June 24, 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 Gary Locke, Governor Brad Owen, Lieutenant Governor

Also Present:

Jim Marolich, Seafirst, Bank of America, N.W. Michael Donohue, Smith Barney Inc. Lynn Rodeheaver, Office of the State Treasurer Kay L. King, Office of the State Treasurer Susan Schaffer, Standard & Poor’s Rating Agency Darlene DeRose, P.G. Corbin & Co. Michael Forrester, Standard & Poor’s Rating Agency Gina Terry, Office of Financial Management John Fricke, Office of Financial Management Mike Clarey, Office of the State Treasurer Martin Reynoso, Office of the State Treasurer Svein Braseth, Office of the State Treasurer Doug Vaughn, Department of Transportation Ellen Evans, Seattle Northwest Securities Cynthia Weed, Preston Gates & Ellis Dean Torkelson, Seattle Northwest Securities Dick Thompson, Office of Financial Management Jay Kirkevold, Office of the State Treasurer Colleen Malkmus, Office of the State Treasurer Vicki Cox, Office of the State Treasurer

Lieutenant Governor Owen moved that the minutes for the May 12, 1997, meeting be approved.  Governor Locke seconded the motion.  The motion passed and the minutes were adopted.

Chairman Murphy introduced Governor Locke and Lieutenant Governor Owen to Michael Forrester, Chris Irwin and Susan Schaffer from Standard & Poor’s Rating Agency.  He stated that Standard & Poor’s staff were visiting to review the state’s economic stability.

Mr. Kerr spoke to proposed Resolution No. 864 which awards the sale of $28,000,000 State of Washington Fuel Tax General Obligation Bonds, Series 1997F.  The apparent winning bid was submitted by Bank of America, doing business as Seafirst, with a true interest rate of 5.334857%.  Goldman Sachs submitted a bid of 5.3576%, Merrill Lynch submitted a bid of 5.3802%, Robert W. Baird & Co. submitted a bid of 5.3884% and Smith Barney submitted a bid of 5.347412%.  Mr. Kerr stated that all bids were submitted in compliance with the committee’s rules and each bidder submitted a good faith check or surety bond through Surebid in the amount of $280,000.

Mr. Kerr continued by stating that these were strong bids.  The market was stronger at the time of the bids then was anticipated in May when the bonds were authorized to be sold.  Mr. Torkelson stated that interest rates have been inching down over the past few months and the timing on the bond sale was fortuitous.  Chairman Murphy asked if the bond counsel or Attorney General’s representative found any reason not to accept the apparent winning bid.  Both Ms. Weed and Mr. Fallis answered in the negative.

Mr. Kerr presented proposed Resolution No. 864 to the committee.

Resolution No. 864 provides for the award of sale of $28,000,000 State of Washington Motor Vehicle Fuel Tax General Obligation Bonds, Series 1997F, authorized by Chapters 47.10.812, 47.10.761, and 47.10.834 RCW.

Lt. Governor Owen moved adoption of Resolution No. 864.  Governor Locke seconded the motion and the resolution was adopted.

Chairman Murphy stated that he and Mr. Kerr had discussed market opportunities for refunding bonds.  Mr. Kerr told the members that staff had been monitoring the interest rates and that the market was looking favorable to refund some bonds.  The market was 10-15 basis points away from the goal of 5% savings.  Mr. Kerr wanted the members to give him an indication of whether or not they would approve action in the near future to refund some higher rated bonds.  Chairman Murphy stated to let the record show that the three members gave their approval to continue monitoring the market for the best rates.  Mr. Kerr stated he had worked with the Office of Financial Management in the past to assure steps were taken to spread savings over the life of the issue.

There being nothing further to come before the committee, the meeting was adjourned at 9:15 AM.

	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