It has a flashy new website, a new name and, says executive director Ashbel C. Williams Jr., a whole new way of doing business.
"Tremendous … amazing … head and shoulders more cost effective than any comparison product out there … the best,'' Williams said of Florida Prime at a recent public meeting. ''We have completely put the toothpaste back in the tube, so to speak, about perceptions of liquidity and safety for Florida Prime.''
Yet almost three years after cities, counties and school districts felt betrayed by the State Board of Administration, some don't trust the state's money managers.
"They should have cleaned house,'' said Pasco Commissioner Michael Cox, whose county has a paper loss of $4.7 million. "It's a loss now as far as I'm concerned,'' he said.
"We're having terrible budget issues,'' and not having access to that money just delays more projects.
The SBA says it's proud of the strides made — including an outside money manager hired to handle the fund, beefed up oversight, improved customer service and a new communications director. "A pretty remarkable transformation,'' Williams called it.
Florida Prime, which three years ago was the country's largest local investment pool with $31 billion, has dwindled to less than $6 billion. The number of communities and schools participating has fallen from 1,002 to 803; some are parking their extra cash in banks, other money markets or Treasury bills.
The breach in trust came in 2007, when the SBA did not fully inform its clients that the local pool and other funds held about $2 billion of troubled, mortgage-related securities like those fueling the collapse of Wall Street. After anxious communities started withdrawing billions, the state froze the local fund.
The SBA quarantined distressed securities in a separate account and, nearly three years later, is still slowly returning principal and income to the locals.
The SBA has never tallied all costs from its risky investing in 2007. It says that about $1.6 billion, 80 percent of the frozen balances, have been returned to local governments; some $585 million remains quarantined. Were those tainted securities sold today, local governments could lose $302 million.
That does not include millions in increased fees and unearned interest payments, and hundreds of millions in losses taken by Citizens Property Insurance, Florida's Hurricane Catastrophe Fund and another pooled fund managed by the SBA.
After the debacle, the Legislature ordered a group of local government representatives to advise the SBA, a group led today by Osceola County Tax Collector Patsy Heffner. She said SBA improvements on client focus, operations and investment policies have made a difference.
"We're seeing the trust and the confidence steadily returning,'' Heffner said.
As an example, she cited her own county. Osceola withdrew $170 million right before the state froze the local pool. Today, the county has $240 million invested.
Heffner credits the SBA's improved communications and speaks glowingly of the pool these days. But other locals still want their money and ask why no one was found negligent.
Jefferson County had $2.7 million invested when the fund was frozen, leaving the school district no money to pay 220 teachers. The county took out a short-term loan to meet payroll. Today, the cash-strapped Panhandle school district still has about $160,000 that can't be redeemed.
Port St. Lucie had $291 million invested in the pool and deposited another $134.3 million after SBA officials assured Marcia Dedert, the city's finance director, that everything was fine. The next day, the SBA froze the pool and Port St. Lucie's money.
The city had to borrow $7.5 million to finish roads and sewers from an annexation project, Dedert said. Port St. Lucie asked the FBI to investigate what it called an outright deception by the SBA, but nothing happened.
Hillsborough County, which had $871 million in the pool in 2007, still has $376 million invested, including $26 million still frozen. If the bad securities were sold today, Hillsborough calculates that it would take a loss of $8.2 million — plus $4 million in lost interest.
Hillsborough Clerk of Court Pat Frank wonders if the SBA learned its lesson. Now the agency is investing state pension money in hedge funds that Frank worries are risky and secretive and could face the same trouble as the local government pool did.
"With everything we went through in 2007 with all the transparency issues and the risky investments, I just see this as another problem waiting to happen,'' Frank said.
She recently wrote to Williams to protest the shift of state pension fund assets into hedge funds and other so-called alternative investments. His response did not reassure her.
"I felt as if I was dancing with someone, and he was going one way and I was going another and never the twain shall meet,'' Frank said.
Frank's counterpart in Nassau County, John Crawford, has moved more than $55 million of the county's money out of the SBA but is still waiting for more than $1.6 million plus interest.
''Anything that's run by the state of Florida should be so accountable and so transparent that any taxpayer can look at it and say, 'I trust you,' '' Crawford said.
"We trusted the experts at the SBA, we trusted the state of Florida, we trusted the board of trustees. … That trust was not well founded.''
Computer assisted reporting specialist Connie Humburg contributed to this report.