<PAGE>
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FLORIDA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND 212/830-5200
================================================================================
Dear Shareholder:
We are pleased to present the annual report of Florida Daily Municipal Income
Fund for the year ended August 31, 1999.
The Fund had net assets of $73,310,928 and 1,000 active shareholders as of
August 31, 1999.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
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<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1999
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Tax Exempt Investments (12.88%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,000,000 Florida Housing Corporation Homeowners Mortgage 03/31/00 3.06% $ 4,000,942 VMIG-1
1,000,000 Orange County, FL HFA - Series 1999A-3 06/01/00 3.40 1,000,000 MIG-1
1,300,000 School District of Forsyth County, GA TAN (b) 12/31/99 3.20 1,300,524
2,000,000 School District of Gwinnett County, GA
(Construction Sales Tax Notes) 12/31/99 3.10 2,002,079 MIG-1
1,140,000 Town of Hilton Head Island, SC GO - Series 1999(b) 12/30/99 3.20 1,140,000
----------- ------------
9,440,000 Total Other Tax Exempt Investments 9,443,545
----------- ------------
<CAPTION>
Other Variable Rate Demand Instruments (c) (61.27%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Alachua County, FL IDA (Florida Rock Industries, Inc.)
LOC NationsBank 11/01/22 3.40% $ 1,000,000 A1+
400,000 Industrial Development Board of City of Decatur, FL
(Solid Waste Amoco Oil Co.) 05/01/25 3.05 400,000 P1 A1+
2,350,000 City of Gainsville, FL IDRB (Heat - Pipe Technology, Inc. Project)
LOC Amsouth Bank 05/01/18 3.40 2,350,000 Aa3
500,000 City of Tampa, FL Occupation License Tax Boards - Series 1996A
Insured By FGIC 10/01/18 3.30 500,000 VMIG-1 A1+
4,115,000 Escambia County, FL IDRB (Gelman Sciences, Inc. Project)
LOC National Bank of Detroit 07/01/04 3.35 4,115,000 A1+
1,180,000 Florida Development Finance Company (Intrepid Powerboats, Inc.)(b)
LOC Sun Trust Bank 06/01/23 3.45 1,180,000
1,000,000 Florida HFA (Caribbean Key) - Series F
LOC Key Bank 06/01/26 3.30 1,000,000 VMIG-1
1,000,000 Florida HFA (Heron Park Project) - Series V
LOC NationsBank 12/01/29 3.40 1,000,000 VMIG-1
1,345,000 Florida HFA (Multifamily) - Series E
LOC Comerica Bank 04/01/26 3.35 1,345,000 A1
1,000,000 Florida HFA (Tiffany Club Project)
LOC NationsBank 09/01/26 3.30 1,000,000 VMIG-1
580,000 Gulf Breeze, FL RB - Series 1985B
Insured By FGIC 12/01/15 3.25 580,000 VMIG-1 A1+
995,000 Gulf Breeze, FL RB - Series 1985C
Insured By FGIC 12/01/15 3.25 995,000 VMIG-1 A1+
2,700,000 Highlands County, FL Health Facility Authority RB
(Adventist Health System/Sunbolt Inc.) - Series 1996B
LOC Capital Markets Assurance Corp. 10/01/26 3.30 2,700,000 VMIG-1 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (c) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,500,000 Highlands County, FL IDRB - Series 1997(b)
LOC PNC Bank, N.A. 12/01/17 3.40% $ 2,500,000
2,100,000 Hillsborough County, FL(IMC Fertilizer Inc. Project)
LOC Rabobank Nederland 02/01/04 3.25 2,100,000 P1
1,000,000 Illinois HEFA (Northwestern Memorial Hospital) 08/15/25 2.95 1,000,000 VMIG-1 A1+
900,000 Indian River County, FL IDRB (Florida Convention Centers Project)
LOC Toronto-Dominion Bank 01/01/11 3.45 900,000 P1
600,000 Jackson County, MS (Chevron USA Inc. Proj.) 12/15/24 3.10 600,000 P1
150,000 King George County, VA (Birchwood Power Partners)
LOC Credit Suisse First Boston 10/01/24 3.05 150,000 A1+
1,650,000 Marion County, FL IDA
(Hamilton Products, Incorporation Project) - Series 1995(b)
LOC Comerica Bank 11/01/15 3.50 1,650,000
2,000,000 Miami-Dade County, FL IDA Professional Modification
LOC Bankers Trust Company 08/01/18 3.35 2,000,000 A1
2,300,000 Ocean Highway & Port Authority, FL RB - Series 1990
LOC ABN AMRO Bank N.V. 12/01/20 3.35 2,300,000 VMIG-1
2,100,000 Ocean Highway & Port Authority, FL RB
(Port, Airport & Marina Improvement)
LOC ABN AMRO Bank N.V. 12/01/20 3.35 2,100,000 VMIG-1 A1+
2,950,000 Okeechobee County, FL Solid Waste
(Chambers Waste System of Florida)
LOC Morgan Guaranty Trust Company 03/01/06 3.35 2,950,000 A1+
1,000,000 Orange County, FL Health Facilities Authority RB
(Adventist Health System/Sunbelt Obligation)
LOC Rabobank Nederland 11/15/26 3.25 1,000,000 A1+
900,000 Orange County, FL IDRB
(Florida Convention Centers Project) - Series A
LOC Toronto-Dominion Bank 01/01/11 3.40 900,000 P1
3,500,000 Pinellas County, FL HFA MFHB (Foxbrid)
Collateralized by Federal National Mortgage Association 06/15/25 3.30 3,500,000 A1+
1,000,000 Pinellas County, FL Industry Council IDRB
(Genca Corporation Project)(b)
LOC PNC Bank, N.A. 11/01/09 3.40 1,000,000
900,000 Polk County, FL IDRB (Florida Convention Center Project)
LOC Toronto-Dominion Bank 01/01/11 3.40 900,000 P1
1,200,000 St. Lucie County, FL SolidWaste RB (Florida Power & Light) 01/01/27 3.10 1,200,000 VMIG-1 A1+
----------- ------------
44,915,000 Total Other Variable Rate Demand Instruments 44,915,000
----------- ------------
</TABLE>
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See Notes to Financial Statements.
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1999
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Put Bonds (d) (4.51%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,300,000 Davis County, UT TRAN (b) 12/29/99 3.20% $ 2,304,406
1,000,000 Putnam County, FL Development Authority
(Seminole Electric) - Series 1984 D
LOC National Rural Utilities Cooperative Finance Corporation 09/15/99 3.00 1,000,000 VMIG-1 A1+
----------- ------------
3,300,000 Total Put Bonds 3,304,406
----------- ------------
<CAPTION>
Tax Exempt Commercial Paper (20.66%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,500,000 Jacksonville, FL Electric Authority - Series A 10/12/99 3.30% $ 2,500,000 P1 A1+
1,000,000 Palm Beach County, FL HFA
Insured by MBIA Insurance Corp. 10/15/99 3.35 1,000,000 VMIG-1 A1+
2,200,000 Palm Beach County, FL HFA
Insured by MBIA Insurance Corp. 10/15/99 3.30 2,200,000 VMIG-1 A1+
2,150,000 Sarasota County Public Hospital District RB
(Sarasota Memorial Hospital)
LOC Sun Trust Bank 11/16/99 3.25 2,150,000 VMIG-1 A1+
4,200,000 St. Lucie County, FL PCRB (Florida Power & Light) 10/20/99 3.25 4,200,000 VMIG-1 A1+
2,000,000 Sunshine State Government Finance Commission RB - Series 1986
Insured By FGIC 10/21/99 3.35 2,000,000 A1+
1,100,000 West Orange Memorial Tax District RB - Series 1991A
LOC Rabobank Nederland 09/09/99 3.40 1,100,000 VMIG-1
----------- ------------
15,150,000 Total Tax Exempt Commercial Paper 15,150,000
----------- ------------
Total Investments (99.32%) (Cost $72,812,951+) $ 72,812,951
Cash and Other Assets in Excess of Liabilities(0.68%) 497,977
------------
Net Assets (100.00%) $ 73,310,928
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 48,862,962 Share Outstanding (Note 3) $ 1.00
============
Class B Shares, 24,447,966 Share Outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
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See Notes to Financial Statements.
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FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings are those of the holding company 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. Certain issuers have either 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 that are not rated which the Fund's Board of Trustees has
determined to be of comparable quality to those rated securities in which
the Fund invests.
(c) Securities payable on demand at par including accrued interest (usually
with seven days notice) and if indicated, 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.
(d) The maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
FGIC = Financial Guaranteed Insurance Company MFHB = Multi-Family Housing Board
GO = General Obligations PCRB = Pollution Control Revenue Bond
HEFA = Health and Education Facilities Authority RB = Revenue Bond
HFA= Housing Finance Authority TAN = Tax Anticipation Note
IDA= Industrial Development Authority TRAN = Tax and Revenue Anticipation Note
IDRB = Industrial Development Revenue Bond
LOC= Letter of Credit
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest.................................................................... $ 3,085,635
----------------
Expenses: (Note 2)
Investment management fee................................................... 375,213
Administration fee.......................................................... 196,987
Shareholder servicing fee (Class A)......................................... 161,198
Custodian fee............................................................... 16,844
Shareholder servicing and related shareholder expenses...................... 49,030
Legal, compliance and filing fees........................................... 31,451
Audit and accounting........................................................ 65,665
Trustees' fees.............................................................. 6,161
Amortization of organization expenses....................................... 11,443
Other....................................................................... 8,296
----------------
Total expenses........................................................... 922,288
Less: Fees waived (Note 2)............................................... ( 271,869)
----------------
Net expenses............................................................. 650,419
----------------
Net investment income.......................................................... 2,435,216
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments........................................ -0-
----------------
Increase in net assets from operations......................................... $ 2,435,216
================
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 31, 1999 AND 1998
================================================================================
<TABLE>
<CAPTION>
1999 1998
----------------- ------------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income........................................ $ 2,435,216 $ 3,938,702
Net realized gain (loss) on investments...................... -0- 5,663
----------------- ------------------
Increase in net assets from operations........................... 2,435,216 3,944,365
Dividends to shareholders from:
Net investment income:
Class A...................................................... ( 1,620,048)* ( 3,272,717)*
Class B...................................................... ( 815,168)* ( 665,985)*
Net realized gain on investments:
Class A...................................................... ( 1,463) ( -- )
Class B...................................................... ( 303) ( -- )
Transactions in shares of beneficial interest (Note 3):
Class A...................................................... ( 70,890,088) 23,066,896
Class B...................................................... ( 601,324) 13,266,676
----------------- ------------------
Total increase (decrease)................................ ( 71,493,178) 36,339,235
Net assets:
Beginning of year............................................ 144,804,106 108,464,871
----------------- ------------------
End of year.................................................. $ 73,310,928 $ 144,804,106
================= ==================
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies.
Florida Daily Municipal Income Fund, a Massachusetts Business Trust, is a
no-load, non-diversified, open-end management investment company registered
under the Investment Company Act of 1940. The Fund is a short-term, tax exempt
money market fund. The Fund has two classes of stock authorized, Class A and
Class B. The Class A shares are subject to a service fee pursuant to the
Distribution and Service Plan. The Class B shares are not subject to a service
fee. Additionally, the Fund may allocate among its classes certain expenses, to
the extent allowable to specific classes, including transfer agent fees,
government registration fees, certain printing and postage costs, and
administrative and legal expenses. Class Specific expenses of the Fund were
limited to distribution fees and transfer agent expenses. In all other respects
the Class A and Class B shares represent the same interest in the income and
assets of the Fund. Its financial statements are prepared in accordance with
generally accepted accounting principles for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation 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) 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 income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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.
e) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. (Manager) at the annual rate of .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 .21% of the Fund's average daily net assets.
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<PAGE>
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2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and Reich & Tang Distributors, Inc. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement,
only with respect to Class A shares of the Fund. For its services under the
Shareholder Servicing Agreement, the Distributor receives from the Fund with
respect only to the Class A shares, a fee equal to .25% of the Fund's average
daily net assets. There were no additional expenses borne by the Fund pursuant
to the Distribution Plan.
During the year ended August 31, 1999 the Manager voluntarily waived investment
management fees and administration fees of $84,262 and $187,607, respectively.
Fees are paid to Trustees who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $31,326 paid to Reich & Tang
Services, Inc., an affiliate of the Manager, as servicing agent for the Fund.
3. Transactions in Shares of Beneficial Interest.
At August 31, 1999, an unlimited number of shares of beneficial interest ($.01
par value) were authorized and capital paid in amounted to $73,310,928.
Transactions, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A Year Ended Year Ended
August 31, 1999 August 31, 1998
--------------- ---------------
<S> <C> <C>
Sold............................................ 155,272,178 320,606,336
Issued on reinvestment of dividends............. 1,502,955 3,368,914
Redeemed........................................ ( 227,665,221) ( 300,908,354)
--------------- ---------------
Net increase (decrease)......................... ( 70,890,088) 23,066,896
=============== ===============
<CAPTION>
Class B Year Ended Year Ended
August 31, 1999 August 31, 1998
--------------- ---------------
<S> <C> <C>
Sold............................................ 193,141,234 133,547,316
Issued on reinvestment of dividends............. 776,131 633,588
Redeemed........................................ ( 194,518,689) ( 120,914,228)
--------------- ---------------
Net increase (decrease)......................... ( 601,324) 13,266,676
=============== ===============
</TABLE>
4. 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 55% of these investments are
further secured, as to principal and interest, by letters of credit issued by
financial institutions. The Fund maintains a policy of monitoring its exposure
by reviewing the credit worthiness of the issuers, as well as that of the
financial institutions issuing the letters of credit, and by limiting the amount
of holdings with letters of credit from one financial institution.
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FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights.
Year Ended August 31, Period Ended
----------------------------------------------- -----------------
Class A 1999 1998 1997 1996 August 31, 1995**
------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income.......................... 0.025 0.029 0.030 0.031 0.032
Less distributions:
Dividends from net investment income........... ( 0.025) ( 0.029) ( 0.030) ( 0.031) ( 0.032)
------- ------- ------- ------- -------
Net asset value, end of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return....................................... 2.50% 2.92% 3.08% 3.09% 3.60%*
Ratios/Supplemental Data
Net assets, end of period (000).................... $ 48,863 $119,754 $ 96,683 $ 36,758 $ 20,974
Ratios to average net assets:
Expenses (Net of waivers and reimbursements)....... 0.78% 0.75% 0.57% 0.56% 0.40%*
Net investment income.............................. 2.51% 2.86% 3.03% 3.05% 3.54%*
Expenses paid indirectly........................... -- -- -- 0.06% --
Management and Administration fees waived and
expense reimbursed.............................. 0.29% 0.27% 0.51% 0.67% 0.95%*
<CAPTION>
Year Ended August 31, Period Ended
----------------------------------------------- -----------------
Class B 1999 1998 1997 1996 August 31, 1995**
------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income.......................... 0.028 0.032 0.033 0.033 0.036
Less distributions:
Dividends from net investment income........... ( 0.028) ( 0.032) ( 0.033) ( 0.033) ( 0.036)
------- ------- ------- ------- -------
Net asset value, end of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Net asset value, end of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return....................................... 2.80% 3.22% 3.34% 3.35% 3.84%*
Ratios/Supplemental Data
Net assets, end of period (000).................... $ 24,448 $ 25,050 $ 11,782 $ 9,611 $ 10,174
Ratios to average net assets:
Expenses (Net of waivers and reimbursements)....... 0.50% 0.46% 0.30% 0.31% 0.14%*
Net investment income.............................. 2.78% 3.16% 3.27% 3.34% 3.78%*
Expenses paid indirectly........................... -- -- -- 0.06% --
Management and Administration fees waived and
expense reimbursed.............................. 0.29% 0.27% 0.51% 0.67% 0.95%*
* Annualized
** Class A commenced operations on October 6, 1994 and Class B commenced operations on September 19, 1994.
</TABLE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Board of Trustees and Shareholders of
Florida Daily Municipal Income Fund
In our opinion, the accompanying statement of net assets 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, 1999, and the
results of its operations, the changes in its net assets and the financial
highlights for the year then ended, in conformity with generally accepted
accounting principles. 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 audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which 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 audit, which included
confirmation of securities at August 31, 1999 by correspondence with the
custodian, provides a reasonable basis for the opinion expressed above. The
financial statements for the year ended August 31, 1998, including the financial
highlights for each of the three years in the period then ended and for the
period from September 19, 1994 (Commencement of Operations) to August 31, 1995,
were audited by other independent accountants whose report dated September 25,
1998 expressed an unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
September 30, 1999
- --------------------------------------------------------------------------------
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
================================================================================
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition have joined
PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or a disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the two most recent fiscal years and through
August 13, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
Effective August 13, 1999, the Fund, with the approval of its Board of Trustees
and its Audit Committee, engaged PwC as its independent auditors.
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<PAGE>
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- -----------------------------------------------------
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 effective prospectus, which
includes information regarding the Fund's
objectives and policies, experience of its
management, marketability of shares, and other
information.
- -----------------------------------------------------
Florida Daily Municipal Income Fund
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent & Dividend
Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, NY 10020
FL899A
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<PAGE>
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FLORIDA
DAILY
MUNICIPAL
INCOME
FUND
Annual Report
August 31, 1999
- --------------------------------------------------------------------------------
<PAGE>
