State of Florida Division of Bond Finance

Transcription

State of Florida
Division of Bond Finance
The following Official Statement, prepared subsequent to the most recent
filing pursuant to SEC Rule 15c2-12, is provided in lieu of such filing.
Notice
The following Official Statement is placed on the internet as a matter of convenience
only and does not constitute an offer to sell or the solicitation of an offer to buy bonds.
Although the information has been formatted in a manner which should exactly replicate the
printed Official Statement, physical appearance may differ due to electronic communication
difficulties or particular user equipment. In order to assure accuracy, users should obtain
a copy of and refer to the printed Official Statement. The user of this Official Statement
assumes the risk of any discrepancies between the printed Official Statement and the electronic
version of this document.
Copies of the printed Official Statement may be obtained from:
Florida Division of Bond Finance
1801 Hermitage Boulevard
Suite 200
Tallahassee, Florida 32308
E-Mail: bond@fsba.state.fl.us
Phone: (850) 488-4782
Fax: (850) 413-1315
Refunding Issue
This Official Statement has been prepared by the Division of Bond Finance to provide information about the 2003A Bonds. Selected information is
presented on this cover page for the convenience of the reader. To make an informed decision, a prospective investor should read this Official
Statement in its entirety. Unless otherwise indicated, capitalized terms have the meanings given in Appendix D.
$109,770,000
STATE OF FLORIDA
Department of Management Services
Florida Facilities Pool Revenue Refunding Bonds, Series 2003A
Dated: April 15, 2003
Due: September 1, as shown on the inside front cover
Insured Ratings
AAA
Aaa
AAA
Underlying Ratings
A+
AA3
AA
Bond Ratings
Fitch Ratings
Moody’s Investors Service
Standard & Poor’s Ratings Services
Tax Exemption
In the opinion of Bond Counsel, interest on the 2003A Bonds is excluded from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the alternative minimum tax; however, interest on the
2003A Bonds is taken into account in determining federal taxes imposed on corporations subject to the alternative
minimum tax. The 2003A Bonds and the income therefrom are exempt from Florida taxes, except estate taxes and
corporate net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. See Appendix F "Form of Approving Opinion of Bond Counsel" for assumptions and limitations made by Bond Counsel.
Redemption
The 2003A Bonds are not subject to redemption prior to maturity.
Security
The 2003A Bonds are payable from Pool Pledged Revenues consisting of all fees, charges, revenues or receipts derived
by the Department of Management Services from the operation, leasing or other disposition of Facilities in the Florida
Facilities Pool, a reserve account and other revenues described herein. The Pool Pledged Revenues are dependent
upon annual legislative appropriation. The 2003A Bonds are not secured by the full faith and credit of the
State of Florida.
The scheduled payment of principal of and interest on the 2003A Bonds when due will be guaranteed under a municipal
bond insurance policy to be issued concurrently with the delivery of the 2003A Bonds by Financial Security Assurance
Inc.
Lien Priority
The aggregate principal amount of Parity Bonds (including the 2003A Bonds) expected to be outstanding subsequent
to the refunding to be accomplished with the proceeds of the 2003A Bonds is $358,070,000.
Additional Bonds
Additional bonds payable on a parity with the 2003A Bonds and the Outstanding Parity Bonds may be issued if Pool
Pledged Revenues are sufficient to cover 110% of the Aggregate Debt Service required to be paid; 110% of necessary
debt service reserve fund deposits, if any; 100% of necessary deposits to the Capital Depreciation Reserve Fund; and
100% of operating and maintenance expenses. The description of the requirements for the issuance of Additional Bonds
is only a summary of the complete requirements. See "ADDITIONAL BONDS" herein for more complete information.
Purpose
Proceeds will be used to refund a portion of the State of Florida, Department of Management Services, Division of
Facilities Management, Florida Facilities Pool Revenue Refunding Bonds, Series 1992 and to pay certain costs of
issuance.
Interest Payment Dates
March 1 and September 1, commencing September 1, 2003.
Record Dates
February 15 and August 15.
Closing/Settlement
It is anticipated that the 2003A Bonds will be available for delivery in New York, New York on June 4, 2003.
Denominations
$5,000 and integral multiples thereof.
Form
Printed certificates will be issued. Underwriters will be required to qualify the 2003A Bonds for the FAST Automated
Securities Transfer System of The Depository Trust Company.
Bond Registrar/
Paying Agent
U.S. Bank Trust National Association, New York, New York, or its successor.
Bond Counsel
Greenberg Traurig, P.A., Miami, Florida.
Issuer Contact
Division of Bond Finance, (850) 488-4782, bond@fsba.state.fl.us
Maturity Structure
The 2003A Bonds will mature on the dates and bear interest at the rates set forth on the inside front cover.
April 29, 2003
MATURITY STRUCTURE
Initial
CUSIP©
341602XE5
341602XF2
341602XG0
341602XH8
341602XJ4
341602XK1
341602XL9
341602XM7
341602XN5
341602XP0
341602XQ8
341602XR6
341602XS4
341602XT2
341602XU9
Due Date
September 1, 2003
September 1, 2004
September 1, 2005
September 1, 2006
September 1, 2007
September 1, 2008
September 1, 2009
September 1, 2010
September 1, 2011
September 1, 2012
September 1, 2013
September 1, 2014
September 1, 2015
September 1, 2016
September 1, 2017
Principal
Amount
$ 1,475,000
5,785,000
6,125,000
6,450,000
6,795,000
7,145,000
7,525,000
7,915,000
8,330,000
8,775,000
9,230,000
9,710,000
10,230,000
10,765,000
3,515,000
Interest
Rate
4.00%
6.00
5.25
5.25
5.25
5.25
5.25
5.25
5.25
5.25
5.25
5.25
5.25
5.25
5.25
Price or
Yield*
1.15%
1.20
1.42
1.71
2.15
2.49
2.79
3.11
3.36
3.48
3.60
3.70
3.80
3.90
3.99
(Accrued interest from April 15, 2003 to be added)
___________________________
* Price and yield information provided by the underwriters.
©
Copyright 2003 American Bankers Association. CUSIP data herein is provided by Standard & Poor's, CUSIP Service Bureau, a division of
McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services.
The State of Florida has not authorized any dealer, broker, salesman or other person to give any
information or to make any representations, other than those contained in this Official Statement, and if
given or made, such other information or representations must not be relied on. Certain information
herein has been obtained from sources other than records of the State of Florida which are believed to be
reliable. The information and expressions of opinion herein are subject to change without notice, and
neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the State of Florida since the date
hereof. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor
shall there be any sale of the 2003A Bonds by any person in any jurisdiction in which it is unlawful for such
person to make such an offer, solicitation or sale.
STATE OFFICIALS
GOVERNING BOARD OF THE DIVISION OF BOND FINANCE
GOVERNOR
JEB BUSH
Chairman
CHIEF FINANCIAL OFFICER
TOM GALLAGHER
ATTORNEY GENERAL
CHARLIE CRIST
COMMISSIONER OF AGRICULTURE
CHARLES H. BRONSON
WILLIAM S. SIMON
Secretary
CHRIS KEENA
Director
Division of Facilities Management
COLEMAN STIPANOVICH
Executive Director
State Board of Administration of Florida
J. BEN WATKINS III
Director
BOND COUNSEL
Greenberg Traurig, P.A.
Miami, Florida
[This page intentionally left blank]
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AUTHORITY FOR THE ISSUANCE OF THE 2003A BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
General Legal Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Division of Bond Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
State Board of Administration of Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Department of Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Administrative Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DESCRIPTION OF THE 2003A BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Registration and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
THE REFUNDING PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Application of the 2003A Bond Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECURITY FOR THE 2003A BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Pool Pledged Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2003A Bonds Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Debt Service Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Ambac Surety Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding Parity Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Flow of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Ceiling on State Revenue Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
MUNICIPAL BOND INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Bond Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Financial Security Assurance Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ADDITIONAL BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
THE FLORIDA FACILITIES POOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Description of the Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Pool Rental Rates and Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Facilities in the Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Occupancy Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
State Construction Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Standard Lease Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SCHEDULE OF DEBT SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
PROVISIONS OF STATE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Bonds Legal Investment for Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Negotiability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Uniform Commercial Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Original Issue Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
State Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Intangible Personal Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
RECENT STATE FINANCIAL DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Budget Revenue Estimating Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Recent State Constitutional Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Investment of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Bond Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Verification of Mathematical Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Legal Opinion and Closing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Execution of Official Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
-
State of Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
General Purpose Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Definitions and Summary of Certain Provisions of the Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
Form of Continuing Disclosure Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
Form of Approving Opinion of Bond Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
Specimen of Municipal Bond Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
OFFICIAL STATEMENT
Relating to
$109,770,000
STATE OF FLORIDA
Florida Facilities Pool Revenue Refunding Bonds, Series 2003A
For definitions of capitalized terms not defined in the text hereof, see Appendix D.
INTRODUCTION
This Official Statement sets forth information relating to the sale and issuance of the $109,770,000 State of
Florida Department of Management Services, Florida Facilities Pool Revenue Refunding Bonds, Series 2003A, dated
April 15, 2003 (the "2003A Bonds") by the Division of Bond Finance of the State Board of Administration of Florida
(the "Division of Bond Finance").
Proceeds will be used to refund a portion of the State of Florida, Department of Management Services,
Division of Facilities Management, Florida Facilities Pool Revenue Refunding Bonds, Series 1992 (hereinafter the
"Refunded Bonds") and to pay certain costs of issuance. The refunding is being effectuated to achieve debt service
savings due to lower interest rates. See "THE REFUNDING PROGRAM" below for more detailed information.
The 2003A Bonds will be payable from Pool Pledged Revenues consisting of all fees, charges, revenues or
receipts derived by the Department of Management Services from the operation, leasing or other disposition of
Facilities in the Florida Facilities Pool, a reserve account and other revenues described herein. The lien of the 2003A
Bonds on the Pool Pledged Revenues is on a parity with the Outstanding Parity Bonds. See "SECURITY FOR THE
2003A BONDS" below for more detailed information. The Pool Pledged Revenues are dependent upon annual
legislative appropriation for rental payments from the Agencies leasing Facilities in the Pool. No
requirement exists to make such annual appropriations in the future, nor may any Registered Owner of
any 2003A Bond legally compel the Legislature to make such appropriations. The 2003A Bonds are not
secured by the full faith and credit of the State of Florida.
The scheduled payment of principal of and interest on the 2003A Bonds when due will be guaranteed under
a municipal bond insurance policy to be issued by Financial Security Assurance Inc. concurrently with the delivery
of the 2003A Bonds.
Requests for additional information may be made to:
Phone (850) 488-4782
Fax (850) 413-1315
E-mail: bond@fsba.state.fl.us
Mail: P. O. Box 13300
Tallahassee, Florida 32317-3300
This Official Statement speaks only as of its date and the information contained herein is subject to change.
Any statements made in this Official Statement which involve opinions or estimates, whether or not expressly stated,
are set forth as such and not as representations of fact. No representation is made that any of the opinions or
estimates will be realized. To make an informed decision, a full review should be made of the entire Official
Statement. The descriptions of the 2003A Bonds and the documents authorizing and securing the same do not purport
to be comprehensive or definitive. All references to and descriptions of such documents are qualified by reference
to the actual documents. Copies of such documents may be obtained from the Division of Bond Finance.
End of Introduction
1
AUTHORITY FOR THE ISSUANCE OF THE 2003A BONDS
General Legal Authority
The 2003A Bonds are being issued by the Division of Bond Finance on behalf of the Department of
Management Services (the "Department") pursuant to Article VII, Section 11(d), of the Florida Constitution, the State
Bond Act and the Florida Building and Facilities Act (collectively, the "Act"). Article VII, Section 11(d), of the Florida
Constitution provides that revenue bonds payable solely from funds derived directly from sources other than State tax
revenues may be issued by the State of Florida or its agencies, without a vote of the electors, to finance or refinance
capital projects. The Act authorizes the Department to acquire Facilities and to own, operate, finance and refinance
such Facilities through the issuance of obligations by the Division of Bond Finance.
The Division of Bond Finance, a public body corporate created pursuant to the State Bond Act, is authorized
to issue bonds on behalf of the State or its agencies. The Governing Board of the Division of Bond Finance (the
“Governing Board”) is composed of the Governor, as Chairman, and the Cabinet of the State of Florida, consisting
of the Attorney General, as Secretary, the Chief Financial Officer, as Treasurer, and the Commissioner of Agriculture.
The Director of the Division of Bond Finance may serve as an assistant secretary of the Governing Board.
On January 7, 2003, a State constitutional amendment that changed the composition of the State’s Cabinet
became effective. Prior to January 7, 2003, the Cabinet consisted of, and the Governing Board included, the State
Comptroller, the State Treasurer, the Secretary of State, the Commissioner of Education, the Attorney General, and
the Commissioner of Agriculture.
State Board of Administration of Florida
The State Board of Administration of Florida (the “Board of Administration”) was created by Article IX,
Section 16 of the Florida Constitution of 1885, as amended, and is continued under Article IX, Section 9(c) of the
Florida Constitution as revised in 1968. The Board of Administration is composed of the Governor, as Chairman, the
Attorney General and the Chief Financial Officer. Under the State Bond Act, the Board of Administration determines
the fiscal sufficiency of all bonds proposed to be issued by the State of Florida or its agencies. It also acts as the fiscal
agent of the Department in administering the Sinking Fund and the Rebate Fund established pursuant to the Resolution
as described below.
Prior to January 7, 2003, the Board of Administration was composed of the Governor, as Chairman, the State
Comptroller, as Secretary, and the State Treasurer, as Treasurer. On January 7, 2003, a State constitutional
amendment became effective, which, among other things, consolidated the offices of the State Comptroller and State
Treasurer into the newly-created office of Chief Financial Officer.
The State of Florida Department of Management Services (the "Department") operates under the direction
of the Governor and a Secretary who acts as the administrator. The Department succeeded to the powers and duties
of the former Division of Facilities Management to carry out and effectuate the purposes of the Florida Building and
Facilities Act, Sections 255.501-255.525, Florida Statutes.
Administrative Approval
By the Original Resolution adopted May 20, 1986 (the "Original Resolution"), the Governing Board authorized
the issuance of not exceeding $300,000,000 State of Florida, Department of General Services, Division of Facilities
2
Management, Florida Facilities Pool Revenue Bonds (the "Bonds"), which Bonds were sold in multiple series. On
March 22, 1994, the Governing Board adopted the Eleventh Supplemental Resolution, which authorized the issuance
of an additional $300,000,000 Florida Facilities Pool Revenue Bonds, which may be sold in multiple series. The
Original Resolution has been amended and supplemented numerous times, most recently by the Twenty-fifth
Supplemental Resolution of the Governing Board adopted on April 22, 2003 (collectively, the "Resolution"), which
authorized the issuance and sale of the 2003A Bonds.
The Department, by resolution adopted on April 17, 2003, requested the Division of Bond Finance to issue
the 2003A Bonds.
The Board of Administration approved the fiscal sufficiency of the 2003A Bonds by a resolution to be adopted
on April 22, 2003.
DESCRIPTION OF THE 2003A BONDS
The 2003A Bonds are revenue bonds of the Department payable solely from the Pool Pledged Revenues and
certain other funds as set forth in this Official Statement on a parity with the Florida Facilities Pool Revenue and
Revenue Refunding Bonds, Series 1992 through Series 2002A (the "Parity Bonds") anticipated to be outstanding in
the aggregate principal amount of $358,070,000 subsequent to the refunding accomplished with proceeds of the 2003A
Bonds.
The 2003A Bonds will be issued as registered bonds in the denomination of $5,000 or integral multiples
thereof. Interest is payable on September 1, 2003 for the period from April 15, 2003 to September 1, 2003, and
semiannually thereafter on March 1 and September 1 of each year until maturity. The 2003A Bonds shall mature
as set forth on the inside front cover.
Registration and Payment
Principal of and premium, if any, on the 2003A Bonds will be payable to the Registered Owner upon
presentation and surrender of the 2003A Bonds when due at the corporate trust office of U.S. Bank Trust National
Association, New York, New York, or its successor, as paying agent and bond registrar (the "Bond Registrar/Paying
Agent"). Interest on the 2003A Bonds will be paid by check or draft mailed on each Interest Payment Date (or by
wire transfer under certain circumstances) to each Registered Owner thereof as of the Record Date next preceding
each Interest Payment Date.
The Division of Bond Finance, the Department, and the Bond Registrar/Paying Agent may treat the
Registered Owner of any 2003A Bond as the absolute owner thereof for all purposes, whether or not such 2003A
Bond shall be overdue, and will not be bound by any notice to the contrary.
Transfer and Exchange
Each 2003A Bond will be transferable or exchangeable only upon the registration books by the Registered
Owner thereof or by his attorney duly authorized in writing, upon surrender of such 2003A Bond to the Bond
Registrar/Paying Agent together with a written instrument of transfer (if so required) satisfactory in form to the
Division of Bond Finance and the Bond Registrar/Paying Agent, duly executed by the Registered Owner or his duly
authorized attorney. Upon surrender to the Bond Registrar/Paying Agent for transfer or exchange of any 2003A
Bond, duly endorsed for transfer or accompanied by an assignment in accordance with the Resolution, the Bond
Registrar/Paying Agent will deliver in the name of the transferee(s) a fully registered 2003A Bond of authorized
denomination of the same maturity for the aggregate principal amount which the Registered Owner is entitled to
receive.
3
Neither the Division of Bond Finance nor the Bond Registrar/Paying Agent may charge the Registered Owner
or his transferee for any expenses incurred in making any exchange or transfer of the 2003A Bonds. However, the
Division of Bond Finance and the Bond Registrar/Paying Agent may require payment from the Registered Owner
of a sum sufficient to cover any tax, fee, or other governmental charge that may be imposed in relation thereto. Such
governmental charges and expenses will be paid before any such new 2003A Bond shall be delivered.
The Bond Registrar/Paying Agent will not be required to issue, transfer or exchange any 2003A Bonds on
the Record Date.
THE REFUNDING PROGRAM
The proceeds derived from the sale of the Series 2003A Bonds, together with other legally available moneys,
will be used to refund the State of Florida, Department of Management Services, Division of Facilities Management
Florida Facilities Pool Revenue Refunding Bonds, Series 1992 maturing in the years 2004 through 2017, inclusive, in
the outstanding principal amount of $118,440,000 (the "Refunded Bonds"). This refunding is being effectuated to
achieve debt service savings.
Simultaneously with the delivery of the 2003A Bonds, the Division of Bond Finance will cause to be deposited
a portion of the proceeds of the 2003A Bonds in an irrevocable escrow account (the "Escrow Deposit Trust Fund"),
under an agreement (the "Escrow Deposit Agreement") to be entered into between the Division of Bond Finance and
the Board of Administration (the "Escrow Agent"). The Board of Administration will invest those proceeds in direct
obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States
of America (the "Federal Obligations") or, at the discretion of the Director of the Division of Bond Finance, will invest
the proceeds in the State Treasury investment pool, or other legally authorized investments.
It is anticipated that the proceeds in the Escrow Deposit Trust Fund will be invested in the State Treasury
investment pool in an amount which will be sufficient to redeem the Refunded Bonds on September 1, 2003, without
reliance on any interest earnings. The Refunded Bonds will therefore be considered as remaining outstanding and
economically defeased only, and will continue to have a claim upon the Pledged Revenue, as well as the Escrow
Deposit Trust Fund, until they are redeemed on September 1, 2003.
The maturing investments and the cash on deposit in the Escrow Deposit Trust Fund will be sufficient to pay
(1) all semiannual interest payments accruing through, and (2) the principal of and the required redemption premium
of 1% on the Refunded Bonds on September 1, 2003. The Refunded Bonds will be called for redemption on
September 1, 2003 at the principal amount thereof with interest due thereon, plus a premium of 1% of the principal
amount of such bonds. Prior to the redemption of the Refunded Bonds, no funds held in escrow will be available to
pay debt service on the Series 2003A Bonds.
(Remainder of page intentionally left blank)
4
Sources and Uses of Funds
Sources of Funds:
Principal Amount of 2003A Bonds . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued Interest 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plus: Net Original Issue Premium . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$109,770,000
787,794
13,959,166
$124,516,960
Uses of Funds:
Deposit to Escrow Deposit Trust Fund . . . . . . . . . . . . . . . . . . . . . .
Deposit to Debt Service Fund for Accrued Interest 1 . . . . . . . . . . .
Underwriter’s Discount2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Surety Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$122,767,423
787,794
763,833
187,910
10,000
$124,516,960
1
2
Accrued interest from April 15, 2003 to the date of delivery.
Includes a premium of $390,000 for a municipal bond insurance policy purchased by the underwriters.
Application of the 2003A Bond Proceeds
Upon receipt of the proceeds of the 2003A Bonds, the Department of Management Services will transfer and
apply such proceeds as follows:
(A) The accrued interest on the 2003A Bonds, will be transferred to the Board of Administration and
deposited in the Debt Service Fund created by the Resolution.
(B) The amount necessary to pay all costs and expenses of the Division of Bond Finance in connection with
the preparation, sale and issuance of the 2003A Bonds, including a reasonable charge for the services
of the Division of Bond Finance, will be transferred to the Division of Bond Finance to be deposited in
the Bond Proceeds Trust Fund, subject to disbursement of the funds to the Bond Fee Trust Fund and the
Arbitrage Compliance Trust Fund pursuant to written instructions at the delivery of the 2003A Bonds
unless such amounts shall be provided from another legally available source.
(C) All remaining proceeds will be transferred to the Board of Administration for deposit into the Escrow
Deposit Trust Fund. After the redemption of the Refunded Bonds, any excess proceeds not used for
such purpose will be transferred to the Debt Service Fund and shall be used for any purpose for which
moneys may be legally used from such fund (including the payment of debt service).
See "MISCELLANEOUS - Investment of Funds" herein for policies governing the investment of various
funds.
SECURITY FOR THE 2003A BONDS
Pool Pledged Revenues
The 2003A Bonds will be payable solely from and secured on a parity with the Outstanding Bonds and any
additional Bonds hereafter issued, by the Pool Pledged Revenues. The Pool Pledged Revenues consist of all fees,
charges, revenues or receipts derived from the operation, leasing, or other disposition of Facilities in the Florida
Facilities Pool. The Florida Facilities Pool currently consists of all State-owned buildings under the jurisdiction of the
5
Department, except those facilities removed from the Pool by the Department pursuant to and subject to the conditions
provided in the Resolution. See "THE FLORIDA FACILITIES POOL."
The Pool Pledged Revenues are dependent upon annual legislative appropriation for rental
payments from the Agencies leasing Facilities in the Pool. No requirement exists to make such annual
appropriations in the future, nor may any Registered Owner legally compel the Legislature to make such
appropriations.
During Special Session C of the 2001 Legislature, the Legislature enacted Section 4 of Chapter 2001-367,
Laws of Florida, which reduced appropriations to the Department of Corrections. According to the legislation, the
reduction in appropriations was to be accomplished by reducing lease payments and by consolidating staff and facilities
in existing Department of Corrections institutions and facilities. Although this legislation was not specifically targeted
to reduce appropriations for rent relating to Florida Facilities Pool buildings, the legislation had that effect. In
accordance with Chapter 2001-367, effective March 31, 2002, the Department of Corrections terminated its lease
relating to the Hurston & Sony Buildings in the Facilities Pool. Those leases covered 85,347 square feet and
generated $15.39/square foot in annual rents. The Department of Management Services, Division of Facilities
Management has presently re-leased 28,719 square feet, or 34% of the vacated space at an annual rental rate of
$15.39/square foot. Further, the Department plans to fill the remaining leasable space with agencies that are currently
leasing outside of the Florida Facilities Pool.
The Division of Bond Finance and the Department have each covenanted to use its best efforts to cause the
Legislature to appropriate moneys to each Agency obligated to pay rent sufficient to enable each to meet their
respective obligations under the Resolution.
The 2003A Bonds shall not be a debt of the State or of any political subdivision thereof and neither
the State nor any political subdivision thereof shall be liable thereon. Neither the Division of Bond Finance
nor the Department shall have the power to pledge the credit, the revenues or the taxing power of the
State or of any political subdivision thereof; and neither the credit, revenues, nor the taxing power of the
State or of any political subdivision thereof shall be, or shall be deemed to be, pledged to the payment of
the 2003A Bonds. The 2003A Bonds are not secured by a mortgage or other security interest in the Pool
Facilities or any other assets of the State.
2003A Bonds Insured
The scheduled payment of principal of and interest on the 2003A Bonds when due will be guaranteed under
a municipal bond insurance policy to be issued concurrently with the delivery of the 2003A Bonds by Financial
Security Assurance Inc. For a more complete description of the municipal bond insurance policy see "MUNICIPAL
BOND INSURANCE" below.
Debt Service Reserve Fund
The Resolution provides for creation of a Debt Service Reserve Fund for the benefit of the holders of all
Bonds issued thereunder and provides that the Debt Service Reserve Requirement shall be an amount not less than
one-half of the maximum annual Debt Service for each Series of Bonds. See "APPENDIX D - Definitions and
Summary of Certain Provisions of the Resolution." The Debt Service Reserve Requirement for the 2003A Bonds
and Outstanding Parity Bonds is an amount equal to the maximum annual Debt Service for each Series of Bonds.
Amounts in the Debt Service Reserve Fund shall be transferred to the Debt Service Fund in the amounts and
at the times necessary to cure any deficiency therein. Moneys so transferred shall be restored to equal the Debt
Service Reserve Requirement within one year from the date on which moneys were so transferred.
6
In lieu of the required transfers to the Debt Service Reserve Fund, the Division of Bond Finance may cause
to be deposited into the Debt Service Reserve Fund for the benefit of the Registered Owners of Bonds a surety bond,
an insurance policy, a letter of credit or other similar obligation in an amount equal to the difference between the Debt
Service Reserve Requirement and the sums, if any, then on deposit in the Debt Service Reserve Fund. The Debt
Service Reserve Fund is currently funded by debt service reserve account surety bonds. Ambac Assurance
Corporation ("Ambac") has issued surety bonds securing the Facilities Pool Revenue Bonds, Series 1990, 1992, 1993A,
1993B, 1993C, 1994A, 1995A, 1996A, 1996B, 1997A, 1998B, 1999B, 2000A and 2002A Bonds. MBIA Insurance
Corporation has issued a surety bond securing the Series 1998A Bonds. Financial Security Assurance, Inc. has issued
a reserve insurance policy securing the Series 1999A Bonds. In each instance, the amount available under such
surety bonds and insurance policy is the maximum annual Debt Service for the series of bonds secured by the
respective credit facility instrument.
The Debt Service Reserve Requirement for the 2003A Bonds has been set at the maximum annual Debt
Service for the 2003A Bonds, which is $11,516,813. The Debt Service Reserve Requirement for the 2003A Bonds
will be funded by the surety bond obtained from Ambac Assurance Corporation which currently satisfies the Reserve
Requirement for the Refunded Bonds. See "Ambac Surety Bond" below for additional information.
Ambac Surety Bond
The Debt Service Reserve Requirement attributable to Series 1992 Bonds and any Bonds issued to refund
those bonds is secured by a surety bond issued by Ambac and purchased in lieu of funding the Debt Service Reserve
Requirement for the Series 1992 Bonds. This surety bond covers the Series 2003A Bonds as well as the Outstanding
portion of the Series 1992 Bonds. The surety bond provides that upon the later of (i) 1p.m., New York Time, one (1)
day after receipt by Ambac of a demand for payment executed by the State Board of Administration of Florida
certifying that provision for the payment of principal of and interest on the Bonds when due will not be made or (ii)
1p.m., New York Time, on the interest payment date specified in the demand for payment submitted to Ambac,
Ambac will promptly deposit funds with the Paying Agent sufficient to enable the Paying Agent to make such
payments due on the Outstanding Series 1992 Bonds (as applicable) and the 2003A Bonds, but in no event exceeding
the Surety Bond Coverage, as defined in the Surety Bond.
Pursuant to the terms of the surety bond, the surety bond coverage is automatically reduced to the extent of
each payment made by Ambac under the terms of the surety bond, and the Department of Management Services is
required to reimburse Ambac for any draws under the surety bond with interest at a market rate. Upon such
reimbursement, such surety bond is reinstated to the extent of each principal reimbursement up to but not exceeding
the Surety Bond Coverage. The reimbursement obligation of the Department of Management Services is subordinate
to all Outstanding Bonds of the Department of Management Services, whether issued by the Department of
Management Services or a predecessor agency.
In the event the amount on deposit, or credited to the Debt Service Reserve Fund, exceeds the amount of the
surety bond, any draw on the surety bond shall be made only after all the funds in the Debt Service Reserve Fund
have been expended. If a draw is made pursuant to the surety bond, any other surety bond or any insurance policy,
letter of credit or similar obligation, the Division of Facilities Management shall be obligated either (i) to reinstate the
maximum limits of such surety bond, insurance policy, letter of credit or other similar obligation or (ii) to deposit into
the Debt Service Reserve Fund, funds in the amount of the disbursement made under such surety bond, insurance
policy letter of credit or other similar obligation, or a combination of such alternatives, as shall provide that the amount
in the Debt Service Reserve Fund equals the Debt Service Reserve Requirement. In the event that the Department
of Management Services elects to deposit into the Debt Service Reserve Fund funds in the amount of any such
disbursement, Ambac shall be entitled to reimbursement for any draws made under the Surety Bond prior to the
making of any such deposit.
The Surety Bond does not insure against nonpayment caused by the insolvency or negligence of the Trustee
or the Paying Agent.
7
Outstanding Parity Bonds
The Division of Bond Finance has issued several series of Florida Facilities Pool Revenue and Revenue
Refunding Bonds which, along with the 2003A bonds, are anticipated to be outstanding in the aggregate principal
amount of $358,070,000 subsequent to the refunding to be accomplished with proceeds of the 2003A Bonds and are
payable from the Pool Pledged Revenues. The 2003A Bonds are secured by a lien on the Pool Pledged Revenues
on a parity with the Outstanding Parity Bonds. See "ADDITIONAL BONDS" below.
Except for the pledge referred to above, the Pool Pledged Revenues are not pledged, encumbered or
committed in any manner and are available for pledge and application in the manner set out herein.
Flow of Funds
Prior to the first business day of the month preceding each fiscal quarter commencing on the first day of July,
October, January and April, the Department sends an invoice to each agency leasing space in Pool facilities for the
rents and additional charges owed for space rental for the quarter. The invoices are due and payable to the
Department on the 15th of the first month in the quarter. In the event an agency fails to pay all amounts due by the
25th day of the month in which due, the Department is authorized to instruct the appropriate State financial officials
to transfer amounts due as outlined in Section 255.521, Florida Statutes, from general revenues withheld from such
agencies.
All rental receipts are deposited in the Clearing Fund held in the State Treasury and are promptly transferred
from the Clearing Fund to the Revenue Fund held by the Board of Administration as Trustee. No later than the last
business day of each April, July, October and January, the Board of Administration transfers monies in the Revenue
Fund to various funds held pursuant to the Resolution, in the following order. First, the amount necessary to provide
for the aggregate debt service accruing through the last day of such month is transferred to the Debt Service Fund.
Monies are then transferred to the Debt Service Reserve Fund in the amount such that the total on deposit therein
equals the Debt Service Reserve Requirement as of the last day of the next quarter, and thereafter into the Capital
Depreciation Reserve Fund in an amount equal to 1/4 of the annual Capital Depreciation Reserve Requirement for
the then current fiscal year. Monies are then transferred to the Operation and Maintenance Fund in an amount
determined by the Department as being required for operation and maintenance expenses through the end of the next
quarter. If Subordinated Indebtedness has been issued, the amount necessary to provide for payment of debt service
accruing on such obligations in the next quarter is to be transferred to the Subordinated Indebtedness Fund. Any
moneys in the Revenue Fund remaining after the foregoing transfers shall be deposited in the Working Capital Fund
for any lawful purpose of the Department which would not adversely affect the exclusion from federal income taxes
of interest on the Bonds.
Ceiling on State Revenue Collections
The Florida Constitution limits the amount of taxes, fees, licenses and charges for services imposed by the
Legislature and collected during any fiscal year to the amount of revenues allowed for the prior fiscal year, plus an
adjustment for growth. Growth is defined as the amount equal to the average annual rate of growth in Florida personal
income over the most recent 20 quarters times the State revenues allowed for the prior fiscal year. The revenues
allowed for any fiscal year could be increased by a two-thirds vote of the Legislature.
The constitutional limit could operate to restrict the amount of revenues from which the State could
appropriate funds. Because the Pool Pledged Revenues are dependent upon annual legislative
appropriation, such constitutional provision could limit State revenues available for appropriation and,
therefore, the willingness of the State Legislature to appropriate moneys to the Agencies for payment of
rentals.
8
MUNICIPAL BOND INSURANCE
Bond Insurance Policy
Concurrently with the issuance of the 2003A Bonds, Financial Security Assurance Inc. ("Financial Security")
will issue its Municipal Bond Insurance Policy for the 2003A Bonds (the "Policy"). The Policy guarantees the
scheduled payment of principal of and interest on the 2003A Bonds when due as set forth in the form of the Policy
included as Appendix G to this Official Statement.
The Policy is not covered by any insurance security or guaranty fund established under New York, California,
Connecticut or Florida insurance law.
Financial Security Assurance Inc.
Financial Security is a New York domiciled insurance company and a wholly owned subsidiary of Financial
Security Assurance Holdings Ltd. ("Holdings"). Holdings is an indirect subsidiary of Dexia, S.A., a publicly held
Belgian corporation. Dexia, S.A., through its bank subsidiaries, is primarily engaged in the business of public finance
in France, Belgium and other European countries. No shareholder of Holdings or Financial Security is liable for the
obligations of Financial Security.
At September 30, 2002 Financial Security’s total policyholders’ surplus and contingency reserves were
approximately $1,728,433,000 and its total unearned premium reserve was approximately $972,390,000 in accordance
with statutory accounting principles. At September 30, 2002, Financial Security's total shareholder’s equity was
approximately $1,928,564,000 and its total net unearned premium reserve was approximately $814,684,000 in
accordance with generally accepted accounting principles.
The financial statements included as exhibits to the annual and quarterly reports filed by Holdings with the
Securities and Exchange Commission are hereby incorporated herein by reference. Also incorporated herein by
reference are any such financial statements so filed from the date of this Official Statement until the termination of
the offering of the Bonds. Copies of materials incorporated by reference will be provided upon request to Financial
Security Assurance Inc.: 350 Park Avenue, New York, New York 10022, Attention: Communications Department
(telephone (212) 826-0100).
The Policy does not protect investors against changes in market value of the Bonds, which market value may
be impaired as a result of changes in prevailing interest rates, changes in applicable ratings or other causes. Financial
Security makes no representation regarding the Bonds or the advisability of investing in the Bonds. Financial Security
makes no representation regarding the Official Statement, nor has it participated in the preparation thereof, except
that Financial Security has provided to the Issuer the information presented under this caption for inclusion in the
Official Statement.
ADDITIONAL BONDS
No Bonds shall be issued after the issuance of the 2003A Bonds on a parity therewith or with the Parity
Bonds unless the Department delivers a certificate stating that, based upon the Pool Rental Rates charged in the Fiscal
Year preceding issuance of such additional Bonds and being charged during the then current Fiscal Year, the
aggregate amount of Pool Pledged Revenues has been and will be sufficient to cover:
(i) 110% of the amount of the Aggregate Debt Service required to be paid during such Fiscal Years (or
applicable portions thereof);
(ii) 110% of necessary deposits, if any, to the Debt Service Reserve Fund and to any other reserve funds
9
(other than the Capital Depreciation Reserve Fund) pledged to the security of any Bonds during such Fiscal Years
(or applicable portions thereof);
(iii) 100% of necessary deposits to the Capital Depreciation Reserve Fund during such Fiscal Years (or
applicable portions thereof); and
(iv) 100% of operating and maintenance expenses incurred and expected to be incurred during such Fiscal
Years (or applicable portions thereof) for all Facilities in the Pool, and other expenses incurred and expected to
be incurred by the Department in managing such Facilities and administering the Pool.
The Department has covenanted to establish the rates, rents, fees and charges at levels sufficient to assure
compliance with the coverage requirements as additional Facilities are added to the Pool and as additional Bonds are
issued to finance such Facilities.
The Division of Bond Finance, on behalf of the Department, has covenanted not to issue any obligations, other
than the Parity Bonds, the 2003A Bonds and Subordinated Indebtedness authorized under the Resolution, payable out
of or secured by the Trust Estate or other moneys, securities or funds held under the Resolution, and will not create
or cause to be created any lien or charge on the Trust Estate, or such moneys, securities or funds.
THE FLORIDA FACILITIES POOL
(Source: Department of Management Services)
Description of the Program
In response to a need for additional State-owned office buildings, the Legislature enacted the Florida Building
and Facilities Act in 1985. The former Division of Facilities Management was created under the Act and was
authorized to create the Florida Facilities Pool, to plan the acquisition and construction of new Facilities to be added
to the Pool, to finance such Facilities through the issuance of bonds by the Division of Bond Finance, to manage and
maintain the existing Facilities in the Pool, to establish Pool Rental Rates for Facilities in the Pool, and to oversee the
leasing of office space by State Agencies. The Department has succeeded to the powers and duties of the Division
of Facilities Management.
The Act authorizes the Department to finance additional Facilities by utilizing lease revenues derived from
existing and future Facilities, thereby spreading the debt service cost of new Facilities among Agencies housed not
only in the new Facilities, but also in existing Facilities which are debt free.
Any Facility which is acquired and approved pursuant to Section 11(f) of Article VII of the Florida
Constitution and is financed under the Act, and any Facility in the Florida Facilities Pool, shall be occupied, to the
extent that space is available, by Agencies as authorized by the Department. Any Agency occupying space in Pool
Facilities shall contract for such space and pay rental for such space at the Pool Rental Rate established by the
Department.
Pool Rental Rates and Receipts
The Department has the authority to establish and collect reasonable rentals or charges for the use of Pool
Facilities, exclusively for the purpose of paying the expenses of improving, repairing, maintaining and operating
Facilities, and paying debt service charges in connection with its obligations. The Pool Rental Rate is to be applied
uniformly to all Agencies using or occupying space in Pool Facilities with additional charges based upon the elements
of service and special requests as provided. Separate Pool Rental Rates may be established for warehouse space
and parking space incidental to Facilities in the Pool. The Department will not furnish or supply any free use of the
Facilities to any person, firm or corporation, whether public or private.
10
The Department has covenanted to establish Pool Rental Rates so that Pool Pledged Revenues will be
sufficient to cover 110% of debt service on all outstanding obligations, 110% of any debt service reserve deposits,
100% of capital depreciation reserve deposits, and 100% of operation and maintenance of the Facilities. The
Department is required to enforce the payment of any and all accounts owed by reason of the ownership and
operation of the Facilities. Should an Agency fail to make a timely payment of the Pool Pledged Rentals or charges,
the Department is authorized to instruct the appropriate State financial officials to withhold general revenues of the
Agency in an amount sufficient to pay the rentals and charges due and unpaid from such Agency and forward said
general revenue amounts to the Department. The lease agreements with each Agency authorize the Department to
terminate the lease of any Agency that fails to make rental payments.
The following table shows a comparison of the Department’s full-service office rental rate to the state-wide
average private office rental rate for State Agencies for the past five fiscal years. Also included is the Department’s
full-service office rental rate for the current fiscal year. The Department charges four separate rental rates: fullservice office ($15.39/square foot), which includes custodial services, utilities, basic building maintenance and basic
security; non-full service office ($14.14/square foot), which includes all services of the full-service office rate except
custodial services; conditioned storage ($5.11/square foot), which is charged for climate controlled storage space; and
unconditioned storage ($3.45/square foot), which is charged for non-climate controlled storage space. The majority
of the leased space in the Pool (5,017,167 square feet) consists of full-service office space.
There are currently proposals to decrease the rental rates for full-service and non full-service office space.
Any reductions in Pool Rental Rates will comply with the Pool Rental Rate covenant described above.
Fiscal Year
Rental Rate
($/Net Square Foot) 1
1997 - 98
1998 - 99
1999 - 00
2000 - 01
2001 - 02
2002 - 03
$14.74
14.98
15.13
15.39
15.39
15.39
Private Rental Rate
($/Net Square Foot)
$15.352
16.053
16.383
16.533
16.893
not available
1
Highest per square foot rental rate charged for Facilities in the Pool (full-service office space).
Average rental rate for office space paid by State Agencies in privately owned office space state-wide.
3
Average full- service rate paid by State Agencies in privately owned office space in counties where the Department of Management Services
has an office facility.
Source: Department of Management Services.
2
The following table shows the total rental receipts of the Facilities in the Pool for the past five fiscal years.
Fiscal Year
Rental Receipts*
1997 - 98
1998 - 99
1999 - 00
2000 - 01
2001 - 02
$68,127,000
73,502,000
76,966,000
82,768,000
84,337,000
*Rounded to the nearest thousand.
11
Facilities in the Pool
The Florida Facilities Pool consists of State-owned office buildings under the jurisdiction of the Department
(presently 61 buildings with approximately 5.9 million net rentable square feet). By law, the Florida Facilities Pool shall
also include each Facility financed with the proceeds of Bonds pursuant to the Act and any Facility submitted to the
Pool by any Agency and qualified for entry into the Pool under rules established by Department. Any Agency which
requests that bonds be issued under the Act for the financing or acquisition of a Facility shall submit all, but not less
than all, of the Eligible Facilities under its jurisdiction for entry into the Pool. Set forth below is a list of the Facilities
currently in the Pool.
Existing Buildings
Bloxham
Bloxham Annex "A"
Bloxham Annex "B"
Bloxham Annex "C"
Capitol
Carlton
Chapman
Coleman
Collins
Computer Center
DER Office/Lab
Douglas
DEP East #1
Elliot
"F" Building
FDLE
Firestone
Fletcher
Gray
Holland
Johns
Knott
Larson
Legislative Wing (House)
Legislative Wing (Senate)
Records Center - Capitol Center
Records Center (New)
Pepper
Satellite Office Complex Bldg. 1
Satellite Office Complex Rudd Bldg.
Satellite Office Complex Bldg. 2B
Satellite Office Complex Bldg. 3A
Satellite Office Complex Bldg. 4A
Satellite Office Complex Bldg. 4B
Satellite Office Bldgs. (3B & 4C)
Turlington
Twin Towers
Warren
Alachua Regional Service Center
Daytona Beach
Dimick
Duval - Phase 1
FDLE-Jacksonville
Location
City
County
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Tallahassee
Leon
Alachua
Alachua
Daytona Beach
Volusia
W. Palm Beach
Palm Beach
Jacksonville
Duval
Jacksonville
Duval
12
Net Rentable
Square Feet*
27,058
4,932
1,974
3,335
328,573
150,584
5,252
8,404
176,253
24,554
56,539
100,893
100,114
12,079
1,590
265,890
36,575
155,535
201,336
51,251
35,183
73,670
183,547
69,157
65,734
20,477
78,929
161,642
261,928
115,538
131,807
80,659
84,443
98,174
195,401
321,128
166,656
28,796
46,078
73,248
64,011
163,185
78,876
Existing Buildings (continued)
FDLE-Jacksonville Joint Dispatch Ctr.
FDLE-Orlando
FDLE-Miami
FDLE-Miami Evidence Warehouse
Fort Pierce
Gore
Grizzle
Hurston
James
Marathon
Opa-Locka Office Building
Peterson
Rohde
Sebring
Trammell
Lee Davis
Broward RSC (SONY)
Total Pool Facilities:
Location (continued)
City
County
Jacksonville
Duval
Orlando
Orange
Miami
Dade
Miami
Dade
Ft. Pierce
St. Lucie
Ft. Lauderdale
Broward
Largo
Pinellas
Orlando
Orange
Pensacola
Escambia
Marathon
Monroe
Opa-Locka
Dade
Lakeland
Polk
Miami
Miami-Dade
St. Petersburg
Pinellas
Tampa
Hillsborough
Tampa
Hillsborough
Ft. Lauderdale
Broward
Net Rentable
Square Feet*
4,162
71,618
69,216
10,288
74,337
55,548
128,477
259,345
74,205
32,814
34,435
58,092
252,238
44,627
115,279
18,866
126,359
5,919,282
______________________
* Includes office space as well as storage, warehouse and food service space.
Pursuant to the Resolution, the Department may direct or otherwise cause the removal of one or more of the
Facilities from the Pool if such removal will not result in a breach by the Department of its obligations. Effective
March 11, 2003, the Department removed nine facilities representing a total of 103,000 square feet of space.
Occupancy Data
For each Fiscal Year since the creation of the Pool in 1986, the occupancy rate for the buildings which
comprise the Pool has been in excess of 95%. The following table sets forth the occupancy percentage rates for the
Facilities in the Pool for each of the last five Fiscal Years.
Occupancy Percentage Rate
Fiscal Year
1997 - 98
1998 – 99
1999 – 00
2000 – 01
2001 – 02
Occupancy Percentage
98%
98
98
97
96
State Agencies occupied a total of approximately 17,940,369 net square feet of office space as of June 2002.
Of this amount approximately 32%, or 5,728,919 net square feet, was from Florida Facilities Pool space. A summary
of State Agency office space as of June 2002 follows.
13
Agency Office Space Summary
(Net Square Feet Occupied)
As of June 2002
Agency Owned Space
2,851,723
Florida Facilities Pool Space*
5,728,919
Private Leased Space
9,359,727
Total Space Occupied by State Agencies
17,940,369
* This number represents the total office space of the Florida Facilities Pool and excludes
other areas such as storage space, warehouse space and food service space.
Source: Department of Management Services
State Construction Process
Each year, State Agencies determine their facilities needs and submit them in their Capital Improvements
Program to the Governor’s Office of Planning and Budgeting and the Legislative Appropriations Committees for
consideration in the State budget process. The Department’s Capital Improvements Program includes the State office
facility needs under the Florida Facilities Pool program.
The State’s General Appropriations Act provides funding for specific facilities. Funding for Pool Facilities
is appropriated to the Department. The appropriations provide for general revenue funding of land acquisition,
planning and first years debt service. The appropriations also establish a maximum amount to finance the
construction.
Once the Department has resolved site selection and land acquisition issues, the project management is
assumed by the Facilities Development Program of the Department. The Facilities Development Program first
coordinates the selection of an architectural/engineering firm to plan, design and administer the construction of the
project. There are two basic types of construction contracting - bid and construction management. The majority of
the Florida Facilities Pool projects have been built under a construction management contract, wherein the construction
manager is responsible not only for the construction, but is also a member of the design and engineering team for the
project. After the completion of construction and acceptance of the project, occupancy of the building is coordinated
by the Department.
Standard Lease Provisions
The standard State lease is on a month-to-month basis until terminated by the Department. The standard
State lease provides for heating, air conditioning and janitorial services for leased premises at the expense of the
Department during the facilities normal working hours at a flat rate per square foot. The Department provides for
interior maintenance and repairs in accordance with generally accepted practices established by the Facilities
Operations and Maintenance Program. The Department also maintains and keeps in repair the exterior of the leased
premises. The lessee is responsible for the cost of any changes in the layout of the leased space.
14
SCHEDULE OF DEBT SERVICE
The table below shows the debt service on the outstanding Florida Facilities Pool Revenue and Revenue
Refunding Bonds, Series 1992 through Series 2002A anticipated to be outstanding subsequent to the refunding to be
accomplished with proceeds of the 2003A Bonds, as well as the debt service on the 2003A Bonds and total debt
service.
Bond
Year1
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Outstanding
Debt Service
$29,013,813
19,191,243
19,131,316
19,228,515
19,161,369
19,217,406
19,141,206
19,211,028
19,172,345
19,208,600
19,221,708
19,154,386
19,194,123
19,217,403
19,239,559
19,253,984
19,268,545
19,156,351
15,742,474
15,831,138
15,853,166
11,317,810
8,936,713
8,935,138
7,354,150
6,593,356
1,022,138
$446,968,979
Series 2003A Debt Service
Principal
Interest
Total
$1,475,000
$2,186,531
$3,661,531
5,785,000
5,728,875
11,513,875
6,125,000
5,381,775
11,506,775
6,450,000
5,060,213
11,510,213
6,795,000
4,721,588
11,516,588
7,145,000
4,364,850
11,509,850
7,525,000
3,989,738
11,514,738
7,915,000
3,594,675
11,509,675
8,330,000
3,179,138
11,509,138
8,775,000
2,741,813
11,516,813
9,230,000
2,281,125
11,511,125
9,710,000
1,796,550
11,506,550
10,230,000
1,286,775
11,516,775
10,765,000
749,700
11,514,700
3,515,000
184,538
3,699,538
$109,770,000
$47,247,881
$157,017,881
1
Amounts are shown based on the bond year ending September 1.
Note: Totals may not add due to rounding.
15
Total Combined
Debt Service
$32,675,343
30,705,118
30,638,091
30,738,728
30,677,956
30,727,256
30,655,944
30,720,703
30,681,483
30,725,413
30,732,833
30,660,936
30,710,898
30,732,103
22,939,096
19,253,984
19,268,545
19,156,351
15,742,474
15,831,138
15,853,166
11,317,810
8,936,713
8,935,138
7,354,150
6,593,356
1,022,138
$603,986,860
PROVISIONS OF STATE LAW
Bonds Legal Investment for Fiduciaries
The State Bond Act provides that all bonds issued by the Division of Bond Finance are legal investments for
state, county, municipal or other public funds, and for banks, savings banks, insurance companies, executors,
administrators, trustees, and all other fiduciaries, and also are securities eligible as collateral deposits for all state,
county, municipal, or other public funds.
Negotiability
The 2003A Bonds will have all the qualities and incidents of negotiable instruments under the Uniform
Commercial Code - Investment Securities Law of the State.
Uniform Commercial Code
The 2001 Legislature adopted revisions to Florida’s uniform commercial code relating to secured transactions
(Chapter 679, Florida Statutes). Under the rewritten code, transfers by governments and governmental units continue
to remain exempt from the provisions of the uniform commercial code relating to secured transactions (Chapter 2001198, Laws of Florida).
TAX MATTERS
General
The Internal Revenue Code of 1986, as amended (the "Code"), includes requirements which the Division of
Bond Finance, the Board of Administration and the Department must continue to meet after the issuance of the 2003A
Bonds in order that interest on the 2003A Bonds not be included in gross income for federal income tax purposes. The
failure by the Division of Bond Finance, the Board of Administration and the Department to meet these requirements
may cause interest on the 2003A Bonds to be included in gross income for federal income tax purposes retroactive
to their date of issuance. The Division of Bond Finance, the Board of Administration and the Department have
covenanted in the Resolution to comply with the requirements of the Code in order to maintain the exclusion of interest
on the 2003A Bonds from gross income for federal income tax purposes.
In the opinion of Bond Counsel, assuming continuing compliance by the Division of Bond Finance, the Board
of Administration and the Department with the tax covenant referred to above, under existing statutes, regulations,
rulings and court decisions interest on the 2003A Bonds is excluded from gross income for federal income tax purposes.
Interest on the 2003A Bonds is not an item of preference for purposes of the alternative minimum tax imposed on
individuals and corporations; however, interest on the 2003A Bonds is taken into account in determining adjusted
current earnings for purposes of computing the alternative minimum tax imposed on corporations. Bond Counsel is
further of the opinion that the 2003A Bonds and the interest thereon are exempt from taxation under the laws of the
State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or
profits on debt obligations owned by corporations as defined therein.
Original Issue Premium
The 2003A Bonds are noncallable, and all of such 2003A Bonds were sold at a price in excess of the amount
payable at maturity. Under the Code, the difference between the principal amount of a Series 2003A Bond and the
cost basis of such a Series 2003A Bond to a 2003A Registered Owner (other than a 2003A Registered Owner who
16
holds such a Series 2003A Bond as inventory, stock in trade or for sale to customers in the ordinary course of business)
is "bond premium." Bond premium is amortized over the term of such a Series 2003A Bond for federal income tax
purposes. A 2003A Registered Owner is required to decrease his basis in such a Series 2003A Bond by the amount
of amortizable bond premium attributable to each taxable year he holds the Series 2003A Bond. The amount of the
amortizable bond premium attributable to each taxable year is determined at a constant interest rate compounded
actuarially. The amortizable bond premium attributable to a taxable year is not deductible for federal income tax
purposes. Registered Owners of 2003A Bonds should consult their own tax advisors with respect to the precise
determination for federal income tax purposes of the treatment of bond premium upon sale, redemption or other
disposition of such Series 2003A Bonds and with respect to the state and local consequences of owning and disposing
of such Series 2003A Bonds.
Except as described herein, Bond Counsel will express no opinion regarding the federal income tax
consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of the Series 2003A
Bonds. Prospective purchasers of Series 2003A Bonds should be aware that the ownership of Series 2003A Bonds
may result in collateral federal income tax consequences, including (i) the denial of a deduction for interest on
indebtedness incurred or continued to purchase or carry Series 2003A Bonds or, in the case of a financial institution,
that portion of the owner’s interest expense allocable to interest on a Series 2003A Bond, (ii) the reduction of loss
reserve deduction for property and casualty insurance companies by 15% of certain items, including interest on the
Series 2003A Bonds, (iii) the inclusion of interest on the Series 2003A Bonds in the effectively connected earnings and
profits (with adjustments) of certain foreign corporations doing business in the United States for purposes of a branch
profits tax, (iv) the inclusion of interest on the Series 2003A Bonds in the passive income subject to federal income
taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close of the taxable year,
and (v) the inclusion in gross income of interest on the Series 2003A Bonds by recipients of certain Social Security and
Railroad Retirement benefits.
State Taxes
The 2003A Bonds and the income thereon are exempt from taxation by the State or any county, municipality,
political subdivision, agency, or instrumentality of the State, except estate taxes imposed by Chapter 198, Florida
Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended.
Florida laws governing the imposition of estate taxes do not provide for an exclusion of state or local bonds
from the calculation of the value of the gross estate for tax purposes. Florida’s estate tax is generally calculated on
the basis of the otherwise unused portion of the federal credit allowed for state estate taxes. Under Chapter 198,
Florida Statutes, all values for state estate tax purposes are as finally determined for federal estate tax purposes. Since
state and local bonds are included in the valuation of the gross estate for federal tax purposes, such obligations would
be included in such calculation for Florida estate tax purposes. Prospective owners of the 2003A Bonds should consult
their own attorneys and advisors for the treatment of the ownership of the 2003A Bonds for estate tax purposes.
The exemption is not applicable to any tax imposed by Chapter 220 on interest, income, or profits on debt
obligations owned by corporations and other specified entities.
Intangible Personal Property Tax
The State currently levies an intangible personal property tax on items situated in this state such as shares of
stock, mutual funds, bonds, notes, certain obligations for the payment of money, and accounts receivable, pursuant to
Chapter 199, Florida Statutes. Effective January 1, 2000, the intangible personal property tax rate of 2 mills per dollar
of valuation was reduced to 1.5 mills, and was further reduced to 1 mill effective July 1, 2000. Additionally, the amount
17
of property exempt from tax was scheduled to be increased from $20,000 to $250,0001 on January 1, 2002 by the
Legislature during its regular 2001 session; however, this increase was delayed until July 1, 2003 by legislation adopted
in the December, 2001 special session.
Bonds issued by the State, including the 2003A Bonds, are exempt from the intangible personal property tax.
RECENT STATE FINANCIAL DEVELOPMENTS
Budget Revenue Estimating Conference
The following is for general informational purposes only and does not imply that the general
revenues of the State are pledged as security for the 2003A Bonds.
General revenue collections for Fiscal Year 2001-02 totaled $19,340.6 million, or $148.4 million more than the
last revised estimate made prior to the end of that fiscal year by members of the Revenue Estimating Conference
(“REC”).
In March, 2002, the REC estimated general revenue collections for Fiscal Year 2002-03 at $19,867 million.
The Florida Legislature utilized this estimate when it formulated the budget for Fiscal Year 2002-03.
Budgeted general revenue appropriations for Fiscal Year 2002-03 totaled approximately $20,700 million, which
was to be funded by general revenue collections of $19,867 million, $297.3 million in trust fund transfers and $535.7
million from the available Working Capital Fund of $764.9 million. Budget Stabilization Fund reserves (totaling $940.9
million) were not used to achieve the balanced budget.
The REC met again in November, 2002, revised its forecast for the remainder of Fiscal Year 2002-03 and
prepared a forecast for Fiscal Year 2003-04. The general revenue collection estimate for Fiscal Year 2002-03 was
reduced from $19,867 million to $19,637.4 million, due mainly to the anticipated impact (a negative $222.7 million
adjustment) of corporate tax legislation passed by the 2002 Legislature, and intervening changes in economic conditions,
resulting in a net negative adjustment of $6.9 million. The minor change in estimates due to economic conditions
resulted from lower estimated sales tax collections, which more than offset estimated increases in documentary stamp
tax, corporate income tax and intangible tax collections.
Actual general revenue collections for the six-month period ended December 31, 2002 were $9,130 million,
$20 million less than the $9,149.9 million estimated for that period by the REC in November, 2002.
The REC met again in March, 2003 and revised its forecast for the remainder of Fiscal Year 2002-03 and for
Fiscal Year 2003-04. The general revenue collection estimate for Fiscal Year 2002-03 was reduced from $19,637.4
million to $19,610.4 million, a net negative adjustment of $27 million from the November 2002 forecast. The change
in estimates resulted primarily from lower estimated sales tax and estate tax collections, which more than offset
estimated increases in documentary stamp tax collections and reductions in tax refunds, particularly in the area of
corporate income taxes.
The year-end Working Capital Fund surplus for Fiscal Year 2002-03 is projected to be $130.2 million and the
amount in the Budget Stabilization Fund is expected to remain at $958.9 million.
General revenues in Fiscal Year 2003-04 are now expected to decrease by 1.6% from the November 2002
estimate to $20,118.7 million, which is $508 million more than the amount currently estimated to be collected in Fiscal
Year 2002-03.
1
For a married couple filing jointly, the current exemption is $40,000; on July 1, 2003 it is scheduled to increase to $500,000.
18
Estimates are subject to risk and uncertainties which may affect actual revenue collections and
cause results to differ materially from those stated. No assurance is given that actual revenue impact will
not differ materially from the estimates provided.
Recent State Constitutional Amendments
Two amendments to the State constitution which require an expansion of State educational programs were
adopted in the November 2002 general election. Although the eventual cost of implementing the amendments will
depend on the characteristics of subsequently-adopted implementing legislation, it is likely that the State will increase
spending for educational purposes.
Constitutional Amendment for Public School Class Size Reduction - Florida voters approved an amendment
to the Florida Constitution which requires the Florida Legislature to provide funding for sufficient classrooms so that,
by the beginning of the 2010 school year, there will be a maximum number of students assigned to each teacher for
various grade levels.
For prekindergarten through grade 3 the number of students may not exceed 18; for grades 4 through 8 the
number of students may not exceed 22; and for grades 9 through 12 the number of students may not exceed 25.
Beginning in the 2003-2004 fiscal year, the State is required to provide sufficient funds to reduce the average number
of students in each classroom by two each year until the eventual maximum numbers are reached. The class size
requirements do not apply to extracurricular classes.
Payment of the costs associated with reducing class sizes is the responsibility of the State and not of the local
school districts. State economists estimate the program will cost between $20.0 billion and $27.5 billion over the eight
year phase-in period, depending on how the classrooms are built. Of the $20.0 billion estimate, $4.415 billion is
estimated to be needed for capital expenses. Of the $27.5 billion estimate, $9.356 billion is estimated to be needed for
capital expenses. After the class size reductions are fully implemented, the annual operating costs are estimated to
be $2.5 billion in today’s dollars.
Constitutional Amendment for Voluntary, Universal Pre-Kindergarten Education - Florida voters also
approved an amendment to the Florida Constitution which requires the establishment, no later than the 2005 school year,
of a voluntary program which permits every 4-year-old in the State to attend a free, high quality pre-kindergarten
program. The program is designed to develop language and cognitive capabilities and emotional, social, regulatory and
moral capacities through education in basic skills and such other skills as the Legislature may determine to be
appropriate. The program must be established without taking away funds used for existing education, health and
development programs. Existing education, health and development programs are those funded by the State as of
January 1, 2002 that provided for child or adult education, health care, or development. State economists estimate the
annual operation of the program will cost between $425 and $650 million in today’s dollars, depending on the extent
to which funding for existing school readiness programs for 4-year-olds is used to reduce the cost of the new program.
Estimates are subject to uncertainties which may affect costs and cause results to differ materially
from those stated. In particular, the manner in which the Legislature will implement the amendments is
unknown at this time. No assurance is given that actual revenue impact will not differ materially from the
estimates provided.
MISCELLANEOUS
Investment of Funds
All State funds are invested by either the Chief Financial Officer or the Board of Administration. At closing,
19
the 2003A Bond proceeds will be deposited as described above under the heading "REFUNDING PROGRAM Application of the 2003A Bond Proceeds." After collection by the Department, rental receipts are deposited quarterly
to the various funds established pursuant to the Resolution. The Board of Administration administers the Revenue
Fund, the Debt Service Fund, the Debt Service Reserve Fund, the Capital Depreciation Reserve Fund, and would
administer the Rent Stabilization Fund and the Subordinated Indebtedness Fund in the event variable rate bonds or
subordinated obligations were issued. Investment of Debt Service Fund moneys is controlled by the Resolution; see
"Investment by the Board of Administration" below for the Board of Administration’s investment policy with respect
to sinking fund investments. The Chief Financial Officer holds the Construction Fund, if any, the Clearing Fund, the
Operation and Maintenance Fund and the Working Capital Fund. If elected by the Director of the Division of Bond
Finance, moneys held in the Escrow Deposit Fund will be invested in the State Treasury investment pool, which is
administered by the Chief Financial Officer. See "Investment by the Chief Financial Officer" below. Investment
earnings are credited to the account or fund from which such investments were made.
Investment by the Chief Financial Officer - Funds held in the State Treasury are invested by internal and
external investment managers. The ratio of internally managed funds to externally managed funds within the
Treasury’s investment portfolio has ranged from approximately 83% internal vs. 17% external on June 30, 1991, to
approximately 43.45% internal vs. 56.55% external on December 31, 2002. The total portfolio value was
$5,130,416,324 on June 30, 1991, and $13,046,003,852 on December 31, 2002.
Funds managed internally provide for routine as well as unexpected disbursements, with investment objectives
being safety of principal and liquidity. The weighted average maturity of internal investments varies between four
months and nine months. Investment objectives are met by use of investments with the credit ratings of “BBB” and
above which are readily convertible to cash with no loss of principal.
The external manager program was created to provide enhanced investment returns on funds not needed to
meet cash flow, with the expectation that returns will exceed internal short-term investment returns by at least 150
basis points. External investment strategy focuses on medium-term, fixed-income securities, rather than money market
instruments, in order to take advantage of higher returns historically achieved by such securities. Portfolio managers
with varied specialities are hired to actively manage funds. These funds may be invested in demand notes, U.S.
Government and agency obligations, corporate debt, including convertible bonds, municipal debt, and mortgage-backed
securities.
Investment in longer-term, fixed-income securities, convertible bonds and mortgage-backed securities exposes
assets to changes in market value. Mortgage-backed securities and convertible bonds have investment characteristics
that differ from those of traditional fixed-income securities, which can result in greater price and yield volatility than
is the case with traditional fixed-income securities.
The maximum term of investments by external managers in the regular medium term program is six years.
The mix of securities used to achieve this duration is at the discretion of the manager. These managers may leverage
up to 10% of the market value of their investments. Leveraging techniques include the use of reverse repurchase
agreements or forward purchase commitments which are not covered by cash or near cash assets.
Investment by the Board of Administration - The Board of Administration manages investment of assets on
behalf of the members of the Florida Retirement System (the “FRS”). It also acts as sinking fund trustee for most
State bond issues and manages a short-term investment pool for local governments and smaller trust accounts on behalf
of third party beneficiaries.
The Board of Administration adopts specific investment policy guidelines for the management of its funds
which reflect the long-term risk, yield, and diversification requirements necessary to meet its fiduciary obligations. As
of December 31, 2002, the Board of Administration directed the investment/administration of 27 trust funds in over 140
20
portfolios.
As of December 31, 2002, the total market value of the FRS Trust Fund was $83,565,082,820. The Board of
Administration pursues an investment strategy which allocates assets to different investment types. The long-term
objective is to meet liability needs as determined by actuarial assumptions. Asset allocation levels are determined by
the liquidity and cash flow requirements of the FRS, absolute and relative valuations of the asset class investments, and
opportunities within those asset classes. Funds are invested internally and externally under a Total Fund Investment
Plan.
The Board of Administration uses a variety of derivative products as part of its overall investment strategy.
These products are used to manage risk or to execute strategies more efficiently or more cost effectively than could
be done in the cash markets. They are not used to speculate in the expectation of earning extremely high returns. Any
of the products used must be within investment policy guidelines designed to control the overall risk of the portfolio.
The Board of Administration invests assets in 26 designated trust funds other than the FRS Trust Fund. As
of December 31, 2002, the total market value of these trust funds equaled $30,403,662,356. Each fund is independently
managed by the Board of Administration in accordance with the applicable documents, legal requirements and
investment plan. Liquidity and preservation of capital are preeminent investment objectives for most of these funds,
so investments for these are restricted to high quality money market instruments (e.g., cash, short-term treasury
securities, certificates of deposit, banker’s acceptances, and commercial paper). The term of these investments is
generally short, but may vary depending upon the requirements of each trust and its investment plan.
Investment of bond sinking funds is controlled by the resolution authorizing issuance of a particular series of
bonds. The Board of Administration’s investment policy with respect to sinking funds is that only U.S. Treasury
securities, and repurchase agreements backed thereby, be used.
Bond Ratings
Standard & Poor's Ratings Services, Moody's Investors Services, and Fitch Ratings (herein referred to
collectively as "Rating Agencies") have assigned their municipal bond ratings of AAA, Aaa and AAA, respectively,
to the 2003A Bonds with the understanding that upon the delivery of the 2003A Bonds, a policy insuring the payment
when due of the principal of and interest on the 2003A Bonds will be issued by Financial Security Assurance, Inc.
Additionally, Standard & Poor’s Ratings Services, Moody’s Investors Services, and Fitch Ratings have assigned
underlying ratings (i.e., without regard to municipal bond insurance) of AA, Aa3 and A+, respectively, to the 2003A
Bonds. Such ratings reflect only the respective views of such Rating Agencies at the time such ratings were issued
and an explanation of the significance of such ratings may be obtained from any of the respective Rating Agencies
furnishing the same.
The Division of Bond Finance and the Department furnished to such Rating Agencies certain information and
materials in respect to the State and the 2003A Bonds. Generally, Rating Agencies base their ratings on such
information and materials and on investigations, studies and assumptions made by the Rating Agencies. There is no
assurance that such ratings will be maintained for any given period of time or that they may not be lowered, suspended
or withdrawn entirely by the Rating Agencies, or any one of them, if, in their or its judgment, circumstances warrant.
Any such downward change in, suspension of or withdrawal of such ratings may have an adverse effect on the market
price of the 2003A Bonds.
Verification of Mathematical Calculations
The arithmetical accuracy of the mathematical computations supporting the adequacy of the funds deposited
pursuant to the Escrow Deposit Agreement to pay the principal of, redemption premium, if any, and interest on the
21
Refunded Bonds, will be verified by Causey Demgen & Moore, Inc., Certified Public Accountants, as a condition of
the delivery of the 2003A Bonds.
Litigation
Currently there is no litigation pending, or to the knowledge of the Department or the Division of Bond Finance
threatened, which if successful would have the effect of restraining or enjoining the issuance or delivery of the 2003A
Bonds or questioning or affecting the validity of the 2003A Bonds or the proceedings and authority under which such
2003A Bonds are to be issued. The Department and the Division of Bond Finance from time to time engage in certain
routine litigation the outcome of which would not be expected to have any material adverse effect on the issuance and
delivery of the 2003A Bonds.
Legal Opinion and Closing Certificates
The approving legal opinion of Greenberg Traurig, P.A., Miami, Florida, will be provided on the date of delivery
of the 2003A Bonds, as well as the printed bonds and a certificate, executed by appropriate State officials, to the effect
that to the best of their knowledge the Official Statement, as of its date and as of the date of delivery of the 2003A
Bonds, does not contain an untrue statement of a material fact or omit to state a material fact which should be included
herein for the purpose for which the Official Statement is intended to be used, or which is necessary to make the
statements contained herein, in the light of the circumstances under which they were made, not misleading. Such legal
opinion will be printed on the 2003A Bonds. A proposed form of the legal opinion of Bond Counsel is attached hereto
as Appendix F.
Continuing Disclosure
The Department will undertake, for the benefit of the beneficial owners and Registered Owners of the 2003A
Bonds, to provide, or cause to be provided, certain financial information and operating data and to provide notices of
certain material events. Such financial information and operating data will be filed with each Nationally Recognized
Municipal Securities Information Repository ("NRMSIR") and with the state information depository (if a state
information depository is established for the State of Florida). As of the date hereof, no state information depository
has been established for the State of Florida. Notices of material events will be filed with each NRMSIR or with the
Municipal Securities Rulemaking Board. The form of the undertaking is set forth as Appendix E, Form of Continuing
Disclosure Agreement. This undertaking is being made in order to assist the underwriters in complying with Rule 15c212 of the Securities and Exchange Commission.
Neither the Department nor the Division of Bond Finance has failed to make any disclosures required by the
Rule.
The Department presently plans to file information with the following NRMSIRs:
Bloomberg Municipal Repositories
100 Business Park Drive
Skillman, NJ 08558
(609) 279-3225
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
(201) 346-0701
Standard & Poor’s J. J. Kenny Repository
55 Water Street, 45th Floor
New York, NY 10041
(212) 438-4595
Interactive Data
Attn: NRMSIR
100 William Street, 10th Floor
New York, NY 10038
(212) 771-6999
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The Division of Bond Finance also intends to make this Official Statement available through the above NRMSIRs.
Underwriting
J.P. Morgan Securities, Inc. (the "Underwriters") have agreed to purchase the 2003A Bonds at an aggregate
purchase price of $122,965,332.94 (which represents the par amount of the 2003A Bonds plus an original issue
premium of $13,959,165.65 and minus the Underwriters’ discount of $763,832.71, which includes a premium of
$390,000 for a municipal bond insurance policy purchased by the underwriters) plus accrued interest from April 15,
2003 to the date of delivery of the 2003A Bonds. The Underwriters may offer and sell the 2003A Bonds to certain
dealers (including dealers depositing bonds into investment trusts) and others at prices lower than the offering price
stated on the inside front cover.
Execution of Official Statement
The execution and delivery of this Official Statement have been duly authorized by the Department of
Management Services and the Division of Bond Finance.
DIVISION OF BOND FINANCE of the STATE
BOARD OF ADMINISTRATION OF FLORIDA on
behalf of the STATE OF FLORIDA DEPARTMENT
OF MANAGEMENT SERVICES
JEB BUSH
Governor, as Chairman of the Governing Board of the
WILLIAM S. SIMON
Secretary
J. BEN WATKINS III
Director
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APPENDIX A
STATE OF FLORIDA
STATISTICAL, DEMOGRAPHIC
AND
FINANCIAL INFORMATION
The information contained in this Appendix is intended to provide an overview of the
organization of the State’s government, as well as general economic, financial and demographic
data which might be of interest in connection with the foregoing Official Statement. All information
contained herein has been obtained from sources believed to be accurate and reliable. Estimates
of future results are statements of opinion based on the most recent information available, which
is believed to be accurate. Such estimates are subject to risks and uncertainties which may cause
actual results to differ materially from those set forth herein.
A-1
TABLE OF CONTENTS
Page
GENERAL HISTORY AND GEOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
STATE GOVERNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
Executive Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
Legislative Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
Judicial Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
Services Provided by State Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
DEMOGRAPHIC & ECONOMIC INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-5
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-5
Gross State Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
Housing Starts and Construction Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
International Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
Primary Sources of Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
STATE FINANCIAL OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Budgetary Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Revenue Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
State Revenue Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Financial Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Budget Shortfalls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
Evaluation, Accounting and Auditing Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
Sales and Use Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
Motor Fuel Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
Alcoholic Beverage Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
Corporate Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
Documentary Stamp Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
Intangible Personal Property Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Estate Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Gross Receipts Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Communications Services Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Other State Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Tobacco Litigation Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Lottery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
FLORIDA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Five Year History of Trust Fund and General Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
Financial Retrospect and Outlook Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
Actual and Projected General Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
Operating and Fixed Capital Outlay Budget by Program Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
Five Year History of Legislative Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-21
STATE DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
State Full Faith and Credit Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
State Revenue Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
STATEMENT OF ASSETS AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
FLORIDA RETIREMENT SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
A-2
STATE OF FLORIDA
GENERAL HISTORY AND GEOGRAPHY
Florida is the 26th largest state with land area of 54,252
square miles and a water area of 4,308 square miles, with tidal
shoreline in excess of 2,200 miles.
Juan Ponce de Leon made the first recorded landing in Florida
in 1513, and subsequently claimed the territory for Spain. The
Spaniards founded the first permanent settlement, St. Augustine,
in 1565. Florida was acquired by the United States from Spain in
1821, became a territory of the United States in 1822, and was
admitted to statehood in 1845 as the 27th state. The State capital
is the city of Tallahassee.
Florida has 67 counties and 405 municipalities.
STATE GOVERNMENT
Services Provided by State Government
Florida’s governmental powers are divided among the
executive, legislative and judicial branches.
The State provides a wide range of services to its residents
and to its local government units. The education system is the most
extensive service provided by the State. On November 5, 2002,
voters approved constitutional amendments requiring class size
reductions and providing for a free, voluntary pre-kindergarten
program for 4-year-olds.
Executive Branch
In 1998, voters approved amendments to the State
constitution which restructured the State Cabinet. Since adoption
of the amendments, the State legislature has adopted several
measures to implement the constitutional changes and to
otherwise reorganize the executive branch of the State
government.
Over half of the State’s general revenue appropriations are
for education. All tax supported schools, from kindergarten
through postsecondary, constitute a single, unified system of
public education under the State Board of Education. Each of
Florida’s 67 counties comprises a single school district operating
under an elected district school board. In addition, there are 34
area vocational-technical centers administered by the local school
boards. The State’s 28 community colleges and ten State
universities are operated by local boards of trustees, under the
oversight of the State Board of Education.
The supreme executive power is vested in the Governor. The
Lieutenant Governor acts as Governor upon a vacancy in the
office or incapacity of the Governor. The executive branch
consists of the Governor and Cabinet, which is comprised of the
Attorney General, the Chief Financial Officer, and the
Commissioner of Agriculture, each of whom is elected for four
years. All executive functions are allotted among not more than 25
departments under the direct supervision of the Governor, Lt.
Governor, Governor and Cabinet, or a Cabinet Member. The State
Constitution limits cabinet members to eight consecutive years in
office.
Government services are generally organized along
functional or program lines into departments, which constitute the
principal administrative units within the executive branch. Listed
below are the departments and a brief summary of their respective
responsibilities.
Legislative Branch
Agency for Health Care Administration is the State’s chief health
policy and planning entity, and oversees the health care industry
in the State.
The legislative power of the state is vested in a bicameral
legislature, consisting of a senate and a house of representatives.
There are 40 senatorial districts and 120 representative districts
within the State. Senators are elected for four-year terms and
representatives for two-year terms. The State Constitution also
limits legislators to eight consecutive years in office.
Department of Agriculture and Consumer Services inspects food
and other consumer products to assure public safety, and assists
in producing and promoting agricultural products as well as
conserving agricultural resources. It also protects consumers
against unfair and deceptive business practices and licenses
private security, investigative and repossession services.
Regular sessions of the legislature convene on the first
Tuesday after the first Monday in March of each year for 60 days.
Special sessions may be called by the Governor or by joint
proclamation of the President of the Senate and the Speaker of the
House of Representatives.
Department of Business and Professional Regulation ensures
that regulated industries and certain non-medical professionals
meet prescribed standards of education, competency and
practice. It also administers the State’s child and farm labor laws
and oversees workplace regulation and enforcement.
Judicial Branch
The judicial power is vested in a supreme court, 5 district
courts of appeal, 20 circuit courts and 67 county courts. As a
result of a constitutional amendment adopted in 1998, by July 1,
2004 the legislature will be required to fund certain costs of the
judicial system previously borne by the counties.
Department of Children and Family Services provides family and
health services to promote self sufficiency. The department
addresses neglect, abuse or exploitation of children and adults
unable to protect themselves, and provides services to preserve
families, prevent inappropriate institutional care and improve quality
of life for people with mental illnesses or developmental disabilities.
A-3
Department of Law Enforcement conducts criminal investigations,
provides criminal analysis laboratories, offers criminal justice
training, and compiles statistics and maintains records of criminal
activities.
Department of Citrus exercises its powers to stabilize and protect
the citrus industry of the State.
Department of Community Affairs coordinates the State’s efforts
to provide vocational, technical and adult educational programs;
helps develop employment opportunities; oversees special district
reporting; conducts research and training for affordable housing
programs; develops and implements the State’s energy policy;
reviews local land use plans, developments of regional impact and
state comprehensive plans; and coordinates governmental efforts
to protect coastal resources.
Department of Legal Affairs represents the State in civil lawsuits
and in criminal appeals. It also issues formal advisory opinions and
is the chief enforcement agency for antitrust, consumer protection,
and civil racketeering laws.
Department of the Lottery manages Florida’s state lottery as a selfsupporting, revenue producing department designed to generate
additional funding for public education.
Department of Corrections is responsible for the incarceration,
supervision and rehabilitation of criminal offenders.
Department of Management Services is responsible for various
administrative functions of State government, including facilities
management, information technology, administrative hearings,
retirement, and state group insurance programs. The Agency for
Workforce Innovation, an independent body within the department,
administers State and federal workforce development and
unemployment compensation programs, and serves as a one-stop
delivery system for welfare transition services.
Department of Education, under the direction of the State Board of
Education, implements education policy and oversees Florida’s
education system through curriculum development, student
assessment, teacher standards and certification, financial
assistance, instructional support, community services, and
workforce development and vocational rehabilitation programs. It
also participates in oversight of higher education by providing
support for the State’s Community Colleges and the State
University System.
Department of Military Affairs implements the National Defense Act
as it applies to Florida, and administers the Florida National Guard
with the Governor as Commander in Chief.
Department of Elderly Affairs (also, Elder Affairs) administers
services to assist the elderly in maintaining independence and
quality of life, and to support their families and caregivers. The
department also develops policy recommendations for long-term
care.
Department of Revenue administers the collection, enforcement
and auditing of taxes, manages tax information systems, provides
taxpayer assistance, and administers the federal child support
enforcement program in the State.
Department of Environmental Protection implements programs to
protect against air and water pollution, ensure domestic water
supplies, and coordinate the State’s stormwater program. This
department also oversees Florida’s 152 State parks and other
outdoor recreational facilities.
Department of State oversees the elections process, corporate
records, Florida’s international relations, cultural entities, libraries
and historic preservation.
Department of Transportation is charged with providing a safe,
interconnected statewide transportation system. Its responsibilities
include planning and implementing transportation policies, designing
and constructing facilities, and administering motor carrier
compliance and toll operations.
Department of Financial Services, under the Chief Financial
Officer, administers the State treasury and oversees accounting
and auditing of State agencies. It also administers the State’s risk
management and fire marshal offices, regulates insurance agents
and investigates insurance fraud, and participates in administration
of the workers compensation system. The Financial Services
Commission, an independent agency housed within the
Department but consisting of the Governor and Cabinet, regulates
securities transactions, financial institutions and insurers operating
in the State.
Department of Veterans’ Affairs assists military veterans and their
dependents in securing benefits to which they are entitled under
federal or State law by virtue of their military service.
The Public Employees Relations Commission is a neutral
adjudicatory body which resolves public sector labor disputes,
career service appeals, veteran’s preference appeals, drug
testing cases, certain age discrimination cases, and whistle
blower appeals.
Department of Health oversees a State health plan, as well as a
wide range of State and community efforts to prevent diseases
and disabilities. The department monitors disease trends, provides
health care and early intervention services, gives medical direction
for child protection and sexual abuse treatment, promotes
innovative and cost effective health care delivery systems, and
serves as statewide repository of health data.
The Public Service Commission, an arm of the legislature,
regulates the operation of electric utilities, telecommunications and
telephone companies, and water or wastewater utilities within the
State.
Department of Highway Safety and Motor Vehicles promotes safe
driving through law enforcement, public education, titling and
registering motor vehicles and vessels, licensing drivers, and
regulating vehicle exhaust.
In addition to statutorily created departments and
commissions, there are several constitutional boards responsible
for governmental functions.
On November 5, 2002, voters approved a constitutional
amendment creating a 17-member Board of Governors responsible
for managing the State University System. The Board consists of
14 members appointed by the governor, plus the commissioner of
education, a faculty representative and a student representative.
Department of Juvenile Justice coordinates the State’s programs
for juvenile offenders including prevention, diversion, residential
and non-residential commitment, delinquency institutions, training,
reentry and aftercare.
A-4
person has violated parole, and for reporting on persons under
consideration for clemency.
Fish and Wildlife Conservation Commission, comprised of seven
members appointed by the Governor, exercises the State’s
regulatory and executive powers with respect to wild animal life,
fresh water aquatic life, and marine life.
Taxation and Budget Reform Commission will be established in
2007 and each 20th year thereafter to examine the State’s
budgetary process, revenue needs and tax policy, to determine
funding methods favored by citizens, and to recommend changes.
Florida Commission on Ethics enforces the State’s code of ethics
for public employees and officers not under the jurisdiction of the
Judicial Qualification Commission.
State Board of Administration, comprised of the Governor,
Attorney General and Chief Financial Officer, is the long-term
investment body for the State. It also serves as fiscal agent or
trustee with respect to bonds issued by the State or its agencies,
and manages investment of Florida’s retirement system monies.
Judicial Qualification Commission investigates and makes
recommendations to the Supreme Court with respect to action
against any justice or judge whose conduct may warrant
disciplinary measures.
State Board of Education is the chief policy making and
coordinating body of public education and vocational rehabilitation
in Florida. It consists of seven members appointed by the
Governor.
Parole Commission is made up of three members appointed by the
Governor. It is responsible for determining which prisoners will be
granted parole and the terms of conditional release, whether a
DEMOGRAPHIC & ECONOMIC INFORMATION
population averaged a 2.1% annual increase, due primarily to net
in-migration. During that period, 14% of the State’s population
growth was due to the excess of births over deaths, and 86% to
net in-migration. Approximately one-third of such in-migration was
from foreign countries, with the rest from other states.
During the latter half of the twentieth century, the State’s
population increased dramatically, and growth in the gross state
product outpaced both the Southeast and the nation. During the
same period, the manufacturing base of the State’s economy
declined and the service and trade bases increased. The 1990's
saw Florida become a leader in high-tech industrial employment,
and international trade increased.
While the 1990's saw the State’s population grow by 23.5%,
the elderly population (aged 65 of older) increased by 18.6% and
constituted 17.5% of the State’s total population on April 1, 2000.
The working age population (18-64) grew by approximately 24%
from 1990-2000, representing 59.6% of the total population in
2000. Growth in this age group is projected at 20% between 2000
and 2010, to become 60.4% of total population by 2010.
Population
Florida ranks as the fourth most populous state, with a
population of 16.66 million as of April 1, 2002. From 1990 to 2000,
the U.S. population increased about 1% annually, while Florida's
Population Change
Florida and U.S., 1970 - 2010
(April 1 census figure)
Florida
Year
1970
1980
1990
2000
2010 (est)
U. S.
(in thousands)
% change
(in thousands)
% change
6,791
9,747
12,938
15,982
18,978
37.1%
43.5
32.7
23.5
18.7
205,052
227,726
248,710
281,422
312,700
13.5%
11.1
9.2
13.2
11.1
Source: Office of Economic and Demographic Research, Florida Demographic Estimating Conference and US Economic Estimating Conference
(February, 2003).
Florida Population Age Trends, 1990-2010
1990
Age
0-4
5-17
18-24
25-44
45-64
65 + up
Total
Population
873,022
2,010,809
1,227,467
3,920,704
2,549,998
2,355,926
12,937,926
2000
% of total
6.7%
15.5
9.5
30.3
19.7
18.2
100.0
Population
964,590
2,698,896
1,339,051
4,565,763
3,619,911
2,794,167
15,982,378
2010 (est.)
% of total
6.0%
16.9
8.4
28.6
22.6
17.5
100.0
Source: Office of Economic and Demographic Research, The Florida Legislature. (September, 2002)
A-5
Population
1,112,364
2,941,969
1,701,303
4,478,773
5,217,234
3,415,060
18,866,703
% of total
5.9%
15.6
9.0
23.7
27.7
18.1
100.0
Gross State Product
The second largest sector of the 2000 GSP was Finance,
Insurance and Real Estate (“FIRE”). Real estate was by far the
largest industry, accounting for 65.8% of the FIRE portion of 2000
GSP, followed by depositary institutions, which accounted for
10.9%. The following table compares the components of the
State’s GSP over the most recent ten-year period available.
Gross State Product (“GSP”) represents the value of goods
and services produced by a state, and serves as a broad
measure of a state’s economy. Private industry accounted for
88.4% of the State’s 2000 GSP. Services constituted the largest
sector of that year’s GSP, with health services and business
services contributing the most within the industry (26.5% and
25.9%, respectively).
Gross State Product by Major Industry
1991-2000
(millions of chained 1996 dollars)
Industry
Agriculture, forestry, and fishing . . . . . . . . . . . . . . .
Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and public utilities . . . . . . . . . . . . . .
Wholesale trade . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retail trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance, insurance, and real estate . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1991
% of Total
$7,073
815
14,391
25,412
25,121
19,631
31,465
65,759
70,799
45,720
$305,752
2.3%
0.3
4.7
8.3
8.2
6.4
10.3
21.5
23.2
15.0
100.0%
2000
$9,327
861
20,742
32,955
37,363
38,091
53,587
92,430
102,212
50,823
$437,759
% of Total
% Change
2.1%
0.2
4.7
7.5
8.5
8.7
12.2
21.1
23.3
11.6
100.0%
31.9%
5.6
44.1
29.7
48.7
94.0
70.3
40.6
44.4
11.2
43.2%
Source: U.S. Department of Commerce, Bureau of Economic Analysis, (June, 2002).
1
A measure of real output and prices using 1996 as the base year and applying annual - weighted indexes to allow for changes in relative prices and associated
purchasing patterns over time, as developed by the Bureau of Economic Analysis.
2
May not add, due to chaining formula.
Tourism is not treated as a separate industry sector, but
remains an important aspect of the Florida economy. Its financial
impact is reflected in a broad range of market sectors, such as
transportation, communications, retail trade and services, and in
State tax revenues generated by business activities which cater
to visitors, such as hotels, restaurants, admissions and gift shops.
According to Visit Florida, the direct support organization for the
Florida Commission on Tourism, approximately 62.3 million people
visited the State in 2001, down slightly from the revised 2000
figure of 64.7 million. According to the Florida Statistical Abstract,
(University of Florida, Bureau of Economic and Business
Research, 2002) during Fiscal Year 2001-02, the State licensed
4,737 hotels and motels with 392,273 total units. During the same
period 39,431 food service establishments were licensed, with
seating capacity of 3,349,806. Visitors to the State’s public parks
and recreation areas totaled 17,734,774 for Fiscal Year 2001-02,
a 2.3% decrease from the prior year, while visits to national parks
in the State remained at 8.9 million. In 2000, hotels and lodging
contributed 5.4% of the services component of GSP, and
amusement and recreation contributed 6%.
are 23 fixed route transit systems. There are 828 aviation
facilities, of which 131 are available for public use; 20 provide
scheduled commercial service and 13 provide international
service. According to the Airport Council International preliminary
figures, in 2001, seven Florida airports were among North
America’s top 100 based on number of passengers. Miami
International Airport was the 12th largest North American airport
and the 19th largest in the world, based on total passenger count,
while Orlando International Airport ranked 15th in North America
and 24th worldwide. Of the top 100 North American airports
based on total cargo volume for 2001, five were in Florida with
Miami ranking 6th in the world. Florida also has 14 deep water
ports, 9 major shallow water ports, and 4 significant river ports,
many of which are interconnected by the State’s inland waterway
system.
In 2000, agriculture, forestry and fishing constituted only
about 2.1% of GSP. However, in that same year, according to the
U.S. Department of Agriculture, Florida’s farmers produced 68.1%
of the nation’s oranges, 48.4% of its sugar cane, and 27.8% of its
tomatoes.
Transportation of goods and passengers is facilitated by
Florida’s integrated transportation system. The State has
approximately 116,442 miles of roads, 13 freight railroads with
2,887 miles of track, and AMTRAK passenger train service. There
Construction activity, which constituted approximately 4.7%
of Florida’s 2000 GSP, is another factor to consider in analyzing
the State’s economy. The following table shows housing starts
and construction values from 1993 through 2002.
A-6
Florida Housing Starts and Construction Value: 1993-2002
Construction Value (millions of current dollars)
Housing Starts (thous)
Private Residential
Public
Year
Single
Family
MultiFamily
Single
Family
MultiFamily
Other
Private
Education
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
89.3
93.3
78.9
87.1
86.2
95.2
99.1
97.5
107.3
122.4
21.8
33.7
36.7
32.4
45.2
51.2
68.1
63.8
59.9
61.5
8,915.5
9,773.8
8,584.6
9,958.8
10,143.8
11,476.7
12,571.6
14,356.4
16,320.1
19,716.1
1,374.5
1,923.9
2,287.9
2,152.2
2,735.7
3,545.0
4,248.6
4,633.8
4,882.9
5,455.1
4,009.6
4,144.2
5,401.1
5,307.7
6,552.2
7,790.5
8,879.6
9,512.4
9,543.3
8,478.0
1,139.1
1,282.7
975.1
932.2
891.0
1,471.1
1,624.9
1,675.0
1,834.7
880.5
Highways
1,274.8
1,413.7
1,354.0
1,695.3
1,319.4
1,735.9
1,577.4
1,924.8
2,247.3
2,770.9
Other
Total
3,352.5
3,268.5
3,331.0
2,905.1
3,014.1
3,114.2
3,442.4
3,878.7
4,084.5
5,391.6
19,807.4
21,663.2
22,241.3
22,994.2
24,697.4
28,553.4
32,190.8
35,930.9
38,753.1
43,646.5
Source:
F.W. Dodge Statistical Service; Florida Legislature Office of Economic and Demographic Research.
Note:
Private residential construction includes all residential buildings owned by the private sector. This includes both multi-family (two or more dwelling units)
and single-family construction.
Other private construction includes all non-residential construction owned by the private sector and is made up of
manufacturing and non-manufacturing. Public construction includes all projects owned by a governmental entity.
Employment
State employees have civil service privileges. Public employees are
prohibited from striking, and the failure by the legislature to appropriate
monies sufficient to fund a collective bargaining agreement does not
constitute an unfair labor practice.
Between 1990 and 2000, Florida’s working age population
(age 18-64) increased by approximately 23.7% and the number of
employed persons increased approximately 20.2%. The services
sector of the State’s economy continues to grow. In 2001,
services constituted 37.6% of the State’s total non-farm jobs,
compared to 35.5% five years earlier. The total number of nonfarm jobs increased 10% while jobs in services increased 17%
over the same period.
During the 1990's , Florida became a leader in high-tech industrial
employment, ranking first in the Southeast and fifth in the nation by
1999, with the number of high-tech jobs increasing nearly 36% over
that decade. The primary areas of the State’s high-tech employment
are communications services, software and computer-related
services, software services, data processing and information
services and communications equipment manufacturing. High-tech
exports accounted for 35.6% of Florida’s export sales in 2000.
There are approximately 400,000 employees of the State,
counties, school boards, municipalities and special taxing districts
in collective bargaining units under the jurisdiction of the Public
Employees Relations Commission (PERC). PERC also monitors the
State’s career service system, under which more than 100,000
Unemployment Rate, Florida vs. U.S.
1992-2002
Total Civilian Labor Force
(in thousands)
Year
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
............
............
............
............
............
............
............
............
............
............
............
Total Employment
(in thousands)
Florida
U.S.
Florida
U.S.
6,560.5
6,660.2
6,806.1
6,850.2
6,953.6
7,105.9
7,183.1
7,275.6
7,499.8
7,579.5
7,754.1
128,099.1
129,185.3
131,044.6
132,311.3
133,938.2
136,284.8
137,665.2
139,372.0
141,273.8
141,300.0*
145,800.0*
6,017.8
6,190.8
6,359.5
6,474.4
6,600.8
6,767.7
6,855.8
6,982.3
7,216.0
7,281.7
7,342.1
118,487.9
120,258.7
123,069.0
124,903.3
126,708.1
129,556.9
131,433.2
133,084.0
134,792.4
135,400.0*
137,800.0*
Annual Average
Unemployment Rate
(percent)
Florida
8.3%
7.0
6.6
5.5
5.1
4.8
4.6
4.0
3.8
3.9
5.3
US
7.5%
6.9
6.1
5.6
5.4
4.9
4.5
4.4
4.1
4.2
5.5
Source: U.S. Department of Commerce, Florida Department of Labor and Employment Security, and the February, 2003 US and Florida Consensus
Economic Estimating Conferences.
* Rounded.
A-7
Composition of Nonagricultural Employment
Florida and the Nation
1998 and 2002 Year End 1
(thousands)
1998
Florida
# of
% of
Jobs
Total
6.7
0.1
361.0
5.3
494.7
7.2
354.7
5.2
367.1
5.4
1,391.3
20.3
444.3
6.5
2,441.1
35.7
14.4
982.7
6,843.6
100.0
Mining . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . .
Transport. Comm. and Public Utilities
Wholesale Trade . . . . . . . . . . . . . . . . .
Retail Trade . . . . . . . . . . . . . . . . . . . . .
Finance, Insurance and Real Estate . .
Services . . . . . . . . . . . . . . . . . . . . . . . .
Government . . . . . . . . . . . . . . . . . . . . .
Total Non-farm . . . . . . . . . . . . . . . . . . .
United States
# of
% of
Jobs
Total
569
0.4
6,153
4.8
18,715
14.6
6,773
5.3
6,857
5.4
23,158
18.1
7,477
5.8
38,087
29.7
20,354
15.9
128,143
100.0
Florida
# of
% of
Jobs
Total
6.1
0.1
420.4
5.8
442.9
6.1
354.2
4.8
368.5
5.0
1,443.0
19.7
459.6
6.3
2,735.2
37.4
1,081.2
14.8
7,311.1
100.0
20022
United States
# of
% of
Jobs
Total
550
0.4
6,448
4.9
16,487
12.5
6,740
5.1
6,646
5.1
23,787
18.1
7,811
5.9
41,311
31.4
21,724
16.5
131,504
100.0
Source: US Department of Labor, Bureau of Labor Statistics.
Not Seasonally adjusted.
2
Preliminary.
1
Income
Historically, Florida’s total personal income has grown at rates
similar to those of the U.S. and the other southeastern states.
From 1992 to 2001, Florida’s total nominal personal income grew
by 70% and per capita income expanded approximately 41%. For
the nation, total and per capita personal income increased by 61%
and 45%, respectively.
Because Florida has an older and proportionally larger
retirement population than most states, property income (dividends,
interest, and rent) and transfer payments (social security,
retirement, disability, unemployment insurance, workers’
compensation and veterans benefits) are major sources of
income.
Total and Per Capita Personal Income
U.S., Florida and Southeast
Total Personal Income
(In Millions of Current Dollars)
Year
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
U.S.
5,376,622
5,598,446
5,878,362
6,192,235
6,538,103
6,928,545
7,418,497
7,769,367
8,314,032
8,678,255
%
Change
S.E.
4.1%
5.0
5.3
5.6
6.0
7.1
4.7
7.0
4.4
1,153,443
1,218,508
1,289,941
1,366,116
1,445,912
1,532,165
1,639,428
1,710,364
1,820,327
1,915,546
%
Change
5.6%
5.9
5.9
5.8
6.0
7.0
4.3
6.4
5.2
Per Capita Personal Income
(In Current Dollars)
Florida
279,028
296,927
311,909
333,525
355,136
377,673
405,146
419,096
445,740
474,625
%
Change
6.4%
5.0
6.9
6.5
6.3
7.3
3.4
6.4
6.5
Source: U.S. Department of Commerce, Bureau of Economic Analysis (October 21, 2002).
A-8
U.S.
20,960
21,539
22,340
23,255
24,270
25,412
26,893
27,843
29,469
30,472
%
Change
2.8%
3.7
4.1
4.4
4.7
5.8
3.5
5.8
3.4
S.E.
%
Change
Florida
%
Change
18,753
19,487
20,290
21,147
22,038
22,986
24,242
24,944
26,194
27,246
3.9%
4.1
4.2
4.2
4.3
5.5
2.9
5.0
4.0
20,441
21,320
21,905
22,942
23,909
24,869
26,161
26,593
27,764
28,947
4.3%
2.7
4.7
4.2
4.0
5.2
1.7
4.4
4.3
Personal Income by Major Source: 1997 - 2001
(millions of current dollars)
Earnings
Wages and Salaries:
Farm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Farm:
Private
Ag. Svcs., forestry, fishing & other . . . . .
Mining . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . .
Trans., Comm. and Public Utilities . . . . .
Wholesale Trade . . . . . . . . . . . . . . . . . . .
Retail Trade . . . . . . . . . . . . . . . . . . . . . . .
Finance, Insurance and Real Estate . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Private . . . . . . . . . . . . . . . . . . . . . . . .
Government and Government Enterprises . . .
Total Wages and Salaries . . . . . . . . . . . . . . . . . . .
1997
% Total
% Change
783,550
0.2%
$ 1,070,352
0.2%
36.6%
1,856,651
252,966
9,625,873
16,617,759
11,367,045
13,036,357
22,145,349
15,797,640
59,407,855
150,107,495
30,839,462
181,730,507
0.5
0.1
2.6
4.4
3.0
3.5
5.9
4.2
15.8
39.8
8.2
48.2
2,530,983
298,984
14,075,098
18,472,283
14,901,286
16,766,003
28,461,947
21,257,330
83,822,530
200,586,444
37,722,103
239,378,899
0.5
0.1
3.0
3.9
3.1
3.5
6.0
4.5
17.7
42.4
8.0
50.5
36.3
18.2
46.2
11.2
31.1
28.6
28.5
34.6
41.1
33.6
22.3
31.7
24,261,205
6.4
27,942,683
5.9
15.2
1,359,439
20,327,831
227,678,982
0.4
5.4
60.4
641,391
28,632,372
296,595,345
0.1
6.0
62.6
(52.8)
40.9
30.3
Dividends, Interest & Rent
102,604,202
Transfer Payments . . . . . . . . . . . . . . . . . . . . . . .
60,961,792
Contributions for Social Security . . . . . . . . . . . . . (14,411,945)
Total Other Income . . . . . . . . . . . . . . . . . . . . . . . . . $149,154,049
27.2
16.2
(3.8)
122,124,717
73,404,417
(18,526,050)
$177,003,084
25.8
15.5
(3.9)
19.0
20.4
28.5
18.7
Other Earnings:
Other Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proprietor’s Income
Farm Proprietor’s Income . . . . . . . . . . . . . . . . . .
Non-farm Proprietor’s Income . . . . . . . . . . . . . .
Total Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2001
% Total
Other Income
Total Income1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $376,833,031
$473,598,429
25.7%
Source: US Department of Commerce, Bureau of Economic Analysis (October 21, 2002).
1
Does not reflect residence adjustments.
International Trade
Florida’s location lends itself to international trade and
travel. The State’s international merchandise trade (imports and
exports) totaled $70.96 billion in 2001. The State’s exports
declined by 3.8% and imports by 3.9% in 2001, while the nation’s
exports declined by 6.3% and imports by 6.2% during the same
period. The State’s top five exports for 2001 were machinery,
electrical machinery, optical and medical instruments, motor
vehicles and knit apparel, and the top five imports were motor
vehicles, apparel, aircraft and spacecraft, electrical machinery
and mineral fuel and oil. Florida’s top trading partners for 2001
were Brazil, Dominican Republic, Japan, Honduras and
Venezuela. (Source: Enterprise Florida)
Florida’s International Trade: 1992-2001
(millions of U.S. dollars)
Source:
Year
Exports
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
21,277
21,830
25,074
29,433
31,409
36,825
37,640
34,156
35,851
34,530
% Change
Imports
% Change
14.2
2.6
14.9
17.4
6.7
17.2
2.2
(9.3)
5.0
(3.7)
16,885
18,057
20,863
22,681
25,021
26,844
31,643
35,437
37,901
36,430
12.0
6.9
15.5
8.7
10.3
7.3
17.9
12.0
7.0
(3.9)
Enterprise Florida.
A-9
Primary Sources of Sales Tax
expenditure over the past ten years, and compare the top twenty
types of businesses generating sales tax revenues in FY 1997
and 2002.
Understanding the types of transactions and businesses
which generate most of the State’s primary tax revenue is also
relevant to an assessment of economic activity within the State.
The following tables illustrate taxable sales by category of
Florida Taxable Sales and Sales Tax Liability by Category
1993-2002
(Millions of current dollars)
Consumer Non-durables
Recreation/Tourism
Consumer Durables
Motor
Vehicles and parts
Other
Taxes
Sales
Taxes
Building
Investment
Other
Taxes
Business
Investment
Year
Sales
Taxes
Sales
Sales
Taxes
Sales
1993
$32,255
1,926.7
$48,531
2,968.9
$26,556
1,586.4
$10,136
605.5
$9,009
1994
32,907
1,967.7
50,994
3,135.5
29,093
1,739.7
11,208
670.2
9,839
588.4
30,393
1,780.7
1995
34,659
2,072.5
54,405
3,345.3
31,351
1,874.7
12,137
725.8
10,389
621.2
32,209
1,887.1
1996
36,806
2,200.9
58,331
3,586.7
34,544
2,065.6
13,196
789.1
10,881
650.6
34,219
2,004.8
1997
39,489
2,361.3
62,085
3,817.5
35,904
2,098.5
14,400
861.1
11,538
689.9
36,193
2,120.5
1998
41,956
2,508.8
65,689
4,039.1
38,792
2,319.6
15,738
941.1
12,379
740.3
38,339
2,246.2
1999
44,644
2,669.5
68,702
4,224.3
42,144
2,520.1
18,399
1,100.2
13,940
833.6
41,293
2,419.3
2000
48,958
2,908.1
76,015
4,515.3
46,776
2,778.5
20,520
1,218.9
15,593
926.2
44,711
2,602.2
2001
51,313
3,048.0
81,715
4,853.9
48,658
2,890.3
21,384
1,270.2
16,190
961.7
46,273
2,693.1
2002*
49,980
2,968.8
74,658
4,434.7
52,498
3,118.4
20,820
1,236.7
16,030
952.2
47,471
2,762.8
538.2
Sales
Taxes
$27,957
1,636.3
Source: Office of Economic and Demographic Research.
* November 15, 2002 estimates.
State Sales Tax Collections by Top 25 Business Types
Fiscal Years Ended June 30, 1997 vs. 2002
Type of Business1
Motor Vehicle Dealers
Restaurants and Lunchrooms
Office Space and Commercial Rental
Communications
Grocery Stores
Department Stores
Hotels, Apartment Houses, etc.
Lumber and Building Material
General Merchandise Stores
Music Stores, Radios, Television
Wholesale Dealers
Clothing Stores
Variety Stores
Manufacturing, Mining
Furniture Stores
Admissions
Rental of Tangible Property
Utilities, Electricity or Gas
Garages and Repair Shops
Auto Accessories, Tires, Parts
Store and Office Equipment
Industrial Machinery Equipment
Household Appliances
Taverns, Night Clubs
Motor Boat & Yacht Dealers
1997
$1,762,479,491
941,706,106
655,733,974
542,537,881
543,505,712
642,015,203
549,969,231
459,913,842
109,079,021
322,027,429
298,650,672
306,276,289
509,378,501
365,452,645
251,849,575
247,088,474
206,422,080
292,721,000
146,209,767
148,810,409
134,924,737
158,976,910
77,186,612
117,595,330
98,193,293
2002
$2,660,273,646
1,199,606,624
936,203,987
845,132,3282
716,627,507
692,763,832
687,451,715
660,977,647
637,390,609
495,459,844
402,225,634
386,662,463
377,972,044
364,641,689
343,300,697
339,024,857
328,427,486
322,763,442
203,254,969
180,144,142
175,581,684
149,603,859
146,575,569
146,489,050
136,170,260
Source: Florida Department of Revenue.
1
Arranged in descending order of collection amounts for Fiscal Year ended June 30, 2002. In that Fiscal Year, "Miscellaneous" business types
accounted for $178,760,621 in sales tax collections.
2
Includes sales and use tax portion of Communications Service Tax.
A-10
STATE FINANCIAL OPERATIONS
information within its area of expertise by unanimous consent of
the conference principals. Once an estimating conference is
convened, an official estimate does not exist until a new
consensus is reached.
Florida law requires that financial operations of the State be
maintained through the General Revenue Fund, trust funds, the
Working Capital Fund and the Budget Stabilization Fund
administered by the Chief Financial Officer. The majority of State
tax revenues are deposited in the General Revenue Fund. Trust
funds consist of monies which under law or trust agreement are
segregated for a specified purpose. Revenues in the General
Revenue Fund which exceed the amount needed for
appropriations may be transferred to the Working Capital Fund.
State monies are disbursed by the Chief Financial Officer upon
warrants or other orders pursuant to appropriations acts. The
Governor and Chief Financial Officer are responsible for insuring
that sufficient revenues are collected to meet appropriations and
that no deficits occur in State funds.
Consensus revenue estimating conferences are
generally held twice each year to estimate revenue
collections for the next fiscal year based on current tax laws
and administrative procedures. General State and national
economic scenarios are agreed upon by the conference
principals; the revenue estimates are then derived with the
assistance of a custom-designed State econometric computer
model. Consensus estimating conferences are held in late autumn
to establish a forecast for the Governor’s budget recommendations, and in the spring to determine the revenues available for
appropriation during the legislative session. Conferences may
reconvene at any time if it is felt that prior recommendations are no
longer valid. Meetings are also held from time to time to determine
fiscal impact of possible tax law changes, and after each
legislative session to review changes in tax legislation and to
amend official conference recommendations accordingly.
The State Constitution mandates the creation and
maintenance of a Budget Stabilization Fund, in an amount
not less than 5% nor more than 10% of the last complete
fiscal year’s net revenue collections for the General
Revenue Fund. Monies in the Budget Stabilization Fund may be
transferred to the General Revenue Fund to offset a deficit therein
or to provide emergency funding. Monies in this fund are
constitutionally prohibited from being obligated or otherwise
committed for any other purpose. Any withdrawals from the
Budget Stabilization Fund must be restored from general revenues
in five equal annual installments, unless the legislature establishes
a different restoration schedule.
State Revenue Limitation
The rate of growth in State revenues in a given fiscal
year is limited to no more than the average annual growth
rate in personal income over the previous five years.
Revenues have never exceeded the limitation. Revenues collected
in excess of the limitation are to be deposited into the Budget
Stabilization Fund unless two-thirds of the members of both
houses of the legislature vote to raise the limit. The revenue limit
is determined by multiplying the average annual growth rate in
personal income over the previous five years by the maximum
amount of revenue permitted under the cap for the previous year.
State revenues include taxes, licenses, fees, and charges for
services imposed by the legislature on individuals, businesses, or
agencies outside of State government as well as proceeds from
the sale of lottery tickets. State revenues subject to the limitation
do not include lottery receipts returned as prizes; balances carried
forward from prior years; proceeds from the sale of goods (e.g.
land, buildings); funds pledged for debt service on State bonds;
State funds used to match federal money for Medicaid (partially
exempt); balances carried forward from the prior fiscal year;
charges imposed on the local governmental level; receipts of the
Hurricane Catastrophe Trust Fund; and revenues required to be
imposed by amendment to the Constitution after July 1, 1994. The
revenue limitation may be adjusted to reflect the transfer of
responsibility for funding governmental functions between the
State and other levels of government.
The State budget must be kept in balance from current
revenues each State fiscal year (July 1-June 30), and the State
may not borrow to fund governmental operations. (See "Budget
Shortfalls" below.)
Budgetary Process
The State’s budgetary process is an integrated, continuous
system of planning, evaluation and controls. Individual State
agencies prepare and submit appropriation requests to the Office
of Planning and Budgeting, Executive Office of the Governor, no
later than September 1 of the year preceding legislative
consideration. The Office of Planning and Budgeting conducts a
detailed evaluation of all agency requests, after which it makes
budget recommendations to the Governor. The State is in the
process of implementing performance-based budgeting standards,
and the 2002 Legislature has incorporated into the General
Appropriation bill standards and measures to be applied in the
budget process. The bill implements 91% of the standards to be
applied. Under performance-based budgeting, agencies receive
lump sum appropriations for each program area. Agency heads
have latitude to transfer appropriations among categories within
programs to accomplish program objectives.
Financial Control
From recommended appropriations and revenue estimates,
the Governor submits a recommended budget to the legislature.
After passage, the Governor may exercise line item vetoes or veto
the entire bill.
After the appropriations bill becomes law, the Office of
Planning and Budgeting prepares monthly status reports
comparing actual revenue receipts to the estimates on
which appropriations were based. This constant cash flow
monitoring system enables the Governor and the Chief Financial
Officer to insure that revenues collected will be sufficient to meet
appropriations. The Administration Commission, comprised of the
Governor and Cabinet, is authorized to reduce all approved State
agency budgets to prevent a deficit in any fund. (See "Budget
Shortfalls" below.)
Revenue Estimates
State law provides for consensus estimating conferences to
develop a variety of official economic and demographic information
for use in planning and budgeting. Each conference develops
A-11
contained in the appropriations act. The statutory guidelines
include a requirement that all branches of government receiving
General Revenue Fund appropriations are generally required to
accept a proportional budget reduction. If the revenue estimating
conference projects a shortfall in the General Revenue Fund in
excess of 1.5% of the moneys appropriated from the General
Revenue Fund during a fiscal year, the shortfall must be resolved
by the legislature. Moneys in either the Working Capital Fund or the
Budget Stabilization Fund are available for eliminating shortfalls in
the General Revenue Fund. Additionally, the legislature can also
eliminate a shortfall by reducing appropriations.
By September 15 of each fiscal year, monies in excess of
the amount needed to meet General Revenue Fund appropriations
are transferred to the Working Capital Fund. The Working Capital
Fund is limited to 10% of net revenue of the General Revenue Fund
for the preceding fiscal year and may be used to meet revenue
shortages in lieu of or in addition to reducing appropriations, and
to make loans to other funds to correct imbalances in cash flow.
Such loans must be repaid during the same fiscal year in which
they are made.
All balances of General Revenue Fund appropriations for
operations in each fiscal year (except appropriations made to the
State University System) expire on the last day of such fiscal year.
Agencies may certify forward liabilities and encumbrances at
June 30, with unused amounts expiring on December 31. Capital
projects are often funded on a multi-year basis, with the full
appropriation being made in the first year even though payments
are actually made over multiple years.
Evaluation, Accounting and Auditing Procedures
Florida has an integrated, computerized general ledger
accounting system which provides on-line monitoring of budget
commitments by individual agency units. This system prevents
agencies from overcommitting available funds.
Budget Shortfalls
Each State agency supported by any form of taxation,
licenses, fees, imposts, or exactions must file with the Chief
Financial Officer financial and other information necessary for
preparation of the State’s annual financial statements. In addition,
each such agency must prepare financial statements showing the
financial position and results of agency operations as of June 30
for internal management purposes. The Chief Financial Officer is
responsible for preparing the State’s combined annual financial
report, copies of which are available from the Chief Financial
Officer, Division of Accounting and Auditing. The Auditor General
conducts annual audits of all officers and agencies in the
executive and judicial branches. Individual agency audits are
made in accordance with generally accepted auditing standards
and governmental auditing standards as adopted by the State
Board of Accountancy. In addition to the annual financial and
compliance audits, performance audits are made to determine the
efficiency and effectiveness of agency operations.
Appropriations are maximum amounts available for
expenditure in the current fiscal year and are contingent upon the
collection of sufficient revenues. The Governor and the Chief
Financial Officer are responsible for ensuring that revenues
collected will be sufficient to meet appropriations and that no
deficit occurs in any state fund. A determination that a deficit has
occurred or will occur can be made by either the Governor or the
Chief Financial Officer after consultation with the revenue
estimating conference. A determination made by the Chief
Financial Officer is reported to the Governor and subsequently to
the Legislative Budget Commission for further action if the
Governor does not certify the existence of a deficit within 10 days
after the report by the Chief Financial Officer. Within 30 days after
determining that a budget shortfall will occur, the Governor is
required to develop a plan of action to eliminate the budget shortfall
for the executive branch and the Chief Justice of the Supreme
Court is required to develop a plan of action for the judicial branch.
Systems and procedures were established to enable the
State and its component units to comply with the recent
Governmental Accounting Standards Board ("GASB") Statement
No. 34, Basic Financial Statements and Management’s
Discussion and Analysis for State and Local Governments in a
timely manner.
Budget shortfalls of less than 1.5% of the money
appropriated from the General Revenue Fund during a fiscal year
are resolved by the Legislative Budget Commission for the
executive branch and by the Chief Justice of the Supreme Court
for the judicial branch, with the approval of the Legislative Budget
Commission, subject to statutory guidelines and directives
REVENUES
may (by referendum) assess a 0.5% or 1% discretionary sales
surtax within their county.
Major sources of tax revenues to the General Revenue Fund
are the sales and use tax, corporate income tax, intangible
personal property tax, beverage tax, and estate tax. Unlike many
other jurisdictions, the State of Florida does not levy ad
valorem taxes on real property or tangible personal
property, nor does it impose a personal income tax.
The sales tax is also levied on the following: (1) rental of
tangible personal property; (2) rental of transient lodging and nonresidential real property; (3) admissions to places of amusement,
most sports and recreation events; (4) non-residential utilities (at
a 7% rate); and (5) restaurant meals.
Sales and Use Tax
Exemptions include groceries, medicines, hospital rooms and
meals, fuels used to produce electricity, electrical energy used in
manufacturing, purchases by certain nonprofit institutions, most
professional, insurance, and personal service transactions,
apartments used as permanent dwellings, the trade-in value of
motor vehicles, and residential utilities.
The largest single source of tax receipts in Florida is
the sales and use tax. It is a uniform tax upon either the sale of
tangible personal property at retail or its use irrespective of where
it may have been purchased. The sales tax is 6% of the sales
price of tangible personal property sold at retail in the State, and
the use tax is 6% of the cost price of tangible personal property
used or stored for use in this State. In addition, local governments
A-12
Two percent of collections are deposited into the Alcoholic
Beverage and Tobacco Trust Fund, and the Children and
Adolescent Substance Abuse Trust Fund receives 9.8%, while the
remainder of revenues are deposited into the General Revenue
Fund.
In each of the past three legislative sessions, measures were
enacted which temporarily waived collection of the sales tax on
clothing priced under certain amounts. General revenue was
estimated to decrease by $142.7 million in Fiscal Year 1999-2000,
and $35.5 million in Fiscal Year 2000-01 as a result of the sales tax
waivers.
Corporate Income Tax
Receipts of the sales and use tax, with the exception of the
tax on gasoline and special fuels, are credited to either the
General Revenue Fund, the Solid Waste Management Trust
Fund, or counties and cities. Legislation was enacted in 2000
which provides that 2.25% of sales tax receipts are to be
deposited in the Revenue Sharing Trust Fund for Counties in lieu
of intangible personal property taxes which were so distributed
under prior law.
Florida collects a tax upon the net income of corporations,
organizations, associations, and other artificial entities for the
privilege of conducting business, deriving income, or existing
within the State. This tax is levied at a rate 5.5% of net corporate
income, less a $5,000 exemption. Net income is defined as that
share of adjusted federal income which is apportioned to Florida.
All business income is apportioned by weighted factors of sales
(50%), property (25%), and payroll (25%).
Motor Fuel Tax
Florida adopted an emergency excise tax to recoup taxes lost
through reductions in adjusted federal income resulting from the
Accelerated Cost Recovery System under federal tax law. As a
result of the 1986 Tax Reform Act, this tax has been repealed on
assets placed in service after January 1, 1987.
The second largest source of State tax receipts is the
tax on motor fuels. However, these revenues are almost
entirely dedicated trust funds for specific purposes and are
not included in the State General Revenue Fund.
All receipts of the corporate income tax are credited to the
General Revenue Fund.
Taxes on motor fuels (gasoline and diesel fuel) include
several distinct fuel taxes: (1) the State sales tax on motor fuels,
levied at 6% of the average retail price per gallon of fuel, not to fall
below 6.9 cents per gallon; (2) the State excise tax of four cents
per gallon of motor fuel, with proceeds distributed to local
governments; (3) the State Comprehensive Enhanced Transportation System (SCETS) tax, which is levied at a rate in each county
equal to two-thirds of the sum of the county’s local option motor
fuel taxes; (4) aviation fuel, which air carriers may choose to be
taxed at 6.9 cents per gallon or 8% of the retail price of fuel, not to
be less than 4.4 cents per gallon; and (5) local option motor fuel
taxes, which may range between one cent to 12 cents per gallon.
Documentary Stamp Tax
Deeds and other documents relating to realty are taxed upon
execution or recording at 70 cents per $100 of consideration.
Corporate shares, bonds, certificates of indebtedness, promissory
notes, wage assignments, and retail charge accounts are taxed
upon issuance or renewal at 35 cents per $100 of face value, or
actual value if issued without face value.
Documentary stamp tax collections are distributed as follows:
Most of the proceeds of the sales tax on motor fuels
are deposited into the State Transportation Trust Fund for
road maintenance and construction. The proceeds of the
State excise tax of four cents per gallon is distributed by formula
to local governments. The first two cents (described as the
Constitutional Gas Tax) are primarily pledged for each county’s
debt service requirements, with any remaining balance deposited
into the county’s transportation trust fund. The remaining two
cents of the excise tax (described as the County and Municipal
Gas Taxes) are part of the State Revenue Sharing Program.
Proceeds from the SCETS tax are, to the maximum extent possible,
expended on road projects in the counties in which the revenues
are derived. Local option gas taxes of one to 11 cents per net
gallon, and the so-called "ninth cent fuel tax" of one cent per net
gallon, of motor fuel may be levied by counties, for use by local
governments for transportation expenditures. Local Option Gas
Tax revenues may be pledged for payment of bonds issued by the
Division of Bond Finance on behalf of local governments to fund
transportation capital improvements.
62.63%
7.56%
1.94%
4.2%
4.2%
7.53%
8.66%
to the Land Acquisition Trust Fund for debt service on
Preservation 2000 ("P2000") Bonds and Florida Forever
Bonds; to fund the Land Acquisition Trust Fund up to
70% of official revenue forecast; the Ecosystem
Management and Restoration Trust Fund; with the
balance to the General Revenue Fund;
to the General Revenue Fund, after funding the
Ecosystem Management and Restoration Trust Fund;
to the Land Acquisition Trust Fund for coastal land
acquisition and land management;
to the Water Management Lands Trust Fund;
to the Conservation and Recreation Lands Trust Fund;
to the State Housing Trust Fund and the Local
Government Housing Trust Fund;
to the State Housing Trust Fund for use by the
Department of Community Affairs and the Florida
Housing Finance Corporation, and to the Local
Government Housing Trust Fund;
to the Aquatic Plant Control Trust Fund;
to the State Game Trust Fund for lake restoration;
to the Department of Environmental Protection Grants &
Donations Trust Fund and the Department of Agriculture
and Consumer Services General Inspection Trust Fund
for water quality improvement.
Alcoholic Beverage Tax
2.28%
.50%
.50%
Florida’s alcoholic beverage tax is an excise tax on beer,
wine, and liquor. The 1999 Florida Legislature reduced the
surcharge on alcoholic beverages sold for consumption on
premises, which is expected to reduce total collections by $30.3
million in Fiscal Year 1999-2000 and $37.4 million in Fiscal Year
2000-01.
Except to the extent needed to pay debt service on P2000
or Florida Forever Bonds, proceeds are subject to a 7% general
revenue service charge.
A-13
Communications Services Tax
The State tax on intangible personal property is levied on
two distinct bases.
Stocks, bonds, notes, governmental
leaseholds, interests in limited partnerships registered with the
Securities and Exchange Commission, and other miscellaneous
intangible personal property are currently taxed at an annual rate
of 1 mill. A non-recurring 2 mill tax is levied on mortgages and
other obligations secured by liens on Florida realty. Obligations
issued by the State or local governmental entities in Florida, or by
the federal government, are exempt from such taxation.
The communications services tax is imposed on retail sales
of communications services which originate and terminate in
Florida, or originate or terminate in Florida and are billed to a
Florida address. Communications services include all forms of
telecommunications previously taxed by the gross receipts tax
plus cable television and direct-to-home satellite service. The
communications services tax replaced certain sales and use
taxes and gross receipts taxes, at revenue-neutral rates.
Communications services tax receipts are included in sales tax
and gross receipts tax collections, as appropriate.
The Department of Revenue uses part of the proceeds for
administrative costs. Of the remaining tax proceeds, 33.5% is
distributed to the County Revenue Sharing Trust Fund and 66.5%
is distributed to the General Revenue Fund.
Other State Taxes
To the extent not pre-empted to the federal government, the
State levies a one-time excise tax on cigarettes, at rates based
on their weight and package quantity, and on other tobacco
products at the rate of 25% of the wholesale price. The State
also imposes a tax on racing and jai-alai admissions, and on
contributions to pari-mutuel pools, or "handle."
Estate Tax
A tax is imposed on decedents’ estates for the privilege of
transferring property at death. The State constitution limits
the tax on estates of resident decedents to the aggregate
amount allowable as a credit against or a deduction from
any similar tax levied by the United States or any other
state. Thus, the Florida estate tax on resident decedents does
not increase the total tax liability of the estate. Reduction or
elimination of the federal estate tax could reduce the amount of
such taxes collected at the State level. The tax on estates of
nonresident decedents is equal to the amount allowable as a
credit against federal estate tax for state death taxes paid
multiplied by the ratio of the value of the property taxable in
Florida over the value of the entire gross estate.
Insurance premiums received by insurers are generally
taxed at 1.75% of such receipts, adjusted for return premiums
and subject to credits for certain other taxes paid by the insurers.
Tobacco Litigation Settlement
As a result of settling litigation by the State against the
tobacco industry in 1997, Florida expects to receive more than
$11 billion over 25 years. Payments are subject to adjustment for
various factors, including inflation and tobacco product sales
volume. Proceeds of the settlement are expected to be used for
children’s health care coverage and other health-related
services, to reimburse the State for medical expenses, for
improvements in State efforts to reduce sales of tobacco
products to minors, and to promote production of reduced risk
tobacco products.
All receipts of the estate tax are credited to the
General Revenue Fund.
Gross Receipts Tax
The gross receipts tax is imposed at a rate of 2.5% of the
gross receipts of providers of electricity, natural gas, and
telecommunications services. Telecommunications services are
subject to a unified Telecommunications Services Tax, a portion
of which is collected with the gross receipts tax at revenueneutral rates.
A portion of the tobacco settlement revenues have been
deposited in the Lawton Chiles Endowment Fund to provide a
perpetual source of funding for health and human services for
children and elders, and for biomedical research activities. As of
June 30, 2002, the market value of the endowment was
$1,293,010,138.
All gross receipts tax collections are credited to the Public
Education Capital Outlay and Debt Service Trust Fund. The
potential impact of electric utility deregulation on gross receipts
tax collections cannot be determined at this time.
Lottery
In order to provide additional funding for education, the
1987 Legislature created the Department of the Lottery to operate
a State lottery. Revenues generated by the Florida Lottery are
used to pay prizes, fund the Educational Enhancement Trust
Fund, and pay the administrative costs of operating the lottery.
FLORIDA FINANCIAL INFORMATION
The following tables present information regarding the State’s historical and projected financial resources, as well as budgets by
program area and appropriations by department.
A-14
Five Year History of Trust Fund and General Revenues1
(millions of dollars)
General Revenue Receipts2
1997-98
1998-99
1999-2000
2000-01
2001-02
Sales and Use Tax3
Beverage Licenses and Taxes
Corporation Income Tax
Corporation Trust Fund Fees
Tobacco Tax
Insurance Premium Tax
Pari-mutuel Fees, Licenses and Taxes
Estate Tax
Interest Earnings
Auto Title and Lien Fees
Oil and Gas Severance Tax
Solid Mineral Severance Tax
Drivers Licenses and Fees
Motor Vehicle and Mobile Home Licenses
Motor Vehicle Fees and Charges
Medical and Hospital Fees
Plus Service Charges to GR
Other GR
Total GR Collections and Transfers
Less Refunds of GR
Net GR Collections and Transfers
$11,841.1
550.1
1,395.7
429.6
101.8
142.1
295.5
25.6
756.0
595.0
217.9
24.0
6.4
29.0
61.2
0.8
41.3
99.8
383.8
159.7
17,156.5
(204.6)
16,951.8
$12,706.5
562.1
1,472.2
479.9
95.4
132.6
257.9
14.0
751.2
674.1
216.5
24.3
3.2
30.1
62.2
0.8
41.8
104.5
401.5
160.3
18,190.9
(321.9)
17,869.0
$13,766.7
556.6
1,406.5
453.8
99.9
125.3
285.2
13.0
578.5
778.7
230.8
30.3
4.0
24.9
63.5
0.7
44.1
118.9
409.7
171.2
18,390.3
(362.2)
18,800.1
$13,952.2
523.3
1,344.8
479.2
107.5
273.5
283.1
16.6
660.8
767.1
300.6
28.6
4.7
15.8
63.0
0.5
44.4
127.4
364.7
166.8
18,819.8
(339.9)
19,184.7
$14,148.0
526.0
1,218.5
602.9
113.7
275.5
331.0
18.6
726.8
751.3
227.0
27.7
5.3
12.4
58.7
0.7
39.1
134.5
347.0
167.5
18,993.7
(391.6)
19,340.8
Trust Fund Revenues2
Major Transportation Revenues:
Auto Title and Lien Fees
Motor Fuel Tax
Motor Vehicle and Mobile Home Licenses
Motor Vehicle Fees and Charges
Subtotal
85.5
1,175.7
361.6
201.5
1,826.9
89.4
1,256.1
368.9
204.0
1,918.4
88.0
1,309.9
399.9
212.1
2,009.9
114.0
1,379.7
411.4
222.7
2,127.9
6.5
1,441.2
450.7
210.8
2,109.2
Workers Insurance Tax:
Workers’ Compensation Tax
Workers’ Comp. Special Disability
Unemployment Compensation Tax
Subtotal
77.8
133.6
550.4
761.7
74.4
129.1
550.2
753.7
96.5
135.3
522.6
754.5
110.6
161.9
519.5
792.0
135.7
171.2
619.2
926.1
Conservation and Recreational Lands:
Sales and Use Tax1
Subtotal
559.7
28.3
(0.3)
38.0
625.7
641.8
27.9
0.3
44.6
714.6
704.9
21.2
1.6
46.0
773.8
764.0
18.7
2.8
49.5
835.0
908.9
18.0
(1.0)
51.6
977.5
442.6
785.2
1,227.8
489.8
802.8
1,292.7
545.0
861.2
1,406.2
593.6
873.1
1,466.7
687.9
891.7
1,579.6
59.8
34.6
40.8
36.7
24.5
10.0
12.6
81.6
65.0
14.3
13.6
83.9
22.3
258.2
758.1
45.6
33.5
40.6
38.6
27.1
12.0
24.6
82.6
54.1
13.7
15.8
73.3
22.6
261.7
745.8
46.7
37.2
25.8
41.0
28.2
13.5
21.1
86.5
64.8
14.5
14.6
49.4
21.9
132.4
597.4
20.3
40.7
38.7
40.6
29.3
17.5
21.1
94.0
60.2
14.3
18.1
53.7
28.9
284.2
761.7
55.0
41.4
31.2
45.5
30.5
15.5
19.6
111.1
54.2
15.0
16.5
46.7
29.7
289.3
Education - Tuition , Fees and Charges:
Educational Fees, Licenses and Taxes3
Lottery to Education
Subtotal
Agencies’ Administrative Trust Funds:
General Inspection Fees and Licenses
Citrus Inspection Fees and Licenses
Other D.O.S. Fees, Licenses and Taxes
Corporation Trust Fund Fees
D.O.I. and Treas Fees, Licenses & Taxes
Citrus Taxes
Hunting and Fishing Licenses
Professional Fees and Licenses
Drivers' Licenses and Fees
Lottery to Administration3
Subtotal
A-15
801.2
(Five Year History of Trust Fund and General Revenues - continued)
1997-98
1998-99
1999-2000
2000-01
2001-02
Tobacco Tax
Lottery to Prizes
Interest Earnings
Other Trust
Subtotal
Total Trust Fund Revenue
Less General Revenue Service Charge
Net Trust Fund Revenue
157.8
1,022.1
531.0
2,048.7
3,759.6
8,959.8
(350.4)
8,609.4
158.5
1,048.4
572.5
2,213.2
3,992.6
9,417.7
(369.2)
9,048.5
160.0
1,272.9
459.5
1,928.6
3,821.0
9,362.8
(373.7)
8,989.2
157.3
1,140.5
639.7
1,363.4
3,300.9
9,284.2
(328.3)
8,955.9
159.8
1,165.8
512.7
1,601.1
3,439.4
9,833.0
(309.0)
9,524.0
Revenues Shared With Local Governments
and School Districts
Sales and Use Tax1
Motor Fuel Tax
Gross Receipts Tax
Mtr Vehicle and Mobile Home Licenses
Tobacco Taxes
Other Fees, Licenses and Taxes4
Total Local Government
1,095.5
9.7
56.1
67.9
29.9
368.8
328.8
1.1
5.0
634.2
121.4
168.1
0.0
2,886.6
1,166.5
9.9
63.5
80.5
29.9
413.2
343.6
0.5
5.1
639.6
122.6
162.2
0.0
3,037.2
1,264.1
10.9
64.7
81.9
29.9
369.5
353.3
0.7
4.5
666.2
123.3
157.8
0.0
3,126.7
1,800.9
11.3
70.0
87.4
0.0
36.2
358.7
0.8
4.5
686.4
124.0
12.0
0.0
3,192.0
1,845.8
10.8
60.7
99.1
0.0
1.5
369.3
0.9
4.6
769.8
127.2
11.2
14.1
3,314.9
Donations and Federal Assistance
Counties and Cities
U.S. Government
CFS TANF Grants
HRS/AHCAMedicaid Grants
HRS/All Other Grants
Education Grants
Transportation Grants
Labor and Workforce Innovation Grants5
Other Grants
Other Donations/Federal Assistance
Total Donations/Federal Assistance
77.1
8,117.1
81.6
3,534.0
944.0
1,105.6
695.2
437.4
1,319.4
246.5
8,440.7
78.1
9,004.7
48.8
3,696.2
1,236.6
1,229.4
725.5
468.7
1,599.6
268.3
9,351.1
76.8
10,140.1
2.7
4,194.4
1,350.3
1,340.6
1,029.0
381.0
1,842.1
309.5
10,526.3
85.8
11,527.2
0.0
4,836.6
1,492.8
1,564.3
1,278.7
276.7
2,078.2
358.9
11,971.8
92.3
13,406.9
0.0
5,598.1
1,592.6
1,812.1
1,350.5
665.4
2,388.1
872.5
14,371.6
Summary of Trust Fund and General Revenue
General Revenue
Trust Fund
Revenues Shared with Local Governments
Donations & Fed Assistance
1997-98
16,951.8
8,609.4
2,886.6
8,440.7
1998-99
17,869.0
9,048.5
3,037.2
9,351.1
1999-20003
18,800.1
8,989.2
3,126.7
10,526.3
2000-01
19,159.7
9,284.2
3,192.0
11,971.8
2001-02
19,385.3
9,833.0
3,314.9
14,371.6
$36,888.5
$39,305.8
$41,442.3
$43,607.8
$46,904.7
Other Trust Fund Revenues for State Use:
Total Direct Revenues
Source: Florida Consensus Estimating Conference Revenue Analysis Fiscal Years 1970-71 through 2010-2011 (Vol. 18), Spring, 2002.
1
2
3
4
5
Numbers may not add due to rounding.
The Trust Fund portion of each tax source may include a General Revenue service charge.
Beginning in Fiscal Year 2001-02, Sales and Gross Receipts Taxes include their portions of Communications Services Tax.
Beginning in Fiscal Year 2001-02, includes portion of Communications Services Tax.
Department of Labor Grants for Fiscal Years 1996-97 through 1999-2000, Department of Workforce Innovation was created in Fiscal Year 2000-01.
A-16
FINANCIAL RETROSPECT AND OUTLOOK STATEMENTS
Combined General Revenue and Working Capital Funds
Retrospect
Recurring
Funds
Non-Recurring
Funds
Total
All
Funds
Funds Available 2001-02
Balance forward from 2000-01 . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer from trust funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Midyear reversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancellation of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FCO reversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reappropriation from 2000-01 certified forward . . . . . . . . . . . . .
Federal funds interest earnings rebate . . . . . . . . . . . . . . . . . . . .
Total 2001-02 funds available . . . . . . . . . . . . . . . . . . . . . . . . .
$0.0
0.0
19,089.3
0.0
0.0
0.0
0.0
0.0
(5.4)
$19,083.9
Expenditures 2001-02
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aid to Local Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Capital Outlay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Capital Outlay - ALG . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non operating disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to Budget Stabilization Fund . . . . . . . . . . . . . . . . . . . .
Total 2001-02 expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,298.6
8,289.9
17.2
0.0
0.0
0.0
$18,605.7
$350.6
23.9
60.6
78.0
0.6
46.9
$560.6
$10,649.2
8,313.8
77.8
78.0
0.6
46.9
$19,166.3
Ending Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$478.2
$506.0
$984.2
A-17
$488.7
0.3
239.2
167.1
129.6
0.6
23.5
17.6
0.0
$1,066.6
$488.7
0.3
19,328.5
167.1
129.6
0.6
23.5
17.6
(5.4)
$20,150.5
Combined General Revenue and Working Capital Funds
Financial Outlook Statement
FY 2002-03 and FY 2003-04
1
Total
Recurring
Funds
FUNDS AVAILABLE 2002-03
Estimated revenues - March 14, 2003 REC . . . . . . . . . . . . . . . .
Transfer from trust funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancellation of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FCO reversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal settlements per AG memo . . . . . . . . . . . . . . . . . . . . . . . .
$
0.0
18,946.2
0.0
0.0
0.0
0.0
0.0
(4.3)
$18,941.9
EFFECTIVE APPROPRIATIONS 2002-03
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aid to Local Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed capital outlay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed capital outlay/ALG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to Budget Stabilization Fund . . . . . . . . . . . . . . . . . . . .
Reappropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to Campaign Financing Trust Fund . . . . . . . . . . . . . . .
State Board of Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Emergency/disaster spending authority . . . . . . . . . . . . . . . . . . .
Reserves due to vetoed trust fund items . . . . . . . . . . . . . . . . . .
$9,441.7
10,587.7
15.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Total 2002-03 effective appropriations 2,3 . . . . . . . . . . . . . . . .
$20,044.5
Ending Balance (Working Capital Fund) . . . . . . . . . . . . . . . . . .
($1,102.6)
FUNDS AVAILABLE 2003-04
Estimated revenues - March 14, 2003 REC . . . . . . . . . . . . . . . .
Unused appropriations 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancellations of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FCO reversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Recurring
All
Funds
$
984.2
664.2
197.3
29.0
2.0
3.6
5.8
0.0
$1,886.1
Funds
$
984.2
19,610.4
197.3
29.0
2.0
3.6
5.8
(4.3)
$20,828.0
$435.8
29.0
88.2
48.0
18.0
8.4
6.5
0.4
30.0
$9,877.5
10,616.7
103.3
48.0
18.0
8.4
6.5
0.4
30.0
(11.0)
$653.3
(11.0)
$20,697.8
$1,232.8
$130.2
$0.0
19,750.9
0.0
$130.2
367.8
31.2
$130.2
20,118.7
31.2
0.0
0.0
0.0
(4.3)
$19,746.6
160.0
2.0
2.0
0.0
$693.2
160.0
2.0
2.0
(4.3)
$20,439.8
Budget Stabilization Fund 5
Balance for Fiscal Year 2001-02 . . . . . . . . . . . . . . . . . . . . . . . .
Estimated Balance for Fiscal Year 2002-03 . . . . . . . . . . . . . . . .
Estimated Balance for Fiscal Year 2003-04 . . . . . . . . . . . . . . . .
$940.9
$958.9
$966.4
Source: Office of Economic and Demographic Research. March 14, 2003 Revenue Estimating Conference.
1
Estimates of future results are statements of opinion based on the most recent information available, which is believed to be accurate. Such estimates
are subject to risks and uncertainties which may cause actual results to differ materially from those set forth herein. This financial statement is based on
current law as it is currently administered. It does not include the potential effect of any legal actions which might affect revenue appropriations. In
addition, it does not recognize any deficits in any spending programs unless specifically stated.
2
3
4
5
Under current administrative practices, the Working Capital Fund receives transfers from the General Revenue Fund to the extent there is a year-end surplus
projected in the General Revenue Fund.
The General Appropriations Act authorizes up to $9.8 million to be loaned to the Department of Children and Family Services if needed, to be repaid
by the end of Fiscal Year 2002-03. This loan is not included in this table.
This amount is an estimate of unused appropriations from fiscal year 2002-2003, and includes $75 million appropriated for education which is not expected
to be used due to reduced estimates of student population growth.
Monies in the Budget Stabilization Fund are available to the legislature to address a budget shortfall, as described in "STATE FINANCIAL OPERATIONS Budget Shortfall" in this Appendix A.
A-18
Actual and Projected General Revenues
The actual general revenue collections for Fiscal Year 2001-02 of $19,744.0 million were $565.9 million or 3.0%, more than
collections for Fiscal Year 2000-01. The general revenue projections adopted at the March 14, 2003 meeting of the Revenue Estimating
Conference for Fiscal Years 2002-03, 2003-04 and 2004-05 are also shown in the following table.
General Revenues
Fiscal Years 2001-02 through 2004-05
2001-02
Actual
2002-03
2003-04
Estimate % Change
Sales Tax- GR . . . . . . . . . . . . . .
$14,646.7
$14,485.2
Beverage Tax & Licenses . . . . . .
533.0
536.5
Corporate Income Tax . . . . . . . .
1,074.2
Documentary Stamp Tax . . . . . .
602.9
Tobacco Tax . . . . . . . . . . . . . . . .
Insurance Premium Tax . . . . . . .
1
(1.1)%
Estimate
$15,238.6
2004-05
% Change
5.2%
1
Estimate % Change1
$16,209.6
6.4%
0.7
547.3
2.0
557.3
1.8
1,085.0
1.0
1,265.0
728.3
20.8
571.4
16.6
1,454.8
15.0
269.9
268.2
(0.6)
268.7
355.1
379.7
6.9
404.4
Pari-Mutuels Tax . . . . . . . . . . . .
20.5
20.5
0.0
20.3
(1.0)
Intangibles Tax . . . . . . . . . . . . . .
685.2
733.4
7.0
555.1
(24.3)
531.3
(4.3)
Estate Tax . . . . . . . . . . . . . . . . .
766.0
549.7
(28.2)
369.0
(32.9)
216.1
(41.4)
Interest Earnings . . . . . . . . . . . .
252.9
261.5
3.4
239.2
(8.5)
290.0
21.2
Driver’s Licenses . . . . . . . . . . . .
56.0
58.1
3.8
69.0
18.8)
71.4
3.5
Medical & Hospital Fees . . . . . . .
159.4
143.9
(9.7)
145.6
1.2
151.0
3.7
(21.5)
527.4
(7.7)
0.2
264.5
(1.6)
6.5
421.0
4.1
19.8
(2.5)
Auto Title & Lien Fees . . . . . . . .
28.4
28.9
1.8
29.6
2.4
30.4
2.7
Severance Taxes . . . . . . . . . . . .
17.1
17.1
0.0
17.2
0.6
17.2
0.0
Corporation Filing Fees . . . . . . .
115.7
120.2
3.9
124.1
3.2
126.1
1.6
Service Charges . . . . . . . . . . . . .
359.3
374.8
4.3
364.8
(2.7)
366.2
0.4
Other Taxes, Licenses & Fees . .
226.8
220.2
2.9
224.8
2.1
230.5
2.5
Less: Refunds . . . . . . . . . . . . . . .
(425.1)
(400.8)
(5.7)
(335.4)
(16.3)
(353.0)
5.2
Net General Revenue: . . . . . . . .
$19,744.0
$19,610.4
Source:
1
0.7%
$20,118.7
2.6%
$21,131.6
5.0%
Office of Economic and Demographic Research, March 14, 2003 Consensus Revenue Estimating Conference results.
Represents percentage change from prior year, based on current estimates.
The projections are based on the best information available when the estimates are made. Investors should be aware that there
have been material differences between past projections and actual general revenue collections; no assurance can be given
that there will not continue to be material differences relating to such amounts.
A-19
A-20
$ 41,796.3
257.9
9,956.9
2,268.4
3,015.4
13,469.0
$ 12,828.7
$ 23,306.7
19.7
9,333.8
$ 7,063.4
8.5
195.2
5,032.6
75.4
85.5
$ 1,666.2
$ 6,727.3
-
143.7
4,946.1
39.1
375.0
2,019.5
82.3
$ 1,516.1
336.1
8.5
51.5
86.5
36.3
3.2
150.1
FCO
9,003.0
$ 2,555.7
$
$
516.8
15.9
75.5
133.4
38.1
23.6
230.3
FCO
-
93.2
4,844.6
68.8
50.8
15.9
168.7
4,978.0
106.9
74.4
$ 43,732.8 $ 7,187.0
273.7
9,426.8
2,377.2
3,107.9
14,838.0
$ 13,709.2 $ 1,843.1
$ 24,350.6 $ 6,670.2
26.9
8,671.2
2,122.8
490.5
10,067.6
$ 2,971.6 $ 1,612.8
$ 19,382.2 $
246.8
755.6
254.4
2,617.4
4,770.4
$ 10,737.6 $
Operating
2000-01
$ 39,088.0
297.0
2,977.2
2,464.3
3,110.6
16,833.3
$ 13,405.6
$ 19,974.7
194.6
$ 9,302.6
-
136.3
6,833.2
20.0
41.5
$ 2,271.6
$ 9,108.0
-
71.5
6,807.5
1.0
27.1
$ 2,200.9
$
-
64.8
25.7
19.0
14.4
70.7
FCO
167.9
0.6
49.8
38.3
28.0
0.3
50.9
FCO
-
76.3
6,098.0
11.4
26.8
0.6
126.1
6,136.3
39.4
27.1
$ 42,213.0 $ 8,196.0
291.4
3,931.5
2,380.6
3,243.2
18,394.6
$ 13,971.7 $ 1,866.5
$ 21,723.5 $ 8,028.1
43.5
2,983.7
2,086.2
568.8
12,860.3
$ 3,181.0 $ 1,815.6
$ 20,489.5 $
247.9
947.8
294.4
2,674.4
5,534.3
$ 10,790.7 $
Operating
2002-03
Fiscal Year 2001-02 appropriations reflect the net appropriations by the Legislature from the regular and special sessions. The decline in appropriation from Fiscal Year
2000-01 to Fiscal Year 2001-02 is due to the removal of $6.5 billion of double budgeting transfers from the budget process.
1
67.5
2,267.7
2,105.0
536.4
11,773.1
$ 3,225.0
$ 19,113.3
229.5
709.5
359.3
2,574.2
5,060.2
$ 10,180.6
$
2001-021
Operating
Source: Annual Conference Committee Report on General Appropriations Bills as passed by the Legislature before veto messages.
Total All Funds
Judicial Branch
General Government
Growth Mngmt, & Transportation
Natural Resources, Environment
Criminal Justice & Corrections
Human Services
Education
Total All Funds
Total Trust Funds
Judicial Branch
General Government
Human Services
Education
Trust Funds
$ 18,489.6
238.2
Judicial Branch
Total General Revenue
623.1
General Government
248.9
2,640.4
4,466.0
$ 10,273.0
Human Services
Operating
General Revenue
1999-2000
Education
Program
(In Millions of Dollars)
Operating and Fixed Capital Outlay Budget By Program Area
Fiscal Years 1999-2000 through 2002-03
Five Year History of Legislative Appropriations
1998-991
1999-20001
2000-012
2001-022
2002-032
Administered Funds
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$237,403,166
($62,397,126)
$390,710
$0
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,592,515
(28,848,722)
0
110,000
$27,161,724
125,443,724
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
303,995,681
(91,245,848)
390,710
110,000
152,605,448
Agency/Health Care Administration
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,290,281,904
2,348,402,850
2,657,075,294
2,900,090,507
3,313,236,115
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,970,266,022
5,480,762,491
6,829,917,014
7,746,300,351
8,760,179,770
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,260,547,926
7,829,165,341
9,486,992,308
10,646,390,858
12,073,415,885
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
7,630,205
188,590,604
190,348,697
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
910,323,520
988,154,908
1,015,818,137
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
917,953,725
1,176,745,512
1,206,166,834
144,121,919
Agency/Workforce Innovation
Agriculture/Consumer Svcs
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
124,203,843
145,441,682
152,043,409
134,612,771
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
124,491,196
141,599,495
200,957,708
207,616,204
176,662,921
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
248,695,039
287,041,177
353,001,117
342,228,975
320,784,840
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,288,132
35,557,218
35,245,188
34,380,166
34,880,120
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,268,441
30,928,913
31,821,788
32,611,660
33,646,060
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,556,441
66,486,131
67,066,976
66,991,826
68,526,180
Banking and Finance
Business/Professional Reg
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
0
500,000
716,824
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163,500,939
163,004,198
129,200,966
123,082,495
153,699,802
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163,500,939
163,004,198
129,200,966
123,582,495
154,416,626
Children & Families
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,541,686,998
1,614,421,900
1,668,808,131
1,534,004,694
1,696,995,752
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,842,826,889
2,116,347,300
1,866,096,539
1,486,818,612
2,123,758,502
WCF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
16,223,630
0
0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,384,513,887
3,730,769,200
3,551,128,300
3,020,823,306
3,820,754,254
83,772,622
79,653,609
67,873,516
56,181,659
73,671,430
Citrus
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Community Affairs
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,366,520
26,204,866
17,498,505
20,026,934
13,588,435
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
624,907,323
729,429,675
699,690,538
866,983,074
726,825,617
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
640,273,843
755,634,541
717,189,043
887,010,008
740,414,052
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,528,437,487
1,572,364,106
1,564,335,876
1,562,670,890
1,616,034,367
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
140,972,628
114,494,113
111,246,487
101,235,798
150,732,031
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,669,410,015
1,686,858,219
1,675,582,363
1,663,906,688
1,766,766,398
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,650,268,741
10,345,361,312
10,768,515,832
10,010,721,117
10,862,130,993
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,819,636,221
4,042,851,007
4,891,460,443
5,706,446,823
4,995,287,495
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,489,893,962
14,388,212,319
15,659,976,275
15,717,167,940
15,857,418,488
109,745,104
Corrections
Education
Elder Affairs
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98,000,439
100,501,663
101,098,270
109,545,084
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
116,058,838
139,470,916
92,056,828
122,802,075
219,864,786
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
214,059,277
239,972,579
193,155,098
232,347,159
329,609,890
Environmental Protection
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128,104,344
82,258,239
211,713,182
96,278,925
102,418,408
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,409,955,141
1,439,713,132
1,666,263,027
1,673,783,268
1,863,475,291
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,538,059,485
1,521,971,371
1,877,976,209
1,770,062,193
1,965,893,699
Fish/Wildlife Conservation Commission
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,519,089
46,550,505
49,712,682
46,436,960
62,235,604
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,730,425
113,037,196
116,265,588
127,713,835
155,597,563
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86,249,514
159,587,701
165,978,270
174,150,795
217,833,167
A-21
(Five Year History of Legislative Appropriations - Continued)
1998-991
1999-20001
2000-012
2001-022
2002-032
Executive Office of the Governor
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,335,116
90,502,002
60,458,203
103,098,799
72,826,819
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86,998,213
89,224,990
68,107,211
74,222,402
66,029,037
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
150,331,329
179,726,992
128,565,414
177,321,201
138,855,856
Health
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
437,900,612
407,480,180
431,209,027
413,417,216
423,150,590
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,204,177,792
1,323,155,745
1,323,391,458
1,422,983,573
1,770,322,821
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,642,078,404
1,730,635,925
1,754,600,485
1,836,400,789
2,193,473,411
127,155,850
Highway Safety and Motor Vehicles
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113,555,389
124,405,788
140,061,148
114,979,007
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204,699,067
216,609,626
216,952,555
235,307,710
255,407,626
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
318,354,456
341,015,414
357,013,703
350,286,717
382,563,476
109,022,879
115,586,745
125,528,008
133,389,995
161,090,907
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
362,893,304
392,641,002
402,390,169
396,844,934
419,679,645
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,896,718
39,470,327
36,394,695
44,358,690
58,729,533
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
395,790,022
432,111,329
438,784,864
441,203,624
478,409,178
540,634,109
Insurance and Treasurer
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Justice Administration
Juvenile Justice
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
524,441,350
563,265,287
564,491,586
531,623,152
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102,590,873
116,813,223
140,749,150
87,136,593
99,816,858
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
627,032,223
680,078,510
705,240,736
618,759,745
640,450,967
-
Labor and Employment Security
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,016,696
43,738,167
8,586,834
705,848
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,678,177,471
2,620,796,725
502,890,139
60,061,477
-
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,619,193,167
2,664,534,892
511,476,973
60,767,325
-
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81,184,903
89,190,209
100,694,513
99,397,066
105,726,852
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,438,008
55,502,340
104,247,964
138,327,627
160,024,505
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
142,622,911
144,692,549
204,942,477
237,724,703
265,751,357
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,261,623
32,795,929
35,778,238
28,854,678
31,738,308
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,544,398
88,036,839
88,585,537
101,986,575
113,276,398
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
104,805,921
120,832,768
124,363,775
130,841,253
145,014,706
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
159,469,697
166,784,038
151,405,107
158,479,773
190,023,130
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,114,510
6,037,183
4,819,575
1,760,490
2,022,384
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168,584,207
172,821,221
156,224,682
160,240,263
192,045,514
142,223,740
139,573,233
141,667,953
142,546,080
140,885,212
14,372,081
Law Enforcement
Legal Affairs
Legislative Branch
Lottery
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Services (General Government)
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,018,683
33,370,151
26,997,830
13,352,151
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
355,679,284
400,767,745
243,444,958
383,783,491
6,934,298
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
396,697,867
434,137,896
270,442,788
397,135,642
21,306,379
Management Services
(Retirement Benefits Admin.)
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,112,742
7,458,670
8,282,256
9,235,284
9,698,912
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,119,437,118
2,461,213,976
2,754,637,704
18,327,935
17,136,695
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,126,549,860
2,468,672,646
2,762,919,960
27,563,219
26,835,607
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,780,006
11,177,224
13,931,730
19,691,027
14,922,820
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,755,951
25,536,476
50,529,992
95,610,793
35,314,030
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,535,957
36,713,700
64,461,722
115,301,820
50,236,850
Military Affairs
A-22
(Five Year History of Legislative Appropriations - Continued)
1998-991
1999-20001
2000-012
2001-022
2002-032
Parole Commission
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,987,449
10,425,330
10,411,464
8,551,861
8,982,469
26,377,039
26,733,099
26,821,000
31,450,525
27,194,475
Public Service Commission
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115,910,662
137,547,478
137,455,694
121,086,167
126,828,207
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,893,127,496
3,066,882,741
2,435,320,712
292,990,158
325,560,935
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,009,038,158
3,204,430,219
2,572,776,406
414,076,325
452,389,142
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
226,809,636
246,675,853
272,056,163
230,273,839
279,265,414
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,871,490
19,237,174
26,121,952
44,677,516
13,557,520
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
240,681,025
265,913,027
298,178,115
274,951,355
292,822,934
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91,332,078
87,192,694
102,049,831
115,923,399
98,934,806
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,865,466
60,798,058
58,187,933
65,213,374
74,231,349
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
148,197,544
147,990,752
160,237,764
181,136,773
173,166,155
State Court System
State
Transportation
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
200,215,063
25,271,897
0
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,801,468,230
4,497,308,931
7,160,002,255
5,752,576,296
5,241,613,583
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,801,468,230
4,497,308,931
7,360,217,318
5,777,848,193
5,241,613,583
Veteran’s Affairs
GR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,361,052
5,391,572
10,806,109
10,166,164
7,839,468
TF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,134,129
20,409,510
21,199,295
27,242,647
25,304,279
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,495,181
25,801,082
32,005,404
37,408,811
33,143,747
General Revenue Fund . . . . . . . . . . . . . . . . .
18,002,562,333
18,704,708,789
19,911,348,249
19,038,920,914
20,645,393,542
Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . .
27,351,689,471
29,952,138,009
33,142,774,008
28,393,684,719
29,681,876,230
Working Capital . . . . . . . . . . . . . . . . . . . . . . .
0
0
16,223,630
0
0
Total All Funds . . . . . . . . . . . . . . . . . . . . . . . .
$45,354,251,704
$48,656,846,798
$53,070,345,887
47,432,605,633
50,327,269,772
Percent Change . . . . . . . . . . . . . . . . . . . . . . .
7.04%
7.28%
9.07%
(10.62%)
6.10%
Total by Fund:
1
Net Appropriations, Executive Office of the Governor, Florida’s Final Budget Report and Ten-Year Summary of Appropriations Data, Vol. 22, (October 15,
1999)
2
Executive Office of the Governor, Final Budget Reports (October 15, 2001 and November 18, 2002). Includes general and supplemental appropriations,
adjusted for governor’s veto. Figures for 2002-03 are estimates.
A-23
STATE DEBT
Bonds outstanding under this authorization include financings
for the State University System, individual universities, public
schools, State owned office facilities, and toll roads. The
Constitution specifically authorizes the issuance of bonds to fund
student loans; to finance housing; and to refund outstanding bonds
at a lower net interest cost. The Constitution was amended in
1998 to expressly permit the issuance of bonds pledging a
dedicated State tax source for the purposes of conservation,
outdoor recreation, water resource development, restoration of
natural systems, or historic preservation.
As a general rule, bonds of the State or its agencies are
issued by the Division of Bond Finance pursuant to the State Bond
Act, ss. 215.57-.83, Florida Statutes. During the 2001 Session the
Florida Legislature formalized in statute an annual Debt
Affordability Study to be used as a tool for measuring, monitoring
and managing the State’s debt. The State debt fiscal responsibility
policy, s. 215.98, Florida Statutes, establishes debt service to
revenues as the benchmark debt ratio to estimate future debt
capacity, using a target ratio of 6% and a cap of 7%. The
estimated future debt capacity is intended to provide legislative
policy makers with information to measure the financial impact of
new financing programs and to assist them in formulating capital
spending plans.
Bonds are also outstanding, which are payable from
documentary stamp taxes deposited in the Land Acquisition Trust
Fund for conservation and recreation purposes.
The study first looks at total State debt outstanding,
separating the debt into net tax-supported debt and self supporting
debt. Net tax-supported debt is repaid by the State from a
specified tax revenue source or general appropriation of the State.
Self supporting debt is reasonably expected to be repaid from
project revenue or loan repayments. Some but not all of State debt
is additionally secured by the full faith and credit of the State.
Other Obligations
Although most debt of the State or its agencies is issued
through the Division of Bond Finance, there are other entities
which issue bonds or incur other long term obligations which are
secured by State revenues. These include the Florida Housing
Finance Corporation, the Florida Ports Financing Commission, the
Correctional Privatization Commission, the Department of
Corrections, the Department of Juvenile Justice, the Department of
Children and Families, the Florida Hurricane Catastrophe Fund
Finance Corporation, the Inland Protection Financing Corporation
and the Investment Fraud Restoration Financing Corporation. The
Florida Legislature has also dedicated 2.59% of cigarette tax
collections to the H. Lee Moffitt Cancer Center and Research
Institute, for 10 years, which are pledged to secure bonds issued
by the City of Tampa. The City of Tallahassee has recently issued
bonds to finance relocation of the developmental research school
of Florida State University. The bonds are payable from lease
revenues appropriated to the University each year. The State
Comptroller, a predecessor to the Chief Financial Officer, has
entered into a consolidated equipment financing program for State
agencies, which is subject to annual appropriation.
State Full Faith and Credit Debt
Article VII, Section 11(a) of the Florida Constitution
authorizes the issuance of bonds pledging the full faith and credit
of the State to finance or refinance State capital outlay projects
upon approval by vote of the electors, provided that the
outstanding principal amount may not exceed 50% of total State
tax revenues for the two preceding fiscal years. There are
currently no bonds outstanding under this authorization.
All of Florida’s full faith and credit debt which is currently
outstanding has been issued under separate constitutional
authority which also authorizes the pledge of a dedicated tax or
other revenue source as well. Such debt includes bonds for
pollution control and abatement and solid waste disposal
(operating revenues, assessments); right-of-way acquisition and
bridge construction (motor fuel or special fuel taxes); public
education capital outlay (gross receipts taxes); roads within a
county (second gas tax); and school districts or community
colleges (motor vehicle license revenues). Although these bonds
are not subject to the above-referenced debt limitation, each
program has debt service coverage tests which must be met prior
to issuance.
The 2000 Legislature authorized creation of the Tobacco
Settlement Financing Corporation with the power to issue up to $3
billion in revenue bonds (not to exceed $1.5 billion annually) to
purchase the State’s interest in the tobacco litigation settlement
agreement, subject to legislative approval. No bonds have been
approved by the legislature or issued by the Tobacco Settlement
Finance Corporation.
State Revenue Bonds
The 2000 Legislature also created the Florida Water Pollution
Control Financing Corporation to finance projects through the
State’s Department of Environmental Protection which are
authorized under the federal Clean Water Act. The corporation is
authorized to issue bonds secured through the repayment of loans
to local government entities. The principal amount of such bonds
which may be issued is limited to $100 million in Fiscal Year 200203.
The Florida Constitution authorizes the issuance of bonds to
finance or refinance State capital outlay projects, which are
payable from funds derived directly from sources other than State
tax revenues.
A-24
Debt Outstanding by Type and Program1
As of June 30, 2002
(In Million Dollars)
Amount
$ 15,421.7
$ 3,800.5
$ 19,222.2
Debt Type
Net Tax-Supported Debt
Self Supporting Debt
Total State Debt Outstanding
Dollar Amount
Education
Public Education Capital Outlay
Capital Outlay
Lottery
University System Improvement
Total Education
Environmental
Preservation 2000 / Florida Forever
Conservation and Recreation
Save Our Coast
Inland Protection (Tanks)
Total Environmental
Transportation
Right-of-Way and Bridge Acquisition
Florida Ports
Total Transportation
Appropriated Debt / Other
Facilities
Master Lease
Prisons
Juvenile Justice
Children & Families
Investment Fraud
Radio Tower Lease
Affordable Housing
Florida High Charter School
Lee Moffitt Cancer Center
Total Appropriated Debt
Total Net Tax-Supported Debt Outstanding
$ 7,677.7
943.0
1,527.5
211.9
$ 10,360.0
2,499.9
22.7
158.1
35.2
2,715.9
982.2
345.3
1,327.5
390.7
23.3
175.4
19.2
35.0
5.9
289.0
23.3
56.3
1,018.2
$ 15,421.7
Self Supporting Debt
Education
University Auxiliary Facility Revenue Bonds
Environmental
Florida Water Pollution Control
Pollution Control
Transportation
Toll Facilities
Orlando-Orange Co. Expressway Authority
Road and Bridge
Total Transportation
Total Self Supporting Debt Outstanding
$
439.1
48.1
0.1
$ 2,011.4
1,005.3
296.5
$
3,313.2
3,800.5
Source: 2002 Report - Debt Affordability Study Update.
1
Excludes refunded debt.
Per Capita Tax Supported Debt
For Fiscal Years Ended June 30
Year
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
20012
20022
1
2
Total Principal
Outstanding1
(thousands)
$4,517,700
5,202,700
5,991,000
7,232,700
8,190,100
9,130,600
10,270,100
11,754,100
13,087,200
14,117,453
14,490,486
15,421,695
Population
(thousands)
13,196
13,424
13,609
13,879
14,149
14,412
14,713
14,929
15,482
15,882
16,248
16,582
Per
Capita
$342
388
440
521
579
634
698
787
845
889
892
930
State of Florida, Debt Affordability Analysis; excludes refunded debt.
Population estimate by the Office of Economic and Demographic Research, Florida Legislature, (February, 2002).
A-25
A-26
Source: 2001 Report Debt Affordability Study Update
Fiscal
Year
Principal
Interest
Total
2003 $
604,621 $
773,571 $ 1,378,191
2004
596,995
782,188
1,379,182
2005
626,073
752,775
1,378,848
2006
649,055
720,828
1,369,883
2007
682,391
687,134
1,369,525
2008
708,555
652,478
1,361,033
2009
736,982
617,341
1,354,323
2010
757,001
580,013
1,337,014
2011
787,993
540,955
1,328,948
2012
819,852
500,330
1,320,183
2013
853,791
456,750
1,310,541
2014
603,957
411,022
1,014,979
2015
609,102
379,301
988,402
2016
626,840
347,409
974,250
2017
630,898
315,091
945,989
2018
609,694
282,381
892,075
2019
569,445
251,223
820,668
2020
553,165
221,776
774,941
2021
550,535
193,338
743,873
2022
539,895
145,509
685,404
2023
523,865
117,641
641,506
2024
443,955
90,390
534,345
2025
387,355
68,007
455,362
2026
239,255
48,186
287,441
2027
199,310
35,863
235,173
2028
145,880
25,789
171,669
2029
111,350
18,308
129,658
2030
83,105
12,424
95,529
2031
51,175
8,463
59,638
2032
21,930
5,898
27,828
2033
6,550
4,801
11,351
2034
6,550
4,474
11,024
2035
6,550
4,146
10,696
2036
6,550
3,819
10,369
2037
6,550
3,492
10,042
2038
6,550
3,164
9,714
2039
6,550
2,837
9,387
2040
6,550
2,509
9,059
2041
6,550
2,182
8,732
2042
6,550
1,854
8,404
2043
6,550
1,527
8,077
2044
6,550
1,199
7,749
2045
6,550
872
7,422
2046
6,025
551
6,576
244
6,744
2047
6,500
$ 15,421,695 $ 10,080,052 $ 25,501,746
In 30 Years
99.4%
In 20 Years
85.1%
In 10 Years
45.2%
In 5 Years
48602.1%
Percent of
Debt Retired
Principal
Interest
$ 109,735 $ 198,130
116,205
193,078
117,628
187,014
112,905
180,921
123,480
175,095
129,620
168,590
140,475
161,769
144,665
154,630
140,320
147,060
159,555
139,696
165,895
131,311
164,755
122,449
169,690
113,588
180,065
104,408
185,880
94,652
193,335
84,995
202,100
74,913
191,790
64,464
188,045
54,607
178,155
45,048
166,890
35,386
105,345
26,453
110,905
21,006
88,235
15,272
90,890
10,842
47,390
6,322
25,180
3,872
18,530
2,489
10,105
1,590
5,270
1,136
5,535
873
5,815
596
6,105
305
$ 3,800,493 $ 2,722,560
Total
$ 307,865
309,283
304,642
293,826
298,575
298,210
302,244
299,295
287,380
299,251
297,206
287,204
283,278
284,473
280,532
278,330
277,013
256,254
242,652
223,203
202,276
131,798
131,911
103,507
101,732
53,712
29,052
21,019
11,695
6,406
6,408
6,411
6,410
$ 6,523,053
Self-Supporting Debt
In 30 Years
99.5%
In 20 Years
81.9%
In 10 Years
34.1%
In 5 Years
15.3%
Percent of
Debt Retired
Total State Debt Outstanding As of June 30, 2002
(In Thousands of Dollars)
Principal
$
714,356
713,200
743,701
761,960
805,871
838,175
877,457
901,666
928,313
979,407
1,019,686
768,712
778,792
806,905
816,778
803,029
771,545
744,955
738,580
718,050
690,755
549,300
498,260
327,490
290,200
193,270
136,530
101,635
61,280
27,200
12,085
12,365
12,655
6,550
6,550
6,550
6,550
6,550
6,550
6,550
6,550
6,550
6,550
6,025
6,500
$ 19,222,188
Interest
$
971,701
975,266
939,789
901,749
862,228
821,068
779,110
734,643
688,016
640,026
588,061
533,472
492,889
451,817
409,742
367,376
326,136
286,240
247,945
190,556
153,027
116,842
89,013
63,458
46,705
32,111
22,180
14,913
10,052
7,034
5,674
5,070
4,452
3,819
3,492
3,164
2,837
2,509
2,182
1,854
1,527
1,199
872
551
244
$ 12,802,611
Total
$ 1,686,057
1,688,465
1,683,489
1,663,709
1,668,100
1,659,244
1,656,567
1,636,309
1,616,328
1,619,434
1,607,746
1,302,184
1,271,681
1,258,723
1,226,520
1,170,405
1,097,681
1,031,195
986,525
908,606
843,782
666,142
587,273
390,948
336,905
225,381
158,710
116,548
71,332
34,234
17,759
17,435
17,107
10,369
10,042
9,714
9,387
9,059
8,732
8,404
8,077
7,749
7,422
6,576
6,744
$ 32,024,799
Total Existing Debt
In 30 Years
99.4%
In 20 Years
84.4%
In 10 Years
43.0%
In 5 Years
19.5%
Percent of
Debt Retired
Net Tax-Supported Bonds Issued Since July 1, 2002
(chronological, by date of issuance)
State Board of Education Lottery Revenue Bonds, Series 2002B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Capital Outlay Refunding Bonds, 2002 Series B . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Capital Outlay Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Public Education Capital Outlay Bonds, 2000 Series C . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Public Education Capital Outlay Refunding Bonds, 2002 Series B . . . . . . . . . . . . .
Less: Public Education Capital Outlay Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Department of Transportation Right-of-Way Acquisition and Bridge Construction Bonds, Series 2002A . . . .
Less: Right-of-Way Acquisition and Bridge Construction Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Public Education Capital Outlay Refunding Bonds, 2002 Series C . . . . . . . . . . . . .
Less: Public Education Capital Outlay Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Department of Environmental Protection Florida Forever Revenue Bonds, Series 2002B . . . . . . . . . . . . . . .
State Board of Education Public Education Capital Outlay Bonds, 2002 Series A . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Lottery Revenue Bonds, Series 2002C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Department of Management Services Florida Facilities Pool Revenue Refunding Bonds, Series 2002A . . . .
Less: Florida Facilities Pool Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Public Education Capital Outlay Bonds, 2001 Series H . . . . . . . . . . . . . . . . . . . . . .
Department of Environmental Protection Save Our Coast Refunding Revenue Bonds, Series 2003A . . . . . .
Less: Save Our Coast Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Florida Education System University System Improvement Revenue Refunding Bonds, Series 2003A . . . . .
Less: University System Improvement Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Board of Education Public Education Capital Outlay Refunding Bonds, 2003 Series A . . . . . . . . . . . . .
$150,000,000
94,740,000
(95,630,000)
100,000,000
264,470,000
(243,900,000)
250,955,000
(51,900,000)
326,000,000
(331,600,000)
150,000,000
250,000,000
233,555,000
46,910,000
(44,000,000)
282,095,000
(162,890,000)
74,575,000
(79,185,000)
50,545,000
(53,295,000)
415,585,000
(424,435,000)
$1,202,595,000
Self Supporting Bonds Issued Since July 1, 2002
(chronological, by date of issuance)
Florida Atlantic University Parking Facility Revenue Bonds, Series 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Florida International University Parking Facility Revenue Bonds, Series 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
University of Central Florida Housing Revenue Refunding Bonds, Series 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: University of Central Florida Housing Bonds refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A-27
$8,995,000
22,915,000
14,055,000
(13,525,000)
$32,440,000
STATEMENT OF ASSETS AND LIABILITIES
Administered by State Treasurer
ASSETS
Currency and Coins
Unemployment Compensation Investments Due From U.S Treasury -Unemployment TF
Deferred Compensation Assets
Bank Accounts
Consolidated Revolving Account
Total Cash, Receivables, and Other Assets
Certificates of Deposit
Securities
Total Investments
Total Assets of the Treasurer
(1)
(2)
(3)
(4)
(5)
JUNE 30, 2002
$300,000.00
2,059,742,742.08
1,224,431,277.96
303,902,919.36
471,256.70
$3,588,848,196.10
JUNE 30, 2001
$300,000.00
2,137,523,791.56
1,328,283,430.90
254,575,698.01
(781,550.24)
$3,719,901,370.23
$1,943,000,000.00
11,391,553,976.06
$13,334,553,976.06
$16,923,402,172.16
$1,997,900,000.00
10,158,934,373.20
$12,156,834,373.20
$15,876,735,743.43
LIABILITIES
JUNE 30, 2002
General Revenue Fund
Trust Fund
Working Capital Fund
Budget Stabilization Fund
Total Four Funds
(6)
(7)
Adjustments
Due to Special Purpose Accounts
Due to Deferred Compensation Participants
Due to Consolidated Revolving Account Agency Participants
Total Liabilities of the Treasurer
(8)
(2)
(4)
JUNE 30, 2001
$1,859,117,793.64
11,052,905,939.99
305,401,542.53
940,890,000.00
$14,158,315,276.16
$1,353,038,654.45
11,063,896,085.24
293,943,680.15
893,990,000.00
$13,604,868,419.84
$3,937,292.24
1,536,247,069.10
1,224,431,277.96
471,256.70
$16,923,402,172.16
$9,975,414.08
934,390,028.85
1,328,283,430.90
(781,550.24)
$15,876,735,743.43
Source: Annual Report of the State Treasurer for the Fiscal Year Ended June 30, 2002.
1
Unemployment Trust Fund - Represents U.C. Benefit Funds invested by the Federal Government and due from U.S. Treasury.
2
All assets are held in the Deferred Compensation Trust Fund for the exclusive benefit of participants and their beneficiaries. Of the plan assets, $53,755,805.30 is
Statutory Valuation Reserves.
3
Represents "Per Reconciled Cash Balance" of $324,829,673.51 as of June 30, 2002 with receipted items in transit of $22,313,264.62 and disbursed items in transit
of $1,386,510.47 which nets to $20,926,754.15. These items have cleared the bank but have not been posted to the State ledger. The Total Bank Accounts figure
does not include $10,191,231.26 held in clearing and\or revolving accounts outside the Treasury.
4
The amount due to agency participants in the Consolidated Revolving Account as of June 30, 2002 is $3,878,740.93. Of this $471,256.70 is in a financial institution
account and $3,407,484.23 is invested in Special Purpose Investment Accounts.
5
Represents Treasurer’s Special Purpose Investment Accounts held in the Treasurer’s custody and interest due to those accounts. Treasurer’s Special Purpose
Investment Accounts are investments on behalf of state agencies with funds outside the Treasurer’s Cash Concentration System and other statutorily created entities.
6
Includes Purchased Interest in the amount of $278,210.44.
7
Included in the Trust Fund Balance is $6,148,836,209.14 earning interest for the benefit of Trust Funds, Unemployment Trust Fund balance of $2,059,742,742.08, and
the remaining balance of $2,844,326,988.77 earning interest for General Revenue.
8
Represents a ($1,538,662.85) posting discrepancy within the Comptrollers records and $5,475,955.09 interest not yet receipted to State Accounts.
Note:
Total Market Value of all Securities held by the Treasury.
2002
$13,461,782,493.59
A-28
2001
$12,257,009,423.52
FLORIDA RETIREMENT SYSTEM
(Source: Florida Department of Management Services, Division of Retirement)
the member’s DROP accumulation may be paid out as a lump sum,
a rollover, or a combination of these two payout methods.
The Florida Retirement System (FRS) provides retirement,
disability and death benefits for participating public employees. The
FRS Pension Plan is a cost-sharing, multiple employer, defined
benefit plan administered by the Division of Retirement in the
Department of Management Services.
SMSC members; State University System faculty, Executive
Service staff, and Administrative and Professional Service staff;
and State Community College System faculty and certain
administrators may elect to participate in the existing optional
annuity programs for these targeted employee groups instead of
the FRS Pension Plan. Beginning in June, 2002, active FRS
Pension Plan members, Senior Management Service Optional
Annuity Program participants, and new hires may participate in a
new defined contribution program, the Public Employees’ Optional
Retirement Program (also called the FRS Investment Plan), in lieu of
the FRS Pension Plan or the Senior Management Service Optional
Annuity Program. Employees who are actively participating in the
State University System Optional Retirement Program or a State
Community College Optional Retirement Program are not eligible to
participate in the FRS Investment Plan. New hires whose positions
are eligible for participation in the State University System or State
Community College Optional Retirement Programs may participate
in one of these nonintegrated optional programs, the FRS
Investment Plan, or the FRS Pension Plan.
Membership is compulsory for employees working in regularly
established positions for a state agency, county governmental unit,
district school board, State university, State community college or
participating city or special district. Elected officials who are eligible
to participate in the Elected Officers’ Class (EOC) may elect to
withdraw from the FRS altogether or to participate in the Senior
Management Service Class (SMSC) in lieu of the EOC. Regular
Class membership covers any position that is not designated to
participate in any other membership class. There are five classes
of plan membership: Regular Class, Special Risk Class, Special Risk
Administrative Support Class, Elected Officers' Class, and Senior
Management Service Class.
Participation by cities, municipalities and special districts,
although optional, is generally irrevocable once the election to
participate is made. As of June 30, 2002, there were 837
participating employers, and 894,782 individual participants, as
follows:
Retirees & Beneficiaries . . . . . . . . . .
198,3031
Terminated Vested Participants . . . .
DROP Participants . . . . . . . . . . . . . .
Active Vested Participants . . . . . . . .
Active Non-vested Participants . . . . .
56,635
28,389
380,133
231,322
TOTAL . . . . . . . . . . . . . . . . . . . . . . .
_______________
894,782
1
Employers pay all contributions, which are determined annually
by actuarial evaluation, and adopted by the legislature (See
"Schedule of Funding Progress" below). As of June 30, 2002,
actuarial determinations are based on the following:
Actuarial Cost Method: . . . . . . . . . . . . . . . . Entry Age Normal
Amortization method: . . . . . . . . . . Level Percent of Pay, Open
Equivalent Single amortization period: . . . . . . . . . . . 30 years
Asset valuation method: . . . . . . . . . 5-year Smoothed Method
Investment rate of return: . . . . . . . . . . . . . . . . . . . . . . . . 8%
Projected salary increases: . . . . . . . . . . . . . . . . . . . . . 6.25%1
Inflation level: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5%
Cost of living adjustments: . . . . . . . . . . . . . . . . . . . . . . . . 3%
_____________
Excludes Institute of Food and Agricultural Sciences Supplemental
Program ("IFAS"), Teachers’ Retirement System Survivors’ Benefit ("TRSSB") and General Revenue payment recipients.
Members of the FRS Pension Plan receive one month of
service credit for each month in which any salary is paid. Members
vest after 6 years for service retirement benefits for all membership
classes. Members vest after 8 years for non-duty related disability
benefits. After they are vested, members are eligible for normal
retirement when they have met the minimum age or service
requirements for their membership class, which for the Regular
Class, SMSC and the EOC is age 62, or 30 years of service
regardless of age. Normal retirement for members of the Special
Risk Class and the Special Risk Administrative Support Class, after
becoming vested, is age 55, or 25 years of service regardless of
age. Early retirement may be taken any time after vesting subject to
a 5% benefit reduction for each year prior to normal retirement age.
1
Includes individual salary growth of 5% plus an age-graded merit scale
from 5% at age 20, to 1.5% at age 40, to 0.25% at age 60.
The Florida Retirement System Trust Funds are invested by a
separate agency, the State Board of Administration. The rate of
investment return for Fiscal Year 2001-02 was 8.0%, calculated
on the basis of fair value. As of June 30, 2002, the Florida
Retirement System Trust Funds were valued at $88.39 billion
(market value), and were invested in the classes and approximate
percentages as follows:
51.5%
13.0%
26.7%
4.3%
3.4%
1.1%
Retirement benefits under the FRS Pension Plan are computed
on the basis of age and/or years of service, average final
compensation and service credit. The State Constitution prohibits
increasing benefits without concurrently providing for funding the
increase on a sound actuarial basis.
Domestic Equities
Foreign Equities
Fixed Income
Real Estate
Alternative Investments
Cash and cash equivalents
For a discussion of investment policies, see “MISCELLANEOUS
- Investment of Funds - Investment by the Board of Administration”
in the body of this Official Statement. Prior to November 1, 1999,
Alternative Investments were part of the Domestic Equities Class.
FRS Pension Plan members may participate in the Deferred
Optional Retirement Program (DROP), a program which allows a
member to retire and continue employment for up to 60 months while
the member’s benefits accumulate in the FRS Trust Fund, earning
monthly interest at an equivalent annual rate of 6.5%. At termination
A-29
Financial statements are prepared using the accrual basis of
accounting, and reporting is done in accordance with Government
Accounting Standards Board requirements.
For additional information, see the Florida Retirement System
Annual Report, available by contacting the Division of Retirement,
Cedars Executive Center, 2639 North Monroe Street, Bldg. C,
Tallahassee, Florida 32399-1560.
Annuitants and Annualized Benefit Payments1
Fiscal Year
1996-97
1997-98
Annuitants
155,702
164,029
Benefits Payments (000 omitted)
$1,599,527
$1,759,703
Average Benefits
$10,273
$10,728
____________
Source: Florida Retirement System Annual Reports.
1
Excludes General Revenue, IFAS and TRS-SB recipients and payments.
2
Excludes DROP participants and accrued benefits.
1998-992
171,152
$1,979,202
$11,564
1999-002
181,026
$2,170,600
$11,991
2000-012
188,394
$2,340,020
$12,421
2001-022
198,303
$2,548,317
$12,851
Schedule of Funding Progress
Actuarial
Accrued Liability
(AAL)
Entry Age
(b)
Unfunded
AAL
(UAAL)
(b-a)
Funded
Ratio
(a/b)
Annualized
Covered
Payroll
(c)
UAAL as a
Percentage
of Covered
Payroll
((b-a)/c)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
July 1, 1998
$66,997,227
$63,205,829
$(3,791,398)
106.00%
July 1, 19991
77,795,313
68,575,249
(9,220,064)
113.45
18,998,0862
(48.53)
July 1, 2000
88,503,838
74,948,950
(13,554,888)
118.09
20,463,4032
(66.24)
2
(68.00)
(58.28)
$18,010,189
(21.05)%
July 1, 2001
95,517,948
80,993,718
(14,524,230)
117.93
21,360,862
July 1, 2002
99,405,677
86,469,774
(12,935,903)
114.96
22,195,1842
Source: Florida Department of Management Services, Division of Retirement.
1
For Fiscal Year 1998-99, contributions were based on closed, level % of pay amortization method, using a 7-year equivalent single
amortization method.
2
Includes DROP payroll.
A-30
APPENDIX B
STATE OF FLORIDA
wwwwwvwwwww
ANNUAL
FINANCIAL REPORT
wwwwwvwwwww
For the Fiscal Year
Ended June 30, 2002
JEB BUSH
GOVERNOR
TOM GALLAGHER
DEPARTMENT OF FINANCIAL SERVICES
Effective January 7, 2003, the constitutional offices of Treasurer and Comptroller were
merged into one Chief Financial Officer. This is a result of Florida voter approval of
Constitutional Revision Eight in November 1998.
wwwwwvwwwww
This document and related information is available via the
Department of Financial Services’ homepage on the
World Wide Web: www.fldfs.com
STATE OF FLORIDA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
TABLE OF CONTENTS
PAGE
Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B- 3
INDEPENDENT AUDITOR’S REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B- 7
MANAGEMENT’S DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B- 9
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
Governmental Fund Financial Statements
Fund Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets . . . . .
Statement of Revenues, Expenditures, and Changes in Fund Balances . . . . . . . . . . . . . . . . . . . . .
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities . . . . . . . . . . . . . . . .
Proprietary Fund Financial Statements
Fund Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Revenues, Expenses, and Changes in Fund Net Assets . . . . . . . . . . . . . . . . . . . . . . .
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-19
B-20
B-23
B-24
B-27
B-29
B-30
B-32
B-34
Fiduciary Fund Financial Statements
Fund Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-39
Statement of Fiduciary Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-40
Statement of Changes in Fiduciary Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-41
Component Unit Financial Statements
Component Unit Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-43
Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-44
Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-46
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-49
OTHER REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedules - General and Major Special Revenue Funds . . . . . . . . . . . . . . .
Budget to GAAP Reconciliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note A - Budgetary Beginning Fund Balance Restatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note B - Lump Sum Expenditure Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note C - Budgetary Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension Trust Fund Schedule of Funding Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information About Infrastructure Assets Reported Using the Modified Approach . . . . . . . . . . . . . . .
B-87
B-94
B-96
B-96
B-97
B-98
B-99
TOM GALLAGHER
February 26, 2003
The Honorable Jeb Bush, Governor
President of the Senate
Speaker of the House of Representatives
Citizens of the State of Florida
As required by Section 216.102(3), Florida Statutes, I am pleased to submit the State of Florida Comprehensive
Annual Financial Report (CAFR) for the fiscal year ended June 30, 2002.
INTRODUCTION TO THE REPORT
This report is prepared in conformance with generally accepted accounting principles as prescribed in
pronouncements of the Governmental Accounting Standards Board (GASB). It is a comprehensive presentation of
the state’s financial and operating activities during the fiscal year ended June 30, 2002. The CAFR is presented in
three sections: introduction, financial, and statistical and economic data.
Responsibility
In the past, the Office of the Comptroller had the responsibility to prepare and publish the CAFR. Effective January 7,
2003, the constitutional offices of the Treasurer and the Comptroller were merged into the Chief Financial Officer
(CFO) under the Department of Financial Services. This was a result of Florida voter approval of Constitutional
Revision Eight in November 1998. As a result, the CFO assumes the responsibility to prepare and publish the CAFR.
Basic Financial Statements
Basic financial statements presented in the CAFR include government-wide financial statements, fund financial
statements, and notes to the financial statements. Notes to the financial statements disclose additional information
such as the state’s significant accounting policies, deposits and investments, tax revenue, capital assets, pensions
and other postemployment benefits, long-term liabilities, risk management, contingencies, and litigation. Notes to the
financial statements are an integral part of the basic financial statements and should be viewed as such. The
Management’s Discussion and Analysis (MD&A), which precedes the basic financial statements, presents financial
highlights, overall financial analysis, and economic outlook of the state. The various financial statements presented
in the CAFR are discussed in more detail in the MD&A and Note 1 to the financial statements.
Independent Auditor
The basic financial statements within the Financial Section of the CAFR have been audited by the Auditor General,
and his opinion is included in the CAFR. The Auditor General also conducts a Statewide Federal Awards Audit as
required by the U.S. Office of Management and Budget (OMB). This report is issued separately.
THE CAPITOL • T ALLAHASSEE , FLORIDA 32399-0301 • (850) 413-2850
PROFILE OF THE STATE
Governmental Structure
Florida’s constitution divides the governmental structure of the state into three separate independent branches. The
Legislative Branch has exclusive law-making power for the state. The Executive Branch, with the Governor as its
chief, administers the laws made by the Legislature. The Cabinet shares some executive power and responsibilities
with the Governor. The Judicial Branch interprets the law and applies the Constitution. Refer to the organizational
chart dated June 30, 2002 following this letter for more detail.
Financial Reporting Entity
Because accounting and financial reporting emphasize economic substance over legal form, the financial reporting
entity presented in the CAFR includes organizations in addition to the state’s primary government. These
organizations are defined as component units. Refer to Note 1 to the financial statements for more information.
FINANCIAL INFORMATION
Accounting System
The Florida Financial Management Information System Act requires the design and implementation of a unified
management information system, which contains five subsystems. One of the five subsystems designated by the
Legislature is the Florida Accounting Information Resource (FLAIR) Subsystem. The Department of Financial
Services is responsible for the design, implementation, and operation of FLAIR. FLAIR is a computer-based, double
entry general ledger accounting system. Internal accounting controls are in place to provide reasonable assurance
regarding the safeguarding of assets and reliability of financial records for the preparation of financial statements and
maintaining accountability.
Budgetary Control
While the departmental component of FLAIR provides agency management with a budgetary check mechanism, the
central component (also a part of FLAIR) maintains a separate accounting system on the cash basis for the control of
budget by line item of the appropriations act. Florida law strictly prohibits overspending. Refer to the Other Required
Supplem entary Information Section within the CAFR for a detailed discussion of the state’s budget process.
Cash Management and Investment
All moneys received by any state agency must be deposited in the State Treasury, unless specifically exempted.
Receipts in any fund may be by direct deposit or by transfer from another fund. The Chief Financial Officer approves
disbursements from the State Treasury upon request of the agency authorized to make the expenditure. Moneys
being held in the State Treasury are invested in various security instruments, as discussed in Note 2 to the financial
statements.
The State Board of Administration has the investing responsibility for members of the Florida Retirement System and
state and local governments. Refer to Note 2 to the financial statements for more information about the state’s
investments.
State Funds
Section 215.32(1), Florida Statutes, created the following state funds to account for moneys received by the state.
These funds differ from external reporting funds that are required to be used in the financial statements by the
Governmental Accounting Standards Board (GASB).
The General Revenue Fund consists of all moneys received by the state from every source, except moneys
deposited into trust funds, the Working Capital Fund, and the Budget Stabilization Fund. About 45 percent of all
taxes, licenses, fees, and other operating receipts are credited to the General Revenue Fund.
Trust Funds
Trust funds consist of receipts that are earmarked for a specific purpose, either by general law, the Constitution, or a
trust agreement. Each receipt is credited to the accounts which make up the trust funds.
Working Capital Fund
The Working Capital Fund consists of funds available in the General Revenue Fund which are not needed for
appropriations. The Working Capital Fund serves as a reserve fund to offset unanticipated expenditures, such as
spending on emergencies. Refer to the Statistical and Economic Data Section of the CAFR for the operating history
of the Working Capital Fund.
Budget Stabilization Fund
The Budget Stabilization Fund must be maintained at not less than 5 percent of the previous year’s General Revenue
net collections. Moneys in the fund may only be used to cover revenue shortfalls in the General Revenue Fund and
for emergencies as defined by law. Expenditures from the fund must be restored in equal installments in each of the
five succeeding fiscal years unless other repayment schedules are established by the Legislature. Refer to the
Statistical and Economic Data Section of the CAFR for the operating history of the Budget Stabilization Fund.
Debt Administration
Florida maintains a high bond rating from Moody’s Investors Services (Aa2), Standard and Poor’s Corporation (AA+),
and Fitch, Inc. (AA) on all state general obligation bonds. Bonds are issued to finance capital outlay for education
projects of state universities, community colleges, and local school districts; environmental protection; and highway
construction. Refer to the MD&A and Note 8 to the financial statements for more information about the state’s
outstanding bonds.
Tax Revenue
The largest revenue source for the state is taxes. Sales and use tax represents over 60 percent of all the state taxes
collected. Florida’s law provides that each sale, admission charge, storage, or rental is taxable unless the transaction
is specifically exempt. Refer to Note 4 to the financial statements for more information about the state’s tax revenue.
Tobacco Litigation Settlement
Florida's 1997 tobacco settlement is expected to total approximately $13 billion over the initial 25-year period. As of
June 30, 2002, the state has received approximately $3.3 billion from the settlement. The settlement anticipates that
the state will use the funds for children's health care coverage and other health-related services and for mandated
improvements in state enforcement efforts regarding the reduction of sales of tobacco products to minors.
ACKNOWLEDGEMENTS
The preparation of the CAFR requires the cooperation of fiscal and accounting personnel throughout the state. This
year, we implemented several new GASB standards, including Statement No. 34, which required additional effort.
We sincerely appreciate all those that have contributed to this effort including all state agencies and the Auditor
General’s Office. Special appreciation goes to General Robert F. Milligan, former State Comptroller, for his
leadership while head of the Department of Banking and Finance.
Sincerely,
//SS//
Tom Gallagher
Chief Financial Officer
TG:twh
AUDITOR GENERAL
STATE OF FLORIDA
WILLIAM O. MONROE, CPA
AUDITOR GENERAL
850/488-5534/SC 278-5534
Fax: 488-6975/SC 278-6975
The President of the Senate, the Speaker of the
House of Representatives, and the
Legislative Auditing Committee
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying financial statements of the governmental activities, the business-type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the
State of Florida as of and for the year ended June 30, 2002, which collectively comprise the State’s basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the State’s management.
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the
financial statements of the Legislature constituting less than 1 percent of assets and revenues of the governmental
activities; the Lottery Fund (Florida Department of the Lottery) also constituting approximately 25 percent and 51
percent of the assets and revenues, respectively, of the business-type activities; nor did we audit the discretely presented
component units (other than the State's universities and community colleges, comprising approximately 59 percent and
80 percent of the assets and revenues, respectively, of the aggregate discretely presented component unit column) as
described in Note 1 to the basic financial statements. Those financial statements were audited by other auditors whose
reports thereon have been made available to us and our opinion on the basic financial statements, insofar as it relates to
the amounts included for these entities, is based solely upon the reports of the other auditors.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally
accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors
provide a reasonable basis for our opinions.
Records of the Board of Trustees of the Internal Improvement Trust Fund were not adequate to document the
ownership and valuation of a substantial portion of land, which is recorded at $3.085 billion and constitutes 27.4 percent
of the reported land value, and 7.4 percent of capital assets reported for governmental activities at June 30, 2002. As a
result, it was not practicable in the circumstances for us to determine whether the amount reported for land within the
governmental activities is fairly presented.
In our opinion, except for the effects of such adjustments, if any, of not providing adequate documentation regarding
the amount reported for land within the governmental activities as described in the preceding paragraph, based on our
audit and the reports of other auditors, the basic financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities, the business-type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of the State of
Florida as of June 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof
for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report, dated February 26, 2003, on our
consideration of the State’s internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction with this report in considering the
results of our audit. That report will be included as part of our separately issued Report on the Audit of the Federal
Awards Programs of the State of Florida.
As discussed in Note 1 to the financial statements, the State has implemented a new financial reporting model as
required by the provisions of Government Accounting Standards Board Statement No. 34, Basic Financial Statements –
and Management’s Discussion and Analysis – for State and Local Governments; Statement No. 35, Basic Financial Statements – and
Management’s Discussion and Analysis – for Public Colleges and Universities; Statement No. 37, Basic Financial Statements – and
Management’s Discussion and Analysis – for State and Local Governments: and Omnibus; Statement No. 38, Certain Financial
Statement Note Disclosures; as of June 30, 2002.
As discussed in Note 1 H. to the financial statements, the State made accounting changes to its financial reporting
entity. The changes reflected management’s judgment with regard to the State’s legal and financial relationship with
certain entities.
The accompanying management discussion and analysis on pages 15 through 18 and the required supplementary
information – budgetary information, pension trust fund information, and information on infrastructure using the
modified approach on pages 92 through 106 are not a required part of the basic financial statements but is
supplementary information required by the Governmental Accounting Standards Board. We and the other auditors
have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods
of measurement and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the State’s basic financial statements. The supplementary information - combining statements and individual fund
statements and schedules on pages 110 through 177 are presented for purposes of additional analysis and are not a
required part of the basic financial statements. This information has been subjected to the auditing procedures applied
by us and the other auditors in the audit of the basic financial statements and, in our opinion, based on our audit and
the reports of other auditors, are fairly stated in all material respects in relation to the basic financial statements taken
as a whole. The introductory section on pages 6 through 9, and the statistical and economic data section on pages 180
through 189 have not been subjected to the auditing procedures applied by us and the other auditors in the audit of
the basic financial statements and, accordingly, we express no opinion on them.
Respectfully submitted,
William O. Monroe, CPA
February 26, 2003
STATE OF FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
The State of Florida (the State)’s general purpose external
financial statements are presented within the financial section of
this Comprehensive Annual Financial Report (CAFR).
The
components of the general purpose external financial statements
include:
•
•
•
Changes in the State’s financial position may be measured over
time by increases and decreases in the Statement of Net Assets.
Information on how the State’s net assets changed during the
fiscal year are presented in the Statement of Activities.
Fund Financial Statements
Management’s Discussion and Analysis (MD&A)
Basic Financial Statements
Other Required Supplementary Information (RSI)
Fund financial statements focus on individual parts of the State,
reporting the State's operations in more detail than the
government-wide financial statements. Fund financial statements
include the statements for governmental, proprietary, and fiduciary
funds. Financial statements for the State’s component units are
also presented.
The MD&A, a component of RSI, introduces the basic financial
statements and provides an analytical overview of the State’s
financial activities. Because fiscal year ended June 30, 2002 is the
first year in which the State implemented the provisions of
Governmental Accounting Standards Board (GASB) Statement No.
34, this MD&A does not provide comparisons with the previous
year. Future reports will provide such comparisons.
Notes to the Financial Statements
Notes to the financial statements provide additional information
that is essential to the full understanding of the data provided in the
government-wide and fund financial statements.
Overview of the Financial Statements
Refer to Note 1 to the financial statements for more detailed
information on the elements of the financial statements. Table 1
below summarizes the major features of the basic financial
statements.
The State’s basic financial statements comprise the following
elements:
Government-wide financial statements provide both long-term and
short-term information about the State's overall financial condition.
Table 1: Major Features of the Basic Financial Statements
Government-wide
Financial Statements
Governmental Funds
Proprietary Funds
Fiduciary Funds
Scope
Entire State government
(except fiduciary funds)
and the State’s component
units
Activities of the State that
are not proprietary or
fiduciary
Activities of the State
that are operated
similar to private
businesses
Instances in which the
State is the trustee or agent
for someone else’s
resources
Required financial
statements
• Statement of net assets
• Statement of activities
• Balance sheet
• Statement of
revenues,
expenditures, and
changes in fund
balances
• Statement of net
assets
• Statement of
revenues,
expenses, and
changes in net
assets
• Statement of cash
flows
• Statement of fiduciary
net assets
• Statement of changes in
fiduciary net assets
Accounting basis
and measurement
focus
Accrual accounting and
economic resources focus
Modified accrual
accounting and current
financial resources focus
Accrual accounting
and economic
resources focus
Accrual accounting and
economic resources focus
Type of
asset/liability
information
All assets and liabilities,
both financial and capital,
and short-term and longterm
Only assets expected to
be used up and liabilities
that come due during the
year or soon thereafter;
no capital assets included
All assets and
liabilities, both
financial and capital,
and short-term and
long-term
All assets and liabilities,
both short-term and longterm
Type of
inflow/outflow
information
All revenues and expenses
during the year, regardless
of when cash is received or
paid
• Revenues for which
cash is received
during or soon after
the end of the year
• Expenditures when
goods or services
have been received
and payment is due
during the year or
soon thereafter
All revenues and
expenses during the
year, regardless of
when cash is received
or paid
All revenues and expenses
during the year, regardless
of when cash is received or
paid
B-9
STATE OF FLORIDA
Condensed Financial Information
Table 3: Condensed Statement of Activities
For Fiscal Year Ended June 30, 2002
Condensed Statement of Net Assets
(in millions)
The largest component ($41.4 billion) of the State’s net assets
reflects its investment in capital assets (e.g. land, infrastructure,
buildings, equipment, and others), less any related debt
outstanding that was needed to acquire or construct the assets.
The State uses these capital assets to provide services to the
citizens and businesses in the State; consequently, these net
assets are not available for future spending. Restricted net assets
are the next largest component, totaling $13.3 billion. Restricted
net assets represent resources that are subject to external
restrictions, constitutional provisions, or enabling legislation on
how they can be used. The remaining portion of net assets is
unrestricted, which can be used to finance government operations.
Revenues
Program revenues
Charges for services
Operating grants & contributions
Capital grants & contributions
Total program revenues
General revenues
Sales and use tax
Motor fuel tax
Corporate income tax
Documentary stamp tax
Intangible tax
Communication service tax
Estate tax
Gross receipts utilities tax
Alcoholic beverage tax
Cigarette tax
Other taxes
Interest
Other revenues
Total general revenues
Total revenues
Program expenses
General government
Education
Human services
Criminal justice & corrections
Natural resources & environment
Transportation
State courts
Turnpike
Lottery
Unemployment compensation
State Board of Administration
Other
Total program expenses
Excess (deficiency) before
gain (loss) and tranfers
Gain (loss) on sale of capital assets
Transfers
Change in net assets
Beginning net assets - restated
Prior period adjustments
Ending net assets
Table 2 below presents the State’s condensed statement of net
assets as of June 30, 2002, derived from the government-wide
Statement of Net Assets.
Table 2: Condensed Statement of Net Assets
As of June 30, 2002
(in millions)
Businesstype
Activities
Total
Primary
Government
17,232
41,834
59,066
6,744
17,165
23,909
$ 11,393
4,619
16,012
2,920
3,703
6,623
$
38,329
3,061
41,390
6,150
178
9,389
13,267
(10,112)
44,545
Governmental
Activities
Current and other assets
Capital assets
Total assets
Other liabilities
Long-term liabilities
Total liabilities
Net assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted (a)
Total net assets
$
$
7,117
(10,290)
35,156 $
$
28,625
46,453
75,078
9,664
20,868
30,532
(a) Governmental activities reflect a negative unrestricted net asset
balance of $10.3 billion. This deficit is primarily the result of
education-related bonds in which the State is responsible for the
debt, but the local school districts own the capital assets. Because
the State does not own these capital assets, the bonded debt is
not netted on the line item “invested in capital assets, net of related
debt.” Instead, this bonded debt is netted with “unrestricted net
assets.”
Education-related bonds include State Board of
Education Capital Outlay Bonds, Public Education Capital Outlay
(PECO) Bonds, and Lottery Education Bonds, which have a total
ending balance at June 30, 2002, of $10.1 billion. The State has
an additional $1.3 billion in bonded debt in which the State does
not own the related capital assets, including some Road and
Bridge Bonds and Pollution Control Bonds. The additional bonded
debt also includes Inland Protection Bonds and Investment
Restoration Bonds which have no related capital assets. The
resources related to the payment of this debt will be provided from
future revenue sources. If these bonds were removed, the
adjusted unrestricted net assets for governmental activities would
be $1.1 billion.
Governmental
Businesstype
Total
Primary
Activities
Activities
Government
$
4,421
12,159
1,326
17,906
$
4,740 $
184
.....
4,924
9,161
12,343
1,326
22,830
15,601
2,101
1,210
1,591
738
779
745
527
547
444
1,156
419
114
25,972
43,878
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
20
3
23
4,947
15,601
2,101
1,210
1,591
738
779
745
527
547
444
1,156
439
117
25,995
48,825
6,499
14,488
14,973
3,066
1,738
2,071
280
.....
.....
.....
.....
.....
43,115
.....
.....
.....
.....
.....
.....
.....
261
1,595
1,486
41
158
3,541
6,499
14,488
14,973
3,066
1,738
2,071
280
261
1,595
1,486
41
158
46,656
763
1,406
.....
1
1,070
(1,070)
1,833
337
34,189
9,101
(866)
(49)
35,156 $ 9,389 $
$
2,169
1
.....
2,170
43,290
(915)
44,545
Program Expenses and Revenues for Governmental Activities
Table 4 below presents program expenses and revenues for
governmental activities. Overall, program revenues were not
sufficient to cover program expenses for governmental activities.
The net program expenses of these governmental activities were
therefore supported by general revenues, mainly taxes.
Table 4: Program Expenses and Revenues
for Governmental Activities
For the Fiscal Year Ended June 30, 2002
(in millions)
Condensed Statement of Activities
State Programs
Table 3 below presents the State’s condensed statement of
activities for the fiscal year ended June 30, 2002, as derived from
the government-wide Statement of Activities. Over time, increases
and decreas es in net assets measure whether the State’s financial
position is improving or deteriorating. During the fiscal year, the
net assets of the governmental activities increased by $967 million
or 2.8 percent, and the net assets of the business-type activities
increased by $288 million or 3.2 percent.
General government
Education
Human services
Criminal justice & corrections
Transportation
State courts
Totals
Program
Expenses
$
6,499 $
14,488
14,973
3,066
1,738
2,071
280
3,279 $
1,873
9,641
416
778
1,904
15
3,220
12,615
5,332
2,650
960
167
265
$
43,115 $
17,906 $
25,209
(b) Net Program Expenses are mainly supported by taxes.
B-10
Net Program
Program
Expenses
Revenues (Revenues) (b)
STATE OF FLORIDA
Program Expenses and Revenues for Business-type Activities
session of the 2001 Legislature and adjustments to recognize
liabilities, rather than previously reported revenues, for cash
received from unclaimed property.
Table 5 below presents program expenses and revenues for
business-type activities. With the exception of unemployment
compensation, program revenues generated from business-type
activities were sufficient to cover program expenses.
Unemployment compensation expenses not covered by program
revenues are supported by fund reserves.
Employment Services
Fund balance at June 30, 2002 totaled $219 million, an increase of
$169 million. The increase relates, in part, to the recording of
revenues associated with receivables from the 2000-01 fiscal year
that were not recorded until the 2001-02 fiscal year. In addition,
assessments were increased for workers compensation from the
previous year.
Table 5: Program Expenses and Revenues
for Business-type Activities
For the Fiscal Year Ended June 30, 2002
Proprietary Funds
(in millions)
Program
Expenses
State Programs
Turnpike
Lottery
Other
Totals
Program
Revenues
The State’s proprietary funds reported net assets of $9.6 billion,
including $9.4 billion for enterprise funds and $0.2 billion for
internal service funds.
Net Program
Expenses
(Revenues)
$
261 $
1,595
1,486
41
158
478 $
2,568
924
633
321
(217)
(973)
562
(592)
(163)
$
3,541 $
4,924 $
(1,383)
Lottery
Net assets at June 30, 2002 totaled $235 million, an increase of
$46 million during the fiscal year. The increase primarily relates to
an increase in ticket sales due to changes introduced in the
Fantasy 5 on-line game and growth in the scratch-off ticket market.
Unemployment Compensation
Net assets at June 30, 2002 totaled $1.6 billion, a decrease of
$593 million during the fiscal year. The decrease primarily relates
to an increase in payments associated with unemployment
compensation claims from the previous year.
Overall Analysis
Financial highlights for the State as a whole during the fiscal year
ended June 30, 2002 include the following:
•
The assets of the State exceeded its liabilities (net
assets) at the close of the fiscal year by $35.2 billion for
governmental activities and by $9.4 billion for businesstype activities.
•
The State’s total net assets increased during the year by
$1.3 billion. Net assets of governmental activities
increased by $967 million, while net assets of businesstype activities increased by $288 million.
State Board of Administration (SBA)
Net assets at June 30, 2002 totaled $4.4 billion, an increase of
$565 million during the fiscal year. The increase primarily relates
to reimbursement premium revenue received annually from
participating insurers for the Florida Hurricane Catastrophe Fund.
Total receipts for the year increased from the previous year due to
growth exposure.
Budget Variances in the General Fund
As a result of changes during the year in the State’s projected
revenues, various appropriation revisions were made to the
original budget. Economic slowdown resulted in final budgeted
revenues lower than the original budgeted revenues. After budget
amendments, the actual charges (expenditures) in the General
Fund were $237 million below the final budgeted amounts. This is
mainly the result of low er than expected operating expenditures.
On the other hand, resources available for appropriation were
$457 million below the final budgeted amount. This is primarily
due to less sales tax revenues than anticipated. Refer to the
budgetary comparison schedule for the General Fund in the Other
RSI section of the CAFR.
Fund Analysis
Funds that experienced significant changes during the year are as
follows:
Governmental Funds
As of the close of the fiscal year, the State’s governmental funds
reported a combined ending fund balance of $10.6 billion, with
$4.5 billion reported as unreserved fund balance and the remaining
amount of $6.1 billion reserved for specific purposes. See Note 1
to the financial statements for an explanation of the different types
of reserve categories.
Capital Asset and Long-term Debt Activity
General Fund
Fund balance at June 30, 2002 totaled $3.3 billion, a decrease of
$175 million during the fiscal year. The decrease is the result of
the difference between an increase of $370 million of revenue
sources exceeding expenditures and an adjustment to decrease
the beginning fund balance by $544.7 million primarily for sales tax
revenues recorded in the 2000-01 fiscal year rather than the 200102 fiscal y ear.
Capital Asset Activity
Transportation
Fund balance at June 30, 2002 totaled $898 million, a decrease of
to the recognition of expenditures incurred in the 2000-01 fiscal
year but reported as an adjustment in the 2001-02 fiscal year.
Long-term Debt Activity
At June 30, 2002, the State reported $41.8 billion in capital assets
for governmental activities and $4.6 billion in capital assets for
business-type activities.
Refer to Note 5 to the financial
statements for additional information on capital assets and Note 7
to the financial statements for additional information on
construction commitments.
Section 11 of Article VII of the State Constitution authorizes the
State to issue general obligation bonds and revenues bonds to
finance or refinance the cost of state fixed capital outlay projects
authorized by law. General obligation bonds are secured by the
full faith and credit of the State and payable from the proceeds of
various taxes. Revenue bonds are payable from funds that receive
legally restricted revenues. The Division of Bond Finance of the
State Board of Administration has the responsibility to issue all
state bonds. During the past year, the State continued to maintain
Public Education
Fund balance at June 30, 2002 totaled $253 million, a decrease of
to a reduction in general revenue funding as a result of a special
B-11
STATE OF FLORIDA
a high bond rating from Moody's Investors Services (Aa2),
Standard and Poor's Corporation (AA+), and Fitch, Inc. (AA) on all
State general obligation bonds.
Economic Conditions and Outlook
As a result of decline in the economic climate in fiscal year ended
June 30, 2002, the Legislature acted to reduce appropriations in
various areas from the original level. For more detail on
appropriations and reductions in appropriations for the fiscal year,
refer to report, The 2001 Special Session “C” Summary of
Legislation Passed, available on the Legislature’s web page
(http://www.leg.state.fl.us ) and in the Senate Document Center,
304 Capitol, (850) 487-5915.
The State of Florida Debt Affordability Study Update 2002 Report,
prepared by the Division of Bond Finance, discloses a future
increase in the State’s debt position as measured by the
benchmark debt ratio of debt service to revenue as a result of an
increase in expected borrowing. To obtain a copy of this report,
contact the Division of Bond Finance, 1801 Hermitage Blvd., Suite
200, Tallahassee, Florida 32308, (850) 488-4782.
Even though the economy as a whole was weakened in the fiscal
year ended June 30, 2002, housing starts spiked to a level of
175,000 units because of low interest rates. Because of this spike,
total construction employment grew in the fiscal year. However,
construction employment is expected to decrease in the coming
year due to weakness in the commercial sector.
Refer to Notes 8, 9, and 10 to the financial statements and the
Statistical and Economic Data section of the CAFR for additional
information on the State’s long-term debt and other liabilities.
Infrastructure
The economic climate of the State in fiscal year ending June 30,
2003 is expected to experience slow growth.
Tourism, a
cornerstone of the State’s economic strength, is expected to
rebound as additional efforts are put forth in advertising and travel
incentives.
The State has elected to use the modified approach to account for
its bridges and roadways included on the State Highway System.
Under this approach, the Florida Department of Transportation
(FDOT) has made the commitment to preserve and maintain these
assets at levels established by the FDOT and approved by the
Florida Legislature. No depreciation expense is reported for such
assets, nor are amounts capitalized in connection with
improvements that lengthen the lives of such assets, unless the
improvements also increase their service potential. The FDOT
maintains an inventory of these assets and performs periodic
condition assessments to establish that the predetermined
condition level is being maintained.
The State’s population is also expected to grow by 299,000 (1.8%)
in fiscal year ending June 30, 2003. Population growth provides
stimulus to the State’s economic expansion.
Florida’s economy has continued to show its strength and
resilience.
Despite the devastation experienced during the
September 11 attacks coupled with the recession, the State’s
economy is expected to recover. Although the possibility of a war
looming in the horizon has dampened the economy from growing
at a faster pace, the economic fundamentals remain strong. Such
strength should provide impetus for the State’s economy to
achieve more sustained growth.
The most recent condition assessments show that the condition of
the roadway and bridges included on the State Highway System
are being maintained at or near FDOT standards. The recent
condition assessments were also consistent with condition
assessments conducted during the last two years. In addition, the
FDOT makes annual estimates of the amounts that must be
expended to preserve and maintain the roadway and bridges
included on the State Highway System at the predetermined
condition levels. There were no significant differences from the
estimated annual amount to preserve and maintain these assets
compared with the actual amounts spent during the current period.
Contact the State’s Financial Management
Questions about this report or requests for additional financial
information may be addressed to:
Statewide Financial Reporting Section
Bureau of Accounting
Department of Financial Services
200 East Gaines Street
Telephone: (850) 410-9951
For further information on the FDOT’s established condition
standards, recent condition assessments, or other information on
infrastructure reported on the modified approach, refer to the Other
Required Supplementary Information section of this report.
B-12
STATE OF FLORIDA
BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2002
STATE OF FLORIDA
STATEMENT OF NET ASSETS
JUNE 30, 2002
(in thousands)
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS-TYPE
ACTIVITIES
ACTIVITIES
ASSETS
Current assets
Pooled investments with State Treasury (Note 2)
Investments (Note 2)
Receivables, net (Note 3)
Internal balances
Due from component unit/primary
Inventories
Other
Total current assets
Noncurrent assets
Restricted cash and cash equivalents
Restricted pooled investments with
State Treasury
Restricted investments
Long term investments
Due from other governmental entities
Other loans and notes receivable
Capital assets (Note 5):
Land and other nondepreciable assets
Nondepreciable infrastructure
Buildings, equipment, and other
depreciable assets
Accumulated depreciation
Construction work in progress
Total capital assets
Other
Total noncurrent assets
Total assets
$
39,694
10,335,918
201,324
2,429,241
399,143
8,425
58,829
126,485
13,599,059
$
29,689
2,507,633
2,347,634
121,456
(399,143)
70
1,125
5,199
4,613,663
COMPONENT
UNITS
TOTALS
$
69,383
12,843,551
2,548,958
2,550,697
......
8,495
59,954
131,684
18,212,722
$
986,345
1,334,728
3,226,998
902,125
......
1,275,945
36,551
88,819
7,851,511
......
33
33
66,583
......
......
2,064,883
1,462,281
74,834
357,293
68,626
6,342,181
......
......
357,293
68,626
8,407,064
1,462,281
74,834
188,072
2,202,757
770,856
......
2,824,822
11,250,970
23,516,148
740,627
2,806,703
11,991,597
26,322,851
2,990,455
......
5,283,406
(2,333,844)
4,117,481
41,834,161
299,297
(114,218)
886,502
4,618,911
5,582,703
(2,448,062)
5,003,983
46,453,072
10,498,926
(4,154,454)
903,774
10,238,701
30,578
45,466,737
11,372
11,398,416
41,950
56,865,153
235,063
16,526,854
59,065,796
16,012,079
75,077,875
24,378,365
The notes to the financial statements are an integral part of this statement.
B-14
STATE OF FLORIDA
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS-TYPE
ACTIVITIES
ACTIVITIES
LIABILITIES
Current liabilities
Accounts payable and other liabilities (Note 3)
Accrued prize liability
Due to component units/primary
Compensated absences (Note 10)
Installment purchases/capital leases (Note 10)
Claims payable
Bonds payable (Notes 8 and 10)
Bonds payable from restricted
assets (Note 8 and 10)
Certificates of participation payable (Note 10)
Deposits
Deferred revenue
Obligations under security lending
agreements
Other
Total current liabilities
Noncurrent liabilities
Advances from other funds
Due to other governments
Due to primary
Certificates of participation payable (Note 10)
Installment purchases/capital leases (Note 10)
Deposits
Deferred revenue
Claims payable
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Environment, Recreation and Conservation
Health and Family Services
Transportation
Public Education
Tax Collection and Administration
Employment Services
Other governmental funds
Lottery
Hurricane Catastrophe Fund
Debt service
Other
Funds held for permanent endowment
Expendable
Nonexpendable
Unrestricted (deficit)
Total net assets
$
TOTALS
COMPONENT
UNITS
2,825,020
......
887,390
145,947
12,798
244,341
575,550
172,544
230,449
100
4,570
89
......
......
2,997,564
230,449
887,490
150,517
12,887
244,341
575,550
1,259,928
......
295,723
44,042
12,414
......
91,654
......
5,580
92,897
......
55,355
......
13,298
......
55,355
5,580
106,195
......
......
......
481
531,428
1,954,945
......
6,744,468
2,442,686
453
2,919,544
4,397,631
453
9,664,012
6,859
297,466
2,539,995
......
......
25,336
......
14,065,092
95,355
111,754
328,307
......
1,974,317
565,129
......
17,165,290
23,909,758
......
1,529,112
6,341
......
1,697,052
......
183
452,044
......
......
18,392
......
3,703,124
6,622,668
......
1,529,112
31,677
......
15,762,144
95,355
111,937
780,351
......
1,974,317
583,521
......
20,868,414
30,532,426
20
......
6,406
76,035
4,678,455
......
142,879
......
29,023
4,466
408,405
724,965
6,070,654
8,610,649
38,329,290
3,061,253
41,390,543
8,511,766
2,426,345
537,474
897,742
246,260
187,855
214,204
770,274
......
......
......
445,994
94,342
......
......
......
......
......
......
......
232,248
1,556,012
4,362,126
......
......
2,426,345
537,474
897,742
246,260
187,855
214,204
770,274
232,248
1,556,012
4,362,126
445,994
94,342
......
......
......
......
......
......
......
......
......
......
122,305
3,775,260
......
1,295,901
(10,289,643)
35,156,038
......
......
177,772
9,389,411
......
1,295,901
(10,111,871)
44,545,449
742,854
348,403
2,267,128
15,767,716
B-15
$
$
$
STATE OF FLORIDA
STATEMENT OF ACTIVITIES
(in thousands)
FUNCTIONS/PROGRAMS
Primary government
Government activities:
General government
Education
Human services
Criminal justice and corrections
Natural resources and environment
Transportation
State courts
Total governmental activities
Business-type activities:
Turnpike
Lottery
Nonmajor enterprise funds
Total business-type activities
Total primary government
Component units
Florida Housing Finance
Corporation
South Florida Water
Management District
University of Florida
Florida State University
University of South Florida
Florida Residential Property
and Casualty JUA
Nonmajor component units
Total component units
CHARGES FOR
SERVICES
EXPENSES
$
6,499,588
14,488,469
14,973,427
3,065,808
1,737,772
2,070,684
279,821
43,115,569
$
261,540
1,595,011
1,485,594
40,876
158,478
3,541,499
46,657,068
$
402,209
$
$
2,608,450
160,123
566,067
227,347
301,137
544,175
13,790
4,421,089
$
476,999
2,568,469
739,855
633,436
321,304
4,740,063
9,161,152
$
257,203
PROGRAM REVENUES
OPERATING
GRANTS AND
CONTRIBUTIONS
$
671,004
1,713,463
9,074,866
187,010
474,307
37,475
1,308
12,159,433
CAPITAL
GRANTS AND
CONTRIBUTIONS
$
29
......
495
1,740
2,239
1,321,629
3
1,326,135
$
781
......
183,573
......
......
184,354
12,343,787
$
253
......
......
......
3
256
1,326,391
$
245,278
$
......
258,670
8,592
38,985
83,532
2,471,729
692,834
1,059,517
116,787
1,236,365
190,678
424,976
135,601
778,380
306,614
322,268
......
40,714
23,764
3,019
......
4,481,365
1,118,606
1,129,335
261,370
9,483,111
$
3,372,021
$
2,820,860
$
General revenues
Taxes (Note 4)
Sales and use tax
Fuel taxes
Intangible personal property tax
Communication service tax
Estate tax
Utilities taxes
Beverage and tobacco taxes
Property taxes
Other taxes
Investment earnings
Payments from the State of Florida
Transfers
Contributions to permanent funds
Miscellaneous
Total general and other revenues, payments, and transfers
Net assets - beginning, as restated
Adjustments to increase (decrease) beginning net assets
Net assets - ending
B-16
412,399
STATE OF FLORIDA
NET (EXPENSE) REVENUES AND CHANGES IN NET ASSETS
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS-TYPE
COMPONENT
TOTALS
UNITS
ACTIVITIES
ACTIVITIES
$
(3,220,105)
(12,614,883)
(5,331,999)
(2,649,711)
(960,089)
(167,405)
(264,720)
(25,208,912)
$
......
......
......
......
......
......
(25,208,912)
$
......
......
......
......
......
......
......
......
$
216,493
973,458
(562,166)
592,560
162,829
1,383,174
1,383,174
(3,220,105)
(12,614,883)
(5,331,999)
(2,649,711)
(960,089)
(167,405)
(264,720)
(25,208,912)
$
216,493
973,458
(562,166)
592,560
162,829
1,383,174
(23,825,738)
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
100,272
......
......
......
(127,561)
......
......
......
......
......
......
......
......
......
......
......
......
(416,270)
(171,778)
(309,254)
18,814
......
......
......
(1,972,054)
......
......
......
(2,877,831)
15,601,244
2,100,946
1,210,346
1,590,981
737,776
779,167
745,080
526,586
990,271
......
1,156,175
418,916
......
......
1,070,190
......
113,620
27,041,298
1,832,386
34,189,407
(865,755)
35,156,038
$
......
......
......
......
......
......
......
......
......
......
......
20,078
950
......
(1,070,190)
......
3,081
(1,046,081)
337,093
9,101,474
(49,156)
9,389,411
$
15,601,244
2,100,946
1,210,346
1,590,981
737,776
779,167
745,080
526,586
990,271
......
1,156,175
438,994
950
......
......
......
116,701
25,995,217
2,169,479
43,290,881
(914,911)
44,545,449
B-17
$
......
......
......
......
......
......
......
......
......
437,994
......
71,382
(297)
3,213,922
41,376
958
284,626
4,049,961
1,172,130
14,590,588
4,998
15,767,716
B-18
STATE OF FLORIDA
GOVERNMENTAL FUND FINANCIAL STATEMENTS
Major Funds
GENERAL FUND
This fund is the State’s primary operating fund. It accounts for the financial resources and transactions not accounted for
in other funds.
ENVIRONMENT, RECREATION AND CONSERVATION
This fund accounts for operations of various programs such as air pollution control, water quality assurance, ecosystem
management, and marine resources conservation, etc.
HEALTH AND FAMILY SERVICES
This fund includes internal reporting funds used to operate various health and family service-related programs such as
health care, elder affairs, and child support, etc.
TRANSPORTATION
This fund includes the internal reporting special revenue funds used to account for the administration of the maintenance
and development of the State highway system and other transportation-related projects.
PUBLIC EDUCATION
This fund includes the internal reporting funds administered by the Department of Education to operate education-related
programs.
TAX COLLECTION AND ADMINISTRATION
This fund accounts for operations of the State’s tax collection and administration functions.
EMPLOYMENT SERVICES
This fund includes internal reporting funds used for employee-service related programs (i.e., workers compensation,
employment security, labor market statistics, administration of the unemployment compensation program, etc.).
LAWTON CHILES ENDOWMENT FUND
This blended component unit was created to provide a perpetual source of enhanced funding for State children’s health
programs, child welfare programs, children’s community-based health and human services initiatives, elder programs, and
biomedical research activities related to tobacco use.
Nonmajor Funds
Nonmajor governmental funds are presented, by fund type, beginning on page 109.
B-19
STATE OF FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2002
(in thousands)
General
Fund
Environment,
Recreation
and
Conservation
Health and
Family
Services
Public
Education
Transportation
ASSETS
Current assets
Pooled investments with State Treasury
Investments
Due from other funds (Note 11)
Due from component units/primary
Inventories
Other
$
Noncurrent assets
Advances to other funds (Note 11)
Due from other governmental entities
Other loans and notes receivable, net (Note 3)
Other
Total assets
687
4,159,216
......
909,757
253,725
1,229
17,922
1,051
5,343,587
$
3,331
12,180
27,970
618
24,827
68,926
849
1,702,141
......
102,387
36,875
81
705
......
1,843,038
$
......
......
907,863
4,351
......
912,214
3,321
953,169
......
813,105
72,535
......
16,309
......
1,858,439
$
10
345
3,199
......
......
3,554
1,547
469,542
......
55,973
453,491
4,902
15,114
......
1,000,569
$
......
230,225
518,692
57,418
120
806,455
182
1,417,531
......
9,851
80,468
173
......
......
1,508,205
4,214
......
......
......
......
4,214
$ 5,412,513
$
2,755,252
$
1,861,993
$
1,807,024
$
1,512,419
$
$
45,584
6,894
1,895
222
......
3,059
4,725
256,661
319,040
$
995,139
45,562
4,745
1,946
......
66,726
25,587
63,633
1,203,338
$
412,327
3,362
......
739
......
2,029
1,196
30,183
449,836
$
37,535
7,645
854,779
11
......
......
......
163,795
1,063,765
LIABILITIES AND FUND BALANCES
Current liabilities
Accounts payable and accrued liabilities (Note 3)
Due to other funds (Note 11)
Compensated absences
Claims payable
Deposits
Deferred revenues
Obligations under security lending agreements
Advances from other funds (Note 11)
Deposits
Deferred revenues
Total liabilities
Fund balances
Reserved for encumbrances
Reserved for inventories
Reserved for advances
Reserved for long-term receivables
Reserved for capital outlay
Reserved for debt service
Reserved for permanent trust
Reserved for Budget Stabilization Fund
Reserved for Working Capital Fund
Other reserved
Unreserved, reported in:
General fund
Special revenue funds
Capital projects funds
Permanent fund
Total fund balances
Total liabilities and fund balances
815,512
179,481
16,024
6,674
16,311
7,342
9,991
1,024,845
2,076,180
......
43
......
43
9,866
......
......
9,866
......
3,199
......
3,199
10,000
123,188
326,258
459,446
195,976
......
......
195,976
2,076,223
328,906
1,206,537
909,282
1,259,741
44,038
17,922
681
......
......
......
......
940,890
304,652
26,588
5,093
705
......
988,093
888,134
......
......
......
......
96,925
5,004
16,309
......
......
......
......
......
......
......
......
78,290
15,114
224,796
579,542
......
......
......
......
......
......
7,414
......
......
......
......
......
......
......
......
......
2,001,519
......
......
......
......
447,396
......
......
......
634,143
......
......
......
......
......
......
......
245,264
......
......
3,336,290
2,426,346
655,456
897,742
252,678
$ 5,412,513
$
B-20
2,755,252
$
1,861,993
$
1,807,024
$
1,512,419
STATE OF FLORIDA
Tax Collection
and
Administration
$
198
404,834
......
241,557
5,642
......
84
......
652,315
Employment
Services
$
117,789
......
......
......
......
117,789
46
228,024
......
82,568
2,538
......
......
......
313,176
Lawton Chiles
Endowment
Fund
$
3,571
......
......
......
......
3,571
104
......
50,000
73,384
......
......
......
......
123,488
Nonmajor
Governmental
Funds
$
1,575,816
......
......
......
......
1,575,816
18,604
930,057
126,035
134,909
144,760
......
8,463
3,617
1,366,445
$
25,538
10,264,514
176,035
2,423,491
1,050,034
6,385
58,597
4,668
14,009,262
341,343
17,158
4,557
12,447
5,631
381,136
2,046,074
259,908
1,462,281
74,834
30,578
3,873,675
$ 17,882,937
$
770,104
$
316,747
$
1,699,304
$
1,747,581
$
103,534
390,951
4,939
4
......
......
......
......
499,428
$
12,130
28,736
117
122
29,061
......
......
27,365
97,531
$
121,093
20
......
......
......
......
......
285,390
406,503
$
208,252
146,506
4,789
467
......
7,833
1,511
95,380
464,738
$
Totals
6/30/02
$
2,751,106
809,157
887,288
10,185
45,372
86,989
43,010
1,947,252
6,580,359
7
......
......
7
......
640
......
640
......
......
......
......
1,572
5,261
165
6,998
217,421
132,331
326,423
676,175
499,435
98,171
406,503
471,736
7,256,534
......
84
......
......
......
......
......
......
......
......
1,955
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
1,292,801
......
......
......
73,594
8,182
16,708
10,901
......
445,994
......
......
......
4,346
215,388
58,316
242,185
1,578,536
888,134
445,994
1,292,801
940,890
304,652
127,859
......
270,585
......
......
......
216,621
......
......
......
......
......
......
......
665,403
50,713
4
2,001,519
2,479,412
50,713
4
270,669
218,576
1,292,801
1,275,845
10,626,403
1,747,581
$ 17,882,937
770,104
$
316,747
$
1,699,304
$
B-21
B-22
STATE OF FLORIDA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO
THE STATEMENT OF NET ASSETS
JUNE 30, 2002
(in thousands)
Total fund balances for governmental funds
$
10,626,403
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital assets used in governmental activities are not financial resources
and therefore are not reported in the funds.
Nondepreciable infrastructure
Buildings, equipment and other depreciable assets
11,250,597
23,516,148
4,348,372
4,117,481
(2,063,042)
41,169,556
41,169,556
(686,876)
(77,911)
(2,173,285)
(24,407)
(14,259,968)
(17,222,447)
(17,222,447)
Long-term debt is not due and payable in the current period and therefore
is not reported in the funds.
Installment purchases/capital leases
Claims payable
Bonds payable
Accrued interest payable on bonds that is not recognized on the fund
statements but is recognized on the Statement of Net Assets.
(36,280)
Assets (receivables) not available to provide current resources are offset
with deferred revenues (liability) in the fund statements. The reduction of the
liability and recognition of revenue increases net assets in the Statement
of Net Assets.
369,433
Internal service funds are used to report activities that provide goods and
services to other funds or agencies within the State. Therefore, the excess
of assets over liabilities of the internal service funds are included as
governmental activities on the Statement of Net Assets.
249,373
Net assets of governmental activities
$
B-23
35,156,038
STATE OF FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
(in thousands)
Environment,
Recreation
and
Conservation
General
Fund
REVENUES
Taxes (Note 4)
Licenses and permits
Fees and charges
Grants and donations
Investment earnings
Fines, forfeits, settlements and judgments
Other revenue
$ 18,662,521
76,244
401,900
9,743
242,026
4,959
4
Total revenues
EXPENDITURES
Current:
General government
Education
Human services
Natural resources and environment
Transportation
State courts
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
OTHER FINANCING SOURCES (USES)
Proceeds of bond issues
Proceeds of refunding bonds
Operating transfers in (Note 11)
Operating transfers out (Note 11)
Proceeds of financing agreements
Payments to refunded bond agent
Total other financing sources (uses)
Net change in fund balances
$
269,232
20,118
582,683
9,181,145
61,320
13,114
......
$
......
6,063
158,146
1,359,104
39,312
12,838
1,613
$
769,365
......
103,697
1,561,309
71,315
244
......
381,448
10,127,612
1,577,076
2,505,930
3,087,871
10,280,133
4,327,963
2,537,762
294,269
......
240,042
83,856
......
......
......
......
819,658
......
......
301,715
172,298
......
10,150,440
......
14,513
......
......
29,159
......
......
......
......
......
1,167,957
......
2,493,285
......
4,036,682
......
......
......
......
......
1,404
1,816
2,428
......
......
61
4
......
283
......
12,399
20,856,140
1,121,373
10,366,475
3,661,525
4,050,485
(1,458,743)
(739,925)
(238,863)
(2,084,449)
(1,544,555)
2,919
......
2,642,912
(817,072)
......
......
237,020
......
1,052,455
(564,125)
......
......
......
......
777,492
(589,511)
......
......
150,653
......
2,272,577
(334,999)
......
......
989,971
......
1,243,764
(845,202)
......
......
1,828,759
725,350
187,981
2,088,231
1,388,533
(14,575)
(50,882)
370,016
3,511,041
Fund balances - beginning, as restated
2,966,274
2,440,921
(544,767)
$
......
43,468
66,958
156,232
106,474
8,316
......
Public
Education
Transportation
19,397,397
Fund balances - beginning, as restated (Note 1)
Adjustments to increase (decrease) beginning
fund balances (Note 13)
Fund balances - ending
$
Health and
Family
Services
3,336,290
$
B-24
706,338
......
......
2,440,921
706,338
2,426,346
3,782
$
655,456
(156,022)
1,136,221
$
605,401
(242,261)
(196,701)
893,960
408,700
897,742
$
252,678
STATE OF FLORIDA
Tax Collection
and
Administration
$
$
5,287,909
18,420
186,657
......
1,617
6,869
......
Employment
Services
$
291,301
63
8,219
640,604
5,803
3,902
......
Lawton Chiles
Endowment
Fund
Nonmajor
Governmental
Funds
$
$
......
......
......
......
(100,551)
2
......
(100,549)
Totals
6/30/02
150,360
954,656
408,549
548,630
67,811
928,484
844
$ 25,430,688
1,119,032
1,916,809
13,456,767
495,127
978,728
2,461
3,059,334
43,399,612
5,501,472
949,892
663,748
......
......
......
......
......
......
2,694
1,139,164
142,579
......
......
......
......
......
6,588
8,008
......
......
......
......
......
......
......
654,946
3,444
478,676
408,262
446,022
......
37,190
409,285
5,726,035
14,462,838
14,957,079
2,946,024
1,574,462
1,167,957
277,232
3,327,986
......
......
......
......
......
......
555,656
721,400
557,533
736,514
666,442
1,288,331
8,008
3,714,881
45,733,660
4,835,030
(338,439)
(108,557)
(655,547)
(2,334,048)
......
......
28,460
(4,902,351)
......
......
......
......
508,758
(89,861)
......
......
......
......
189,264
(45,007)
......
......
34,184
971,060
2,836,420
(2,202,310)
1,913
(971,060)
1,414,747
971,060
11,552,102
(10,390,438)
1,913
(971,060)
(4,873,891)
418,897
144,257
670,207
2,578,324
(38,861)
80,458
35,700
14,660
244,276
309,530
49,737
1,257,101
1,231,592
11,247,882
......
88,381
......
29,593
309,530
138,118
1,257,101
1,261,185
10,382,127
1,275,845
$ 10,626,403
270,669
$
218,576
$
1,292,801
$
B-25
(865,755)
B-26
STATE OF FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
(in thousands)
Net change in fund balance - total governmental funds
$
Internal service funds are used by management to charge the costs of
goods or services to other funds and agencies within the State. Therefore, the
net revenue (expenses) of the internal service funds is reported with
governmental activities.
244,276
(1,718)
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities the cost of these assets is allocated over the
estimated useful lives of the assets and reported as depreciation expense.
This is the amount by which capital outlays expenditures exceeded depreciation
in the current period.
Capital outlay expenditures
Depreciation expense
2,434,882
(251,669)
2,183,213
2,183,213
In the Statement of Activities, the gain or (loss) on the sale of assets is reported,
whereas in the governmental funds, only the proceeds from the sale increase
financial resources. Thus, the change in net assets differs from the change in
fund balances by the cost of the assets sold.
(170,154)
Revenues recognized in the Statement of Activities that do not provide current
financial resources and are not recognized as revenues in the governmental
funds, i.e., deferred revenues.
369,433
Some expenses reported in the Statement of Activities do not require the use
of current financial resources and, therefore, are not reported as expenditures
in governmental funds.
Decrease in compensated absences
Increase in accrued interest
Decrease in claims payable
Decrease in arbitrage liability
Increase in due to other governments
5,859
(2,333)
71,925
5,511
(5,000)
75,962
75,962
The incurrence of long-term debt (i.e., bonds and leases) provide current
financial resources to governmental funds, while the repayment of the
principal long-term debt consumes the current financial resources of
governmental funds. Neither transaction has any effect on net assets. Also,
governmental funds report the effect of premiums, discounts, and deferred
amount on refundings, when debt is first issued, whereas these amounts are
deferred and amortized in the Statement of Activities.
Bond proceeds
Refunding bond proceeds
Repayment of bonds
Repayment of capital leases/installment purchase contracts
Payment to refunded bond escrow agent
Amortization of bond premium
Amortization of deferred amount on refunding
Accrued interest at refunding
Change in net assets of governmental activities
(1,413,992)
(971,060)
552,253
2,583
971,060
6,784
(1,423)
(14,831)
(868,626)
(868,626)
$
B-27
1,832,386
B-28
STATE OF FLORIDA
PROPRIETARY FUND FINANCIAL STATEMENTS
Major Funds
TRANSPORTATION
This fund includes the internal reporting enterprise funds which primarily account for operations of the Florida Turnpike.
LOTTERY
This fund accounts for lottery operations in the State, which include sale of lottery tickets, payment of lottery prizes, and
transfers to the Education Enhancement Trust Fund.
UNEMPLOYMENT COMPENSATION
This fund primarily accounts for the receipt of monies for and payment of unemployment compensation benefits.
STATE BOARD OF ADMINISTRATION
This blended component unit includes the internal reporting enterprise funds, which primarily account for investments for
the Florida Hurricane Catastrophe Fund, created to help cover insurers’ losses in the event of a hurricane disaster.
Nonmajor Funds
Nonmajor proprietary funds are presented, by fund type, beginning on page 143.
B-29
STATE OF FLORIDA
PROPRIETARY FUNDS
JUNE 30, 2002
(in thousands)
Transportation
ASSETS
Current assets
Investments
Due from other funds (Note 11)
Inventories
Other
$
Noncurrent assets
Restricted pooled investments with State Treasury
Capital assets
Nondepreciable Infrastructure
Buildings, equipment, and other depreciable assets
Other
Total assets
13,089
130,206
......
6,896
388
......
......
624
151,203
Lottery
$
12,425
113,697
1,890,049
51,187
......
......
1,125
1,764
2,070,247
State Board
of
Administration
Unemployment
Compensation
$
347
2,026,623
......
51,353
3,565
......
......
......
2,081,888
$
2,612
......
457,585
10,164
223
......
......
......
470,584
33
357,293
68,626
......
500
......
......
......
1,992,100
......
......
......
......
......
......
......
......
......
4,350,081
......
740,627
2,806,703
251,737
(77,900)
886,432
11,372
5,045,423
......
......
19,216
(16,332)
......
......
1,994,984
......
......
......
......
......
......
......
......
......
5,830
(5,105)
......
......
4,350,806
5,196,626
4,065,231
2,081,888
4,821,390
22,020
63,588
......
936
......
......
537
64,570
......
151,651
72,261
70,315
......
285
......
......
......
1,924,395
......
2,067,256
71,373
121
......
......
......
......
569
1,789
......
73,852
2,082
11
......
578
......
......
......
421,243
......
423,914
236,160
......
6,341
1,752,407
......
......
20
3,783
1,998,711
......
1,759,561
......
......
......
......
......
3,282
1,762,843
......
......
......
......
......
......
452,024
......
452,024
......
......
......
......
......
......
......
2,135
2,135
2,150,362
3,830,099
525,876
426,049
2,884
232,248
......
......
......
......
......
1,556,012
......
......
725
......
......
4,362,126
32,490
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (Note 3)
Bonds payable
Deposits
Certificates of participation payable
Advances from other funds (Note 11)
Bonds payable
Certificates of participation payable
Deposits
Total liabilities
NET ASSETS
Restricted for lottery
Restricted for unemployment compensation
Restricted for Hurricane Catastrophe Fund
Unrestricted
Total net assets
3,050,124
......
......
......
(3,860)
$
3,046,264
B-30
$
235,132
$
1,556,012
$
4,395,341
STATE OF FLORIDA
Nonmajor
Enterprise
Funds
$
1,216
237,107
......
1,856
260
70
......
2,811
243,320
$
......
......
......
......
......
$
Internal
Service
Funds
Totals
6/30/02
29,689
2,507,633
2,347,634
121,456
4,436
70
1,125
5,199
5,017,242
$
14,155
71,404
25,289
5,750
48,242
2,040
232
1
167,113
33
357,293
68,626
6,342,181
500
......
......
......
18,809
......
......
......
22,514
(14,881)
70
......
7,703
740,627
2,806,703
299,297
(114,218)
886,502
11,372
11,398,916
373
......
935,034
(270,802)
......
......
683,414
251,023
16,416,158
850,527
4,808
34,337
100
2,771
89
......
12,192
30,689
......
84,986
172,544
168,372
100
4,570
89
......
13,298
2,442,686
......
2,801,659
37,635
3,821
103
2,551
5,993
11,795
5,908
7,693
5,580
81,079
......
......
......
......
......
183
......
9,192
9,375
236,160
1,759,561
6,341
1,752,407
......
183
452,044
18,392
4,225,088
2,803
......
929
368,878
95,355
40,647
......
11,463
520,075
94,361
7,026,747
601,154
7,520
......
......
......
149,142
3,061,253
232,248
1,556,012
4,362,126
177,772
136,526
......
......
......
112,847
156,662
$
9,389,411
$
249,373
B-31
STATE OF FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
(in thousands)
Transportation
OPERATING REVENUES
Sales - nonstate
Fees
Sales - state
Rents and royalties - nonstate
Rents - state
Fines, forfeits and judgements
Other revenue
$
740
447,288
......
9,198
......
242
......
Lottery
$
2,335,232
......
......
......
......
......
......
State Board
of
Administration
Unemployment
Compensation
$
......
616,755
......
......
......
......
......
$
479,150
100
17,018
2
......
......
3
Total operating revenues
457,468
2,335,232
616,755
496,273
OPERATING EXPENSES
Benefit payments
Payment of lottery winnings
Commissions on lottery sales
Contractual Services
Personal services
Depreciation
Materials and supplies
Repairs and maintenance
Basic services
Bad debt
......
......
......
139,250
40,493
14,090
5,196
......
......
1,706
......
......
1,165,843
132,351
85,578
24,222
1,035
3,071
1,717
4,758
6
191
1,477,951
......
......
......
3,755
......
3,888
......
......
......
......
......
......
......
10,786
12,660
490
682
669
......
292
......
Total operating expenses
200,735
1,418,772
1,485,594
25,579
Operating income (loss)
256,733
916,460
(868,839)
470,694
1,034
21,751
(60,805)
838
......
......
233,237
(176,239)
(96)
155
183,573
131,602
......
......
2,600
......
140,006
(15,297)
22
......
(37,182)
57,057
317,775
124,731
219,551
973,517
(551,064)
595,425
58,665
(12,903)
......
32
(927,466)
......
265,313
46,083
2,780,951
189,049
......
......
NONOPERATING REVENUES (EXPENSES)
Grants and donations
Investment earnings
Property disposition gain (loss)
Other
Total nonoperating revenues (expenses)
Income (loss) before transfers
and contributions
Operating transfers in (Note 11)
Operating transfers out (Note 11)
Capital contributions
Total net assets - beginning, as restated (Note 1)
Adjustments to increase (decrease) beginning
net assets (Note 13)
Total net assets - beginning, as restated
Total net assets - ending
2,780,951
$
3,046,264
B-32
11,518
(4,730)
......
(544,276)
235,132
565,425
2,149,444
3,829,916
(49,156)
189,049
$
......
(30,000)
......
......
2,100,288
$
1,556,012
3,829,916
$
4,395,341
STATE OF FLORIDA
Nonmajor
Enterprise
Funds
$
47,755
240,479
560
......
16
29,123
29
Internal
Service
Funds
Totals
6/30/02
$
2,862,877
1,304,622
17,578
9,200
16
29,365
32
$
46,848
......
334,001
12
84,345
......
......
317,962
4,223,690
465,206
......
......
......
26,764
103,168
4,379
5,093
75
18,836
80
......
1,477,951
1,165,843
132,351
262,378
184,298
19,994
17,930
2,461
23,594
2,084
191
......
......
......
232,553
120,589
32,963
13,222
16,596
11,288
32
......
158,395
3,289,075
427,243
159,567
934,615
37,963
3
9,855
(22)
186
(61)
184,610
536,451
(252,363)
950
2,694
110
4,530
(23,082)
(11,921)
40
9,961
472,342
(30,323)
169,528
1,406,957
7,640
1,103
(166,500)
417
71,318
(1,141,599)
417
4,344
(15,303)
1,601
4,548
337,093
152,114
9,101,474
......
251,091
(49,156)
152,114
$ 156,662
(1,718)
......
9,052,318
$
9,389,411
251,091
$
249,373
B-33
STATE OF FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(in thousands)
Transportation
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers
Paid to vendors
Paid to employees
Paid for grants made
Lottery prizes
Unemployment benefits
$
Net cash provided (used) by operating activities
458,599
(142,719)
(39,716)
......
......
......
Lottery
$
276,164
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in (out)
Advances from or repayment from other funds
Cash received non-capital grants or donations
Net cash provided (used) by noncapital
financing activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Cash receipts from sale of capital assets
Cash received from the sale of bonds
Cash received capital grants and donations
Payment of bond principal
Payment of principal installment purchase/capital lease
State Board
of
Administration
$
$
581,994
(2,445)
......
......
......
(986,738)
495,536
(11,755)
(12,731)
......
......
......
923,248
(407,189)
471,050
39,285
(188)
18,500
(927,499)
......
......
9,388
......
182,693
(29,998)
......
......
57,597
(927,499)
192,081
(29,998)
1,432
17,605
4,361
(72,056)
(3,338)
Payment of interest on bonds/installment purchase/capital lease
Purchase or construction of capital assets
2,335,596
(228,535)
(24,581)
......
(1,159,232)
......
Unemployment
Compensation
59
......
......
......
......
......
......
......
......
......
3
......
......
......
......
(99,156)
(214,611)
......
(1,326)
......
......
(9)
(304)
(365,763)
(1,267)
......
(310)
37,851
220,844
36,736
(234,295)
11,623
(94,208)
11,936
......
1,098
......
128,460
......
......
101,091,124
86,148
(101,641,049)
Net cash provided (used) by investing activities
61,136
(70,649)
129,558
(463,777)
Net increase (decrease) in cash and cash equivalents
29,134
(76,167)
(85,550)
(23,035)
Net cash (used) by capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Security lending
Proceeds from the sale or maturity of investments
Investment earnings
Purchase of investments
Cash and cash equivalents - beginning, as restated
Cash and cash equivalents - ending
471,487
$
500,621
B-34
202,289
$
126,122
2,112,520
$
2,026,970
25,647
$
2,612
STATE OF FLORIDA
Nonmajor
Enterprise
Funds
$ 319,564
(59,991)
(96,490)
......
......
(7)
Internal
Service
Funds
Totals
6/30/02
$
4,191,289
(445,445)
(173,518)
......
(1,159,232)
(986,745)
$
487,091
(279,290)
(110,870)
(100)
......
(4)
163,076
1,426,349
96,827
(164,347)
......
......
(1,073,171)
(188)
201,193
(71,410)
......
......
(164,347)
(872,166)
(71,410)
(12)
......
3
......
(77)
1,482
17,605
4,364
(72,056)
(3,415)
......
......
......
......
(15,529)
(14)
(915)
(99,179)
(217,156)
(22,105)
(16,204)
(1,015)
(368,355)
(53,838)
21,868
60
10,099
(680)
72,440
101,217,820
273,379
(101,876,024)
3,638
......
496
......
31,347
(312,385)
4,134
29,061
(126,557)
(24,287)
209,262
$ 238,323
3,021,205
$
2,894,648
109,846
$
85,559
B-35
STATE OF FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(in thousands)
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities
Transportation
Operating income (loss)
$
256,733
Lottery
$
916,460
Adjustment to reconcile operating income to
net cash provided by operating activities:
Depreciation expense
14,090
1,035
Change in assets and liabilities:
(Increase) decrease in accounts receivable
(Increase) in due from other funds
Increase (decrease) in allowance for uncollectibles
(Increase) decrease in inventories
Increase (decrease) in accounts payable
Increase (decrease) in compensated absences
Increase (decrease) in due to other funds
(Decrease) in deferred revenues
Decrease in prize liability
(1,226)
7,905
......
154
(965)
4,719
(5,249)
3
......
(1,017)
......
143
53
54
(92)
......
......
6,612
Net cash provided (used) by operating activities
Unemployment
Compensation
State Board
of
Administration
$
$
(868,839)
......
490
(19,464)
(2,457)
13,535
......
29,432
......
(9,833)
450,437
......
$
276,164
$
923,248
$
$
......
$
......
$
(407,189)
470,694
369
(39)
......
......
(1,012)
578
(30)
......
......
$
471,050
Noncash investing, capital, and financing activities
Capital appreciation
B-36
......
$
(8,687)
STATE OF FLORIDA
Nonmajor
Enterprise
Funds
$
159,567
Internal
Service
Funds
Totals
6/30/02
$
934,615
$
37,963
4,379
19,994
32,963
3,412
(3,551)
(957)
......
358
2,771
(2,462)
(441)
......
(17,926)
1,858
12,721
207
27,867
7,976
(17,574)
449,999
6,612
2,050
(16,401)
......
55
41,224
(1,149)
99
23
......
$
163,076
$
......
$ 1,426,349
$
96,827
$
$
......
......
B-37
STATE OF FLORIDA
FIDUCIARY FUND FINANCIAL STATEMENTS
PRIVATE-PURPOSE TRUST FUNDS
Individual fund descriptions and financial statements begin on page 155.
PENSION AND OTHER EMPLOYEE BENEFITS TRUST FUNDS
AGENCY FUNDS
INVESTMENT TRUST FUND
This blended component unit includes the internal reporting funds used to account for the external portion of investment pools reported by the
State.
B-39
STATE OF FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2002
(in thousands)
ASSETS
Pooled investments with State Treasury (Note 2)
Privatepurpose
Trust Funds
Pension and
Other Employee
Benefits
Trust Funds
$
$
Total cash and cash equivalents
Investments
Certificates of deposit
U.S. government & federally guaranteed obligations
Federal agencies
Commercial paper
Repurchase agreements
Bonds and notes
International bonds and notes
Real estate contracts
Short term investments
Domestic equity
Limited partnerships
Equity group trust
International equity
Deferred compensation contracts
Other investments
Total investments (Note 2)
Receivables
Accounts receivable
Pension contributions
State contributions receivable
Nonstate contributions receivable
Interest receivable
Dividends receivable
Pending investment sales
Forward contracts
Proceeds from the sale of investments
Due from state funds (Note 11)
Due from other governments
Total receivables
Security lending collateral
Tuition and housing receivable
Capital assets
Other assets
Total assets
7,357
876,797
1,053,453
228,738
Agency
Funds
$
39,258
2,789,143
Investment
Trust Fund
$
16,614
......
Totals
6/30/02
$
1,116,682
3,894,678
884,154
1,282,191
2,828,401
16,614
5,011,360
18
1,827,445
351,372
34,144
33,677
665,621
......
......
123,248
201,839
......
......
......
......
......
94,999
5,084,978
7,669,551
2,173,189
1,005,817
9,069,632
1,070,348
3,261,417
1,003,903
46,488,245
2,551,660
11,418
11,408,449
1,400,115
......
10,439
2,781,993
422,487
336,144
61,646
928
......
......
......
......
......
......
......
......
3,706
189,555
3,431,307
3,381,208
6,079,126
1,720,147
......
......
......
......
......
......
......
......
......
......
295,011
13,125,723
11,824,618
8,622,603
2,821,287
9,736,181
1,070,348
3,261,417
1,127,151
46,690,084
2,551,660
11,418
11,408,449
1,400,115
3,706
3,237,364
92,293,721
3,617,343
14,801,343
113,949,771
19,466
......
......
......
15,723
257
17,844
......
......
1,077
26,120
24,286
1,348
187
108,714
324,370
106,952
2,661,428
384,805
10,141
12,228
......
700,582
......
......
......
29,771
......
......
......
......
116,901
......
......
......
......
......
17,497
......
......
......
......
......
......
744,334
1,348
187
108,714
387,361
107,209
2,679,272
384,805
10,141
130,206
26,120
80,487
3,634,459
847,254
17,497
8,010,086
......
......
8,171
(4,916)
......
236,984
......
......
......
......
......
4,303,360
......
......
......
......
71
1,139,610
195,976
798,979
768
(404)
174,783
4,579,697
13,690,040
195,976
798,979
8,939
(5,320)
174,854
6,511,717
105,223,712
7,529,982
19,138,885
138,404,296
208,379
......
98,175
......
1,519
206,163
57,579
......
1,354,768
331,632
111,099
360
137,533
3,556,093
41,889
1,546,095
4,536,370
375,819
5,959
12,356
......
......
8,840,368
54,253
68,679
1,502
......
......
756,418
......
......
......
181
33,049
541,612
2,727,339
600,964
......
2,870,419
......
......
......
966
......
......
......
3,283
......
9,739
......
4,317,548
......
......
......
......
......
1,007,652
1,546,095
4,634,545
375,819
10,942
251,568
608,930
2,727,339
15,113,648
385,885
3,050,197
1,862
137,533
3,556,093
6,063,300
15,483,290
7,529,982
4,331,536
33,408,108
......
$ 14,807,349
$104,996,188
LIABILITIES
Accounts payable
DROP
Pending investment purchases
Forward contracts payable
Broker rebate fees
Due to component units
Claims payable
Deposits payable
Compensated absences liability
Unclaimed property payable
Tuition and housing benefits payable
Total liabilities
NET ASSETS
Held in trust for pension benefits and other purposes $
448,417
$
B-40
89,740,422
$
STATE OF FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
(in thousands)
Privatepurpose
Trust Funds
Pension and
Other Employee
Benefits
Trust Funds
Investment
Trust Fund
Totals
06/30/02
ADDITIONS
Contributions and other deposits
Pension fund contributions - state
Pension fund contributions - nonstate
Employer/employee contributions
Tuition and housing contract sales
Purchase of time by employees
Fees
Grants and contributions
Flexible benefit contributions
Transfers in from state funds (Note 11)
Deposits required by law
$
......
......
......
431,706
......
85,502
128,281
......
14,259
......
$
584,496
1,512,119
890,361
......
74,978
......
103
122,082
32,407
1
$
......
......
......
......
......
......
......
......
......
......
584,496
1,512,119
890,361
431,706
74,978
85,502
128,384
122,082
46,666
1
Total contributions and other deposits
659,748
3,216,547
Investment income
Interest income
Dividends
Net increase/(decrease) in fair market value
Total investment income
72,654
3,231
153,891
229,776
1,779,180
716,484
(10,234,718)
(7,739,054)
363,142
......
3,821
366,963
2,214,976
719,715
(10,077,006)
(7,142,315)
Investment activity expense
Net income from investing activity
(1,935)
227,841
(451,578)
(8,190,632)
(2,226)
364,737
(455,739)
(7,598,054)
Security lending activity
Security lending income
Security lending expense
Net income from security lending
26,500
(23,782)
2,718
97,891
(88,185)
9,706
386,731
(111,967)
274,764
Total net investment income
230,559
Other additions
262,340
......
262,340
(7,928,292)
946
Total additions
......
$
374,443
......
......
374,443
3,876,295
(7,323,290)
946
891,253
(4,711,745)
(3,446,049)
......
636,777
......
......
......
181,416
13,986
38,494
......
15
101,127
1,077
3,287,468
......
492,817
323,386
121,411
......
96,930
......
3,890
161
25,963
1,278
......
......
......
......
......
......
336
......
......
......
......
......
3,287,468
636,777
492,817
323,386
121,411
181,416
111,252
38,494
3,890
176
127,090
2,355
972,892
4,353,304
336
5,326,532
......
......
......
......
......
......
DEDUCTIONS
Benefit payments
Tuition and housing payments
Insurance claims expense
HMO payments
Remittances to annuity companies
Student loan default payments
Administrative expense
Prepaid participant refunds
Program contribution refunds
Property disposition gain (loss)
Transfers out to state funds (Note 11)
Other deductions
Total deductions
Depositor activity
Deposits
Withdrawals
Excess of deposits over withdrawals
Net assets - beginning, as restated (Note 1)
Net assets - beginning, as restated
Net assets - ending
(81,639)
(9,065,049)
98,805,471
14,631,840
......
......
98,805,471
14,631,840
113,967,367
14,807,349
$ 104,996,188
(1,155)
448,417
B-41
$
89,740,422
175,509
61,812,791
(62,011,389)
(198,598)
531,211
530,056
$
61,812,791
(62,011,389)
(198,598)
$
(8,971,179)
113,968,522
(1,155)
STATE OF FLORIDA
COMPONENT UNIT FINANCIAL STATEMENTS
Major Component Units
FLORIDA HOUSING FINANCE CORPORATION
Pursuant to Section 420.504, Florida Statutes, this corporation was created as an entrepreneurial public corporation
organized to provide and promote public welfare by administering the governmental function of financing or refinancing
housing and related facilities in Florida.
SOUTH FLORIDA WATER MANAGEMENT DISTRICT
Pursuant to Chapter 373, Florida Statutes, this district was created as a public corporation to promote the natural systems
protection and restoration, development and proper utilization of surface and ground water within district boundaries and to
prevent damage from floods, soil erosion and excessive drainage.
UNIVERSITY OF FLORIDA
University of Florida is a major, public, comprehensive, land-grant, research university with a main campus location in
Gainesville, Florida.
FLORIDA STATE UNIVERSITY
Florida State University is a comprehensive, residential and coeducational institution with a main campus location in
Tallahassee, Florida.
UNIVERSITY OF SOUTH FLORIDA
University of South Florida is a multi-campus national research university with a main campus location in Tampa, Florida.
FLORIDA RESIDENTIAL PROPERTY AND CASUALTY JOINT UNDERWRITING ASSOCIATION
Pursuant to Section 627.351(6), Florida Statutes, this association was created to provide certain residential property and
casualty insurance coverage to qualified risks in the State of Florida under specified circumstances.
Nonmajor Component Units
Nonmajor component units are presented beginning on page 173.
B-43
STATE OF FLORIDA
COMPONENT UNITS
JUNE 30, 2002
(in thousands)
Florida
Housing
Finance
Corporation
ASSETS
Current assets
Investments (Note 2)
Inventories
Other
Noncurrent assets
Restricted investments with State Treasury
Restricted investments (Note 2)
Long term investments (Note 2)
Other loans and notes receivable, net (Note 3)
Capital assets:
Buildings, equipment, and other
depreciable assets
Total capital assets (Note 5)
Other
Total assets
$
$
$
7,187
......
293,533
6,161
11,191
814
1,366
320,252
University
of
Florida
$
205,109
281,529
219,710
286,326
177,002
4,747
22,268
1,196,691
Florida
State
University
$
66,655
154,995
118,712
54,214
213,189
2,197
3,976
613,938
......
......
......
......
2,694,675
......
......
......
......
......
20,584
78,993
1,034,249
......
34,803
8,088
48,322
334,943
......
12,434
......
1,279,017
42,859
131,076
2,850
(2,136)
......
714
15,287
2,710,676
4,264,196
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
Installment purchases/capital leases (Note 9 and 10)
Deposits
Deferred revenue
Other
Advances from other funds
Due to primary
Installment purchases/capital leases (Notes 9 and 10)
Deferred revenue
Claims payable
Other
Total liabilities
NET ASSETS
Restricted for:
Debt service
Other
Permanent funds:
Expendable
Nonexpendable
Unrestricted (deficit)
Total net assets
275,934
11,839
1,185,440
78,737
......
......
1,570
1,553,520
South Florida
Water
Management
District
300,123
(104,763)
136,549
1,610,926
......
1,610,926
1,931,178
2,460,686
(1,197,727)
109,937
1,415,755
83,404
2,667,788
3,864,479
1,056,419
(382,024)
97,762
903,233
64,079
1,371,099
1,985,037
104,072
24,827
......
......
30,621
......
6,193
......
59,987
225,700
29,483
......
762
1,967
4,160
......
25,564
......
3,637
65,573
221,782
81,512
7,581
1,918
15,623
......
102,737
......
12,220
443,373
50,371
144,438
2,124
177
5,445
......
33,312
......
830
236,697
......
......
......
3,265,002
......
28,560
......
......
70,960
3,364,522
3,590,222
......
......
......
67,915
4,307
......
4,466
13,923
21,174
111,785
177,358
......
......
......
433,340
13,969
......
......
110,190
101,002
658,501
1,101,874
......
......
......
184,669
3,321
......
......
34,806
15,023
237,819
474,516
714
1,510,106
950,077
706,203
......
604,843
6,047
......
3,563
1,186,671
553
584,073
......
......
68,417
673,974
10,726
5,570
221,371
1,753,820
......
......
622,294
2,762,605
......
......
219,692
1,510,521
B-44
$
$
$
STATE OF FLORIDA
Florida
Residential
Property and
Casualty JUA
University
of South
Florida
$
$
66,751
73,430
85,150
143,016
65,431
4,451
12,259
450,488
$
1,670
340,090
501,329
32,467
......
......
17,513
893,069
Nonmajor
Component
Units
$
363,039
472,845
823,124
301,204
809,132
24,342
29,867
2,823,553
Totals
6/30/02
$
986,345
1,334,728
3,226,998
902,125
1,275,945
36,551
88,819
7,851,511
2,839
11,823
371,476
......
6,997
......
......
......
87,747
......
35,072
48,934
462,089
683,109
75,913
66,583
188,072
2,202,757
770,856
2,824,822
17,067
......
1,520,436
2,990,455
914,769
(371,473)
125,944
686,307
23,180
1,102,622
1,553,110
3,488
(1,927)
......
1,561
......
89,308
982,377
5,760,591
(2,094,404)
433,582
5,620,205
49,113
6,974,435
9,797,988
10,498,926
(4,154,454)
903,774
10,238,701
235,063
16,526,854
24,378,365
101,549
14,781
3,005
891
9,915
......
76,624
......
......
206,765
91,624
......
......
......
......
......
83,173
6,859
150,000
331,656
661,047
30,165
30,570
7,461
25,890
481
203,825
......
70,792
1,030,231
1,259,928
295,723
44,042
12,414
91,654
481
531,428
6,859
297,466
2,539,995
......
......
......
203,792
47,536
......
......
39,177
7,813
298,318
505,083
......
......
......
......
......
......
......
......
358,283
358,283
689,939
20
6,406
76,035
523,737
73,746
463
......
210,309
150,710
1,041,426
2,071,657
20
6,406
76,035
4,678,455
142,879
29,023
4,466
408,405
724,965
6,070,654
8,610,649
446,277
......
4,898,389
8,511,766
7,866
438,984
......
......
104,276
960,689
122,305
3,775,260
......
......
154,900
1,048,027
......
......
292,438
292,438
732,128
342,833
688,016
7,726,331
742,854
348,403
2,267,128
15,767,716
$
$
$
B-45
STATE OF FLORIDA
STATEMENT OF ACTIVITIES
COMPONENT UNITS
(in thousands)
Program Revenues
Functions/Programs
Florida Housing Finance
Corporation
South Florida Water
Management District
Florida Residential Property
and Casualty JUA
Nonmajor Component Units
Total component units
Charges for
Services
Expenses
$
$
402,209
$
257,203
Operating
Grants and
Contributions
$
245,278
Florida
Housing
Finance
Corporation
Capital
Grants and
Contributions
$
......
$
100,272
258,670
8,592
38,985
83,532
......
2,471,729
692,834
1,059,517
116,787
1,236,365
190,678
424,976
135,601
778,380
306,614
322,268
......
40,714
23,764
3,019
......
......
......
......
......
4,481,365
1,118,606
1,129,335
261,370
......
412,399
100,272
9,483,111
$
3,372,021
$
2,820,860
$
General revenues
Property taxes
Investment earnings
Payments from the State of Florida
Transfers
Contributions to permanent funds
Miscellaneous
Total general revenues
Net assets - beginning, as restated (Note 1)
Net assets - ending
B-46
$
......
......
......
......
......
......
......
......
100,272
573,702
......
673,974
STATE OF FLORIDA
Net (Expense) Revenue and Changes in Net Assets
South Florida
Water
University
Florida
University
Management
of
State
of South
District
Florida
University
Florida
$
......
$
(127,561)
$
$
$
......
......
(309,254)
......
......
(171,778)
......
13,234
......
314,994
1,247
......
......
329,475
157,697
1,351,827
997
1,510,521
......
......
......
(416,270)
......
(7,091)
......
544,522
19,942
......
......
557,373
141,103
2,649,229
(27,727)
2,762,605
$
......
(171,778)
......
......
......
(127,561)
......
......
(416,270)
......
......
......
......
$
$
......
......
......
......
......
256,150
18,292
......
......
......
676
11,166
286,284
158,723
1,595,097
......
1,753,820
......
Florida
Residential
Property and
Casualty JUA
$
......
Nonmajor
Component
Units
$
......
Totals
6/30/02
$
100,272
......
......
(127,561)
......
......
......
18,814
......
......
......
......
(416,270)
(171,778)
(309,254)
18,814
......
(1,972,054)
(1,972,054)
(309,254)
18,814
(1,972,054)
(2,877,831)
......
16,825
......
287,456
1,509
......
......
305,790
(3,464)
1,105,862
(54,371)
1,048,027
......
......
......
181,844
30,122
(297)
2,066,950
18,678
282
273,460
2,571,039
598,985
7,041,247
86,099
7,726,331
437,994
71,382
(297)
3,213,922
41,376
958
284,626
4,049,961
1,172,130
14,590,588
4,998
15,767,716
B-47
$
......
......
......
......
18,814
273,624
......
292,438
$
$
STATE OF FLORIDA
NOTES TO THE FINANCIAL STATEMENTS
TABLE OF CONTENTS
NOTE
PAGE
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.................................................................56
2 DEPOSITS AND INVESTMENTS......................................................................................................62
3 RECEIVABLES AND PAYABLES......................................................................................................66
4 TAX REVENUES ...............................................................................................................................68
5 CAPITAL ASSETS.............................................................................................................................69
6 PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS...........................................................71
7 COMMITMENTS AND OPERATING LEASES ..................................................................................73
8 BONDS PAYABLE ............................................................................................................................74
9 CAPITAL LEASES, INSTALLMENT PURCHASE CONTRACTS, AND
CERTIFICATES OF PARTICIPATION..............................................................................................77
10 CHANGES IN LONG-TERM LIABILITIES ..........................................................................................78
11 INTERFUND BALANCES AND TRANSFERS ..................................................................................80
12 RISK MANAGEMENT ........................................................................................................................83
13 PRIOR PERIOD ADJUSTMENTS ....................................................................................................84
14 FLORIDA PREPAID COLLEGE PROGRAM ...................................................................................86
15 FLORIDA HURRICANE CATASTROPHE FUND ............................................................................86
16 CONTINGENCIES ............................................................................................................................86
17 LITIGATION .......................................................................................................................................87
18 DEFICIT FUND EQUITY....................................................................................................................88
19 SUBSEQUENT EVENTS ..................................................................................................................89
B-49
STATE OF FLORIDA
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
information on major funds.
For financial reporting purposes, the State of Florida’s (the State’s)
financial reporting entity includes the primary government (i.e.,
legislative agencies, the Governor and Cabinet, departments and
agencies, commissions, boards of the Executive Branch, and
various offices relating to the Judicial Branch) and its component
units.
The State’s discretely presented component units are grouped into
the following categories:
State Universities and Community Colleges. State universities
and community colleges receive funding from the State and
operate under the supervision of the State Board of Education.
Component units included in this category are (in alphabetical
order):
Component units, as defined in Governmental Accounting
Standards Board (GASB) Statement No. 14, The Financial
Reporting Entity, are legally separate organizations for which the
elected officials of the State are financially accountable. In
addition, component units can be other organizations for which the
nature and significance of their relationship with the State are such
that exclusion would cause the State’s financial statements to be
misleading or incomplete.
State Universities
Major:
•
•
•
Nonmajor:
•
Florida Agricultural and Mechanical University
•
Florida Atlantic University
•
Florida Gulf Coast University
•
Florida International University
•
New College of Florida
•
University of Central Florida
•
University of North Florida
•
University of West Florida
Blended Component Units
A component unit is reported as blended when either (1) the
component unit’s governing body is substantively the same as the
governing body of the State or (2) the component unit provides
services entirely, or almost entirely, to the State or otherwise
exclusively, or almost exclusively, benefits the State even though it
does not provide services directly to it.
Community Colleges
Nonmajor:
•
Brevard Community College
•
Broward Community College
•
Central Florida Community College
•
Chipola Junior College
•
Daytona Beach Community College
•
Edison Community College
•
Florida Community College at Jacksonville
•
Florida Keys Community College
•
Gulf Coast Community College
•
Hillsborough Community College
•
Indian River Community College
•
Lake City Community College
•
Lake-Sumter Community College
•
Manatee Community College
•
Miami-Dade Community College
•
North Florida Community College
•
Okaloosa-Walton Community College
•
Palm Beach Community College
•
Pasco-Hernando Community College
•
Pensacola Junior College
•
Polk Community College
•
St. Johns River Community College
•
St. Petersburg College
•
Santa Fe Community College
•
Seminole Community College
•
South Florida Community College
•
Tallahassee Community College
•
Valencia Community College
The State’s blended component units are (in alphabetical order):
•
•
•
•
•
•
•
•
•
•
•
•
Citrus Commission (Department of Citrus)
Florida Engineers Management Corporation
Florida Prepaid College Program
Florida School for the Deaf and the Blind
Surplus Lines (Florida Surplus Lines Service Office)
Florida Water Pollution Control Financing Corporation
Partnership in Correctional Excellence (Foundation)
Inland Protection Financing Corporation
Investment Fraud Restoration (Financing) Corporation
Wireless Emergency Telephone System (Wireless 911
Board)
Workforce Florida
Blended component units that are considered major are reported in
separate columns in the fund financial statements. Other blended
component units that are considered nonmajor are reported with
other funds in the appropriate columns in the fund financial
statements. In addition, the financial data for some blended
component units (e.g. State Board of Administration (SBA)) are
reported in more than one fund type, some of which are
considered major (e.g. Lawton Chiles Endowment Fund – SBA)
and others are considered nonmajor. Refer to Section D of this
note for more information on the determination criteria for major
funds and a list of major funds and fund types.
Discretely Presented Component Units
Component units that are not blended are discretely presented. In
the government-wide financial statements, discrete presentation
entails reporting component unit financial data in a column
separate from the financial data of the State.
Florida Housing Finance Corporation (Major). Pursuant to
Section 420.504, Florida Statutes, this corporation was created as
an entrepreneurial public corporation organized to provide and
promote public welfare by administering the governmental function
of financing or refinancing housing and related facilities in Florida.
This entity has a December 31 year end.
In addition, financial data for discretely presented component units
that are considered major are reported in separate columns in the
basic financial statements for component units. Discretely
presented component units that are considered nonmajor are
combined and reported in one column in the component unit
financial statements and detailed in the combining statements.
The determination of whether a component unit is major or
nonmajor is based on the amount of assets, liabilities, revenues,
and expenditures/expenses the component units report on their
financial statements. Refer to Section D of this note for more
Water Management Districts. These districts were created in
accordance with Section 373.069, Florida Statutes, to provide for
the management and conservation of water and related land
resources. The Governor appoints members of the governing
boards of the districts, subject to confirmation by the Senate. In
addition, the general regulatory and administrative functions of the
B-50
STATE OF FLORIDA
districts are either fully or in part financed by general
appropriations. Water management districts have a fiscal year end
of September 30. Component units included in this category are
(in alphabetical order):
controversies, equitably apportion the surface waters of the
ACFRB, and engage in water planning. Operational funding
required by the commission is equally shared among the party
states.
Major:
South Florida Water Management District
Nonmajor:
Northwest Florida Water Management District
St. Johns River Water Management District
Southwest Florida Water Management District
Suwannee River Water Management District
Board of Control for Southern Regional Education. Sections
244.01 - 244.03, Florida Statutes, promote the development and
maintenance of regional education services and facilities in the
southern states to provide greater educational advantages and
facilities for the citizens in the region. The states established a
joint agency called the Board of Control for Southern Regional
Education to submit plans and recommendations to the states from
time to time for their approval and adoption by appropriate
legislative action for the development, establishment, acquisition,
operation, and maintenance of educational facilities in the region.
The statute establishing this joint venture will be repealed January
7, 2003, in accordance with Chapter 2000-321, Laws of Florida.
•
•
•
•
•
Florida Residential Property and Casualty Joint Underwriting
Association (Major). Pursuant to Section 627.351(6), Florida
Statutes, this association was created to provide certain residential
property and casualty insurance coverage to qualified risks in the
State under specified circumstances. This entity has a December
31 year end.
Regional Planning Councils. Sections 186.501 - 186.513,
Florida Statutes, the “Florida Regional Planning Council Act”,
provide for the creation of regional planning agencies to assist
local governments in resolving their common problems. The
regional planning councils are designated as the primary
organization to address problems and plan solutions that are of
greater-than-local concern or scope. Participants in these councils
are required by statutes to contribute to the support of these
programs.
Other. Additional discretely presented component units of the
State also include various foundations and not-for-profit
organizations. The fiscal year ends of these component units may
vary.
Component units included in this category are (in
alphabetical order):
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Nonmajor:
Astronauts Memorial Foundation
Commission for Florida Law Enforcement Accreditation
Enterprise Florida
Florida Agriculture Center and Horse Park Authority
Florida Agriculture in the Classroom Program
Florida Agricultural Museum
Florida Birth-Related Neurological Injury Compensation
Plan
Florida Commercial Space Financing Corporation
Florida Comprehensive Health Association
Florida Education Foundation
Florida Education Fund
Florida Endowment Foundation for Vocational
Rehabilitation
Florida First Capital Finance Corporation
Florida Fund for Minority Teachers
Florida Healthy Kids Corporation
Florida Patient’s Compensation Fund
Florida Space Authority
Florida Sports Foundation
Florida State Fair Authority
Florida Telecommunications Relay
Florida Tourism Industry Marketing Corporation
Forestry Arson Alert Program
Friends of Florida State Forests
Prison Rehabilitative Industries and Diversified
Enterprises (PRIDE)
Technological Research and Development Authority
Tri-County Commuter Railroad Authority
Wildlife Alert Reward Association
Wildlife Foundation of Florida
Southern States Energy Compact. Section 377.711, Florida
Statutes, enacted this compact into law joining the State of Florida
and other states to recognize that proper employment and
conservation of energy and employment of energy-related
facilities, materials, and products can assist substantially in the
industrialization of the South and the development of a balanced
economy in the region. The State of Florida appropriates funds to
support Florida’s participation in the compact.
Related Organizations
Organizations for which the State is accountable because the
State appoints a voting majority of the board but is not financially
accountable are related organizations. The State’s related
organizations include certain transportation authorities, hospital
districts, port authorities, and aviation authorities. Since the State
is not financially accountable for any of these organizations,
applicable financial data is not included in the State’s financial
statements.
Contact
Financial statements of the component units that issue separate
statements and other financial statement related information may
be obtained from:
Statewide Financial Reporting Section
Bureau of Accounting
Department of Financial Services
200 East Gaines Street
Telephone: (850) 410-9951
Department Website: http://www.fldfs.com
Joint Ventures
Contact the joint ventures directly for their financial statements.
A joint venture is an organization that results from contractual
arrangement and that is owned, operated, or governed by two or
more participants as a separate and specific activity subject to joint
control, in which the participants retain (1) an ongoing financial
interest or (2) an ongoing financial responsibility. Financial data for
the State’s joint ventures is not included in its statements. The
State’s joint ventures include the following (in alphabetical order):
B. Basic Financial Statements
The State’s financial statements have been prepared in
accordance with generally accepted accounting principles as
prescribed by the Governmental Accounting Standards Board
(GASB). As a result of the implementation of GASB Statement No.
34, Basic Financial Statements – and Management’s Discussion
and Analysis – for State and Local Governments, as amended by
GASB Statement No. 37, the State has reformatted its financial
statements and restated beginning balances as appropriate. The
basic financial statements of the State, including its component
units, are presented in the required format discussed below.
Apalachicola-Chattahoochee-Flint Ri ver Basin (ACFRB)
Commission. Section 373.71, Florida Statutes, provided for the
creation of an interstate administrative agency to promote
interstate comity, remove causes of present and future
B-51
STATE OF FLORIDA
major funds. The State elected to add certain other major funds
which had specific public interest. Major individual governmental
funds and major individual enterprise funds are reported as
separate columns in the fund financial statements. The nonmajor
funds are combined in a column in the fund financial statements
and detailed in the combining statements. The State reports the
following major funds:
The government-wide financial statements (i.e., the statement of
net assets and the statement of activities) report information on all
of the non-fiduciary activities of the primary government and its
component units. The effect of interfund activity has been
removed from these statements. Governmental activities, which
normally are supported by taxes and intergovernmental revenues,
are reported separately from business-type activities, which rely to
a significant extent on fees and charges for support. Likewise, the
primary government is reported separately from its discretely
presented component units.
~Major Governmental Funds~
General Fund – this fund accounts for the financial resources of
the State, except those required to be accounted for in another
fund. This is the State’s primary operating fund.
The statement of activities demonstrates the degree to which the
direct expenses of a given function are offset by program
revenues. Direct expenses are those that are clearly identifiable to
a specific function. Some functions may include administrative
overhead that is essentially indirect expenses of other functions.
The State currently does not allocate those indirect expenses to
other functions. Program revenues include (1) charges to
customers or applicants who purchase, use, or directly benefit from
goods, services, or privileges provided by a given function; (2)
grants and contributions that are restricted to meeting the
operational requirements of a particular function; and (3) grants
and contributions that are restricted to meeting the capital
requirements of a particular function. Taxes and other items not
properly included among program revenues are reported instead
as general revenues.
Environment, Recreation, and Conservation - accounts for the
operations of various programs such as air pollution control, water
quality assurance, ecosystem management, and marine resources
conservation, etc.
Health and Family Services - includes funds used to operate
various health and family service-related programs such as health
care, elder affairs, and child support, etc.
Transportation - accounts for the maintenance and development
of the State highway system and other transportation-related
projects.
Public Education - includes funds to operate education-related
programs.
Tax Collection and Administration - accounts for operations of
the State’s tax collection and administration functions. Refer to
Note 4 for additional information on tax revenues.
Separate fund financial statements are provided for governmental
funds, proprietary funds, and fiduciary funds, even though the latter
are excluded from the government-wide financial statements.
Employment Services - accounts for funds used for employeeservice related programs other than unemployment compensation
(i.e., workers’ compensation, employment security, labor market
statistics, administration of the unemployment compensation
program, etc.).
C. Basis of Accounting
The government-wide financial statements are reported using the
economic resources measurement focus and the accrual basis of
accounting, as are the proprietary fund and fiduciary fund financial
statements. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of
related cash flows.
Lawton Chiles Endowment Fund - provides a perpetual source
of enhanced funding for the future of State children’s health
programs, child welfare programs, children’s community-based
health and human services initiatives, elder programs, and
biomedical research activities related to tobacco use.
Governmental fund financial statements are reported using the
current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as they
become susceptible to accrual, generally when they are both
measurable and available. Revenues are considered available
when they are collected within 30 days of the end of the current
fiscal year. The major revenue that meets this availability criterion
is tax revenue. Expenditures generally are recorded when a
liability is incurred, as under accrual accounting. However,
expenditures for insurance and similar services extending over
more than one fiscal year generally are accounted for as
expenditures of the fiscal year of acquisition. Further, principal and
interest on general long-term debt are recognized when due.
~Major Business-type Funds~
Transportation - primarily accounts for operations of the Florida
Turnpike.
Lottery - accounts for lottery operations in the State, which include
sale of lottery tickets, payment of lottery prizes, and transfers to the
Education Enhancement Trust Fund.
Unemployment Compensation - accounts for receipt of monies
for and payment of unemployment compensation benefits.
Under GASB Statement No. 20, Accounting and Financial
Reporting for Proprietary Funds and Other Governmental Entities
That Use Proprietary Fund Accounting, proprietary funds have the
option to elect to apply all pronouncements of the Financial
Accounting Standards Board (FASB) issued after November 30,
1989, unless FASB conflicts with GASB. The State has elected
not to apply FASB pronouncements issued after the applicable
date.
State Board of Administration - primarily accounts for
investments for the Florida Hurricane Catastrophe Fund, which
was created to help cover insurers’ losses in the event of a
hurricane disaster.
Fund Types
Additionally, the State reports the following fund types:
D. Basis of Presentation
~Governmental Fund Types~
Major Funds
Special Revenue Funds - used to account for revenues which are
legally restricted to expenditures for specific purposes.
GASB Statement No. 34, as amended by GASB Statement No. 37,
sets forth minimum criteria (percentage of the assets, liabilities,
revenues or expenditures/expenses for either fund category or the
governmental and enterprise combined) for the determination of
Capital Projects Funds - used to account for resources used for
the acquisition or construction of major capital facilities other than
those financed by other funds.
B-52
STATE OF FLORIDA
Investments
Debt Service Fund - used to account for resources earmarked to
pay principal, interest, and service charges on long-term debt of
governmental funds.
Section 18.10, Florida Statutes, authorizes the State to invest in
various instruments. Investments of the Local Government
Surplus Funds Trust Fund, a Securities and Exchange
Commission Rule 2a7-like external investment pool, are reported
at amortized cost. Investments of the Debt Service Escrowed
Fund, which meet the requirements of a legal or in-substance
defeasance, are reported at cost. Other investments are reported
at fair value at the reporting date. Details of investments are
included in Note 2.
Permanent Funds - used to report resources that are legally
restricted to the extent that only earnings, and not principal, may
be used for purposes that support the State’s programs.
~Proprietary Fund Types~
Proprietary fund revenues earned in the normal course of business
where goods or services are generally provided in exchange are
considered operating revenues. Examples of operating revenues
include sales, fees, and rents. On the other hand, subsidies and
grants to proprietary funds or other sources of revenues which
finance either capital or current operations are recorded as
nonoperating revenues when earned.
Inventories
Inventories primarily consist of expendable supplies. Inventories
are recorded as expenditures when consumed. At the end of the
fiscal year, inventory is reported as an asset and a fund balance
reservation. The method used to determine the cost of inventories
varies by agency responsible for the inventories.
Enterprise Funds - used to report activities for which a fee is
charged to external users for goods or services.
Restricted Assets
Internal Service Funds - primarily used to report activities that
provide goods or services to other funds or agencies within the
State, rather than to the general public. Internal service funds are
classified into the following categories:
When both restricted and unrestricted resources are to be used for
the same purpose, the agency responsible for administering the
resources determines the flow assumption used to identify the
portion of expenses paid from restricted resources.
•
•
•
Data Centers - accounts for services provided by data
processing centers operated by various agencies.
Communications and Facilities - primarily accounts for
services provided by the Department of Management
Services such as those related to the construction,
operation, and maintenance of public facilities, and
management and operation of the Suncom (state
communication) Network.
Other - account for services provided to other State
agencies such as legal services, records management,
and community services (inmate work squads), etc.
Capital Assets
Capital assets are real and personal property that have a cost
equal to or greater than an established capitalization threshold and
have an estimated useful life extending beyond one year. For
additional information, refer to Note 5.
Compensated Absences
Employees earn the right to be compensated during absences for
vacation and illness as well as for unused special compensatory
leave earned for hours worked on legal holidays and other
specially authorized overtime. Compensated absences for annual
leave are recorded as a liability when the benefits are earned.
Compensated absences for sick leave are calculated based on the
vesting method. Within the limits established by law or rule, the
value of unused leave benefits will be paid to employees upon
separation from State service. The amounts reported for
compensated absences are based on current year-end salary
rates and include employer social security and pension
contributions at current rates.
~Fiduciary Fund Types~
Fiduciary funds are used to report assets held in a trustee or
agency capacity for others and therefore cannot be used to
support the State’s own programs.
Private-Purpose Trust Funds - used to report trust arrangements
under which principal and income benefit individuals, private
organizations, or other governments.
Long-term Liabilities
Pension and Other Employee Benefits Trust Funds - used to
report resources that are required to be held in trust for the
members and beneficiaries of pension plans and other employee
benefit plans.
Refer to Note 8 for information on bonds payable, Note 9 for
information on capital leases, installment purchase contracts, and
certificates of participation, and Note 10 for changes in long-term
liabilities.
Agency Funds - used to report resources held by the State in a
purely custodial capacity.
Net Assets
Investment Trust Funds - used to report the external portion of
investment pools reported by the State.
The government-wide statement of net assets classifies net assets
into the following categories: (1) invested in capital assets, net of
related debt, (2) restricted, and (3) unrestricted. The “invested in
capital assets, net of related debt” component of net assets
consists of capital assets, including restricted capital assets, net of
accumulated depreciation and reduced by the outstanding
balances of any bonds, mortgages, notes, or other borrowings that
are attributable to the acquisition, construction, or improvement of
those assets. Net assets are reported as “restricted” when
constraints placed on net asset use are either (a) externally
imposed by creditors, grantors, contributors, or laws or regulations
of other governments or (b) imposed by law through constitutional
provisions or enabling legislation. “Unrestricted” net assets consist
of net assets that do not meet the definition of “restricted” or
“invested in capital assets, net of related debt.”
E. Assets, Liabilities, and Net Assets or Fund Balance
Cash and Cash Equivalents
The State’s cash includes cash on hand and on deposit in banks,
including demand deposits, certificates of deposit, and time
deposits. Most deposits are held by financial institutions qualified
as public depositories under Florida law. Cash equivalents are
short-term, highly liquid investments. For the purposes of GASB
Codification Section 2450, Cash Flow Statements, pooled
investments with the State Treasury include cash equivalents.
Details of deposits are included in Note 2.
B-53
STATE OF FLORIDA
Reserves of Fund Balance
H. Reporting Changes
In the fund financial statements, governmental funds report
reserves of fund balance for amounts that are not available for
appropriation or are legally reserved by outside parties for use for
a specific purpose. The State has the following types of reserves
of fund balance:
Changes in Reporting State Universities
Effective July 1, 2001, the State’s universities became legally
separate from the State, requiring that they be reported as
discretely presented component units rather than part of the
primary government. Due to this change, the financial activity and
account balances of over 50 discretely presented component units
associated with the state universities, which were previously
reported as discretely presented component units of the State, are
now reported as part of state universities’ financial activity and
account balances.
Reserve for encumbrances represents outstanding purchase
orders, contracts, and other commitments.
Reserves for inventories, advances, and long-term
receivables represent fund assets that are not expendable
financial resources.
Reserve for capital outlay represents funds reserved for capital
projects.
Changes in Accounting Standards
The Governmental Accounting Standards Board (GASB) has
issued GASB Statement No. 34, Basic Financial Statements – and
Management’s Discussion and Analysis – for State and Local
Governments, GASB Statement No. 35, Basic Financial
Statements – Management’s Discussion and Analysis – for
Colleges and Universities, GASB Statement No. 37, Basic
Financial Statements – and Management’s Discussion and
Analysis – for State and Local Governments: Omnibus – An
Amendment of Statements No. 21 and No. 34, and GASB
Statement No. 38, Certain Financial Statement Note Disclosures .
These statements have been implemented this year. The new
accounting and reporting standards impacted the State’s revenue
and expenditure recognition and assets, liabilities, and fund
equity/net asset reporting. The State has reformatted its financial
statements and restated beginning equity/net asset balances as
appropriate to comply with these standards. The following
schedule summarizes changes to fund equities/net assets as
previously reported on the Combined Balance Sheet. The
changes are primarily due to fund reclassifications as a result of
GASB Statement No. 34. Reporting entity changes include
changes in the law, changes in organizational structure, and
effects of management’s judgment with regard to the State’s legal
and financial relationship with certain entities.
Reserve for debt service represents fund assets reserved for
payment of debt service.
Reserve for permanent trust represents trust fund assets that
must be held in perpetuity by the donee.
Reserve for Budget Stabilization Fund represents funds
available to cover revenue shortfalls in the General Revenue Fund
and for emergencies defined by law.
Reserve for Working Capital Fund represents funds available in
the General Revenue Fund used to offset unanticipated
expenditures such as spending on emergencies.
Other reserves represent fund assets reserved for various
reasons, including donor-imposed restrictions and statutory
guidelines.
F. Interfund Activity and Balances
The effect of interfund activities, except those between funds
reported as governmental activities and funds reported as
business-type activities, has been eliminated from the governmentwide statements. In the fund financial statements, transfers
represent flows of assets without equivalent flows of assets in
return or a requirement for repayment. In addition, transfers are
recorded when a fund receiving revenue provides it to the fund
which expends the resources. Transfers and balances between
funds are made to accomplish various provisions of law.
Entities affected by changes in the law and/or changes in
organizational structure were as follows (in alphabetical order):
Entities changing status within the reporting entity:
•
Historic Pensacola Preservation Board (now
component unit of the University of West Florida)
Interfund receivables and payables have been eliminated from the
statement of net assets, except for the residual amounts due
between governmental and business-type activities.
a
Entities removed from the reporting entity:
•
Center for Systematic Entomology, Inc. (DSO)
•
Florida Endowment Foundation for Florida’s Graduates
•
Seminole County Expressway Authority
•
St. Lucie County Expressway and Bridge Authority
For additional information, refer to Note 11.
G. Nonmonetary Transactions
Entities affected by management’s judgment with regard to the
State’s legal and financial relationship with certain entities (in
alphabetical order):
The State participates in various activities which are, in part,
represented by nonmonetary transactions. The majority of these
nonmonetary transactions are reported within the receiving
governmental funds of the State’s reporting entity. Examples
include nonmonetary assistance in the form of Federal grants,
such as Electronic Benefit Transfer (EBT) cards for food
assistance and donated food commodities. The State also acts as
an agent for the United States Department of Agriculture in the
distribution of donated food commodities to qualifying
organizations outside the State’s reporting entity. Transactions
related to this activity are not reported in the accompanying
financial statements.
Entities changing status within the reporting entity:
•
Florida Prepaid College Foundation (now a component
unit of the Florida Prepaid College Board)
Entities removed from the reporting entity:
•
Mid-Bay Bridge Authority
•
Orlando-Orange County Expressway Authority
•
Tampa-Hillsborough County Expressway Authority
Entities added to the reporting entity:
•
Florida Residential Property and
Underwriters Association
State Attorneys and Public Defenders of the State of Florida are
furnished certain office space and other services by counties under
the provisions of Chapter 27, Florida Statutes. Some counties also
provide certain facilities and services to other officers and staff of
the judicial branch. The value of these services provided by the
counties is not reported as a revenue.
B-54
Casualty
Joint
STATE OF FLORIDA
The following is a reconciliation prior year ending equity balances
to the current year restated beginning balances (in thousands):
June 30, 2001
As Previously
Reported
Fund and Other
Reclassifications
June 30, 2001
As Restated
GOVERNMENTAL FUNDS AND ACTIVITIES
General Fund
$
Special Revenue Funds
Environment, Recreation, & Conservation
Health & Family Services
Transportation
Public Education
Tax Collection & Administration
Employment Services
Nonmajor Special Revenue Funds
Total Special Revenue Funds
3,425,713
$
85,328
$
3,511,041
6,254,934
......
......
......
......
......
......
......
6,254,934
(6,254,934)
2,440,921
706,338
1,136,221
605,401
309,530
49,737
752,167
(254,619)
......
2,440,921
706,338
1,136,221
605,401
309,530
49,737
752,167
6,000,315
109,924
368,911
(1,013)
(2)
108,911
368,909
Permanent Funds
Lawton Chiles Endowment Fund
Other Permanent Fund
Total Permanent Funds
......
......
......
......
......
1,257,101
1,605
1,258,706
......
1,257,101
1,605
1,258,706
Adoption of GASB Statements No. 33 & 34 (to include the following)
Capital assets, net of depreciation
Long-term debt and notes payable
Internal service fund conversion
Total Adoption of GASB Statements No. 33 & 34
......
......
......
......
39,146,711
(16,456,277)
251,091
22,941,525
Capital Projects Funds
Debt Service Fund
TOTAL GOVERNMENTAL FUNDS AND ACTIVITIES
PROPRIETARY FUNDS AND BUSINESS-TYPE ACTIVITIES
Enterprise Funds
Transportation
Lottery
Nonmajor Enterprise Funds
Total Enterprise Funds
$
10,159,482
$
24,029,925
$
34,189,407
$
2,802,793
......
......
......
......
......
2,802,793
$
(2,802,793)
2,780,951
189,049
2,149,444
3,829,916
152,114
6,298,681
$
......
2,780,951
189,049
2,149,444
3,829,916
152,114
9,101,474
$
3,086,059
$
6,015,415
$
9,101,474
$
6,364,338
1,257,101
......
97,301,194
......
14,631,836
$
$
(6,364,338)
(1,257,101)
531,211
1,504,277
......
4
$
......
Internal Service Funds
TOTAL PROPRIETARY FUNDS AND BUSINESS-TYPE ACTIVITIES
FIDUCIARY FUNDS
Fiduciary Funds
Expendable Trust Fund
Non-Expendable Trust Fund
Private Purpose Trust Funds
Pension & Other Employment Benefits
Agency Funds
Investment Trust Fund SBA
39,146,711
(16,456,277)
251,091
22,941,525
283,266
(283,266)
......
531,211
98,805,471
......
14,631,840
TOTAL FIDUCIARY FUNDS
$
119,554,469
$
(5,585,947)
$
113,968,522
ACCOUNT GROUPS
General Fixed Assets
$
7,773,299
$
(7,773,299)
$
......
TOTAL ACCOUNT GROUPS
$
7,773,299
$
(7,773,299)
$
......
State University System
$
6,830,889
$
(6,830,889)
$
......
TOTAL PRIMARY GOVERNMENT
$
147,404,198
$
9,855,205
$
157,259,403
$
12,069,031
......
$
......
6,830,889
$
14,590,588
......
DISCRETELY PRESENTED COMPONENT UNITS
Component Units
State University System - New Component Units
Florida Residential Property & Casualty Joint Underwriting
Association - New Component Unit
Other changes in the reporting entity
State University System - effects of GASB 34 and 35 implementation
and elimination of the Board of Regents
Community Colleges - effects of GABS 34 and 35 implementation
and inclusion of a new component unit
Water Management Districts - effects of GASB 34 implementation
TOTAL DISCRETELY PRESENTED COMPONENT UNITS
$
B-55
......
......
273,624
(488,511)
......
......
......
(2,279,384)
......
......
......
(1,396,156)
(418,905)
......
......
12,069,031
$
2,521,557
$
14,590,588
STATE OF FLORIDA
NOTE 2 - DEPOSITS AND INVESTMENTS
A.
Deposits
A.
At June 30, 2002, the carrying amount of deposits totaled
$2,418,894,354, which consisted of the following: $210,357,715
cash and cash equivalents in financial institutions; $33,026
restricted cash in financial institutions; and $2,208,503,613 pooled
investments with the State Treasury. The reported carrying
amount of component unit deposits totaled $712,589,640, which
consisted of cash and cash equivalents in financial institutions.
B.
C.
Insured or registered, or securities held by
the State or its agent in the State’s name.
Uninsured
and
unregistered,
with
securities held by the counterparty’s trust
department or agent in the State’s name.
Uninsured
and
unregistered,
with
securities held by the counterparty, or by
its trust department or agent but not in the
State’s name.
Chapter 280, Florida Statutes (F.S.), generally requires public
funds to be deposited in a bank or savings association that is
designated by the State Treasurer as authorized to receive
deposits in the State and that meets the collateral requirements.
The Treasurer determines the collateral requirements and
collateral pledging level for each Qualified Public Depository (QPD)
following guidelines outlined in Chapter 4C-2, Florida
Administrative Code (FAC) and Section 280.04, Florida Statutes.
The Treasurer is directed by FAC to review the “Public Depository
Monthly Reports” and continually monitor the collateral pledging
level(s) and required collateral of each QPD. If the Treasurer
determines that a QPD has violated the law and rule and has not
pledged adequate collateral and/or has not used the proper
collateral pledging level or levels, the QPD is immediately notified
of the fact and directed to immediately comply with the Treasurer’s
collateral requirements.
Eligible collateral includes Federal,
Federally-guaranteed, state and local government obligations, and
corporate bonds , letters of credit issued by a Federal Home Loan
Bank, and with the Treasurer’s permission, collateralized mortgage
obligations, real estate mortgage investment conduits and
securities or other interests in any open-end management
investment company registered under the Investment Company
Act of 1940 provided the portfolio of such investment company is
limited to direct obligations of the United States ( U.S.)
Government and to repurchase agreements fully collateralized by
such direct obligations of the U.S. Government and provided such
investment company takes delivery of such collateral either directly
or through an authorized custodian.
Certain investments, such as mutual funds, cannot be categorized
because they are not evidenced by securities that exist in physical
or book entry form. Securities held by the other parties underlying
securities lending agreements also are not categorized.
Statutes provide that if a loss to public depositors is not covered by
deposit insurance, demanding payment under letters of credit, and
the proceeds from the sale of collateral pledged or deposited by
the defaulting depository, the difference will be provided by an
assessment levied against other QPD’s.
The State Treasury records , as an investment, funds credited to
the State’s account in the Federal Unemployment Compensation
Trust Fund pursuant to Section 903 of the Social Security Act. The
fund is drawn upon primarily to pay unemployment compensation
benefits. This money is pooled with deposits from other states and
is managed by the Federal Government. No disclosures can be
made of specific securities owned.
1.
Unless specifically exempted by statute, all cash of the State must
be deposited in the State Treasury. Certain component units are
allowed by statute to deposit cash with the State Treasury. The
State Treasury, in turn, keeps the funds fully invested to maximize
interest earnings. Authorized investment types are set forth in
Section 18.10, F.S., and include certificates of deposit, direct
obligations of the United States Treasury, obligations of Federal
agencies,
asset-backed
or
mortgage-backed securities,
commercial paper, bankers’ acceptances, medium term corporate
obligations, repurchase agreements, commingled and mutual
funds, derivatives, negotiable certificates of deposit; and, subject to
certain rating conditions, foreign bonds denominated in U.S.
dollars and registered with the Securities and Exchange
Commission (SEC) for sale in the U.S. and convertible debt
obligations of any corporation domiciled within the U.S.
The State Treasury had holdings at June 30, 2002, of
$2,276,639,816 for component units in total. These investments
are reported as part of the primary government and may be
different from the amounts reported by some component units due
to different reporting periods.
Deposits held in trust that are fully secured under trust business
laws, deposits that are fully secured under Federal regulations,
and/or deposits that are outside the country are exempted from
being placed with a QPD. Also exempt are deposits of the System
Trust Fund, which is used to administer the Florida Retirement
System, and wire transfers and transfers of funds solely for the
purpose of paying registrars and paying agents. A number of
these deposits, however, are insured or collateralized.
Security Lending. State statutes authorize the State Treasury to
participate in a security lending program. Agents of the State
Treasury loan securities, including U.S. Government and federallyguaranteed obligations, bonds and notes to broker/dealers for
collateral with a simultaneous agreement to return the collateral for
the same securities in the future. Collateral for loaned securities
cannot be less than 100 percent of the fair value of the underlying
security plus accrued interest. Such collateral may consist of cash;
government securities; unconditional, irrevocable standby letters of
credit; or other assets specifically agreed to in writing. Cash
collateral is invested by the agent in investments authorized by
Section 18.10, F.S. Maturities of investments made with cash
collateral generally are not matched to maturities of the securities
loaned because security loan agreements are generally openended with no fixed expiration date. Since the collateral under
security lending agreements (including accrued interest) exceeded
the fair value of the securities underlying those agreements
(including accrued interest), the Treasury had no credit risk
exposure at June 30, 2002. If a situation occurs where an agent
does not receive collateral sufficient to offset the fair value of any
securities lent, or the borrowers fail to return the securities or fail to
pay the State Treasury for income distributions by the securities’
issuers while the securities are on loan, the agent is required to
indemnify the State Treasury for any losses which might occur.
The State Treasury does not have the ability to pledge or sell the
The deposit balances reported by the State’s banks totaled
$3,320,641,930. Of this amount, $2,215,261,515 was covered by
Federal and other depository insurance, letters of credit, or the
collateral pool described above and $1,015,380,415 was
uncollateralized. The deposit balances reported by component
unit banks totaled $731,484,935. Of this amount, $429,204,723
was covered by Federal and other depository insurance or the
collateral pool described above, $278,804,566 was collateralized
with securities held by the pledging financial institution’s trust
department in the component unit's name, and $23,475,646 was
uncollateralized.
B.
Pooled Investments with the State Treasury
Investments
The schedules below disclose the carrying value and fair value of
each type of investment classified in categories of credit risk.
These categories are as follows:
B-56
STATE OF FLORIDA
non-cash collateral securities so the non-cash portion of the
collateral held (U.S. Government and federally-guaranteed
obligations valued at $430,630,026) is not reported in the balance
sheet.
during the year but none were in force at June 30, 2002. In the
following Schedule of Pooled Investments, the fair value of
derivatives , $2,623,996,598, is included in the pooled investments
categorized as U.S. Government obligations and Federal agencies
and bonds and notes.
Derivatives. The State invests in derivatives of asset-backed and
mortgage-backed securities to improve yield. Investments in
derivatives of mortgage-backed securities include various classes
such as “Interest Only” and “Principal Only”. These derivatives are
based on cash flows from interest and principal payments on
underlying mortgages. Therefore, prices of mortgage derivatives
are highly sensitive to pre-payments by mortgagees caused by
changing market conditions. The State utilized option contracts
Detail of the holdings and the credit risk of investments held, as
well as the reconciliations to the Government-wide Statement of
Net Assets and the Statement of Fiduciary Net Assets , are as
follows (in thousands):
Schedule of Pooled Investments
A
U. S. Government and
federally guaranteed obligations
Bankers' acceptances
Commercial paper
Repurchase agreements
Bonds and notes
Total classifiable investments
Risk Category
B
$
4,582,415
170,753
1,694,029
166,639
2,973,490
$
......
......
127,073
275,583
1,488,566
$
9,587,326
$
1,891,222
Fair
Value
$
11,478,548
Unemployment compensation funds
pooled with U. S. Treasury
Mutual funds
Securities held with others under security
lending agreements
Securities held with others under reverse
repurchase agreements
2,059,743
877,547
1,919,150
431,881
Total nonclassifiable investments
5,288,321
Total investments
16,766,869
Cash on hand
Cash on deposit
300
2,208,504
Total State Treasury holdings
Adjustments:
Outstanding warrants
Unsettled securities liability
18,975,673
(1,080,417)
(799,734)
Reconciled balance, June 30, 2002
Reconciliation to basic financial statements (in thousands):
Governmental Activities
Business-type Activities
Fiduciary Funds
Total pooled investments with State Treasury
Restricted pooled investments with State Treasury (Business-Type Activities)
Total
2.
4,582,415
170,753
1,821,102
442,222
4,462,056
Other Investments
$
17,095,522
$
10,335,918
2,507,633
3,894,678
16,738,229
357,293
$
17,095,522
Florida Hurricane Catastrophe Fund, the Florida Prepaid College
Trust Fund, and the Lawton Chiles Endowment Fund, participate in
security lending programs. The SBA had received and invested
$17,122,555,800 in cash and $292,884,346 in U.S. Government
securities as collateral for the lending programs as of June 30, 2002.
At June 30, 2002, the collateral held for the security lending
transactions exceeded the fair value of the securities underlying the
agreements (including accrued interest) except for total credit risk of
$2,290,033 in three of the security lending programs. All securities
lending programs have indemnity clauses requiring the lending
agent to assume borrower’s risk from default. Maturities of
investments made with cash collateral generally are not matched to
maturities of the securities loaned, due to securities loan agreements
being open-ended with no fixed expiration date. As such,
investments made with cash collateral are primarily in short-term
investments. However, investments purchased for some security
lending programs included investments with final maturities of six
State Statutes allow investment of funds in a range of instruments ,
including federally -guaranteed obligations, other Federal agency
obligations, certain State bonds, commercial paper, obligations of a
Florida political subdivision as permitted by law, common stock,
repurchase and reverse repurchase agreements , and real estate.
Securities identified above may be loaned to securities dealers,
provided the loan is collateralized by cash or U.S. Government
securities having a fair value of at least 100 percent of the fair value
of the securities loaned. If bond proceeds are invested, investments
must be made in accordance with bond covenants. These covenants
usually require investment in federally -guaranteed obligations.
Security Lending. Through the State Board of Administration
(SBA), various funds, including the Defined Benefit Pension Plan,
the Investment Trust Funds, the Florida Lottery Trust Fund, the
B-57
STATE OF FLORIDA
•
months or more representing a range of approximately 7 percent to
78 percent of total collateral invested. There are no restrictions on
the amount of securities that can be loaned at one time to one
borrower for most funds. For the Local Government Surplus Funds
Trust Fund, the SBA has adopted industry practice for SEC 2a7-like
pools, which generally restricts lending activity to no more than onethird of the portfolio.
•
The SBA issued a separate report (financial statements and notes)
pertaining to the State’s Investment Trust Funds for the period ended
June 30, 2002, as required by GASB Statement No. 31. Additional
information pertaining to the Investment Trust Funds or a copy of the
report may be obtained from the Senior Operating Officer-Finance
and Accounting, State Board of Administration of Florida, 1801
Hermitage Boulevard, Suite 101, Tallahassee, Florida 32308, (850)
488-4406.
Lawton Chiles Endowment Fund:
•
•
Derivatives.
The SBA has established investment policy
guidelines for each investment portfolio. Pursuant to these
guidelines, derivative investment instruments are not to be used to
speculate in the expectation of earning extremely high returns.
Various derivative investment instruments are used as part of the
investment strategy to hedge against interest rate risk, currency
risk in foreign markets, and mortgaged-backed security
prepayment risk, as well as for yield-curve strategy purposes,
diversification, and the management of equity market exposure.
Derivative investment instruments include futures, options, forward
exchange contracts, floating rate notes, interest rate swaps,
inflation-indexed securities, mortgage-backed security derivative
instruments such as c ollateralized mortgage obligations, exchange
traded funds on the Europe, Australasia, and the Far East (EAFE)
Index, OPALs (Optimized Portfolios as Listed Securities) on certain
indices, and international participatory notes (to gain broad
exposure to equity markets in India and South Korea).
•
•
•
•
•
•
•
•
•
•
•
•
Mortgage-backed security derivative investments with a
fair value of $54,971 and a cost of $53,864; and
Floating rate notes with a fair value of $188,202 and a
cost of $188,322.
SBA Administrative Trust Fund:
•
•
fair value of $851,976 and a cost of $834,816; and
Floating rate notes with a fair value of $1,028,588 and a
cost of $1,027,807.
Florida Prepaid College Trust Fund:
Defined Benefit Pension Plan:
•
fair value of $2,126,947 and a cost of $1,990,073.
Blind Services Endowment Fund:
As of June 30, 2002, investments reported at fair value in various
derivative products for various Plans and Funds are as follows:
•
•
Forward exchange contracts with a receivable balance of
$10,937,493 and discount of $8,694 and a payable
balance of $10,718,177 with a premium of $28,243;
Treasury inflation-indexed securities with a fair value of
$147,420,540 and a cost of $136,766,871;
Mortgage-backed security derivative instruments with a
fair value of $5,530,195 and cost of $5,368,482;
Floating rate notes with a fair value of $143,820,468 and a
cost of $143,887,570; and
Russell 3000 Index Receipts with a fair value of
$14,248,520 and a cost of $14,192,348.
Florida McKnight Education Fund:
The Defined Benefit Pension Plan also held units in the State Street
Global Advisors, Inc. (SSGA ) Emerging Markets Fund and the
SSGA Daily Active Emerging Markets Fund. These funds use equity
return swaps and equity futures to gain exposure to certain
international equity markets. The Defined Benefit Pension Plan does
not directly hold positions in these derivatives; it holds only units of
the emerging markets funds.
•
India and South Korea participatory notes with a fair value
of $7,963,365 and a cost of $7,790,226; and a
Matched agreement involving a repurchase agreement
(Lehman Mortgage Backed Securities (MBS) Index + 10
basis points) and a reverse repurchase agreement (6
month London International Bank Offered Rate (LIBOR) +
6 basis points) with the same underlying securities and
counterparties. Maturity dates are the same in both
agreements. In Fiscal Year 2001-02, the interest income
was $16,109,762 and the interest expense was
$5,802,444.
•
494 long and 2,903 short futures contracts on U.S.
Treasury obligations;
224 short call options on ten-year treasury futures.
Forward exchange contracts with a receivable balance of
$384,558,099 and discount of $246,688 and a payable
balance of $374,946,227 with a premium of $872,948;
Interest rate swaps, mortgage index swaps, and mortgage
index linked certificates with notional principal values of
$1,446,943,998. The underlying securities have a fair
value of $1,056,650,539 and a cost of $1,088,152,434;
$368,248,848 and a cost of $344,088,114;
Mortgage-backed security derivative instruments with a
fair value of $856,256,568 and a cost of $818,978,977;
Floating rate securities (including certificates of deposit,
bonds and notes) with a fair value of $4,197,976,003 and
a cost of $4,193,531,286. The majority of these
investments were in one of the security lending cash
collateral reinvestment programs.
S & P Depository Receipts (SPDRs) with a fair value of
$69,272,000 and a cost of $78,825,332;
Exchange traded fund on the EAFE Index with a fair value
of $196,365,035 and a cost of $192,664,594;
Morgan Stanley Capital International (MSCI) Canada
OPAL with a fair value of $14,310,531 and a cost of
$16,627,938;
•
•
fair value of $192,633,938 and a cost of $180,211,816;
$50,059,844 and a cost of $48,891,094; and
S & P Depository Receipts (SPDRs) with a fair value of
$148,440 and a cost of $162,272.
In addition to the derivative investments described above, the SBA
had the following derivative investments (all floating rate securities)
at June 30, 2002:
Original Cost
Florida Hurricane Catastrophe
Fund
$ 972,355,408
Local Government Surplus
Funds Investment Pool
Trust Funds
1,623,153,274
Florida Lottery
846,370,543
Total
$3,441,879,225
Fair Value
$ 971,217,529
1,627,821,469
853,825,639
$3,452,864,637
The carrying values (securities reported at cost, amortized cost, or
fair value) reported in the Other Investments Schedules for the
primary government and component units are categorized as follows
(in thousands):
B-58
STATE OF FLORIDA
Other Investments Schedule
Primary Government
Risk Category
B
A
Federally Guaranteed Obligations
Federal Agencies
Bankers Acceptances
Commercial Paper
Repurchase Agreements
Bonds and Notes
Stocks
$
$
605,217
$
18
6,138,577
8,003,698
......
11,122,122
5,462,287
12,576,406
42,437,626
$
2,679,961
406,928
306,310
......
217,292
858,606
152,557
52
86,345,933
$
1,941,763
Carrying
Value
C
$
$
Fair
Value
3,285,196
$
3,285,192
......
15
......
671,131
682,683
5,652,173
6
6,545,505
8,310,023
......
12,010,545
7,003,576
18,381,136
42,437,684
6,616,931
8,317,339
12,009,449
7,003,576
18,381,137
9,685,969
97,973,665
98,051,308
9,428,058
3,931,716
626,629
2,821,763
2,845,157
3,261,417
1,400,115
16,375,939
9,436,685
3,931,054
626,629
2,821,763
2,845,157
3,261,417
1,400,115
16,375,939
Investments Held by Others Under Reverse Repurchase Agreements
U. S. obligations
Federal agencies
Bonds and notes
Stocks
Investment Agreements
Real Estate Contracts
Deferred Compensation (Mutual Funds and Annuities)
Money Market and Mutual Funds
42,437,684
40,690,794
Total investments
$
138,664,459
40,698,759
$
138,750,067
Reconciliation to the basic financial statements:
Investments - current
Long-term investments
Security lending collateral
Total investments
Governmental
Activities
$
201,324
......
2,064,883
......
Business-type
Activities
$
2,347,634
68,626
6,342,181
......
$
$
2,266,207
8,758,441
Fiduciary
Funds
$
......
......
113,949,771
13,690,040
$
$
127,639,811
$
Total
2,548,958
68,626
122,356,835
13,690,040
138,664,459
Other Investments Schedule
Component Units
Risk Category
B
A
Federally Guaranteed Obligations
Federal Agencies Obligations
Repurchase Agreements
Bonds and notes
Stocks
$
7,789
$
250
540,032
67,551
9,603
890,757
1,047,288
496,026
144,073
......
69,075
30,168
$ 2,563,020
$ 739,592
Carrying
Value
C
$
3,748
$
11,787
Fair
Value
$
11,787
85,204
3,316
......
88,588
68,950
1,121,262
214,940
9,603
1,048,420
1,146,406
1,121,262
214,940
9,603
1,048,420
1,146,406
249,806
3,552,418
3,552,418
Investment agreements
Real estate agreements
Deferred compensation investments
Money market and mutual funds
620,524
33,586
220
1,993,863
620,524
33,586
220
1,993,863
2,648,193
2,648,193
Total investments
$ 6,200,611
$ 6,200,611
Reconciliation to the basic financial statements:
Investments - current
Restricted investments - noncurrent
Long-term investments
$ 3,226,998
2,202,757
770,856
Total investments
$ 6,200,611
B-59
$
STATE OF FLORIDA
NOTE 3 - RECEIVABLES AND PAYABLES
The lines “Receivables, net” and “Other loans and notes
receivables, net” as presented on the Government-wide Statement
of Net Assets and the applicable balance sheets and statements of
net assets in the fund financial statements, consist of the following
(in thousands):
GOVERNMENTAL ACTIVITIES
Environment,
Recreation and
Conservation
General
Fund
21,452 $
......
4,973
80,230
9,651
2,113
(16,032)
102,387 $
Transportation
374,678 $
......
1,265
......
700,330
6,376
(269,544)
813,105 $
$
Long term interest receivable
Other loans and notes
receivable
$
618
......
$
4,351
......
$
......
......
$
56,224
1,194
$
......
......
$
618
$
4,351
$
......
$
57,418
$
......
Lawton Chiles
Endowment
Fund
Nonmajor
Governmental
Funds
76
74,696
340
844
6,612
......
......
82,568
$
67,499
......
5,885
......
......
......
......
73,384
$
Employment
Services
1,512 $
......
4,649
......
40,836
9,195
(219)
55,973 $
Total
Governmental
Funds
Accounts receivable
Taxes receivable
Interest & dividends receivable
Loans & notes receivable
Due from Federal government
Other receivables
Allowance for uncollectibles
Receivables, net
$
Long term interest receivable
Other loans and notes
receivable
$
......
......
$
......
......
$
12,447
......
$
73,640
1,194
$
......
$
......
$
12,447
$
74,834
$
$
$
47,839 $
894
10,426
21,830
37,563
47,564
(31,207)
134,909 $
Tax
Collection and
Administration
Public
Education
Accounts receivable
Taxes receivable
Loans & notes receivable
Due from Federal government
Other receivables
Receivables, net
$
109,956 $
916,374
20,664
4,835
674
1,196
(143,942)
909,757 $
Health and
Family
Services
...... $
......
3,318
6,206
1,974
......
(1,647)
9,851 $
$
......
......
$
......
Continued below
Internal
Service
Funds
623,037 $
1,233,444
51,529
113,945
797,640
66,487
(462,591)
2,423,491 $
25
241,480
9
......
......
43
......
241,557
Total
Governmental
Activities
1,755
......
111
......
......
3,884
$
5,750
$
$
......
......
$
73,640
1,194
$
......
$
74,834
BUSINESS-TYPE ACTIVITIES
Transportation
Accounts receivable
Taxes receivable
Other receivables
Receivables, net
$
$
5,032 $
......
1,712
152
......
6,896 $
Lottery
Unemployment
Compensation
46,332 $
......
5,693
......
(838)
51,187 $
State
Board of
Administration
72,356 $
26,663
44,030
4,311
(96,007)
51,353 $
198
......
9,966
......
......
10,164
Nonmajor
Enterprise
Funds
$
$
TOTAL
12,252 $
......
592
9
(10,997)
1,856 $
136,170
26,663
61,993
4,472
(107,842)
121,456
COMPONENT UNITS
Accounts receivable
Other receivables
Receivables, net
$
$
$
749,241
189,049
(36,165)
902,125
Other loans and notes receivable, net
B-60
$
$
$
2,916,651
(91,829)
2,824,822
624,792
1,233,444
51,640
113,945
797,640
70,371
(462,591)
2,429,241
STATE OF FLORIDA
The lines “Accounts payable and other liabilities” and “Accounts
payable and accrued liabilities” as presented on the governmentwide Statement of Net Assets and the applicable balance sheets
and statements of net assets in the fund financial statements,
consist of the following (in thousands):
Environment,
Recreation and
Conservation
General
Fund
Accounts payable
Construction contracts
Claims payable
$
Accrued salaries & wages
Deposits payable
Due to Federal government
Due to other governmental
units
Accrued Interest
Other payables
Accounts payable and
accrued liabilities
$
754,203
62
2,683
$
37,250
......
......
Health and
Family
Services
$
971,078
......
......
Public
Education
Transportation
$
245,567
155,058
......
$
23,879
......
......
Tax
Collection and
Administration
Employment
Services
$
$
14,257
......
......
12,106
......
......
49,454
6
17
......
404
246
22,706
......
219
10,129
1,573
......
133
13,523
......
12
......
......
24
......
......
3,771
......
5,316
7,684
......
......
1,136
......
......
......
......
......
......
......
......
89,164
......
101
......
......
......
815,512
$
45,584
$
995,139
$
412,327
$
37,535
$
103,534
$
12,130
Continued Below
Lawton Chiles
Nonmajor
Total
Endowment Governmental Governmental
Fund
Funds
Funds
Accounts payable
$
121,093
......
$
134,128
6,351
Claims payable
Deposits payable
Due to Federal government
Due to other governmental
......
......
......
......
......
5,824
178
50
units
Accrued Interest
Other payables
accrued liabilities
......
......
......
20,030
......
41,691
$
121,093
$
208,252
$
$
2,313,561
161,471
2,683
Internal
Service
Funds
$
Government-wide
Total
Reconciling
Governmental
Balances
Activities
27,529
......
$
......
......
88,282
15,684
532
......
2,248
......
......
......
......
......
......
121,785
......
47,108
19
......
7,839
......
36,279
......
2,751,106
$
37,635
$
36,279
$
2,341,090
161,471
2,683
90,530
15,684
532
121,804
36,279
54,947
$
2,825,020
Transportation
Accounts payable
Deposits payable
Due to other governmental units
Other payables
accrued liabilities
$
37 $
21,458
......
......
525
......
......
$
22,020 $
Unemployment
Compensation
Lottery
9,978 $
......
......
52,031
1,764
......
8,488
72,261 $
B-61
70,534
......
State Board
of Administration
$
......
......
......
839
......
71,373
2,082 $
......
......
......
......
......
......
$
2,082 $
Nonmajor
Enterprise
Funds
3,534 $
......
1,204
......
......
......
70
4,808 $
TOTAL
86,165
21,458
1,204
52,031
2,289
839
8,558
172,544
STATE OF FLORIDA
NOTE 4 - TAX REVENUES
Florida levies neither a personal income tax nor an ad valorem tax
on real or tangible personal property. Taxes are, however, the
principal sources of financing State operations. A schedule of tax
Health and
Tax Collection
Nonmajor
Family
Public
and
Employment Governmental
Services Education Administration
Services
Funds
General
Fund
Sales and use tax
$ 15,594,659
Fuel taxes
Motor fuel tax
Pollutant tax
Aviation fuel tax
Solid minerals severance tax
Oil and gas production tax
Total fuel taxes
revenues by major tax type for each applicable major
governmental fund and nonmajor governmental funds in the
aggregate is presented below (in thousands):
$
......
$
......
$
......
$
......
$
Total
......
$ 15,594,659
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
1,769,257
234,474
48,690
43,468
5,057
2,100,946
......
......
......
......
......
......
......
......
......
......
......
......
1,769,257
234,474
48,690
43,468
5,057
2,100,946
1,210,346
......
......
......
......
......
1,210,346
......
......
......
1,590,981
......
......
1,590,981
Intangible personal property tax
......
......
......
737,776
......
......
737,776
Communications service tax
528,034
......
251,133
......
......
......
779,167
Estate tax
745,080
......
......
......
......
......
745,080
......
......
518,232
8,354
......
......
526,586
525,527
......
23,599
549,126
......
......
......
......
......
......
......
......
......
420,093
......
420,093
......
......
......
......
21,052
......
......
21,052
546,579
420,093
23,599
990,271
35,134
......
......
......
142
......
35,276
......
......
269,232
......
......
......
269,232
......
......
......
......
......
......
......
426,163
......
......
......
......
3,596
429,759
......
291,301
......
......
......
......
291,301
43,125
......
......
54,133
31,611
439
129,308
504,422
291,301
269,232
54,133
31,753
4,035
1,154,876
$ 18,662,521
$ 269,232
$ 769,365
$ 5,287,909
$ 291,301
150,360
$ 25,430,688
Gross receipts utilities tax
Beverage and tobacco taxes
Alcoholic beverage tax
Cigarette tax
Smokeless tobacco tax
Total beverage and tobacco taxes
Other taxes
Insurance premium tax
Workers' compensation special disability tax
Hospital public assistance tax
Citrus excise tax
Pari-Mutuel wagering tax
Other
Total other taxes
Total
Reconciliation of balances in governmental fund statements to
government-wide financial statements:
Sales and
Governmental fund statements
use tax
$ 15,594,659
Other taxes
$ 1,154,876
Government-wide accruals
Government-wide statements
6,585
$ 15,601,244
1,299
$ 1,156,175
B-62
$
STATE OF FLORIDA
NOTE 5 - CAPITAL ASSETS
Capital assets are recorded at historical cost or estimated historical
cost if purchased or constructed. Donated capital assets are
recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to
the value of the assets or materially extend the assets’ lives are
not capitalized.
Capital Asset Category
Land and land improvements
Buildings and building improvements
Infrastructure and infrastructure improvements
(depreciable)
Leasehold improvements
Property under capital lease
Furniture and equipment
Works of art and historical treasures
Library resources
Other fixed assets
For financial statement purposes, the State reports capital assets
under the following categories and has established a reporting
capitalization threshold for each category. Applicable capital
assets are depreciated over the appropriate estimated useful lives
using the straight-line method.
Estimated Useful
Life (in Years)
Not depreciable.
5 – 50
3 – 50
Reporting Capitalization Threshold
Capitalize all.
$100,000
$100,000
$100,000
Threshold correlates to specific asset category.
$100,000 when work is completed.
$1,000 and $250 for non-circulated books.
Capitalize all unless considered a collection. Also,
capitalize if already capitalized as of June 30, 1999.
$25
$1,000
The State has elected to use the modified approach for accounting
for its bridges and roadways included in the State Highway
System. Under this approach, the Department of Transportation
has made the commitment to preserve and maintain these assets
at levels established by the Department of Transportation and
approved by the Florida Legislature. No depreciation expense is
reported for such assets, nor are amounts capitalized in
connection with improvements that lengthen the lives of such
assets, unless the improvements also increase their service
potential.
The Department of Transportation maintains an
inventory of these assets and performs periodic condition
assessments to establish that the predetermined condition level is
being maintained. In addition, the Department of Transportation
makes annual estimates of the amounts that must be expended to
preserve and maintain these assets at the predetermined condition
2 – 15
2 – 20
Not depreciable.
2 – 25
5 – 50
5 – 50
3 – 20
levels. Refer to RSI for additional information on infrastructure
using the modified approach.
Not included in the reported capital assets are the irreplaceable
collections at various historic sites and museums throughout the
State. For example, the Museum of Florida History, located in
Tallahassee, currently has artifacts illustrating the history of Florida
since the arrival of human beings on the peninsula. It also has
access to collections that include Florida upland and underwater
archaeology, Florida archives, and Florida and Spanish colonial
numismatics.
Primary government capital asset activities for the year ended
June 30, 2002, are as follows (in thousands):
Balance
7/1/2001
Capital assets, not being depreciated:
Infrastructure and infrastructure
improvements - nondepreciable
Total capital assets, not being depreciated
$
Adjustments &
Restatements
3,034,812
2,385,662
196,683
......
......
1,556,278
......
22,586
332,468
4,493,677
Less accumulated depreciation for:
Library resources
Other
Total accumulated depreciation
......
......
......
......
......
......
......
......
Total capital assets, being depreciated, net
7,773,299
$
678,126
31,863
......
182,220
158,365
1,459
(1,373)
(291,099)
759,561
1,081,938
98,447
13,652
1,115,790
343
6,003
23,841
2,340,014
4,493,677
$
7,538,512
23,566,442
2,447,959
33,552,913
244,810
3,279,622
Capital assets, being depreciated:
Library resources
Other
Total capital assets, being depreciated
Governmental activities capital assets, net
$
Increases
(1,580,453)
$
B-63
31,972,460
688,997
$
11,351
$
11,250,970
......
1,459,435
2,148,432
50,294
34,723
96,368
23,516,148
4,117,481
38,884,599
186,746
19,345
268
2,820
207,868
8
2,381
630
420,066
119,945
3,890
......
......
263,857
75
193
1,938
389,898
3,130,589
244,001
268
185,040
1,658,654
1,392
23,401
40,061
5,283,406
99,667
9,581
4,321
168,145
43
805
2,070
284,632
53,298
1,801
1,762
233,159
......
77
705
290,802
1,128,307
106,227
16,211
1,050,776
386
6,731
25,206
2,333,844
135,434
$
Balance
6/30/2002
Decreases
2,283,866
99,096
$
195,464
2,949,562
$
41,834,161
STATE OF FLORIDA
Balance
7/1/01
Infrastructure and infrastructure
improvements - nondepreciable
$
681,665
Adjustments
$
Increases
15,819 $
43,143
Balance
6/30/02
Decreases
$
......
$
740,627
......
823,984
1,505,649
2,729,019
(82,279)
2,662,559
77,684
144,797
265,624
......
......
......
2,806,703
886,502
4,433,832
Library resources
Other
2,843,831
......
66,385
......
......
2,910,216
(2,656,073)
33
28,037
3
18
(2,627,982)
9,564
8
10,222
......
2
19,796
158
......
2,575
......
......
2,733
197,164
41
102,069
3
20
299,297
Library resources
Other
53,529
......
26,805
3
......
80,337
550
33
15,211
......
......
15,794
6,628
......
13,360
......
6
19,994
34
......
1,873
......
......
1,907
60,673
33
53,503
3
6
114,218
2,829,879
Business-type activities capital assets, net
$
4,335,528
(2,643,776)
$
(198)
18,783 $
265,426
826
$
826
185,079
$
4,618,911
Depreciation expense charged to functions/programs of governmental activities is as follows (in thousands):
General government
Education
Human services
Transportation
State courts
Total depreciation expense (governmental activities)
$
$
59,979
5,674
38,306
94,054
38,907
45,111
2,601
284,632
In addition, component units’ capital asset activities for the year ended June 30, 2002 are as follows (in thousands):
COMPONENT UNITS
Balance
7/1/01
Land and other non-depreciable assets
$
2,151,145 $
600,469
2,751,614
Library resources
Other
2,881,792
1,593,367
......
28,419
917,662
......
79,513
608,397
6,109,150
Library resources
Other
19,352
3,795
......
......
110,361
......
......
1,054
134,562
Component units capital assets, net
Adjustments
5,974,588
$
Increases
583,717 $
(1,637)
582,080
B-64
$
15,066
303,466
318,532
$
$
$
2,990,455
903,774
3,894,229-
3,387,329
(839,670)
77,575
49,112
1,218,403
166
423,955
(552,527)
3,764,343
421,947
60,063
10,614
47,580
277,118
151
51,730
20,434
889,637
16,571
1,738
1,955
3,922
227,022
......
8,923
4,073
264,204
6,674,497
812,022
86,234
121,189
2,186,161
317
546,275
72,231
10,498,926
1,911,407
293,423
22,910
6,271
1,177,556
85
312,136
30,014
3,753,802
145,310
26,560
3,560
3,121
203,641
20
27,431
10,923
420,566
5,748
114
1,197
1,330
143,907
......
781
1,399
154,476
2,070,321
323,664
25,273
8,062
1,347,651
105
338,786
40,592
4,154,454
10,541
8,726,202 $
270,659
608,408
879,067
Balance
6/30/02
Decreases
592,621
469,071
$
1,348,138
109,728
$
428,260
6,344,472
$
10,238,701
STATE OF FLORIDA
NOTE 6 - PENSION AND OTHER POSTEMPLOYMENT BENEFITS
The Florida Retirement System (FRS) was created December 1,
1970, with consolidation of the Teachers’ Retirement System
(Chapter 238, Florida Statutes (F.S.)), the State and County
Officers and Employees’ Retirement System (Chapter 122, F.S.),
and the Highway Patrol Pension Trust Fund (Chapter 321, F.S.).
In 1972, the Judicial Retirement System (Section 121.046, F.S.)
was also consolidated with the FRS. The FRS was created by
Chapter 121, F.S., to provide a defined benefit pension plan for
participating public employees. The FRS also provides optional
retirement programs in lieu of the defined benefit pension plan to
members of the Senior Management Service Class as well as
faculty and specified employees in the state university system and
state community colleges. In June 2002, the Public Employee
Optional Retirement Program (PEORP) was implemented as a
defined contribution plan alternative available to all FRS members
in lieu of the defined benefit plan. The earliest possible enrollment
in the PEORP will be effective July 1, 2002. Provisions relating to
the FRS are also contained in Chapter 112, F.S.
creditable service and age 62. Thirty years of creditable
service regardless of age.
•
Note: Members who terminated employment before July 1, 2001,
or who did not return to work on July 1, 2001, or their first regularly
scheduled day thereafter and who were not on an approved leave
of absence, must return to work for one work year before being
covered by 6-year vesting.
Benefits under the defined benefit plan are computed on the basis
of age, average final compensation, and service credit. Members
are also eligible for in-line-of-duty or regular disability and
survivors’ benefits. Pension benefits are increased each July 1 by
a 3 percent cost- of-living adjustment.
Except for elected officers and members of the optional retirement
programs, FRS membership is compulsory for all employees filling
a regularly established position in a state agency, county agency,
state university, state community college, or district school board.
Members of the Elected Officers’ Class may elect to withdraw from
the FRS altogether or to participate in the Senior Management
Service Class in lieu of the Elected Officers’ Class. Participation
by cities, municipalities, and special districts, although optional, is
generally irrevocable after election to participate is made.
The Deferred Retirement Option Program (DROP) was
established, effective July 1, 1998, subject to provisions of Section
121.091(13), Florida Statutes. It permits eligible defined benefit
plan employees who have reached their normal retirement date to
defer receipt of monthly benefit payments while continuing
employment with an FRS employer. An employee may participate
in the DROP for a maximum of 60 months after becoming eligible
to participate. During the period of DROP participation, deferred
monthly benefits remain in the FRS pension trust fund and accrue
interest. As of June 30, 2002, the FRS Pension Trust Fund
projected $1,546,094,627 accumulated benefits and interest for
28,576 current and prior participants in the DROP.
There are f ive general classes of membership as follows:
•
Regular Class - This class consists of members of the
FRS who do not qualify for membership in the other
classes.
•
Senior Management Service Class (SMSC) - This class
consists of members in senior management level
positions in state and local governments as well as
assistant
state
attorneys,
assistant
statewide
prosecutors, assistant public defenders, assistant
attorneys general, deputy court administrators, and
assistant capital collateral representatives.
•
Special Risk Class - This class consists of members who
are employed as law enforcement officers, firefighters,
firefighter trainers, fire prevention, state fixed-wing pilots
for aerial firefighting surveillance, correctional officers,
emergency
medical
technicians,
paramedics,
correctional probation officers, or certain health-care
related positions within state forensic or correctional
facilities, and meet the criteria to qualify for this class.
•
Special Risk Administrative Support Class - This class
consis ts of Special Risk Class members who are
transferred or reassigned to nonspecial risk law
enforcement, firefighting, or correctional administrative
support positions within an FRS special risk employing
agency.
•
The FRS is primarily a cost-sharing multiple-employer publicemployee defined benefit pension plan administered by the
Department of Management Services, Division of Retirement.
Optional retirement programs are available to targeted employee
groups such as senior managers and faculty of the state university
and community college systems. Costs of administering the FRS
are funded through investment earnings on investments made for
the pension trust fund. Reporting of the FRS is on the accrual
basis of accounting. Revenues are recognized when earned and
expenses are recognized when the obligation is incurred.
Investments are reported at fair value. Short-term investments are
reported at amortized cost, which approximates fair value.
Securities traded on a national or international exchange are
valued at the last reported sales price at current exchange rates.
Mortgages are valued on the basis of expected future principal and
interest payments and are discounted at prevailing interest rates
for similar instruments. The fair value of real estate investments is
based on independent appraisals. Investments that do not have
an established market are reported at estimated fair value. No
investment in any one organization represents 5 percent or more
of the net assets available for pension benefits.
All participating employers must comply with statutory contribution
requirements. Except in those instances where employees have
elected to remain in pre-existing plans, employees make no
required contributions.
Statutes require that any unfunded
actuarial liability (UAL) be amortized within a 30-fiscal year period.
The balance of legally required reserves for all defined benefit
pension plans at June 30, 2002, was $88,156,410,000. Of this
amount, $88,141,999,276 was attributable to the FRS and was
reserved to provide for total current and future benefits, refunds,
and administration of the FRS. Section 121.031(3), F.S., requires
an annual actuarial review of the FRS, which is provided to the
Legislature as guidance for funding decisions. The conclusions of
the review are included in the annual report of the FRS.
Elected Officers’ Class (EOC) - This class consists of
elected state and county officers in addition to the
elected officers of some city and special districts.
The FRS defined benefit plan provides vesting of benefits after six
years of service for all membership classes. Members are eligible
for normal retirement when they have met the requirements listed
below. Early retirement may be taken any time after vesting;
however, there is a 5 percent benefit reduction for each year prior
to the normal retirement date.
•
Special Risk (Including Administrative Support Class) Six or more years of Special Risk Class service and age
55. Twenty-five total years special risk service and age
52.
Regular Class, Senior Management Service Class, and
Elected Officers' Class Members - Six or more years of
B-65
STATE OF FLORIDA
FRS Retirement Contribution Rates:
Normal Cost Rates Recommended
by Actuarial Review
7/1/01
as of 7/1/00 for
Statutory
Fiscal Year
Rates*
2001-2002
(Ch. 121, F.S.)
Membership Class
Regular
Senior Management
Special Risk
Special Risk Administrative Support
Judges
Legislators/Attorneys/Cabinet
Elected County, City, and Special
District Officers
Deferred Retirement Option
Program - applicable to
members from all of the
above classes or plans
9.91%
11.73%
22.07%
12.55%
20.61%
15.14%
6.19%
8.17%
17.33%
8.72%
17.45%
11.29%
17.61%
14.03%
11.56%
11.56%
FRS Participating Employers:
Employer Types
State Agencies
County Agencies
District School Boards
Community Colleges
Cities
Special Districts
Hospitals
Other
Total Participating Employers
* All rates, except for DROP, are reduced by a variable offset by class for
06/30/02
54
397
67
28
127 *
148 *
4 *
12
837
* These totals include the 51 cities, 3 independent
rate increases due to actuarial experience, a reduction of employer
contribution rates, and an 0.10% offset of the PEORP adm inistration fee.
hospitals, and 22 independent special districts that are
closed to new FRS members as of January 1, 1996.
FRS Membership:
Member Types
Active:
Non-Vested
Vested
DROP Participants
Current Retirees
and Beneficiaries
Vested Terminated
Total Members
Regular
Senior
Management
Special
Risk
Special Risk
Administrative
Elected
Officers
208,503
333,416
24,616
2,043
3,754
244
20,191
41,402
3,335
97
33
585
1,464
161
231,322
380,133
28,389
183,166
52,330
636
401
13,057
3,596
112
23
1,473
285
198,444
56,635
802,031
7,078
81,581
265
Additional information about the FRS defined benefit plan is
contained in the various publications available from the Division of
Retirement within the Department of Management Services.
894,923
payments were at least $30 but not more than $150 per month
pursuant to Section 112.363, F.S. To be eligible to receive the
HIS, a retiree under a state-administered retirement system must
provide proof of health insurance coverage, which can include
Medicare.
A. Other Postemployment Benefits
Section 112.0801, F.S., provides that retirees may participate in
their former employers’ group health insurance programs. In
general, premiums are paid by the retiree.
The HIS program is funded by required contributions from FRS
participating employers. Employer contributions are a percentage
of payroll for all active FRS employees and are added to the
amount submitted for retirement contributions. HIS contributions
are deposited in a separate trust fund from which HIS payments
are authorized. For the fiscal year ended June 30, 2002, the
contribution rate was 1.11 percent of payroll pursuant to Section
112.363, F.S. In the event contributions fail to provide subsidy
benefits to all participants, the subsidy payments may be reduced
or canceled. Additional information pertaining to the HIS is as
follows:
The Retiree Health Insurance Subsidy (HIS) established by
Section 112.363, F.S., is to assist retirees of any stateadministered retirement systems in paying health insurance costs.
For the fiscal year ended June 30, 2002, eligible retirees and
beneficiaries received a monthly retiree health insurance subsidy
payment equal to the number of years of creditable service
completed at the time of retirement multiplied by $5. The
HIS recipients as of 6/30
HIS contributions for FY ending 6/30
HIS payments for FY ending 6/30
HIS trust fund net assets at 6/30
HIS contribution rate
3,968
Total
6/30/02
2000
2001
2002
157,777
$187,962,156
$197,463,561
$83,856,299
0.94%
166,111
$196,699,884
$207,366,190
$76,929,351
0.94%
174,971
$240,112,109
$217,326,138
$101,282,614
1.11%
B. State of Florida Participation
actual and required employer contributions totaling $442,717,029,
or 8.50 percent. The State’s contributions to the FRS for the fiscal
years ending June 30, 2000, and June 30, 2001, were
$606,297,516 and $540,341,275, respectively. These amounts
were also equal to the required contributions for each year.
Covered payroll refers to all compensation paid by the state to
active employees covered by the FRS on which contributions to
The State of Florida contributed as required to the FRS as part of a
cost-sharing multiple-employer public-employee defined benefit
pension plan. For the fiscal year ended June 30, 2002, the State’s
total covered payroll for its 139,576 state employee members plus
8,186 state DROP participants amounted to $5,205,427,920 with
B-66
STATE OF FLORIDA
the defined benefit pension plan are based. The state’s
contributions represented 24.77 percent of the total contributions
required of all participating employers.
NOTE 7 - COMMITMENTS AND OPERATING
LEASES
A. Construction Commitments
Employees’ eligibility, benefits, and contributions by class are as
previously described. Employees not filling regular established
positions but are working under the other personal services (OPS)
status are not covered by the FRS.
Road and bridge construction projects, supervised by the
Department of Transportation, are included in the Department of
Transportation work program, which is updated during each budget
cycle. As of June 30, 2002, the Department had available
approximately $1.5 billion in budget authority arising from both
current and prior year projects which represents amounts
committed on executed contracts. Other major construction
commitments of the State of Florida at June 30, 2002, totaled
$601.1 million. Additional disclosures on construction in progress
are included in the capital assets note (Note 5). Construction
commitments for component units totaled $1.1 billion.
C. State University System Optional Retirement Program
(SUSORP)
Section 121.35, F.S., created the SUSORP for eligible State
University System faculty, administrators, and administrative and
professional staff. This program was designed to aid universities
in recruiting employees who may not remain in the FRS long
enough to vest. The SUSORP is a defined contribution plan that
provides full and immediate vesting of all contributions paid on
behalf of the participants to the participating provider companies to
invest as directed to provide retirement and death benefits.
Employees in eligible positions are compulsory participants in the
SUSORP unless they elect membership in the FRS.
B. Florida Ports Financing Commission Revenue Bonds
The State has enacted legislation obligating it to remit annually $25
million to a designated trustee for the purpose of repaying the debt
on certain Florida Ports Financing Commission revenue bonds.
The Florida Ports Financing Commission is not part of the State’s
reporting entity. These revenue bonds do not create or constitute
a legal obligation or debt of the State. Funding for the annual
remittance comes from the State of Florida, Department of
Transportation’s portion of motor vehicle registration fees, which
were in excess of $421.3 million for the fiscal year ended June 30,
2002. Florida Ports Financing Commission revenue bonds
outstanding as of June 30, 2002, amounted to $337,743,748,
including Series 1996 bonds payable of $198,242,655, and Series
1999 bonds payable of $139,501,093.
The employing university contributed 10.43 percent of covered
payroll for July 2001 through June 2002. When applicable, a
portion of the total contribution is transferred to the FRS Trust
Fund to help amortize any unfunded actuarial liability (UAL). There
was no UAL this fiscal year. The required 0.01 percent was applied
to the administration of the SUSORP program, 0.10 percent was
applied to the administrative expense to establish the Public
Employee Optional Retirement Program, and the remainder (10.32
percent) was paid to the provider companies designated by the
participant. A participant may contribute by salary reduction an
amount not to exceed the percentage contributed by the university.
Additional information pertaining to the SUSORP is as follows:
Members
13,527
Payroll
$ 771,816,000
Contributions:
Employee
$ 38,815,096
Employer
$ 81,122,119
C. Operating Leases
Operating leases are not recorded on the statements of net assets;
however, operating lease payments are recorded as expenses
when incurred. Total lease payments for the State’s governmental
activities, business-type activities, and component units were $298
million, $16 million, and $34 million, respectively for the year ended
June 30, 2002. The following is a schedule of future noncancelable operating lease payments for the primary government
and component units at June 30, 2002 (in thousands):
5.03% of payroll
10.51% of payroll
D. Senior Management Service Optional Annuity Program
(SMSOAP)
Section 121.055, Florida Statutes, created the SMSOAP as an
optional retirement program for state members of the Senior
Management Service Class.
The SMSOAP is a defined
contribution plan that provides full and immediate vesting of all
contributions paid on behalf of the participants to the participating
provider companies to invest as directed to provide retirement and
death benefits. Employees in eligible state positions may make an
irrevocable election to participate in the SMSOAP in lieu of the
Senior Management Service Class. Employers contributed 12.49
percent of covered payroll for July 2001 through June 2002. When
applicable, a portion of the total contribution is transferred to the
FRS Trust Fund to help amortize the unfunded actuarial liability
(UAL). There was no UAL this fiscal year. The required 0.10
percent was used for the administrative expense to establish the
Public Employee Optional Retirement Program, and 12.39 percent
was paid to the provider companies designated by the participant.
A participant may contribute by salary reduction an amount not to
exceed the percentage contributed by the employer. Additional
information pertaining to the SMSOAP is as follows:
Members
116
Payroll
$ 9,744,000
Contributions:
Employee
$
57,280
Employer
$ 1,285,661
Primary Government
Governmental
Business-type
Activities
Activities
Component
Units
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018-2022
2023-2027
2028-2032
2033-2037
2038-2042
2043-2047
2048-2052
$
$
Total
$
Year Ending
June 30
0.59% of payroll
13.19% of payroll
B-67
170,698
150,914
119,478
94,609
82,005
149,453
83,875
77,530
13,458
13,612
......
......
......
......
955,632
$
$
18,944
17,668
15,204
13,302
10,640
24,370
12,147
12,147
12,147
12,147
......
......
......
......
148,716
$
40,030
21,495
17,082
11,768
7,154
22,030
15,481
15,685
6,786
5,080
1,135
1,135
1,108
1,000
166,969
STATE OF FLORIDA
NOTE 8 - BONDS PAYABLE
A. Outstanding Bonds
Bonds payable at June 30, 2002, are as follows (in thousands):
Original
Amount
Bond Type
Road and Bridge Bonds
SBE Capital Outlay Bonds
Inland Protection Bonds
Lottery Education Bonds
Public Education Bonds
Conservation and Recreation Lands Bonds
Save Our Coast Bonds
Preservation 2000 Bonds
Florida Forever Bonds
Pollution Control Bonds
Investment Restoration Bonds
Water Pollution Control Bonds
Florida Facilities Pool Bonds
Amount
Outstanding
$
1,570,955
1,109,225
253,335
1,665,390
11,172,432
32,670
217,470
2,987,855
468,640
60,000
8,935
50,000
457,470
20,054,377
$
1,278,695
942,970
35,150
1,527,465
7,677,700
22,710
158,140
2,039,295
460,595
21,445
5,905
48,060
390,700
14,608,830
63,431
(31,619)
$
20,054,377
$
14,640,642
$
575,550
14,065,092
14,640,642
Unamortized premiums(discounts) on bonds payable
Amount deferred on refunding
Total bonds payable
Statement of Net Assets Presentation:
Bonds payable (current)
Bonds payable (non-current)
Total bonds payable
Toll Facilities Bonds
Less payable from restricted assets
Unamortized premiums(discounts) on bonds payable
Amount deferred on refunding
$
$
2,125,975
$
1,799,415
(55,355)
(34,616)
(12,392)
$
2,125,975
$
1,697,052
$
55,355
1,697,052
$
1,752,407
Statement of Net Assets Presentation:
Bonds payable (current)
Bonds payable (non-current)
Total bonds payable
B. Types of Bonds
Interest
Rates
Annual
Maturity To
3.500-6.500
3.000-6.000
5.000-5.000
4.000-6.250
3.500-9.125
4.750-5.375
4.000-5.250
4.000-6.000
3.375-5.375
5.600-5.600
3.750-4.125
3.500-5.550
4.000-6.750
2031
2022
2003
2021
2032
2012
2012
2013
2021
2009
2007
2017
2029
3.750-6.500
2030
Road and Bridge (serial and term) Bonds are secured by a
pledge of a portion of the State-assessed motor fuel tax revenues,
discretionary sales tax levied by the City of Jacksonville, and by a
pledge of the full faith and credit of the State.
Lottery Education Bonds are issued to finance all or a portion of
the costs of various local school district educational facilities. The
bonds mature serially and are secured by a pledge of a portion of
the lottery revenues transferred to the Educational Enhancement
Trust Fund.
State Board of Education (SBE) Capital Outlay Bonds are
issued to finance capital outlay projects of school districts and
community colleges. The bonds mature serially and are secured by
a pledge of a portion of the State-assessed motor vehicle license
tax and by a pledge of the full faith and credit of the State.
Public Education Bonds are issued to finance capital outlay
projects of local school districts, community colleges, vocational
technical schools and state universities. The bonds, serial and
term, are secured by a pledge of the State’s gross receipts tax
revenues and by a pledge of the full faith and credit of the State.
Inland Protection Bonds are issued by the Inland Protection
Financing Corporation (a blended component unit) to finance the
payment and settlement of reimbursement obligations of the
Department of Environmental Protection for the cleanup of
contamination from leaking petroleum storage tanks. The bonds
mature serially and are secured by a pledge of revenues under a
service contract with the Department of Environmental Protection.
Conservation and Recreation Lands Bonds are issued to
acquire lands, water areas, and related resources. The bonds
mature serially and are primarily secured by a pledge of the
documentary stamp tax.
Save Our Coast Bonds are used to finance the purchase of
environmentally significant coastal property. The bonds mature
serially and are secured by a pledge of State Land Acquisition
B-68
STATE OF FLORIDA
Trust Fund collections (primarily documentary stamp taxes).
monetary losses as a result of fraudulent securities activities
committed by GIC Government Securities, Inc. The bonds mature
serially and are secured by a pledge of revenues under a Funding
Agreement with the Department of Banking and Finance.
Preservation 2000 Bonds are issued to pay the cost of acquiring
lands and related resources in furtherance of outdoor recreation
and natural resources conservation. The bonds mature serially
and are secured by a pledge of a portion of the documentary
stamp tax.
Water Pollution Control Bonds are issued by the Water Pollution
Control Financing Corporation (a blended component unit) to fund
loans to local governments to finance or refinance the cost of
wastewater treatment and storm water management projects. The
bonds mature serially and are secured by a pledge of the loan
payments from local governments.
Florida Forever Bonds are issued to finance the cost of
acquisition and improvements of lands, water areas, and related
property interests and resources in the State of Florida for the
purposes of restoration, conservation, recreation, water resource
development, or historical preservation. The bonds mature serially
and are secured by a pledge of a portion of the documentary
stamp tax.
Florida Facilities Pool Bonds are issued to provide funds for the
acquisition and construction of facilities to be leased to State
agencies. The bonds, serial and term, are secured by a pledge of
the revenues, derived from the leasing and operations of these
facilities.
Pollution Control Bonds are issued to make funds available for
local government acquisition and construction of pollution control
facilities. The bonds are to be serviced by revenues pledged by the
local governments, and the full faith and credit of the State is
pledged as additional security. The bonds mature serially. This
amount includes $21,310,000 that has been escrowed by local
governments.
Toll Facilities Bonds are issued to provide construction funds for
roads and bridges. The bonds are secured by a pledge of toll
facility revenues and a portion of the State-assessed gasoline
taxes. The bonds outstanding at June 30, 2002, consist of
$1,103,695,000 of serial bonds and $695,720,000 of term bonds.
Investment Restoration Bonds are issued by the Investment
Fraud Restoration Financing Corporation (a blended component
unit) to finance the simultaneous payment of approved claims
made pursuant to Section 517.1203, F.S., by persons who suffered
C. Debt Service Requirements
Annual debt service requirements to amortize bonds at June 30,
2002, are as follows (in thousands):
Primary Government
Year Ending
June 30
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018-2022
2023-2027
2028-2032
Bonds Payable and Interest
Unamortized Premiums/(Discounts)
(Amount Deferred or Refunded)
Total Bonds Payable and Interest
$
$
$
Year Ending
June 30
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018-2022
2023-2027
2028-2032
2033-2037
2038-2042
Bonds Payable and Interest
Unamortized Premiums
Unamortized (Discounts)
Total Bonds Payable and Interest
$
$
$
Principal
Interest
575,550 $
755,310 $
565,930
725,273
589,995
696,736
619,345
665,848
653,505
633,165
3,671,160
2,634,144
3,177,585
1,684,147
2,728,570
927,178
1,674,155
301,823
353,035
39,278
14,608,830 $
9,062,902 $
63,431
......
(31,619)
......
14,640,642 $
9,062,902 $
Principal
91,654
96,900
128,376
170,328
128,934
906,676
753,063
655,108
778,625
578,159
329,456
166,536
4,783,815
86
(13,792)
4,770,109
Component Units
Interest
$
258,705
239,361
243,075
237,561
239,396
420,450
324,573
227,337
149,279
65,699
10,102
1,530
$
2,417,068
......
......
$
2,417,068
$
$
$
B-69
Total
1,330,860
1,291,203
1,286,731
1,285,193
1,286,670
6,305,304
4,861,732
3,655,748
1,975,978
392,313
23,671,732
63,431
(31,619)
23,703,544
Total
345,288
341,332
371,451
407,889
368,870
1,327,120
1,077,636
882,445
927,904
643,858
339,558
168,066
7,201,417
86
(13,792)
7,187,711
Principal
Interest
$
55,355 $
93,273 $
58,150
90,436
60,470
87,379
55,460
84,167
58,385
81,263
333,100
357,244
415,785
262,568
445,725
148,095
287,660
49,559
29,325
2,496
$ 1,799,415 $
1,256,480 $
(34,615)
......
(12,393)
......
$ 1,752,407 $
1,256,480 $
Total
148,628
148,586
147,849
139,627
139,648
690,344
678,353
593,820
337,219
31,821
3,055,895
(34,615)
(12,393)
3,008,887
STATE OF FLORIDA
State of Florida, Full Faith and Credit, State Board of Education,
Public Education Capital Outlay Refunding Bonds, 2001 Series G
in the amount of $223,210,000 were used to refund $104,130,000
of the State of Florida, Full Faith and Credit, State Board of
Education, Public Education Capital Outlay Bonds, Series 1986-B
(Refunding Bonds) maturing in the years 2011 through 2013. The
refunding resulted in debt savings of $8,042,973 and an economic
gain of $5,515,655.
D. Advance Refundings and Current Refundings
During the fiscal year ended June 30, 2002, the State of Florida
took advantage of favorable conditions and issued bonds for the
purpose of current or advance refunding (refunding) previously
issued bonds. The refundings of these bond series were made in
order to obtain lower interest rates and the resulting savings in
debt service payments over the life of the bonds. The economic
gains obtained by these refundings are the differences between
the present value of old debt service and new debt service
requirements.
State of Florida, Sunshine Skyway Revenue Refunding Bonds,
Series 2001 in the amount of $17,555,000 along with additional
funds of $1,946,335 were used to refund $19,125,000 of the State
of Florida, Sunshine Skyway Revenue Refunding Bonds, Series
1991 maturing in the years 2002 through 2009. The refunding
resulted in debt savings of $2,492,992, an economic gain of
$1,908,408, and a deferred loss on refunding of $247,412.
The proceeds of the current refundings are used to immediately
call the refunded bonds. The proceeds of the advance refundings
were deposited into irrevocable trusts and invested in direct
obligations of the Federal government and/or obligations
guaranteed by the Federal government. The funds deposited
along with the interest to be earned will be sufficient to meet the
future principal and interest payments on the refunded bonds as
they become due.
E. In-substance Defeasance
Bonds defeased through the consummation of refunding
transactions are not included in Florida’s outstanding debt.
Irrevocable escrow accounts held by the State Board of
Administration to service the refunded bonds are reported as
agency funds. The following refundings occurred during the fiscal
year:
During the fiscal year ended June 30, 2002, the State of Florida or
other local governments used available resources to complete the
following in-substance defeasance. An in-substance defeasance
occurs when funds other than bond proceeds are used to establish
irrevocable escrow accounts to satisfy scheduled principal and
interest payments on the bonds considered defeased.
Advance Refundings
The following bond was considered to have been defeased during
the fiscal year:
State of Florida, Department of Environmental Protection, Florida
Forever Revenue Bonds, Series 2001B in the amount of
$268,640,000 along with additional funds of $1,341,105 were used
to advance refund $169,700,000 of the State of Florida,
Department of Environmental Protection, Preservation 2000
Revenue Bonds, Series 1995A maturing in the years 2006 through
2013. The refunding resulted in debt savings of $14,528,636, an
economic gain of $11,358,882, and a deferred loss on refunding of
$10,819,531.
State of Florida, Full Faith and Credit, Pollution Control Bonds,
Series E in the amount of $5,790,000, maturing in the years 2003
through 2006.
F. Prior-year Defeased Bonds
In prior years, the State has deposited with escrow agents in
irrevocable trusts amounts sufficient to meet the debt service
requirements of certain bonds. These defeased bonds are not
reported as outstanding debt. Irrevocable trusts established with
the State Board of Administration are reported in an agency fund.
Debt considered defeased consists of the following (in thousands):
State of Florida, Department of Environmental Protection,
Preservation 2000 Revenue Refunding Bonds, Series 2001A in the
amount of $185,240,000 were used to advanc e refund
$187,700,000 of the State of Florida Department of Natural
Resources, Preservation 2000 Revenues Bonds, Series 1993A
maturing in the years 2004 through 2013. The refunding resulted
in debt savings of $14,232,079, an economic gain of $11,277,651,
and a deferred loss on refunding of $7,630,591.
Principal at
6/30/02
SBE Higher Education Bonds
Public Education Capital Outlay Bonds
Total
Current Refundings
State of Florida, Full Faith and Credit, State Board of Education
Public Education Capital Outlay Refunding Bonds, 2001 Series D
in the amount of $269,315,000 along with additional funds of
$4,298,519 were used to refund $275,710,000 of the State of
Florida, Full Faith and Credit, State Board of Education, Public
Education Capital Outlay Refunding Bonds Series 1992-A
$
$
133,150
41,070
1,375,565
34,695
48,940
11,010
1,644,430
Toll Facilities
$
228,940
Component Units
University Certificates
$
3,555
G. Arbitrage Regulations
State of Florida, Full Faith and Credit, State Board of Education,
Public Education Capital Outlay Refunding Bonds, 2001 Series E
in the amount of $209,785,000 along with additional funds of
$3,999,900 were used to refund $199,995,000 of the State of
Florida, Full Faith and Credit, State Board of Education Public
Education Capital Outlay Bonds, Series 1989-A (Refunding Bonds)
The State of Florida complies with Federal arbitrage regulations.
B-70
STATE OF FLORIDA
C. Certificates of Participation
NOTE 9 - CAPITAL LEASES, INSTALLMENT
PURCHASE CONTRACTS, AND
CERTIFICATES OF PARTICIPATION
The State has issued certificates of participation to finance
privately operated detention facilities. The following is a schedule
of future minimum certificates of participation payments at June 30,
2002 (in thousands):
A. Capital Leases
The State has a number of capital leases provide for the
acquisition of buildings. All of the State’s capital leases were
reported within governmental activities and consisted of $107.2
million for buildings at June 30, 2002.
Capital leases for
component units at June 30, 2002 consisted of $82.7 million for
buildings and $23.1 million for furniture and equipment. The
following is a schedule of future minimum capital lease payments
for the primary government and component units at June 30, 2002
(in thousands):
Year Ending
June 30
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018-2022
2023-2027
2028-2032
Governmental
Activities
Component
Units
$
10,722
10,725
10,721
10,720
10,714
53,523
44,835
4,263
......
......
156,223
(48,983)
$
107,240
$
Total
Interest
Present value of future minimum
payments
$
Year Ending
June 30
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018
Total
10,008
10,273
8,407
7,307
8,914
29,547
24,068
25,314
25,294
23,790
172,922
(67,128)
Interest
Principal
105,794
B. Installment Purchase Contracts
The State has a number of installment purchase contracts
providing for the acquisition of buildings, furniture, and equipment.
At June 30, 2002, installment purchase contracts for governmental
activities consisted of $17.3 million for furniture and equipment.
For business-type activities, installment purchase contracts
consisted of $272,000 for buildings.
Installment purchase
contracts for component units at June 30, 2002 consisted of $36.5
million for buildings and $13 million for furniture and equipment.
The following is a schedule of future minimum installment
purchase contract payments for the primary government and
component units at June 30, 2002 (in thousands):
Year Ending
June 30
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018-2022
Governmental
Activities
Business-type
Activities
Component
Units
$
8,323
5,124
3,467
1,527
64
......
......
......
18,505
(1,193)
$
100
100
92
......
......
......
......
......
292
(20)
$
8,542
6,539
5,643
4,115
2,694
13,776
14,571
4,626
60,506
(11,007)
$
17,312
$
272
$
49,499
Total
Interest
Present value of future
minimum payments
Governmental
Activities
$
10,337
9,880
9,875
9,902
9,870
49,270
38,391
3,777
B-71
$
141,302
40,367
100,935
STATE OF FLORIDA
NOTE 10 - CHANGES IN LONG-TERM LIABILITIES
Changes during the fiscal year in long-term liabilities are summarized below (in thousands):
Balance
7/1/01
Bonds payable:
$ 1,158,710
SBE Capital Outlay Bonds
958,500
78,920
Lottery Education Bonds
1,205,305
Public Education Bonds
7,283,740
Conservation & Recreation Lands Bonds
24,365
Save Our Coast Bonds
175,235
Preservation 2000 Bonds
2,362,595
Florida Forever Bonds
50,000
34,430
Investment Restoration Bonds
6,960
Water Pollution Control Bonds
50,000
......
13,388,760
Unamortized bond premiums/(discounts)
......
Amounts deferred on refunding
......
Total bonds payable
13,388,760
Certificates of participation
Deposits
Claims payable
Installment purchase contracts and capital
leases payable
Due to other governments:
Federal arbitrage liability
Total Governmental Activities
Restatements
and
Adjustments
$
Additions
Deletions
Balance
6/30/02
Due Within
One Year
(Current)
......
......
......
......
......
......
......
......
$ 150,000 $ 30,015 $ 1,278,695 $ 30,845
26,070
41,600
942,970
44,300
......
43,770
35,150
35,150
375,000
52,840
1,527,465
58,905
1,155,610
761,650
7,677,700
199,490
......
1,655
22,710
1,740
......
17,095
158,140
18,095
185,240
508,540
2,039,295
155,985
418,640
8,045
460,595
10,230
......
......
12,985
21,445
3,370
......
......
1,055
5,905
1,095
......
......
1,940
48,060
4,550
402,010
......
11,310
390,700
11,795
402,010
2,310,560
1,492,500
14,608,830
575,550
(4,249)
74,492
6,812
63,431
......
(4,630)
(28,928)
(1,939)
(31,619)
......
393,131
2,356,124
1,497,373
14,640,642
575,550
......
......
704,854
820,000
43,675
......
31,433
1,425,210
58,975
421,204
128,530
320,623
1,715
......
153,741
347,175
100,935
421,204
711,076
2,218,658
5,580
92,897
145,947
244,341
97,419
99,746
15,719
88,332
124,552
12,798
24,917
......
$15,035,950
1,296
......
$ 1,994,491
......
5,000
$ 3,306,175
5,877
......
$2,094,213
20,336
5,000
$18,242,403
......
......
$1,077,113
The following discloses which funds will liquidate the above longterm liabilities other than bonds. The compensated absences
liabilities will be liquidated by the applicable governmental and
internal service funds that account for the salaries and wages of
the related employees. The claims payable will be liquidated by
the General Fund and the employment services related special
revenue fund. The due to other governments liability will be
liquidated by the special revenue fund, the debt service fund, and
the internal service fund. Deposits will be liquidated by the special
revenue fund and the internal service fund when such monies
become earned. The special revenue fund, capital projects fund,
and the internal service fund, in which the leases and installment
purchase contracts are recorded, will liquidate the capital lease
and installment purchase contract obligations.
Changes in long-term liabilities is continued on the following page.
B-72
STATE OF FLORIDA
Changes in long-term liabilities (continued):
Balance
7/1/2001
Restatements
and
Adjustments
Additions
Balance
6/30/2002
Deletions
Due Within
One Year
(Current)
Bonds payable
$
Unamortized bond premiums/(discounts)
Amounts deferred on refunding
Total bonds payable
Lottery grand prizes payable
Deposits
Installment purchase contracts
and capital leases payable
Due to other governments:
Federal arbitrage liability
Total Business-type Activities
COMPONENT UNITS
Bonds payable
Installment purchase contracts
and capital leases payable
Other long-term liabilities
Total Component Units
1,853,490
(34,259)
(14,052)
1,805,179
......
......
......
......
17,555 $
(194)
(247)
17,114
71,630 $
163
(1,907)
69,886
1,799,415 $
(34,616)
(12,392)
1,752,407
55,355
......
......
55,355
......
......
3,690
1,846,267
......
8,296
150,802
465,342
11,776
237,508
......
800
1,759,561
465,342
22,962
230,449
13,298
4,570
......
357
......
85
272
89
......
......
321
7,109
......
......
......
1,089
321
6,020
......
......
$
1,808,869
$
$
5,318,918
164,027
$
61,934
356,897
$
$
5,901,776
$
1,862,350
$
645,034
$
309,368
$
4,006,885
$
303,761
(654,148) $
266,502
254,865
61,041
$
149,526
39,123
$
4,770,109
452,447
$
91,654
44,042
68,099
524,765
53,218
202,278
205,218
B-73
$
571,402
27,958
61,509
$
278,116
155,293
1,022,431
$
6,400,280
12,414
297,466
$
445,576
STATE OF FLORIDA
NOTE 11 - INTERFUND BALANCES AND TRANSFERS
At June 30, 2002, amounts to be received or paid with current
available resources are reported as due from or due to other funds,
whereas the noncurrent portion is reported as advances to or
advances from other funds. Interfund balances at June 30, 2002,
consist of the following (in thousands):
Due from Other Funds
Due to Other Funds
General Fund
Environment, Recreation and
Transportation
Public Education
Employment Services
Nonmajor
Transportation
Lottery
Nonmajor
Fiduciary Funds
Private-purpose Trust Funds
Pension and Other Employee
Benefits Trust Fund
Agency Funds
Total
General
Fund
$
......
5,303
2,258
632
324
156,651
23,291
......
19,435
814
Environment,
Recreation
and
Conservation
$
3,275
......
56
167
......
29,610
......
......
3,630
......
Health and
Family
Services
$
Transportation
23,759
542
......
124
......
3,633
4,451
......
28,407
10
$
81
21
1
......
......
135,786
......
......
75,956
......
Tax
Public
Collection and Employment
Education Administration
Services
Nonmajor
Governmental
Funds
$
$
...... $
......
......
......
......
......
50
......
17
......
15 $
......
2,560
......
......
......
......
......
12
59
180
......
487
......
3
......
......
......
......
1,866
Internal
Service
Fund
55,626 $
841
7,395
402
4,471
42,894
25
......
8,109
437
8,607
154
31,769
1,495
1,770
178
819
......
2,463
613
32
8
121
......
24,441
......
......
......
......
......
......
......
......
......
4,489
56,204
13
......
......
......
......
70,247
......
......
......
......
......
......
......
1,327
......
......
......
......
2
6,682
5
......
......
3,864
23
32
......
11
157
13
......
......
185,428
10,154
......
......
10,563
5
24
20,378
$ 253,725
......
137
36,875
2
7,118
72,535
......
1
453,491
......
......
$ 80,468 $
$
$
$
......
1,669
5,642 $
......
......
2,538
$
......
3,446
144,760 $
146
......
48,242
Continued below
Due from Other Funds
Due to Other Funds
General Fund
Environment, Recreation & Conservation
Transportation
Public Education
Employment Services
Nonmajor
State Board
Unemployment
of
Transportation Compensation Administration
$
......
......
......
388
......
......
......
......
......
......
$
2,488
33
475
154
......
12
91
......
222
21
Transportation
Lottery
Nonmajor
......
......
......
......
......
......
9
......
......
57
Fiduciary Funds
Pension & Other Employee Benefits Trust Funds
Agency Funds
Total
......
......
......
388
......
3
......
3,565
$
$
$
$
B-74
Nonmajor
Fiduciary Funds
Privatepurpose
Trust
Funds
$
$
$
85,409
......
504
......
......
22,187
......
......
8,044
......
Total
2
......
56
......
......
......
......
......
201
1
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
1
......
......
......
647
......
......
......
......
63,588
70,315
121
11
34,337
......
2
190
223 $
......
......
......
260
......
......
......
1,077
......
12,179
......
12,228
......
......
110
$ 116,901
206,163
12,356
33,049
$ 1,232,918
$
39
......
1
......
......
......
8
......
......
......
Agency
Funds
...... $
......
......
......
......
......
1
20
10
......
$
......
......
......
......
1,077
......
......
......
......
......
Pension and
Other Employee
Benefits Trust
Fund
$
179,481
6,894
45,562
3,362
7,645
390,951
28,736
20
146,506
3,821
STATE OF FLORIDA
Advances to Other Funds
General
Fund
Advances from Other Funds
Transportation
Public Education
Nonmajor
Transportation
Total
$
$
45
10,000
......
7
725
1,403
......
12,180
Business-type
Activities
Health and
Family
Services Transportation
Nonmajor
Transportation
$
$
......
......
......
......
......
500
$
219,502
230,225 $
16,658
17,158
$
......
......
......
......
345
......
......
345
$
$
9,821
......
......
......
2
900
B-75
$
Fiduciary
Funds
Privatepurpose
Trust Funds
......
......
......
......
500
......
$
......
......
195,976
......
......
......
......
500
......
$ 195,976
Total
$
9,866
10,000
195,976
7
1,572
2,803
236,160
$ 456,384
STATE OF FLORIDA
During the course of operations, there are numerous transactions
between funds within the State. Interfund transfers during the year
are as follows (in millions):
Transfers from Other Funds (in millions)
Transfers to Other Funds (in millions)
General Fund
Environment, Recreation
and Conservation
Transportation
Public Education
Employment Services
Nonmajor
Environment,
Recreation Health and
General
and
Family
Fund Conservation Services
Public
Transportation Education
Tax
Lawton Chiles
Nonmajor
Internal
Collection and Employment Endowment Governmental Service
Administration
Services
Fund
Funds
Fund
$ ......
$
$
100
$
510
25
$
101
......
$
1
$
......
$
64
$
1
113
12
14
9
2,150
37
......
181
10
......
......
1
......
871
......
......
60
......
4
......
1
4
113
12
......
114
......
1
......
......
......
1,500
......
......
732
2
......
1
......
......
......
7
......
108
......
......
8
......
......
......
18
......
......
......
......
492
......
10
......
......
......
......
1
......
......
......
......
......
......
......
189
......
446
75
277
808
268
16
45
794
2
......
......
......
......
......
......
......
2
......
......
......
1
......
112
......
......
......
20
......
......
......
......
......
20
13
......
......
......
......
......
927
......
......
1
......
......
......
......
2
......
......
4
......
1
......
......
......
......
......
......
......
......
10
30
......
......
......
......
1
1
......
......
......
99
......
......
......
1
......
Transportation
Lottery
Nonmajor
Fiduciary Funds
Pension and Other Employee Benefits
Trust Funds
Total
$
3
$ 2,643
$
......
1,052
......
778
$
$
......
2,273
$
......
1,244
......
28
$
......
509
$
......
189
$
$
......
2,836
Continued below
Transfers to Other Funds (in millions)
General Fund
Transportation
Public Education
Employment Services
Nonmajor
Transfers from Other Funds (in millions)
Fiduciary Funds
Pension and
PrivateOther Employee
Unemployment
purpose
Benefits Trust
Transportation Compensation Nonmajor Trust Funds
Fund
$
......
......
......
41
......
......
......
......
18
......
$
5
......
2
1
......
......
......
......
4
......
$
1
......
......
......
......
......
......
......
......
......
$
......
......
......
......
14
......
......
......
......
......
$
9
......
......
......
......
......
......
......
......
......
Total
$
817
564
590
335
845
4,902
90
45
2,202
15
Transportation
Lottery
Nonmajor
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
13
927
5
30
167
Fiduciary Funds
Pension and Other Employee Benefits Trust
Total
......
......
59
......
......
12
......
......
1
......
......
14
......
23
32
101
26
11,674
$
$
$
B-76
$
$
$
$
......
4
STATE OF FLORIDA
NOTE 12 - RISK MANAGEMENT
A.
State Risk Management Trust Fund
group health insurance, such as the risks of loss related to medical
and prescription drug claims, are administered through the State
Employees Group Health Insurance Trust Fund, a Pension and
Employee Benefits Trust Fund. It is the practice of the State not to
purchase commercial coverage for the risks of losses covered by
this Fund.
The State Risk Management Trust Fund provides property
insurance coverage for State buildings and contents against loss
from fire, lightning, sinkholes, flood, and other hazards customarily
insured by extended coverage and loss from the removal of
personal property from such properties when endangered by
covered perils. The property insurance program self-insures the
first $2 million per occurrence with an annual aggregate of $5
million for all perils except windstorm. The property insurance
program self-insures the first $4 million per occurrence with an
annual aggregate of $8 million for windstorm. Commercial excess
insurance is purchased for losses over the self-insured retention
up to $70 million for windstorm losses and $200 million for fire
losses.
The Fund’s estimated fiscal year-end liability includes an amount
for c laims that have been incurred but not reported, which is based
on analyses of historical data performed by both the State and its
contractors. Changes in claims liability amounts for the fiscal
years ended June 30, 2001, and June 30, 2002, were as follow s
(in thousands):
The Fund’s estimated liability for unpaid property insurance claims
at the fiscal year-end is determined by management analyses.
Changes in the Fund’s property insurance claims liability amount
for the fiscal years ended June 30, 2001, and June 30, 2002, were
as follows (in thousands):
Fiscal Year
Ended
June 30, 2001
Beginning of
Fiscal Year
Liability
Current Year
Claims and
Changes in
Estimate
Claim
Payments
Balance at
Fiscal
Year End
$
$
$
$
June 30, 2002
5,024
4,181
(126)
292
(717)
(753)
Fiscal Year
Ended
June 30, 2001
June 30, 2002
4,181
3,720
The estimated liability for unpaid casualty insurance claims at June
30, 2002, was $1 billion. This amount was determined through an
actuarial method based on historical paid and incurred losses and
includes an amount for losses incurred but not yet reported. In
addition, this amount includes the present value of workers’
compensation indemnity reserves discounted using a 4 percent
annual percentage rate.
Changes in the Fund’s casualty insurance claims liability for the
fiscal years ended June 30, 2001, and June 30, 2002, were as
follows (in thousands):
Fiscal Year
Ended
June 30, 2001
June 30, 2002
Current Year
Claims and
Changes in
Estimate
$
$
622,821
815,819
Claims
Payments
Balance at
Fiscal
Year End
296,386
$ (103,388)
$ 815,819
279,686
(93,505)
1,002,000
Current Year
Claims and
Changes in
Estimate
$
$
46,367
42,396
Claim
Payments
Balance at
Fiscal
Year End
472,909
$ (476,880)
$ 42,396
492,435
(480,578)
54,253
The amount of settlements for property or workers’ compensation
claims did not exceed insurance coverage for each of the last three
years.
The State Risk Management Trust Fund also provides casualty
insurance coverage for the risks of loss related to Federal civil
rights actions, workers’ compensation, court-awarded attorney
fees, automobile liability, and general liability. The State is selfinsured for all claims associated with liability risks and is selfinsured for the first $15 million of workers’ compensation coverage.
The State has excess life insurance policies for the remaining risk
associated with workers’ compensation coverage. Prior to
February 10, 2002, the workers’ compensation policy deductible
was $2 million.
Beginning of
Fiscal Year
Liability
Beginning of
Fiscal Year
Liability
B. Employees Health Insurance Fund
Employees may obtain health care services through participation in
the State’s group health insurance plan or through membership in
a health maintenance organization plan under contract with the
State. The State’s risk financing activities associated with State
B-77
STATE OF FLORIDA
NOTE 13 - PRIOR PERIOD ADJUSTMENTS
Fund balances and net assets at July 1, 2001, have been increased (decreased) as follows (in thousands):
MAJOR FUNDS
General Fund
To reduce prior year fund balance to correct sales taxes receivable.
$
(543,503)
To record a receivable relating to an inter-agency agreement between the Department of Education
and the State Technology Office.
980
To correct revenues and expenditures due to allocation among funds at the Department of Business
and Professional Regulation.
(2,244)
Total General Fund
(544,767)
Transportation
To correct revenues and expenses related to work performed by the Department of Transportation on behalf
of transportation authorities.
(242,261)
Public Education
To correct the due to and due from balances of the Student Loan Operating Trust Fund that were not
previously adjusted for prior year transactions.
$
To establish the liability for future claims on unclaimed property.
(3,532)
(193,169)
Total Public Education
(196,701)
Employment Services
To record prior year taxes receivable for the Workers' Compensation Administrative Trust Fund.
$
To record prior year taxes receivable for the Special Disability Trust Fund.
18,084
71,679
To correct the overstatement of prior year accounts receivable for vending facilities.
Total Employment Services
(1,382)
88,381
NONMAJOR FUNDS
Special Revenue Funds - Regulation and Licensing
To record prior year receivables relating to motor vehicle licenses.
$
34,547
To correct revenues and expenditures due to allocation among funds at the Department of Business
and Professional Regulation.
2,339
Total Special Revenue Funds - Regulation and Licensing
36,886
Special Revenue Funds - Public Safety
To record an allowance for uncollectible accounts on court ordered restitutions for the Forfeiture and
Investigative Support Trust Fund at the Department of Law Enforcement.
(1,448)
Special Revenue Funds - Citrus Commission
To correct the overstatement of payables and receivables and record the receivable for a
developmental loan to others for the Citrus Advertising Trust Fund.
2,007
Capital Projects Funds - School for the Deaf and the Blind Construction Trust Fund
To correct an error in recording receivables.
Total Governmental Activities
$
(7,852)
(865,755)
$
(49,156)
Proprietary Funds - Unemployment Compensation
To correct the reported allowance account for the Unemployment Compensation Benefit Trust Fund.
B-78
STATE OF FLORIDA
FIDUCIARY FUNDS
Private-Purpose Trust Fund - Unclaimed Property
To record cash advanced to the Principal State School Trust Fund and to establish a liability for
$
(5,243)
future claims on unclaimed property.
Private-Purpose Trust Fund - Student Loan Guaranty Reserve
To correct due to and due from balances of the Student Loan Guaranty Reserve Trust Fund that were not
previously adjusted for prior year transactions.
2,733
Private-Purpose Trust Fund - FL Prepaid College Program
To include the fund equity of the Florida Prepaid College Foundation in the Florida Prepaid College Program.
Total Fiduciary Funds
1,355
$
(1,155)
COMPONENT UNITS
MAJOR COMPONENT UNITS
To record changes to component units of the university.
$
(27,727)
To record library materials transferred to Developmental Research School and Panama Canal operations.
997
To record transfer of assets to New College of Florida, to remove USF Charter School, and to add fixed assets.
Total Major Component Units
(54,371)
(81,101)
NONMAJOR COMPONENT UNITS
Florida Sports Foundation, Inc.
To properly reflect prior year's ending equity based on the final audit which was not available as of
last year's Comprehensive Annual financial Report (CAFR).
$
146
Florida Commercial Space Financing Corporation
To properly reflect prior year's ending equity based on final audit which was not available as of last year's CAFR.
(76)
Florida Comprehensive Health Association
189
The Florida Endowment Foundation for Vocational Rehabilitation, Inc. d/b/a The Able Trust
826
Florida Healthy Kids Corporation
To correlate the reporting period with that of the State.
36,941
Technological Research Development Authority
To record changes due to GASB 34 and void a check that was disbursed in the prior year.
64
Tri-County Commuter Railroad Authority
680
Florida A&M University
To record changes to component units of the university.
14
New College of Florida
To record beginning balances transferred from the University of South Florida.
53,898
University of West Florida
To record a policy change for Auxiliary Housing Revenue and to record beginning balances for component units.
3,291
Florida International University
To properly reflect furniture and equipment balances.
(9,801)
Community Colleges
To record due to/froms and transfers between community colleges and their component units.
(73)
Total Nonmajor Component Units
86,099
Total Component Units
$
B-79
4,998
STATE OF FLORIDA
NOTE 14 – FLORIDA PREPAID COLLEGE
PROGRAM
NOTE 16 – CONTINGENCIES
A. Federal Family Education Loans Program
The Florida Prepaid College Program was created in 1987, to
provide a medium through which the costs of registration and
dormitory residence may be paid in advance of enrollment in a
State postsecondary institution at a rate lower than the projected
corresponding cost at the time of actual enrollment. The Program
is administered by the Florida Prepaid College Board and the State
of Florida guarantees to meet the obligations of the Board to
qualified beneficiaries if moneys in the Program are insufficient.
The Program is accounted for in a private-purpose trust fund. An
actuarial study is performed to determine the Program’s funding
status. Additional information as of June 30, 2002, is as follows:
Actuarial present value of future
benefits payable
Net assets available
(Fair Value)
Net assets as a percentage of
tuition and housing benefits
obligation
The Florida Department of Education (FDOE) administers the
Federal Family Education Loans Program (FFELP), under which
the FDOE guarantees loans made to eligible students and their
parents by financial institutions. At June 30, 2002, approximately
$4.1 billion of loans were outstanding under this Program. The
United States Department of Education (USDOE) participates in
the Program as a reinsurer and reimburses the FDOE for defaulted
loans at various rates based on the incidence of default. For loans
made prior to October 1, 1993, the reimbursement rate for
defaulted loans can be 80, 90, or 100 percent. For loans made on
or after October 1, 1993, the reimbursement rate for defaulted
loans can be 78, 88, or 98 percent. For loans made on or after
October 1, 1998, the reimbursement rate for defaulted loans can
be 75, 85 or 95 percent. During the 2001-2002 fiscal year, the
actual rates were 95, 98 and 100 percent. A potential liability
exists for loans defaulted in excess of the Federal reimbursement.
The specific amount of this potential liability is indeterminable.
$3,556,093,283
$3,934,691,501
B. Federally-assisted Grant Programs
111%
Florida participates in a number of federally-assisted grant
programs. These programs are subject to audits by the grantors or
their representatives. Any disallowance as a result of these audits
may become a liability of the State.
Any foreseeable
disallowances will not have a material adverse effect on the State
of Florida’s financial position.
NOTE 15 – FLORIDA HURRICANE
CATASTROPHE FUND
The Florida Hurricane Catastrophe Fund (FHCF) was created in
1993 by Section 215.555, Florida Statutes, as a State fund to
provide a stable and ongoing source of reimbursement to
qualified insurers for a portion of their catastrophic hurricane
losses, thereby creating additional insurance capacity to ensure
that covered structures (and their contents) damaged or
destroyed in a hurricane may be repaired or reconstructed as soon
as possible. The Fund is administered by the State Board of
Administration, which contracts with each insurer writing covered
policies in the State to reimburse the insurer for a percentage of
losses incurred from covered events from reimbursement
premiums collected. However, payments made to insurers shall
not exceed the moneys in the Fund, together with the maximum
amount of revenue bonds that may be issued by a county or
municipality, or FHCF Finance Corporation. Beginning June 1,
1999, payments made to insurers shall not exceed the actual
claims -paying capacity of the fund up to a limit of $11 billion for
that contract year, unless the Board determines that there is
sufficient estimated claims -paying capacity to provide $11
billion of capacity for the current contract year and an
additional $11 billion of capacity for subsequent contract years.
Upon such determination being made, the estimated claims paying capacity for the current contract year shall be
determined by adding to the $11 billion limit one half of the
funds estimated claims -paying capacity in excess of $22 billion.
The Fund is accounted for as an enterprise fund administered by
the State Board of Administration. An actuarially determined
formula is used to calculate the reimbursement premium collected.
Additional information as of June 30, 2002, follows:
Net assets available to meet
future catastrophic
losses (Fair Value)
$ 4,362,103,000
No catastrophic losses were incurred during the fiscal year related
to prior years’ hurricane seasons. Subsequent to the fiscal yearend, there were no reported residential property losses by qualified
insurers within the State of Florida for the 2002 hurricane season
ending on November 30, 2002.
B-80
STATE OF FLORIDA
NOTE 17 – LITIGATION
Due to its size and broad range of activities, the State is involved in
numerous routine legal actions. The departments involved believe
that the results of such litigation pending or anticipated will not
materially affect the State of Florida’s financial position.
collects assessments on “net premiums collected” and “net
premiums written” from carriers of workers’ compensation
insurance and by self-insurers in the State. Claimants allege that
there is no statutory definition of “net premiums” and the
Department does not currently have a rule providing guidance as to
how “net premiums” are calculated. Claimants allege that industry
standards would allow them to deduct various costs of doing
business in calculating “net premiums.” In 2000, the Florida
Legislature clarified in the existing law the phrase “net premiums
written” and “net assessments collected.” The Claimants seek
refunds of assessments paid during 1995 – 1998 of approximately
$35 million. On December 27, 2001, the Circuit Court granted
plaintiffs’ motion for a partial final summary judgment, ruling that
the plaintiffs were entitled to deduct ceded premiums from their
premium base in calculating assessments paid for years 1995 –
1998. A stipulated Final Judgment was entered on August 15,
2002, in favor of RISCORP in the amount of $22,475,886. The
Department has appealed that Final Order to the First District Court
of Appeal. On July 25, 2002, a stipulated Final Judgment was
entered in favor of the Florida Hospitality Mutual Insurance
Company in the amount of $1,620,869. The Department has
appealed that Final Order to the First District Court of Appeal, and
the appeal has been consolidated with the RISCORP appeal.
A. Nathan M. Hameroff, M.D., et. al. v. Agency for Health Care
Administration, et. al.
Case No. 95-5931, Leon County Circuit Court, 2nd Judicial Circuit.
This is a class action suit, among other similar suits, wherein the
plaintiffs challenge the constitutionality of the Public Medical
Assistance Trust Fund (PMATF) annual assessment on net
operating revenue of free-standing out-patient facilities offering
sophisticated radiology services. The case went to trial October 2,
2000. On February 5, 2001, the trial court ruled that Section
395.7015, Florida Statutes, was unconstitutional and disallowed
further assessments. Judgment was entered against the Agency
on February 15, 2001. The Agency successfully appealed that
order to the First District of Appeal, and the Florida Supreme Court
denied certiorari of the appellate courts decision. However, during
the pending appeal, the plaintiffs returned to the Circuit Court with a
new theory of the PMATF being an unconstitutional income tax and
prevailed in an order dated December 20, 2002. Additionally, the
Circuit Court entered an order on January 7, 2003, finding a
subclass of plaintiffs to which the PMATF should have never
applied. The Agency has appealed both orders. The potential
refund liability for all such suits could total approximately $144
million
B.
E. U.S. Environmental Protection Agency v. Florida
Department of Transportation
This issue constitutes an environmental claim.
Title to
contaminated land is in dispute. The Department maintains that it
is not the owner of the contaminated land. The U.S. Environmental
Protection Agency (EPA) is conducting additional tests at the site
for pollution and has asserted a cost recovery claim against the
Department of approximately $25.6 million. The Department’s
Motion for Declaratory Judgment on the Department’s ownership of
the property was denied and upheld on appeal. The EPA is
preparing an Amended Record of Decision. On November 14,
2002, a tolling agreement was signed, which extended the time to
sue until December 1, 2003.
Savona, et. al. v. Agency for Health Care Administration
Case No. 96-6323, Leon County Circuit Court, 2nd Judicial Circuit.
In this case, Plaintiffs seek retroactive and prospective relief on
behalf of a class of Medicaid providers (doctors), demanding
reimbursement of differential between Medicare and Medicaid rates
for dual-enrolled eligibles. This case was settled on October 6,
2000. A total of $98 million, inclusive of interest, fees, and costs,
would be paid by the Agency for Health Care Administration over
three years subject to legislative approval. The State’s share
(within the Medicaid Program) would be 45 percent of the $98
million. Final judgment on settlement was entered on June 18,
2001. The Florida Legislature appropriated $32 million in the 20012002 Budget for the first installment of the settlement, which was
paid on July 27, 2001. The second of three settlement installments
was paid on July 25, 2002.
F. Sarnoff v. Department of Highway Safety and Motor
Vehicles
Case No. SC01-351 Florida Supreme Court. This suit alleges the
improper setting of the fee for the motor vehicle inspection
program. Plaintiffs challenge the constitutionality of Section
325.214(2), Florida Statutes, which imposes a $10.00 fee on the
emissions inspection of automobiles in 7 of Florida’s 67 counties,
and seek class action certification, declaratory judgment, and
refund claims. On December 29, 2000, the First District Court of
Appeal reversed the trial court’s class certification order, and a
rehearing was denied on February 2, 2001. Plaintiffs have invoked
the discretionary review of the Florida Supreme Court on this issue.
Oral Argument was held on November 7, 2001. The amount of
potential loss to the State is estimated to be $96-106 million. The
decision of the Florida Supreme Court has been rendered. The
Court has limited the issue in Sarnoff to a constitutional challenge
to former Section 325.214, Florida Statutes, as amended by
Section 2 of Chapter 98-254, Laws of Florida, which sets the
$10.00 emissions inspection fee. Potential liability has therefore
been significantly reduced.
C. State Contracting and Engineering Corp. v. Florida
Department of Transportation, et. al.
Case No. 98006566(11), 17th Circuit Court, Broward County. The
Florida Department of Transportation used a Value Engineering
Change Proposal (VECP) design submitted by State Contracting
and Engineering Corp. (SCEC) for the construction of a barrier
sound wall in Broward County and several subsequent Department
projects. Subsequent to the initial use of the VECP design, SCEC
patented the design. SCEC claims that the Department owes
SCEC royalties and compensation for other damages involving the
Department’s use of the VECP design on the subsequent projects.
The case went to trial on January 28, 2002. After a verdict in favor
of Plaintiff, a judgment in the amount of $9,111,217 was issued.
The Department transferred $10,230,000 to the court registry to
cover the judgment and post-judgment interest. The case is on
appeal.
G.
al.
Paul K. Mateo, et al., v. Florida Department of Revenue, et
Case No. 1D01-4836, First District Court of Appeal. This is a class
action suit seeking declaratory relief and a tax refund of sales taxes
paid on the lease of motor vehicles where the concerned price
included a $2.00 surcharge imposed by Section 212.0606, Florida
Statutes. The Department was successful in moving to dismiss
Plaintiff’s Complaint in the trial court. A trial court dismissed an
Amended Complaint challenging the constitutionality of the statute
with prejudice. The trial court found that the Plaintiff had not
complied with the requirements of Section 215.26, Florida Statutes,
D. Riscorp Insurance Company, et. al. v. Florida Department
of Labor and Employment Security and Mary B. Hooks,
consolidated with Florida Hospitality Mutual Insurance
Company v. Department of Labor and Employment Security
Case No. 99-5027, Leon County Circuit Court, 2nd Judicial Circuit,
consolidated with Case No. 00-602, Leon County Circuit Court, 2nd
Judicial Circuit. Pursuant to Section 440.51, F.S., the Department
B-81
STATE OF FLORIDA
thereby making the plaintiff’s non-compliance with the statute fatal
to his refund request. The Plaintiff timely appealed the trial court’s
order of dismissal. The appeal was set for oral argument on
September 18, 2002. The plaintiff lost the appeal, and the case was
settled in favor of the Department.
Transportation terminated Cone Constructors, Inc., on a
construction contract involving a portion of the Suncoast Parkway.
Cone Constructors, Inc., sued claiming breach of contract and
wrongful termination. Subsequent to the initial court filings, the
contractor filed for bankruptcy and the Department was able to
settle the dispute with the bankruptcy trustee for a payment of
$575,000.
However, once Cone Constructors, Inc., was
terminated, St. Paul was required to finish the project and did so. It
now alleges that it has incurred losses on the project, for which it is
seeking damages from the Department. Estimated loss to the
State could be in excess of $25 million.
H. Transitions Optical, Inc. v. Florida Department of
Revenue, et al.
Case No. 2D00-4208, Second District Court of Appeal. In this
case, Transitions Optical and co-Plaintiff, Pepperidge Farm,
brought a class action suit (Case No. 99-8574-CI-20, 6th Judicial
Circuit) on behalf of themselves and all other similarly situated
businesses, challenging the imposition of ad valorem county taxes
on the computer software owned and operated by them in their
places of business and seeking a refund of all ad valorem taxes
previously paid. The Transitions Optical, Inc., case is currently on
appeal in the Second District Court of Appeal. The trial court
denied a motion to dismiss and certified a class of taxpayers. The
Department of Revenue filed a notice of appeal of the order on
class certification. The Pepperidge Farm Polk County case is
currently on appeal in the Second District Court of Appeal. This
case pertains to ad valorem taxes that relate to county funds and
not the State of Florida. The estimated loss to the counties of the
State may be in excess of $25 million.
I.
L.
Case No. 02-856, 17th Judicial Circuit, Broward County. The
Department of Transportation contracted with Traylor Brothers to
construct a ‘signature’ bascule bridge over the Intercoastal
Waterway in Fort Lauderdale, Florida. Traylor Brothers has sued
the Department for breach of contract alleging, among other things,
that the contract documents contained errors, defects, and
omissions and failed to disclose the complexity of the project, that
the Department failed to properly administer and coordinate the
construction activities under the contract, and that there were
differing site conditions. Discovery has been undertaken by both
parties. Traylor Brothers has not filed its Qualified Acceptance
Letter setting forth its claims. Potential loss to the State is
estimated at $30 million.
Rendon v. Florida Department of Transportation, et al.
Case No. 017716-CA-25 Eleventh Judicial Circuit. The Plaintiffs
(persons covered by the Americans with Disabilities Act or ADA) in
this certified class action suit, seek a declaratory judgment that
Sections 320.0848 (2) and (3), Florida Statutes, violate the
Americans with Disabilities Act of 1990 in that the surtax charged
for a disabled parking permit is illegal. Issues include the right to
proceed with refund claims when no one has applied for a refund
claim. On November 14, 2001, the trial court granted Plaintiffs’
motion for summary judgment. On February 25, 2002, the State
appealed the decision to the Third District Court of Appeal (Case
No. 3D02-61). On October 30, 2002, the Third District Court of
Appeal reversed the Trial Court’s decision and granted Summary
Judgment in favor of the State. The State was found not to violate
the ADA and no refund was required. Rendon has petitioned the
Florida Supreme Court seeking jurisdiction (Case No. SC03-42).
The Attorney General is representing FDOT and the Department of
Highway Safety and Motor Vehicles. Estimated loss to the State
could be in excess of $25 million.
M.
Graves Brothers v. Florida Citrus Commission
Case No. 02-CA-004686, Tenth Judicial Circuit Court. Five citrus
blenders filed a challenge to the “box tax” of the Florida Citrus
Commission, Section 601.15, Florida Statutes. The complaint
states that the tax is an illegal imposition upon compelled speech.
The case has been transferred to Polk County. The final hearing in
this case is set for June 2003. Potential loss to the State is
estimated at $100 million.
NOTE 18 – DEFICIT FUND EQUITY
Special Revenue Fund - Department of Education
The Principal State School Trust Fund has a deficit fund balance of
approximately $150 million. The deficit is a result of establishing
an advance (liability) for potential future claims on a portion of cash
transfers received from the Unclaimed Property Trust Fund.
Currently, the projected collections continue to exceed the
projected claim payments. Due to the long-term nature of the
ultimate liability that causes the deficit, the Department plans to
continue utilizing the underlying cash for educational programs.
J. Pharmaceutical Research and Manufacturers of America
v. Rhonda M. Medows & Bob Sharpe (in their official
capacities) Agency for Health Care Administration, 4:01
CV356-WS (Stafford, W.)
U.S. District Court (N.D. Fla.). “Pharma” is challenging the recent
Medicaid preferred drug list on constitutional and civil rights
grounds. Pharma alleges that the statute is preempted by federal
law under the Supremacy Clause of the United States Constitution
and deprives Pharma members of federally protected rights.
Complaint was filed August 7, 2001. A decision finding for the
Agency on all counts was rendered on December 28, 2001.
Pharma appealed this case to the U.S. Eleventh Circuit Court of
Appeals. The appellate court upheld the decision in favor of the
defendants on September 6, 2002. Pharma filed a petition for a
writ of certiorari in the U.S. Supreme Court on December 5, 2002,
to which the Agency responded on January 8, 2003. Although this
lawsuit does not claim money damages, the fiscal impact to
Medicaid could be as high as $300 million annually on anticipated
savings to the pharmacy program if an injunction is rendered
against the Agency.
K.
Traylor Brothers, Inc. v. Department of Transportation
Enterprise Fund - Department of Business and Professional
Regulation
The Hotel and Restaurant Trust Fund has a deficit fund equity of
approximately $3.7 million. Fee revenues have not been sufficient
to cover the costs of the fund. The Department has implemented
cost-cutting measures and is proposing rule changes to increase
fees. These changes are intended to eliminate the deficit.
Fiduciary Funds
Employee Benefits Trust Fund - Department of Management
Services
The State Employees Health Insurance Trust Fund has a deficit of
approximately $43 million. The deficit is a result of insurance
claims exceeding insurance premiums.
Amounts were
appropriated for the 2002-2003 fiscal year to address the deficit.
St. Paul Surety v. Florida Department of Transportation
This is a pre-suit claim arising out of Case No. CI 00-6996, 9th
Judicial Circuit, Orange County, Florida (Cone Constructors, Inc., v.
FL Dept of Transportation). In that case, the Florida Department of
B-82
STATE OF FLORIDA
NOTE 19 – SUBSEQUENT EVENTS
The following bond series for the primary government were issued subsequent to June 30, 2002:
Agency/Bond
Series
Amount
Matures
Interest Rate
State Board of Education, Lottery Revenue Bonds
2002B
$150,000,000
7/1/2003 - 7/1/2022
4.000% - 5.250%
State Board of Education, Capital Outlay Refunding
Bonds
2002B
$94,740,000
1/1/2003 - 1/1/2015
3.375% - 5.375%
Department of Transportation, Right-of-Way
Acquisition and Bridge Construction Bonds
2002A
$250,955,000
7/1/2003 - 7/1/2032
3.250% - 5.250%
State Board of Education, Public Education Capital
Outlay Refunding Bonds
2002B
$264,470,000
6/1/2003 - 6/1/2023
4.000% - 5.375%
Outlay Bonds
2000C
$100,000,000
6/1/2003 - 6/1/2032
3.250% - 5.250%
Outlay Refunding Bonds
2002C
$326,000,000
6/1/2003 - 6/1/2023
3.250% - 5.250%
Outlay Bonds
2002A
$250,000,000
6/1/2003 - 6/1/2032
3.125% - 5.000%
Department of Environmental Protection, Florida
Forever Revenue Bonds
2002B
$150,000,000
7/1/2003 - 7/1/2022
3.500% - 5.250%
State Board of Education, Lottery Revenue Bonds
2002C
$233,555,000
1/1/2004-1/1/2022
4.000% - 5.250%
Department of Management Services, Florida Facilities
Pool Revenue Refunding Bonds
2002A
$46,910,000
9/1/2003-9/1/2023
2.625% - 4.625%
Florida Board of Education, Florida Atlantic University
Parking Facility Revenue Bonds
2002
$8,995,000
7/1/2004 - 7/1/2023
2.500% - 4.350%
Florida Board of Education, University of Central Florida
Florida Housing Revenue Bonds
2002
$14,055,000
10/1/2003 - 10/1/2020 2.500% - 4.500%
Florida Board of Education, University of South Florida
Parking Facility Revenue Bonds
2002
$12,700,000
7/1/2004 - 7/1/2023
3.000% - 4.750%
Florida Board of Education, Florida International
University Parking Facility Revenue Bonds
2002
$22,915,000
7/1/2004 - 7/1/2022
2.600% - 4.600%
COMPONENT UNITS
B-83
OTHER REQUIRED
SUPPLEMENTARY
INFORMATION
STATE OF FLORIDA
BUDGETARY COMPARISON SCHEDULES
GENERAL AND MAJOR SPECIAL REVENUE FUNDS
(in thousands)
General Fund
Variance with
Final Budget
- Favorable
(Unfavorable)
Original
Budget
Final
Budget
$ 2,014,137
127,904
2,142,041
$ 2,014,137
127,904
2,142,041
510,937
74,724
19,874,394
1,118
265,185
12,416
1,215
302
20,740,291
507,859
75,124
18,769,194
1,108
230,010
12,431
1,215
302
19,597,243
503,288
75,564
18,294,852
1,236
238,645
12,432
184,121
4,250
19,314,388
(4,571)
440
(474,342)
128
8,635
1
182,906
3,948
(282,855)
30
3,402,549
900
3,403,479
30
3,933,002
900
3,933,932
30
3,757,097
2,193
3,759,320
......
(175,905)
1,293
(174,612)
TOTAL REVENUES
24,143,770
23,531,175
23,073,708
(457,467)
TOTAL AVAILABLE RESOURCES
26,285,811
25,673,216
25,215,749
(457,467)
EXPENDITURES
Operating expenditures:
Salaries and benefits
Other personal services
Expenses
Grants and aids
Operating capital outlay
Food products
Fixed capital outlay
Lump sum
Special categories
Financial assistance payments
Grants/aids to local governments
Data processing services
Pensions and benefits
Claim bills and relief acts
Total Operating Expenditures
2,998,117
44,627
461,747
8,313,699
16,390
66,748
64,116
1,922,856
5,146,226
239,317
65,779
76,551
9,235
......
19,425,408
4,035,724
262,191
833,687
8,318,689
68,130
64,473
154,550
7,611
5,500,140
244,421
113,919
91,938
9,235
400
19,705,108
3,983,608
246,238
788,942
8,313,752
55,972
63,755
130,458
......
5,432,416
242,952
113,919
86,824
8,588
400
19,467,824
52,116
15,953
44,745
4,937
12,158
718
24,092
7,611
67,724
1,469
......
5,114
647
......
237,284
Nonoperating expenditures:
Transfers
Purchase of investments
Refunds
Other
Total Nonoperating Expenditures
2,386,705
137,998
397,453
208,256
3,130,412
2,386,705
137,998
397,453
332,048
3,254,204
2,386,705
137,998
397,453
332,048
3,254,204
......
......
......
......
......
22,555,820
22,959,312
22,722,028
237,284
$ 3,729,991
$ 2,713,904
Fund Balances, July 1, 2001
Reversions
Fund Balances, July 1, 2001, restated
Actual
$
2,014,137
127,904
2,142,041
$
......
......
......
REVENUES
Direct revenues:
Fees and charges
Licenses
Taxes
Miscellaneous
Interest
Grants
Refunds
Other
Indirect revenues:
Employee/employer contributions
Transfers and distributions
Other
Total Indirect Revenues
TOTAL EXPENDITURES
FUND BALANCES, JUNE 30, 2002
$
2,493,721
The notes to required supplementary information are an integral part of this schedule.
B-87
$
(220,183)
STATE OF FLORIDA
(in thousands)
Variance with
Final Budget
Original
Final
- Favorable
Budget
Budget
Actual
(Unfavorable)
Reversions
$
1,521,336
2,296
1,523,632
$ 1,521,336
2,296
1,523,632
$ 1,521,336
2,296
1,523,632
$
......
......
......
148,664
17,398
......
24,474
73,968
69,183
9,715
......
5,881
349,283
52,614
43,789
......
496
77,374
181,179
2,868
237,020
76,939
672,279
64,726
44,849
......
650
84,835
179,482
7,149
237,020
88,305
707,016
12,112
1,060
......
154
7,461
(1,697)
4,281
......
11,366
34,737
1,922,861
13,612
1,936,473
1,514,023
2,490
1,516,513
1,295,575
2,745
1,298,320
(218,448)
255
(218,193)
TOTAL REVENUES
2,285,756
2,188,792
2,005,336
(183,456)
3,809,388
3,712,424
3,528,968
(183,456)
EXPENDITURES
Expenses
Grants and aids
Lump sum
Special categories
148,201
33,327
45,152
4,751
4,207
692,163
3,890
354,263
542,084
7,873
1,835,911
151,492
33,923
47,064
4,751
4,796
935,140
......
383,881
293,576
7,918
1,862,541
147,076
28,552
41,455
2,992
4,243
935,140
......
356,636
293,576
7,917
1,817,587
4,416
5,371
5,609
1,759
553
......
......
27,245
......
1
44,954
236,181
35,434
16,035
287,650
236,181
35,434
16,024
287,639
236,181
35,434
16,024
287,639
......
......
......
......
2,123,561
2,150,180
2,105,226
44,954
1,685,827
$ 1,562,244
$ 1,423,742
REVENUES
Direct revenues:
Fees and charges
Licenses
Taxes
Miscellaneous
Interest
Grants
Refunds
Bond proceeds
Other
Indirect revenues:
Other
Transfers
Refunds
Other
TOTAL EXPENDITURES
$
B-88
$
(138,502)
STATE OF FLORIDA
(in thousands)
Original
Budget
Reversions
$
458,763
14,876
473,639
Final
Budget
$
458,763
14,876
473,639
Actual
$
458,763
14,876
473,639
Variance with
Final Budget
- Favorable
(Unfavorable)
$
......
......
......
REVENUES
Direct revenues:
Fees and charges
Licenses
Miscellaneous
Interest
Grants
Refunds
Other
Indirect revenues:
Other
701,273
76,873
2,183
19,439
8,716,339
455,835
378,025
10,349,967
868,805
21,585
1,160
19,616
8,020,242
803,530
85,453
9,820,391
1,154,874
20,544
1,175,418
1,280,558
(213)
1,280,345
771,696
20,131
10
10
8,312,213
691,700
4,596
9,800,356
(97,109)
(1,454)
(1,150)
(19,606)
291,971
(111,830)
(80,857)
(20,035)
871,866
2,538
874,404
(408,692)
2,751
(405,941)
TOTAL REVENUES
11,525,385
11,100,736
10,674,760
(425,976)
11,999,024
11,574,375
11,148,399
(425,976)
EXPENDITURES
Expenses
Grants and aids
Food products
Lump sum
Special categories
Special expenses
1,085,399
69,181
355,600
159,353
18,295
846
10,366
148,216
8,460,186
29,990
4,500
79,929
......
10,421,861
1,103,372
72,060
383,596
184,315
16,450
746
7,457
......
8,391,960
35,647
6,163
74,014
4
10,275,784
1,060,926
63,261
338,358
162,003
13,684
521
7,457
......
7,749,000
33,614
6,163
64,933
4
9,499,924
42,446
8,799
45,238
22,312
2,766
225
......
......
642,960
2,033
......
9,081
......
775,860
857,786
10,141
10,369
878,296
862,143
10,141
10,392
882,676
862,143
10,141
10,392
882,676
......
......
......
......
11,300,157
11,158,460
10,382,600
775,860
Transfers
Refunds
Other
TOTAL EXPENDITURES
$
698,867
$
415,915
$
765,799
B-89
$
349,884
STATE OF FLORIDA
(in thousands)
Transportation
Original
Budget
$
21,002
Final
Budget
$
21,002
Actual
$
21,002
Variance with
Final Budget
- Favorable
(Unfavorable)
$
......
REVENUES
Direct revenues:
Interest
Grants
Refunds
Bond proceeds
Other
1,507
31,778
......
150,660
3
183,948
1,507
19,312
......
150,660
3
171,482
1,487
15
......
150,653
11,858
164,013
27,200
27,200
27,142
27,142
27,689
27,689
TOTAL REVENUES
211,148
198,624
191,702
(6,922)
232,150
219,626
212,704
(6,922)
722
10
141
41,040
41,913
734
10
141
34,207
35,092
673
9
141
34,207
35,030
61
1
......
......
62
150,654
150,654
150,654
150,654
150,654
150,654
......
......
192,567
185,746
185,684
62
Indirect revenues:
EXPENDITURES
Expenses
Transfers
TOTAL EXPENDITURES
$
39,583
$
33,880
$
B-90
27,020
(20)
(19,297)
......
(7)
11,855
(7,469)
547
547
$
(6,860)
STATE OF FLORIDA
(in thousands)
Public Education
Original
Budget
Variance with
Final Budget
- Favorable
(Unfavorable)
Final
Budget
Actual
1,003,083
144
1,003,227
$ 1,003,083
144
1,003,227
$ 1,003,083
144
1,003,227
Direct revenues:
Fees and charges
Licenses
Taxes
Miscellaneous
Interest
Grants
Refunds
Bond proceeds
Other
13,711
1,505
519,000
80
4,262
1,414,686
810
990,583
6,109
2,950,746
1,453
......
519,000
59
57,442
1,592,302
......
990,583
16,300
3,177,139
1,431
......
518,626
59
48,111
1,590,350
11,034
989,971
12,743
3,172,325
(22)
......
(374)
......
(9,331)
(1,952)
11,034
(612)
(3,557)
(4,814)
Indirect revenues:
Other
1,771,090
......
1,771,090
1,771,090
2,550
1,773,640
1,680,514
2,049
1,682,563
(90,576)
(501)
(91,077)
TOTAL REVENUES
4,721,836
4,950,779
4,854,888
(95,891)
5,725,063
5,954,006
5,858,115
(95,891)
EXPENDITURES
Expenses
Grants and aids
Lump sum
Special categories
Payments to U.S. Treasury
10,210
1,202
7,481
1,896,123
1,224
2,088,049
100
267,833
77,294
......
......
428
4,349,944
27,634
4,037
21,924
2,218,367
1,886
1,605,651
......
268,796
77,967
84,008
519
431
4,311,220
26,930
2,766
16,701
2,150,943
1,038
1,605,651
......
249,631
76,004
84,008
519
419
4,214,610
704
1,271
5,223
67,424
848
......
......
19,165
1,963
......
......
12
96,610
330,369
698
364,380
695,447
330,369
698
364,380
695,447
330,369
698
364,380
695,447
......
......
......
......
5,045,391
5,006,667
4,910,057
96,610
Reversions
$
$
......
......
......
REVENUES
Transfers
Refunds
Other
TOTAL EXPENDITURES
$
679,672
$
947,339
$
B-91
948,058
$
719
STATE OF FLORIDA
(in thousands)
Original
Budget
Reversions
$
375,667
77
375,744
Final
Budget
$
375,667
77
375,744
Actual
$
375,667
77
375,744
Variance with
Final Budget
- Favorable
(Unfavorable)
$
......
......
......
REVENUES
Direct revenues:
Fees and charges
Licenses
Taxes
Miscellaneous
Interest
Refunds
Other
170,017
21,750
5,299,644
21
3,933
......
......
5,495,365
170,017
19,864
5,299,644
......
1,363
......
......
5,490,888
149,545
18,550
5,359,873
23
255
23,451
15,095
5,566,792
370,255
......
33,709
403,964
360,276
......
36,160
396,436
455,577
89,391
44,022
588,990
95,301
89,391
7,862
192,554
TOTAL REVENUES
5,899,329
5,887,324
6,155,782
268,458
6,275,073
6,263,068
6,531,526
268,458
66,202
2,739
29,162
22,838
3,550
2,701
8,966
136,158
67,072
2,298
30,869
22,838
2,777
2,520
8,741
137,115
65,944
1,660
29,575
19,452
2,655
2,282
6,879
128,447
1,128
638
1,294
3,386
122
238
1,862
8,668
1,968,985
90,681
3,932,968
5,992,634
1,979,006
90,681
3,932,968
6,002,655
1,979,006
90,681
3,932,968
6,002,655
......
......
......
......
6,128,792
6,139,770
6,131,102
8,668
Indirect revenues:
Sale of investments
Other
EXPENDITURES
Expenses
Grants and aids
Special categories
Transfers
Refunds
Other
TOTAL EXPENDITURES
$
146,281
$
123,298
$
B-92
400,424
(20,472)
(1,314)
60,229
23
(1,108)
23,451
15,095
75,904
$
277,126
STATE OF FLORIDA
(in thousands)
Employment Services
Original
Budget
Reversions
$
54,068
16,347
70,415
Final
Budget
$
54,068
16,347
70,415
Actual
$
54,068
16,347
70,415
Variance with
Final Budget
- Favorable
(Unfavorable)
$
......
......
......
REVENUES
Direct revenues:
Fees and charges
Licenses
Taxes
Miscellaneous
Interest
Grants
Refunds
Other
10,114
16
242,426
411
665
460,324
19,406
2,321
735,683
3,707
14
308,140
717
1,995
682,280
1,171
3,458
1,001,482
7,563
1
306,875
42
5,224
614,115
11,700
3,399
948,919
3,856
(13)
(1,265)
(675)
3,229
(68,165)
10,529
(59)
(52,563)
Indirect revenues:
Other
283,871
172
284,043
343,412
......
343,412
506,570
763
507,333
163,158
763
163,921
TOTAL REVENUES
1,019,726
1,344,894
1,456,252
111,358
1,090,141
1,415,309
1,526,667
111,358
135,142
20,345
57,665
5,741
4,432
80
400
454,169
13,456
691,430
127,437
24,126
51,689
22,446
5,285
80
1,721
984,589
15,793
1,233,166
116,216
17,746
44,008
16,616
4,610
80
1,721
926,115
15,269
1,142,381
11,221
6,380
7,681
5,830
675
......
......
58,474
524
90,785
40,411
2,243
211,427
254,081
40,411
2,243
211,427
254,081
40,411
2,243
211,427
254,081
......
......
......
......
945,511
1,487,247
1,396,462
90,785
EXPENDITURES
Expenses
Grants and aids
Food products
Special categories
Transfers
Refunds
Other
TOTAL EXPENDITURES
$
144,630
$
(71,938)
$
B-93
130,205
$
202,143
STATE OF FLORIDA
BUDGET TO GAAP RECONCILIATION
GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS
(in thousands)
General
Fund
Budgetary basis fund balances
$
Items not included in budgetary basis fund balances:
Security lending investments within the State Treasury
Fair value adjustments to investments within the State Treasury
Special investments within the State Treasury
Non-State Treasury cash and investments
Other GAAP basis fund balances not included in
budgetary basis fund balances
$
1,024,845
22,008
13,174
4,018
Adjustments (basis differences):
Receivables not certified forward (only certain
expenditure refunds are certified forward)
Inventories and prepaid items
Liabilities not certified forward (accrual items not
recognized in the certified forward process)
Encumbrances
765,799
Transportation
$
27,020
63,633
1,365
7,827
3,331
30,183
648
......
1,547
(68,505)
263,887
3,546,919
1,683,622
773,450
323,285
1,225,146
18,973
1,051,556
705
889,184
16,309
1,320,821
15,114
3,336,290
B-94
$
(3,137)
(1,498,786)
44,038
$
1,423,742
Health and
Family
Services
256,661
5,507
......
849
(10,847)
Adjusted budgetary basis fund balances
GAAP basis fund balances
2,493,721
Environment,
Recreation and
Conservation
(314,630)
5,093
$
2,426,346
(1,028,491)
5,004
$
655,456
(839,767)
78,289
$
897,742
STATE OF FLORIDA
Tax
Collection and
Administration
Public
Education
$
948,058
$
$
130,205
163,795
3,511
796
4,396
......
......
......
117,987
298,085
2,809
1,418,641
521,220
132,168
90,491
......
247,199
84
85,106
......
(1,263,868)
7,414
$
400,424
Employment
Services
252,678
27,365
587
......
3,617
(29,606)
(497,834)
......
$
270,669
(653)
1,955
$
218,576
B-95
STATE OF FLORIDA
NOTE A
- BUDGETARY BEGINNING FUND BALANCE RESTATEMENTS
In the past, the State’s Combined Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Budgetary Basis)
– All Budgetary Fund Types, included as part of the General Purpose Financial Statements, was presented by the following budgetary fund
types: General Revenue Fund, Trust Funds, Budget Stabilization Fund, and Working Capital Fund. These budgetary fund types are different
from the fund types for financial reporting purposes. Statement No. 34 of the Governmental Accounting Standards Board (GASB) requires that
budgetary information be presented for the general fund and for each major special revenue fund that has a legally adopted annual budget. The
following schedule shows the beginning fund balance restatements from the budgetary fund types to the financial reporting fund types under the
new reporting model:
June 30, 2001
As Previously
Reported
Fund
Reclassifications
Budget Conversion
Reclassifications and
Adjustments
June 30, 2001
As Restated
$
537,516
$
(537,516)
$
$
......
Trust Fund
$
9,429,874
$
(4,451,319)
$
$
......
$
......
$
1,791,242
$
222,895
$
2,014,137
$
......
......
......
......
......
......
$
1,521,336
(269,697)
21,002
1,003,083
375,667
54,068
$
......
728,460
......
......
......
......
$
1,521,336
458,763
21,002
1,003,083
375,667
54,068
BUDGETARY FUND TYPES
......
(4,978,555)
FINANCIAL REPORTING FUND TYPES
General Fund
Special Revenue Funds
Major Special Revenue Funds
Transportation
Public Education
Employment Services
Nonmajor Special Revenue Funds
Government Administration
Business and Community Development
Regulation and Licensing
Tobacco Settlement
Public Safety
Corrections
Consumer Protection and Safety
Agriculture
Juvenile Justice
Judicial Services
Military & Veterans' Affairs
Citrus Commission
School for the Deaf and the Blind
Wireless Emergency Telephone System
Total Special Revenue Funds
TOTAL
......
......
......
......
......
......
......
......
......
......
......
......
......
......
51,077
(67,319)
164,037
24,695
49,822
51,120
56,811
35,517
19,295
30,164
26,489
16,156
193
34,077
......
207,597
......
226,596
......
11,421
......
......
2,123
......
......
......
......
......
51,077
140,278
164,037
251,291
49,822
62,541
56,811
35,517
21,418
30,164
26,489
16,156
193
34,077
$
......
$
3,197,593
$
1,176,197
$
4,373,790
$
9,967,390
$
......
$
(3,579,463)
$
6,387,927
In order for budgetary information to be presented for financial reporting as required by GASB, adjustments were made to convert information
from the budgetary fund structure to the financial reporting fund structure.
The State elected to present its budgetary comparison schedules for the general fund and major special revenue funds as part of the other
required supplementary information. In addition, budgetary comparison schedules for nonmajor special revenue funds which have legally
adopted annual budgets are presented with other combining and individual fund statements and schedules. The operating history of the Budget
Stabilization Fund and the Working Capital Fund is presented in the Statistical and Economic Data section of the CAFR.
NOTE B
- LUMP SUM EXPENDITURE CATEGORY
The Lump Sum expenditure category presented in the budgetary comparison schedules is used as a budgetary tool to track moneys
appropriated to a particular fund until subsequent allocations are made to other expenditure categories.
B-96
STATE OF FLORIDA
NOTE C
- BUDGETARY REPORTING
Budget Process
Chapter 216, Florida Statutes (F.S.), promulgates the process used to develop the budget for the State of Florida. By September 15 of each
year, the head of each state agency and the Chief Justice of the Supreme Court for the Judicial Branch submit a final annual legislative budget
request to the Governor and Legislature. Then, at least 45 days before the scheduled annual legislative session in each year, the Governor, as
Chief Budget Officer, submits his recommended budget to each legislator.
The Governor also provides estimates of revenues sufficient to fund the recommended appropriations. Revenue estimates for the General Fund
are made by the Revenue Estimating Conference. This group includes members of the Executive and Legislative branches with forecasting
experience who develop official information regarding anticipated state and local government revenues as needed for the state budgeting
process. Revenue estimates for trust fund (consist mainly of special revenue funds) are provided by state agencies. These estimates may be
revised during the course of the Legislature’s consideration and adoption of a final budget. These estimates, together with known available cash
balances, are further considered by the Executive Office of the Governor and the Chief Justice of the Florida Supreme Court during the
preparation of annual release (spending) plans. Further adjustments to the original budget’s trust fund revenue estimates may be made to
conform the agency revenue estimates to actual and projected revenue streams.
The Governor’s recommended budget forms the basis of the appropriations bill. As amended and approved by the Legislature (subject to the
line-item veto power of the Governor and override authority of the Legislature), this bill becomes the General Appropriations Act. The Governor
and the Chief Justice of the Supreme Court may, under certain conditions, establish releases for amounts not appropriated by the Legislature to
agencies and the Judicial Branch, respectively. These releases, called additional appropriations, are made primarily for nonoperating
disbursements, such as the purchase of investments and the transfer of money between State funds.
The State Comptroller, as Chief Fiscal Officer, approves disbursements in accordance with legislative authorizations. The budget is controlled
at the account code level, which is defined as an appropriation category (e.g., salaries) within a budget entity. The Governor and the
Comptroller are responsible for detecting conditions which could lead to a deficit in any agency’s funds and reporting that fact to the Legislative
Budget Commission and the Chief Justice of the Supreme Court. The Constitution of the State, Article VII, Section 1(d), states, “Provision shall
be made by law for raising sufficient revenue to defray the expenses of the State for each fiscal period.”
Budgetary Basis of Accounting
The budgetary basis of accounting required by State law differs materially from the basis used to report revenues and expenditures in
accordance with generally accepted accounting principles (GAAP). Appropriations are made from funds that are prescribed by law. These legal
basis fund types (known as State funds) are the General Revenue Fund, numerous trust funds, the Budget Stabilization Fund, and the Working
Capital Fund. (See the Letter of Transmittal within the CAFR for more detail.) Certain moneys, known as local funds, available to agencies for
their operations are maintained outside the State Treasury. Because the funds are located in banks outside of the State Treasury, budgetary
authority and the disbursement of these funds are not controlled by the State Comptroller. For example, the State Board of Administration
operates from such funds.
If circumstances warrant, the head of a department or the Chief Justice of the Supreme Court may transfer appropriations (other than fixed
capital outlay appropriations) but only to the extent of 5 percent of the original appropriation or $150,000, whichever is greater. Transfers of
general revenue appropriations in excess of 5 percent or $150,000, whichever is greater, or for fixed capital outlay, may be approved by the
Legislative Budget Commission or the Chief Justice of the Supreme Court. The Governor and the Chief Justice of the Supreme Court may
approve transfers of expenditure authority within any trust fund for agencies and the Judicial Branch, respectively, if the transfers are less than 5
percent of the original approved budget or $1 million, whichever is greater. The Legislative Budget Commission may approve trust fund
transfers in excess of 5 percent or $1,000,000. At the end of the fiscal year, any balance of an operating appropriation which has not been
disbursed but is expended (recorded as a payable) or contracted to be expended (recorded as a reserve for encumbrances in governmental
fund types), may be certified forward into the next fiscal year. Certifications forward for agencies and the judicial branch are subject to the
approval of the Governor and the Chief Justice of the Supreme Court, respectively.
Budgetary basis revenues are essentially reported on the cash basis and include amounts classified by GAAP as other financing sources.
Budgetary basis expenditures include disbursements, except those for prior year certified forwards, plus current year payables and
encumbrances which are certified forward into the next fiscal year. They also include amounts classified by GAAP as other financing uses.
State law requires prior year payables and encumbrances not certified forward to be paid from the current year budget.
The presentation of the budgetary data excludes most fixed capital outlay projects. Many fixed capital outlay projects are funded on a multi-year
basis since major construction projects require several years to complete. These are accounted for as capital projects funds. Appropriations
are made in total the first year even though they are released and expended over a period of years as required by the projects. Although the
State Transportation Trust Fund within the Department of Transportation is reported as a special revenue fund, the projects within the fund are
primarily of a multi-year nature, generally requiring several years to complete and are accounted and appropriated for accordingly. Because of
the multi-year nature of such projects, these multi-year fixed capital outlay projects and the State Transportation Trust Fund are not presented
on the budgetary comparison schedules.
Budget to GAAP Reconciliation
The budgetary comparison schedules for the General Fund and the major special revenue funds present comparisons of the original estimated
budget and legally adopted budget with actual data on a budgetary basis. Since accounting principles applied for the purposes of developing
data on a budgetary basis differ significantly from those used to present financial statements in conformity with GAAP, a budget to GAAP
reconciliation is presented following the budgetary comparison schedules.
B-97
STATE OF FLORIDA
PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS
(in thousands)
Actuarial
Value of
Assets
(A)
Actuarial
Valuation
Date
July 1, 1997
$
Actuarial Accrued
Liability (AAL)
Entry Age
(B)
Unfunded
AAL
(UAAL)
(B-A)
$
Funded
Ratio
(A/B)
Annualized
Covered
Payroll
(C)
UAAL as a
Percentage of
Covered Payroll
((B-A)/C)
56,220,804
$ 61,610,883
5,390,079
91.25%
$ 17,257,738
July 1, 1998
66,997,227
63,205,829
(3,791,398)
106.00%
18,010,189
31.23%
July 1, 1999
77,795,313
68,575,249
(9,220,064)
113.45%
18,998,086
(1)
(48.53%)
July 1, 2000
88,503,838
74,948,950
(13,554,888)
118.09%
20,463,403
(1)
(66.24%)
(68.00%)
(58.28%)
(21.05%)
July 1, 2001
95,517,948
80,993,718
(14,524,230)
117.93%
21,360,862
(1)
July 1, 2002
99,405,677
86,469,774
(12,935,903)
114.96%
22,195,184
(1)
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(in thousands)
Year
Ended
6/30
Annual
Required
Contributions
Percent
Contributed
1997
3,036,978
100%
1998
3,206,516
100%
1999
3,096,290
2000
1,969,057
2001
2002
1,869,731
1,825,485
100%
111%
(2)
110%
98%
ADDITIONAL INFORMATION
The information presented in the above schedules was determined as part of the actuarial valuations
at the dates indicated. Additional information as of the latest actuarial valuation follows:
Valuation date
July 1, 2002
Actuarial cost method
Entry Age Normal
Amortization method
Level Dollar of Pay, Open
Equivalent single amortization period
Not Applicable
Asset valuation method
5-Year Smoothed Method
(3)
Actuarial assumptions:
Investment rate of return
8.00%
Projected salary increases
6.25%
Includes inflation at
3.50%
Cost-of-Living Adjustments
3.00%
(4)
(1) Includes Deferred Retirement Option Program (DROP) Payroll
(2) The 2000 required annual contribution and the corresponding percent contributed were restated
to reflect a change in the annual required contribution through the use of the actuarial determined surplus.
(3) The UAAL surplus for the July 1, 2002 valuation precludes the need for an amortization period.
(4) Includes individual salary growth of 5.00%, plus an age-graded merit scale from 5.00% at age 20, to 1.50% at age 40,
to 0.25% at age 60.
B-98
STATE OF FLORIDA
INFORMATION ABOUT INFRASTRUCTURE ASSETS
REPORTED USING THE MODIFIED APPROACH
Pursuant to GASB Statement 34, Basic Financial Statements –
and Management’s Discussion and Analysis – for State and Local
Governments, the State has adopted an alternative process to
recording depreciation expense on selected infrastructure assets.
Under this alternative method, referred to as the modified
approach, the State expenses certain maintenance and
preservation costs and does not report depreciation expense.
Assets accounted for under the modified approach include
approximately 12,000 centerline miles of roads and 6,260 bridges
that the State is responsible to maintain.
superstructure, and substructure, are assigned a condition rating.
The condition rating ranges from 0 to 9. A rating of 8 to 9 is very
good to excellent, which indicates that no repairs are necessary.
A rating of 5 to 7 is fair to good, which indicates that minor repairs
are required. A rating below 5 identifies bridges needing major
repairs or replacement. A rating of 4 or less indicates a condition
of poor to failing and requires urgency in making repairs. A rating
of 2 requires closure of the bridge and a rating of 1 is used for a
bridge that is closed but with corrective action may be put back into
light service. A rating of 0 indicates that the bridge is out of service
and beyond corrective action.
In order to utilize the modified approach, the State is required to:
•
•
•
•
The FDOT standard is to ensure that 90 percent of all Department
maintained bridges do not need major repairs or replacement.
Maintain an asset management system that includes an
up-to-date inventory of eligible infrastructure assets.
Perform condition assessments of eligible assets and
summarize the results using a measurement scale.
Estimate each year the annual amount to maintain and
preserve the assets at the condition level established
and disclosed by the State.
Document that the assets are being preserved
approximately at, or above, the established condition
level.
Routine Maintenance Program: The FDOT is responsible for
managing and performing routine maintenance on the State
Highway System to help preserve the condition of the highway
system. Routine maintenance includes many activities, such as:
highway repair, roadside upkeep, emergency response,
maintaining signs, roadway striping, and keeping storm drains
clear and structurally sound.
The quality and effectiveness of the routine maintenance program
is monitored by quarterly surveys, using the Maintenance Rating
Program (MRP), which result in an annual assessment. The MRP
has been used since 1985 to evaluate routine maintenance of the
transportation system in five broad categories, or elements. The
five rating elements are roadway, roadside, vegetation/aesthetics,
traffic services, and drainage. The MRP provides a maintenance
rating of 1 to 100 for each category and overall.
Condition and Maintenance Programs
Resurfacing Program:
Road pavements require periodic
resurfacing. The frequency of resurfacing depends on the volume
of traffic, type of traffic, pavement material variability and weather
conditions.
Resurfacing preserves the structural integrity of
highway pavements and includes pavement resurfacing, pavement
rehabilitation and minor reconstruction.
The FDOT standard is to achieve and maintain an overall
maintenance rating of 80.
The Florida Department of Transportation (FDOT) conducts an
annual Pavement Condition Survey. Pavements are rated on a
scale of 0 to 10 (with 10 being the best) in each of three criteria:
ride smoothness, pavement cracking, and wheel path rutting. Ride
smoothness is what the motorist experiences. It directly affects
motor vehicle operation costs. Pavement cracking refers to the
structural deterioration of the pavement, which leads to loss of
smoothness and deterioration of the road base by water seepage if
not corrected. Wheel path ruts are depressions in pavement
caused by heavy use. Ride smoothness and wheel path rutting
are measured mechanically using lasers. Pavement cracking is
determined through visual observation by experienced survey
crews.
Condition Rating for the State Highway Sys tem
Percentage of pavement meeting FDOT standards
2002
2001
2000
79%
79%
79%
Percentage of bridges meeting FDOT standards
The condition rating scales were set by a statewide committee of
pavement engineers so that a pavement segment receiving a
rating of six or less in any of the three rating criteria is designated a
deficient pavement segment.
2002
2001
2000
93%
93%
92%
Maintenance Rating
The FDOT standard is to ensure that 80% of the pavement on the
State Highway System has a score greater than six in all three
criteria.
Bridge Repair/Replacement Program: The FDOT Bridge Repair
Program places primary emphasis on periodic maintenance and
specified rehabilitation work activities on State Highway System
bridge structures. The FDOT Bridge Replacement Program’s
primary focus is on the replacement of structurally deficient or
weight restricted bridges on the State Highway System. In
addition, this program addresses bridges that require structural
repair but which are more cost effective to replace.
2002
2001
2000
85
84
82
Comparison of Needed-to-Actual Maintenance/Preservation
(in millions)
Resurfacing Program
The FDOT conducts bridge condition surveys using the National
Bridge Inspection (NBI) Standards to determine condition ratings.
Each bridge is inspected at least once every two years. During the
inspection process, the major components, such as deck,
Needed
Actual
B-99
2002
2001
2000
1999
1998
$416.9
$467.0
$416.4
$385.7
$306.5
367.4
421.2
342.4
360.0
295.9
STATE OF FLORIDA
Bridge Repair/Replacement Program
Needed
Actual
2002
$236.1
2001
$344.6
2000
$200.5
1999
$259.4
1998
$210.5
250.0
379.5
196.7
292.2
234.8
Routine Maintenance Program
Needed
Actual
2002
$388.2
2001
$374.3
2000
$348.2
1999
$342.9
1998
$317.3
392.9
371.7
357.9
338.4
307.4
The Florida Department of Transportation determines its program
needs based on a five-year plan (plan). The needed amounts
provided above are for estimated expenses and commitments
relating to appropriate projects within the plan at the time of the
budget request. The nature of a long-term plan is that it is
continually changing. Projects are added, deleted, adjusted, or
postponed. The difference between the needed and the actual
amounts above reflects these changes.
B-100
APPENDIX C
[RESERVED]
APPENDIX D
DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS
OF THE RESOLUTION
The following is a summary of certain provisions of the Resolution. The statements contained herein do not
purport to be complete and this summary is qualified in its entirety by reference to the Resolution, a copy of which may
be obtained from the Division. Certain capitalized terms used in this summary are defined in the definition section
hereof. Article and Section references herein are to the Florida Facilities Pool Revenue Bond Resolution adopted on
May 20, 1986 by the Governor and Cabinet sitting as the Governing Board of the Division.
Definition of Certain Terms. In addition to words and terms elsewhere defined in the Resolution, the
following words and terms shall have the following meanings, unless some other meaning is plainly indicated. Words
importing the singular number shall include the plural number in each case and vice versa, and words importing persons
shall include firms and corporations.
"Account or Accounts" shall mean, as the case may be, each or all of the Accounts required or authorized to
be created pursuant to the Resolution.
"Accreted Value" shall mean with respect to any Capital Appreciation Bonds (i) as of any Valuation Date, the
amount set forth for such date in the Supplemental Resolution authorizing such Capital Appreciation Bonds and (ii) as
of any date other than a Valuation Date, the sum of (a) the Accreted Value as of the preceding Valuation Date and (b)
the product of (1) a fraction, the numerator of which is the number of days having elapsed from the preceding Valuation
Date and the denominator of which is the number of days from such preceding Valuation Date to the next succeeding
Valuation Date and (2) the difference between the Accreted Values for such preceding and succeeding Valuation Dates.
"Accrued Aggregate Debt Service" shall mean, as of any date of calculation, an amount equal to the sum of the
amounts of accrued Debt Service with respect to all Series, calculating the accrued Debt Service with respect to each
Series at an amount equal to the sum of (i) interest on the Bonds of such Series accrued and unpaid and to accrue to the
end of the then current calendar month, and (ii) Principal Installments due and unpaid and that portion of the Principal
Installment for such Series next due which would have accrued (if deemed to accrue in the manner set forth in the
definition of Debt Service) to the end of such calendar month. For purposes of this definition, the Original Principal
Amount of Capital Appreciation Bonds shall be included in the calculation of Principal Installments in such manner and
during such period of time as is specified in the Supplemental Resolution authorizing such Capital Appreciation Bonds.
For purposes of this definition, the Accreted Value of Capital Appreciation Bonds less the Original Principal Amount
thereof shall be included in the calculation of accrued and unpaid and accruing interest on Capital Appreciation Bonds
in such manner and during such period of time as is specified in the Supplemental Resolution authorizing such Capital
Appreciation Bonds.
"Acquire or Acquisition" means to purchase, erect, build, construct, reconstruct, replace, extend, better, equip,
develop, rehabilitate, remodel, enlarge, furnish, repair or improve a Facility, in each case to the extent same constitute
capital expenditures under applicable law.
"Acquisition Costs" shall mean all reasonable and necessary costs incurred in the Acquisition of a Facility,
which costs may include, but are not limited to:
(a)
The cost of Acquiring real property and any buildings thereon, including payments for
options, deposits, or contracts to purchase properties.
(b)
The cost of site preparation, demolition, and development.
D-1
(c)
Any expenses relating to the issuance of the Bonds incurred by the Division or the Division
of Facilities Management, including, but not limited to, private placement fees, underwriting fees, original issue
discounts, rating agency fees, and other necessary fees.
(d)
Fees in connection with the planning, execution, and financing of a Facility, such as those of
architects, engineers, attorneys, feasibility consultants, financial advisers, accountants, the Division and the
Division of Facilities Management, including the allocable portions of direct costs of the Division, the Division
of Facilities Management and the lessee Agencies.
(e)
The cost of studies, surveys, plans, permits, insurance, interest, financing, taxes and
assessments, and other operating and carrying costs during the Acquisition of a Facility.
Facility.
(f)
The cost of Acquiring a Facility.
(g)
The cost of land improvements, such as landscaping and offsite improvements.
(h)
Capital expenditures incurred in connection with relocation to and initial occupancy of a
(i)
Any initial expense, charge or cost payable upon issuance of the obligations with respect to
the Acquisition of a Facility relating to or incurred in connection with remarketing of obligations, such as
remarketing agent or indexing agent fees or for credit enhancements or liquidity features, including, but not
limited to, letter of credit fees, whether direct pay or standby, swap agent fees and similar expenses.
(j)
The initial cost of such other items, including premiums for indemnity and surety bonds,
premiums on insurance, including, but not limited to, municipal bond insurance, debt service reserve insurance
and lease payment insurance, and fees and expenses of trustees, depositories, registrars, book entry registrars
and paying agents for obligations issued under the Act.
(k)
Interest on Bonds from the date thereof to the time when interest is to be covered solely from
sources other than proceeds of Bonds and any amounts necessary to establish or fund any reserves or capital
depreciation reserves required in connection with such obligations.
(1)
The reimbursement of all moneys advanced or supplied to or borrowed by the Division, the
Division of Facilities Management or others for the payment of any item of cost of a Facility.
(m)
Such other expenses as may be reasonable and necessary to the Acquisition of any Facility
under applicable law, the financing thereof under the Act and the placing of same in use.
"Act" shall mean the Constitution and laws of the State of Florida, including particularly Sections 215.57215.83, Florida Statutes, as amended, and the Florida Building and Facilities Act, Sections 255.501-255.525, Florida
Statutes, as amended.
"Agency" shall mean any department created by Chapter 20, Florida Statutes, the Executive Office of the
Governor, the Game and Fresh Water Fish Commission, the Parole and Probation Commission, the State Board of
Administration, the Department of Military Affairs, the Legislative Branch or the Judicial Branch of government of the
State.
"Aggregate Debt Service" for any period shall mean, as of any date of calculation, the sum of the amounts of
Debt Service for such period with respect to all Series; provided, however, that for purposes of estimating Aggregate
Debt Service for any future period, (i) any Variable Interest Rate Bonds shall be deemed to bear at all times to the
maturity thereof the Estimated Average Interest Rate applicable thereto; (ii) any Put Bonds Outstanding during such
period which are secured as to payment of principal upon tender prior to maturity date by a credit facility shall be
D-2
assumed to mature on the stated maturity date thereof, unless such credit facility expires within one year or less of the
date of calculation in which case such Put Bonds shall be assumed to mature on the expiration date of such credit facility;
and (iii) any such Put Bonds Outstanding which are not so secured by a credit facility shall be assumed to mature on the
next date upon which the Holder thereof may require payment thereof. For purposes of this definition, the Original
Principal Amount of Capital Appreciation Bonds shall be included in the calculation of Principal Installments in such
manner and during such period of time as is specified in the Supplemental Resolution authorizing such Capital
Appreciation Bonds. For purposes of this definition, the Accreted Value of Capital Appreciation Bonds less the Original
Principal Amount thereof shall be included in the calculation of accrued and unpaid and accruing interest on Capital
Appreciation Bonds in such manner and during such period of time as is specified in the Supplemental Resolution
authorizing such Capital Appreciation Bonds.
"Authorized Officer of the Division of Facilities Management" shall mean the Director of the Division of
Facilities Management or any other person or persons designated by the Director of the Division of Facilities
Management to act on behalf of the Division of Facilities Management under the Resolution. The designation of such
person or persons shall be evidenced by delivery to the Trustee of a written certificate containing the specimen signature
of such person or persons and signed on behalf of the Division of Facilities Management by its Director.
"Bond" or "Bonds" shall mean any bonds, notes or other evidences of obligations, as the case may be, without
regard to the term thereof, authenticated and delivered pursuant to the Resolution.
"Bondholder" or "Holder of Bonds" or "Holder" or "Owner" or "Registered Owner" shall mean any person who
shall be the bearer of any coupon Bond or Bonds not registered as to principal only, or the registered owner of any
coupon Bond or Bonds registered as to principal only, or the registered owner of any fully registered Bond or Bonds
without coupons.
"Bond Registrar" shall mean Citibank, N.A. , as bond registrar for the Bonds of each Series, and its successor
or successors hereafter appointed in the manner provided in the Resolution.*
"Capital Appreciation Bonds" shall mean any Bonds hereafter issued as to which interest is payable only at the
maturity or prior redemption of such Bonds. For the purposes of (i) receiving payment of the Redemption Price if a
Capital Appreciation Bond is redeemed prior to maturity, or (ii) receiving payment of a Capital Appreciation Bond if
the principal of all Bonds is declared immediately due and payable following an Event of Default as provided in the
Resolution or (iii) computing the principal amount of Bonds held by the registered owner of a Capital Appreciation Bond
in giving to the Division or the Trustee any notice, consent, request, or demand pursuant to the Resolution for any
purpose whatsoever, the principal amount of the Capital Appreciation Bond shall be deemed to be its Accreted Value.
"Capital Depreciation Reserve Fund" shall mean the Capital Depreciation Reserve Fund required to be created
pursuant to the Resolution.
"Capital Depreciation Reserve Requirement" shall mean the amount determined by an Authorized Officer of
the Division of Facilities Management pursuant to the Resolution to be the amount necessary to fund the capital
improvement needs of Facilities in the Pool and to restore Facilities to satisfy the criteria for Qualified Facilities in the
manner set forth in Section l3M-10.003(l)(b) of the Rules or any successor provision thereto.
"Clearing Fund" shall mean the Clearing Fund required to be created pursuant to the Resolution.
*
U.S. Bank Trust National Association has succeeded to the duties of Citibank, N.A. as Bond Register/Paying
Agent for the Bonds.
D-3
"Code" shall mean the Internal Revenue Code of 1954, as amended, or any successor provisions thereto.
"1986 Code" shall mean the Internal Revenue Code of 1986, as amended, any regulations promulgated
thereunder and the regulations promulgated under the Code.
"Construction Fund" shall mean the Construction Fund required to be created pursuant to the Resolution.
"Debt Service" for any period shall mean, as of any date of calculation and with respect to any Series, an amount
equal to the sum of (i) interest accruing during such period on Bonds of such Series, except to the extent that such interest
is to be paid from deposits in the Debt Service Fund made from the proceeds of Bonds or Subordinated Indebtedness
(including amounts, if any, transferred thereto from the Construction Fund) and (ii) that portion of each Principal
Installment for such Series which would accrue during such period if such Principal Installment were deemed to accrue
daily in equal amounts from the next preceding Principal Installment due date for such Series or, if (a) there shall be no
such preceding Principal Installment due date or (b) such preceding Principal Installment due date is more than one year
prior to the due date of such Principal Installment, then, from a date one year preceding the due date of such Principal
Installment or from the date of issuance of the Bonds of such Series, whichever date is later. Such interest and Principal
Installments for such Series shall be calculated on the assumption that (1) no Bonds (except for Put Bonds actually
tendered for payment and not purchased in lieu of redemption prior to the redemption date thereof) of such Series
Outstanding at the date of calculation will cease to be Outstanding except by reason of the payment of each Principal
Installment on the due date thereof and (2) the principal amount of Put Bonds tendered for payment and not purchased
in lieu of redemption prior to the redemption date thereof shall be deemed to accrue on the date required to be paid
pursuant to such tender. For purposes of this definition, the Original Principal Amount of Capital Appreciation Bonds
shall be included in the calculation of Principal Installments in such manner and during such period of time as is specified
in the Supplemental Resolution authorizing such Capital Appreciation Bonds. For purposes of this definition, the
Accreted Value of Capital Appreciation Bonds less the Original Principal Amount thereof shall be included in the
calculation of accrued and unpaid and accruing interest on Capital Appreciation Bonds in such manner and during such
period of time as is specified in the Supplemental Resolution authorizing such Capital Appreciation Bonds.
"Debt Service Fund" shall mean the Debt Service Fund required to be created pursuant to the Resolution.
"Debt Service Reserve Fund" shall mean the Debt Service Reserve Fund required to be created pursuant to the
Resolution.
"Debt Service Reserve Requirement" shall mean the lower of (a) with respect to any Series that does not
constitute Variable Interest Rate Bonds, an amount equal to one-half (1/2) of the maximum annual Debt Service for such
Series, and with respect to any Series of Variable Interest Rate Bonds, an amount equal to five percent (5%) of the
aggregate principal amount of such Bonds Outstanding or (b) the maximum amount that will not result in a violation of
the covenants, agreements and obligations of the Division and the Division of Facilities Management pursuant to the
Resolution. The Division may provide by Supplemental Resolution that the components of the formula for determining
the Debt Service Reserve Requirement set forth in clause (a) of the preceding sentence for any Series shall be greater
than required by this definition.
"Department of General Services" shall mean the Department of General Services of the State of Florida.*
"Depository" shall have the meaning ascribed to it in subsection the Resolution.
*
The Department of General Services has been renamed the Department of Management Services.
D-4
"Development Costs" shall mean costs incurred or paid or to be incurred or paid by or on behalf of the Division
or the Division of Facilities Management in connection with the planning and development of additions, betterments,
enlargements or improvements to the Facilities, including, without limitation, management expenses related thereto, costs
in providing such engineering, legal, financial and other services as may be necessary or appropriate to determine the
legality and the financial and engineering feasibility thereof and to obtain all licenses, permits and approvals necessary
in connection therewith and other costs normally incurred prior to long-term financing as determined by the Division
and the Division of Facilities Management.
"Division" shall mean the Division of Bond Finance of the Department of General Services.*
"Division of Facilities Management" shall mean the Division of Facilities Management of the Department of
General Services.**
"Eligible Facility" shall mean all State-owned Facilities under the jurisdiction of the Department of General
Services and all other State-owned Facilities except those having less than 3,000 square feet.
"Estimated Average Interest Rate" shall mean, as to any Variable Interest Rate Bond or Bonds, one hundred
fifteen percent (115%) of the greatest of (i) the daily average interest rate on such Bonds during the twelve months ending
with the month preceding the date of calculation, or such shorter period that such Bonds shall have been outstanding,
(ii) the rate of interest on such Bonds on the date of calculation or (iii) the rate of interest certified in writing by the
remarketing agent serving with respect to such Bonds (or if no such remarketing agent is serving, an agent satisfactory
to the Trustee appointed by the Division in the Supplemental Resolution authorizing the issuance of such Bonds for the
purpose of making the determination required by this clause (iii)) as of a particular date of calculation to be that rate
which, in the sole judgment of such remarketing agent having due regard for prevailing financial market conditions,
would be borne by fixed rate bonds of a rating similar to such Bonds with a maturity thirty years after the date of
calculation.
"Event of Default" shall have the meaning given to such term in the Resolution.
"Facility" shall mean buildings, structures, improvements, real estate, and related interests in real estate and
appurtenances, fixtures, and fixed equipment, including, but not limited to, those for the purpose of housing either
personnel, equipment, or functions and all storage and parking facilities related thereto or any one or more than one or
all of the foregoing, or any combination thereof, furnished and acquired pursuant to the Act and the Resolution.
"Fiduciary or Fiduciaries" shall mean the Trustee, the Bond Registrar, the Paying Agents, the Depositories, or
any or all of them, as may be appropriate.
"Fiscal Year" shall mean the twelve (12) month period commencing at 12:01 a.m. on July 1 of each year and
ending at 12:01 a.m. the succeeding July 1 or such other fiscal year of the State as may be mandated by law.
"Funds" or "funds" shall mean, as the case may be, each or all of the Funds required or authorized to be created
"Gross Revenues" shall mean the gross receipts derived by the Division of Facilities Management from the Pool
Pledged Revenues.
*
**
The Division was transferred to the State Board of Administration in 1992.
The Division of Facilities Management was abolished by the 1997 Legislature. The power and duties of the
Division of Facilities Management were transferred to the Department of Management Services.
D-5
"Insurer" shall mean any nationally recognized company engaged in the business of insuring municipal bonds
which may from time to time insure the payment of the principal of and interest on all or any portion of the Bonds of any
Series.
"Investment Securities" shall mean any securities that at the time are legal for investment of funds to be invested
pursuant to the Resolution, including, but not limited to, bonds, notes, commercial paper, time drafts, bills of exchange,
bankers acceptances or other evidences of indebtedness. To the extent permitted by law, investments in any security
authorized in this definition may be made under or pursuant to repurchase agreements, reverse repurchase agreements
or certificates of participation.
"Maximum Interest Rate" shall mean, with respect to any particular Variable Interest Rate Bonds, a numerical
rate of interest, which shall be set forth in the Supplemental Resolution authorizing such Bonds, that shall not exceed
the maximum rate of interest permitted under law and that shall be the maximum rate of interest such Bonds may at any
time bear.
"Net Revenues" for any period shall mean the Gross Revenues during such period less operating and
maintenance expenses for the Facilities in the Pool, as calculated in accordance with generally accepted accounting
principles.
"Operation and Maintenance Fund" shall mean the Operation and Maintenance Fund required to be created
"Opinion of Counsel" shall mean an opinion in writing signed by an attorney or firm of attorneys (who may be
counsel to the Division) selected by the Division.
"Original Principal Amount" shall mean, when used with respect to a Capital Appreciation Bond, an amount
equal to the Original Principal Amount of such Capital Appreciation Bond and not its Accreted Value.
"Outstanding", when used with reference to Bonds, shall mean, as of any date of calculation, Bonds theretofore
or thereupon being authenticated and delivered under the Resolution except:
(i)
Bonds canceled by the Trustee at or prior to such date;
(ii)
Bonds (or portions of Bonds) for the payment or redemption of which moneys, equal to the principal
amount or Redemption Price thereof, as the case may be, with interest to the date of maturity or
redemption date, shall be held in trust under the Resolution and set aside for such payment or
redemption (whether at or prior to the maturity or redemption date), provided that if such Bonds (or
portions of Bonds) are to be redeemed, notice of such redemption shall have been given or provision
satisfactory to the Trustee shall have been made for the giving of such notice as provided in Article
IV;
(iii)
Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered
pursuant to the terms of the Resolution unless proof satisfactory to the Trustee is presented that any
such Bonds are held by a bona fide purchaser in due course; and
(iv)
Bonds paid or deemed to have been paid as provided in the Resolution.
A Capital Appreciation Bond, other than a Capital Appreciation Bond that satisfies one or more of the
exceptions set forth in the sentence immediately preceding, shall be Outstanding only to the extent of its Accreted Value.
D-6
"Paying Agent" shall mean Citibank, N.A. , as paying agent for the Bonds of each Series, and its successor or
successors hereafter appointed in the manner provided in the Resolution.*
"Pool" shall mean the Florida Facilities Pool created pursuant to the Act.
"Pool Pledged Revenues" shall mean all legislative appropriations and all fees, charges, revenues, or receipts
derived by the Division of Facilities Management from the operation, leasing, or other disposition of Facilities in the
Pool, and the proceeds of Bonds issued under the Act and the Resolution; and shall include any moneys appropriated
to an Agency for the purpose of making such rental payments, rental payments received with respect to such Facilities
from whatever sources, and receipts therefrom, and investment of any such moneys pursuant to the Act and the
Resolution, all as are available for the payment of Debt Service on such Bonds as are issued with respect to the Pool.
"Pool Rental Rates" shall mean the per square foot rental rates established by the Division of Facilities
Management pursuant to Section 255.51, Florida Statutes, as amended, for Facilities in the Pool.
"Principal Installment" shall mean, as of any date of calculation and with respect to any Series, so long as any
Bonds thereof are outstanding, (i) the principal amount of Bonds (including the principal amount of any Put Bonds
tendered for payment and not purchased in lieu of redemption prior to the redemption date thereof) of such Series due
(or so tendered for payment and not purchased in lieu of redemption) on a certain future date for which no Sinking Fund
Installments have been established, or (ii) the unsatisfied balance (determined as provided in the Resolution) of any
Sinking Fund Installments due on a certain future date for Bonds of such Series, plus the amount of the sinking fund
redemption premiums, if any, which would be applicable upon redemption of such Bonds on such future date in a
principal amount equal to said unsatisfied balance of such Sinking Fund Installments, or (iii) if such future dates coincide
as to different Bonds of such Series, the sum of such principal amount of Bonds and of such unsatisfied balance of
Sinking Fund Installments due on such future date plus such applicable redemption premiums, if any.
"Put Bonds" shall mean Bonds which by their terms may be tendered by and at the option of the Holder thereof
for payment by the Division prior to the stated maturity thereof.
"Qualified Facility" shall mean an Eligible Facility that has satisfied one or more of the following criteria:
(a)
Is structurally sound and is in a satisfactory state of repair;
(b)
Is determined by the Division of Facilities Management to be suitable for entry into the Pool
although not meeting the requirements of paragraph (a);
(c)
Is under the jurisdiction of the Department of General Services.
"Real Property" shall mean all lands, including improvements and fixtures thereon and property of any nature
appurtenant thereto or used in connection therewith, and every estate, interest, and right, legal or equitable, therein,
including terms of years and liens by way of judgment, mortgage, or otherwise and the indebtedness secured by such
liens.
"Redemption Price" shall mean, with respect to any Bond, the principal amount thereof plus the applicable
premium, if any, payable upon redemption thereof pursuant to such Bond or the Resolution.
"Refunding Bonds" shall mean all Bonds, whether issued in one or more series, authenticated and delivered on
original issuance pursuant to the Resolution, and any Bonds thereafter authenticated and delivered in lieu of or in
substitution for such Bonds pursuant to the Resolution.
*
U.S. Bank Trust National Association has succeeded to the duties of Citibank, N.A. as Bond Registrar/Paying
Agent for the Bonds.
D-7
"Regular Record Date" shall have the meaning given to such term in the Resolution.
"Rent Stabilization Fund" shall mean the Rent Stabilization Fund required to be created pursuant to the
Resolution.
"Resolution" shall mean this Florida Facilities Pool Revenue Bond Resolution as from time to time amended
or supplemented by Supplemental Resolutions in accordance with the terms thereof.
"Revenue Fund" shall mean the Revenue Fund required to be created pursuant to the Resolution.
"Rules" shall mean the Rules adopted by the Division of Facilities Management to implement the provisions
of the Florida Building and Facilities Act, Sections 255.501-255.525, Florida Statutes, as amended.
"Series" shall mean all of the Bonds authenticated and delivered on original issuance and identified pursuant
to this Resolution or the Supplemental Resolution authorizing such Bonds as a separate series of Bonds, or any Bonds
thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the terms of the Resolution,
regardless of variations in maturity, interest rate, Sinking Fund Installments, or other provisions.
"Sinking Fund Installment" shall mean an amount so designated with respect to a Series of Bonds set forth in
a Supplemental Resolution.
"Special Record Date" shall have the meaning given to such term in the Resolution.
"State" shall mean the State of Florida.
"Subordinated Indebtedness" shall mean indebtedness of the Division incurred as contemplated in the
Resolution.
"Subordinated Indebtedness Fund" shall mean the Subordinated Indebtedness Fund required to be created
"Supplemental Resolution" shall mean any resolution supplemental to or amendatory of the Resolution, adopted
by the Division in accordance with the Resolution.
"Trust Estate" shall mean (i) the proceeds of the sale of Bonds, (ii) the Gross Revenues, and (iii) all Funds
established by the Resolution including the investments, if any, thereof (excluding any Fund established for the purpose
of rebating investment earnings to the federal government pursuant to applicable provisions of the Code), and the same
are hereby pledged and assigned, subject only to the provisions of the Resolution permitting the application thereof for
the purposes and on the terms and conditions set forth in the Resolution.
"Trustee" shall mean the State Board of Administration and its successor or successors and any corporation,
bank or trust company which may at any time be substituted in its place pursuant to the Resolution and any co-trustee
appointed pursuant to the Resolution.
"Valuation Date" shall mean with respect to any Capital Appreciation Bonds the date or dates set forth in the
Supplemental Resolution authorizing such Bonds on which specific Accreted Values are assigned to the Capital
Appreciation Bonds.
"Variable Interest Rate" shall mean a variable interest rate to be borne by a Series of Bonds or any one or more
maturities within a Series of Bonds. The methods of computing such variable interest rate shall be specified in the
Supplemental Resolution authorizing such Series of Bonds. Such Supplemental Resolution shall also specify either (i)
the particular period or periods of time for which such variable interest rate shall remain in effect or (ii) the time or times
upon which any change in such variable interest rate shall become effective.
D-8
"Variable Interest Rate Bonds" shall mean Bonds which bear a Variable Interest Rate.
"Working Capital Fund" shall mean the Working Capital Fund required to be created pursuant to the
Resolution.
The Resolution was adopted pursuant to the provisions of the Act and constitutes a resolution authorizing the
Bonds pursuant to the Act.
The Resolution constitutes a contract between the Division and the Division of Facilities Management and the
Holders from time to time of the Bonds.
Authorization of Bonds. The Resolution authorizes Bonds of the Division to be issued on behalf of and in
the name of the Division of Facilities Management to be designated as "Florida Facilities Pool Revenue Bonds". The
aggregate principal amount of the Bonds which may be executed, authenticated and delivered under the Resolution is
established initially at an amount not to exceed $300,000,000, except as may hereafter be provided in the Resolution or
as may be limited by law. The Division may increase this amount by Supplemental Resolution. Bonds issued pursuant
to the Resolution shall be (a) for the purpose of paying all or a portion of the Acquisition Costs of any Facility which
is to be leased in whole or in part to an Agency or Agencies, or (b) Refunding Bonds.
The Bonds may, if and when authorized by the Division pursuant to one or more Supplemental Resolutions,
be issued in one or more Series, and the designation thereof, in addition to the name "Florida Facilities Pool Revenue
Bonds", shall include such further appropriate particular designation added to or incorporated in such title for the Bonds
of any particular Series as the Division may determine.
Issuance of Additional Bonds. The Bonds of each additional Series shall be executed and delivered to the
Trustee and thereupon shall be authenticated by the Bond Registrar, but only upon the receipt by the Trustee of:
(a)
An opinion of Counsel of nationally recognized standing in the field of law relating to
municipal bonds to the effect that (i) the Division has the right and power under the Act as amended to the date
of such opinion to adopt the Resolution, and the Resolution has been duly and lawfully adopted by the Division,
is in full force and effect and is the valid and binding agreement of the Division and the Division of Facilities
Management enforceable in accordance with its terms; (ii) the Resolution creates the valid pledge which it
purports to create of the Trust Estate, subject only to the provisions of the Resolution permitting the application
thereof for the purposes and on the terms and conditions set forth in the Resolution; and (iii) the Division of
Facilities Management is duly authorized and entitled to request the Division to issue the Bonds of such Series
and such Bonds have been duly and validly authorized and issued by the Division, in accordance with law,
including the Act as amended to the date of such Opinion, and in accordance with the Resolution, and constitute
the valid and binding obligations of the Division and the Division of Facilities Management as provided in the
Resolution, enforceable in accordance with their terms and the terms of the Resolution, and are entitled to the
benefits of the Act as amended to the date of such Opinion and the Resolution. Such opinion may take
exception for limitations imposed by or resulting from bankruptcy, insolvency, moratorium, reorganization or
other laws affecting creditors' rights and judicial discretion and may state that no opinion is being rendered as
to the availability of any particular remedy;
(b)
A written order as to the delivery of such Bonds, signed by the Secretary or any Assistant
Secretary of the Division;
(c)
A copy of the Supplemental Resolution authorizing such Bonds, specifying (i) the authorized
principal amount, designation and Series of such Bonds; (ii) the purposes for which such Series of Bonds is
being issued, which shall be (a) the purpose specified in the Resolution or (b) the refunding of Bonds as
provided in the Resolution (among other requirements, including dates of maturity, rates, denomination, Paying
Agents, Redemption Prices, Sinking Fund Installment amount, the fund allocations, if any, for the Bonds);
D-9
(d)
Except in the case of Refunding Bonds, a certificate of the Secretary or Assistant Secretary
of the Division stating that either (i) no Event of Default has occurred and is continuing under the Resolution
or (ii) the proceeds of sale of each Series of Bonds will be applied to cure such Event of Default;
(e)
Except in the case of the initial Series of Bonds issued under the Resolution, a certificate of
the Director of the Division of Facilities Management stating that the aggregate amount of Pool Pledged
Revenues has been and will continue to be sufficient to cover:
(i)
110% of the amount of the Aggregate Debt Service required to be paid;
(ii)
110% of necessary deposits, if any, to the Debt Service Reserve Fund and to any other
reserve funds (other than the Capital Depreciation Reserve Fund) pledged to the security of
any Bonds;
(iii)
100% of necessary deposits to the Capital Depreciation Reserve Fund; and
(iv)
100% of operating and maintenance expenses incurred and expected to be incurred;
and as to each of the foregoing, during such Fiscal Years (or applicable portions thereof) for all Facilities in
the Pool.
For purposes of determining Aggregate Debt Service for clause (i) above, (x) any Series of Bonds of
a maturity three years or less from their date of original issuance, the principal of which is anticipated to be paid
from proceeds of Refunding Bonds, shall be deemed to amortize in equal annual payments commencing on the
first anniversary of the date of original issuance of such Series and ending on the thirtieth (30th) anniversary
of such issuance; and (y) amounts in the Rent Stabilization Fund anticipated at the time of such determination
to be available to pay Debt Service on the Bonds in the then current Fiscal Year may, at the option of the
Division, be credited against Aggregate Debt Service for such Fiscal Year.
(f)
Except in the case of Refunding Bonds, evidence, duly certified, satisfactory to the Trustee
that the legislature of the State shall have duly approved each Facility to be Acquired with the proceeds of the
Bonds of such Series.
Additional Bonds (other than Refunding Bonds). One or more Series of Bonds may be issued at any time
for the purpose of paying all or a portion of the Acquisition Costs of the Facilities to be financed by such Series of Bonds.
Proceeds, including accrued interest, of each Series of Bonds so authorized (under the Resolution) shall be
applied simultaneously with the delivery of such Bonds as shall be provided in the Supplemental Resolution authorizing
such series.
Additional Bonds (Refunding Bonds). One or more Series of Refunding Bonds may be issued at any time
to refund any Outstanding Bonds. The proceeds, including accrued interest, of the Refunding Bonds of each Series shall
be applied simultaneously with the delivery of such Bonds for the purposes of making deposits in such Funds and
Accounts under the Resolution as shall be provided by the Supplemental Resolution authorizing such Series of Refunding
Bonds and shall be applied to the refunding purposes thereof in the manner provided in said Supplemental Resolution.
Exchange, Transfer and Registry. The Bonds shall be transferable by the registered owner thereof in person
or by his attorney duly authorized in writing, only upon the books of the Division, which shall be kept for such purposes
at the offices of the Bond Registrar, upon surrender of such Bonds together with a written instrument of transfer
satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney. Upon the
transfer of any Bond the Division shall issue in the name of the transferee a new Bond or Bonds of the same aggregate
principal amount and Series and maturity as the surrendered Bond.
D-10
The person in whose name any Bond shall be registered upon the books of the Division shall be deemed by the
Division and each Fiduciary as the absolute owner of such Bond.
The registered owner of any Bond or Bonds may exchange such Bond or Bonds for a new Bond or Bonds of
any denomination of the same aggregate principal amount, Series and maturity as the surrendered Bond or Bonds.
Any Bond or Bonds mutilated, destroyed, stolen or lost may be replaced by a new Bond or Bonds of like date
of issue, maturity date, principal amount and interest rate per annum as the Bond or Bonds so mutilated, destroyed, stolen
or lost, and such new Bond or Bonds shall constitute original additional contractual obligations on the part of the
Division.
The Pledge Effected by the Resolution. The Bonds shall be payable solely from and secured as to the
payment of the principal and Redemption Price thereof, and interest thereon, in accordance with their terms and the
provisions of the Resolution solely by the Trust Estate and the Trust Estate is pledged and assigned to the Trustee for
the benefit of the holders of the Bonds subject only to the provisions of the Resolution permitting the application thereof
for the purposes and on the terms and conditions set forth in the Resolution. The Bonds shall not constitute a general
obligation of the State or any political subdivision thereof, nor shall the full faith and credit of the State or any political
subdivision thereof be pledged to the payment of the principal or Redemption Price of the Bonds or the interest on the
Bonds. The Trust Estate so pledged and assigned is immediately subject to the lien of such pledge without any further
physical delivery thereof or other further act. The lien of such pledge shall be a first lien and shall be valid and binding
as against all parties having claims of any kind in tort, contract or otherwise against the Division, irrespective of whether
such parties have notice thereof.
Creation of Funds and Accounts. The Resolution provides that the Division of Facilities Management, with
the assistance of the Division if requested by the Division of Facilities Management, will create the following Funds and
Accounts: (1) Construction Fund, (2) Clearing Fund, (3) Revenue Fund, (4) Debt Service Fund, (5) Rent Stabilization
Fund, (6) Debt Service Reserve Fund, (7) Capital Depreciation Reserve Fund, (8) Operation and Maintenance Fund, (9)
Subordinated Indebtedness Fund, (10) Working Capital Fund and (11) Rebate Fund. Additional Funds and Accounts
may be created pursuant to Supplemental Resolutions, if any, adopted by the Division.
The Division of Facilities Management, with the assistance of the Division if requested by the Division of
Facilities Management, shall maintain the Construction Fund, Clearing Fund, the Operation and Maintenance Fund and
the Working Capital Fund in accounts established with the State Treasurer, or, at the option of the Division of Facilities
Management, at one or more Depositories in the manner contemplated by the Resolution.
The Trustee shall maintain the Revenue Fund, the Debt Service Fund, the Rent Stabilization Fund, the Debt
Service Reserve Fund, the Capital Depreciation Reserve Fund and the Subordinated Indebtedness Fund in accounts
established with the State Treasurer, or, at the option of the Trustee, at one or more Depositories in the manner
contemplated by the Resolution.
Construction Fund. Amounts in the Construction Fund shall be applied to the Acquisition Costs of the
Facilities to be financed. The proceeds, if any, of insurance maintained pursuant to the Resolution against physical loss
of or damage to the Facilities, or of contractors' performance bonds shall be paid into the Construction Fund. To the
extent that other moneys are not available, amounts in the Construction Fund shall be applied to the payment of principal
of and interest on Bonds when due.
Upon completion of construction of all Facilities to be financed by the proceeds of a Series of Bonds, a
certificate of an Authorized Officer of the Division of Facilities Management will be filed with the Trustee. The
certificate will state if additional funds are needed for the payment of the Acquisition Costs of such Facilities. Upon the
filing of a completion certificate, the balance in the Account of the Construction Fund established in respect of such
Series in excess of the amount, if any, stated in such certificate shall, unless otherwise directed by Supplemental
Resolution, be deposited in the Revenue Fund, provided that, in the opinion of nationally recognized bond counsel, such
application will not adversely affect the exemption from Federal and State income taxation of interest on any of the
Bonds.
D-11
Collection of Pool Pledged Revenues; Clearing Fund. Pool Pledged Revenues are to be collected quarterly
in the form of rents from each Agency leasing space in Pool Facilities and such Revenues shall be promptly deposited
by the Trustee into the Revenue Fund.
Payments Into Certain Funds. Not later than the last business day of each April, July, October and January,
the Trustee shall transfer from the Revenue Fund to the following Funds and Accounts in the following order the amounts
set forth below (such application to be made in such a manner so as to assure immediately available funds in such Funds
on the last business day of such month):
1.
To the Debt Service Fund, the amount, if any, required so that the balance in said Fund shall equal the
Accrued Aggregate Debt Service as of the last day of the month in which such transfer is made and, if interest and/or
principal are required to be paid to Holders of Bonds during the quarter commencing on the first day of the following
month on a day or days other than the first day of such quarter, Accrued Aggregate Debt Service as of the last day during
such quarter through which such interest and/or principal is required to be paid; provided that, for the purposes of
computing the amount to be deposited in said Fund, there shall be excluded from the balance of said Fund the amount,
if any, set aside in said Fund from the proceeds of Bonds (including amounts, if any, transferred thereto from the
Construction Fund) for the payment of interest on Bonds less that amount of such proceeds to be applied in accordance
with the Resolution to the payment of interest accrued and unpaid and to accrue on Bonds to the last day of the then
current quarter or, if interest is required to be paid to Holders of Bonds during the next succeeding quarter on a day or
days other than the first day of such quarter, less that amount of such proceeds to be applied in accordance with the
Resolution to the payment of interest accrued and unpaid and to accrue on Bonds to the day through and including the
last day during such quarter as of which such interest is required to be paid;
2.
Subject to the requirements of the Resolution, to the Debt Service Reserve Fund, the amount, if any,
required for such Fund, after giving effect to any surety bonds, insurance policy, letter of credit or other similar obligation
deposited in such Fund pursuant to a Supplemental Resolution, to equal the Debt Service Reserve Requirement as of the
last day of the calendar quarter commencing on the first day of the month succeeding that in which such transfer was
made;
3.
To the Capital Depreciation Reserve Fund, an amount equal to one-quarter of the Capital Depreciation
Reserve Requirement established pursuant to the Resolution for the then current Fiscal Year;
4.
To the Operation and Maintenance Fund, such amount as the Division of Facilities Management shall
estimate is required, together with amounts then on deposit therein, to provide for operation and maintenance expenses
of the Facilities to be paid through the end of the calendar quarter commencing on the first day of the month succeeding
that in which such transfer was made;
5.
To the Subordinated Indebtedness Fund, such amount as shall be required to pay all debt service due
and payable on Subordinated Indebtedness through the end of the calendar quarter commencing on the first day of the
month succeeding that in which such transfer was made; and
6.
To the Working Capital Fund, any remaining moneys in the Revenue Fund on the date on which each
transfer from the Revenue Fund is to occur pursuant to the Resolution.
By Supplemental Resolution, the Division may require that moneys otherwise to be transferred from the
Revenue Fund to the Working Capital Fund be transferred to such other Funds or Accounts as the Division may establish
by Supplemental Resolution.
Debt Service Fund. The Trustee shall pay out of the Debt Service Fund to the respective Paying Agents, the
amount required for the payment of interest on the Bonds then to be redeemed. Such amounts shall be applied by the
Paying Agents on and after the due dates thereof to pay principal and interest on the Bonds. The Trustee shall also pay
out of the Debt Service Fund the accrued interest included in the purchase price of Bonds purchased for retirement.
D-12
Amounts accumulated in the Debt Service Fund with respect to any Sinking Fund Installment may be applied
by the Trustee to (i) the purchase of Bonds of the Series, maturity and interest rate within each maturity for which such
Sinking Fund Installment was established or (ii) the redemption at the applicable sinking fund Redemption Price of such
Bonds, if then redeemable by their terms. All such purchases of any Bonds shall be made at prices not exceeding the
applicable sinking fund Redemption Price of such Bonds plus accrued interest. The amount, if any, deposited in the Debt
Service Fund from the proceeds of each Series of Bonds shall be set aside in such Fund and applied to the payment of
interest on Bonds.
In the event of the refunding of any Bonds, the Trustee shall, upon the direction of the Division, withdraw from
the Debt Service Fund all or any portion of amounts accumulated therein with respect to Debt Service on the Bonds being
refunded and deposit such amounts with itself as Trustee to be held for the payment of the principal or Redemption Price,
if applicable, and interest on the Bonds being refunded. These amounts may be deposited into any Fund or Account by
the Trustee as the Division may direct, as more fully provided for in the Resolution.
Rent Stabilization Fund. After all of the interest payable on Variable Interest Rate Bonds of a Series has been
capitalized or, if all of the interest payable on such Bonds has not been capitalized for any period, upon the original
issuance of such Bonds, the following amounts shall be transferred from the Funds described below to the Rent
Stabilization Fund:
(a)
any amount deposited from the proceeds of such Bonds in the Debt Service Fund in excess
of the amount that may be applied to pay interest on such Bonds;
(b)
any amount deposited from the proceeds of such Bonds in the Construction Fund and
allocated for the payment of capitalized interest on such Bonds in excess of the amount that may be applied to
pay interest on such Bonds; provided that no application will contravene any applicable law or adversely affect
the exemption of interest on any Bonds from Federal income taxation.
Additionally, any balance in the Debt Service Fund representing moneys transferred from the Revenue Fund
to the Debt Service Fund in excess of the amount required to pay Debt Service on the Bonds of such Series shall be
deposited in the Rent Stabilization Fund.
A Supplemental Resolution authorizing a Series of Bonds may provide that a portion of the proceeds of such
Series may be deposited in the Rent Stabilization Fund.
The Trustee shall apply amounts from the Rent Stabilization Fund to the extent necessary to cure a deficiency
in the Debt Service Fund.
Debt Service Reserve Fund. If the amount in the Debt Service Fund shall be less than the amount required
to be in such Fund, the Trustee shall apply amounts from the Debt Service Reserve Fund to the extent necessary to cure
the deficiency.
Moneys in the Debt Service Reserve Fund in excess of the Debt Service Reserve Requirement, after giving
effect to any surety bond, insurance policy, letter of credit or other similar obligation shall be transferred to the other
Fund and Accounts to cure any deficiencies.
In the event of the refunding of any Bonds, all or any portion of amounts accumulated in the Debt Service
Reserve Fund with respect to the Bonds or the Debt Service thereon shall be withdrawn and held for the payment of the
principal, or Redemption Price, if applicable, and interest on the Bonds being refunded.
In lieu of the required transfers to the Debt Service Reserve Fund, the Division may cause to be deposited into
the Debt Service Reserve Fund for the benefit of the holders of the Bonds a surety bond, an insurance policy, a letter of
credit or other similar obligation in an amount equal to the difference between the Debt Service Reserve Requirement
and the sums, if any, then on deposit in the Debt Service Reserve Fund or being deposited in the Debt Service Reserve
Fund.
D-13
The providers, if any, of the surety bond, insurance policy, letter of credit or other similar obligation shall be
rated in one of the two highest rating categories by a nationally recognized bond rating agency, or shall have the
qualifications set forth in a Supplemental Resolution authorizing the issuance of a Series of Bonds.
In the event that any amount shall be applied from the Debt Service Reserve Fund to cure any deficiency in the
Debt Service Fund, the Division shall restore the amount in the Debt Service Reserve Fund to the Debt Service Reserve
Requirement within one year from the date on which moneys were so applied to cure such deficiency.
Capital Depreciation Reserve Fund. An Authorized Officer of the Division of Facilities Management shall
determine the Capital Depreciation Reserve Requirement for each Fiscal Year prior to the commencement of each Fiscal
Year and shall certify such determination to the Trustee in writing prior to the commencement of such Fiscal Year.
Amounts in the Capital Depreciation Reserve Fund shall be applied only to: (a) fund capital improvements
necessary or desirable to enable the Division and the Division of Facilities Management to comply with their covenants
and other obligations under the Resolution; and (b) restore Facilities to satisfy the criteria for Qualified Facilities as set
forth in the Rules.
Operation and Maintenance Fund and Working Capital Fund. Amounts credited to the Operation and
Maintenance Fund from the proceeds of Bonds of any series, authorized by the Resolution or any Supplemental
Resolution, shall be applied from time to time by the Division of Facilities Management to the payment of operation and
maintenance expenses of the Facilities. Unless otherwise provided by Supplemental Resolution, amounts in the Working
Capital Fund may be applied to any lawful purpose of the Division of Facilities Management, however no moneys in the
Working Capital Fund may be applied in a manner that would adversely affect the exemption of interest on any Bonds
from Federal income taxation.
Rebate Fund. Notwithstanding anything in the Resolution to the contrary, the Trustee shall transfer to the
Rebate Fund from the other Funds and Accounts established under the Resolution the amounts required to be transferred
(when such amounts are so required to be transferred) in order to preserve the exclusion from gross income for Federal
income tax purposes of interest on the Bonds. The Trustee shall make payments ("Rebates") from the Rebate Fund of
amounts required to be deposited therein to the United States of America in the amounts and at the times required by the
1986 Code; provided, however, that the amounts and timing of such transfers to and payments from the Rebate Fund shall
be determined, in accordance with the 1986 Code, by the Division of Facilities Management, or such other agency as
may be subsequently designated by proper authority, and the Trustee shall be under no obligation to make such transfers
or payments except as directed in writing by the Director or equivalent officer of such agency, or his designee. The
Division, the Division of Facilities Management and the Trustee covenant for the benefit of the Holders of the Bonds
that each will comply with the requirements of the 1986 Code relating thereto. There shall be excluded from the Trust
Estate and from the lien of the Resolution the Rebate Fund, together with all moneys and securities from time to time
held therein and all investment earnings derived therefrom.
Subordinated Indebtedness. The Division may, at any time, or from time to time, issue Subordinated
Indebtedness payable out of the Subordinated Indebtedness Fund and which may be secured by a pledge of the Trust
Estate or any portion thereof that shall be expressed to be, subordinate in all respects to the pledge of the Trust Estate
created by the Resolution as security for the Bonds.
Credits Against Sinking Fund Installments. When Bonds of any Series or maturity for which Sinking Fund
Installments have been established are purchased, redeemed, or deemed to have been paid, the Division may, by written
notice to the Trustee, specify a portion of the Bonds so purchased, redeemed, or deemed to have been paid as a credit
against any Sinking Fund Installment. Such amounts are to be credited against future Sinking Fund Installments.
Investment of Certain Funds. Moneys held in the Debt Service Fund and the Subordinated Indebtedness Fund
shall be invested and reinvested by the Trustee to the fullest extent practicable in Investment Securities as set forth in
the Resolution. The Trustee shall make all such investments of moneys held by it in accordance with written instructions
received from the Secretary or any Assistant Secretary of the Division. If the Trustee shall not have received such written
instructions, the Trustee shall make all such investments in such manner as it, in its discretion, shall determine to be
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appropriate.
Moneys held in the Construction Fund may be invested in any manner permitted by State law. Such moneys
and the earnings thereon shall be held by the State Treasurer and separately accounted for.
All Investment Securities acquired with moneys in any Fund or Account, including any Fund or Account held
by the Division, shall be held by the Trustee or the State Treasurer in trust or by a Depositary as agent in trust in favor
of the Trustee or the State Treasurer. Obligations purchased as an investment of moneys in any Fund created under the
provisions of the Resolution shall be deemed at all times to be a part of such Fund and any profit realized from the
liquidation of such investment shall be credited to such Fund and any loss resulting from the liquidation of such
investment shall be charged to such Fund.
Annual Budget. Within fifteen (15) days after the end of each regular session of the State legislature, the
Division of Facilities Management shall prepare and file with the Trustee an annual budget for the ensuing Fiscal Year
which shall set forth in reasonable detail the estimated Pool Pledged Revenues and operation and maintenance expenses
and other expenditures of the Facilities in the Pool for such Fiscal Year. The Division of Facilities Management also
may at any time adopt an amended annual budget for the remainder of the then current Fiscal Year.
Operation and Maintenance of Facilities. The Division of Facilities Management shall at all times operate
the Facilities or cause the same to be operated in a proper, efficient and economical manner, and, using its best efforts,
shall maintain, repair or reconstruct the same and all appurtenances thereto and keep them in good working order. In
particular the Division of Facilities Management covenants to abide by the Rules relating to the operation and
maintenance of the Facilities.
Rents, Rates, Fees and Charges. The Division of Facilities Management has, and will have as long as any
Bonds are Outstanding, good right and lawful power to fix, establish, maintain and collect rents, rates, fees and charges
with respect to the use of the Facilities. The Division of Facilities Management shall fix, establish and maintain rents,
rates, fees and charges which are reasonably expected to yield Gross Revenues during each Fiscal Year which shall be
sufficient to fund for each such period 110% of the Aggregate Debt Service, 110% of the required deposits to the Debt
Service Reserve Fund, 100% of required deposits to the Capital Depreciation Reserve Fund, and 100% of projected
operating and maintenance expenses. Prior to the onset of each Fiscal Year, the Division of Facilities Management shall
review the rents, rates, fees and charges so established and shall promptly establish or revise the same as necessary to
comply with the foregoing requirements, provided that such shall in any event produce moneys sufficient to enable the
Division and the Division of Facilities Management to comply with all their respective covenants under the Resolution.
The Division of Facilities Management will not furnish or cause to be furnished any use of the Facilities free
of charge to any person, firm, or corporation, public or private. The Division of Facilities Management will enforce the
payment of any and all accounts owing to it by reason of the ownership and operation of the Facilities.
The Division of Facilities Management may lease a portion of any Facility in the Pool to private persons or
entities, provided that any Agency needing space shall have first priority. The Division of Facilities Management will
use its best efforts to monitor the leasing of space by Agencies in the private sector and to ensure that no space is leased
by an Agency in the private sector when comparable space is available for rental in a Pool Facility.
The Division and the Division of Facilities Management will each use its best efforts to cause the State
legislature to appropriate moneys, to each Agency obligated to pay rental, sufficient to enable each to meet their
respective obligations under the Resolution.
Maintenance of Insurance. The Division of Facilities Management shall at all times use its best efforts to
insure or cause to be insured the Facilities in the Pool against loss or damage by fire and from other causes customarily
insured against and in such relative amounts as are usually obtained by those operating properties similar to the Facilities
in the Pool, and any additional or other insurance which it shall deem necessary or advisable to protect its interests and
those of the Bondholders.
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The Division of Facilities Management shall issue a certificate to the Trustee each year setting forth any
insurance in effect held pursuant to the Resolution; whether and to what extent any Facility has been damaged; the
amount if any of insurance proceeds covering the loss or damage, and specifying the costs to the Divisions of Facilities
Management of reconstruction or replacement thereof.
Reconstruction; Application of Insurance Proceeds. If any Facility shall be damaged or destroyed, the
Division of Facilities Management shall diligently provide for its reconstruction and replacement. Insurance proceeds,
if any, shall be held and invested separately and made available to the extent necessary for the replacement or
reconstruction of the Facility. The proceeds of any insurance not used after 36 months shall be applied to cure any
deficiencies in any Fund or Account or, if no such deficiency exists, for any lawful purposes.
The proceeds of business interruption loss insurance, if any, shall be paid into the Revenue Fund.
Events of Default. The following, except as provided in any Supplemental Resolution, shall constitute Events
of Default:
(I)
default in the due and punctual payment of the principal or Redemption Price of any Bond when and
as the same shall become due and payable, whether at maturity or by call or proceedings for
redemption, or otherwise;
(ii)
default in the due and punctual payment of any installment of interest on any Bond or the unsatisfied
balance of any sinking Fund Installment (except when such Sinking Fund Installment is due on the
maturity date of such Bond), when and as such interest installment or Sinking Fund Installment shall
become due and payable;
(iii)
default by the Division or the Division of Facilities management in the performance or observance of
any other of the covenants, agreements or conditions on its part in the Resolution or in the Bonds
contained, and such default shall have continued for a period of 60 days after written notice specifying
such default and requiring that it shall have been remedied and stating that such notice is a "Notice of
Default" hereunder given to the Division and the Division of Facilities Management by the Trustee
or to the Division, the Division of Facilities Management and the Trustee by the Holders of not less
than 25% in principal amount of the Bonds Outstanding;
(iv)
a court, having jurisdiction in the premises, shall have entered a decree or order providing for relief
in respect of the Division or the Division of Facilities Management in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the
Division or the Division of Facilities Management or for any substantial part of the property of either,
or ordering the winding-up or liquidation of its affairs and such decree or order shall remain unstayed
and in effect for a period of 90 days.
In each and every such case, unless remedied, and unless the principal of all of the Bonds shall have become
due and payable, the Trustee or the Holders of not less than 25% in principal amount of the Bonds may declare the
principal of all Outstanding Bonds plus interest accrued thereon to be due and payable immediately, and the same shall
then become due and payable immediately. However, if after such declaration the Event of Default shall have been
remedied or otherwise made satisfactory to the Trustee, and in every such case (I) the Holders of 25% in principal
amount of the Bonds Outstanding may rescind such declaration and annul such Event of Default, or (ii) if the Trustee
shall have acted itself, and no written direction to the contrary by the holders of 25% in principal amount of the Bonds
Outstanding shall have been received, the declaration of Default and such Default shall ipso facto be annulled.
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Application of Revenues and Other Moneys After Default. During the continuance of an Event of Default,
the Trustee shall (I) request that the State Treasurer immediately release to the Trustee all moneys then on deposit in the
Construction Fund and (ii) apply all moneys, securities, funds and revenues held by it (including Construction Fund
moneys) pursuant to the provisions of the Resolution or received by it pursuant to any right given or action taken under
the provisions of Article 803 of the Resolution as follows and in the following order:
(i)
Expenses of Fiduciaries - to the payment of the reasonable and proper charges, expenses and liabilities
of the Fiduciaries;
(ii)
Principal or Redemption Price and Interest - to the payment of the interest and principal or
Redemption Price then due on the Bonds, as follows:
payable,
(a)
unless the principal of all of the Bonds shall have become or have been declared due and
First: Interest - To the payment to the persons entitled thereto of all installments of interest
then due in the order of the maturity of such installments, together with accrued and unpaid interest
on the Bonds theretofore called for redemption, and, if the amount available shall not be sufficient to
pay in full any installment or installments maturing on the same date, then to the payment thereof
ratably, according to the amounts due thereon, to the persons entitled thereto, without any
discrimination or preference; and
Second: Principal or Redemption Price - To the payment to the persons entitled thereto of
the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at
maturity or by call for redemption, in the order of their due dates, and, if the amount available shall
not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably,
according to the amounts of principal or Redemption Price due on such date, to the persons entitled
thereto, without any discrimination, or preference.
(b)
if the principal of all of the Bonds shall have become or have been declared due and payable,
to the payment of the principal and interest then due and unpaid upon the Bonds without preference or priority
of principal over interest or of interest over principal, or of any installment of interest over any other installment
of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal
and interest, to the persons entitled thereto without any discrimination or preference except as to any difference
in the respective rates of interest specified in the Bonds;
(iii)
Operation and maintenance expenses - to the payment of the amounts required for reasonable and
necessary operation and maintenance expenses and for the reasonable improvements and repairs of
the Facilities necessary in the judgment of the Trustee to prevent a loss of Pool Pledged Revenues.
For this purpose the books of records and accounts of the Division of Facilities Management relating
to the Facilities shall at all times be subject to the inspection of the Trustee and its representatives and
agents during the continuance of such Event of Default;
(iv)
Subordinated Indebtedness - to the payment of principal, redemption price and interest then due on
Subordinated Indebtedness.
Proceedings Brought by Trustee. If an Event of Default shall happen and shall not have been remedied, then
and in every such case the Trustee, by its agents and attorneys, may proceed, and on written request of not less than 25%
in principal amount of the Bonds Outstanding shall proceed to protect and enforce its rights and the rights of the Holders
of the Bonds under the Resolution, forthwith by a suit or suits in equity or at law, as more fully set forth in the Resolution.
Additionally, and regardless of the happening of an Event of Defaults, unless the Holders of 25% in principal amount
of Bonds then Outstanding shall have requested otherwise, the Trustee shall have the power, but is under no obligation,
to institute and maintain any such other actions or proceedings as the Trustee deems advisable to prevent any impairment
of the security for the Bonds.
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If and whenever all overdue installments of interest on all Bonds, together with the reasonable and proper
charges, expenses and liabilities of the Trustee, and all other sums payable by the Division or the Division of Facilities
Management under the Resolution, including the principal and Redemption Price of and accrued unpaid interest on all
Bonds which shall then be payable, shall either be paid by or for the account of the Division or the Division of Facilities
Management, as the case may be, or provision satisfactory to the Trustee shall be made for such payment, and all defaults
under the Resolution or the Bonds shall be made good or secured to the satisfaction of the Trustee or provision deemed
by the Trustee to be adequate shall be made therefor, the Trustee shall pay over to the Division all moneys, securities
and funds then remaining unexpended in the hands of the Trustee (except moneys, securities and funds deposited or
pledged, or required by the terms of the Resolution to be deposited or pledged, with the Trustee), and thereupon the
Division and the Trustee shall be restored, respectively, to their former positions and rights under the Resolution. No
such payment over to the Division by the Trustee nor such restoration of the Division and the Trustee to their former
positions and rights shall extend to or affect any subsequent default under the Resolution or impair any right consequent
thereon.
Restriction on Bondholder's Action. Subject to any requirements imposed by Supplemental Resolution, no
Holder of any Bond shall have any right to institute any suit, action or proceeding at law or in equity for the enforcement
of any provision of the Resolution or the execution of any trust under the Resolution or for any remedy under the
Resolution, unless such Holder shall have previously given to the Trustee written notice of the happening of an Event
of Default, as provided in this Article, and the Holders of at least 25% in principal amount of the Bonds then Outstanding
shall have filed a written request with the Trustee, and shall have offered it reasonable opportunity, either to exercise the
powers granted in the Resolution or by the Act or to institute such action, suit or proceeding in its own name, and unless
such Holders shall have offered to the Trustee adequate security and indemnity against the costs, expenses and liabilities
to be incurred therein or thereby, and the Trustee shall have refused to comply with such request for a period of 60 days
after receipt by it of such notice, request and offer of indemnity. It is understood and intended that no one or more
Holders of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the
pledge created by the Resolution, or to enforce any right under the Resolution, except in the manner therein provided;
and that all proceedings at law or in equity to enforce any provision of the Resolution shall be instituted, had and
maintained in the manner provided in the Resolution and for the equal benefit of all Holders of the Outstanding Bonds,
subject only to the provisions of Section 702 of the Resolution.
Nothing in the Resolution or in the Bonds contained shall affect or impair the obligations of the Division and
the Division of Facilities Management, which are absolute and unconditional, to pay from the Trust Estate at the
respective dates of maturity and places therein expressed the principal of (and premium, if any) and interest on the Bonds
to the respective Holders thereof, or affect or impair the right of action, which is also absolute and unconditional, of any
Holder to enforce such payment of his Bond from the Trust Estate.
Remedies Not Exclusive. No remedy by the terms of the Resolution conferred upon or reserved to the Trustee
or the Bondholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under the Resolution or existing at law, including under the Act,
or in equity or by statute on or after the date of execution and delivery of the Resolution.
Notice of Default. The Trustee shall promptly mail written notice of the occurrence of any Event of Default
to each registered owner of Bonds then Outstanding at his address, if any, appearing on the registry books of the
Division.
Supplemental Resolutions Effective Upon Filing With the Trustee. A Supplemental Resolution of the
Division may be adopted which, upon the filing with the Trustee of a copy thereof certified by the Secretary or any
Assistant Secretary of the Division, shall be fully effective in accordance with its terms:
1.
To close the Resolution against, or provide limitations and restrictions in addition to the
limitations and restrictions contained in the Resolution on, the authentication and delivery of Bonds or the
issuance of other evidences of indebtedness;
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2.
To add to the covenants and agreements of the Division or the Division of Facilities
Management in the Resolution, other covenants and agreements to be observed by the Division or the Division
of Facilities Management which are not contrary to or inconsistent with the Resolution as theretofore in effect;
3.
To add to the limitation and restrictions in the Resolution, other limitations and restrictions
to be observed by the Division or the Division of Facilities Management which are not contrary to or
inconsistent with the Resolution as theretofore in effect;
4.
To add to the Events of Default in the Resolution additional Events of Default;
5.
To authorize Bonds of a Series and, in connection therewith, specify and determine the
matters and things referred to in Article II, and also any other matters and things relative to such Bonds which
are not contrary to or inconsistent with the Resolution as theretofore in effect, or to amend, modify or rescind
any such authorization, specification or determination at any time prior to the first authentication and delivery
of such Bonds;
6.
With the prior written opinion of nationally recognized bond counsel that to do so will not
affect the tax-exempt status of interest on the Bonds, to authorize, in compliance with applicable law, Bonds
of each Series to be issued in the form of coupon Bonds registrable as to principal only and, in connection
therewith, specify and determine the matters and things relative to the issuance of such coupon Bonds, including
provisions relating to the timing and manner of provision of any notice required to be given under the
Resolution to the Holders of such coupon Bonds, which are not contrary to or inconsistent with the Resolution
as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination
at any time prior to the first authentication and delivery of such coupon Bonds;
7.
To authorize, in compliance with all applicable law, Bonds of each Series to be issued in the
form of Bonds issued and held in book-entry form on the books of the Division or any Fiduciary appointed for
that purpose by the Division and, in connection therewith, make such additional changes to the Resolution, not
adverse to the rights of the Holders of the Bonds, as are necessary or appropriate to accomplish or recognize
such book-entry form Bonds and specify and determine the matters and things relative to the issuance of such
book-entry form Bonds as are appropriate or necessary;
8.
To authorize Subordinated Indebtedness of a Series and, in connection therewith, specify and
determine such matters and things relative to such Subordinated Indebtedness which are not contrary to or
inconsistent with the Resolution as theretofore in effect, or to amend, modify or rescind any such authorization,
specification or determination at any time prior to the first authentication and delivery of such Subordinated
Indebtedness;
9.
To confirm, as further assurance, any security interest, pledge or assignment under, and the
subjection to any security interest, pledge or assignment created or to be created by, the Resolution of the Pool
Pledged Revenues or of any other monies, securities or funds;
10.
To modify any of the provisions of the Resolution in any other respect whatever, provided
that (I) such modifications shall be, and be expressed to be, effective only after all Bonds of each Series
outstanding at the date of the adoption of such Supplemental Resolution shall cease to be Outstanding, and (ii)
such Supplemental Resolution shall be specifically referred to in the text of all Bonds of any Series
authenticated and delivered after the date of the adoption of such Supplemental Resolution and of bonds issued
in exchange therefor or in place thereof;
11.
To appoint or remove the Trustee;
12.
To modify, amend or supplement the Resolution or any resolution supplemental thereto in
such manner as to permit the qualification thereof under the Trust Indenture Act of 1939, as amended, or any
similar federal statute hereafter in effect or to permit the qualification of the Bonds for sale under the securities
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laws of any of the states of the United States of America;
13.
To modify, amend or supplement the Resolution or any resolution supplemental thereto to
permit the issuance of Bonds and Subordinated Indebtedness in the form of debt instruments not then
contemplated by the Resolution, including but not limited to debt instruments the interest on which is subject
to federal income taxation under the Code; or
14.
To modify, amend or supplement the Resolution to the extent necessary to enable the Division
and the Division of Facilities Management to comply with their covenants, agreements and obligations under
the Resolution.
Supplemental Resolutions Effective Upon Consent of Trustee. For any one or more of the following
purposes and at any time or from time to time, a Supplemental Resolution may be adopted, which, upon (I) the filing with
the Trustee of a copy thereof certified by the Secretary or any Assistant Secretary of the Division, and (ii) the filing with
the Division of an instrument in writing made by the Trustee consenting thereto, shall be fully effective in accordance
with its terms:
1.
To cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent
provision in the Resolution; or
2.
To insert such provisions clarifying matters or questions arising under the Resolution.,,as are
necessary or desirable and are not contrary to or inconsistent with the Resolution as theretofore in effect.
The Trustee shall not consent to any Supplemental Resolution pursuant to the Resolution that would materially adversely
affect the interests of the Bondholders.
Supplemental Resolutions Effective With Consent of Bondholders. At any time or from time to time, a
Supplemental Resolution may be adopted subject to consent by Bondholders and/or, if required pursuant to the
Resolution, each provider of credit enhancement with respect to an affected Series of Bonds, in accordance with and
subject to the provisions of Article XI, which Supplemental Resolution, upon the filing with the Trustee of a copy thereof
certified by the Secretary or any Assistant Secretary of the Division and upon compliance with the provisions of said
Article XI, shall become fully effective in accordance with its terms as provided in said Article XI.
Supplemental Resolutions -- General Provisions. The Resolution shall not be modified or amended in any
respect except as provided in and in accordance with and subject to the provisions of Article X and Article XI of the
Resolution. Nothing in Article X or Article XI of the Resolution contained shall affect or limit the right or obligation
of the Division and the Division of Facilities Management to adopt, make, do, execute, acknowledge or deliver any
resolution, act or other instrument pursuant to the provisions of Section 704 of the Resolution or the right or obligation
of the Division and the Division of Facilities Management to execute and deliver to any Fiduciary any instrument which
elsewhere in the Resolution it is provided shall be delivered to said Fiduciary.
Any Supplemental Resolution referred to and permitted or authorized by the Resolution may be adopted by the
Division, without the consent of any of the Bondholders, but shall become effective only on the conditions, to the extent
and at the time provided in said Sections, respectively. The copy of every Supplemental Resolution when filed with the
Trustee shall be accompanied by an opinion of counsel stating that such Supplemental Resolution has been duly and
lawfully adopted in accordance with the provisions of the Resolution, is authorized or permitted by the Resolution, and
is valid and binding upon the Division and the Division of Facilities Management in accordance with its terms.
The Trustee is authorized to accept the delivery of a certified copy of any Supplemental Resolution referred
to and permitted or authorized by the Resolution and to make all further agreements and stipulations which may be
therein contained, and the Trustee, in taking such action, shall be fully protected in relying on an Opinion of Counsel
that such Supplemental Resolution is authorized or permitted by the provisions of the Resolution.
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No Supplemental Resolution shall change or modify any of the rights or obligations of any Fiduciary without
its written assent thereto.
Powers of Amendment. The Resolution provides for amendment or modification of the Resolution, of the
rights and obligations of the Division, of the Division of Facilities Management, and of the Holders of the Bonds, by
Supplemental Resolution. Consent to such amendments is required of the Holders of not less than a majority in principal
amount of the Bonds Outstanding of each Series of Bonds affected, and in the case of a modification or change of any
Sinking Fund Installment, of the Holders of any Series or Maturity of Bonds entitled to a Sinking Fund Installment,
unless no change shall take effect while such Bonds remain Outstanding. A Series of Bonds is deemed affected by a
change or amendment which adversely affects or diminishes the rights of the Holders of the Bonds of such Series, as the
Trustee shall determine, in its discretion and conclusively and bindingly on all parties. However, no change or
amendment, without the consent of the Holders of such Bonds, shall change the terms of redemption or maturity, reduce
the principal amount or Redemption Price, if any, reduce the rate of interest, or adversely affect the percentages of the
Holders necessary to give effect to any changes or modification of any Series of Bonds.
Consent of Bondholders. The Division may at any time adopt a Supplemental Resolution modifying or
amending the Resolution. A copy or brief summary of such Supplemental Resolution satisfactory to the Trustee shall
be mailed by the Division to the Bondholders for consent, but failure so to mail shall not affect the validity of the
Supplemental Resolution if, subsequently, the Bondholders properly consent thereto. The Supplemental Resolution will
not be effective without (I) (a) the proper written consent of the requisite percentages of the Holders of the affected
Bonds, and (b) an Opinion of Counsel that the Supplemental Resolution has been duly adopted, is valid and binding on
the Division and the Division of Facilities Management, and is enforceable in accordance with its terms, and (ii) proper
notice, as provided below, is given. Consent to the particular form of wording shall not be necessary, rather it shall be
sufficient that consent is given to the substance of the proposed amendment or modification. Consent shall be effective
only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent
is given. Any such consent shall be binding on the Holder of such Bonds giving such consent or a subsequent Holder
thereof and of any Bonds given in exchange therefor, unless such consent is revoked in writing to the Trustee before the
time when the Trustee files a written statement that no revocation is on file. At any time after the Holders of the required
percentages of the Bonds shall have filed their consents, the Trustee shall file a written statement with the Division so
stating, which statement shall be conclusive (on all parties). At any time thereafter, notice stating that the Supplemental
Resolution has been consented to by the requisite percentages of Bondholders may be given by the Division to the
Bondholders, but failure so to mail shall not affect the validity of the Supplemental Resolution. Such Supplemental
Resolution shall become binding on the Division, the Division of Facilities Management, and the Bondholders after 40
days after the mailing of the notice mentioned above, except in the event that a court of competent jurisdiction issues a
final decree setting aside such Supplemental Resolution.
Modifications or Amendments by Unanimous Consent. The terms and provisions of the Resolution and the
rights and obligations of the Division, the Division of Facilities Management and of the Holders of the Bonds thereunder
may be modified or amended in any respect upon the adoption and filing by the Division of a Supplemental Resolution
and the consent of the Holders of all of the Bonds then Outstanding, such consent to be given as provided in the
Resolution except that no notice to Bondholders either by mailing or publication shall be required; provided, however,
that no such modification or amendment shall change or modify any of the rights or obligations of any Fiduciary without
the filing with the Trustee of the written assent thereto of such Fiduciary in addition to the consent of the Bondholders.
Consent of Credit Enhancement Provider When Consent of Bondholder Required. If required by the
Supplemental Resolution authorizing the issuance of an affected Series of Bonds, each provider of credit enhancement
with respect to such Series of Bonds shall be deemed to be the Holder of Bonds of any Series as to which it has provided
credit enhancement at all times for the purpose of giving any approval or consent to the execution and delivery of any
Supplemental Resolution or any amendment, change or modification of this Resolution which, as specified in the
Resolution, requires the written approval or consent of the Holders of at least a majority in aggregate principal amount
of Bonds of such Series at the time Outstanding.
Defeasance. If at any time the Division and the Division of Facilities Management shall have paid or caused
to be paid or made provision for the payment of the principal, interest, and redemption premium, if any, of the Bonds,
then the pledge of the Trust Estate and all obligations of the Division and the Division of Facilities Management to the
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Bondholders shall thereupon cease, terminate, become void, and be discharged and satisfied. In such event, the Trustee
shall cause an accounting as requested by the Division, shall present all desirable and necessary evidence of such
discharge and satisfaction, and shall pay over or deliver to the Division all moneys or securities not needed for the
payment of principal or Redemption Price, if applicable, of Bonds not already surrendered for such payment or
redemption. Any Bonds, the principal or Redemption Price, if any, for which are so paid shall cease to be entitled to any
lien, benefit or security under the Resolution and all covenants, agreements, and obligations of the Division and the
Division of Facilities Management to the Holders of such Bonds shall thereupon cease, terminate and, be discharged and
satisfied.
Outstanding Bonds shall be deemed to have been paid as follows:
(a)
where, in case any of said Bonds are to be redeemed prior to maturity, the Division shall have given
to the Trustee instructions in writing to mail notice of redemption to the affected Bondholders;
(b)
where there shall have been deposited with the Trustee moneys, or securities (including principal and
interest when due) which shall be sufficient to pay when due the principal, or Redemption Price, it applicable, and
interest due or to become due on said Bonds on or prior to the redemption or maturity date thereof, and
(c)
where the Holders of Bonds, not by their terms to be redeemed within the next succeeding 60 days,
are mailed notice that the deposit required in (b) above has been made and that said Bonds are deemed to have been paid
and stating the redemption or maturity date upon which moneys are expected to be available for the payment of the
principal or Redemption Price, if applicable, on said Bonds.
Bonds already purchased by the Trustee at the direction of the Division or otherwise acquired by the Division
or Division of Facilities Management are not subject to the provisions of (a) and (c) above.
The Trustee shall, as necessary, apply moneys held by it pursuant to the Resolution to the retirement of Bonds
which constitute less than all of the bonds of any maturity within a Series, in amounts equal to the unsatisfied balances
of any Sinking Fund Installments with respect to such Bonds.
The Trustee shall, in the manner set forth in the Resolution, apply moneys deposited with it, and redeem or sell
Investment Securities so deposited with it and apply the proceeds thereof, to the purchase of such Bonds and shall cancel
any Bonds so purchased; provided, however, that after such purchase and cancellation sufficient moneys and Investment
Securities remaining on deposit with the Trustee shall be sufficient to pay, when due, Principal Installments and
Redemption Prices, if applicable, and interest due or to become due on all Bonds for which such moneys or Investment
Securities are held, on or prior to the redemption date or maturity date thereof. The Trustee shall similarly and in the
same manner purchase and cancel Bonds (I) which, prior to the maturity date therefor, are deemed to have been paid as
first set forth above, which are not to be redeemed prior to their maturity date, or (ii) which, prior to the mailing of notice
of redemption (as set forth in clause (a) above) therefor, are deemed to have been paid as first set forth above, which are
to be redeemed at any date before their maturity.
If, as a result of any purchase, acquisition, or cancellations moneys and Investment Securities remaining on
deposit with the Trustee exceed the total amount required to be deposited for the purchase or redemption of Bonds, as
first set forth above, the Trustee shall, if requested by the Division, pay the excess to the Division free and clear of any
trust, lien, security interest, pledge or assignment securing such Bonds or otherwise under this Resolution.
Moneys and Investment Securities deposited with the Trustee for the purpose of purchase or redemption of
Bonds as first set forth above, together with principal and interest on any such Investment Securities, shall be used only
for and shall be held in trust for the payment of the principal or Redemption Price, if applicable, and interest on the
Bonds so purchased or redeemed, except as permitted by certain provisions of the Resolution.
For purposes of determining whether Variable Interest Rate Bonds shall be deemed to have been paid prior to
the maturity or redemption date thereof, as the case may be, by the deposit of moneys, or Investment Securities and
moneys, if any, as first set forth above, the interest to come due on such Variable Interest Rate Bonds on or prior to the
D-22
maturity date or redemption date thereof, as the case may be, shall be calculated at the maximum rate permitted by the
terms thereof; provided, however, that if on any date, as a result of such Variable Interest Rate Bonds having borne
interest at less than such maximum rate for any period, the total amount of moneys and Investment Securities on deposit
with the Trustee for the payment of interest on such Variable Interest Rate Bonds in excess of the total amount which
would have been required to be deposited with the Trustee on such date in respect of such Variable Interest Rate Bonds,
as first set forth above, the Trustee shall, if requested, by the Division, pay the amount of such excess to the Division of
Facilities Management free and clear of any trust, lien, security interest, pledge or assignment securing the Bonds or
otherwise existing under the Resolution.
Put Bonds shall be deemed to have been paid as first set forth above, only if, in addition to satisfying the
requirements of clauses (a) and (c) above, there shall have been deposited with the Trustee moneys in an amount which
shall be sufficient to pay when due the maximum amount of principal of and premium, if any, and interest on such Bonds
which could become payable to the Holders of such Bonds upon the exercise of any options provided to the Holders of
such Bonds; provided, however, that if, at the time a deposit is made with the Trustee for the purpose of paying or
redeeming Bonds, as first set forth above, the options originally exercisable by the Holder of a Put Bond are no longer
exercisable, such Bond shall not be considered a Put Bond for these purposes. If any portion of the moneys deposited
with the Trustee for the payment of the principal of and premium, if any, and interest on Put Bonds is not required for
such purpose, the Trustee shall, if requested by the Division, pay the amount of such excess to the Division of Facilities
Management free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise
existing under the Resolution.
Pursuant to certain restrictions in the Resolution, Investment Securities which are either (i) bonds, notes, or other
obligations of the United States, or (ii) other bonds the interest on which is exempt from Federal Income taxation and
which are rated in the highest rating category by Moody's Investor's Service or Standard and Poor's Corporation and
which are subject to redemption prior to the maturity date or dates thereof at the option of the issuer thereof on a
specified date or dates may be included as Investment Securities to be deposited with the Trustee to purchase or redeem
Bonds as first set forth above. In the event any such Investment Securities are actually redeemed by the issuer thereof
prior to their maturity date, the Trustee, at the direction of the Division, shall reinvest the proceeds of such Redemption,
provided that sufficient moneys and Investment Securities (including both principal and interest thereon) on deposit with
the Trustee, are sufficient to pay or redeem the Bonds as first set forth above. In the event such Investment Securities
are included as Investment Securities deposited with the Trustee and which are irrevocably called for redemption prior
to their maturity date by the issuer thereof to pay or redeem the Bonds as first set forth above, then any notice of
redemption to be published by the Trustee may, at the option of Division, be changed to any other permissible
redemption date, and redemption dates may be established for any Bonds deemed to have been paid or redeemed as first
set forth above upon their maturity date or dates, at any time prior to the actual mailing of any applicable notice of
redemption.
However, no such change or establishment of a redemption date or dates may be made, unless, taking into
account such changed or newly established redemption dates, the moneys and Investment Securities (including both
principal and interest thereon) would be sufficient to pay when due the principal and Redemption Price, if applicable and
interest on all Bonds deemed to have been paid as first set forth above.
The Division and the Division of Facilities Management agree that each will take no action which will cause
the Bonds to be "arbitrage bonds" within the meaning of the Code and the regulations thereunder.
Anything in the Resolution to the contrary notwithstanding, any moneys held by a Fiduciary in trust for the
payment and discharge of any of the Bonds which remain unclaimed for six years after the date when such Bonds have
become due and payable, shall, at the written request of the Division of Facilities Management, be repaid by the
Fiduciary to the Division of Facilities Management, as its absolute property and free from trust, and the Fiduciary shall
thereupon be released and discharged with respect thereto and the Bondholders shall look only to the Division of
Facilities Management for the payment of such Bonds.
D-23
APPENDIX E
FORM OF CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by the Florida
Department of Management Services (the "Department") and the Division of Bond Finance of the State Board of
Administration of Florida (the "Division") in connection with the issuance of $109,770,000 State of Florida, Department
of Management Services, Florida Facilities Pool Revenue Refunding Bonds, Series 2003A (the "Bonds"). This
Disclosure Agreement is being executed and delivered pursuant to Section 17 of the Twenty-Fifth Supplemental
Resolution adopted by the Governor and Cabinet, as the Governing Board of the Division of Bond Finance, on April 22,
2003 (the “Twenty-Fifth Supplemental Resolution”) providing for the sale of the Bonds. The Department and the
Division covenant and agree as follows:
SECTION 1. PURPOSE OF THE DISCLOSURE AGREEMENT. This Disclosure Agreement is being
executed and delivered by the Department and the Division for the benefit of the Registered Owners and Beneficial
Owners of the Bonds and in order to assist the Participating Underwriters in complying with Rule 15c2-12 (the “Rule”)
of the Securities and Exchange Commission (the “SEC”). It shall inure solely to the benefit of the Department, the
Division, the Registered Owners, the Beneficial Owners and the Participating Underwriters.
SECTION 2. DEFINITIONS. In addition to the definitions set forth in the resolution adopted by the Division
of Bond Finance on May 20, 1986 (the “ Original Resolution”), as supplemented and amended, which apply to any
capitalized term used in this Disclosure Agreement, the following capitalized terms shall have the following meanings:
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent
with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees,
depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with
the Rule in connection with the offering of the Bonds.
SECTION 3. CONTINUING DISCLOSURE. (A) Information To Be Provided. The Department assumes
all responsibilities for any continuing disclosure as described below. In order to comply with the Rule, the Department
hereby agrees to provide or cause to be provided the information set forth below, or such information as may be required
to be provided, from time to time, under the Rule.
(1) Financial Information and Operating Data. For fiscal years ending on June 30, 2003 and thereafter, annual
financial information and operating data shall be provided within nine months after the end of the State's fiscal year.
Such information shall include:
(a)
(b)
(c)
(d)
(e)
Investment of Funds;
Facilities in the Pool;
Sources and Amounts of State Funds;
History of Legislative Appropriations; and
Schedule of Outstanding Bonds;
(2) Audited Financial Statement. If not submitted as part of the annual financial information, a copy of the
State’s audited financial statements, prepared in accordance with generally accepted accounting principles, will be
provided when and if available.
(3) Material Events Notices. Notice of the following events relating to the Bonds will be provided in a timely
manner, if material:
(a)
principal and interest payment delinquencies;
E-1
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
non-payment related defaults;
unscheduled draws on debt-service reserves reflecting financial difficulties;
unscheduled draws on credit enhancements reflecting financial difficulties;
substitution of credit or liquidity providers, or their failure to perform;
adverse tax opinions or events affecting the tax-exempt status of the security;
modifications to rights of security holders;
bond calls, except for mandatory redemptions where notice of redemption to Registered
Owners and the public is given as required under the terms of the Resolution;
defeasances;
release, substitution or sale of property securing repayment of the securities;
rating changes.
(4) Failure to Provide Annual Financial Information; Remedies.
(a) Notice of the failure of the Department to provide the information required by paragraphs (A) (1)
or (A)(2) of this Section will be provided in a timely manner.
(b) The Department acknowledges that its undertaking pursuant to the Rule set forth in this Section
is for the benefit of the Beneficial Owners and Registered Owners of the Bonds and shall be
enforceable only by such Beneficial Owners and Registered Owners; provided that the right to enforce
the provisions of such undertaking shall be conditioned upon the same enforcement restrictions as are
applicable to information undertakings in the Resolution and shall be limited to a right to obtain
specific enforcement of the Department’s obligations hereunder.
(B) Methods of Providing Information.
(1) (a) Annual financial information and operating data described in paragraph 3(A)(1) and the audited
financial statements described in paragraph 3(A)(2) shall be sent to each nationally recognized municipal
securities information repository (hereafter "NRMSIR") and to the state information depository (hereafter
"SID") (if a SID is established for the State of Florida).
(b) Material event notices described in paragraph 3(A)(3) and notices described in paragraph 3(A)(4)
shall be sent to each NRMSIR or to the Municipal Securities Rulemaking Board (hereafter "MSRB"), and to
the SID (if a SID is established for the State of Florida). As of the date hereof, no state information depository
has been established for the State of Florida.
(2) Information shall be provided by:
(a) electronic facsimile transmissions confirmed by first class mail, postage prepaid;
(b) overnight delivery service;
(c) electronic delivery;
(d) first class mail, postage prepaid;
(e) any other delivery method generally acceptable in the tax-exempt bond market, or
(f) by whatever means are mutually acceptable to the Department or its designated agent and
the entity to which it is to be provided.
(C) If this Disclosure Agreement is amended to change the operating data or financial information to be
disclosed, the annual financial information containing amended operating data or financial information will explain, in
narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial
information being provided.
(D) The Department’s obligations hereunder shall continue until such time as the Bonds are no longer
Outstanding or until the Department shall otherwise no longer remain obligated on the Bonds.
E-2
(E) This Disclosure Agreement may be amended or modified so long as:
(1) any such amendments are not violative of any rule or regulation of the SEC or MSRB, or other
federal or state regulatory body;
(2) the amendment may only be made in connection with a change in circumstances that arises from
a change in legal requirements, change in law, or change in the identity, nature, or status of the obligated person,
or type of business conducted;
(3) this Disclosure Agreement, as amended, would have complied with the requirements of Rule 15c212 of the SEC at the time of the primary offering, after taking into account any amendments or interpretations
of the rule, as well as any change in circumstances; and
(4) the amendment does not materially impair the interests of Beneficial Owners or Registered
Owners, as determined either by parties unaffiliated with the issuer or obligated person (such as the trustee or
bond counsel), or by approving vote of the Beneficial Owners and Registered Owners pursuant to the terms of
the Resolution at the time of the amendment.
SECTION 4. ADDITIONAL INFORMATION. If, when submitting any information required by this
Disclosure Agreement, the Department chooses to include additional information not specifically required by this
Disclosure Agreement, the Department shall have no obligation to update such information or include it in any such
submissions.
Dated this 4th day of June, 2003.
DEPARTMENT OF MANAGEMENT
SERVICES
DIVISION OF BOND FINANCE
By
By
Director
Secretary
E-3
APPENDIX F
FORM OF APPROVING OPINION OF BOND COUNSEL,
GREENBERG TRAURIG, P.A.
MIAMI, FLORIDA
_____________, 2003
State of Florida
Tallahassee, Florida
$109,770,000
STATE OF FLORIDA
DEPARTMENT OF MANAGEMENT SERVICES
FLORIDA FACILITIES POOL REVENUE REFUNDING BONDS
SERIES 2003A
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance and sale by the Division of
Bond Finance of the State Board of Administration of the State of Florida (the “Division”), on behalf
of itself and on behalf of the State of Florida Department of Management Services (the “Department
of Management Services”), of $109,770,000 aggregate principal amount of State of Florida,
Department of Management Services, Florida Facilities Pool Revenue Refunding Bonds, Series
2003A (the “Bonds”), initially issued and delivered on this date pursuant to the Constitution and laws
of the State of Florida, including particularly, the State Bond Act, Sections 215.57-215.83, Florida
Statutes, as amended, and the Florida Building and Facilities Act, Sections 255.501-255.525, Florida
Statutes, as amended (hereinafter collectively referred to as the “Act”), and pursuant to the Florida
Facilities Pool Revenue Bond Resolution, as amended and supplemented (the “Resolution”), duly
adopted by the Governor and Cabinet of the State of Florida sitting as the governing board of the
Division (in such capacity, the “Board”), on behalf of the Division and on behalf of the Department
of Management Services.
The Department of Management Services has covenanted in the Resolution to apply the
proceeds of the Bonds to (i) refund certain outstanding indebtedness, and (ii) pay certain costs
associated with the issuance of the Bonds.
The Bonds will be dated and mature on the dates and in the principal amounts and will bear
interest at the rates determined pursuant to and set forth as provided by the Resolution and will be
issued only as fully registered bonds without coupons. Principal of and interest on the Bonds will be
paid by U.S. Bank Trust National Association, New York, New York, as paying agent, or by any
alternate or successor paying agent, to the registered owners or registered assigns thereof.
The Bonds shall be payable solely from and secured as to the payment of the principal
thereof and interest thereon, on a parity with certain outstanding State of Florida, Department of
F-1
State of Florida
_______________, 2003
General Services, Division of Facilities Management, Florida Facilities Pool Revenue Bonds, certain
outstanding State of Florida, Department of Management Services, Division of Facilities
Management, Florida Facilities Pool Revenue and Revenue Refunding Bonds, and certain
outstanding State of Florida, Department of Management Services, Florida Facilities Pool Revenue
Bonds, and any additional parity Bonds hereafter issued, by the Trust Estate (as defined in the
Resolution and as described below). The Bonds shall not constitute a general obligation of the State
of Florida or any political subdivision thereof, nor shall the full faith and credit of the State of Florida
or any political subdivision thereof be pledged to the payment of the principal of the Bonds or the
interest on the Bonds.
As defined in the Resolution, Trust Estate means (i) the proceeds of the sale of the Bonds, (ii)
the gross receipts derived by the Department of Management Services from the Pool Pledged
Revenues (as defined in the Resolution and as described below), and (iii) all funds established by the
Resolution, including the investments, if any, thereof (excluding any fund established for the purpose
of rebating investment earnings to the federal government pursuant to applicable provisions of the
Internal Revenue Code of 1986, as amended). As defined in the Resolution, Pool Pledged Revenues
means (i) all legislative appropriations and all fees, charges, revenues or receipts derived by the
Department of Management Services from the operation, leasing, or other disposition of facilities in
the Florida Facilities Pool, including any moneys appropriated to any agency of the State of Florida
for the purpose of making such rental payments, (ii) rental payments received with respect to such
facilities from whatever sources, and receipts therefrom, (iii) the proceeds of Bonds issued under the
Act and the Resolution, and (iv) investment of any such moneys pursuant to the Act and the
Resolution, all as are available for the payment of debt service on the bonds issued pursuant to the
Resolution.
The Division is authorized to issue Florida Facilities Pool Revenue Bonds, on behalf of and
in the name of the Department of Management Services, in addition to the Bonds, upon the terms and
conditions set forth in the Resolution, and such bonds, when issued, shall, with the Bonds and with
all other such bonds theretofore and thereafter issued, be entitled to the equal benefit, protection and
security of the provisions, covenants and agreements of the Resolution.
In rendering the opinions in paragraph number 4 below, we have assumed continuing
compliance with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”),
that must be met after the issuance of the Bonds in order that interest on the Bonds not be included in
gross income for federal income tax purposes. The failure by the Division and the Department of
Management Services to meet such requirements may cause interest on the Bonds to be included in
gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The
Division and the Department of Management Services have covenanted to comply with such
requirements.
F-2
State of Florida
_______________, 2003
In connection with the issuance of the Bonds, we have examined the Act, the Resolution,
certified copies of certain proceedings of the Division, of the former Division of Facilities
Management of the Department of Management Services and of the Department of Management
Services and such other documents, instruments, proceedings and opinions as we have deemed
necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon
representations of the Division and of the Department of Management Services furnished to us,
without undertaking to verify such representations by independent investigation.
Based upon the foregoing, we are of the opinion that:
1.
The Department of Management Services is a principal unit of the executive branch
of the government of the State of Florida. The Division is a division of the State Board of
Administration of the State of Florida and is a public body corporate. Pursuant to the Act, the
Department of Management Services is empowered to request the issuance of the Bonds, and the
Division is empowered to issue the Bonds on behalf of itself and on behalf of the Department of
Management Services.
2.
The Resolution has been duly adopted by the Board, is valid and binding upon the
Division and the Department of Management Services and is in full force and effect and enforceable
in accordance with its terms. The Bonds are entitled to the benefits and security of the Resolution for
the payment thereof in accordance with the terms of the Resolution.
3.
The Bonds have been duly authorized, executed and issued in accordance with the
Act and the Resolution. The Bonds represent valid special obligations of the Division and of the
Department of Management Services, enforceable in accordance with their terms and the terms of the
Resolution. The Bonds are payable solely from the sources and in the manner described in the
Resolution, and are secured by a valid and binding lien on the Trust Estate.
4.
(a)
Under existing statutes, regulations, rulings and court decisions, interest on
the Bonds is excluded from gross income for federal income tax purposes. Furthermore, interest on
the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations; however, interest on the Bonds is taken into account in
determining adjusted current earnings for purposes of computing the alternative minimum tax
imposed on corporations.
(b)
The Bonds were sold at a price in excess of the amount payable at maturity.
Under the Code, the difference between the amount payable at maturity of the Bonds and the tax
basis to the purchaser (other than a purchaser who holds a Bond as inventory, stock in trade or for
sale to customers in the ordinary course of business) is “bond premium”. Bond premium is
amortized for federal income tax purposes over the term of a Bond. A purchaser of a Bond is
required to decrease his adjusted basis in the Bond by the amount of amortizable bond premium
F-3
State of Florida
_______________, 2003
attributable to each taxable year he holds the Bond. The amount of amortizable bond premium
attributable to each taxable year is determined at a constant interest rate compounded actuarially.
The amortizable bond premium attributable to a taxable year is not deductible for federal income tax
purposes. Purchasers of the Bonds should consult their own tax advisors with respect to the precise
determination for federal income tax purposes of the treatment of bond premium upon sale or other
disposition of Bonds and with respect to the state and local consequences of owning and disposing of
Bonds.
(c) We express no opinion regarding other federal tax consequences resulting from
the ownership, receipt or accrual of interest on, or disposition of the Bonds.
5.
The Bonds and the income thereon are exempt from taxation under the laws of the
State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on
interest, income or profits on debt obligations owned by corporations, as defined therein.
The opinions set forth in numbered paragraphs 2 and 3 above are subject to state and federal
laws and equitable principles affecting the enforcement of creditors’ rights.
We do not express any opinion herein as to the adequacy or accuracy of any official
statement of the Division or the Department of Management Services pertaining to the offering of the
Bonds.
In rendering the foregoing opinions, we have assumed the accuracy and truthfulness of all
public records and of all certifications, documents and other proceedings examined by us that have
been executed or certified by public officials acting within the scope of their official capacities and
have not verified the accuracy or truthfulness thereof.
We have also assumed the genuineness of the signatures appearing upon such public records,
certifications, documents and proceedings.
F-4
State of Florida
_______________, 2003
5.
The Bonds and the income thereon are exempt from taxation under the laws of the
State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on
interest, income or profits on debt obligations owned by corporations, as defined therein.
The opinions set forth in numbered paragraphs 2 and 3 above are subject to state and federal
laws and equitable principles affecting the enforcement of creditors’ rights.
We do not express any opinion herein as to the adequacy or accuracy of any official
statement of the Division or the Department of Management Services pertaining to the offering of the
Bonds.
In rendering the foregoing opinions, we have assumed the accuracy and truthfulness of all
public records and of all certifications, documents and other proceedings examined by us that have
been executed or certified by public officials acting within the scope of their official capacities and
have not verified the accuracy or truthfulness thereof.
We have also assumed the genuineness of the signatures appearing upon such public records,
certifications, documents and proceedings.
F-5
APPENDIX G
1 of 2
FINANCIAL
SECURITY
ASSURANCE®
ISSUER:
BONDS:
MUNICIPAL BOND
INSURANCE POLICY
Policy No.: -N
Effective Date:
Premium: $
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for consideration received,
hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying
agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing
the Bonds) for the Bonds, for the benefit of the Owners or, at the election of Financial Security, directly
to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that
portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be
unpaid by reason of Nonpayment by the Issuer.
On the later of the day on which such principal and interest becomes Due for Payment or the
Business Day next following the Business Day on which Financial Security shall have received Notice of
Nonpayment, Financial Security will disburse to or for the benefit of each Owner of a Bond the face
amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason
of Nonpayment by the Issuer, but only upon receipt by Financial Security, in a form reasonably
satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then
Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the
Owner's rights with respect to payment of such principal or interest that is Due for Payment shall
thereupon vest in Financial Security. A Notice of Nonpayment will be deemed received on a given
Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will
be deemed received on the next Business Day. If any Notice of Nonpayment received by Financial
Security is incomplete, it shall be deemed not to have been received by Financial Security for purposes
of the preceding sentence and Financial Security shall promptly so advise the Trustee, Paying Agent or
Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in
respect of a Bond, Financial Security shall become the owner of the Bond, any appurtenant coupon to
the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully
subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond,
to the extent of any payment by Financial Security hereunder. Payment by Financial Security to the
Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the
obligation of Financial Security under this Policy.
Except to the extent expressly modified by an endorsement hereto, the following terms shall have
the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a
Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's
Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment"
means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the
date on which the same shall have been duly called for mandatory sinking fund redemption and does not
refer to any earlier date on which payment is due by reason of call for redemption (other than by
mandatory sinking fund redemption), acceleration or other advancement of maturity unless Financial
Security shall elect, in its sole discretion, to pay such principal due upon such acceleration together with
any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on
the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the
Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for
payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall
also include, in respect of a Bond, any payment of principal or interest that is Due for Payment
APPENDIX G
2 of 2
Page 2 of 2
Policy No. -N
made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the
United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order
of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently
confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or
the Paying Agent to Financial Security which notice shall specify (a) the person or entity making the claim,
(b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for
Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is
entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or
any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.
Financial Security may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by
giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the
Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying
Agent, (a) copies of all notices required to be delivered to Financial Security pursuant to this Policy shall be
simultaneously delivered to the Insurer's Fiscal Agent and to Financial Security and shall not be deemed
received until received by both and (b) all payments required to be made by Financial Security under this
Policy may be made directly by Financial Security or by the Insurer's Fiscal Agent on behalf of Financial
Security. The Insurer's Fiscal Agent is the agent of Financial Security only and the Insurer's Fiscal Agent
shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of Financial
Security to deposit or cause to be deposited sufficient funds to make payments due under this Policy.
To the fullest extent permitted by applicable law, Financial Security agrees not to assert, and hereby
waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and
defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment
or otherwise, to the extent that such rights and defenses may be available to Financial Security to avoid
payment of its obligations under this Policy in accordance with the express provisions of this Policy.
This Policy sets forth in full the undertaking of Financial Security, and shall not be modified, altered or
affected by any other agreement or instrument, including any modification or amendment thereto. Except to
the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is
nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the
Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT
COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE
76 OF THE NEW YORK INSURANCE LAW.
In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this Policy to be executed
on its behalf by its Authorized Officer.
[Countersignature]
FINANCIAL SECURITY ASSURANCE INC.
By
By
Authorized Officer
A subsidiary of Financial Security Assurance Holdings Ltd.
350 Park Avenue, New York, N.Y. 10022-6022
Form 500NY (5/90)
(212) 826-0100
FINANCIAL
SECURITY
ASSURANCE®
ENDORSEMENT NO. 1 TO
MUNICIPAL BOND
INSURANCE POLICY
(Florida Insurance
Guaranty Association)
ISSUER:
Policy No.: -N
Effective Date:
BONDS:
Notwithstanding the terms and provisions contained in this Policy, it is further understood that the
insurance provided by this Policy is not covered by the Florida Insurance Guaranty Association created
under part 11 of chapter 631, Florida Statutes.
Nothing herein shall be construed to waive, alter, reduce or amend coverage in any other section of
the Policy. If found contrary to the Policy language, the terms of this Endorsement supersede the Policy
language.
In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this Endorsement to
be executed on its behalf by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By:
Authorized Officer
A subsidiary of Financial Security Assurance Holdings Ltd.
350 Park Avenue, New York, N.Y. 10022-6022
Form No. 553NY (FL 6/90)
(212) 826-0100

State of Florida Division of Bond Finance

Transcription

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