As filed with the Securities and Exchange Commission on November 5, 2009
Investment Company Act File Number 811-8654
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Florida Daily Municipal Income Fund
(Exact name of registrant as specified in charter)
600 Fifth Avenue
New York, NY 10020
(Address of principal executive offices) (Zip code)
Christine Manna
c/o Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-830-5200
Date of fiscal year end: August 31
Date of reporting period: August 31, 2009
Item 1: Report to Stockholders
- --------------------------------------------------------------------------------
FLORIDA
DAILY MUNICIPAL 600 FIFTH AVENUE
INCOME FUND NEW YORK, N.Y. 10020
(212) 830-5200
================================================================================
Dear Shareholder:
In a time of uncertainty it is comforting to know that some things never change.
Since its inception in 1974, Reich & Tang Funds has taken a proactive approach
to risk management. Our investment philosophy and process is more credit focused
than yield focused. Our goals of safety and preservation of capital continually
drive our investment analysis and decisions.
Recently, a number of proposals concerning the money market industry have been
made in the interest of providing greater stability, including recommendations
from the Investment Company Institute Money Market Working Group, the Group of
30 headed by Paul Volcker, and from the Federal Reserve Chairman Ben Bernanke.
These actions were taken in advance of anticipated rule changes by the
Securities and Exchange Commission, which were formally proposed for comments in
July, 2009. As the money market industry grapples with the appropriateness and
impact of these initiatives, rest assured that Reich & Tang Funds continues to
be very cautious given the recent events in our markets. As an organization, we
continue to believe that thorough, fundamental credit analysis is the key to
continued success in our business. Our credit analysts are constantly monitoring
the activity in the credit markets. Throughout this period of market turbulence,
we have not owned any securities that have experienced credit delinquency or
have been downgraded below Tier 1, however current and future portfolio holdings
are subject to market risk.
Reich & Tang is proud to be part of Natixis Global Asset Management, one of the
world's largest money management organizations. Natixis brings together the
expertise of multiple specialized investment managers based in the United
States, Europe and Asia to offer a wide spectrum of equity, fixed income and
alternative investment strategies. For more information on Natixis Global Asset
Management, please visit us at www.natixis.com.
We appreciate your support during this turbulent period and thank you for your
business. While it is difficult to predict the future as we navigate through
multiple complex factors in the market, we believe that our fundamental approach
to money market funds and our corporate structure enable us to continue to be a
leader in providing funds that focus on preservation of capital and liquidity
for our shareholders and valued clients.
We welcome any questions you may have about the investments in any of our
portfolios and stand ready to respond to you as we have for 35 years.
Sincerely,
/s/Michael P. Lydon
Michael P. Lydon
President
- --------------------------------------------------------------------------------
<page>
================================================================================
FLORIDA DAILY MUNICIPAL INCOME FUND
EXPENSE CHART
FOR SIX MONTHS ENDED AUGUST 31, 2009
(UNAUDITED)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur the following ongoing costs: management
fees and other Fund expenses. You may also incur distribution and/or service
(12b-1) fees. This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period March 1, 2009 through August 31, 2009.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
<table>
<caption>
- -------------------------------------------------------------------------------------------------------------------------
Beginning Account Ending Account Expenses Paid Annualized
Class A shares Value 3/1/09 Value 8/31/09 During the period * Expense Ratio *
- -------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Actual $1,000.00 $1,000.00 $4.44 0.88%
- -------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.77 $4.48 0.88%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Class B shares Beginning Account Ending Account Expenses Paid Annualized
Value 3/1/09 Value 8/31/09 During the period * Expense Ratio *
- -------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,000.10 $4.44 0.88%
- -------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.77 $4.48 0.88%
- -------------------------------------------------------------------------------------------------------------------------
<fn>
* Expenses are equal to the Fund's annualized expense ratios multiplied by the
average account value over the period (March 1, 2009 through August 31, 2009),
multiplied by 184/365 (to reflect the six month period).
</fn>
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2009
================================================================================
<table>
<caption>
Ratings (a)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
------- ---- ---- ------ ------- ----------
Tax Exempt Commercial Paper (15.35%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
$1,000,000 City of Jacksonville, FL PCRB (Florida Power & Light Company) 09/08/09 0.45% $ 1,000,000 P-1 A-1
2,000,000 Hillsborough County Aviation Authority Airport Facilities - Series B
LOC Landesbank Baden-Wurtemburg 09/03/09 0.60 2,000,000 P-1 A-1+
1,500,000 School District of Palm Beach County, FL
LOC Bank of America, N.A. 09/10/09 0.55 1,500,000 P-1 A-1
1,000,000 Sunshine State Governmental Financing Commission - Series L
LOC Dexia CLF 09/16/09 0.80 1,000,000 P-1 A-1
- ---------- ------------
5,500,000 Total Tax Exempt Commercial Paper 5,500,000
- ---------- ------------
Tax Exempt General Obligation Notes & Bonds (6.14%)
- ------------------------------------------------------------------------------------------------------------------------------------
$2,200,000 Orange County, FL IDA Revenue Refunding Bond
(Orlando-Hawaiian Motel Company Project) - Series 1985
LOC US Bank, N.A. 10/01/09 3.00% $ 2,200,000 P-1 A-1+
- ---------- ------------
2,200,000 Total Tax Exempt General Obligation Notes & Bonds 2,200,000
- ---------- ------------
Tax Exempt Variable Rate Demand Instruments (b) (78.45%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 200,000 BB&T Municipal Trust Floater Certificates - Series 5000 DLL
Relating to Custodial Receipts, Series 2008-1 DLL,
Related to a Pool of Municipal Obligations
LOC Rabobank Nederland 10/01/28 0.43% $ 200,000 VMIG-1
1,750,000 Brevard County, FL Industrial Development Refunding RB
(Pivotal Utility Holdings, Inc. Project) - Series 2005 (c)
LOC Wells Fargo Bank, N.A. 10/01/24 0.43 1,750,000 VMIG-1
1,000,000 Dade County IDA Exempt Facilities Refunding RB
(Florida Power & Light Company Projects) - Series 1993 06/01/21 0.12 1,000,000 VMIG-1 A-1
1,200,000 Florida Development Finance Corporation Enterprise Bond Program
IDRB (Press Ex, Inc. Project) - Series 2007B (c)
LOC Branch Banking & Trust Company 07/01/17 0.52 1,200,000 P-1 A-1
900,000 Florida Housing Finance Agency Housing RB
(Tiffany Club Apartments Project) - 1996 Series P (c)
LOC Federal Home Loan Mortgage Corporation 09/01/26 0.36 900,000 VMIG-1
1,500,000 Florida Housing Finance Corporation Housing RB
(Heritage Pointe Apartments) - 1999 Series I-1 (c)
Collateralized by Federal National Mortgage Association 09/15/32 0.36 1,500,000 A-1+
900,000 Florida Housing Finance Corporation Housing RB
(Timberline Apartments) - Series 1999P (c)
Collateralized by Federal National Mortgage Association 10/15/32 0.36 900,000 A-1+
</table>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<Page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2009
================================================================================
<table>
<caption>
Ratings (a)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
------- ---- ---- ------ ------- ----------
Tax Exempt Variable Rate Demand Instruments (b) (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
$1,135,000 Florida Housing Finance Corporation MMRB
(Cutler Riverside Apartments) - 2008 Series I (c)
LOC Federal Home Loan Mortgage Corporation 06/01/48 0.36% $ 1,135,000 A-1+
1,280,000 Florida Housing Finance Corporation MMRRB
(Lighthouse Bay Apartments) - 2002 Series N-1
LOC Federal Home Loan Mortgage Corporation 11/01/32 0.32 1,280,000 A-1+
4,000,000 Miami-Dade County, FL IDA IDRB
(Airbus Service Company, Inc. Project) - Series 1998A (c)
LOC Calyon 04/01/30 0.43 4,000,000 A-1+
2,300,000 Miami-Dade County, FL IDA Solid Waste Disposal RB
(Waste Management, Inc. of Florida Project) - Series 2007 (c)
LOC JPMorgan Chase Bank, N.A. 09/01/27 0.45 2,300,000 A-1+
3,000,000 Palm Beach County, FL RB Series 1995
(Norton Gallery and School of Art, Inc. Project)
LOC Northern Trust Company 05/01/25 0.49 3,000,000 A-1+
2,700,000 Sarasota County, FL Continuing Care Retirement Community
Refunding RB (The Glenridge on Palmer Ranch, Inc. Project)
- Series 2006
LOC Bank of Scotland 06/01/36 0.28 2,700,000 VMIG-1
2,200,000 Tallahassee, FL IDRB
(Rose Printing Company, Inc. Project) - Series 2000A (c)
LOC Branch Banking & Trust Company 10/01/15 0.43 2,200,000 VMIG-1
1,000,000 Town of Wood River, WI IDRB
(Burnett Dairy Cooperative Project) - Series 2001A (c)
LOC US Bank, N.A. 07/01/16 0.67 1,000,000 A-1+
1,750,000 Volusia County, FL IDA IDRB (Intellitec Project) - Series 2007A (c)
LOC Bank of America, N.A. 10/01/37 0.60 1,750,000 A-1
1,300,000 Washington State EDFA Economic Development, Series 1997-D RB
(Mercer Island Partners Associates, LLC Project) Series 1997-D (c)
LOC US Bank, N.A. 06/01/27 0.62 1,300,000 A-1+
- ---------- ------------
28,115,000 Total Tax Exempt Variable Rate Demand Instruments 28,115,000
- ---------- ------------
Total Investments (99.94%) (Cost $35,815,000+) 35,815,000
Cash and Other Assets, Net of Liabilities (0.06%) 22,824
------------
Net Assets (100.00%) $ 35,837,824
============
<FN>
+ Aggregate cost for federal income taxes is identical. All securities are
valued at amortized cost and as a result, there is no unrealized appreciation
and depreciation.
</fn>
</table>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<Page>
- --------------------------------------------------------------------------------
================================================================================
FOOTNOTES:
(a) Unless the securities are assigned their own ratings, the ratings are those
of the bank whose letter of credit guarantees the issue or the insurance
company who insures the issue. All letters of credit and insurance are
irrevocable and direct pay covering both principal and interest. Ratings
are unaudited. In addition, certain issuers may have a line of credit, a
liquidity facility, a standby purchase agreement or some other financing
mechanism to ensure the remarketing of the securities. This is not a
guarantee and does not serve to insure or collateralize the issue.
(b) Securities are payable on demand at par including accrued interest (usually
with seven days' notice) and, where indicated are unconditionally secured
as to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
(c) Security subject to alternative minimum tax.
<table>
<caption>
KEY:
<s> <c> <c> <c> <c> <c>
EDFA = Economic Development Finance Authority MMRRB = Multi-Family Mortgage Revenue Refunding Bond
IDA = Industrial Development Authority MMRB = Multi-Family Mortgage Revenue Bond
IDRB = Industrial Development Revenue Bond PCRB = Pollution Control Revenue Bond
LOC = Letter of Credit RB = Revenue Bond
</table>
BREAKDOWN OF PORTFOLIO HOLDINGS BY STATE (UNAUDITED)
<table>
<caption>
- ---------------------------- ------------------------------- -----------------------------
States Value % of Portfolio
- ---------------------------- ------------------------------- -----------------------------
<c> <c>
Florida $ 33,315,000 93.02%
Washington 1,300,000 3.63
Wisconsin 1,000,000 2.79
Various States 200,000 0.56
- ---------------------------- ------------------------------- -----------------------------
Total $ 35,815,000 100.00%
- ---------------------------- ------------------------------- -----------------------------
</table>
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY DATE (UNAUDITED)
<table>
<caption>
- ---------------------------- ------------------------------- -----------------------------
Securities Maturing in Value % of Portfolio
- ---------------------------- ------------------------------- -----------------------------
<c> <c>
Less than 31 days $ 33,615,000 93.86%
31 through 60 2,200,000 6.14
61 through 90 -0- -0-
91 through 120 -0- -0-
121 through 180 -0- -0-
Over 180 days -0- -0-
- ---------------------------- ------------------------------- -----------------------------
Total $ 35,815,000 100.00%
- ---------------------------- ------------------------------- -----------------------------
</table>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<Page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2009
================================================================================
<table>
<caption>
ASSETS:
<s> <c>
Investments in securities, at amortized cost (Note 1)...................................... $ 35,815,000
Cash....................................................................................... 46,161
Accrued interest receivable................................................................ 41,979
---------------
Total assets.......................................................................... 35,903,140
---------------
LIABILITIES:
Payable to affiliates (Note 2)............................................................. 8,434
Accrued expenses........................................................................... 56,862
Dividends payable.......................................................................... 20
---------------
Total liabilities..................................................................... 65,316
---------------
Net assets................................................................................. $ 35,837,824
===============
SOURCE OF NET ASSETS:
Net capital paid in on shares of beneficial interest (Note 5).............................. $ 35,836,726
Accumulated undistributed net realized gain................................................ 1,098
---------------
Net assets................................................................................. $ 35,837,824
===============
</table>
Net asset value, per share (Note 5):
<table>
<caption>
Class Name Net Assets Shares Outstanding Net Asset Value
<s> <c> <c> <c>
Class A Shares............................ $29,228,131 29,225,819 $1.00
Class B Shares............................ $6,609,693 6,609,170 $1.00
</table>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<Page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 2009
================================================================================
<table>
<caption>
INVESTMENT INCOME
Income:
<s> <c>
Interest....................................................................$ 1,121,478
-----------------
Expenses: (Note 2)
Investment management fee................................................... 280,757
Administration fee.......................................................... 147,398
Shareholder servicing fee (Class A shares).................................. 125,648
Custodian expenses.......................................................... 7,119
Shareholder servicing and related shareholder expenses+..................... 60,468
Legal, compliance and filing fees........................................... 57,428
Audit and accounting........................................................ 83,788
Trustees' fees and expenses................................................. 13,651
Other....................................................................... 28,835
-----------------
Total expenses........................................................... 805,092
Less: Fees waived (Note 2) ......................................... (108,986)
-----------------
Net expenses............................................................. 696,106
-----------------
Net investment income........................................................... 425,372
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments......................................... 1,098
-----------------
Increase in net assets from operations.......................................... $ 426,470
=================
<fn>
+ Includes class specific transfer agency expenses after fee waivers of
$20,264 and $8,057 for Class A and Class B shares, respectively.
</fn>
</table>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<Page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 31, 2009 AND 2008
================================================================================
<table>
<caption>
2009 2008
---- ----
INCREASE (DECREASE) IN NET ASSETS
<s> <c> <c>
Operations:
Net investment income........................................ $ 425,372 $ 1,636,307
Net realized gain (loss) on investments...................... 1,098 745
----------------- -----------------
Increase in net assets from operations....................... 426,470 1,637,052
----------------- -----------------
Dividends to shareholders from net investment income*:
Class A Shares............................................... (267,185) (786,875)
Class B Shares............................................... (158,187) (849,432)
----------------- -----------------
Total dividends to shareholders.............................. (425,372) (1,636,307)
----------------- -----------------
Distributions to shareholders from realized gains on investments:
Class A Shares............................................... (537) -0-
Class B Shares............................................... (208) -0-
----------------- -----------------
Total distributions to shareholders.......................... (745) -0-
----------------- -----------------
Transactions in shares of beneficial interest (Note 5):
Class A Shares............................................... (16,786,915) 7,302,245
Class B Shares............................................... (41,354,538) 11,124,874
----------------- -----------------
Total capital share transactions............................. (58,141,453) 18,427,119
----------------- -----------------
Total increase (decrease)................................ (58,141,100) 18,427,864
Net assets:
Beginning of year............................................ 93,978,924 75,551,060
----------------- -----------------
End of year.................................................. $ 35,837,824 $ 93,978,924
================= =================
Undistributed net investment income............................... $ -0- $ -0-
================= =================
<FN>
* Designated as exempt-interest dividends for federal income tax purposes.
</FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<Page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies
Florida Daily Municipal Income Fund, (the "Fund"), a Massachusetts Business
Trust, is a non-diversified, open-end management investment company registered
under the Investment Company Act of 1940 (the "1940 Act"). The Fund is a
short-term, tax-exempt money market fund. The Fund has two classes of stock
authorized, Class A and Class B shares.
On June 9, 2009, the Board of Trustees of the Fund determined to liquidate and
dissolve the Fund, subject to approval by the Fund's shareholders at a meeting
scheduled on or about November 9, 2009.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America for investment
companies as follows:
a) Valuation of Securities -
Investments are recorded on the basis of amortized cost, which approximates
value, as permitted by Rule 2a-7 under the 1940 Act. Under this method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Securities Transactions and Investment Income -
Securities transactions are recorded on a trade date basis. Interest
income, adjusted for accretion of discount and amortization of premium, is
recorded on the accrual basis from settlement date. Realized gains and
losses on sales are computed on the basis of specific identification of the
securities sold.
c) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable (if any) income to its shareholders.
Therefore, no provision for federal income tax is required in the financial
statements.
Consistent with Financial Accounting Standards Board ("FASB")
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109 ( "FIN 48" ) management evaluates
tax positions taken or expected to be taken in the course of preparing the
Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the "more-likely-than-not" threshold are
recorded as a component of income tax expense in the current period with a
corresponding adjustment to a liability for uncertain tax positions. The
Fund recognizes interest and penalties, if any, related to uncertain tax
positions as income tax expense in the statement of operations.
d) Dividends and Distributions -
Dividends from net investment income (excluding capital gains and losses,
if any, and amortization of market discount) are declared daily and paid
monthly. Net realized capital gains, if any, are distributed at least
annually and in no event later than 60 days after the end of the Fund's
fiscal year.
e) Accounting Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
1. Summary of Accounting Policies (continued)
f) Representations and Indemnifications -
In the normal course of business the Fund enters into contracts that
contain a variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the
Fund that have not yet occurred. However, based on experience, the Fund
expects the risk of loss to be remote.
g) Allocation of Income and Expenses -
The Fund may allocate among its classes certain expenses to the extent
allowable to specific classes, including shareholder servicing fees,
distribution fees, transfer agent fees, government registration fees,
certain printing and postage costs, and administrative and legal expenses.
For the year ended August 31, 2009, class specific expenses of the Fund
were limited to shareholder servicing fees, distribution fees and transfer
agent expenses. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains or losses on investments
are allocated to each class of shares based on its relative net assets. In
all other respects, all share classes represent the same interest in the
income and assets of the Fund.
h) Risks -
The effect on performance from investing in securities issued or guaranteed
by companies in the banking and financial services industries will depend
to a greater extent on the overall condition of those industries. Financial
services companies are highly dependent on the supply of short-term
financing. The value of securities of issuers in the banking and financial
services industry can be sensitive to changes in government regulation and
interest rates and to economic downturns in the United States and abroad.
The value of, payment of interest on, repayment of principal for and the
ability to sell a municipal security may be affected by constitutional
amendments, legislative enactments, executive orders, administrative
regulations, voter initiatives and the economics of the regions in which
the issuers are located.
Since, many municipal securities are issued to finance similar projects,
especially those relating to education, housing, health care,
transportation and utilities, conditions in those sectors can affect the
overall municipal securities market and a Fund's investment in municipal
securities.
There is some risk that a portion or all of the interest received from
certain tax-free municipal securities could become taxable as a result of
determinations by the Internal Revenue Service.
In a low interest rate environment, such as the environment that existed at
August 31, 2009, Reich & Tang Asset Management, LLC (the "Manager") and
Reich & Tang Distributors, Inc. (the "Distributor") have historically
waived their fees to maintain a minimum non-negative yield for all classes
of the Fund. The Manager and Distributor are under no contractual
obligation to continue such waiver in the future.
2. Investment Management Fees and Other Transactions with Affiliates
Under the Investment Management Contract, the Fund pays an investment management
fee to the Manager equal to an annual rate of 0.40% of the Fund's average daily
net assets.
Pursuant to an Administrative Services Contract, the Fund pays to the Manager an
annual fee of 0.21% of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (continued)
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and the Distributor have entered into a
Distribution Agreement and a Shareholder Servicing Agreement, with respect to
the Class A shares of the Fund. For its services under the Shareholder Servicing
Agreement, the Distributor receives from the Fund a fee equal to 0.25% of the
Fund's average daily net assets with respect only to the Class A shares. There
were no additional expenses borne by the Fund pursuant to the Distribution and
Service Plan.
As of August 31, 2009, the amounts Payable to affiliates included in the
Statement of Assets and Liabilities were as follows:
<table>
<caption>
Fee Type Affiliate Amount
-------- --------- ------
<s> <c> <c>
Management fee Manager $ 6,995
Transfer Agency fees Reich & Tang Services, Inc.
(the "TA") 1,439
-----------
Total $ 8,434
===========
</table>
For the year ended August 31, 2009 the Manager, Distributor and TA voluntarily
waived the following fees:
<table>
<caption>
<s> <c>
Management fees ....................................... $ 11,694
Administration fees.................................... 34,764
Shareholder servicing fees - Class A................... 59,121
Transfer agency fees - Class A......................... 2,096
Transfer agency fees - Class B......................... 1,311
-----------
Total $ 108,986
===========
</table>
Included in the above amounts were waivers to maintain a minimum yield in light
of market conditions.
On June 9, 2009, the Board of Trustees approved an Expense Limitation Agreement
by and among the Manager, the Distributor and the Fund, in order to cap the
Fund's Class A and Class B total fund operating expenses at 1.29% and 1.04%,
respectively. Pursuant to the Expense Limitation Agreement, the Manager and
Distributor agreed to reimburse the Fund for expenses or waive fees in order to
maintain the Expense Caps until the Fund is liquidated. If shareholders of the
Fund do not approve the Plan of Liquidation and Dissolution, the Manager and
Distributor may terminate the Expense Limitation Agreement. The Manager,
Distributor and TA have no right to recoup prior fee waivers.
Trustees of the Fund not affiliated with the Manager are paid a fee that is
allocated among multiple funds, as defined below. Each Independent Trustee
receives an annual retainer of $60,000 and a fee of $3,000 for each Board of
Trustees meeting attended. Each Independent Trustee also receives a fee up to
$1,500 at the discretion of the Lead Trustee for telephonic Board meetings and
committee meetings that are not held on the same day as a Board Meeting. In
addition, the Lead Independent Trustee receives an additional $13,800, payable
quarterly and the Audit Committee Chairman receives an additional annual fee of
$9,200, payable quarterly. Each Independent Trustee will also be reimbursed for
all out-of-pocket expenses relating to attendance at such meetings. The fees
noted above are to be allocated at the discretion of the Manager among the Fund,
the California Daily Tax Free Income Fund, Inc., the Connecticut Daily Tax Free
Income Fund, Inc., the New Jersey Daily Municipal Income Fund, Inc., and the
Daily Income Fund.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (continued)
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees pursuant to the Transfer Agency
Agreement between the TA and the Fund. The TA, an affiliate of the Manager, as
transfer agent and dividend agent, receives a fee of $17.40 per account per year
or a minimum of 0.05% of the monthly average net assets of the Class A and Class
B shares of the Fund. For the year ended August 31, 2009 these fees after
waivers amounted to:
<table>
<caption>
<s> <c> <c>
Amount %
------- --
Class A shares........................... $23,033 0.05%
Class B Shares........................... 8,654 0.04%
-------
Total Transfer Agency Fees............... $31,687
=======
</table>
As of August 31, 2009, no Directors or Officers had investments in the Fund.
3. Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other
Reich & Tang Funds under specified conditions outlined in procedures adopted by
the Board of Trustees of the Fund. The procedures have been designed to ensure
that any purchase or sale of securities of the Fund from or to another fund or
portfolio that is or could be considered an affiliate by virtue of having a
common investment advisor (or affiliated investment advisors), common Trustees
and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as
defined under the procedures, each transaction is effected at the current market
price. For the year ended August 31, 2009, the Fund engaged in purchases and
sales with affiliates, none of which resulted in any gains or losses, which
amounted to:
<table>
<caption>
<s> <c>
Purchases....................................... $ 45,085,000
Sales........................................... 49,430,000
Gain/(Loss)..................................... -0-
4. Compensating Balance Arrangement and Other Transactions
Pursuant to a compensating balance arrangement, the Fund is permitted to
temporarily overdraft or leave balances in their accounts with The Bank of New
York Mellon (the "Bank"). To compensate the Bank for such activity, the Fund may
leave funds or overdraft funds as a compensating balance in the account so the
Bank or the Fund can be compensated for use of funds based upon an agreed upon
formula. Unless agreed otherwise, at the end of pre-determined three month
periods, the Fund will be charged for average overdrafts or receive an earnings
credit for average positive balances computed at the agreed upon rate on the
last day of the period.
Earnings credit, if any, are offset against the Fund's safekeeping fees which
are included in the Statement of Operations under the caption custodian
expenses.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
5. Capital Stock
At August 31, 2009, an unlimited number of shares of beneficial interest of
$.001 par value stock were authorized. Transactions in capital stock, all at
$1.00 per share, were as follows:
<table>
<caption>
Year Ended Year Ended
August 31, 2009 August 31, 2008
--------------- ---------------
Class A Shares Net Assets Shares Net Assets Shares
- -------------- -------------- -------------- ------------- -------------
<s> <c> <c> <c> <c>
Sold......................................$ 198,664,201 198,664,201 $ 173,393,480 173,393,480
Issued on reinvestment of dividends....... 275,179 275,179 804,631 804,631
Redeemed.................................. (215,727,557) (215,727,557) (166,895,866) (166,895,866)
Additional paid-in-capital*............... 1,262 -0- -0- -0-
-------------- -------------- ------------- -------------
Net increase (decrease)...................$ (16,786,915) (16,788,177) $ 7,302,245 7,302,245
============== ============== ============= =============
Class B Shares
Sold......................................$ 83,273,581 83,273,581 $ 236,671,677 236,671,677
Issued on reinvestment of dividends....... 143,423 143,423 405,614 405,614
Redeemed.................................. (124,772,017) (124,772,017) (225,952,417) (225,952,417)
Additional paid-in-capital*............... 475 -0- -0- -0-
-------------- -------------- ------------- -------------
Net increase (decrease)...................$ (41,354,538) (41,355,013) $ 11,124,874 11,124,874
============== ============== ============= =============
<FN>
* During the year ended August 31, 2009, the TA allocated amounts to the Fund
related to aged items below $50 or for which shareholder data was
unavailable.
</FN>
6. Concentration of Credit Risk
The Fund invests primarily in obligations of political subdivisions of the State
of Florida and, accordingly, is subject to the credit risk associated with the
non-performance of such issuers. Approximately 94% of these investments are
further secured, as to principal and interest, by credit enhancements such as
letters of credit, municipal bond insurance and guarantees issued by financial
institutions. The Fund maintains a policy of monitoring its exposure by
reviewing the creditworthiness of the issuers, as well as that of the financial
institutions issuing the credit enhancements, and by limiting the amount of
holdings with credit enhancements from one financial institution.
7. Tax Information
The tax character of distributions paid during the years ended August 31, 2009
and 2008 were as follows:
2009 2008
----------- -----------
Tax-exempt income............................... $ 425,372 $1,636,307
Long-term capital gain.......................... 745 -0-
At August 31, 2009, the Fund had undistributed capital gains for income tax
purposes of $1,098.
As of and during the year ended August 31, 2009, the Fund did not have a
liability for any uncertain tax positions, and did not incur any interest or
penalties. Each of the tax years in the four year period ended August 31, 2009
remains subject to examination by the Internal Revenue Service and state tax
authorities. Management's determination regarding FIN 48 may be subject to
review and adjustment at a later date based on factors, including, but not
limited to an ongoing analysis of tax laws, regulations, and interpretations
thereof.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
8. Tax Components of Net Assets
As of August 31, 2009, the components of net assets on a tax basis were as
follows:
<s> <c>
Capital Stock.................................... $ 35,836,726
Undistributed realized gain...................... 1,098
------------
Net assets....................................... $ 35,837,824
============
9. Fair Value Measurements
The Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157") on September
1, 2008. FAS 157 defines fair value as the price that the Fund would receive to
sell an asset or pay to transfer a liability in an orderly transaction between
market participants at the measurement date. FAS 157 establishes a framework for
measuring fair value and a three level hierarchy for fair value measurements
based on the transparency of inputs to the valuation of an asset or liability.
Inputs may be observable or unobservable and refer broadly to the assumptions
that market participants would use in pricing the asset or liability. Observable
inputs reflect the assumptions market participants would use in pricing the
asset or liability based on market data obtained from sources independent of the
Fund. Unobservable inputs reflect the Fund's own assumptions about the
assumptions that market participants would use in pricing the asset or liability
developed based on the best information available in the circumstances. A Fund
investment in its entirety is assigned a level based upon the inputs which are
significant to the overall valuation. Various inputs may be used to determine
the value of the Fund's investments. These inputs are summarized in three broad
levels:
Level 1 - quoted prices in active markets for identical securities.
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 - significant unobservable inputs (including the Fund's own assumptions
used to determine the fair value of investments).
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. Money
market securities may be valued using amortized cost, in accordance with the
1940 Act. Generally, amortized cost approximates the current fair value of a
security, but as the value is not obtained from a quoted price in an active
market, such securities are reflected as a Level 2.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
9. Fair Value Measurements (continued)
The following table summarizes the inputs used to value the Fund's investments
as of August 31, 2009:
Quoted Prices in Active Significant Other Significant
Markets for Identical Observable Unobservable
Assets Inputs Inputs
Assets: (Level 1) (Level 2) (Level 3)
------ --------- --------- ---------
<s> <c> <c> <c>
Equity securities $ -0- $ -0- $ -0-
Debt securities issued by the U.S. Treasury
and other U.S. government corporation
and agencies -0- -0- -0-
Debt securities issued by states of the United
States and political subdivisions of the states -0- 35,815,000 -0-
Debt securities issued by foreign government -0- -0- -0-
Corporate debt securities -0- -0- -0-
Mortgage-backed securities -0- -0- -0-
Other debt securities -0- -0- -0-
------------------ ----------------- -----------------
Total -0- 35,815,000 -0-
------------------ ----------------- -----------------
</table>
For the year ended August 31, 2009, there were no Level 1 or 3 investments.
The Fund has adopted Financial Accounting Standards Board Standard No. FAS 157-4
- - "Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability have Significantly Decreased and Identifying Transactions that are Not
Orderly" (FSP FAS 157-4).
10. Temporary Guarantee Program for Money Market Funds
While the Fund has maintained its $1.00 share price, there can be no assurance
that the Fund will be able to continue to do so. On October 2, 2008, the Board
of Trustees of the Fund approved the participation by the Fund in the U.S.
Treasury Department's Temporary Guarantee Program for Money Market Funds through
December 18, 2008 (the "Program"). Under the Program, if the Fund's market value
per share drops below $0.995 on any day while the Program is in effect,
shareholders of record on that date who also held shares in the Fund on
September 19, 2008 may be eligible to receive a payment from the Treasury upon
liquidation of the Fund, provided the Fund is liquidated soon after the day on
which the Fund's market value per share drops below $0.995. The Program
required the Fund to pay the U.S. Department of Treasury a fee equal to 0.01%
multiplied by the number of shares outstanding as of September 19, 2008, which
were 64,319,777. This expense was borne by the Fund.
On December 4, 2008, the Board of Trustees of the Fund approved the extension of
the Fund's participation in the Program. The extension provided coverage through
April 30, 2009. The extension of the Program required the Fund to pay the U.S.
Department of Treasury a fee equal to 0.015% multiplied by the number of shares
outstanding as of September 19, 2008. This expense was borne by the Fund.
On April 6, 2009, the Board of Trustees of the Fund approved a second extension
of the Fund's participation in the Program. The extension provided coverage
through September 18, 2009. The extension of the Program required the Fund to
pay the U.S. Department of Treasury a fee equal to 0.015% multiplied by the
number of shares outstanding as of September 19, 2008. This expense was borne
by the Fund.
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
11. Subsequent Events
In accordance with the adoption of SFAS No. 165, "Subsequent Events", and in
preparing these financial statements, the Fund has evaluated events and
transactions for potential recognition or disclosure through October 29, 2009,
the date the financial statements were issued. The following events have
occurred or are scheduled to occur:
On September 18, 2009 the Treasury Guarantee Program expired without renewal.
Effective September 18, 2009, the Fund ceased sales of Fund shares to new
investors. Current Fund investors may continue to purchase new shares.
On October 23, 2009, a notice and proxy statement was sent to Fund shareholders
concerning a special meeting of shareholders to be held on or about November 9,
2009 at which shareholders are being asked to vote on the approval of the
proposed liquidation and dissolution of the Fund. The proxy statement disclosed
that as of October 15, 2009, Natixis Global Asset Management, LP ("NGAM") the
parent company of the Fund's Manager, owned 55.90% interest in the Fund and
anticipates voting in favor of the liquidation and dissolution. As the majority
shareholder of the Fund, NGAM's vote will determine the outcome of the proposal.
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
================================================================================
12. Financial Highlights
<table>
<caption>
Years Ended August 31,
---------------------------------------------------------------
Class A shares 2009 2008 2007 2006 2005
- -------------- ---------- ---------- ---------- ---------- ----------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income................. 0.005 0.017 0.027 0.022 0.010
Net realized and unrealized gain (loss)
on investments...................... 0.000 0.000 -- -- 0.000
---------- ---------- ---------- ---------- ----------
Total from investment operations...... 0.005 0.017 0.027 0.022 0.010
---------- ---------- ---------- ---------- ----------
Less distributions from:
Dividends from net investment income.. (0.005) (0.017) (0.027) (0.022) (0.010)
Net realized gains on investments..... (0.000) -- -- -- 0.000
---------- ---------- ---------- ---------- ----------
Total Distributions................... (0.005) (0.017) (0.027) (0.022) (0.010)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return.............................. 0.51% 1.73% 2.71% 2.20% 1.02%
Ratios/Supplemental Data
Net assets, end of year (000's)........... $ 29,228 $ 46,014 $ 38,712 $ 83,599 $ 72,975
Ratios to average net assets:
Expenses (net of fees waived) (a)...... 1.03% 1.05% 1.00% 0.99% 0.99%
Net investment income.................. 0.53% 1.68% 2.67% 2.17% 1.04%
Management and/or administration fees waived 0.07% 0.07% 0.17% 0.16% 0.16%
Shareholder servicing fees waived...... 0.12% -- 0.00% 0.01% --
Transfer Agency account charges waived. 0.00% -- -- -- --
Expenses paid indirectly............... -- 0.00% 0.00% -- 0.00%
<fn>
(a) Includes expenses paid indirectly, if applicable.
</fn>
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
12. Financial Highlights (continued)
<table>
<caption>
Years Ended August 31,
---------------------------------------------------------------
Class B shares 2009 2008 2007 2006 2005
- -------------- ---------- ---------- ---------- ---------- ----------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income................. 0.006 0.020 0.029 0.024 0.013
Net realized and unrealized gain (loss)
on investments...................... 0.000 0.000 -- -- 0.000
---------- ---------- ---------- ---------- ----------
Total from investment operations...... 0.006 0.020 0.029 0.024 0.013
---------- ---------- ---------- ---------- ----------
Less distributions from:
Dividends from net investment income.. (0.006) (0.020) (0.029) (0.024) (0.013)
Net realized gains on investments..... (0.000) -- -- -- (0.000)
---------- ---------- ---------- ---------- ----------
Total Distributions................... (0.006) (0.020) (0.029) (0.024) (0.013)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return.............................. 0.63% 2.00% 2.98% 2.48% 1.31%
Ratios/Supplemental Data
Net assets, end of year (000's)........... $ 6,610 $ 47,965 $ 36,839 $ 49,550 $ 44,156
Ratios to average net assets:
Expenses (net of fees waived) (a)....... 0.90% 0.79% 0.74% 0.72% 0.70%
Net investment income................... 0.79% 1.94% 2.94% 2.44% 1.27%
Management and/or administration fees waived 0.07% 0.07% 0.17% 0.16% 0.16%
Transfer Agency account charges waived.. 0.01% -- -- -- --
Expenses paid indirectly................ -- 0.00% 0.00% -- 0.00%
<fn>
(a) Includes expenses paid indirectly, if applicable.
</fn>
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Florida Daily Municipal Income Fund
(the "Fund") at August 31, 2009, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2009 by correspondence with the custodian, provide a reasonable basis for
our opinion.
As discussed in Notes 1 and 11, the Board of Trustees approved the liquidation
and dissolution of the Fund, subject to shareholder approval, including the
approval of the majority shareholder, the parent company of the Manager.
PricewaterhouseCoopers LLP
New York, New York
October 29, 2009
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
ADDITIONAL INFORMATION
(UNAUDITED)
================================================================================
ADDITIONAL INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund is required to file its complete schedule of portfolio holdings with
the Securities and Exchange Commission ("SEC") on Form N-Q for its first and
third fiscal quarters. The Fund's Form N-Q is available without charge on the
SEC's website (http://www.sec.gov) or by calling the Fund toll free at (800)
433-1918. You can also obtain copies of the Fund's Form N-Q by visiting the
SEC's Public Reference Room in Washington, DC (please call the SEC at (800)
732-0330 for information on the operation of the Public Reference Room).
INFORMATION ABOUT PROXY VOTING
Information regarding the Fund's proxy voting record for the 12 month period
ending June 30 of each year is filed with the SEC on Form N-PX no later than
August 31 of each year. The Fund's Form N-PX is available without charge, upon
request, by calling the Fund at (800) 433-1918 and on the SEC's website
(http//www.sec.gov). The Fund does not presently invest in voting securities and
has therefore not adopted proxy voting policies and procedures.
LONG TERM CAPITAL GAIN/TAX-EXEMPT INCOME DISTRIBUTION
On December 22, 2008, the Fund paid a long-term capital gain distribution of
$0.000008322 per share. The Fund paid tax-exempt distributions in the amount of
$425,372 during the year ended August 31, 2009.
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT
On June 9, 2009, the Board of Trustees approved the continuance of the
Investment Management Contract. In determining whether to approve the
continuance of the Investment Management Contract, the Trustees considered the
following information:
1) The nature, extent and quality of services provided by the Manager.
The Trustees reviewed in detail the nature and extent of the services provided
by the Manager under the terms of the Fund's Investment Management Contract and
the quality of those services over the past year. The Trustees noted that the
services include managing the investment and reinvestment of the Fund's assets;
the provision of reports to the Board regarding changes in portfolio holdings,
important developments affecting the economy in general and the entities whose
securities are included in the Fund's portfolio, and the money market industry;
and the compensation of all officers, trustees and employees of the Fund who are
officers of the Manager or its affiliates. The Trustees also observed that the
Manager provides various administrative services to the Fund pursuant to the
terms of a separate Administrative Services Contract and considered the nature,
extent and quality of services provided under that agreement as well. The
Trustees evaluated these factors based on their direct experience with the
Manager and in consultation with counsel to the independent Trustees. The
Trustees concluded that the nature and extent of the services provided under the
Investment Management Contract were reasonable and appropriate in relation to
the management fee, that the level of services provided by the Manager had not
diminished over the past year and that the quality of services continues to be
high. The Trustees reviewed the personnel responsible for providing advisory
services to the Fund and concluded, based on their experience and interaction
with the Manager, that (i) the Manager was able to retain quality portfolio
managers and other personnel; (ii) the Manager exhibited a high level of
diligence and attention to detail in carrying out its advisory responsibilities
under the Investment Management Contract; (iii) the Manager was responsive to
requests of the Trustees; and (iv) the Manager had kept the Trustees apprised of
developments relating to the Fund and the industry in general. The Trustees also
focused on the Manager's reputation and long-standing relationship with the Fund
and, in particular, the experience of the Manager in advising money market
funds. The Trustees also noted the high quality of services provided by the
Manager under the Administrative Services Contract.
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
================================================================================
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT (continued)
2) The performance of the Fund and the Manager.
The Trustees reviewed the investment performance of the Fund, both on an
absolute basis and as compared to various Lipper peer group categories on a
gross basis for the one-month and one-, three-, five- and ten-year periods ended
March 31, 2009. The peer group categories included: (i) an asset-based peer
group of the Fund and five other "other states" tax-exempt money market funds,
as classified by Lipper ("performance group 1"); (ii) a competitors class peer
group, representing the Fund and one other "other states" tax-exempt money
market fund that is considered to be competitor of the Fund with similar
distribution channels ("performance group 2"); and (iii) a peer group of the
Fund and all retail and institutional "other states" tax-exempt money market
funds in the Lipper universe regardless of asset size or distribution channel
("performance universe"). These peer groups are collectively referred to as the
"Peer Groups." The Trustees used the Fund's performance against its Peer Groups
to provide objective comparative benchmarks against which they could assess the
Fund's performance. The Trustees considered those comparisons as helpful in
their assessment as to whether the Manager was obtaining for the Fund's
shareholders the performance that was available in the marketplace given the
Fund's investment objectives, strategies, limitations and restrictions. In
reviewing the Fund's performance, the Board noted the Fund's performance was
satisfactory as compared to its Peer Groups. In particular, the Trustees noted
that the Fund's ranking against its Peer Universe was in the 1st quintile for
the one-month period; the 3rd quintile for the one-year, three-year and
five-year periods; and the 4th quintile for the 10-year period. The Board also
considered the Manager's explanation that its investment strategy and process
was generally more conservative than many of its competitors.
In connection with its assessment of the performance of the Manager, the
Trustees considered the Manager's financial condition and whether it has the
resources necessary to continue to carry out its obligations under the
Investment Management Contract. The Trustees took into account, in this regard,
the payments made by the Manager from its own resources to securities brokers,
banks and financial institutions or other industry professionals or
organizations whose customers are shareholders of the Fund ("Participating
Organizations") in connection with distribution assistance and shareholder
servicing provided by the Participating Organizations. The Trustees concluded
that the Manager had the financial resources necessary to continue to perform
its obligations under the Investment Management Contract and to continue to
provide the high quality services that it had provided to the Fund to date.
3) The cost of the advisory services and the profits to the Manager and its
affiliates from the relationship with the Fund.
In connection with the Trustees' consideration of the level of the management
fee, the Trustees considered a number of factors. The Trustees compared the
level of the management fee for the Fund against the advisory fees charged to
funds in the Peer Groups and the Fund's combined management-administrative fees
against fees covering both advisory and administrative services charged to the
funds in the Peer Groups. (noting that the only difference in the Peer Groups
for expense comparison purposes from the Peer Groups for performance comparison
purposes was that the expense universe Peer Group was smaller in that it
consisted of only other retail no-load "other states" tax exempt money market
funds). The Trustees also considered comparative total fund expenses of the Fund
and the Peer Groups. The Trustees used this combined fee information and total
expense data as a guide to help assess the reasonableness of the Fund's
management fee, although they acknowledged that it was difficult to make precise
comparisons with other funds since the exact nature of services provided under
the Peer Group fund agreements is often not apparent. The Trustees also viewed
the Peer Group fee information as a whole as useful in assessing whether the
Manager was providing services at a cost that was competitive with other,
similar funds. In assessing this information, the Trustees considered both the
comparative contract rates as well as the level of the management fees after
waivers and/or reimbursements. The Board noted that the contract rates of the
Fund's management fee and combined fees (management and administrative) were
generally higher, but within the range, of that of the Peer Groups. In assessing
this information, the Trustees considered both the comparative contract rates as
well as the level of the management fees after waivers and/or reimbursements.
The Trustees also noted that the Manager did not advise or sub-advise any other
registered investment companies or other types of accounts, such as
institutional or pension accounts, with similar investment policies to the Fund.
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
ADDITIONAL INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT (continued)
3) The cost of the advisory services and the profits to the Manager and its
affiliates from the relationship with the Fund. (continued)
The Trustees concluded that the level of the management fee was reasonable in
light of these factors.
The Trustees also considered the profitability to the Manager and its affiliates
arising out of their relationships with the Fund. In this regard the Trustees
reviewed profitability data relating to the Manager and its affiliates for the
year ended December 31, 2008. The Trustees considered revenues received by the
Manager under the Investment Management Contract and Administrative Services
Contract as well as revenues received by the Manager's affiliates under the
12b-1 Plans and related agreements, Transfer Agency Agreement and revenues
derived from Reich & Tang's cash management business (e.g. checking and debit
card services that are offered by Reich & Tang to Fund shareholders through
certain Participating Organizations). The Trustees concluded that the
profitability of the Fund to the Manager and its affiliates was reasonable.
4) The extent to which economies of scale will be realized as the Fund
grows and whether fee levels reflect those economies of scale.
With respect to the Trustees' consideration of economies of scale, the Trustees
discussed with the Manager whether economies of scale would be realized by it in
its management of the Fund at higher asset levels. The Trustees also discussed
with the Manager whether certain of the Manager's costs would increase if asset
levels rise and observed that as assets rise, the Manager and its affiliates may
be required to pay increased fees to Participating Organizations. The Trustees
also reviewed the Peer Group data to assess whether the Peer Group funds had
advisory or administrative fee breakpoints and, if so, at what asset levels. The
Trustees concluded that they were unable to assess at this time whether
economies of scale would be realized if the Fund were to experience significant
asset growth. In the event there was significant asset growth in the future, the
Trustees determined to reassess whether the management fee appropriately took
into account any economies of scale that had been realized as a result of that
growth.
5) Other Factors.
In addition to the above factors, the Trustees acknowledged the importance of
the ability of the Manager's affiliate, the distributor, to market the Fund
through its distribution networks, including its customer service and
administration system with banks and bank customers.
Based on a consideration of all these factors in their totality, the Trustees,
including all of the disinterested Trustees, determined that the Fund's
management fee was fair and reasonable with respect to the quality of services
that the Manager provides and in light of the other factors described above that
the Trustees deemed relevant. The Trustees based their decision on evaluations
of all these factors as a whole and did not consider any one factor as
all-important or controlling. The disinterested Trustees were also assisted by
the advice of independent counsel in making this determination.
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Trustees and Officers Information
August 31, 2009(1)
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office and During Past Portfolios in Directorships
and Age Fund Length of 5 Years Fund Complex held by
Time Overseen by Director
Served(3) Director
- ---------------------- --------- -------------- ----------------------------------- ---------------- -------------------
Disinterested Trustees:
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
Albert R. Dowden, Trustee Since 2008 Corporate Director/Trustee. Director/Trustee Director/Trustee
Age 67 of eight for Natures
portfolios Sunshine
Products, Inc.,
Annuity & Life Re
(Holdings) Ltd.,
Boss Group, Ltd.,
Homeowners of
America Holding
Corporation and
AIM Funds.
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
Carl Frischling, Trustee Since 2008 Partner of Kramer Levin Naftalis Director/Trustee Director of AIM
Esq., & Frankel LLP (a law firm) with of eight Funds.
Age 72 which he has been associated with portfolios
since 1994.
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
Edward A. Trustee Since 2006 Certified Public Accountant and Director/Trustee Trustee of the
Kuczmarski, Partner of Crowe Horwath LLP of ten Empire Builder
Age 59 (formerly Hays & Company before portfolios Tax Free Bond Fund
merger in 2009) since 1980. and Director of
ISI Funds.
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
William Lerner, Trustee Since 2008 Self-employed consultant to Director/Trustee Director of MTM
Esq., business entities and of eight Technologies, Inc.
Age 73 entrepreneurs for corporate portfolios
governance and corporate
secretarial services, and for
legal and securities matters.
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
Dr. W. Giles Trustee Since 1994 Professor Emeritus of Business Director/Trustee None
Mellon, Administration in the Graduate of nine
Age 78 School of Management, Rutgers portfolios
University with which he has been
associated with since 1966.
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
James L. Schultz, Trustee Since 2008 Self-employed as a consultant. Director/Trustee Director of
Age 73 of eight Computer
portfolios Research, Inc.
- -------------------- ----------- -------------- ----------------------------------- ---------------- -------------------
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
ADDITIONAL INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
<table>
<caption>
Trustees and Officers Information (continued)
August 31, 2009(1)
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office and During Past Portfolios in Directorships
and Age Fund Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Director
Director
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Disinterested Trustees (continued):
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Robert Straniere, Trustee Since 1994 Owner, Straniere Law Firm since 1980, Director/TrusteDirector of
Esq., Age 68 NYS Assemblyman from 1981 to 2004. of nine Sparx Japan
Partner, Gotham Global Group since portfolios Funds
June, 2005. President, NYC Hot Dog Co.,
since November, 2005. Counsel at Fisher
& Fisher from 1995 to 2006.
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Dr. Yung Wong, Trustee Since 1994 Managing Director of Abacus Associates, Director/TrusteDirector of
Age 70 an investment firm, since 1996. of nine KOAH, Inc.
portfolios and
Director of
the Senior
Network.
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Trustees and Officers Information (continued)
August 31, 2009(1)
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office and During Past Portfolios in Directorships
and Age Fund Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Director
Director
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Disinterested Trustees (continued):
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Steven W. Duff, Trustee(4) Since 1994 President, Chief Executive Officer and Director/Trustee None
Age 55 Director of Reich & Tang Asset of nine
Management, LLC ("RTAM, LLC"), a portfolios
registered Investment Advisor and Chief
President 1994 to 2007 Investment Officer of the Mutual Funds
and Division of RTAM, LLC. Mr. Duff has been
Trustee associated with RTAM, LLC since 1994.
Mr. Duff is also Director/Trustee of five
other funds in the Reich & Tang Fund
Complex. Prior to December 2007 Mr. Duff
was President of the Fund and President
of eight other funds in the Reich & Tang
Fund Complex, Principal Executive Officer
of Delafield Fund, Inc., and President
and Chief Executive Officer of Tax Exempt
Proceeds Fund, Inc. Mr. Duff also serves
as a Director of Reich & Tang Services,
Inc. and Director, Chief Executive
Officer and President of Reich & Tang
Distributors, Inc.
- ------------------- ----------- -------------- ------------------------------------------- --------------- -------------
Michael P. Lydon, President Since 2007 Executive Vice President of RTAM, LLC and Director/Trustee None
Age 46 and President and Chief Executive Officer of of eight
Trustee the Mutual Funds division of RTAM, LLC. portfolios
Associated with RTAM, LLC since January
2005. Mr. Lydon was Vice President at
Automatic Data Processing from July 2000
to December 2004. Mr. Lydon is also
President and Director/Trustee of four
other funds in the Reich & Tang Fund
Complex, President to New York Daily Tax
Vice 2005 - 2007 Free Income Fund, Inc., Principal
President Executive Officer of Delafield Fund,
Inc., and President and Chief Executive
Officer of Tax Exempt Proceeds Fund,
Inc. Mr. Lydon also serves as President,
Chief Executive Officer and Director for
Reich & Tang Services, Inc. and Executive
Vice President and Director of Reich &
Tang Distributors Inc. Prior to 2007, Mr.
Lydon was Vice President of eleven other
Funds in the Reich & Tang Fund Complex.
- ------------------- ----------- -------------- ------------------------------------------- --------------- -------------
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
ADDITIONAL INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
<table>
<caption>
Trustees and Officers Information (continued)
August 31, 2009(1)
- -------------------- ----------- ------------- ------------------------------------------- --------------- -------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office and During Past Portfolios in Directorships
and Age Fund Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Director
Director
- -------------------- ----------- ------------- ------------------------------------------- --------------- -------------
Disinterested Trustees (continued):
- -------------------- ----------- ------------- ------------------------------------------- --------------- -------------
Mia Bottarini, Vice Since 2008 Vice President of RTAM LLC. Ms. Bottarini N/A N/A
Age 43 President is also Vice President and Assistant
and Treasurer of seven other funds in the
Assistant Reich & Tang Complex. Ms. Bottarini has
Treasurer been associated with RTAM LLC and its
predecessors since June 1984.
- -------------------- ----------- ------------- ------------------------------------------- --------------- -------------
Christopher BrancazioChief Since 2007 Senior Vice President, Chief Compliance N/A N/A
Age 43 Compliance Officer and AML Officer of RTAM, LLC since
Officer and September 2007. Mr. Brancazio is also
AML Officer Chief Compliance Officer of seven other
funds in the Reich & Tang Fund Complex.
From February 2007 to August 2007, Mr.
Brancazio was a Compliance Officer at Bank
of New York Asset Management. From March
2002 to February 2007 Mr. Brancazio served
as Vice President, Chief Compliance
Officer, and AML Officer of Trainer
Wortham & Co. Inc., and the Trainer
Wortham Mutual Funds. Mr. Brancazio also
serves as Senior Vice President, Chief
Compliance Officer and AML Officer of
Reich & Tang Services, Inc. and Reich &
Tang Distributors, Inc.
- -------------------- ----------- ------------- ------------------------------------------- --------------- -------------
Richard De Sanctis, Vice Since 2005 Executive Vice President and Chief N/A N/A
Age 52 President Operating Officer of RTAM, LLC.
Associated with RTAM, LLC since 1990. Mr.
De Sanctis is also Vice President of
seven other funds in the Reich & Tang
Treasurer 1993 to 2004 Fund Complex and serves as Executive Vice
and President, Chief Financial Officer, Chief
Assistant Operating Officer and Director of Reich &
Secretary Tang Distributors, Inc. and serves as
Executive Vice President, Chief Operating
Officer and Director of Reich & Tang
Services, Inc. Prior to December 2004,
Mr. De Sanctis was Treasurer and
Assistant Secretary of eleven funds in
the Reich & Tang Fund Complex and Vice
President, Treasurer and Assistant
Secretary of Cortland Trust, Inc.
- -------------------- ----------- ------------- ------------------------------------------- --------------- -------------
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Trustees and Officers Information (continued)
August 31, 2009(1)
- ------------------- ------------ -------------- ----------------------------------------- --------------- --------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office and During Past Portfolios in Directorships
and Age Fund Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Director
Director
- ------------------- ------------ -------------- ----------------------------------------- --------------- --------------
Disinterested Trustees (continued):
- ------------------- ------------ -------------- ----------------------------------------- --------------- --------------
Chris Gill, Vice Since 2008 Senior Vice President and Assistant N/A N/A
Age 44 President Secretary of RTAM LLC. Mr. Gill has
been associated with RTAM LLC and its
predecessor since February 1994. Mr.
Gill is also Vice President of seven
other funds in the Reich & Tang
Complex. Mr. Gill is also a Senior Vice
President and Director of Reich & Tang
Services, Inc.
- ------------------- ------------ -------------- ----------------------------------------- --------------- --------------
Joseph Jerkovich, Treasurer Since 2008 Senior Vice President and Chief N/A N/A
Age 41 and Financial Officer of RTAM, LLC and of
Assistant Reich & Tang Services, Inc. Associated
Secretary with RTAM, LLC since September 2004.
Mr. Jerkovich is Treasurer and Assistant
Vice Secretary of seven other funds in the
President 2007 to 2008 Reich & Tang Fund Complex. From 2007 to
2008 Mr. Jerkovich was Vice President of
eight Funds in the Reich & Tang Fund
Complex. Mr. Jerkovich was Vice
President and Chief Investment Officer
at Winklevoss Consulting from May 2002
to June 2004. Mr. Jerkovich is also
Senior Vice President and Controller of
Reich & Tang Distributors, Inc.
- ------------------- ------------ -------------- ----------------------------------------- --------------- --------------
Christine Manna, Secretary Since 2007 Vice President and Secretary of RTAM, N/A N/A
Age 39 LLC. Ms. Manna is also Secretary of
seven other funds in the Reich & Tang
Complex. Ms. Manna has been associated
with RTAM, LLC and its predecessors
since June 1995. Ms. Manna is also a
Vice President and Assistant Secretary
of Reich & Tang Services, Inc. and
Reich & Tang Distributors, Inc.
- ------------------- ------------ -------------- ----------------------------------------- --------------- --------------
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
ADDITIONAL INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
<table>
<caption>
Trustees and Officers Information (continued)
August 31, 2009(1)
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office and During Past Portfolios in Directorships
and Age Fund Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Director
Director
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Disinterested Trustees (continued):
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
Robert Rickard, Vice Since 2007 Senior Vice President of RTAM LLC. N/A N/A
Age 40 President Associated with RTAM, LLC since
December 1991. Mr. Rickard is also Vice
President of seven other funds in the
Reich & Tang Fund Complex.
- -------------------- ----------- ---------------- ----------------------------------------- -------------- -------------
<fn>
(1) The Statement of Additional Information includes additional information
about Florida Daily Municipal Income Fund, Inc. (the "Fund")
trustees/officers and is available, without charge, upon request by calling
the Fund's transfer agent at (800) 433-1918.
(2) The address for each of the above trustees/officers of the Fund is Reich &
Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.
(3) Each Trustee will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Trustee and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Trustee resigns or retires, or a Trustee is
removed by the Board of Trustee s or shareholders, in accordance with the
Fund's Articles of Incorporation, as amended, and Amended and Restated
By-Laws. Each officer will hold office for an indefinite term until the
date he or she resigns or retires or until his/her successor is elected and
qualifies.
(4) Steven W. Duff and Michael P. Lydon are deemed interested persons of the
Fund due to their affiliation with RTAM, LLC, the Fund's investment
advisor.
</fn>
</table>
- --------------------------------------------------------------------------------
<page>
- --------------------------------------------------------------------------------
- ------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not
authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an FLORIDA
effective prospectus, which includes information DAILY
regarding the Fund's objectives and policies, MUNICIPAL
experience of its management, marketability of INCOME
shares, and other information. FUND
- ------------------------------------------------------
Florida Daily Municipal Income Fund
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
Custodian
The Bank of New York Mellon
2 Hanson Place, 7th Floor
Brooklyn, New York 11217
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc. Annual Report
600 Fifth Avenue August 31, 2009
New York, New York 10020
Distributor
Reich & Tang Distributor, Inc
600 Fifth Avenue
New York, New York 10020
FL8/09A
- --------------------------------------------------------------------------------
Item 2: Code of Ethics
The registrant has adopted a Code of Ethics applicable to its Principal
Executive and Senior Financial Officers. Please note that this Code was last
updated on June 5, 2008 to reflect a change in the Principal Financial Officer
of the Fund. To date there have been no waivers granted from a provision of the
Code of Ethics for a key officer.
Item 3: Audit Committee Financial Expert
The registrant's Board of Trustees has determined that there is an audit
committee financial expert serving on its audit committee, Edward A. Kuczmarski,
who is "independent," as defined in the instructions to this Item.
Item 4: Principal Accountant Fees and Services
FYE 8/31/2009 FYE 8/31/2008
4(a) Audit Fees $33,500 $32,000
4(b) Audit Related Fees $ 0 $ 0
4(c) Tax Fees $ 4,350 $ 4,000
4(d) All Other Fees $ 0 $ 0
4(e)(1) - The audit committee has adopted pre-approval policies and procedures
whereby the audit committee has pre-approved the provision of certain enumerated
tax services to the registrant by the registrant's principal accountant to the
extent the fee is less than $5,000 per occurrence.
4(e)(2) None
4(f) Not applicable.
4(g) $4,350 and $58,475, respectively, were the amount of non-audit fees that
were billed by the registrant's accountant for services rendered to (i) the
registrant, and (ii) the registrant's investment adviser and any control person
of the adviser that provides ongoing services to the registrant for the fiscal
year ended August 31, 2009. $4,000 and $52,950, respectively, were the amount of
non-audit fees that were billed by the registrant's accountant for services
rendered to (i) the registrant, and (ii) the registrant's investment adviser and
any control person of the adviser that provides ongoing services to the
registrant for the fiscal year ended August 31, 2008.
Tax fees for the fiscal year-end August 31, 2009, includes fees billed for the
presentation and review of tax returns. Tax fees for the fiscal year-end August
31, 2008, includes fees billed for the preparation and review of tax returns.
4(h) The registrant's audit committee has considered whether its principal
accountant's provision of non-audit services that were rendered to the
registrant's investment adviser, and any control persons of the investment
adviser that provides ongoing services to the registrant, that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is
compatible with maintaining the principal accountant's independence.
Item 5: Audit Committee of Listed Registrants
Not applicable.
Item 6: Schedule of Investments
Schedule of Investments in securities of unaffiliated issuers is included under
Item 1.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8: Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable.
Item 9: Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors that were implemented
after the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item 9.
Item 10: Controls and Procedures
(a) The registrant's Principal Executive Officer and Principal Financial
Officer have evaluated the design and operation of the registrant's
disclosure controls and procedures within 90 days of this filing and
have concluded that the registrant's disclosure controls and procedures
were effective in ensuring that information required to be disclosed by
the registrant in this Form N-CSR was recorded, processed, summarized
and reported on a timely basis.
(b) There were no changes in the registrant's internal controls over
financial reporting that occurred during the second fiscal quarter
covered by this report that have materially affected, or are reasonably
likely to affect, the registrant's internal controls over financial
reporting.
Item 11: Exhibits
(a)(1) Code of Ethics.
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer, under Rule 30a-2 of the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer, under Section 906 of the Sarbanes-Oxley Act of 2002 and 18
U.S.C. ss.1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized. (Registrant)
Florida Daily Municipal Income Fund
By (Signature and Title)*/s/ Christine Manna
Christine Manna, Secretary
Date: November 5, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Michael P. Lydon
Michael P. Lydon, President
Date: November 5, 2009
By (Signature and Title)* /s/ Joseph Jerkovich
Joseph Jerkovich, Treasurer
Date: November 5, 2009
* Print the name and title of each signing officer under his or her signature.