CFO Alex Sink's Consumer eViews Newsletter

FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S NEWSLETTER

Volume 5 Number 49 December 5, 2008

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Remembering Pearl Harbor – “A Day That Will Live In Infamy”

Florida and the U.S. Navy share a proud heritage that pre-dates our statehood going back to the 1820s. As we observe Pearl Harbor Day 2008, we take a moment to reflect on our state’s ongoing relationship with the Navy and the role that Floridians played in what President Franklin D. Roosevelt aptly described as "a day that will live in infamy."

Pearl Harbor Day commemorates the Japanese attack on the U.S. Naval base at Pearl Harbor that began at dawn on December 7, 1941, crippling the U.S. Pacific Fleet and giving our nation cause to enter World War II. Japan’s surprise air and submarine attack on the U.S. fleet in Hawaii more than six decades ago remains characterized by historians as one of the handful of events that changed the lives of everyone, everywhere.

When war was declared on December 8, 1941, more than 250,000 Floridians signed up to protect this country by serving in the U.S. military during that war. Today Florida is home to five major naval bases and installations in the communities of Pensacola, Panama City, Milton, Mayport and Jacksonville. The U.S. Navy recently decided to homeport a nuclear-powered aircraft carrier at Mayport Naval Station, reinforcing the strong ties to our naval heritage.

We salute all of Florida’s veterans of Pearl Harbor, and all those who served in World War II. It is with gratitude and pride that we remember the valor and sacrifices of American’s Greatest Generation and thank them for their service.


CFO APPOINTS JOHN B. CLARK TO ENERGY AND CLIMATE COMMISSION

Florida Chief Financial Officer Alex Sink announced the appointment of John Boston Clark to the Florida Energy and Climate Commission.

Clark, a graduate of the Southern Technical Institute in Marietta, Ga., is a Master Electrician with more than 40 years dedicated to the energy industry, including electrical construction management, workforce development, and serving five years as the coordinator and training director of the Tallahassee Electrical Joint Apprenticeship School. He currently serves as the Director of the Florida Electrical Workers Association and is a former member of the Workforce Florida Board of Directors.

The statute establishing the nine-member Commission provides that the Governor appoint seven members, and that the Agriculture Commissioner and Chief Financial Officer appoint one member each. The Commission was created to advise the Florida Legislature and Governor on energy policies.

All of the appointees to the Commission are subject to confirmation by the Florida Senate.

Governor Crist appoints seven to Florida Energy and Climate Commission

Governor Charlie Crist announced Monday the following appointments to the Florida Energy and Climate Commission, which require Senate confirmation.


CFO Speaks at Hurricane Risk Mitigation Leadership Forum

Wednesday evening CFO Sink spoke at the 2nd Annual Hurricane Risk Mitigation Leadership Forum Dinner in Orlando. CFO Sink joined representatives from Renaissance Re, Weather Predict, The Weather Channel, the Florida Office of Emergency Management, FLASH, the State Insurance Department, Reinsurance Association of America, AIF, and others in an effort to focus public policy on reducing risks for all Floridians.

At the leadership forum dubbed “Where Science and Public Policy Meet,” CFO Sink spoke about creating a culture of preparedness through mitigations. She highlighted the My Safe Florida Home Program that has provided over 400,000 free wind inspections and awarded grants to help Floridians harden their homes against hurricane damage. In addition to helping harden homes, the program enabled the state to re-invest in our state’s economy by creating thousands of jobs to inspectors and contractors during tight financial times.


'StormStruck: The Tale of Two Homes' exhibit at Epcot

On Wednesday, CFO Alex Sink visited Disney’s Epcot Center to tour the new “StormStruck: The Tale of Two Homes” exhibit, an interactive weather experience. The exhibit allows guests of all ages to become a storm hero, experience a spectacular wind storm and team up to help build a home that can withstand severe weather.

The exhibit is designed to help visitors learn about the risks of natural disasters, understand their property-protection and safety options, and take action today to protect families and homes. Guests will find fun-filled disaster safety games, create-your-own-storm kits and interactive quizzes on natural disasters local to their zip codes.


CFO Sink delivers budget assessment to Palm Beach County firefighters

Chief Financial Officer and State Fire Marshal Alex Sink received a warm welcome Wednesday when she was introduced to speak at the 2009 installation luncheon for officers of Palm Beach County’s Fire Chief’s Association, Fire Marshal’s Association, Training Officer’s Association and EMS Provider’s Association. About 100 firefighters attended the event; State Fire Marshal Sink, along with Les Hallman, Director of the Division of State Fire Marshal, also assisted in the installation of officers.

Sink delivered a frank but optimistic assessment of Florida’s economy.

“While budget cuts are a necessary part of handling a budget deficit, it’s extremely important to prioritize the safety and security of Florida’s citizens,” she said. “I am positive that by working together we will navigate through these tough economic times.”

She assured the firefighters that the essential services they depend on from the State Fire Marshal’s Office will be maintained, noting that last year the office certified 9,000 firefighters, delivered training to 6,000 firefighters, and conducted 3,500 fire and arson investigations.


CFO SINK Addresses Tallahassee Kiwanis Club

Florida Chief Financial Officer Alex Sink joined the Tallahassee Kiwanis Club as the December guest speaker. Speaking to group of about 60 Kiwanians, CFO Sink gave an update on the Florida budget and on the work she is doing to protect Florida’s senior citizens from financial fraud.

“As the keeper of Florida’s checkbook, I used to be able to say that the people had $20 billion in their checking account,” said Sink. “Today it averages about $14 billion."

CFO Sink reiterated her call to the state's leaders to convene in a special session to address Florida's budget crisis.

"If Florida’s families realize they are spending more each month than they are earning, they don’t wait six months before taking action," said CFO Sink. "They do the responsible thing: sit down, examine their budgets and begin making the tough decisions.”

CFO Sink noted that Florida’s unemployment rate at seven percent is higher than the national average and has not been this high since 1993. “Business leaders around the country are meeting now to examine their budgets, and it is time for the Florida Legislature to recognize that we have a problem and work together to identify ways to reduce expenditures and balance the budget.”

In response to questions about solving the budget crisis from the audience, CFO Sink suggested starting by taking a look at every agency and identifying ways to be more efficient with the taxpayer’s money. CFO Sink added that “in fairness, everything has to be on the table.”

In response to questions about solving the budget crisis from the audience, CFO Sink suggested starting by taking a look at every agency and identifying ways to be more efficient with taxpayer dollars.

The CFO also talked with the group about efforts to protect Florida’s seniors and the elderly from financial crime through her “Safeguard our Seniors” (SOS) Task Force, which is charged with reviewing and recommending solutions to better protect Florida seniors against financial fraud, particularly annuity fraud.

“Selling annuities with 15-year terms and surrender charges of 20 percent to a 90 year-old grandmother is simply reprehensible,” said CFO Sink. “This kind of predatory selling should be a felony and those who would take advantage of Florida’s vulnerable seniors should be put in jail.”


CFO's office decorates for the holidays

Visitors to the Chief Financial Officer’s capitol suite are now welcomed by a beautiful Leyland cypress in celebration of the holiday season. This week, CFO Sink received the tree from Tony and Debbie Harris (pictured), who brought the tree from their Ergle Christmas Tree Farm in Dade City, Florida.

Along with providing festive décor and a fun activity for the staff (Capitol staff are each bringing an ornament to decorate the tree), the tree is actually a renewable resource. Many more trees at the Ergle Christmas Tree Farm were planted than were harvested, and while this tree was growing, it provided habitat for animals and clean air for 18 people. After the holidays, the biodegradable tree will be recycled.

“Purchasing a Florida Christmas tree supports Florida agriculture and boosts the state’s economy,” said CFO Sink. “This is a wonderful addition to our office, and I am grateful to the Harris’s for bringing us such a beautiful tree fresh from Florida!”


CFO Sink promotes Money Smart Financial Literacy training

Florida Chief Financial Officer Alex Sink, in partnership with the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Bank of Atlanta – Jacksonville Branch and Regions Bank, promoted the importance of increasing financial literacy at instructor training sessions in Orlando.

CFO Sink delivered opening remarks to participants in the FDIC’s Money Smart Train the Trainer program, which helps adults with little or no banking experience to enhance money skills, build financial knowledge, develop financial confidence and use banking services effectively.

“Clearly, education is the key to any effort to improve financial literacy and that’s why programs like Money Smart are so important for our citizens,” said CFO Sink. “That’s why volunteers like each of you, and the organizations you represent, are so essential to delivering this important training and community support.”

The CFO challenged the attendees to provide the training to at least 10 other participants after their coursework was complete. Volunteers from various non-profit and community organizations who completed the training were certified to give one-hour financial literacy courses using the FDIC’s Money Smart Curriculum.


CFO SINK’S CALL FOR ADDITIONAL INFORMATION RESULTS IN NEW CHARGES FOR JENSON BEACH PASTOR, $500,000 ADDITIONAL BOND

Florida Chief Financial Officer Alex Sink announced that additional charges have been filed against a Jensen Beach pastor and his wife in an ongoing investigation by the Department of Financial Services, Division of Insurance Fraud (DFS), into allegations the couple bilked investors throughout central and south Florida out of more than $8 million in fraudulent real estate schemes. In the newest charges, Rodney and Shalonda McGill are accused of duping an elderly couple out of more than $100,000 worth of property and cash.

Following the McGills’ arrests in September, CFO Sink called on consumers who may have had dealings with the McGills to provide information. DFS investigators have received nearly 100 calls, and the investigation continues while the couple remains in the Martin County Jail with bond set at $1.73 million each, including $500,000 in bond added on Wednesday.

The McGills already face charges of Racketeering, first degree; Conspiracy to Commit Racketeering, first degree; Grand Theft, first degree; Grand Theft, third degree; and Obtaining a Mortgage by False Representation, third degree, for saddling investors with more than $1.15 million in mortgage loans by “flipping” properties in Martin and St. Lucie counties that the McGills sold using fraudulent loan applications.

The additional charges announced today, two counts of grand theft in the first degree, mean the McGills face up to 30 years each in prison as well as penalty enhancements provided by Florida law for theft from persons over the age of 65. The additional charges first degree felony charges were filed today by the Office of the State Attorney, 19th Judicial Circuit of Florida.

The new charges stem from two real estate transactions in which the McGills’ actions allegedly caused Indian River County residents Clarence and Ella Mae Flemming to lose properties and money. The properties are located at 3650 47th St., Vero Beach (a five-acre parcel) and 6361 Summerset Ct., Jacksonville (a six-acre parcel).

In October 2005, the Flemings attended a “How to Invest in Real Estate” seminar hosted by Rodney and Shalonda McGill at the Stuart library. The Flemings told investigators they became very friendly with the McGills and grew to trust Rodney and Shalonda McGill, whom they regarded as family. Investigators said the McGills fraudulently executed a Satisfaction of Mortgage, dated May 30, 2006, for the Flemings’ 3650 47th. St., Vero Beach, property without providing the Flemings with the $157,000 proceeds from the sale.

Subsequent to the Vero Beach sale, the Flemings purchased a property located at 6361 Summerset Ct., Jacksonville, FL. Following the purchase, investigators said Rodney McGill illegally obtained a $125,000 mortgage in the Flemmings’ name on the Jacksonville property from a private money lender. In June 2006 the lender contacted the Flemings upon non-receipt of the first mortgage payment. The Flemings, unable to make the mortgage payment, lost the property in foreclosure. The Flemmings never authorized or requested the McGills to encumber the Jacksonville property in any manner nor did the Flemings receive loan proceeds from the McGills.

Anyone with information is asked to contact Detective Ted Padich at (561) 837-5635 with the Division of Insurance Fraud or Investigator Steve Brignola at (561)837-5233, with the Office of Financial Regulation. The Office of Statewide Prosecution is prosecuting the charges.


Department of Financial Services has an open forum with seniors on financial protections

As part of ongoing efforts to talk with Florida seniors about the Safeguard our Seniors (S0S) initiative, Chief Financial Officer Alex Sink’s Division of Consumer Services partnered with the Franklin County Senior Citizens Council to host an open forum with seniors and other area residents on Thursday at the Franklin County Senior Citizen Center.

Sink created the SOS Task Force in September to develop solutions to better protect Florida seniors against financial fraud. The CFO and the SOS Task Force, which has met in Tampa and Ft. Myers, are expected to recommend legislative action to combat financial fraud against senior investors.

To learn more, visit www.FLSeniors.net. Floridians who believe they may be a victim of annuity fraud should call 1-877-My-FL-CFO or visit www.MyFloridaCFO.com to file a complaint.


My Family CFO

Are you the chief financial officer of your family? Are you always looking out for the best deals, wise investments and smart moves for your family's financial security?

As your family's fiscal watch dog, keep an eye on this column for money-smart ideas from the Chief Financial Officer of Florida, Alex Sink.

If you have a creative way to be fiscally smart, share it with us for this column!

MyFamilyCFO@MyFloridaCFO.com

Idea: How to pay for holiday gift-buying

The holidays bring gift buying and we are all caught in the same trap - how to pay for the gifts?

Through the holiday season, billions of dollars are going to be spent using credit cards. The answer is to not let credit card debt linger - don't spend the next year paying off purchases with interest on this season's gift buying. Here are some helpful ideas for happy holiday spending:

Decide how much you can afford to spend. When thinking about your spending limit, budget as if you would pay cash. In other words, how much money can you have available to pay for this holiday's spending when the bill arrives in January?

Make a list based on your spending ability. Make a spreadsheet listing everyone on your gift list. Show the person, gift, and cost. Create a way to show if the person's gift has already been purchased. Keep track of the spending per individual on this list, and the total spent.

Contact your credit cards for better deals. Give each bank a call and let them know that you need a deal or you won't use their card this year. Ask for zero percent for six months on purchases or inform them that you'll use another card that will give you that deal.

Take advantage of department store card incentives.  Many department stores offer discounts for using their card -- 10 - 15 percent or more. Use these discounts then transfer the balance from the high-rate department store card to a lower-rate credit card before any interest is charged or better yet, pay off the card immediately with cash!

Pay off the cards in full when the bills arrives. Ideally, you should pay off all credit card charges in full when the bills arrive. If you stick to your plan, you have stayed within the holiday-spending limit and can pay them in full. If not, pay the cards off as soon as you can.


Saving Energy, Saving Money

Energy tips for Florida families - these actions represent ways to behave kindly toward Mother Earth, AND save money as well as energy.

These tips are presented by CFO Alex Sink's science advisor Meg Lowman, Ph.D., on the faculty at New College of Florida. Dr. Lowman has written numerous award-winning books and is an expert on world rainforests.

Make your own gift-wrapping paper

Most mass-produced wrapping paper you find in stores is not recyclable and ends up in landfills. And it is expensive!

Instead, get creative! Wrap presents with old maps, the funny papers, paper bags or Kraft paper. Get a marker and write individualized messages and drawings on the wrapping paper; this way, gift tags aren’t necessary. Also, this is a fun project to get the kids involved and make it a family affair. One thing that’s fun to try are potato stamps – cut a design in a potato half, dip it in paint, and then stamp it on the paper for fun, original designs. Just be sure the paper dries before anything gets wrapped!

Use string and twine, recycled or new, to tie up your gifts and add any kind of extra touches that come to mind. Pine cones, jingle bells, buttons, beads, leftover craft supplies, sewing trim - use your imagination!

If every family wrapped just three gifts this way, it would save enough gift paper to cover 45,000 football fields.


Six Ways to Avoid the Flu

1. Get vaccinated - Even though flu season peaks from late December through March, it's never too late to get a flu shot. Definitely get one if you're in a group that has a higher risk of serious flu, such as pregnant women, people over 50, those with chronic medical conditions and nursing-home residents.

2. Wash your hands - Handshakes, TV remotes and the handle of your office coffeemaker all spread the hardy flu virus, which can live up to 48 hours outside the body. Lather up with warm water and scrub vigorously for at least 20 seconds.

3. Use sanitizers in a pinch - While alcohol-based hand sanitizers should not replace old-fashioned soap and water, they can help out between washings. Make sure the alcohol concentration is at least 60 percent, which is the minimum level required to kill the flu virus as well as other viruses and bacteria.

4. Cover up - If you sneeze or cough, cover your mouth and nose—and not with a closed fist or open hand. If you can, use a tissue and then dispose of it in a covered trash can and return to Tip 2. If you don't have tissues available, sneeze or cough into your upper sleeve and wash your hands anyway.

5. Eat right, sleep right, get exercise - While none of these can prevent the flu, they can boost your immune system. Make sure to eat plenty of fruits and vegetables, drink plenty of water and get enough sleep.

6. Stay at home - If you have the flu, stay home. If you don't, try to avoid crowds and contact with those that are sick. And don’t forget to wash those hands!


Deposits vs. Investments

Any money you have in savings and checking accounts or in certificates of deposit (CDs) is known as a deposit. Your financial institution is committed to returning all of your deposits (plus interest) when you ask. You can take money out of a CD before it matures but you will have to pay an early withdrawal penalty.

Your institution is also required to carry government insurance on your deposits. The insurer is usually the Federal Deposit Insurance Corporation (FDIC). Contact your financial institution if you have specific questions about your insured deposits.

Financial institutions can also provide investment products like mutual funds and annuities to their customers. Your bank or credit union may sell you this type of product, but it is not obligated to pay you back for any losses you may have if the investment is not successful.

Equally important, the U.S. government does not insure you against investment losses, even if you purchased the product at a bank or credit union.

Investing in a Mutual Fund

When you invest in a mutual fund, your money is put together with the money of other investors and is used to purchase a variety of securities such as stocks, bonds, and other financial instruments.

Mutual funds are run by investment professionals who decide which investments to buy or sell for the fund. Their decisions are guided by the fund's investment goals.

For example, some mutual funds are designed for people who want to have easy access to their money and invest only for a short time. These funds invest primarily in government securities or very short-term bank CDs, where the investment risks are moderate.

Other mutual funds appeal to people who are willing to take on more risk with the goal of a higher return. Such funds invest primarily in corporate or municipal bonds.

Most mutual funds, however, are more diverse, offering a mix of investments. A typical fund portfolio includes between 30 and 300 different stocks, bonds, and other instruments.

Under the law, any institution selling you shares in a mutual fund or annuity must inform you that:

Federal regulations also require that:

Buying through Your Institution

Consumers should be aware that every product sold by a bank or credit union is not automatically insured by the U.S. government.

Not all banks and credit unions sell investment products, but many do. Some simply rent lobby space to outside companies. Other institutions sell what are called proprietary funds, which are sponsored by an outside company but receive investment advice from the institution itself. Private label funds, meanwhile, are sponsored and managed through an outside company but are only sold through one bank or credit union.

Some mutual funds and annuities have names that sound very much like names of financial institutions. But no mutual funds or annuities are insured by either your institution or the U.S. government. As an investor, you should be aware that these funds have different degrees of risk and could possibly lead to a loss of some or all of your principal.