Florida Special District Handbook Online:
Investment of Surplus Funds Option
Special districts may invest surplus funds in the Local Government Surplus Funds Trust Fund (Florida Prime), which seeks to provide preservation of capital, liquidity and competitive yield. The State Board of Administration of Florida, consisting of the Governor, Chief Financial Officer, and Attorney General are trustees of the fund.
Features of Florida Prime
- Seeks preservation of capital, liquidity and competitive yield by pooling investments in a portfolio of short- term, high quality fixed income securities rated in the highest short- term rating category by one of the nationally recognized statistical rating organizations, or of comparable quality.
- Seeks to maintain a $1.00 value and maintain a weighted average maturity of 60 days or less, with a maximum maturity of any investment limited to 397 days.
- Maintains current balances for individual accounts and distributes pooled investment earnings to each account monthly, based on the average daily balances of the participating accounts on the accrual basis of accounting.
- Provides a monthly statement of the deposits, withdrawals, balances, and earnings.
- Complies with legislation that requires numerous operational and reporting enhancements, including restating objectives to emphasize safety, liquidity and competitive returns with minimization of risks; and providing for enhanced internal controls, transparency and communication.
- Rated AAA by Standard and Poor's, the highest rating available for a local government investment pool.
Investments may be made in the following categories:
- United States Government
- United States Government guaranteed
- United States agency obligations
- United States corporation obligations
- Domestic bank certificates of deposit
- Euro Dollar certificates of deposit
- Bankers' acceptances
- Commercial paper
- Repurchase agreements
- Other investment instruments provided by the Florida Statutes
At the time of first investing surplus funds in the Local Government Surplus Trust Fund (Florida Prime), the special district must prepare and file the following three items with the State Board of Administration:
- Resolution for Investment of Surplus Funds - This resolution must authorize investment in the Local Government Surplus Funds Trust Fund and include the following:
- The official seal of the entity or be notarized
- The name of the chief administrative or financial officer, or the independent trustee responsible for the funds
- Disclosure Statement for Participation in the Local Government Surplus Funds Trust Fund Investment Pool - This must be signed and sent to the State Board of Administration, Financial Operations, before enrolling in the Local Government Investment Pool.
- Participant Account Maintenance Form - The State Board of Administration will provide this form to special districts. Complete this form for each account opened in the fund. Use it to make changes or updates to each account. Special districts can open a maximum of ten accounts.
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