Staff from the State Board of Administration (SBA) recently met with Executive Director Chris Holley and other FAC staff to discuss the pending termination of the Fund B Surplus Funds Trust Fund and the disbursement of the funds remaining after the distribution of the remaining principle to the Fund B participants. Fund B was created in the Fall of 2007 when participants in the Local Government Surplus Fund Trust Funds (now “Florida Prime”) withdrew $14 billion in funds in a single month, creating a liquidity crisis. The SBA trustees instituted a four-day freeze on withdrawals and deposits and created Fund B to segregate the distressed securities. Fund B also includes additional funding from the Local Government Surplus Trust Fund reserve account and the November 2007 interest payments that would have been distributed to Local Government Surplus Funds Participants.
As of September 2014, Fund B participants have received 100% of the original principle and additional returns and legal settlements have created a remaining balance of $40 million in the fund. The SBA trustees have determined that the most equitable way to distribute the residual balance is to divide the it proportionally between Fund B participants affected by the withholding of the November 2007 interest payments. SBA staff has identified 59 counties would be entitled to receive reimbursements under this approach. A statutory amendment is necessary to authorize SBA to distribute the funds in this manner. Accordingly, the Senate Government Oversight and Accountability Committee is sponsoring SPB 7024, filed this week. A House version is forthcoming. SPB 7024 will be heard in the Senate Governmental Oversight and Accountability Committee on February 17 at 10:00 am.
For any questions related to this issue, please contact Laura Youmans, FAC Public Safety Advocate.