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