MEETING OF THE

STATE BOARD OF ADMINISTRATION

(Contact Person: Dorothy Westwood - 488-4406)

THE CAPITOL

JULY 14, 1998

1. Approval of minutes of meeting held on June 24, 1998. (Att. #1)

2. APPROVAL OF FISCAL SUFFICIENCY OF AN AGGREGATE AMOUNT NOT EXCEEDING $500,000,000 STATE OF FLORIDA, FULL FAITH AND CREDIT, STATE BOARD OF EDUCATION, PUBLIC EDUCATION CAPITAL OUTLAY BONDS, 1997 AND 1998 SERIES (LETTER DESIGNATIONS TO BE DETERMINED):

The Division of Bond Finance of the State Board of Administration (the "Division"), on behalf of the State Board of Education, has submitted for approval as to fiscal sufficiency a proposal to issue an aggregate amount Not Exceeding $500,000,000 State of Florida, Full Faith and Credit, State Board of Education, Public Education Capital Outlay Bonds, 1997 and 1998 Series (Letter Designations to be determined) (the "Bonds") for the purpose of financing capital outlay projects for the State System of Public Education in Florida; provided, however, that none of the said Bonds shall be issued in excess of the amount which can be issued in full compliance with the State Bond Act and other applicable provisions of law, and pursuant to Section 9(a)(2), Article XII of the Constitution of Florida, as amended. The Governor and Cabinet adopted on June 26, 1997 the Twelfth Supplemental Authorizing Resolution authorizing the issuance of the 1997 Series Bonds. It is anticipated the Governor and Cabinet will adopt on July

14, 1998 the Thirteenth Supplemental Authorizing Resolution authorizing the issuance of the 1998 Series Bonds.

The State Board of Education has heretofore issued Public Education Bonds, Series A and B of which $136,315,000 in principal amount was outstanding and unpaid on June 30, 1998; and which bonds constitute a prior lien on the Gross Receipts Taxes which are required to be deposited in the Public Education Capital Outlay and Debt Service Trust Fund (the "Gross Receipts Taxes.")

The State Board has heretofore issued Public Education Capital Outlay Bonds, Series 1985, 1985-A, 1986-B, 1986-C, 1987-A, 1989-A, 1989-B, 1990, 1991-A, 1991-B, 1991-C and 1992-A, 1992 Series B, 1992 Series C, 1993 Series A, 1993 Series B, and 1993 Series C, 1993 Series D, 1993 Series E, 1993 Series F, 1994 Series A, 1994 Series B, 1994 Series C, 1995 Series A, 1995 Series B, 1995 Series C, 1995 Series D, 1995

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July 14, 1998

Page 2

Series E, 1995 Series F, 1996 Series A, 1996 Series B and 1997 Series A of which $6,269,605,000 in principal amount was outstanding and unpaid on June 30, 1998. The proposed Bonds shall be junior, inferior, and subordinate to the outstanding and unpaid Public Education Bonds, Series A and B and to the outstanding and unpaid portion of Series 1985, 1985-A, 1986-B, 1986-C, 1987-A, 1989-A, 1989-B, 1990, 1991-A, 1991-B, 1991-C and 1992-A Bonds as to lien on and source and security for payment from the Gross Receipts Taxes. The proposed Bonds shall be issued on a parity as to lien on and source and security for payment from the Gross Receipts Taxes with the outstanding and unpaid Public Education Capital Outlay Bonds, 1992 Series B, 1992 Series C, 1993 Series A, 1993 Series B, 1993 Series C, 1993 Series D, 1993 Series E, 1993 Series F, 1994 Series A, 1994 Series B, 1994 Series C, 1995 Series A, 1995 Series B, 1995 Series C, 1995 Series D, 1995 Series E, 1995 Series F, 1996 Series A, 1996 Series B and 1997 Serie

s A.

A study of this proposal and the estimates of revenue expected to accrue from the Gross Receipts Tax, indicate that the proposed Bonds and all other outstanding bonds having a lien on the Gross Receipts Tax are fiscally sufficient and that the proposal will be executed pursuant to the applicable provisions of law.

RECOMMENDATION: It is recommended that the Board approve the fiscal sufficiency of the proposal outlined above. (Att. #2)

3. APPROVAL OF FISCAL SUFFICIENCY OF NOT EXCEEDING $90,000,000 STATE OF FLORIDA, DEPARTMENT OF ENVIRONMENTAL PROTECTION, SAVE OUR COAST REFUNDING REVENUE BONDS, SERIES 1998A:

The Division of Bond Finance of the State Board of Administration (the "Division"), on behalf of the Department of Environmental Protection of Florida, has submitted for approval as to fiscal sufficiency a proposal to issue Not Exceeding $90,000,000 State of Florida, Department of Environmental Protection, Save Our Coast Refunding Revenue Bonds, Series 1998A (the "Bonds") for the purpose of refunding all or portions of certain outstanding series of Save Our Coast Revenue Bonds. It is anticipated the Governor and Cabinet will adopt a resolution on July 14, 1998 authorizing the issuance and sale of the proposed Bonds.

The Bonds shall have a first lien on and be secured by a portion of the Documentary Stamp Tax imposed pursuant to Chapter 201, Florida Statutes. The Bonds shall not be secured by a pledge of the full faith and credit nor the taxing power of the State of Florida or any political subdivision thereof.

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July 14, 1998

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The estimate of funds pledged to the Bonds indicates that in no State fiscal year will the debt service requirements of the Bonds exceed the pledged revenues available for payment of such debt service requirements and that in no State fiscal year will the monies pledged for the debt service requirements be less than the required coverage amount.

RECOMMENDATION: It is recommended that the Board approve the fiscal sufficiency of the proposal outlined above. (Att. #3)

4. APPROVAL OF FISCAL DETERMINATION OF AN AMOUNT NOT

EXCEEDING $10,100,000 FLORIDA HOUSING FINANCE CORPORATION HOUSING REVENUE BONDS, 1998 SERIES (ONE OR MORE SERIES TO BE DESIGNATED) (COLLEGE PARK APARTMENTS PROJECT):

The Florida Housing Finance Corporation has submitted for approval as to fiscal determination a proposal to issue an amount Not Exceeding $10,100,000 Florida Housing Finance Corporation Housing Revenue Bonds, 1998 Series (one or more series to be designated) (College Park Apartments Project) (the "Bonds") for the purpose of financing the development and construction of a multifamily residential rental development in Collier County, Florida, to be occupied by persons and families of low, moderate and middle income.

The Bonds shall not constitute an obligation, either general or special, of the State or of any local government thereof; neither the State nor any local government thereof shall be liable thereon. Neither the full faith, revenue, credit nor taxing power of the State of Florida, or any local governments thereof shall be pledged to the payment of the principal of, premium (if any), or interest on the Bonds. The Bonds shall be payable as to principal, premium (if any), and interest solely out of revenues and other amounts pledged therefor.

RECOMMENDATION: A study of this proposal and of estimates of revenue and other available moneys expected to accrue indicate that the issue meets the requirements for the fiscal determination required by Section 420.505, Florida Statutes, as stated in Article VII, Subsection 16(c) of the revised Constitution of 1968, and the Executive Director recommends that the State Board of Administration of Florida (the "Board") approve the fiscal determination thereof. It is further recommended that, pursuant to the fiscal determination requirements of Subsection 16(c) of Article VII of the revised Constitution of 1968, the Board find and determine that in no State fiscal year will the debt service requirements of the Bonds proposed to be issued and all other bonds secured by the same pledged

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revenues exceed the pledged revenues available for payment of such debt service requirements. The Board has relied upon information from others but has not independently verified the accuracy or completeness of such information. The Board does not assume any responsibility for, and makes no warranty (express or implied) with respect to any other aspect of this bond issue except for fiscal determination. (Att. #4)

5. PROPOSED UNFUNDED ACTUARIAL LIABILITY (UAL) WORK PLAN FOR REVIEW AND COMMENT BY THE BOARD. THE UAL WORKPLAN IS PROPOSED IN TWO PHASES AS OUTLINED BELOW:

Pursuant to the charge contained in Governor Chiles' letter of March 26, 1998, and the language in CS/CS/HB 3491 passed in the 1998 Session of the Florida Legislature, the staffs of the State Board of Administration and the Division of Retirement have prepared the attached Phase I UAL workplan. (See attachments A and B). This plan has been reviewed by the House and Senate Appropriations/Ways and Means Committees, House and Senate Governmental Operations Committees, the Governor's Office of Planning and Budgeting (collectively-the working group), and other interested parties. All of the proposed tasks, assignments and time lines have been agreed upon by the assignees and work is already underway on some of the more routine aspects of the effort.

Although the statutory language is discretionary as to the appointment of legislative members to the working group, it is expected that appointments will be made later in the work cycle. In other words, we recommend that the staff-generated analytical work be completed and ultimately presented as the factual background information necessary for the real policy formulation phase. Phase I is outlined in the workplan as attachment A--essentially the fact-finding phase. Phase II will begin with the first meeting of the working group as per the outline in attachment B.

In Phase II, review of all the work products will take place along with presentations by the outside consultants. The various policy questions will be identified and attempts made to reach consensus. Throughout the period of analysis and background preparation, routine status reports will be prepared and submitted to the Board. Draft work products will also be submitted as will final versions. Board members or their designees can participate at any time in the process at their discretion. During Phase II, the Board will be asked to put their thoughts on the various policy questions on the record. Ultimately, formal recommendations will be proposed to the Board and submitted to the Legislature in time to meet the statutory deadline of March 1, 1999.

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July 14, 1998

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Although a precise workplan is laid out in the attachments, please recognize that it is subject to change as needed.

The State Board of Administration staff remains cognizant of the fact that the Trustees have a fiduciary responsibility in a matter such as this, and plans to provide full and ongoing briefings as information and developments warrant. (Atts. A&B)