<PAGE> 1
<TABLE>
<S> <C>
Table of Contents
OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4
PORTFOLIO AT A GLANCE
CREDIT QUALITY 5
TWELVE-MONTH DIVIDEND HISTORY 5
TOP FIVE SECTORS 6
NET ASSET VALUE AND MARKET PRICE 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 11
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS 12
FINANCIAL STATEMENTS 15
NOTES TO FINANCIAL STATEMENTS 20
REPORT OF INDEPENDENT AUDITORS 23
DIVIDEND REINVESTMENT PLAN 24
TRUST OFFICERS AND IMPORTANT ADDRESSES 26
RESULTS OF SHAREHOLDER VOTES 27
</TABLE>
Our generations
of money-
management
experience
may help you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 2
OVERVIEW
LETTER TO SHAREHOLDERS
November 20, 2000
Dear Shareholder,
The first three quarters of 2000 proved to be especially volatile, with all of
the major markets declining in the spring and spending the following months
trying to recover. To manage one's portfolio during such unpredictable times
requires investment-management experience, and the following pages should give
you some insight into how we have performed in this difficult environment.
In this report, the portfolio managers will explain how your investment
performed during the reporting period and describe the strategies they used to
manage your trust during that span. The report will also show you how your
investment has performed over time. Helpful charts summarize the trust's largest
investments, and you can examine the complete portfolio to see all of your
trust's holdings as of the end of your trust's reporting period.
At Van Kampen, we place a high priority on providing you and
your financial advisor with the information you need to help
you monitor your investments during all types of markets. With
nearly four generations of investment-management experience,
we've been around long enough to understand that by investing
with Van Kampen you're entrusting us with much more than your
money. Your investments may help make it possible to afford your next house,
keep up with rising college costs, or enjoy a comfortable retirement.
No matter what your reasons for investing, we're thankful that you've chosen to
place your investments with Van Kampen. We will continue to apply our
generations of money-management experience to helping you pursue life's true
wealth.
Sincerely,
[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments
1
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
ECONOMIC GROWTH REMAINED RELATIVELY STRONG DURING THE REPORTING PERIOD,
UNDERPINNED BY LOW UNEMPLOYMENT AND RISING PRODUCTIVITY, YET THERE WERE SIGNS
THAT A HEALTHY SLOWDOWN WAS UNDERWAY. GROSS DOMESTIC PRODUCT, THE PRIMARY
MEASURE OF ECONOMIC GROWTH, INCREASED AT A 2.4 PERCENT ANNUALIZED RATE FOR THE
THIRD QUARTER OF 2000. FOLLOWING RELATIVELY MILD FIRST- AND SECOND-QUARTER DATA,
THIS THIRD-QUARTER FIGURE OFFERS FURTHER EVIDENCE THAT GROWTH MIGHT BE SETTLING
BACK TO A MORE MODERATE AND SUSTAINABLE PACE THAN ITS RAPID RATE IN LATE 1999.
CONSUMER SPENDING AND EMPLOYMENT
CONCERNS ABOUT INFLATION REMAINED AT BAY DUE IN PART TO A GRADUAL SLOWDOWN IN
CONSUMER SPENDING. RISING INTEREST RATES, HIGHER ENERGY COSTS, AND A
DISAPPOINTING STOCK MARKET BEGAN TO TEMPER RETAIL SALES, WHICH LEVELED OFF FROM
THE BLISTERING PACE OF LATE 1999 AND EARLY 2000. AND WHILE CONSUMER SPENDING WAS
BRISK, THE OVERALL TREND HAS BEEN DOWNWARD THIS YEAR.
THE JOBLESS RATE CONTINUED TO BE EXTREMELY LOW BY HISTORICAL STANDARDS, BUT A
RECENT DECLINE IN NEW JOB CREATION SUPPORTS THE POPULAR BELIEF THAT THE ECONOMY
IS MODERATING. ALTHOUGH EMPLOYER COSTS SUCH AS WAGES AND BENEFITS WERE RISING AT
THE END OF 1999 AND THE BEGINNING OF 2000, OVER THE PAST SIX MONTHS THE
EMPLOYMENT COST INDEX HAS SHOWN MARKED DECELERATION, WHICH SHOULD HELP EASE
INFLATION CONCERNS.
INTEREST RATES AND INFLATION
THE FEDERAL RESERVE BOARD (THE FED) RAISED INTEREST RATES FOUR TIMES DURING THE
LAST 12 MONTHS IN AN EFFORT TO WARD OFF INFLATION BY CURBING ECONOMIC GROWTH.
OVER THE SAME PERIOD, THE CONSUMER PRICE INDEX ROSE 3.5 PERCENT, WHICH INDICATED
THAT INFLATION GENERALLY REMAINS UNDER CONTROL.
THE FED HAS ACKNOWLEDGED THE RISK OF RISING INFLATION AND WILL STAY ON GUARD, AS
RISING ENERGY COSTS AND LOW UNEMPLOYMENT THREATEN TO PROPEL THIS FIGURE UPWARD
IN THE COMING MONTHS. AS LONG AS INFLATION IS CONTAINED AND THE PACE OF ECONOMIC
GROWTH REMAINS FAVORABLE, THE FED IS LIKELY TO HOLD INTEREST RATES STEADY IN THE
SHORT TERM, WHICH COULD HELP STABILIZE THE STOCK AND BOND MARKETS.
2
<PAGE> 4
U.S. GROSS DOMESTIC PRODUCT
SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998--September 30, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.60
Sep 00 2.40
</TABLE>
Source: Bureau of Economic Analysis
INTEREST RATES AND INFLATION
(October 31, 1998--October 31, 2000)
[LINE GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Oct 98 5.00 1.50
4.75 1.50
4.75 1.60
Jan 99 4.75 1.70
4.75 1.60
4.75 1.70
Apr 99 4.75 2.30
4.75 2.10
5.00 2.00
Jul 99 5.00 2.10
5.25 2.30
5.25 2.60
Oct 99 5.25 2.60
5.50 2.60
5.50 2.70
Jan 00 5.50 2.70
5.75 3.20
6.00 3.70
Apr 00 6.00 3.00
6.50 3.10
6.50 3.70
Jul 00 6.50 3.70
6.50 3.30
6.50 3.50
Oct 00 6.50 3.50
</TABLE>
Interest rates are represented by the closing midline federal funds target rate
on the last day of each month. Inflation is indicated by the annual percent
change of the Consumer Price Index for all urban consumers at the end of each
month.
3
<PAGE> 5
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS
(as of October 31, 2000)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
<S> <C> <C>
AMEX Ticker Symbol VOF
-----------------------------------------------------------------------
One-year total return based on market price(1) 8.08%
-----------------------------------------------------------------------
One-year total return based on NAV(2) 9.81%
-----------------------------------------------------------------------
Distribution rate as a % of closing common stock
price(3) 6.26%
-----------------------------------------------------------------------
Taxable-equivalent distribution rate as a % of closing
common stock price(4) 9.78%
-----------------------------------------------------------------------
Net asset value $13.86
-----------------------------------------------------------------------
Closing common stock price $11.6875
-----------------------------------------------------------------------
One-year high common stock price (08/25/00) $12.5625
-----------------------------------------------------------------------
One-year low common stock price (07/03/00) $10.6875
-----------------------------------------------------------------------
Preferred share rate(5) 4.250%
-----------------------------------------------------------------------
</TABLE>
(1) Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions
for the period in accordance with the Trust's dividend reinvestment plan,
and sale of all shares at the closing common stock price at the end of the
period indicated.
(2) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3) Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4) The taxable-equivalent distribution rate is calculated assuming a 36%
federal income tax bracket.
(5) See "Notes to Financial Statements" footnote #4, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject
to the federal alternative minimum tax (AMT).
Past performance is no guarantee of future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust
shares, when sold, may be worth more or less than their original cost.
4
<PAGE> 6
PORTFOLIO AT A GLANCE
CREDIT QUALITY
(as a percentage of long-term investments)
<TABLE>
<CAPTION>
As of October 31, 2000
<S> <C> <C>
- AAA/Aaa............ 81.6%
- AA/Aa.............. 7.5%
- A/A................ 6.4%
- BBB/Baa............ 4.5%
[PIE CHART]
<CAPTION>
As of October 31, 1999
<S> <C> <C>
- AAA/Aaa............ 81.1%
- AA/Aa.............. 4.9%
- A/A................ 3.8%
- BBB/Baa............ 10.2%
[PIE CHART]
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
TWELVE-MONTH DIVIDEND HISTORY
(for the period ended October 31, 2000, for common shares)
[BAR GRAPH]
<TABLE>
<CAPTION>
DIVIDENDS
---------
<S> <C>
11/99 0.061
12/99 0.061
1/00 0.061
2/00 0.061
3/00 0.061
4/00 0.061
5/00 0.061
6/00 0.061
7/00 0.061
8/00 0.061
9/00 0.061
10/00 0.061
</TABLE>
The dividend history represents past performance of the trust and is no
guarantee of the trust's future dividends.
5
<PAGE> 7
TOP FIVE SECTORS
(as a percentage of long-term investments)
[INVESTMENT PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
<S> <C> <C>
Public Education 20.00 21.60
Health Care 14.60 26.20
Transportation 11.70 8.90
Higher Education 8.40 6.90
Water & Sewer 6.60 7.00
</TABLE>
NET ASSET VALUE AND MARKET PRICE
(based upon quarter-end values--July 1993 through October 2000)
[INVESTMENT PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NET ASSET VALUE MARKET PRICE
--------------- ------------
<S> <C> <C>
7/93 14.8400 15.0000
15.2200 14.3750
12/93 15.0800 13.6250
12.6300 13.5000
12.5800 12.5000
12.2800 10.5000
12/94 11.8700 9.8750
13.1800 11.2500
13.3800 11.5000
13.6800 11.6250
12/95 14.6200 12.0000
13.8100 12.5000
13.6700 12.2500
13.9500 12.3750
12/96 14.1700 12.6250
13.7800 12.6250
14.2400 13.0000
14.6800 13.2500
12/97 15.0300 13.7500
15.0000 13.8750
14.9600 13.7500
15.3300 14.3125
12/98 15.1200 14.9375
14.9400 14.4375
14.2600 13.1250
13.7100 12.1250
12/99 13.1100 11.6250
13.4200 11.7500
13.4700 11.7500
13.6800 11.8125
10/00 13.8600 11.6875
</TABLE>
The solid line above represents the trust's net asset value (NAV), which
indicates overall changes in value among the trust's underlying securities. The
trust's market price is represented by the dashed line, which indicates the
price the market is willing to pay for shares of the trust at a given time.
Market price is influenced by a range of factors, including supply and demand
and market conditions.
6
<PAGE> 8
[PHOTO]
Q&A WITH YOUR PORTFOLIO MANAGERS
WE RECENTLY SPOKE WITH THE PORTFOLIO MANAGER OF THE VAN KAMPEN FLORIDA
MUNICIPAL OPPORTUNITY TRUST ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED
THE MARKETS AND INFLUENCED THE TRUST'S RETURN DURING THE 12 MONTHS ENDED OCTOBER
31, 2000. THOMAS M. BYRON, PORTFOLIO MANAGER, HAS MANAGED THE TRUST SINCE
JANUARY 1997 AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE 1981. THE FOLLOWING
DISCUSSION REFLECTS HIS VIEWS ON THE TRUST'S PERFORMANCE.
Q WHAT WERE THE MOST IMPORTANT
DEVELOPMENTS IN THE FIXED-INCOME MARKETS AND HOW DID THE TRUST PERFORM
DURING THE REPORTING PERIOD?
A The key factor in the market's
behavior during the past fiscal year has been generally rising interest rates,
especially at the short end of the maturity spectrum. This rate environment
stemmed from the Federal Reserve Board's commitment to keeping inflation in
check by ratcheting up short-term interest rates whenever the economy threatened
to overheat and push the prices of goods and services higher. In fact, the Fed
increased short-term rates four times during the reporting period, with the last
hike occurring in May 2000.
The strength of the economy, and the accompanying Federal Reserve activity,
caused interest rates to rise across the board for the first half of the
reporting period. In the spring of 2000, the bond market rallied as investors
began to anticipate an end to the Fed's rate-tightening cycle. By the end of
October, short-term rates remained high, but rates in the intermediate to long
maturity segments of the market had actually declined from the levels we had
seen at the start of the reporting period.
Because the trust is leveraged, higher short-term rates placed pressure on
the trust's dividend, as the increased cost of borrowing cut into the fund's
earnings. However, the relatively high long-term rates that prevailed for part
of the reporting period allowed the trust to add new holdings at attractive
yields, partially offsetting the decline in income that occurred as short-term
rates climbed.
After the steady increase in short-term interest rates over the past year,
we have seen a more stable environment in recent months, as the Fed has reacted
to slower economic growth, more efficient workforce output, and moderate price
gains by keeping target lending rates unchanged. The inflation rate, as measured
by the consumer price index, peaked in March 2000 at 3.8 percent and has since
dropped back below the 3 percent level.
7
<PAGE> 9
At the state level, Florida's economy continues to outperform the U.S.
economy in terms of employment and income growth, bolstered by increased
international trade, strong demand for tourism, and steady immigration. Tourism
remains the dominant economic engine, but the state economy is increasingly
diversifying in the areas of trade, services, and technology.
Supply in the Florida municipal market was sharply lower from levels of a
year ago, as higher interest rates have made it unattractive for municipalities
to retire existing debt. At the same time, strong economic activity has allowed
many municipalities to generate a budget surplus, enabling them to cover
spending that would normally require municipal bond financing. Based on the
budget for the 1999 fiscal year, for example, the state's fiscal position
appears strong, with increasing reserve levels. Still, Florida has been the
fourth-largest issuer of municipal debt this year (through September 2000), even
though issuance was down 11.5 percent to $8.4 billion.
Because demand has remained strong, the lack of new issuance in the primary
market helped support bond prices, although the somewhat limited selection of
available securities required us to be very selective in choosing new bonds for
the trust's portfolio. In many cases, we found attractive values in the
secondary market, buying and selling bonds that have been in the market for a
while.
The trust continued to provide shareholders with an attractive level of
income. Its monthly dividend of $0.061 per share translates to a distribution
rate of 6.26 percent based on the trust's closing market price on October 31,
2000. Because income from the trust is exempt from federal income taxes, this
distribution rate is equivalent to a yield of 9.78 percent for an investor in
the 36 percent federal income tax bracket.
For the 12 months through October 31, 2000, the trust produced a total
return of 8.08 percent based on market price. This reflects an increase in
market price from $11.5000 per share on October 31, 1999, to $11.6875 per share
on October 31, 2000. Of course, past performance is no guarantee of future
results. As a result of recent market activity, current performance may vary
from the figures shown. By comparison, the Lehman Brothers Florida Municipal
Bond Index posted a total return of 8.14 percent for the same period. This
broad-based, unmanaged index, which reflects the general performance of Florida
municipal securities with maturities greater than five years, does not reflect
any commissions or fees that would be paid by an investor purchasing the
securities it represents. Such costs would lower the performance of the index.
It is not possible to invest directly in an index. For additional performance
results, please refer to the chart and footnotes on page 4.
Q HOW DID YOU REACT TO THE
MARKET CONDITIONS YOU ENCOUNTERED IN MANAGING THE TRUST?
A Much of the activity in the trust's
portfolio during the reporting period was guided by a strategic direction we
adopted in February of 2000 and have gradually implemented since then. It
8
<PAGE> 10
was our goal to lengthen the duration of the portfolio (a measure of its
sensitivity to changes in interest rates) so that it more closely mirrored the
benchmark indicators we use to gauge the trust's performance. At the time, we
felt the market had solid upside potential, and a longer duration would allow
the trust to more fully participate in the gains of the market if it rallied
over time.
As we began implementing this strategy, we caught the market at a good time.
Early in the year, the market presented us with attractive yields on
long-duration securities, particularly those priced at deep discounts. We
purchased some of these bonds and sold prerefunded securities and bonds with
short calls--many of which were scheduled to be called or refunded within the
next year or two. In effect, this strategy helped capture additional par value
and the potential for capital appreciation, all while achieving the desired
effect of extending the portfolio's duration. This strategy was a positive in
terms of the trust's performance, especially during the market rally that
occurred in the second and third quarters of 2000.
Q HOW DID THIS STRATEGY AFFECT THE
COMPOSITION OF THE PORTFOLIO?
A A by-product of this market
activity--and the trust's positioning within the market--was an increase in the
overall credit quality of the portfolio. Typically, the rallies were strongest
at the high end of the quality spectrum, so these securities saw solid price
gains while the valuations of nonrated and lower-rated securities, such as those
rated BBB or lower, remained fairly flat or declined.
Over the course of the reporting period, the portfolio composition came to
reflect this trend, as the trust's allocation to securities rated AAA or AA
increased to 89.1 percent of long-term investments (up from 86 percent at the
start of the period), and its BBB allocation declined to 4.5 percent (down from
10.2 percent). In general, our bias toward high-quality securities was a boost
to portfolio performance.
The trust remained well diversified, though focused on quality, across
various industry sectors and issuers. The portfolio's allocation to health-care
bonds was reduced to 14.6 percent of long-term investments, down from 26.2
percent, and its position in industrial revenue bonds was reduced to 3 percent,
down from 8 percent. Much of this was due to our decision to increase the
diversification of the trust, reducing positions that we considered may be too
big for the portfolio at this time. Also, the health-care sector has had its
share of credit-quality concerns, so we selectively sold issues that we thought
would not meet our expectations for long-term performance. We also initiated a
few transactions for tax purposes, seeking to offset taxable gains for
shareholders.
Q WHAT DO YOU SEE AHEAD FOR
THE ECONOMY AND THE MUNICIPAL MARKET?
A The outlook for the municipal
bond market will be closely tied to the
9
<PAGE> 11
prospects of the U.S. economy and the Fed's reaction to key economic indicators.
While interest rates have been fairly steady of late, the Fed's next move will
be based on whether inflation shows signs of heating up. We believe inflation
appears to be under control at this time, but the Fed will be watching economic
growth statistics, the labor market, and the prices of key commodities, such as
crude oil, for signs of inflationary pressures.
Clearly, the direction of interest rates will be determined by the Fed's
reaction to inflationary signals, so we feel it would be imprudent to make a bet
on the direction of interest rates in terms of how we position the trust.
Consequently, we will seek to maintain a neutral stance with respect to the
portfolio's duration in the near term.
We believe the demand for municipal securities should remain healthy. This
will hopefully bode well for the trust, although it will be competing with a
range of investment options, such as individual bonds, mutual funds, and managed
accounts, for investor assets. Also, the stock market may continue to attract
assets away from bonds, depending on its return prospects and price volatility.
Bond supply should remain tight, helping to support prices, as
municipalities continue to operate with budget surpluses that can be used for
construction projects, education funding, road improvements, and other
expenditures typically financed by new bond issuance. The credit outlook for
state and local government bonds may continue to improve with sound financial
performance based on the strong underlying state economy. Favorable trends
include increasing population, low unemployment rates, and a diversifying
economic base.
We will continue to search for securities that have the potential to enhance
the trust's long-term performance. If our analysis indicates that it would be
advantageous to sell certain bonds--or as bonds are prerefunded, mature
according to schedule, or are called from the portfolio--we will strive to
replace them with bonds that offer the best relative value available at the
time.
10
<PAGE> 12
GLOSSARY OF TERMS
A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.
CALL FEATURE: Allows a bond issuer to buy back a bond on specific dates at set
prices before the bond's maturity date. These dates and prices are set when the
bond is issued. To compensate the bondholder for the potential loss of income
and ownership, a bond's call price is usually higher than the face value of the
bond. Bonds are usually called when interest rates drop so significantly that
the issuer can save money by issuing new bonds at lower rates.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has more
potential to appreciate in price than a par bond does.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest-rate
movements on its price. Typically, funds with shorter durations perform better
in rising-rate environments, while funds with longer durations perform better
when rates decline.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1999
and maturing in 2009 is a 10-year bond. Typically, short-term bonds mature in
five years or less, intermediate-term bonds mature in five to ten years, and
long-term bonds mature after ten years.
PREREFUNDING: The process of issuing new bonds to refinance an outstanding bond
issue prior to its maturity or call date. The proceeds from the new bonds are
generally invested in U.S. government securities. Prerefunding typically occurs
when interest rates decline and an issuer replaces its higher-yielding bonds
with current lower-yielding issues.
SECONDARY MARKET: A market where securities are traded after they are initially
offered.
YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower credit ratings.
The spread is the difference in yield between bonds with short versus long
maturities or the difference in yield between high-quality bonds and
lower-quality bonds.
11
<PAGE> 13
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS
October 31, 2000
THE FOLLOWING PAGES DETAIL YOUR TRUST'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 98.3%
FLORIDA 91.5%
$1,000 Bay Cnty, FL Sch Brd Ctfs Partn (Prerefunded
@ 07/01/04) (AMBAC Insd)..................... 6.750% 07/01/12 $ 1,093,790
1,750 Broward Cnty, FL Edl Fac Auth Rev Nova
Southeastn Univ Proj (Connie Lee Insd)....... 5.875 04/01/07 1,841,437
545 Clay Cnty, FL Hsg Fin Auth Rev Single Family
Mtg (GNMA Collateralized).................... 6.500 09/01/21 568,735
1,000 Escambia Cnty, FL Hlth Facs Auth Hlth Fac Rev
Hlthcare Fac Ln (AMBAC Insd)................. 5.950 07/01/20 1,041,440
250 Escambia Cnty, FL Pollutn Ctl Rev Champion
Intl Corp Proj............................... 6.900 08/01/22 258,080
1,100 Escambia Cnty, FL Utils Auth Util Sys Rev
(FGIC Insd).................................. 5.250 01/01/29 1,053,481
750 Florida Hsg Fin Agy Hsg Willow Lake Apts Ser
J-1 (AMBAC Insd)............................. 5.350 07/01/27 708,488
1,000 Florida Hsg Fin Corp Rev Homeowner Mtg Ser 4
(FSA Insd)................................... 6.250 07/01/22 1,038,030
1,000 Florida Ports Fin Comm Rev St Transn Tr Fd
(MBIA Insd).................................. 5.375 06/01/27 959,820
1,000 Florida Ports Fin Comm Rev St Transn Tr Fd
Intermodal Pgm (FGIC Insd)................... 5.500 10/01/29 973,840
350 Florida St Brd of Ed Cap Outlay Pub Ed Ser A
Rfdg (FGIC Insd)............................. 4.500 06/01/23 297,206
1,000 Florida St Brd of Ed Cap Outlay Pub Ed Ser C
(FGIC Insd).................................. 5.750 06/01/29 1,020,200
1,000 Florida St Brd of Ed Lottery Rev Ser A (FGIC
Insd)........................................ 5.250 07/01/17 994,980
1,000 Florida St Brd of Regt Hsg Rev Univ FL (FGIC
Insd)........................................ 5.500 07/01/28 994,290
500 Florida St Brd of Regt Univ Sys Impt Rev
(AMBAC Insd)................................. 4.500 07/01/23 423,865
500 Gainesville, FL Utils Sys Rev (Escrowed to
Maturity).................................... 8.125 10/01/14 590,685
2,000 Hillsborough Cnty, FL Cap Impt Pgm Rev
Criminal Justice Fac Rfdg (FGIC Insd)........ 5.250 08/01/16 1,981,860
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$1,000 Hillsborough Cnty, FL Indl Dev Auth Indl Dev
Rev Hlth Facs Proj Univ Cmnty Hosp Ser A..... 5.625% 08/15/23 $ 848,410
1,750 Hillsborough Cnty, FL Indl Dev Auth Indl Dev
Rev Univ Cmnty Hosp (MBIA Insd).............. 5.750 08/15/14 1,797,862
1,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn
Ctl Rev Tampa Elec Proj Rfdg(b).............. 8.000 05/01/22 1,069,260
1,750 Hillsborough Cnty, FL Indl Dev Auth Rev
Allegany Hlth Sys J Knox Vlg (Prerefunded @
12/01/03) (MBIA Insd)........................ 6.000 12/01/06 1,811,197
1,500 Hillsborough Cnty, FL Sch Brd Ctfs Partn
(Prerefunded @ 07/01/04) (MBIA Insd)......... 6.000 07/01/12 1,601,445
1,000 Jacksonville, FL Cap Impt Rev Stad Proj Rfdg
(AMBAC Insd)................................. 4.750 10/01/25 882,230
800 Jacksonville, FL Elec Auth Rev Elec Sys Ser
3-C.......................................... 5.500 10/01/30 784,424
1,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc
Proj (Connie Lee Insd)....................... 6.500 02/01/11 1,038,890
500 Lee Cnty, FL Arpt Rev Ser B (FSA Insd)....... 5.750 10/01/33 509,925
750 Lee Cnty, FL Indl Dev Auth Hlthcare Fac Rev
Shell Point Vlg Proj Ser A................... 5.500 11/15/29 621,450
750 Marion Cnty, FL Hosp Dist Rev & Impt Hlth Sys
Munroe Reg Rfdg.............................. 5.500 10/01/29 674,678
260 Miami Beach, FL Stormwater Rev
(FGIC Insd)(a)............................... 5.750 09/01/14 275,135
295 Miami Beach, FL Stormwater Rev
(FGIC Insd)(a)............................... 5.750 09/01/15 310,160
775 Orange Cnty, FL Hsg Fin Auth Single Family
Mtg Rev (GNMA Collateralized)................ 6.550 10/01/21 801,536
750 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 08/01/04) (AMBAC Insd)........ 6.000 08/01/06 795,908
1,200 Polk Cnty, FL Sch Brd Ctfs Partn (FSA
Insd)........................................ 5.000 01/01/14 1,177,800
1,000 Port Saint Lucie, FL Util Rev & Impt Ser A
Rfdg (MBIA Insd)............................. 5.125 09/01/27 942,300
365 Saint Petersburg, FL Excise Tax Rev (Escrowed
to Maturity) (FGIC Insd)..................... 5.000 10/01/16 356,182
635 Saint Petersburg, FL Excise Tax Rev
(Unrefunded Balance) (FGIC Insd)............. 5.000 10/01/16 608,406
250 Tallahassee, FL Hlth Facs Rev Mem Hlthcare
Proj(a)...................................... 6.375 12/01/30 247,015
1,000 Tampa Bay, FL Wtr Util Sys Rev Ser B (FGIC
Insd)........................................ 4.750 10/01/27 873,100
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$1,000 Village Cent Cmnty Dev Dist FL Util Rev (FGIC
Insd)........................................ 6.000% 11/01/18 $ 1,075,850
1,035 West Palm Beach, FL.......................... 5.000 03/01/12 1,040,185
-----------
35,983,575
-----------
PUERTO RICO 4.2%
500 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev
Ser V Rfdg................................... 6.375 07/01/08 519,520
1,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev
Ser Y (FSA Insd)............................. 6.250 07/01/21 1,124,440
-----------
1,643,960
-----------
U. S. VIRGIN ISLANDS 2.6%
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpts
Taxes Ln Nt Ser A (ACA Insd)................. 6.125 10/01/29 1,026,360
-----------
TOTAL LONG-TERM INVESTMENTS 98.3%
(Cost $37,282,140)..................................................... 38,653,895
SHORT-TERM INVESTMENTS 0.8%
(Cost $300,000)........................................................ 300,000
-----------
TOTAL INVESTMENTS 99.1%
(Cost $37,582,140)..................................................... 38,953,895
OTHER ASSETS IN EXCESS OF LIABILITIES 0.9%.............................. 368,235
-----------
NET ASSETS 100.0%....................................................... $39,322,130
===========
</TABLE>
(a) Securities purchased on a when-issued or delayed delivery basis.
(b) Assets segregated as collateral for when-issued or delayed delivery purchase
commitments.
ACA--American Capital Access Insurance Company
AMBAC--AMBAC Indemnity Corporation
Connie Lee--Connie Lee Insurance Company
FGIC--Financial Guaranty Insurance Company
FSA--Financial Securities Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
14
<PAGE> 16
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $37,582,140)........................ $38,953,895
Cash........................................................ 40,728
Receivables:
Investments Sold.......................................... 783,675
Interest Receivable....................................... 589,958
Other....................................................... 961
-----------
Total Assets............................................ 40,369,217
-----------
LIABILITIES:
Payables:
Investments Purchased..................................... 832,955
Investment Advisory Fee................................... 21,543
Income Distributions--Preferred Shares.................... 13,043
Administrative Fee........................................ 6,629
Affiliates................................................ 2,899
Trustees' Deferred Compensation and Retirement Plans........ 108,483
Accrued Expenses............................................ 61,535
-----------
Total Liabilities....................................... 1,047,087
-----------
NET ASSETS.................................................. $39,322,130
===========
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 640 issued with liquidation preference of $25,000
per share)................................................ 16,000,000
-----------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 1,683,270 shares issued and
outstanding).............................................. 16,833
Paid in Surplus............................................. 24,681,474
Net Unrealized Appreciation................................. 1,371,755
Accumulated Undistributed Net Investment Income............. 95,567
Accumulated Net Realized Loss............................... (2,843,499)
-----------
Net Assets Applicable to Common Shares.................. 23,322,130
-----------
NET ASSETS.................................................. $39,322,130
===========
NET ASSET VALUE PER COMMON SHARE ($23,322,130 divided by
1,683,270 shares outstanding)............................. $ 13.86
===========
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
Statement of Operations
For the Year Ended October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $2,250,746
----------
EXPENSES:
Investment Advisory Fee..................................... 249,102
Administrative Fee.......................................... 76,646
Preferred Share Maintenance................................. 50,573
Legal....................................................... 4,152
Custody..................................................... 3,766
Trustees' Fees and Related Expenses......................... 16,954
Other....................................................... 69,615
----------
Total Expenses.......................................... 470,808
Less Credits Earned on Cash Balances.................... 300
----------
Net Expenses............................................ 470,508
----------
NET INVESTMENT INCOME....................................... $1,780,238
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 197,195
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 622,546
End of the Period......................................... 1,371,755
----------
Net Unrealized Appreciation During the Period............... 749,209
----------
NET REALIZED AND UNREALIZED GAIN............................ $ 946,404
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $2,726,642
==========
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
Statement of Changes in Net Assets
For the Years Ended October 31, 2000 and 1999
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.............................. $ 1,780,238 $ 1,738,845
Net Realized Gain.................................. 197,195 30,515
Net Unrealized Appreciation/Depreciation During the
Period........................................... 749,209 (3,170,898)
----------- -----------
Change in Net Assets from Operations............... 2,726,642 (1,401,538)
----------- -----------
Distributions from Net Investment Income:
Common Shares.................................... (1,232,006) (1,232,076)
Preferred Shares................................. (616,163) (494,780)
----------- -----------
Total Distributions................................ (1,848,169) (1,726,856)
----------- -----------
NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES............................ 878,473 (3,128,394)
NET ASSETS:
Beginning of the Period............................ 38,443,657 41,572,051
----------- -----------
End of the Period (Including accumulated
undistributed net investment income of $95,567
and $163,498, respectively)...................... $39,322,130 $38,443,657
=========== ===========
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<TABLE>
<CAPTION>
----------------------------
2000 1999
----------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD (A)............ $ 13.33 $ 15.19
-------- --------
Net Investment Income................................. 1.06 1.03
Net Realized and Unrealized Gain/Loss................. .56 (1.87)
-------- --------
Total from Investment Operations........................ 1.62 (.84)
-------- --------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders......................... .73 .73
Common Share Equivalent of Distributions Paid to
Preferred Shareholders............................ .36 .29
-------- --------
Total Distributions..................................... 1.09 1.02
-------- --------
NET ASSET VALUE, END OF THE PERIOD...................... $ 13.86 $ 13.33
======== ========
Market Price Per Share at End of the Period............. $11.6875 $ 11.500
Total Investment Return at Market Price (b)............. 8.08% -15.61%
Total Return at Net Asset Value (c)..................... 9.81% -7.72%
Net Assets at End of the Period (In millions)........... $ 39.3 $ 38.4
Ratio of Expenses to Average Net Assets Applicable to
Common Shares(1, 2)................................... 2.10% 2.18%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares(2) (d).................... 5.20% 5.06%
Portfolio Turnover...................................... 46% 42%
* Non-Annualized
(1) Ratio of Expenses to Average Net Assets Including
Preferred Shares................................... 1.23% 1.32%
(2) If certain expenses had not been waived by the
Adviser, total return would have been lower and the
ratios would have been as follows:
Ratio of Expenses to Average Net Assets Applicable to
Common Shares......................................... N/A N/A
Ratio of Expenses to Average Net Assets Including
Preferred Shares...................................... N/A N/A
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (d)....................... N/A N/A
</TABLE>
(a) Net Asset Value at July 30, 1993, is adjusted for common and preferred share
offering costs of $.372 per common share.
(b) Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions
for the period in accordance with the Trust's dividend reinvestment plan,
and sale of all shares at the closing common stock price at the end of the
period indicated.
(c) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(d) Net Investment Income is adjusted for the common share equivalent of
distributions paid to preferred shareholders.
N/A = Not Applicable
18
<PAGE> 20
<TABLE>
<CAPTION>
JULY 30, 1993
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF INVESTMENT
----------------------------------------------------- OPERATIONS) TO
1998 1997 1996 1995 1994 OCTOBER 31, 1993
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 14.76 $ 14.08 $ 14.02 $ 11.74 $ 14.89 $ 14.63
------- ------- ------- ------- -------- -------
1.03 1.04 1.08 1.16 1.05 .09
.45 .71 .02 2.22 (3.18) .25
------- ------- ------- ------- -------- -------
1.48 1.75 1.10 3.38 (2.13) .34
------- ------- ------- ------- -------- -------
.73 .73 .73 .73 .79 .07
.32 .34 .31 .37 .23 .01
------- ------- ------- ------- -------- -------
1.05 1.07 1.04 1.10 1.02 .08
------- ------- ------- ------- -------- -------
$ 15.19 $ 14.76 $ 14.08 $ 14.02 $ 11.74 $ 14.89
======= ======= ======= ======= ======== =======
$14.375 $13.125 $12.625 $12.000 $ 9.750 $14.875
15.36% 9.96% 11.57% 31.16% -30.20% -.40%*
8.04% 10.33% 5.80% 26.30% -16.27% -.36%*
$ 41.6 $ 40.8 $ 39.7 $ 39.6 $ 35.8 $ 41.0
2.18% 2.24% 1.83% 1.37% 1.49% 2.59%
4.77% 4.96% 5.46% 6.13% 6.06% 2.10%
15% 4% 16% 24% 101% 0%*
1.33% 1.34% 1.09% .79% .87% 2.16%
N/A N/A 2.40% 2.49% 2.50% N/A
N/A N/A 1.43% 1.44% 1.46% N/A
N/A N/A 4.89% 5.00% 5.05% N/A
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
NOTES TO
FINANCIAL STATEMENTS
October 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Florida Municipal Opportunity Trust (the "Trust") is registered as a
non-diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Trust's investment objective is to seek to
provide a high level of current income exempt from federal income taxes and
Florida State intangible taxes, consistent with preservation of capital. The
Trust will invest in a portfolio consisting substantially of Florida municipal
obligations rated investment grade at the time of investment. The Trust
commenced investment operations on July 30, 1993.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. 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 revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices or, in the absence of
market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services are valued at fair value
using procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market value.
B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when-issued or delayed delivery
purchase commitments until payment is made.
C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond
premium is amortized and original issue discount is accreted over the expected
life of each applicable security.
D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
20
<PAGE> 22
NOTES TO
FINANCIAL STATEMENTS
October 31, 2000
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 2000, the Trust had an accumulated capital loss
carryforward for tax purposes of $2,843,499 which will expire between October
31, 2002 and October 31, 2005.
At October 31, 2000, for federal income tax purposes the cost of long- and
short-term investments is $37,582,140, the aggregate gross unrealized
appreciation is $1,722,379 and the aggregate gross unrealized depreciation is
$350,624, resulting in net unrealized appreciation on long- and short-term
investments of $1,371,755.
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
F. EXPENSE REDUCTIONS During the year ended October 31, 2000, the Fund's custody
fee was reduced by $300 as a result of credits earned on overnight cash
balances.
2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
Investment Advisory Corp. (the "Adviser") will provide investment advice and
facilities to the Trust for an annual fee payable monthly of .65% of the average
net assets of the Trust. In addition, the Trust will pay a monthly
administrative fee to Van Kampen Funds Inc. or its affiliates (collectively "Van
Kampen"), the Trust's Administrator, at an annual rate of .20% of the average
net assets of the Trust. The administrative services provided by the
Administrator include record keeping and reporting responsibilities with respect
to the Trust's portfolio and preferred shares and providing certain services to
shareholders.
For the year ended October 31, 2000, the Trust recognized expenses of
approximately $600, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of
the Trust is an affiliated person.
Under separate Accounting Services and Legal Services agreements, the
Adviser provides accounting and legal services to the Trust. The Adviser
allocates the cost of such services to each Trust. For the year ended October
31, 2000, the Trust recognized expenses of approximately $9,100 representing Van
Kampen's
21
<PAGE> 23
NOTES TO
FINANCIAL STATEMENTS
October 31, 2000
cost of providing accounting and legal services to the Trust, which are reported
as part of other and legal expenses, respectively, in the statement of
operations.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Trust. The maximum
annual benefit per trustee under the plan is $2,500.
At October 31, 2000, Van Kampen owned 6,700 common shares of the Trust.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales, excluding
short-term investments, were $18,398,706 and $17,559,413, respectively.
4. PREFERRED SHARES
The Trust has outstanding 640 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every seven days through an
auction process. The rate in effect on October 31, 2000 was 4.250%. During the
year ended October 31, 2000, the rates ranged from 1.000% to 4.850%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
5. SUBSEQUENT EVENT
On November 20, 2000, the Trustees of Van Kampen Florida Municipal Opportunity
Trust ("Target Fund") announced its intention to merge the Target Fund into the
Van Kampen Trust for Investment Grade Florida Municipals ("Acquiring Fund"). The
Trustees of each of the funds have approved in principle an agreement and plan
of reorganization between the funds providing for a transfer of assets and
liabilities of the Target Fund to the Acquiring Fund in exchange for shares of
beneficial interest of the Acquiring Fund (the "Reorganization"). The
Reorganization is subject to the approval by the shareholders of the Target
Fund.
22
<PAGE> 24
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholders of Van Kampen Florida Municipal
Opportunity Trust
We have audited the accompanying statement of assets and liabilities of Van
Kampen Florida Municipal Opportunity Trust (the "Trust"), including the
portfolio of investments, as of October 31, 2000, and the related statements of
operations, changes in net assets and the financial highlights for the year then
ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The Trust's financial statements and financial highlights for the periods
ended prior to October 31, 2000 were audited by other auditors whose report,
dated December 13, 1999, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the Trust's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen Florida Municipal Opportunity Trust as of October 31, 2000, the results
of its operations, the changes in its net assets and the financial highlights
for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December 6, 2000
23
<PAGE> 25
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be
re-registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued
on the valuation date, generally at the lower of market price or net asset
value, except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in
24
<PAGE> 26
the acquisition of fewer Common Shares than if the dividend or distribution had
been paid in Common Shares issued by the Trust. All reinvestments are in full
and fractional Common Shares and are carried to three decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
25
<PAGE> 27
TRUST OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN FLORIDA MUNICIPAL OPPORTUNITY TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
THEODORE A. MYERS
RICHARD F. POWERS, III* - Chairman
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
RICHARD F. POWERS, III*
President
STEPHEN L. BOYD*
Executive Vice President and
Chief Investment Officer
A. THOMAS SMITH III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
c/o EquiServe
P.O. Box 43011
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT AUDITORS(1)
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
For Federal income tax purposes, the following information is furnished with
respect to the distributions paid by the Trust during its taxable year ended
October 31, 2000. The Trust designated 100% of the income distributions as a
tax-exempt income distribution. In January, 2001, the Trust will provide tax
information to shareholders for the 2000 calendar year.
(1) Independent auditors for the Trust perform an annual audit of the Trust's
financial statements. The Board of Trustees has engaged Deloitte & Touche LLP to
be the Trust's independent auditors.
KPMG LLP, located at 303 West Wacker Drive, Chicago, IL 60601 ("KPMG"), ceased
being the Trust's independent accountants effective April 14, 2000. The
cessation of the client- auditor relationship between the Trust and KPMG was
based solely on a possible future business relationship by KPMG with an
affiliate of the Trust's investment adviser.
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
(C) Van Kampen Funds Inc., 2000. All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
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<PAGE> 28
RESULTS OF
SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on June 21, 2000, where
shareholders voted on the election of trustees and the ratification of Deloitte
& Touche LLP as the independent auditors.
1) With regards to the election of the following trustees by the common
shareholders of the Trust:
<TABLE>
<CAPTION>
# OF SHARES
---------------------------
IN FAVOR WITHHELD
<S> <C> <C>
David C. Arch............................................ 1,551,684 17,044
Howard J Kerr............................................ 1,551,684 17,044
</TABLE>
The other trustees of the Trust whose terms did not expire in 2000 were Rod
Dammeyer, Theodore A. Myers, Richard F. Powers, III, Hugo F. Sonnenschein and
Wayne W. Whalen.
2) With regards to the ratification of Deloitte & Touche LLP as independent
auditors for the Trust, 1,557,483 shares voted in favor of the proposal, 1,370
shares voted against, and 9,874 shares abstained.
YOUR NOTES
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