March 10, 1997

The State Finance Committee met in special meeting after notice duly given to the press and radio of Thurston County.

Present:

Michael J. Murphy, State Treasurer Brad Owen, Lieutenant Governor

Also Present:

John Fricke, Office of Financial Management Gina Terry, Office of Financial Management Svein Braseth, Office of State Treasurer Kay L. King, Office of State Treasurer Lynn M. Rodeheaver, Office of State Treasurer Steve Beacon, Office of State Treasurer John Van Gorkom, Washington Health Care Facilities Authority Susan Musselman, Susan D. Musselman Inc. Rusty Fallis, Attorney General’s Office Dean Torkelson, Seattle-Northwest Securities Mike Colleran, Office of State Treasurer Ellen Evans, Seattle-Northwest Securities Martin Reynoso, Office of State Treasurer Cynthia Weed, Preston Gates & Ellis Darlene DeRose, P.G. Corbin Vicki Cox, Office of State Treasurer Doug Breckel, University of Washington Tim Kerr, Office of State Treasurer

Chairman Murphy stated the first order of business was to “accept” the minutes of the January 7, 1997, committee meeting due to the fact the current members were not in attendance at that meeting, the minutes can not be approved.  Lieutenant Governor Owen moved acceptance of the minutes, Chairman Murphy seconded the motion.  The motion passed and the minutes were accepted.  Chairman Murphy extended congratulations to Governor and Mrs. Locke on the birth of their daughter.

Mr. Kerr spoke to proposed Resolution No. 852 which authorizes a payment agreement up to $10,000,000 on behalf of the University of Washington.  Mr. Kerr stated the interest rate swap was part of a financing package where the University of Washington would enter into a 10 year variable rate line of credit and then lock into a fixed rate if the rates went up.  The University of Washington is proposing to use the swap to finance the Harborview Medical Center’s share of the acquisition of a network of primary health care clinics.  Mr. Kerr also explained RCW 39.96 sets forth a series of conditions which must be met prior to the execution of a swap agreement.

Mr. Kerr introduced Cynthia Weed, bond counsel with Preston, Gates & Ellis, Dean Torkelson and Ellen Evans, financial advisors with Seattle-Northwest Securities, Darlene DeRose, financial advisor with P.G. Corbin, and Doug Breckel, representing the University of Washington.  Ms. Weed explained the process of selecting a counterparty and necessary documentation.  Chairman Murphy asked that reports be submitted to the committee.  Mr. Torkelson and Mr. Kerr explained that it is legislatively mandated that staff provide annual reports to the Legislature and the committee.  Mr. Breckel discussed the University’s payment plan which is set forth in the resolution.  Chairman Murphy and Lt. Governor Owen mentioned they had received a briefing from Mr. Kerr and had no further questions.

Mr. Kerr presented proposed Resolution No. 852 to the committee.

Resolution No. 852 authorizes a payment agreement in a notional amount up to $10,000,000 on behalf of the University of Washington pursuant to Chapter 39.96 RCW.

Lt. Governor Owen moved adoption of Resolution No. 852.  Chairman Murphy seconded the motion and the resolution was adopted.

Mr. Kerr spoke to proposed Resolution No. 859 which authorizes a master financing contract between the State of Washington and the Washington Finance Officers Association (WFOA).  The association’s role in these transactions is to provide a second party to the master financing contract.  He explained that this resolution is also tied to RCW Chapter 39.94 and would delegate to the State Treasurer the authority to come to market with lease/purchase equipment Certificates of Participation (COP) transactions for competitive bids.  Once the COPs are sold, the WFOA will immediately assign its interest in receiving payments on the COPs to a custodial agent bank (currently The Bank of New York is the state’s fiscal agent).  He also stated that the contract does not represent a general obligation of the state.  It is proposed to have these sales every other month through sealed bids utilizing electronic capabilities, i.e., the Webpage.  Ms. Weed stated that the WFOA was not in an operative role and was taking the place of the certificate holders.  Mr. Kerr acknowledged the contributions of Susan Musselman.

Mr. Kerr presented proposed Resolution No. 859 to the committee.

Resolution No. 859 authorizes a master financing contract between the State of Washington and the Washington Finance Officers Association up to a maximum aggregate amount of $50,000,000, setting a maximum interest rate, authorizing the State Treasurer to execute said master financing contract, and providing for competitive bidding of certificates of participation from time to time, all pursuant to Chapter 39.94 RCW.

Lt. Governor Owen moved adoption of Resolution No. 859.  Chairman Murphy seconded the motion and the resolution was adopted.

Mr. Kerr spoke to proposed Resolution No. 860 which appoints him as secretary of the committee.  As secretary of the committee, he is responsible for minutes, resolutions and can sign some closing documents as a representative of the State Treasurer.

Mr. Kerr presented proposed Resolution No. 860 to the committee.

Resolution No. 860 appoints a secretary for the State Finance Committee and sets forth the duties and responsibilities of said secretary.

Lt. Governor Owen moved adoption of Resolution No. 860.  Chairman Murphy seconded the motion and the resolution was adopted.

Chairman Murphy stated that the Public Deposit Protection Commission would periodically bring issues before the members and meetings of both the State Finance Committee and the Public Deposit Protection Commission would be scheduled jointly whenever possible.

There being nothing further to come before the committee, the meeting was adjourned at 1:41 PM.

	STATE FINANCE COMMITTEE STATE OF WASHINGTON   _______________________________________ Michael J. Murphy, State Treasurer & Chairman   ________________________________________ Gary Locke, Governor   ________________________________________ Brad Owen, Lieutenant Governor
________________________________________ Tim Kerr Deputy State Treasurer & Secretary