easter. I’ll be in touch next week.

Until next time...

Ellyn
Ellyn Bogdanoff
Member of the Florida House of Representatives
District 91

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“Show Me the Money!”
HB 391 Needs our Help!

Representative Carl J. Domino
REPRESENTATIVE
CARL J. DOMINO
May 5, 2006 - We are grateful for those times that legislators in Tallahassee “get it right”.
House Bill 391 by Representative Carl Domino benefits condo owners, coop owners and members of Homeowner Associations. The bill contains lender consent language (making it easier for condominium associations to amend their documents when faced with the requirement to obtain lender consent to amendments), extends reinstatement relief to voluntary homeowners’ associations whose covenants have been inadvertently extinguished by the Marketable Record Title Act (MRTA) and clarifies the HOA mediation procedures. In view of the crushing fiscal hardship suffered by Associations from the recent hurricanes, it extends the deadline to retrofit high rise common areas with expensive sprinklers from the current 2014 to 2025. After successfully surviving comprehensive committee reviews in both legislative bodies, HB 391 was passed out of the House by a vote of 113 Yeas vs. 0 Nays and was passed out of the Senate by a vote of 40 Yeas vs. 0 Nays.

Associations are being forced to finance $millions for code compliant upgrades required by windstorm insurance carriers in addition to the $millions in uncovered hurricane damage suffered by every building last year. Many Associations had to scramble to secure long-term (15 - 20 year) financing to preclude a mass exodus of fixed-income residents unable to pay the individual assessments needed to address the damage and/or the threatened increased maintenance costs of “windstorm protection”. Every one of our buildings is also amid expensive construction upgrades to 30-year old elevators, 30 year-old parking decks, 30-year old HVAC risers, waterproofing the building, etc. Associations are being forced to postpone desperately needed modernization to aging mechanical and/or structural components to address the unexpected hurricane damage and adherent spiraling insurance costs. If the expensive measures taken to protect the buildings from future storms are less than 100% effective, they stand to sustain additional damage – and expense – this year.

American Fire Sprinkler Association
AMERICAN FIRE SPRINKLER ASSN
Despite the fact that associations around the State are still reeling from the horrific results of the last two hurricane seasons and are scrambling to pay for increased insurance premiums, uninsured losses and repairs, the Plumbers and Pipefitters Union, the American Fire Sprinkler Association, the Florida Fire Sprinkler Association and the Fire Marshals Association have now vowed to seek a gubernatorial veto of this bill solely because of the retrofit extension. Notwithstanding that every Florida legislator voted to extend the installation deadline for the controversial sprinkler legislation, those benefiting financially refuse to postpone their big payday.

Florida Fire Marshals Association Requiring owners to address the additional expense of a “compromise” fire safety system of questionable benefit at this time is tantamount to an eviction notice for thousands of financially besieged homeowners. Associations desperately need the time to address life safety issues effectively, without having to choose between them or force fixed income owners to relocate. By giving Associations until 2025 to comply; the legislature sought to afford them the time to accumulate the resources to install effective fire safety systems, not some “minimum alternative” political compromise and certainly not at the expense of sacrificing protection from Hurricanes. By 2025, the National Hurricane Center’s predicted meteorological hurricane cycle we currently suffer through will have passed and the bulk of the financed recovery expenses will have been addressed. Nonetheless, at a $million + per Association, the sprinkler legislation’s beneficiaries want the expected $billions in sprinkler sales and installations by 2014, not 2025.

Fire Marshals Association threatens to pressure Governor Jeb Bush to Veto critical bill
GOVERNOR JEB BUSH
Since lawmakers wouldn’t accede to the self-serving supplications of the Plumbers and Pipefitters Union or the Fire Sprinkler Associations to subvert the bill and add to the unprecedented burden already shouldered by homeowners, they enlisted the aid of the State Fire Marshals Association to represent their interests. Having failed to force the deadline extension’s elimination in the legislative committees, the Fire Marshals and their lobbyists have turned their attentions to the Governor, threatening to bring unparalleled pressure to bear on the Governor to veto the bill.

Postpone Expensive Sprinkler Installation If we are to stave off such a veto, we must send thousands of emails to Governor Bush urging him to sign HB 391 into law and to resist attempts to veto this bill – ASAP! The universally supported bill only asks for more time to install these costly sprinkler retrofits while still digging out – literally – from the effects of multiple hurricanes. Please contact Governor Bush at jeb.bush@myflorida.com and copy the Secretary of the DBPR (Department of Business and Professional Regulations), Simone Marstiller, at simone.marstiller@dbpr.state.fl.us. For those who do not have computers, please call the Governor’s Office at 850-488-2272. It is imperative that the Governor’s Office hear from community association members on this very beneficial bill.

Its Time T Act!

Its time to act! Please send an email to Governor Jeb Bush encouraging his enacting HB 391. Either copy the email or send another one to to Simone Marstiller, Secretary of the DBPR (Department of Business and Professional Regulations). The email links below already have the Subject Line filled with “Please enact HB 391”.

Not to sure about emails? No problem! Call the Governor’s Office at 850-488-2272 and relate your support for HB 391.

DBPR Secretary Simone Marstiller
DBPR SECRETARY
SIMONE MARSTILLER
Who is Simone Marstiller? - Before serving as deputy chief of staff for Governor Jeb Bush, Simone Marstiller was general counsel for the Department of Management Services from October 2002 to June 2003, and was interim secretary of the department from January 2003 to April 2003. After she serving as deputy chief of staff for the Governor, she went to the State Technology Office (STO) as Florida CIO. The State Technology Office lost funding in the budget last July, resulting in the elimination of 26 positions, including CIO Simone Marstiller. About 156 high-tech workers were transferred to the state's Department of Management Services. Created by Gov. Jeb Bush in 1998, the scandal-plagued STO was closed after an audit revealed conflicts and irregularities with contracts awarded by the STO. On August 13, 2005, Governor Bush asked Marstiller to lead the Department of Business and Professional Regulation.

To understand the history of the Fire Safety legislation addressed in HB 391, Click Here. To learn more about the relationship among the organizations in the sprinkler alliance, See Below.

Strange Bedfellows!
Fire Safety Legislation Summary

May 14, 2006 - Five years ago, the Florida Legislature passed a clandestine bill requiring every Florida Association housed in a structure 75 feet above grade to install a Full Sprinkler System or, alternatively, establish an acceptable “Alternative Minimum Life Safety System”. Scrutiny of the new law revealed it to be a $multi-billion payday for certain vested interests instead of effective fire protection. This “midnight legislation” was supported by three vested interests, the Plumbers and Pipefitters Union, the American Fire Sprinkler Association, the Florida Fire Sprinkler Association and the Fire Marshals Association (FFMIA). While the State Fire Marshals are motivated by altruistic intentions for both firefighters and the general public, the legislation’s details (wherein the devil resides) were the handiwork of the bill’s major sponsors. Not surprisingly, the Plumbers and Pipefitters Union and the Florida and American Fire Sprinkler Associations (well-financed trade organizations) were intent on creating a need for the sale and installation of $billions in plumbing equipment.

Florida Fire Marshals Association Since the major cause of fire-related deaths is from smoke inhalation and property loss from water damage drives insurance companies to distraction, the law to impregnate every high rise building in Florida with sprinklers was, at best, incomplete. Following a State-wide outcry against the suspect $multi-billion expenditure, the legislation was somewhat modified to allow Associations and their Fire Safety Engineers to compose effective Fire Safety systems (the “opt-out amendment”) instead of the questionable $multi-billion sprinkler retrofit. However, the opt-out amendment that passed over the virulent objections by the Plumbers and Pipefitters Union and the Fire Sprinkler Associations still requires that Community Associations retrofit every unit foyer and common area with sprinklers by 2014.

VESDA Aspirating Smoke Detector
VESDA Aspirating Smoke Detector
Technological advances over the past few years have introduced acceptably safe alternatives to “the sprinklering of common areas”. Intelligent Fire Detection and Alarm systems (VESDA--Very Early Smoke Detecting Apparatus - an air-sampling smoke-detection system that collects and analyzes room air conditions and identifies incipient fire development prior to visible smoke), automatic elevator recall systems, redundant control panels, code-surpassing containment features (firewalls, stairwells, doors, etc.) and dedicated building-wide communications (annunciator contact with units) would provide substantially greater safety at less cost than a half ton of plumbing supplies in your foyer. A mechanical ratchet device recently demonstrated at the Broward County Fire Academy turns every window, balcony or catwalk into a viable escape egress. Subsequent to the original sprinkler mandate, the initial pork barrel payday was being legislatively modified into effective protection. However, the sprinkler vendors are chaffing at the bit to retrofit every unit foyer and hallway with sprinklers before acceptable alternatives render them superfluous.

American Fire Sprinkler Association
AMERICAN FIRE SPRINKLER ASSN
Politics is an oft postulated stewpot for strange bedfellows. The various proponents of the sprinkler law are fueled by different objectives. While Fire Marshals are primarily guided by their aspiration to save lives, their partners in this venture have a huge financial stake in preserving those parts of the statute that require the purchase and installation of $billions in fire sprinkler equipment and its adjunctive plumbing. Despite their differing motives, the political components of their representative organizations have forged an alliance in furtherance of their respective agendas. The value of each party to the alliance is measured by the resources they can contribute to their mutual objective. While the Plumbers and Pipefitters and the Sprinkler Associations bring deep pockets to the table, the Fire Marshals can deliver public and political credibility.

National Fire Sprinkler Association - AKA the Florida Fire Sprinkler Association
NATIONAL FIRE SPRINKLER ASSN
When financial resources were necessary to satisfy political accommodations made by their lobbyists while aligning support for the sprinkler law, the Sprinkler Association did the heavy lifting. When the coalition decided to oppose badly needed popular legislation such as House Bill 391, only the Fire Marshals had the credibility necessary to weather the resulting public suspicion and antipathy. As such, the Fire Marshals donned their dress uniforms, converged on the Capitol and fought to expunge the threatened delay to their partners’ payday. Despite their efforts, the legislature favorably passed HB 391 by a 113 to 0 vote in the House and 40 to 0 in the Senate.

This created an additional dilemma. Since Fire-Rescue personnel were at the forefront of every municipal and county hurricane recovery effort, Fire Marshals are intimately familiar with the damage suffered by the homeowners seeking relief brought by the bill’s deadline extension. If successful at defeating the extension, they would force homeowners to neglect critical hurricane recovery and protection in favor of the questionable fire protection afforded by installing sprinklers in unit foyers and certain common areas. On the face of it, this trade-off is absurd. While no sane human being advocates that dangerous firetraps be excluded from complying with the Fire code, the one-size-fits-all nature of the legislation precludes the Fire Marshals from distinguishing between dangerous tinder box structures and Associations fully compliant with all Fire and Safety codes. The danger to life and property from the upcoming hurricane season far outweighs the comparable threat posed by next year’s possible fires in unit foyers and hallways of structures with hi-tech detection and alarm, automatic elevator recall, code compliant containment and building-wide communications.

Chuck Akers - Executive Director of of the Florida Fire Marshals and Inspectors Association & American Fire Sprinkler Association
CHUCK AKERS - EXECUTIVE
DIRECTOR - FFMIA & AFSA
Having seen the suffering caused by hurricanes and fires, most rational Fire Marshals outside the political arena would favor a solution that addressed both life safety issues as opposed to supporting one at the expense of another. While explaining the rationale for HB 391’s sprinkler deadline extension, legislators apprised the Fire Marshals that when limited resources are available to address multiple life safety issues, allocation is prioritized according to the imminence and danger portended by each threat. When confronted by legislators with the inherent imbalance in their priorities, the Fire Marshals failed to convince them that investing scarce Association resources in limited sprinklers would yield a more productive safety benefit than a comparable investment in hurricane protection.

FFMIA Past President and lifetime member Steven Randall is also the Florida Regional Manager of the National Fire Sprinkler Association (AKA Florida Fire Sprinkler Association)
FORMER FFMIA PRESIDENT
STEVEN RANDALL - NFSA
FLA. REGIONAL DIRECTOR
Unfortunately, fulfilling their responsibility to the alliance has compromised the Fire Marshals’ perspective and clouded their motives. Two items in the Fire Marshals’ October 2005 Newsletter shed light on the basis for their alliance. In his page 3 article, “From the Director’s Chair... ”, Executive Director Chuck Akers of the Florida Fire Marshals and Inspectors Association states, “Have you ever been to the Business Meeting at the conference and hear Rick Butcher, the Secretary/ Treasurer for the association give his report. YOUR organization is out of money? Now, how crazy is that? What in the world does the Executive Board do with all that money they raise from the Fire Prevention and Fire and Life Safety Educators Conference along with the membership monies?” In another article on page 18, “Partnerships, How Important are They?”, Akers states, “As our organization continues to grow, partnerships carry a more important role. We have successfully partnered with and continue to work legislatively with our friends from the Florida Fire Sprinkler Association and the American Fire Sprinkler Association.” Not surprisingly, Akers is also the Executive Director of the American Fire Sprinkler Association. Other key Fire Marshals Association officials are also employed by the National Fire Sprinkler Association, another sprinkler trade organization behind the original legislation. FFMIA Past President and lifetime member Steven Randall is also the Florida Regional Manager of the National Fire Sprinkler Association (AKA Florida Fire Sprinkler Association). FFMIA lifetime member Buddy Dewar also serves as the National Fire Sprinkler Association’s Director of Regional Operations.

FFMIA lifetime member Buddy Dewar is also the National Fire Sprinkler Association’s Director of Regional Operations
FFMIA Official BUDDY DEWAR
also NFSA’s DIRECTOR of
REGIONAL OPERATIONS
The Fire Marshals found themselves in the precarious position of having to choose between their commitment to the public or to their alliance partners. It appears as if they have made their decision. They have vowed to pressure the Governor into applying a veto to HB 391 for the sole purpose of overturning the deadline extension.

Fort Lauderdale Fire Marshal Steve Kastner
FORT LAUDERDALE FIRE
MARSHAL STEVE KASTNER
An unfortunate consequence of this political accommodation will be the diminished credibility for many of the excellent and ethical Fire Marshals across the State. Fort Lauderdale Fire Marshal Steve Kastner has been a bulwark against the catastrophic effects of the past season’s hurricanes. Within 48 hours after Hurricane Wilma, he sent 3-man emergency service teams to every high-rise in the Galt Mile neighborhood to check on possible medical shut-ins, invalids or isolated elderly residents. He has also kept his promise to meet with any Association with questions about or problems with code compliance. To help mitigate damage from the questionable actions taken by the Fire Marshals Association in trying to pressure the Governor to veto a bill unanimously passed and universally supported, the august membership of that organization might reconsider the wisdom of serving as the public face of their alliance. After all, while their partners will continue to be flush with financial resources, the Fire Marshals’ most valuable asset is their credibility.

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Hurricane Preparedness

Sales Tax Holiday

Governor Jeb Bush Plans Sales Tax Holiday
GOVERNOR JEB BUSH
Governor Jeb Bush signed legislation on April 27th authorizing Florida’s second annual 12-day sales tax holiday for hurricane preparedness. Characterizing the
Hurricane Preparedness Sales Tax Holiday as an important component of his comprehensive plan to instill a “culture of preparedness” in Florida, Governor Bush scheduled the tax break to coincide with National Hurricane Preparedness Week. The $565 million budgeted for the plan package includes funding to harden county emergency operations centers, make existing homes more disaster resistant, install permanent generators in all special needs shelters, create safe public shelter for an additional 100,000 people, repair and rehabilitate homes in communities severely impacted by the 2004 and 2005 storms and raise public awareness on the critical need to prepare for hurricanes. The tax holiday begins at 12:01 AM on Sunday, May 21st and ends at midnight on the first day of the 2006 Hurricane Season - Thursday, June 1st. The 12 day holiday is projected to save Floridians an estimated $41 million.

List of Tax-Exempt Items

The following is a list of the specified items that will be tax free. If the sales price of a qualifying item exceeds the allowable threshold amount (listed below), the tax exemption will not apply and the total purchase price is subject to tax.

Qualifying items selling for $10 or less:

  • Blue ice or those items sold as artificial ice

Qualifying items selling for $20 or less:

  • Any portable self-powered light source
  • Battery-powered flashlights
  • Battery-powered lanterns
  • Gas-powered lanterns (including propane, kerosene, lamp oil, or similar fuel)
  • Tiki type torches
  • Candles

Items Qualifying fo Tax Break
ELIGIBLE ITEMS
Qualifying items selling for $25 or less:

  • Any gas or diesel fuel container (including LP gas containers and kerosene containers)

Qualifying items selling for $30 or less:

  • Batteries, including rechargeable (listed sizes only)
    • AAA-cell
    • AA-cell
    • C-cell
    • D-cell
    • 6-volt (excluding automobile and boat batteries)
    • 9-volt (excluding automobile and boat batteries)
  • Coolers (food-storage; non-electrical)
  • Ice chests (food-storage; non-electrical)

Qualifying items selling for $40 or less:

  • Any cell phone charger

Qualifying items selling for $50 or less:

  • Radios (self-powered or battery-powered)
  • Two-way radios (self-powered or battery-powered)
  • Weather band radios (self-powered or battery-powered)
  • Tarpaulins (tarps)
  • Visqueen, plastic sheeting, plastic drop cloths, and other flexible waterproof sheeting
  • Ground anchor systems
  • Tie-down kits (items that are advertised or normally sold as a tie-down or anchoring kit)
  • Bungee cords
  • Ratchet straps

Qualifying items selling for $60 or less:

  • Any cell phone batteries

Qualifying items selling for $75 or less:

  • Any carbon monoxide detectors
  • Any package consisting of two or more of the previously listed qualifying hurricane-preparedness items sold for $75 or less will qualify for the exemption.
  • Any package consisting of one or more of the previously listed hurricane-preparedness items and at least one other item that is otherwise tax-exempt and the package is sold for $75 or less will qualify for the exemption.

Qualifying items selling for $200 or less:

  • Storm shutter devices (defined as materials and products specifically manufactured, rated, and marketed for the purpose of preventing window damage from storms)

Qualifying items selling for $1,000 or less:

  • Portable generators that will be used to provide light, communications, or to preserve perishable food in the event of a power outage.

The Devil is in the Details

This special sales tax holiday DOES NOT apply to clothing, books, or school supplies. The sales tax exemption applies to each eligible item, regardless of the number of items sold on the same invoice to a customer. The exemption DOES NOT apply to the leasing of a qualified item. This exemption does not apply to sales of items within a theme park, entertainment complex, a public lodging establishment, or airports.

Articles that are normally sold as a unit may qualify for the tax exemption provided the individual items are specifically listed as tax exempt and the price of the package is $75 or less. When tax-exempt hurricane-preparedness items are sold together with items that are normally tax-exempt as a single set, unit, product, or package, and the package sells for $75 or less, the entire package qualifies for the exemption. When a package contains tax-exempt hurricane-preparedness items and it also contains taxable items that do not qualify for the hurricane-preparedness sales tax holiday, the full sales price of the package is subject to sales tax. The total price of items advertised as “buy one, get one free,” or “buy one, get one for a reduced price,” cannot be averaged together in order for both items to qualify for the exemption.

The sale of a gift certificate/card is not taxable. Eligible items purchased during the exemption period using a gift certificate/card will still qualify for the exemption, regardless of when the gift certificate/card was purchased. Eligible items purchased after the exemption period using a gift certificate/card are taxable even if the gift certificate/card was purchased during the exemption period. A gift certificate/card CANNOT be used to reduce the selling price of an item in order to qualify for the exemption.

When a customer purchases a qualifying item during the exemption period, then later exchanges the item for the same item, no tax will be due, even if the exchange is made after the exemption period. When a customer uses a store credit during the exemption period on qualified tax-exempt items, the purchase will be exempt from sales tax. When a customer uses a store credit issued during the exemption period and the tax-exempt period has expired, the appropriate sales tax will apply to the full sales price of the newly purchased item.

A customer who pays sales tax to a retailer on a qualifying item when no tax is due must secure a refund of the tax from the retailer and not from the Department of Revenue. When a customer returns a qualifying item during the period of June 2, 2006, through August 31, 2006, and wants a refund/credit for tax paid:

  • The customer must produce a receipt or invoice showing tax was paid on the original purchase of the qualifying item, or
  • The retailer must have sufficient documentation to show that tax was paid on the original purchase of the qualifying item.

Manufacturer’s coupons do not reduce the sales price of an item. Therefore, a manufacturer’s coupon cannot be used to reduce the selling price of a qualifying item in order for the item to qualify for the exemption. Store coupons and discounts do reduce the sales price of an item. Therefore, a store coupon or discount can be used to reduce the sales price of a qualifying item to the “allowable threshold amount” in order for the item to qualify for the tax exemption. Rebates occur after the sale and do not affect the sales price of an item purchased. Eligible items purchased during the exemption period using a rain check will qualify for the exemption regardless of when the rain check was issued. However, issuance of a rain check during the exemption period will not qualify an eligible item for the exemption if the item is actually purchased after the exemption period.

A layaway sale is a transaction in which merchandise is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and receives the merchandise at the end of the payment period. For purposes of this exemption, qualified items will be eligible for the exemption if a retailer and a customer enter into a contract for a layaway sale during the exemption period, the customer makes the usual deposit in accordance with the retailer’s layaway policy, and the merchandise is segregated from the retailer’s inventory. If the final payment on a layaway order is made and the merchandise is given to the customer during the exemption period, that sale of qualified items will be eligible for the exemption, even when the qualified items were placed on layaway before the exemption period.

Rental of any of the items specified in this publication does not qualify for an exemption. For purposes of this exemption, eligible items purchased by mail order (including transactions made over the Internet) will receive the exemption if the order is accepted by the mail-order company during the exemption period for immediate shipment. When the acceptance of the order by the mail-order company occurs during the exemption period, the exemption will apply even if delivery is made after the exemption period.

  • An order is accepted by the mail-order company when the mail-order company has taken an action to fill the order for immediate shipment. Actions to fill an order include placing an “in-date” stamp on a mail-order or assigning an “order number” to a telephone order.
  • An order is considered to be for immediate shipment when delayed shipment is not requested by the customer. An order is for immediate shipment notwithstanding that the shipment may be delayed because of a backlog of orders or because stock is currently unavailable to, or on back order by, the company.

Shipping and handling charges are included as part of the sales price of the eligible item, whether or not separately stated. If multiple items are shipped on a single invoice, to determine if any items qualify for the exemption, the shipping and handling charge must be proportionately allocated to each item ordered and identified separately on the invoice. Repairs to qualifying items do not qualify for the exemption.

To speak with a Department of Revenue representative, call Taxpayer Services, Monday through Friday, 8 a.m. to 7 p.m., ET, at 800-352-3671 or 850-488-6800. For a written reply to your tax questions, write: Taxpayer Services, Florida Department of Revenue, 1379 Blountstown Hwy, Tallahassee FL 32304-2716.

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Senator Jeffrey Atwater

Star Rising in the Legislature

Florida Senator Jeffrey Atwater
SENATOR JEFFREY ATWATER
May 31, 2006 -
Jeffrey Atwater represents the Galt Mile neighborhood in the Florida Senate. On Wednesday, May 24th, civic leader Rose Guttman invited the Senator to join FLPD Police Chief Bruce Roberts, former City Commissioner and Broward Housing Authority Commissioner John Aurelius and better half Doris, GMCA officials Robert Rozema, Pio Ieraci, Leah Glickfield and Eric Berkowitz for a luncheon meeting at Fort Lauderdale’s Tower Club. The Senator was accompanied by Legislative Assistant Kimberly Jaeger. One of the most prolific legislators in the State Capitol, the District 25 seat holder sponsored 44 bills and co-sponsored 33 bills during the 2006 legislative session. His legislative career has been nothing short of meteoric. After serving two years in the House, Atwater surprised well-known former Florida Attorney General Bob Butterworth in an upset victory for the District 25 Senate seat in 2002. Re-elected in 2004, Senator Atwater promises to be the most productive Senator to ever represent the Galt Mile neighborhood. Given the illustrious complement of Senators formerly representing District 25, this is a remarkable achievement.

Former Florida Governor Napoleon Bonaparte Broward and Family
FORMER FL. GOV NAPOLEON B. BROWARD AND FAMILY
Fort Lauderdale Police Chief Bruce Roberts
POLICE CHIEF
BRUCE ROBERTS
Born on April 8, 1958 in St. Louis, Missouri, Atwater moved to Florida at the age of 4. After graduating with a major in Finance from the University of Florida in 1981, he entered the field of Banking. Employed by Barnett Bank of the Treasure Coast, Atwater attained the positions of Chairman, President & CEO from 1994 through 1996. In 1996, he took the reins of Barnett Bank of Broward County, where he again served as Chairman, President & CEO until its acquisition by NationsBank in 1998 - when he became NationsBank President in Broward County. He then assumed the position of President of Riverside National Bank for Palm Beach and Broward counties. Despite his success in the private sector, Atwater’s family legacy fueled a proclivity for public service. In addition to being our county’s namesake, Great-grandfather Napoleon B. Broward also served as Governor of Florida from 1905 through 1909.

Florida Senator Jeffrey Atwater with wife Carole Funkhouser and four children - Amy, John, Amanda and Courtney
JEFF ATWATER with wife CAROLE FUNKHOUSER and
four children - AMY, JOHN, AMANDA and COURTNEY
Village of North Palm Beach residents, Atwater and spouse Carole Funkhouser have four children - Amy, John, Amanda and Courtney. Atwater nourished community roots by participating in a wide variety of local civic organizations. He serves on the Advisory Boards of the United Way of Palm Beach County, Palm Beach Gardens High School and Roger Dean Stadium in Jupiter. He also serves as a Director of Northern Palm Beaches Chamber of Commerce and Children’s Home Society of Broward County as well as a Mentor for Take Stock in Children. His North Palm Beach neighbors also elected Atwater to serve as their Vice-Mayor.

Senator Atwater Taking Oath in Florida Senate
SENATOR ATWATER TAKING OATH IN FLORIDA SENATE
On July 18, 2000, Republican Atwater qualified as a candidate for his home District 83 House seat, subsequently defeating Democrat Pam Dunstan and Independent Michael I. Danchuk. While in the Statehouse, Atwater was appointed to the Council for Competitive Commerce and the Select Committee of the Whole. Following two years of House seasoning, he undertook to run for the District 25 Florida Senate seat vacated by Debby Sanderson. His Democratic opponent, popular former Florida Attorney General Bob Butterworth, had recently been term limited out of his long held State office. In overcoming a significant discrepancy in experience and name recognition, Atwater’s grass roots campaign succeeded in securing the Senate seat by a surprise 14,390 vote margin of victory.

Senator Atwater Watches Gov Bush Enact His Bill
SENATOR ATWATER WATCHES GOV BUSH ENACT HIS BILL
Once in the Senate, Mr. Atwater was able to put his considerable fiscal faculties to work. His banking background and conversance with insurance matters rendered Atwater an important resource for the budget-conscious Senate leadership and the Bush Administration. His re-election in 2004 was solely challenged by write-in candidate Alex Schraff, giving Atwater a 99% landslide victory. When Governor Bush created a Homeowners Association Task Force upon learning that some patriotic homeowners were being precluded from displaying “old glory” by their Association boards, Atwater sponsored Senate Bill 2984, providing statutory support for such patriotic demonstrations. When Governor Bush called for a Special Session of the Legislature to address the catastrophic 2004 Hurricane season, Atwater filed Senate Bill 8-A, legislation requiring that owners of homestead property be reimbursed for a portion of the property taxes levied on their property if it was rendered uninhabitable by a hurricane for at least 60 days. Bush and Atwater developed a political synchronicity that helped endear the sophomore Senator to the Senate leadership.

Senate President Tom Lee
SEN. PRESIDENT TOM LEE
The Administration made clear its intention to measure all legislation against two universal standards; the extent to which it burdened taxpayers and whether or not it’s enactment contributed to the proliferation of big government. Not surprisingly, Atwater’s legislative offerings routinely met the Administration’s criteria for endorsement. Recognizing his rising star, the Senate leadership decided to put Atwater through legislative “Seal Training”. Upon appointing Senator Atwater as Vice Chairman of the Senate Select Committee on Medicaid Reform, Senate President Tom Lee exclaimed, “Senator Atwater is one of the Senate’s most thoughtful and deliberative members. His ability to understand complex issues and identify practical solutions has benefited the Senate. His expertise will be of great value to the Select Committee on Medicaid Reform.” Controlling health care costs is a hot potato issue that has left countless political corpses in its wake.

Designated Senate President Ken Pruitt
DESIGNATED SENATE
PRESIDENT KEN PRUITT
Senator Atwater also chairs the influential Senate Committee on Government Efficiency Appropriations, a star studded panel of Senate powerhouses from both sides of the aisle. From this platform, Atwater has been able to press a personal agenda of infusing legislative offerings with budgetary balance. Other Committee appointments read like a who’s who of legislative fiscal responsibility, including the Committee on Banking and Insurance, the Committee on Ways and Means, the Legislative Budget Commission, the Committee on Communications and Public Utilities and the Committee on Health Care. Atwater’s skill set, the compatibility of his vision with that of the Governor and the Senate leadership, his propensity for inviting bi-partisan input and the particular challenges that currently dog Florida residents have converged into a unique opportunity for the District 25 Senator. His close relationship with Senate President Tom Lee, Governor Bush and the Rules Chairman and designated Senate President Ken Pruitt has presented Atwater with a political environment conducive to unprecedented productivity (Click Here).

The tax on intangible personal property such as stocks and bonds amounts to double taxation
INTANGIBLES TAX
GOOD RIDDANCE!
The Senator takes special satisfaction from having sponsored, nursed and passed a repeal of the State’s Tax on Intangible Personal Property, Senate Bill 714. By contending that the tax on holding acquired assets such as stocks and bonds amounts to double taxation, Atwater overcame opposition claims that the repeal primarily advantaged a small percentage of wealthy asset holders. Atwater aligned broad support for repealing the tax by focusing on the precept that taxing resources twice is inherently unfair. Repealing the intangibles tax was also among the Governor’s top priorities.

Senator Jeffrey Atwater regrets failure to pass save our homes portability
SAVE OUR HOMES
PORTABILITY SINKS
Despite his incredibly productive legislative season, Atwater stated that he regrets “the legislature’s failure to pass Homestead portability legislation.” Several bills were filed that would have allowed homeowners to carry forward their tax exemptions to another home purchased after selling their homesteaded properties. It is estimated that millions of homeowners cannot afford to downsize or otherwise move to more appropriate residences due to the huge tax discrepancy created by skyrocketing property values. These increased property values have been the source of a property tax windfall for local governments.

Senator Atwater explained, “Municipal and County governments blocked passage of every portability bill for fear of losing anticipated ‘just (market) value’ tax assessments on newly purchased properties.” Unfortunately, they appear to be laboring under a self-reinforcing delusion. The resources they are concerned about losing are only generated when an undervalued property is reassessed to “just value” upon being sold. Since the “moving penalty” is preventing this trapped population from selling their homes anyway, the local government’s revenue loss is largely theoretical. Ironically, by blocking portability legislation, they are preventing literally millions of potential real estate transactions from which they would ordinarily realize documentary stamp fees and transaction taxes.

Senator Jeffrey Atwater surrounded by - from left - Jim Rigney, Marty and Shelley Glazer, Ellen O'Neill, Dott Nicholson-Brown, Rose Guttman, Eric Berkowitz and Pio Ieraci
SENATOR JEFFREY ATWATER WITH (From Left) JIM
RIGNEY, MARTY AND SHELLEY GLAZER, ELLEN O'NEILL
DOTT NICHOLSON-BROWN, ROSE GUTTMAN
ERIC BERKOWITZ AND PIO IERACI
Turning to the GMCA officials, Senator Atwater happily remarked that the session’s anti-association legislation was unsuccessful. On March 15th, a contingent of Broward homeowners visited Tallahassee during a Community Association Day event organized to apprise legislators of our opposition to some bills designed to undermine the right of homeowners to govern themselves. For the second time in as many years, Galt Mile homeowners met with Senator Atwater to solicit his support. He concurred that the bills in question were damaging to his constituents and he would do what was necessary to protect our rights.

Former Fort Lauderdale City Commissioner John E. Aurelius
FORMER COMMISSIONER
JOHN E. AURELIUS
When Commissioner Aurelius asked the Senator about his take on Affordable Housing, Atwater spoke to some of the obstacles confronting the issue. The Local Government Comprehensive Planning and Land Development Regulation Act lists the elements that municipalities and counties must address when implementing their comprehensive planning and land development responsibilities, mandating every local government to adopt a Housing Element in its comprehensive plan along with a Capital Improvements Element, a Conservation Element, a Recreation and Open Space Element, a Transportation Element, etc. The Housing Element sets forth goals, objectives, and policies for how the local government should meet the housing needs of its entire current and anticipated population, including low income, very low income, special needs populations, etc. In addition to the Housing Element, the local government must also adopt a Future Land Use Map, which identifies adequate sites for affordable housing. To cure what amounted to an “unfunded mandate” on local governments, the Florida Legislature passed the William E. Sadowski Affordable Housing Act in 1992, creating a dedicated revenue source for affordable housing in Florida. Approximately six dollars of private investment leverage each dollar of Sadowski funds, increasing the hundreds of $millions collected from documentary stamp fees into $billions.

The mandate that local governments provide housing for their entire current and anticipated populations doesn’t require that government actually build the housing, but rather assist the private sector in so doing. In addition to financial incentives and regulatory reform to the private sector, counties and municipalities are adopting inclusionary housing ordinances to implement the housing elements of their comprehensive plans. The official repository for the Sadowski funds, the Florida Housing Finance Corporation, was tasked with helping Floridians obtain safe, decent housing that might otherwise be beyond their resources.

For prospective low-income homeowners, the down payment, debt service, maintenance costs and tax obligations are all barriers to affordable housing. The Senator described some of the programs developed by the Florida Housing Finance Corporation to provide assistance with one or more of these obstacles. They recently alloted $100 million statewide for first time homebuyers at low 30-year fixed interest rates. Eligible applicants could receive assistance with the down payment and closing costs of up to $25,000 in certain high cost counties. Other programs finance a low rate 30-year mortgage through the sale of both taxable and tax-exempt single family mortgage revenue bonds.

Broward County Housing Authority Board of Commissioners
JOHN E. AURELIUS & BROWARD COUNTY
HOUSING AUTHORITY Board of Commissioners
Commissioner Aurelius, who also serves on the Broward County Housing Authority Board of Commissioners, outlined the problem, “While these clear the way to home ownership, the low-income homeowner still needs to make monthly mortgage payments, pay taxes, repair the roof, fix the toilet and otherwise maintain the property.” This is where the program is laced with land mines. Aurelius continued, “If the new homeowner's income is insufficient to address the carrying costs, within a year or two, the property is entangled in litigation.”

Housing costs are dictated by the real estate market. Since the government is powerless to restrain real estate values, to successfully maintain homeowners in residences beyond their means, the State would have to provide subsidies at every level. Programs that assist with entry costs will only succeed if the homeowner’s income is adequate to address the debt service, taxes and the maintenance costs. However, the vast majority of cases are not represented by the few prospective homeowners whose only obstacle was their inability to scrape together the down payment. Lowering the mortgage debt to “affordable” levels by incentivizing low-cost housing subsidizes the developer instead of the homeowner, thereby robbing Peter to pay Paul. Every successful strategy seems to require the State paying for the difference between the property value and what the prospective homeowner is able to afford.

Senator Atwater agreed with Aurelius, acknowledging that there was “no simple solution to affordable housing, especially in a hot real estate market.” That didn’t stop Atwater from chipping away at the problem. In one of the bills he co-introduced this year, Senate Bill 132, Atwater required local governments to identify surplus lands and, where appropriate, make such lands available for purposes of affordable housing. It sought to create the Community Workforce Housing Innovation Program to engender public-private partnerships and the use of joint resources to provide affordable rental and single-family housing opportunities to persons with medium incomes in high-cost counties. It aspired to provide housing assistance for essential services personnel (teachers, law enforcement officers, firefighters, nurses, etc.). Atwater addressed the central obstacle by using land donated by local governments to help close the gap between housing costs and affordability. A similar house bill, HB 1363, was perfected and sent to the Governor.

Citizens Property Insurance Corp. Presidents Council Chair Pio Ieraci asked Senator Atwater if he saw any solution to the insurance crisis affecting property owners. The Senator explained that the answer to the crisis hinged on the State’s success in attracting insurance carriers back to Florida. He said, “While Citizens is capable of addressing our short-term emergency need for windstorm coverage, as more property owners come to rely on the ‘insurer of last resort’, it is in danger becoming a veil for self-insurance.” Every homeowner in the State would have to pay for any windstorm damage sustained by properties covered by Citizens. Atwater exclaimed, “Windstorm damage, like flood damage, should be a national issue addressed by an entity comparable to National Flood Insurance.” However, he expressed concern about the lack of support a National Windstorm Insurance agency would engender in most States. Atwater confirmed, “Outside Florida and the other Gulf states, California and perhaps some of the Midwestern states in Tornado Alley, the support for a national program is extremely soft.” When asked by GMCA Secretary Eric Berkowitz “who our allies might be in a campaign to establish a National Windstorm Fund,” the Senator responded, “The Insurance industry, the Real Estate industry and Mortgage bankers would all benefit from its creation.” When it was explained to Senator Atwater that we were considering the creation of a commercial self-insurance corporation, he agreed to help investigate its viability.

Senator Jeffrey Atwater surrounded by - from left - Jim Rigney, Marty and Shelley Glazer, Ellen O'Neill, Dott Nicholson-Brown and Eric Berkowitz
SENATOR ATWATER GREETS GALT MILE CONSTITUENTS
Senator Atwater has proven to be an eye-popping surprise. He combines the charm and affability of a neophyte legislator with the substance of a nuclear-powered submarine. His success at making constituents feel important doesn’t mitigate the sense that his Senate office is little more than a stopover en route to the Governor’s mansion... or Washington. His people skills, fiscal background, networking agility and organizational talents all complement Atwater’s political pedigree. His unassuming demeanor and small town humility belie his significant achievements. If we have mistakenly aggrandized Senator Atwater, we should feel neither naïve nor gullible, as we are in good company. The Governor and the Senate leadership also think he is the best thing since sliced bread. In fact, Senator Atwater is currently their top prospect for the 2008 Senate Presidency!

Senator Atwater - 2006 Productivity

Senator Atwater Networking in Legislature
SENATOR ATWATER NETWORKING IN LEGISLATURE
2006 saw Atwater involved with almost every major piece of legislation. Bills that he successfully sponsored include:

  • SB 530 (passed as HB 7121 - requires that retail gasoline stations be equipped with alternative means of power generation so that station's fuel pumps may be operated in event of power outage),
  • SB 714 (passed as HB 209 - Intangible Personal Property Tax; repeals provisions re: annual intangible personal property tax),
  • SB 1190 (provides for sale of public hospital to private purchaser),
  • SB 1198 (provides for adoption of 2006 version of Internal Revenue Code as it applies to the corporate income tax),
  • SB 1206 (passed as HB 69 - deletes limitation on annual amount of exemption from sales tax for certain machinery & equipment used to increase productive output or purchased under federal procurement contract),
  • SB 1362 (passed as HB 483 - requires hospitals to meet requirements of federal regulation re: registered nurses performing circulating duties in operating rooms),
  • SB 1366 (passed as HB 819 - redesignates specified provisions as “Radiological Personnel Certification Act”; provides conditions for qualification for radiologist assistant’s certificate),
  • SB 1368 (passed as HB 825 - creates Financial Literacy Council to study financial problems that affect small businesses, young people, working adults, and seniors and to provide recommendations that assist the Department of Financial Services with developing financial literacy programs to empower individuals and businesses to manage their financial matters in order to reduce debt, increase savings, and avoid bankruptcy),
  • SB 1418 (passed as HB 919 - Law Enforcement Investigations; prohibits knowingly & willfully giving false information to law enforcement officers under certain circumstances; provides penalties),
  • SB 1548 (passed as HB 1417 - tightens licensing criteria for hospices),
  • SB 1716 (creates the Legislative Budget Commission to review and approve or disapprove budget amendments recommended by the Governor or the Chief Justice of the Supreme Court, creates Government Efficiency Task Force to develop recommendations for improving governmental operations and reducing costs),
  • SB 2178 (passed as HB 1157 - Dental Hygienists/Dental Charting; expands scope & area of practice of dental hygienists to include dental charting and examination parameters),
  • SB 2564 (passed as HB 1451 - safeguards privacy rights of patients suffering from brain tumors),
  • SB 2566 (passed as HB 1449 - establishes Florida Center for Brain Tumor Research within the Evelyn F. & William L. McKnight Brain Institute of University of Florida),
  • SB 2744 (passed as HB 7153 - makes editorial changes, adjusts cross-references, reorganizes certain sections and removes superfluous language to achieve uniformity, clarification and streamline the processes used by the Office of Financial Regulation to achieve more efficient governance of regulated industries).

Senator Atwater Consulting with Senator Paula Dockery
SENATOR ATWATER CONSULTING WITH
LAKELAND SENATOR PAULA DOCKERY
He also co-sponsored a tidal wave of legislation that passed both houses. He co-introduced:

  • SB 24 (passed as HB 47 - provides the basis for the Hurricane Preparedness Sales Tax Holiday from May 21, 2006 through June 1st),
  • SB 122 (requires state universities & community colleges to waive tuition for recipients of Purple Hearts or other combat decorations),
  • SB 132 (passed as HB 1363 - provides for disposition of county property, municipal property & state lands for use in developing affordable housing, creates Community Workforce Housing Innovation Program),
  • SB 142 (tightens requirements for telecommunication providers seeking to alter rates),
  • SB 194 (passed as HB 631 - constitutional amendment to provide tax discount on homestead of partially or totally permanently disabled veteran age 65 or older who was Florida resident at time of entering military service),
  • SB 256 (tightens accountability and oversight for scholarship eligibility),
  • SB 258 (requires owners & operators of farm labor vehicles to conform such vehicles to certain safety standards),
  • SB 264 (clarifies Homestead ownership for assessment purposes),
  • SB 276 (passed as HB 155 - creates “Justin McWilliams ‘Justice For Justin’ Act”; requires driver of vehicle involved in crash occurring on public or private property that results in injury of person to immediately stop vehicle & remain at scene),
  • SB 488 (passed as HB 761 – classifies trespassing on property of certified domestic violence center as a third degree felony),
  • SB 626 (passed as HB 1569 - constitutional amendment to prohibit transfer of private property taken by eminent domain to natural person or private entity),
  • SB 746 (creates “Katherine's Law”; authorizes State Registrar of Vital Statistics Office of DOH to receive electronically the certificate of death or fetal death which is required to be filed with local registrar and to issue certificate of birth resulting in stillbirth upon request of specified parent),
  • SB 764 (passed as HB 299 - provides legislative findings re: need for improvements in state’s infrastructure in response to hurricane seasons of 2004 & 2005; provides criteria for appropriation to fund construction or renovation of county emergency operations centers & designates alternate state emergency operations centers; provides criteria for appropriation for retrofitting public hurricane evacuation shelters),
  • SB 888 (creates “Florida Renewable Energy Technologies & Energy Efficiency Act”; creates Renewable Energy Technologies Grants Program; creates Solar Energy System Incentives Program; provides tax exemptions in form of rebate for sale or use of certain equipment, machinery, & other materials for renewable energy technologies; establishes corporate tax credit for certain costs re: renewable energy technologies),
  • SB 1310 (passed as HB 371 - creates Cancer Drug Donation Program),
  • SB 1402 (resolution to recognize February 6, 2006, as “Ronald Reagan Day” in State of Florida),
  • SB 1840 (passed as HB 353 - constitutional amendment to increase maximum additional homestead exemption for low-income seniors from $25,000 to $50,000),
  • SB 2290 (amend Medicaid state plan so that its Florida Long-Term Care Partnership Program is in compliance with provisions of Social Security Act; requires long-term care insurance policies to provide incontestability after certain time period),

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Jeb Pulls the Plug

Pols Bounce Bad Bills - Bush Releases Rizzo

Florida Condominium Ombudsman Virgil Rizzo Discharged by Governor Bush
GOV - GOODBYE TO CONDO
OMBUDSMAN VIRGIL RIZZO
June 10, 2006 - Another legislative session has gone the way of all things. The
2006 session opened with the same threats to Associations that were leveled in 2004 and 2005. The same group of Miami legislators carried the water for the same small anti-Association organization that repeatedly demonstrated a burning desire to dismantle the condominium system across the State. They resorted to the same tactics used during the previous two years, claiming that the vast majority of condominium owners abhor being governed by those neighbors they elected to that task. Not surprisingly, they were supported by the same union that is desperately trying to “organize” people’s homes. Another attempt to legislate by anecdote again produced a set of harsh regulations designed to either undermine the will of the majority or punish those elected to realize that will. Seemingly, they have a real problem with democracy. How can one trust a system that persistently permits condo owners to naïvely elect those neighbors they think capable of representing their interests?

Representative Julio Robaina
REP JULIO ROBAINA
CONDO KILLERS 1 & 2
In 2004 and 2005, they sought to relieve condo owners of the right to make decisions about their homes. They supported legislation that transferred condominium governance from the owners to a government bureaucracy. The legislation was imbued with provisions that undermined the ability of homeowners to operate their Associations, infringed on their right to participate in governing themselves and mandated a series of contradictory and expensive regulations with little ostensible purpose and significant consequences. They also aspired to create an expensive independent police agency complete with search and seizure powers, primarily to administer punishment against those perceived to have breached their regulations. Their offering was enigmatically marketed as “empowering to condo owners”.

Representative Rene Garcia
REP RENE GARCIA
CONDO KILLER 3
Upon reading the bills, condo owners across the State flooded Tallahassee with indignant objections to this attack on their rights. Circling the wagons, bill sponsor Julio Robaina exclaimed that “naïve condo owners were misled by their condo board attorneys, who had a serious stake in the outcome.” This inspired thousands of additional ordinarily politically passive homeowners to peruse the bill text. Their disappointment at having been “spun” and characterized as “naïve” by bill sponsors and supporters heightened their anger about this unprecedented attempted intrusion of government into their homes. They contacted Statehouse Representatives, State Senators and the Governor to convey their concern. The bills invariably died in committee. A provision in the original legislation that called for the reincarnation of a Condo Ombudsman was surreptitiously inserted at the eleventh hour into legislation facilitating the installation of defibrillators in Condominiums, ultimately achieving enactment. However, instead of a State sponsored prosecutor with a proclivity for punishment as envisioned by the original bill’s sponsor, the Ombudsman was created to bring quarreling neighbors together and achieve consensus through education.

River Reach Condominium Residents Confront Representative Robaina
RIVER REACH RESIDENTS REPROACH
REPRESENTATIVE ROBAINA ABOUT RIZZO
Even though the Ombudsman's office duplicated the responsibilities - and the cost - of the Division of Land Sales, Condominiums and Mobile Homes, it was widely hoped that a neutral entity whose focus was to bring people together and treat all parties as equals could be useful as a forum to promote better communication between quarreling homeowners. Unfortunately, the individual appointed by the Governor to that end carried some unproductive baggage. Unbeknownst to Governor Bush, Dr. Virgil Rizzo harbored a chronic inability to coexist with neighbors and, in fact, was actively suing and being sued by his Condominium Association, River Reach. Subsequent to the appointment, almost 2 dozen of Rizzo’s neighbors held a press conference characterizing the Governor’s selection “as a disruptive individual unfit to lead the state’s condo mediation efforts.” Neal Ketcher, a retired airline pilot who has lived in River Reach for 33 years, remarked, “It strikes me that someone who has created such disruption, confusion and distrust in his own condominium... should not be allowed to do the same at other condominiums.” Given that people occasionally rise to previously unattained heights when confronted by newly assumed responsibilities, condo owners opted to afford Dr. Rizzo the opportunity to demonstrate the moderation and impartiality required by his new position.

Senator Alex Diaz de la Portilla - Sponsor of Condo Killer Senate Bill 2570
ALEX DIAZ DE LA PORTILLA
Condo Killer Senate Sponsor
In short order, hopeful onlookers were surprised and disappointed by a series of inflammatory comments and contradictory actions revealing Rizzo’s dissatisfaction with his role as neutral mediator. They were also confused by his repeated legislative entreaties for unprecedented police powers. After Hurricane Wilma, Association members across the State debated the benefits of creating reserves to address catastrophic emergencies. Instead of weighing in based on which proposal would best address the needs of the homeowner, the Ombudsman took the opportunity to prejudicially stereotype volunteers elected to condo boards as thieves, stating “I’m against reserves, it puts money into coffers that directors can [illegally] get into.” Strangely enough, he simultaneously supported the “Condo Killer” bills, which contained provisions that eliminated the right of Association members to waive funding their reserves by the vote of the majority.

Department of Business and Professional Regulation’s Division of Florida Land Sales, Condominiums, and Mobile Homes From the outset, Rizzo resented the legal administrative oversight the Department of Business and Professional Regulation exercised over his office. Reports he submitted to the Division were critically incomplete. Last August, Rizzo reported that 50% of the 4000 cases he reviewed during April and June alleged mismanagement by condo boards, supporting his conclusion that, “the major problem continues to be the incapability and inability of board members to properly manage the operation of the association, as required by statute, articles of incorporation, declaration, bylaws, and rules and regulations.” Upon releasing his conclusions to the media, the Ombudsman admitted that the 4000 cases were actually telephone messages left on his answering machine. He neglected to ascertain whether an offense was committed or if a Board was simply enforcing Association rules, if the calls were repeat complaints or even if the caller was actually a condo owner. Independent review uncovered numerous repeat complaints from a handful of callers. Relevant to the insufficiency of his method, a state-commissioned audit of complaints revealed that 54 unit owners filed 833 ‘repeat complaints’ amounting to 46 percent of the total.

Former Condominium Ombudsman Virgil Rizzo
FORMER CONDO OMBUDSMAN VIRGIL RIZZO IN OFFICE
In addition to undermining the department’s objective of creating a scientific basis for productive recommendations, Rizzo’s superficial, unverified database clouded his motives. Officials expressed concern over whether data was being tailored to support his conclusions instead of basing his statements on actual findings. When asked for reports with verifiable data, he responded by denying the Department’s authority and his accountability. Instead, he marginalized the Department’s inquiries, calling their procedures “not only confusing, obsolete and impractical, but also ineffective, inefficient, antiquated and in serious need of complete revision.” DBPR Office of Communications Director Meg Shannon explained the Department’s frustration with the Ombudsman’s refusal to cooperate, “Dr. Rizzo consistently demonstrated an unwillingness to work within the system and at times refused to be held accountable to the department and to taxpayers.” In an attempt to legally divest himself of department accountability, his legislative recommendations repeatedly aspired to lay the groundwork for a complete role reversal by including, “The division shall process the ombudsman’s recommendations and petitions in an expedited manner and defer to his findings.” Shannon confirmed, “He’s refused to acknowledge our oversight.”

Attorney General Charlie Crist
AG CHARLIE CRIST - BE
A NEUTRAL RESOURCE
Despite the Ombudsman’s statutory responsibility to be fair, balanced and even-handed in the performance of his duties, media reports during the past two years have painted Dr. Rizzo’s behavior as laced with evidence of gross prejudice against volunteer board members. Having expressed regret at not being able to “take a baseball bat” to or “to put the handcuffs on” association members he is sworn to help educate, Dr. Rizzo lobbied hard for a huge expansion of both powers and budget. When the Ombudsman asked the Attorney General last August if he could punish and fine those who refused to follow his orders, AG Charlie Crist responded, “The statute specifically states that it is the intent of the Legislature that the ombudsman act as a neutral resource for the rights and responsibilities of unit owners, associations, and board members. While the statutes provide for the ombudsman to make recommendations and assist condominium owners and boards, they do not authorize the ombudsman to issue orders or impose penalties or to initiate legal actions... ”

Marty Glazer and Eric Berkowitz discuss the legislation’s adverse consequences with bill co-sponsor Juan Zapata
SOUTHPOINT PRESIDENT MARTY GLAZER AND
REGENCY TOWER'S ERIC BERKOWITZ
DISCUSS BILL CONSEQUENCES WITH ZAPATA
Enactment of House Bill 1227, co-sponsored by a Statehouse Representative to whom Rizzo made a campaign contributionJuan Zapata – would have released Rizzo from any accountability. The 2006 “Condo Killer” bill sought to imbue the Condominium Ombudsman with the authority to operate independently of the Department of Business and Professional Regulation, eliminating the only statutory oversight constraining the Ombudsman’s behavior. In addition to relieving the Ombudsman from virtually any answerability, the bill “flipped the script”. In diametric opposition to the existing statutory protocol, it required the Department to do his bidding. At the Ombudsman’s discretion, bill section 718.5012 mandated that the Department “pursue enforcement action in circuit court on behalf of a class of unit owners, LESSEES or PURCHASERS for declaratory relief, injunctive relief, or restitution against any developer, association officer or member of the Board or its assignees or agents”.

Representative Juan Zapata
REP JUAN ZAPATA
BILL CO-SPONSOR
This was a novel idea. The peacetime creation of an independent public office empowered to indict, judge and punish. Its target, however, wouldn’t be organized crime... or terrorism... or members of a world-wide conspiracy to betray Earth to the Jovian Moons. Instead, the collective might of the State of Florida would be focused on an insidious yet covert scourge, CONDO OWNERS! Not ONLY condo owners... the bill also empowered the Ombudsman to utilize Department resources for prosecuting unit owners on behalf of their tenants or on behalf of prospective unit buyers - house hunters! Even bill co-sponsor Juan Zapata acknowledged that some of its provisions were “unreasonable”, painting the bill as “a work in progress”.

Presidents Council Chair Pio Ieraci agrees to critique admittedly flawed legislation’s for bill co-sponsor Juan Zapata
PIO IERACI AGREES TO CRITIQUE ZAPATA BILL
More relevant to Rizzo’s ultimate fate was a provision obscured by some of the bill’s more egregious regulations. While stipulating that the Department had to pay all of the Ombudsman’s expenses and bill section 718.5012 mandated that, “No one may question or interfere with the Ombudsman’s appointment of an election monitor,” bill section 718.5011(1) provided that “all revenues collected for the office by the department shall be deposited in a separate fund or account from which the department may not use or divert the revenues.” While condo owner fees would continue to underwrite the Ombudsman’s activities, this provision would create a statutory basis for enabling a self-directed slush fund.

DBPR Secretary Simone Marstiller
DBPR SECRETARY
SIMONE MARSTILLER
This particular provision held special value to the Ombudsman for another reason. Along with placing all the department’s resources at his disposal, this jurisdictional reversal would inoculate his office from having to account for overstepping or abusing its authority. Absent the executive checks and balances, he could appoint questionable election monitors free of concern about the appearance of impropriety.

Following an admittedly rocky start, once the Ombudsman’s office was fiscally stabilized, Rizzo prepared to perform some of his mandated responsibilities. Among them was the provision of qualified monitors to oversee voting procedures when called upon by association members suspecting potential election irregularities. At $3000 and higher for a few hours of oversight, this proved to be an extraordinarily lucrative activity. Contrary to administrative rules, Rizzo opened a private bank account to handle funds attendant to the election monitors. As per Department spokesperson Meg Shannon, Rizzo actually warned Department Secretary Simone Marstiller to not “interfere” with his operation.

Apparently, many of the 40 plus associations that received Rizzo’s services evidenced no basis for suspicion of illicit activity. By evoking the use of election monitors, a small minority of association members could imply that incumbent Board members were untrustworthy, thereby influencing the election. Whether or not there was a legitimate cause to anticipate election intrigue, every monitored association expected, and was entitled to, qualified, unbiased representatives from the Ombudsman’s office. A healthy percentage of the monitored associations claimed that this wasn’t the case. Observation of the monitors’ behavior while supposedly providing oversight led many association officials to suspect that the monitors were less than qualified. Since these concerns were expressed by associations whose boards were previously authenticated by the Ombudsman’s monitors, they couldn’t be characterized as complicit in some vengeful agenda by board members trying to protect questionable credentials.

State Condo Ombusdman Virgil Rizzo, SEIU Local 11 Deputy Director Hiram Ruiz, State Representative Julio Robaina, and State Condominium Advisory Council Vice-Chair Mark Benson
PARTNERS
OMBUDSMAN VIRGIL RIZZO, SEIU LOCAL 11 Deputy Director HIRAM RUIZ
AND STATE REPRESENTATIVE JULIO ROBAINA (AT PODIUM IN SEIU T-Shirt)
The associations demanded that the Ombudsman demonstrate that the monitors were qualified and worthy of the unusually high fees charged for their services. Several association officials have asserted that the monitors’ qualifications were limited to having participated with the Ombudsman in an anti-Association organization that supported all of the new powers he sought in the Condo Killer bills. Association officials also suspected that Rizzo’s admittedly skewed reports blaming every condo problem on “the inability or incapability of board members”, were engineered to support the anti-Association group’s political agenda. As the Ombudsman was less than forthcoming, they commenced a legal action to enforce a response. Not surprisingly, the anti-Association organization heavily criticized the complainants for expecting the Ombudsman to confirm his monitors’ qualifications, intimating that Rizzo’s staff was inadequate to copy his records. This also explains the rationale for the ill-fated Condo Killer provision that, “No one may question or interfere with the Ombudsman’s appointment of an election monitor.” Had this been enacted, Rizzo would have been able to continue thwarting attempts to enforce disclosure.

Playa del Mar Condominium
TOO LITTLE, TO LATE
In the past few months, Rizzo’s rhetoric had toned down appreciably. During visits to associations wherein the Ombudsman had encountered controversy, he reversed course – calmly enumerating his responsibility to reach out equally to all parties and defuse conflicts with education – a venue he previously characterized as inadequate. This was exemplified in a recent visit to Playa del Mar, a marquis Galt Mile Condominium wherein a minority of residents requested that the Ombudsman monitor their election. When the monitors arrived, concerned association officials requested their credentials, naturally interested in their qualifications to perform this important activity. Instead of allaying their concerns with open disclosure, the lead monitor leveled a series of threats intimating that associations weren’t entitled to know if the people that were monitoring their elections were qualified. He also threatened legal retribution for their having dared to make such an inquiry. Two other accompanying monitors displayed a more professional attitude, responding courteously to the legitimate concerns of association officials. They were then permitted to proceed with fulfilling their obligation.

Playa del Mar is managed by the Continental Group, a well known Florida Property Management company. Since Associations utilizing management companies are somewhat protected from attempts to organize their employees, SEIU Local 11 in Miami has waged a campaign to undermine Continental’s credibility in contracted Associations. The anti-Association organization, Condo Killer sponsors Julio Robaina, Juan Zapata and Rizzo are also closely affiliated with Local 11, publicly supporting their efforts to penetrate the Condominium market. When Representative Robaina and Rizzo convened a “Town Hall” meeting sponsored by SEIU to elicit testimony from condo owners about their problems, any speaker not belonging to the anti-Association group or in the union was roundly shouted down. Playa officials suspect that Rizzo’s interest in their home derives from this relationship.

Playa del Mar Condominium
PLAYA DEL MAR CONDOMINIUM
When the 2006 Condo Killer bill died in committee owing to overwhelming opposition and Rizzo could no longer rely on the bill’s “no answerability” provision to effectively protect his records from scrutiny, the Ombudsman opted to reach out to associations previously alienated by the behavior of his representatives. Having adopted a non-responsive posture to several requests made by the Galt Mile Community Association to explain how associations might best utilize his services, he surprised Playa del Mar officials by accepting a mysterious last-minute invitation to speak at a meeting organized by a newly elected Playa Board member – ostensibly for other purposes. Given the unusual circumstances surrounding the meeting’s convention, veteran Playa Board member Lucille Fannin opted to monitor the event. After expressing appreciation for having been invited to speak at “the notorious Playa del Mar”, Rizzo offered a congenial summary of his responsibilities, confirming the Attorney General’s description of his office “as a neutral resource for the rights and responsibilities of unit owners, associations, and board members.” Far from the bat-wielding official intent on hand-cuffing those perceived as uncooperative, Rizzo conveyed a conciliatory description of his duties and methods more in line with the legislature’s original intent. No longer complaining that his lack of police powers rendered him functionally impotent, the new, subdued Rizzo was a friend to all and suddenly satisfied with moderating conflicts using education.

Governor Jeb Bush Plans Sales Tax Holiday
GOVERNOR JEB BUSH
Unfortunately, it was too little, too late. Two years of harsh pronouncements against perceived opponents, exhibitions of rank prejudice, a thinly veiled ongoing relationship with an openly anti-board member organization with ties to a union actively engaging in organizing condominiums and continuous applications for unrestrained punitive power had created a formidable credibility gap. With the Condo Killer bill’s failure to make it out of legislative committee, disclosure became imminent. Governor Bush, fully expecting his appointed Ombudsman to cooperate with the parameters of his office as described by the legislature, was placed in an untenable position. Rizzo’s refusal to produce records when requested by the Department, his unsupported conclusions based on skewed reports and an unrelenting spate of unprovoked insults were unacceptable. The Ombudsman’s dilatory pace in providing proof that his monitors were qualified elicited concern over the reasons for their having been selected and fanned the appearance of a cover-up. To avert a painfully public process in which the State would have to explain an implied complicity with the Ombudsman’s cloudy protocol, the Governor notified Rizzo, “This is to advise you that your appointment as ombudsman is rescinded effective June 1, 2006.”

Representative Bogdanoff offers a Pipeline to Tallahassee
2006 - INSURANCE ASIDE - TALLY
GOOD TO CONDO OWNERS
The simultaneous appointment of Danille Carroll, a 39 year-old Department of Health assistant general counsel, as Rizzo’s replacement marks the end of his controversial tenure as Condominium Ombudsman. Graduating in 1988 with a B.S. in criminal justice from Florida International University in Miami and from the University of Texas School of Law in 1992, Ms. Carroll practiced in the private sector in Houston and Miami (The Curtis and Kimball Co.) until 2002 when she went to work for the state Department of Environmental Protection in West Palm Beach. One year later she became an assistant general counsel for the Health Department. Her appointment to the $80,800 a year position was welcomed by the Department of Business and Professional Regulation. DBPR spokesperson Meg Shannon stated, “She is accomplished, experienced and coming from a leadership position in the Department of Health. She is ready to hit the ground running and ready to work cooperatively with the department for the betterment of the millions of Floridians living in condos.”

Criticism of the Governor’s decision has come primarily from Representative Julio Robaina and those Miami legislators responsible for the annual Condo Killer bills. As expected, the leadership of the anti-Association group in which Dr. Rizzo held membership also protested his dismissal. Presumably, Ms. Carroll is not a member. “We’ll keep the South Florida office because there are so many condos down in that area and I’ll travel back and forth,” affirmed Carroll when asked about her plans for the existing resources. Committed to neutrality, Carroll conveyed her expectation to communicate with representatives reflecting all sides of condo issues, stating, “That’s what the Legislature intended, to bring everyone together. I believe they can and I’m the one to do it. The Legislature intended for me to be a neutral person, someone in the middle, someone without a horse in the race.”

The appointment of Ms. Carroll will mitigate much of the adversarial atmosphere surrounding the Ombudsman’s office. Her mandate is to create a forum that reaches out equally to associations and all unit owners irrespective of whether or not they volunteer service. As anyone that has served as an association volunteer will confirm, settling problems among neighbors is a thankless job. Balancing the legal rights, individual agendas and the potential hardships of friends and neighbors against the law and the Association rules rarely results in a celebration. There are few clear-cut winners and the vast majority of successful outcomes are earmarked by everyone being somewhat disappointed. By definition, it is impossible to perform as a fair and balanced mediator after publicly prejudging an issue or divisively stereotyping a conflict’s participants as thieves. Ms. Carroll seems to realize that when trying to achieve consensus among neighbors, communication and education are infinitely more effective than bats and handcuffs!


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From the Office of Representative Ellyn Bogdanoff

June 2006 Update - After the Session

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
June 15, 2006 - After the 2006 legislative session, District 91 Statehouse Representative
Ellyn Setnor Bogdanoff sent a post session message to constituents participating in her “Legislative Update” email program. Her summary of the session's accomplishments kicks off by describing the session environment as being flush with resources (tax cash). The House and Senate delivered a shot in the arm to education by passing the A++ bill. They booted the opportunity to pass a portability bill, condemning millions of residents wishing to downsize or otherwise move to new digs to remain trapped in their homes. She promised that the legislature will revisit the issue next year. The legislature took preliminary steps to address the State-wide insurance crisis. They made some adjustments to Citizens in the nature of a short-term fix, allocating an additional $250 million to help homeowners upgrade their hurricane protection. Representative Bogdanoff warns that the 2006 legislation will do nothing to stop rising insurance costs. That will require establishing a regulatory environment conducive to attracting insurance carriers back to the state. In that regard, we've a long way do go. Read on: - [editor]

We left Tallahassee on May 5th and the Legislature is no longer in session. Now is the time to reflect on what we accomplished, and I must say we had a very productive year. We passed great legal and education reforms. We addressed affordable housing and took a bold step with respect to encouraging alternative energy sources. We also provided millions for medical research and managed to save some our most precious environmentally sensitive lands.

The budget was flush and we were in a position to give money back to the citizens, while still saving millions for a rainy day – and in a state where hurricanes are becoming regular visitors again, that is a good idea!. Florida now has over $6 billion in reserves, which should make all of us feel very secure. We substantially increased the education budget and Broward alone received an additional 123 million in state dollars.

We are seeing tremendous learning gains because of our educational reforms and I just recently joined the Governor as he signed the A++ bill. This important piece of legislation will bring relevance and rigor to our middle and high schools. High School students will be able to focus on subjects of interest and take courses that have a meaningful impact on their futures, especially for those students who choose not to go to college. Differentiated pay will attract teachers in critical subject areas and in large part because of Broward’s parents efforts, the bill created a uniform start date for the school year.

Legislature fails to pass save our homes portability
SAVE OUR HOMES
PORTABILITY SINKS
Admittedly, there were some disappointments this session. Because of the complexity of the issue, the Legislature was unable to build a consensus on how to deal with the property tax crisis. Although this problem is not felt everywhere in Florida, it is particularly pronounced in our region. The good news…we commissioned a study that will provide the Legislature with preliminary results by September of 2007. Since the solution will likely require a constitutional amendment, we will not have the opportunity to comprehensively address this issue until 2008.

However, the most immediate and effective solution is right here at home. The appraised values of our homes, as well as the tax rate are set by our County Commission. Perhaps all of us should let them know what our property tax structure is doing to our quality of life. The members of the House of Representatives are committed to taking part in the solution, but this must be a team effort between state and local governments.

Governor Bush Signs Insurance Bill
GOVERNOR BUSH SIGNS INSURANCE BILL
Next, we must continue our insurance reforms. Although there were many great components to the Citizens legislation (SB 1980), this is a multi-year fix. We provided 250 million for homeowner loans so citizens can make their homes more hurricane proof. Additionally, we infused millions into the Citizens’ deficit caused by our previous storms so that we could reduce the burden on the policy holders. This is just the beginning. It is inevitable that insurance will be more expensive now that we have had active and destructive hurricane seasons these past 2 years, and additionally a prediction of active hurricane seasons for years to come; but that does not mean that we cannot do more to make insurance available and more affordable.

There are many of us committed to solving this issue and there are a variety of proposals on the table. It is critical that we bring back the free market and we create the regulatory environment that encourages insurance companies to do business in Florida.

We are on summer break, but for those who are reelected in November, we will start preparing for the 2007 Session in late November. As always, I enjoy your feedback and hope you will email me with your comments and ideas at ellynb@bellsouth.net.

Stay safe and cool during the summer.

All the best,

Ellyn
Ellyn Bogdanoff
Member of the Florida House of Representatives
District 91

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Critical Association Insurance Alert!

Citizens Board Meets

June 28, 2006 - Following Hurricane Andrew in 1992, the survival instinct of the State’s insurance carriers kicked into high gear. The $20 billion wake-up call transformed their trade organizations from marketing resources into a pentagon-style war room. Instead of producing catchy media sound bites depicting their concern for our children’s health or the soundness of our homes, they reorganized to do battle with the State’s Department of Insurance Regulation. For thirteen years, they honed their skills while engaging in a cat and mouse game with the Legislature and insurance bureaucrats, lobbying hard to offset the blizzard of regulations created to keep rates affordable. With the State threatening additional restrictions and the industry threatening to pack up and leave, a cold war mentality surrounded the actuaries from both sides charged with finding a compromise.

House Speaker Alan Bense, Senate President Tom Lee and Governor Jeb Bush
HOUSE SPEAKER ALAN BENSE, SENATE
PRESIDENT TOM LEE AND GOV. JEB BUSH
When the recently intensified hurricane seasons again threatened their fiscal stability, insurance carriers coalesced to formulate an industrial strategy. This time, however, they wouldn’t repeat the passive defensive posture they adopted 1992. Instead, they would engineer a pro-active policy. Shortly after the Governor called a special session of the Legislature to address hurricane matters in December of 2004, the industry went to the bunkers and turned on the lights in the war room. When State Insurance Czar Tom Gallagher pressed hard to limit deductibles during a multi-event season, the carriers made it clear that they wouldn’t tolerate any more red ink. They decided to drop the “big one”.

Florida Chief Financial Officer Tom Gallagher
Florida CFO TOM GALLAGHER
Incredulous State officials watched as the carriers abandoned the Florida market. Attempts to stem the exodus were fruitless. By early August of 2005, Safeco and Nationwide joined seven other carriers in leaving the State. Nationwide, Florida’s 4th largest carrier, withdrew from the “new policies” market despite receiving a green light from the State to hike rates by 21% on homes and 25% on mobile homes. The industry’s “scorched earth” policy wouldn’t be “compromised” by accepting anything less than unconditional surrender. Why negotiate with State insurance officials to be “rated carriers” when they could write their own ticket from the other side of the Florida border? With the exception of a few foreign carriers (such as the Australian company QBE), the industry has left the State’s homeowners hanging out to dry.

Commissioner Kevin M. McCarty of the Office of Insurance Regulation and Governor Jeb Bush at SB 1980 Bill Signing
INS. COMMISSIONER KEVIN McCARTY, CFO TOM
GALLAGHER AND GOVERNOR AT SB 1980 BILL SIGNING
Their plan’s effectiveness was confirmed by the recent passage of Senate Bill 1980. The bill recognized that Citizens was never meant to and is incapable of replacing the commercial insurance industry. Faced with the choice of becoming self-insured or capitulating to industry demands, Tallahassee raised the white flag. Spun as the “first step in a painful strategy to attract commercial carriers back to Florida,” the legislation lays the statutory groundwork for disemboweling rate regulations and curtailing access to the State’s safety net. As new eligibility restrictions wean each segment of the State’s decimated insurance market from Citizens, they will either go to non-rated carriers or explore some variation of self-insurance. When enough of the market has acclimated to sky-high rates, the carriers will be invited to return as rated carriers for a negligible rate concession. The operational theory being that upon their return, competition will hopefully serve to constrain, or perhaps lower, rates.

Citizens Property Insurance Corp. One aspect of the bill that received universal support was the infusion of $715 million into Citizens to help offset the expected 20% assessment property owners would have to pony up to address Citizens’ losses. Before passage of the measure, every Florida homeowner would have been assessed about $200 for every $1000 in premium due. After having partially funded the shortfall, the remainder will be absorbed by a 2.5% assessment this year (about $25 for every $1000 of premium due) and a 1% assessment in each of the next ten years. This will only address the 2005 shortfall. Additional future losses will be tacked on incrementally.

CALL Executive Director Donna Berger
EXECUTIVE DIRECTOR
DONNA BERGER - CALL
On June 22nd, the Citizens Property Insurance Corporation convened a meeting of its Board of Directors at the Peabody Hotel in Orlando to address some of the challenges faced by the State’s “insurer of last resort” since unprecedented events have recast its primary mission to serve as an emergency safety net. Donna Berger, an activist Condominium Attorney with the firm of Becker & Poliakoff, P.A., monitored this critical Board meeting in the hopes of learning just how they intended to implement their mandate for constructive disengagement while still being flooded with homeowners abandoned by the commercial insurance market – by design or bankruptcy.
Click to website for Community Association Leadership Lobby (CALL)
COMMUNITY ASSOCIATION
LEADERSHIP LOBBY (CALL)
In essence, Citizens was created to serve as a cork for use in plugging gaps in the State’s insurance market. With the recent emigration of insurance companies assuming characteristics reminiscent of refugees escaping a war zone, that cork has become the main component comprising Florida’s insurance net. When the “Poe” family of companies recently announced their insolvency, the cork grew substantially larger.

As Executive Directive of CALL (Community Association Leadership Lobby), Berger closely watches issues impacting Association homeowners. Earlier this year, she confirmed that CALL considered the insurance crisis facing homeowners to be its top priority. Since some of the decisions made by the Citizens board could cripple an unwary association if unheeded, she sent emergency emails to member associations alerting them to the effects of the meeting’s outcome. The content of her alert is as follows. – [editor]

Important Information
Transition from Poe Insurers to Citizens!

by Donna Berger

Citizens Property Insurance Corporation was created by the Florida Legislature to serve as the State’s insurer of last resort for homeowners who cannot find coverage in the private market. As you know, that role has now grown immeasurably beyond its first beginnings as more and more private insurers pull out of the Florida market. At today’s Board meeting, Citizens announced that, by the end of July 2006, it will have approximately 1.2 million policyholders and will be the largest insurer in the State.

Southern Family Insurance Company, Atlantic Preferred Insurance Company and Florida Preferred Property Insurance of Poe Financial Group (the Poe Insurers) Part of that growth will come from policies transferred by Southern Family Insurance Company, Atlantic Preferred Insurance Company and Florida Preferred Property Insurance of Poe Financial Group (the “Poe Insurers”) which have been placed into liquidation by court order. COVERAGE WITH THE POE INSURERS WILL END BY 12:01 AM ON JULY 1, 2006. Citizens will now be providing insurance coverage to Eligible Policyholders of the Poe Insurers who cannot obtain private coverage. This “Citizens Transition Coverage” will automatically pick up coverage for an Eligible Policyholder beginning July 1, 2006, and ending on the date that coverage would have ended under the Poe policy. An Eligible Policyholder is not required to file an application and does not need to pay any premium already paid to the Poe Insurers; Citizens Transition Coverage will use the same forms and premiums as the Poe Insurers for these Eligible Policyholders.

The real question then becomes, who is an Eligible Policyholder that will be seamlessly folded into Citizens coverage? The answer is all Poe policyholders are eligible for Citizens Transition Coverage EXCEPT the following:

  1. A policyholder who has received an offer of coverage from an admitted carrier;
  2. A commercial lines policyholder, including condo associations, with an aggregate building limit of $25 million or greater;
  3. A policyholder who has obtained replacement coverage with another insurance company;
  4. A policyholder whose coverage was cancelled by a Poe Insurer for non-payment of premium or underwriting reasons, or at the policyholder’s request; or
  5. Coverage written on a form that Citizens does not write (i.e. flood and personal umbrella).

Thus, if your community was insured by one of the Poe Insurers and your aggregate value exceeds $25 million, you will not be eligible for Citizens’ Transition Coverage on July 1, 2006. YOU SHOULD CONTACT YOUR AGENT IMMEDIATELY TO SEE IF YOU QUALIFY FOR CITIZENS REGULAR COVERAGE UNDER CITIZENS’ REGULAR FORMS AND PREMIUMS. You may also contact the Citizens’ Tampa Service Center at 1-800-365-8541 for questions related to eligibility for Transition Coverage. If you do not qualify for Transition Coverage and you do not take action to secure alternate coverage, you may be uninsured as of July 1, 2006, right in the middle of hurricane season, and the application process can be time consuming as Citizens is processing several hundred a week.

Click to Florida Department of Financial Services Press Releases about Poe Insurers
CLICK HERE FOR INFO
FOR MORE INFORMATION ABOUT THE POE INSURERS AND CITIZENS TRANSITION COVERAGE, PLEASE VISIT THE FLORIDA DEPT. OF FINANCIAL SERVICES (FDFS) WEBSITE AT WWW.FLDFS.COM OR CALL THEIR CONSUMER HOTLINE AT 1-800-342-2762.

For those of you that do qualify for Citizens Transition Coverage, please be aware that upon expiration of the Transition Coverage, you must apply for Citizens Regular Coverage on new forms and at higher rates. You will not be able to move on to regular coverage until the expiration of the transition coverage period.

Click to Florida Insurance Guaranty Association (FIGA) web site Under your Poe Coverage, the Florida Insurance Guaranty Association (FIGA) will handle losses occurring on or before 12:01 a.m. on July 1, 2006. The claims process will continue with the adjusting being performed by representatives by FIGA. However, claims for losses incurred after the transition to Citizens on July 1, 2006, will be processed and paid by Citizens.

The contact information for FIGA is: Florida Insurance Guaranty Association, P.O. Box 10366, Jacksonville, FL 32247-0366. You can reach them by phone at 1-800-746-1045 or 1-866-928-4310. The hours of operation for FIGA are 8:00 am-8:00 pm Monday-Friday. You can also get more information on their website at www.figafacts.com.

CALL continues to make finding real solutions to these insurance issues our #1 priority for 2006 and beyond. Towards that end, we have meetings set up with key legislators over the summer months to discuss a national catastrophe fund and other proposals being debated well in advance of the 2007 Legislative Session. Please check the Hurricane/Insurance category on the CALL site regularly at www.callbp.com as all pertinent information received will immediately be placed online for your use.

Again, if your community was insured by one of the Poe Insurers and your aggregate value exceeds $25 million, you will not be eligible for Citizens’ Transition Coverage on July 1st and you must immediately contact your insurance agent to discuss alternate coverage arrangements.

Best Regards,

Donna D. Berger, Esq.
Executive Director, CALL

For additional information, email Donna Berger at Dberger@becker-poliakoff.com or go to the CALL web site at www.callbp.com. CALL has also instituted s new BLOG for condominium owners at condolaw.blogspot.com/.

Useful Links Re: Poe Insurers

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Questionable Insurance Payment Delays

Confusion or Extortion?

Only Game in Town July 8, 2006 - In casinos, one of the benefits enjoyed by the house is the right to set the rules. If the house rules are hopelessly skewed, customers usually pick up their marbles and roll out. When there’s only one game in town, that’s not an option. Since government regulations are designed to preclude monopolies from publicly flourishing, their victims are usually limited to the politically impotent. However, when competition is eliminated by economic developments as opposed to industry intrigue, a company can freely operate in the ensuing market vacuum, often with the blessing of the regulatory agencies normally charged with punishing monopolistic practices.

Following Hurricane Andrew, enlightened self-interest served to unite Florida’s insurance industry. The $20 billion in sustained damages threatened to undermine a competitive insurance market in the State of Florida. While ostensibly created to ground the shaken industry on firmer footing and oppose annual political attempts to lower rates, the newly unified Florida insurance industry discovered an unexpected dimension to their alliance. In addition to protecting participating carriers from legislative threats to their bottom lines, they explored potential pro-active postures.

QBE Insurance However, the industry’s big gun – the threat to leave the State – was an extremely risky gambit. If some players left while others stayed, those remaining would reap a huge competitive benefit at the expense of their departing brethren. This double-edged sword gave solace to Tallahassee bureaucrats charged with industry negotiations. When the 2004 serial storms justified a reconsideration of industry strategy and State insurance policy, the pieces fell into place. Who would blame them for bailing out of a sinking ship?

QBE Claims?
QBE CLAIMS PROCESSING?
With the onset of the insurance crisis, an Australian insurance company that scooped up a healthy slice of the South Florida homeowners market, QBE, was presented with a unique opportunity. Following Hurricane Wilma, the handful of carriers still remaining in the State prepared to join their already departed peers. The industry had successfully implemented its strategy of temporarily abandoning the State to elicit a more favorable regulatory environment. Although they didn’t skip town, QBE will also reap the regulatory benefits of their industry’s strategy. Their catbird status as the sole remaining rated carrier enabled them to withhold desperately needed uncontested benefits free of concern about losing business to competitors. It immunized them against any “good will” penalty that ordinarily deters unethical behavior. By holding undisputed insurance proceeds hostage to concessions on unrelated claims, carriers can pressure desperate policyholders into accepting unfavorable settlements.

Florida Office of Insurance Regulation Commissioner Kevin M. McCarty
FLORIDA OIR COMMISSIONER
KEVIN M. MCCARTY
Many Associations that expeditiously filed the appropriate insurance claims last November, submitted the proper Proof of Loss forms, underwent multiple inspections and claims adjustments are being summarily ignored by their insurers. Agents, Brokers and Adjusters have had to manufacture a stream of razor-thin excuses for the company’s lack of response. When an Association Attorney officially notices the company, they respond with a request for some obscure document or additional unrelated discovery. It is apparent that these unjustifiable dilatory practices are outside the ordinary claims process. In addition to the many Galt Mile Associations dependent on insurance proceeds to complete critical repairs, these institutionalized delays have adversely impacted frustrated policyholders all over the State.

Florida Chief Financial Officer Tom Gallagher
Florida CFO TOM GALLAGHER
To address this problem, the Florida Department of Financial Services (DFS) operates a condominium mediation program which provides a forum to discuss outstanding claims directly with a representative of the Association’s insurance carrier. As described by Florida CFO Tom Gallagher last December, “During the 2005 session, state lawmakers passed legislation to expand our department’s mediation program to condominium associations. Set up in 2004, the mediation program has helped more than 11,000 homeowners reach a satisfactory settlement on their hurricane claims. In partnership, the Department of Business and Professional Regulation is assisting DFS to urge condominium associations to participate in the mediation program and help facilitate prompt and fair settlement of outstanding claims.” On March 13, 2006, Florida Office of Insurance Regulation Commissioner Kevin M. McCarty issued an informational memorandum explaining the terms of Rule 69JER06-01, “Mediation Procedures for Resolution of Disputed Personal Lines Insurance Claims Arising from the 2004 and 2005 Hurricanes and Tropical Storms” - as required by 627.7015(4) in the Florida Statutes. By law (627.7015(3), F.S.), the insurance company picks up the tab for the program’s administrative costs and the mediator’s $300/hour fee.

“Condo Mediation” icon - Click to Condo Mediation web page
“CONDO MEDIATION” ICON
CLICK TO CONDO MEDIATION PAGE
To participate in the program, an Association should complete a Commercial Residential Mediation Request Form (Form No. DFS-I1-1669, Revised 3/06) and return it to the Department of Financial Services. Forms are available by calling the Department at 1(800) 227-8676 (1-800-22-STORM), by faxing the Department at (850) 488-6372, or by logging onto the Department’s website at http://www.fldfs.com and clicking on the “Condo Mediation” icon. Then click on the Commercial Residential Mediation Request link. Once the Department receives your completed Commercial Residential Mediation Request Form, your insurance company will be notified, and will have 21 days to settle your claim before your request for mediation is further processed. If the carrier fails to do so, the department will select an accredited mediator and schedule a conference. For Associations hoping to promote movement on a claim, success will depend upon the adequacy of their preparation. Minimally, the Association should be prepared to produce:

  1. A document by which the Association’s governing board designates an authorized representative that includes the name of the condominium or cooperative, the name of the association, the date of the meeting at which the designation was made, the name of the designated individual(s), and the authority granted to said individual(s).
  2. A copy of the relevant insurance policy and all correspondence(s) with the company (and/or agents/adjusters) regarding the claim;
  3. A detailed report prepared by a professional in the field regarding the losses sustained as a result of the storm. The use of a design professional (engineer or architect) is generally best, but under some circumstances a report prepared by a licensed general contractor will suffice. The report must distinguish between those portions of the building maintained and insured by the Association and those portions for which the individual unit owners are assigned responsibility.
  4. A complete analysis of the policy with particular attention to any exclusions; and
  5. A complete report, with all supporting documentation, of any expenses incurred for mitigation, any emergency rehabilitation/repairs and other losses under the policy.

Florida Department of Financial Services (DFS) web site The documentation should be an authoritative compilation of professional reports and opinions. Its presentation should also be professional, guided primarily by the Association attorney. Despite the mediation’s supposed confidentiality, any documentation presented or information revealed at the conference is fair game for any surreptitious agenda. The carrier is entitled to use any volunteered information, documentation, or other meeting work product to its advantage, possibly resulting in support for the claim’s denial. To avoid inadvertently contributing to additional processing delays or a denial of benefits, Association counsel should be assigned responsibility for composing the presentation and selecting the materials supportive of the Association’s claim.

The carrier’s representative is also bound by certain requirements. At the conference, the representative must produce:

  1. A copy of the policy and the entire claims file – the insurer’s rep must be conversant with the facts and circumstances of the claim as well as the policy’s provisions.
  2. Confirmation of authority to settle the full amount of the claim at the conclusion of the conference.
  3. If any inspection and/or adjustment of the property are required prior to a dispute being resolved, such inspection and adjustment shall occur before the mediation conference.
  4. A failure by the insurer to authorize its representative to settle the full amount of the claim at the conclusion of the conference or to inspect and adjust the property as necessary before the mediation conference shall constitute a failure to appear at the mediation conference.

If mediation fails to produce results, the Association should explore the advisability of legal action with its attorney. If the attorney concurs that the insurance company failed to settle the claim in good faith once its obligation became reasonably clear, they may be liable for additional damages. Inasmuch, raising the stakes may serve to gain the attention of questionably motivated carriers. Even if the mediation effort is unsuccessful, undergoing the process will bolster the Association’s contention that despite being afforded ample opportunity to fairly settle the claim, the carrier has negligently failed to fulfill its obligations under the policy!

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From the Office of Representative Ellyn Bogdanoff

PROPOSAL: COMPREHENSIVE REFORMS FOR THE FLORIDA PROPERTY INSURANCE MARKET
(Last updated 9/7/06)

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
September 26, 2006 - Last December, District 91 Statehouse Representative
Ellyn Setnor Bogdanoff discussed the insurance crisis with GMCA officials, reviewing some of the legislative options being considered prior to the 2006 session. Given Tallahassee’s disappointing lack of progress in ameliorating the insurance environment, Bogdanoff has committed to drafting a comprehensive proposal for reform. Characterizing insurance as “at the top of everyone’s list”, she has compiled “a working document” - evolving in response to the input and feedback she receives from constituents. The five years she spent as a partner in an independent insurance agency, “Setnor Byer Bogdanoff”, should serve to ground her recommendations - affording them the added benefit of being realistic, a dimension that some recently espoused proposals clearly lack. Since the insurance dilemma not only threatens every homeowner’s checkbook, but the entire State economy, having a Statehouse representative with a workable plan universally benefits every district property owner. Read on: - [editor]

Citizens Property Insurance Corp. Bold reform measures are needed to fix our current property insurance crisis and provide Florida’s consumers with affordable property insurance rates. In addressing this problem, we can not treat the symptoms - but we must attack the systemic problems that are currently plaguing Florida’s homeowner’s property insurance market and are causing the lack of availability and affordability of policies. With Citizens Insurance now the state’s fastest growing homeowner property insurer, it is essential for the Legislature to establish the reforms necessary and correct the current trend for long term stability. Those reforms begin with taking a new approach as to the state’s role in the insurance market.

Short term measures to stimulate the market and reduce taxpayer exposure

Reduce the threshold for accessing the CAT Fund to $3.2 Billion (per storm season) in order to lower the re-insurance costs for private insurers and to provide a reliable safety net to protect taxpayers in the event of a catastrophic event.

Underwriting changes for citizen’s to encourage precautionary measures / reduce fraud exposure

Florida Hurricane Catastrophe Fund Transform the underwriting guidelines for Citizen’s Insurance to gradually reduce the state’s exposure as a primary insurer and eliminate its competitive position with private insurers. For markets where private insurers will assume risk, Citizens will need to maintain pricing structures in excess of actuarial sound premiums to encourage carriers to re-enter the market and remove policies from Citizens over the next three years.

  • Establish options for Loss Based Deductible Program (i.e., the smaller the claim/the smaller the deductible; and the larger the claim/the larger the deductible). This will help reduce fraud by establishing a deductible program based on a percentage of the loss, not as a percentage of the total property value/coverage. Such a program discourages the inflation of damage appraisals and provides the resources for homeowners to make necessary repairs to prevent future damage.

  • Implement Florida’s Certified Safe Roof Program

    • Establish a roof certification program based on the quality of construction, condition of structure and projected lifespan

    • Approved experts will perform inspections and provide certifications

    • Establish Zero Deductibles for Roofs

    • Payment of roof claims based on the roof’s depreciated value (Example: A roof with a 20 year lifespan, as established by the certification process, is damaged in year 3 and the cost to replace the roof is 20,000, the insured would receive reimbursement on a pro rata basis based on actual cash value)

(Note: Citizens, as the leading homeowners market in Florida, should set the pace for underwriting guidelines that will shape the future of the Florida Homeowner policy in the private market.)

Other Consumer Mitigation Measures

  1. Provide continued State backed Low Interest Loans / Grant Programs for qualified individuals for Roof Repair and Replacement

  2. Click to MySafeFloridaHome.com Web Site MySafeFloridaHome – Continue providing funding to encourage precautionary measures using general revenues and other potential revenue sources

  3. Landscape Mitigation – Provide statewide standards to establish “hurricane friendly” landscape regulations. Supersede local ordinances that penalize homeowners that responsibly choose to hurricane proof their landscape.

  4. Require companies to establish minimum credits and publish their Premium Credits for mitigation available from private insurers. For example: a homeowner should know in advance what the premium saving will be for installing shutters, etc.

Regulatory changes to provide long term stability and predictability

In order to ensure long term stability, Citizen’s must eliminate its role as a primary insurer and stop its direct competition with the private insurance market. Additionally, Citizens must establish itself as an excess market – a safety net for Florida Homeowner’s Insurance.

Citizens will gradually reduce the state’s role as the primary insurer of risk, which will protect taxpayers in the event of a major hurricane. The creation of a state funded excess insurance product administered by the primary carriers should increase the availability of affordable primary coverage through the private market. This state funded product will provide an appropriate safety net for taxpayers by allowing them to fully insure their property, while limiting the voluntary market’s exposure. This “layered risk” approach will provide additional protection at levels below the catastrophic fund on a per risk basis, potentially reducing the cost of reinsurance for the private market and passing that cost saving to the consumer. Currently, the reinsurance costs in the private market are driving the premiums to excessive levels. This design should help ease that burden.

This new product will provide property coverage only on a “broad perils” basis to allow for better pricing than “wind” only coverage. No liability coverage will be afforded under this design.

Redefining the State’s role in insuring property risks

Over the course of a reasonable number of years, reform Citizens to make it a carrier providing only limited products, as well as the Florida Excess Coverage Carrier described above. This transition period will allow for insured’s to obtain coverage in alternative markets. In the event no market is available, then they will be able to obtain coverage through Citizens.

  • Preclude Citizens from writing new HO3 policies (comprehensive homeowner’s policies including all risk coverage and liability) in order to limit state’s involvement, increase competition and encourage private carriers to return to the market

  • Citizens will only offer DP1 or DP2 (policies that cover basic perils including fire and wind) for those risks that can not otherwise be insured through the private market. This action will convert Citizen’s into its intended purpose which is a True Market of Last Resort and a legitimate role for government (i.e., safety net). It is likely that the private market will respond and bring back the CPL policies that were once readily available in the market to protect an insured against liability losses.

  • After a reasonable number of years, all policies that remain with Citizens, originally written as HO3s, will be converted to a DP1 or DP2. This strategy will reduce state’s exposure while allowing consumers and insurers to adjust to new regulatory environment. Insured’s will receive 12 months notice before a policy conversion takes place.

  • Florida Office of Insurance Regulation Citizens as an authorized excess carrier, will provide insurance coverage over a specified primary limit ($100,000/$200,000/$300,000), which will be negotiated with each private insurance carrier based on their financial ability, However, no carrier will be permitted to choose a limit below $100,000.

  • Citizens must charge actuarially sound premiums for its primary and excess products, as established by an independent board of experts under the purview of OIR.

Additionally, the current and future operations of Citizen’s must be transitioned to a private enterprise with the requisite experience and expertise in the insurance industry.

Eliminate financial incentives for insurers “taking-out” policies from Citizens.

Reforms in the private market to protect consumers

Eliminate the existing artificial and arbitrary wind only zones (such as East/West of I-95 line) and redefine actuarially and scientifically based Geographic Zones within the state. Additionally, eliminate the decisions to deny coverage based on an artificial characteristic such as date of construction.

Require private insurance companies to cover a minimum amount of coverage in each established zone based on their total capacity.

Provide Carriers with rating flexibility within a maximum allowable as established by an Independent Board with actuarial expertise and under the purview of OIR.

Establish regulatory incentives to encourage those carriers writing other lines of insurance to begin writing homeowners. Insured’s will be driven to those carriers that will pick up both their homeowners and auto coverage, which in turn will stimulate other carriers to do the same in order to retain their market share of the profitable risks.

Florida Statewide Building Code Provide incentives for multi-family dwellings/condo associations, etc. to increase reserves and self insure for minor damages

Ensure Independent financial stability for primary insurers

Eliminate exceptions to the Uniform Statewide Building Code

Advocate for changes and reforms at the national level

The establishment of a National Catastrophic Fund or a Coastal Coalition Catastrophic Fund

Create Hurricane Savings Accounts to allow individuals to save money tax free to pay for mitigation, damage to property, and self insurance.

Change Federal Tax policy to encourage carriers to retain more dollars in reserves

CONCERNS AND RESPONSES

“161 %” RATE INCREASE - Due to political pressures, rates have been artificially suppressed for many years and Citizens mandate to not compete with the private market increased rates to the current level. Although passage of any reform will not see immediate relief, it is anticipated that premiums will be reduced upon renewal. However, if Citizens takes aggressive measures to implement the underwriting changes discussed, insured’s could see immediate decreases in premium if they accept some of the coverage changes by endorsement.

FLORIDA ONLY COMPANIES Carriers will not write in Florida if the rate structure jeopardizes the profit realized from other states. It has been stated repeatedly that there are 49 other states with much less risk than . After Hurricane Andrew, the parent company of Prudential Property and Casualty infused 1 billion dollars to save its Florida company out of a moral obligation to its policy holders. Companies could not continue to employ that strategy and continue to expect stockholders to tolerate it. However, each state controls the rate filings and regardless of where else a company writes coverage, companies consistently complain that it is difficult to get a rate filing through Florida. While at first glance this appears to be a protector to the public, it is discouraged competition in the marketplace further driving premiums up because Citizens remains the only viable market in Florida. Carriers will not write coverage if they cannot obtain sufficient premiums to sustain a catastrophic loss. This also serves the taxpayers, because the risk is transferred to the state for any carrier that closes its doors after a Hurricane. The last thing this state can afford is for insurance to compete with other state needs such as education, Medicaid, children’s services.

SURCHARGES By Citizens charging actuarial sound rates, there should not be charges on the back end in the form of surcharges or increased taxes

REINSURANCE MARKET Reducing primary insurance carriers need for re-insurance

CHERRY PICKING Creation of scientifically justified geographical zones that require insurance companies to maintain a certain minimum risk based on their capacity in each zone. There will always be risks that the private market will refuse to cover due to loss history and/or the risk. For those risks that private market will not cover, Citizens will provide basic coverage.

BUILDING UP THE CAT FUND The state should consider taking a portion of those revenues it provides to “rainy day” fund and transferring them to Cat Fund. We must be prepared for the predicted 100 billion dollar storm that will occur within the next 10-20 years.

ARBITRARY DECISION MAKING BY INSURANCE COMPANIES There is a perception that many of the insurance companies’ decisions on whether to insure a risk are arbitrary. For instance, the companies decline east of I-95, which seems to be a magical line that determines the potential for loss. Additionally, companies have flatly denied all risks where the home was built prior to a certain date. The state must do what is necessary to eliminate the arbitrary nature of these decisions without micro managing the underwriting process.

HIGH COST OF TAKE OUT CARRIERS Insureds are forced into the private market and are seeing increases at 2 to 3 times their Citizens premium. It is imperative to explore transitional actions to assist policyholders during phase in of actuarially sound premiums. Until the market forces work to reduce premiums, Citizens could provide insureds for a period of 2-3 years, who are forced into the private market, to consider a DP1 or DP2 policy in Citizens if their private premium is twice the Citizens’ premium.

Please send any comments or ideas about this plan or alternative approaches to ameliorating the insurance catastrophe we all face to Ellyn. They could possibly be added to this list of Concerns and Responses and/or incorporated into the plan. We will monitor its progress during the upcoming session. Ellyn can be reached by email at ellynb@bellsouth.net.

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Blue Ribbon Insurance Panel Considers Crisis

Gov’s Reform Committee Weighs In

Governor Jeb Bush calls for Insurance Reform
GOVERNOR JEB BUSH
November 29, 2006 - In consideration of events leading to the insurance crisis currently threatening to undermine the State’s economic future, Governor Jeb Bush released
Executive Order 06-150 on June 27, 2006. Pondering the pink slip awaiting him at the end of this term, the prospect of his legacy bearing so fatal a scar stirred the Governor to create the Florida Property and Casualty Insurance Reform Committee. He spent the past three years hoping that some State entity would somehow mitigate the crisis. Since officials drew a blank, Governor Bush has gone back to the drawing board.

Click to Executive Order Number 06-150 Having formed itself into an efficient trade organization with a well-oiled political lobby following the trouncing from Hurricane Andrew, Florida’s Insurance Industry out-played, out-fought and out-gunned the State’s overconfident insurance bureaucracy. It took the legislature over twelve years to erect regulatory protections designed to resist an industry “overreaction” to catastrophic events. Simultaneously, it created a specialized infrastructure to cushion the industry from another Andrew-style claims assault. During this period, legislators seeking reelection issues would sponsor unworkable insurance bills useful only as campaign fodder and Administration officials hoping to snag a quick sound bite would propose unending layers of gratuitous regulation.

Florida Hurricane Catastrophe Fund While weathering this protracted legislative assault, the industry became proficient at protecting itself. Despite the absence of serious windstorm events from 1992 (Andrew) until a few years ago, the industry was able to fend off politically motivated attacks on its rate structure. They patiently awaited an opportunity to turn the tables. Subject to statute, they needed some actuarial basis for raising rates. Given the existence of the CAT fund (Florida Hurricane Catastrophe Fund) and other components of the safety net Florida built to help carriers survive catastrophes, their anticipated benefit expenses would be well worth a green light to hike premiums.

Finally, 2004 and 2005 rolled in like freight trains, pounding the state throughout two Hurricane Seasons. While there was controversy over whether Florida had experienced a meteorological seed change or a two-year anomaly, the industry had a $36 billion reason to roll back the twelve years of rate protection. Small carriers unprepared for the onslaught tanked. Industry spokespersons warned that the state would have to allow them astronomical rates or kiss the industry goodbye. Since the State’s protective structures mitigated the cost to carriers, officials realized that the actual hit taken by insurers was not as devastating as hyped in the media. However, this fact didn’t alter the industry’s planned response.

Florida Office of Insurance Regulation Ordinarily, the actuarial model used to formulate rates is rooted in actual experience. Not surprisingly, the reinsurers reconfigured their model to better fit their intentions. Instead of basing reinsurance costs on the 8-event, $36 billion two seasons; reinsurers created a Hurricane model that predicted significantly more frequent and expensive future events. Instead of doubling premiums, the new “worst case scenario” model supports a trebling of rates. Rather than argue with the Office of Insurance Regulation (OIR), special legislative committees or executive task forces about this and other disconnects, the industry opted to achieve their goals by walking out and negotiating from across the state line. To implement this strategy, they simply lapsed into a passive posture as State officials tried to incentivize their return with huge rate increases. It worked like a charm.

Citizens Property Insurance Corp. The legislature, languishing impotently for the bulk of last year’s session, realized that they had to do something... anything. There were few options available. Some legislators actually claimed that the insurance carriers were bluffing, ignoring the fact that they had already left the state. Others opted to reinforce Citizens (Citizens Property insurance Corporation), predicting that the carriers would return if convinced of their tactic’s futility. Two facts eventually dawned on state officials. They weren’t dealing with isolated egocentric companies motivated solely by cut-throat competitive instincts, they were facing a well organized industry strategy designed to elicit deregulation. The second reality was that the carriers could afford to do nothing and bide their time for as long as necessary. The State could not.

By leaving, they triggered the mutation of Citizens from a safety net into the largest insurer in Florida. Since its structure assesses any costs to policy holders across the state, it has inadvertently become a self-insurance vehicle. Not created to perform that function, nervous officials began engineering a divestiture of Citizens’ current client load. A recent board action precludes it from covering properties valued in excess of $1 million. Already encumbered by 1,264,000 property owners as of October 2006, Citizens is averaging 70,000 new policies per month. They are also feverishly dumping clients upon their acceptance by any commercial carrier, without concern for the carrier’s credibility or the premium cost. Insurance officials intend to extricate Citizens from its current level of commitment despite the absence of viable alternatives.

Governor Bush Signs Insurance Bill
GOVERNOR BUSH SIGNS INSURANCE BILL
In what appears to be a contradictory policy, by removing the safety net prior to implementing a strategy to relieve the pressure on property owners, the State is salvaging the company at the expense of those it was created to assist. They would gladly implement that strategy - if they had one. The Administration and legislative leadership have come to the realization that they blew it. Raising a white flag, they passed SB 1980 toward the end of last year’s session. It created the statutory basis for removing price regulations. Anticipating an adverse public reaction, officials attempted to spin their capitulation as “progress”. A wag-the-dog explanation of the legislation characterized it as the first step in a return to normalcy. How is that? “If insurers are allowed to charge whatever they want, they will return. Once they return, good old-fashioned competition will pressure rates downward.”

Commissioner Kevin M. McCarty of the Office of Insurance Regulation and Governor Jeb Bush at SB 1980 Bill Signing
INS. COMMISSIONER KEVIN McCARTY, CFO TOM
GALLAGHER AND GOVERNOR AT SB 1980 BILL SIGNING
Obviously, this ignores the fact that the industry is no longer driven by carriers frenetically undercutting one another. Since they were organized enough to overturn the State’s regulatory framework, what makes officials believe that they aren’t capable of seeing through this puerile plan? In actuality, they will emulate OPEC, setting their own price marks while thumbing their noses at the State. Angry civic leaders are questioning whether we were victimized by some passive collusion between the Industry and our supposed representatives. Although this crisis crystallized almost three years ago, legislators and insurance officials seemed to have belatedly awakened from a deep sleep, only now calling for crisis resolution.

Florida Property and Casualty Insurance Reform Committee
LT. GOVERNOR TONI JENNINGS HEADS FLORIDA
PROPERTY AND CASUALTY INSURANCE REFORM COMMITTEE
The Governor realized that he needed a fresh perspective. On a wing and a prayer, he mandated the creation of the Florida Property and Casualty Insurance Reform Committee. Chaired by Lieutenant Governor Toni Jennings, the Committee is composed of State insurance officials and legislators and is counseled by a “Technical Committee” comprised of industry executives. On November 15th, the Committee released their “Final Report and Recommendations.”

Florida Property and Casualty Insurance Reform Committee Report Cover Page - CLICK TO REPORT
REPORT COVER PAGE (CLICK HERE)
In fulfilling the Governor’s mandate “to examine the Florida insurance market and make recommendations to reduce the cost of premiums, increase the availability of insurance, and reduce the risk to homeowners and businesses,” the committee took 90 days to compile a 230 page report. Included are 6 pages of what the committee entitled “initial recommendations”. The 51 recommendations fall into 9 relevant categories. Some highlights of the Committee’s handiwork are as follows:

Recommendations under the category “Residential Insurance Market/Consumer Issues”, include

  • more transparency for consumers by requiring the premium notice and policy to specify premium mitigation discounts available by dollar amount;
  • identifying the dollar amount of the agent’s commission;
  • identifying the amount of any premium increase that is due to a rate increase and the amounts that are due to a change in coverage;
  • requiring plain language in insurance policies; requiring that insurers offer a policy that excludes windstorm coverage from a residential property insurance policy if the policyholder signs an approved written rejection of such coverage;
  • the elimination of maximum allowable deductibles; i.e. allow insurers to offer deductibles of any amount in addition to the 2%, 5% or 10% deductibles currently offered.

Under the category “Florida’s Commercial Insurance Market/Property Casualty Joint Underwriting Association (PCJUA) is

  • adoption of statutory language that would allow risk pooling for windstorm property coverage for all “like” entities such as public hospitals, public educational facilities and community colleges;
  • development of a plan to depopulate Citizens commercial risks to either the PCJUA or create a new statewide entity for all commercial risks.

Florida Statewide Building Code Entries under “Florida Building Code” include

  • development of a code plus standard that the insurance industry would recognize for maximizing premium discounts;
  • encouraging local governments to “promote and advocate for code plus structures by providing incentives to builders like density bonuses, lower impact fees, and concurrency credits when new construction is built at higher levels than the current approved building code.”

Under the “Reinsurance Market” category, they offer a recommendation to “reduce or eliminate the trust fund (collateral) requirement for non-U.S. (foreign) insurers based on a determination by the OIR of the adequacy of regulation of the country of licensure and the financial strength of the assuming insurer.”

The report’s first 108 pages provide background and perspective for the Committee’s opinions. They also review the rationale behind their recommendations. For instance, the insurance carriers contend that they are only passing through reinsurance increases to policy holders. As such, the Committee examined the underlying rationale for the reduced reinsurance capacity in the Florida property market.

Direct writers, such as State Farm, Allstate, etc., are able to provide coverage for relatively high risk policies, such as property insurance policies, by spreading their exposure to the reinsurance market. A reinsurance company essentially provides insurance to an insurance company. By laying off some of their potential risk, carriers can limit their losses. When Florida property insurers (both residential and commercial) submitted their rate filings to the OIR, factored in were significant reinsurance rate increases, resulting in requests for commensurate rate increases to the insurance buying public.

In addition to considering the losses from the eight hurricanes of 2004 and 2005, the report lists these factors as also contributing to the reinsurance tightening supposedly responsible for the trebling of insurance premiums:

 

  • Predictions of increased frequency and severity of future hurricanes by the hurricane modeling firms;
  • Increased property values in which a similar book of business created a much higher exposure;
  • Increased coastal exposure throughout the state;
  • Increased cost of repair and rebuilding due to demand of building supplies and labor (demand surge) and;
  • Click to A.M. Best More strict requirements by ratings agencies (A.M. Best, Standard & Poors and Moody’s) for reinsurers to maintain favorable financial ratings.

 

There is no contention over the recent increase in South Florida property values. However, premium increases included in 2004 policy renewals already reflected higher valuations as of their renewal dates. Likewise, premium increases in the 2005 renewals considered the prior year’s jump in value. The 2006 renewals should only reflect any change in value from 2005. That single-year percentage increase in property values only marginally contributes to the 250% - 350% increases supposedly being “passed through.”

Increase - Construction Materials (Bureau of Labor Statistics)
INCREASE OVER TEN YEARS FOR CONSTRUCTION MATERIALS (BLS)
The demand for repairs and rebuilding skyrocketed following the two destructive seasons. The cost of building supplies has been climbing steadily for years, especially copper, cement, aluminum, steel and pre-stressed concrete. When demand intensified, the construction industry stepped into a sellers’ market – creating a competitive premium on labor costs. Although demand has unquestionably increased repair costs, the mid-double digit percentage increase (21% over two years - Bureau of Labor Statistics) does not support the trebling of premiums.

Since oceanfront property in Florida is always in demand, it’s a prime target for development. While this steadily adds to the inventory of shoreline properties, the annual percentage increase is nominal. In fact, much of the oceanfront development is reconstruction – where older existing structures are replaced by newer ones. In compliance with the Florida Building Code and local codes, new construction must contain windstorm mitigating components not found in the buildings they replace. As coastal development evolves, the increased storm mitigation will lower the risk of windstorm damage, not increase exposure.

While these three factors play a part in elevating reinsurers’ exposure, they clearly do not account for a 300% rate boost from 2005 to 2006. Most of the increased property values were accounted for by 2005 and included in the 2005 renewal cost. The new coastal construction, given its required inherent mitigation features, is less prone to storm damage than earlier coastal construction, lowering coastal risk exposure. Appreciated construction costs are dwarfed by the 300% increase in premiums.

That leaves two remaining factors to account for the vast majority of the increase. As their primary justification, reinsurers point to predictions of increased frequency and severity of future hurricanes by the hurricane modeling firms. Responding to queries about the botched forecast for Hurricane Ernesto, Director Max Mayfield of the National Hurricane Center in Miami-Dade County explained, “The simple truth is there are some processes in hurricanes that we don’t understand yet, particularly storm intensity. I want people to understand: This is the state of the science. Some of the newer experimental forecast models would yield more reliable results but significant improvements are at least 10 to 15 years off. We’re headed in the right direction, but I’m not expecting miracles.” Mayfield said that our state of knowledge makes current predictive capabilities extremely short term. Beyond a few days, predictions are mostly guesswork tempered by history. As if to emphasize the arbitrary nature of existing hurricane models, 2006 passed without incident. The single event for which the State issued an alert – Ernesto – was downgraded to a Tropical Storm before reaching Florida.

Click to Standard & Poors The final factor, and cloudiest, is the imposition by ratings agencies of increasingly strict requirements for reinsurers to maintain favorable financial ratings. While this may raise the bar for a reinsurer to demonstrate financial viability, it has virtually no impact on their exposure to risk.

Click to QBE Web Site At the end of the day, there is little correlation between the huge 2006 rate increases and the real world. The factors being promoted as “actuarial justifications” appear to be little more than arbitrary rationalizations. The new rate schedules combined with the newly legalized cherry picking currently being practiced foretell banner years for the carriers (as experienced by QBE last year).

Aside from the insurers, the only other beneficiaries of this dilemma are political ideologues antipathetic to regulations. Some plans filed last year extolled the virtues of allowing the insurance market to regulate itself, blaming the current crisis on the existing regulatory environment. Plan sponsors expressed delight with the current state of affairs. Notwithstanding anyone’s views on government regulation, when critically destructive rate increases go right to a company’s bottom line, it fails to pass the smell test.

While there are some contradictory elements in the report, there are also many constructive recommendations rooted in common sense. The report’s heavy focus on the relationship between construction mitigations and premium cost is intuitive. Weeding out costly regulations with no ostensible benefit and removing arbitrary obstacles to being an admitted carrier should promote productive competition.

New House Speaker Marco Rubio
NEW HOUSE SPEAKER
MARCO RUBIO
At present, the Committee’s recommendations apply only to residential property owners and not to community associations. Association members need to contact their legislators to insist that should any of the Committee’s recommendations be adopted, they must also extend to those living within common interest ownership communities and to their governing boards charged with insuring common areas.

Senate President Ken Pruitt
NEW SENATE PRESIDENT
KEN PRUITT
The Committee also needs to shift into overdrive. Although empanelled in June, their initial official work product surfaced on November 15th, six months later. While most rational property owners are resigned to enduring this year’s insurance mauling, they need – and expect – relief before next year. If Governor Bush can align consensus among incoming House Speaker Marco Rubio, Senate President Ken Pruitt and other legislative leaders over what should be brought up at a December 4th Special Session and what should wait until a special session next year or the regular session in March, the Governor could see some of the Committee’s recommendations fast-tracked.

Governor-elect Charlie Crist
GOVERNOR-ELECT CHARLIE CRIST
The new legislative leadership has responded with trepidation. Ken Pruitt wants to touch base with Governor-elect Charlie Crist as well as Chief Financial Officer-elect Alex Sink to secure their blessing before moving on Bush’s request. While Republican Attorney Marco Rubio is amenable to tackling some of the more pressing Insurance issues at a Special Session, the success of his tenure will derive from his relationship with Crist and, to a lesser extent, new CFO Sink. In his campaign, Charlie Crist proposed setting total losses of $3.2 billion, rather than the current $5.3 billion, as the level at which insurance companies can tap into the Florida Hurricane Catastrophe Fund for reinsurance to help pay claims. Since the change should enable insurance companies to obtain more reinsurance at the CAT fund’s lower rates, he would mandate that those savings be passed through to homeowners.

Chief Financial Officer-elect Adelaide (Alex) Sink
CHIEF FINANCIAL OFFICER-ELECT
ADELAIDE (ALEX) SINK
Alex Sink, former president of Bank of America’s Florida operations, said she agrees with his proposal “with the caveat that [insurance companies] would look me in the eye and say, ‘If you do this, we will return to the Florida market.’” While Crist and Sink each support incepting a National Catastrophe Fund to buy reinsurance for claims on hurricanes and other natural disasters, Sink said a more achievable possibility is the creation of a regional fund, with coastal states from Texas to Maine participating. Curing the insurance dilemma was a key plank in both of their campaigns. Their decision about a Special Session will reveal the extent of their commitment.

If the Committee’s efforts produce results, the Administration will have slain an economic dragon and salvaged the Governor’s legacy. During the gubernatorial campaign, Governor Bush refused to endorse either CFO Tom Gallagher or Attorney General Charlie Crist, both of whom served with Bush in the Florida Cabinet. The question then becomes, does Charlie Crist care about saving Bush’s legacy? By waiting until January 2nd, Crist and Sink can chalk up any progress to their own legacies. Although a delay of one month won’t make much difference in their implementing of the Committee’s recommendations, the effectiveness of these recommendations certainly will. If they fail to impact rates, we’re on our own.

The Galt Mile Community Association is currently investigating alternatives to this potential eventuality. Progress will be reported at future Presidents Council meetings.

P.S. - On November 29th, Governor-elect Charlie Crist, Senate President Ken Pruitt, and House Speaker Marco Rubio announced their intention to “call a Special Session of the Florida Legislature starting January 16, 2007 to begin an effort to restructure Florida’s property insurance market and provide relief to Florida residents and businesses.” What a surprise! It appears as if Governor Bush will just have to sit back and wait... like the rest of us.

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Property Insurance Conference

Florida House Holds Pre-Session Pow-wow

Representative Ellyn Bogdanoff
Representative Ellyn Bogdanoff
December 6, 2006 - District 91 Statehouse Representative
Ellyn Setnor Bogdanoff notified the Galt Mile Community Association about an ongoing conference being held by the Florida House of Representatives to address the current property insurance crisis. The three-day conference appears to be a pre-session brainstorming effort in preparation for what House Speaker Mario Rubio called, “a Special Session of the Florida Legislature starting January 16, 2007 to begin an effort to restructure Florida’s property insurance market and provide relief to Florida residents and businesses.” Ellyn’s message is as follows:

“I don’t have to remind you that soaring insurance costs are hurting Floridians. To address this, Speaker Rubio invited everyone to bring their best ideas to Tallahassee for a three-day conference to solve this crisis. He welcomed all ideas - Democrat and Republican - and discussed them openly and frankly. From this, consensus issues are beginning to emerge:

  • Cleaning up Citizens Property Insurance and holding its leaders accountable.
  • Making sure that all houses are built to the strongest standard and have the strongest protections, regardless of where they are in the state.
  • Expanding our efforts to help homeowners stormproof their homes and lower their insurance rates by being prepared.
  • Lowering the cost of reinsurance and directing those savings to homeowners.

However, one issue was clear: The legislature knows they have to find a solution to lower insurance rates for Floridians and make sure that insurance companies treat Florida homeowners fairly.

We understand how important solving the insurance crisis is for Floridians. Our office will continue to seek out good ideas wherever we can find them, listen to the homeowners and small business owners in our community, and come back to Tallahassee on January 16th ready to act and bring real insurance relief to Floridians.

Please don’t hesitate to contact me at ellyn.bogdanoff@myfloridahouse.gov with any additional questions or concerns you may have.”

Would you like to see events as they unfold? Please Click Here to view the House Conference - LIVE!

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