December 2, 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:

Kay L. King, Office of the State Treasurer Bill Robinson, Program Research, House of Representatives Svein Braseth, Office of the State Treasurer Maureen Morris, Office of Financial Management Martin Reynoso, Office of the State Treasurer Ellen Evans, Seattle Northwest Securities Mike Clarey, Office of the State Treasurer Darlene Cimino DeRose, P. G. Corbin & Co. John Fricke, Office of Financial Management Doug Vaughn, Department of Transportation Dean Torkelson, Seattle Northwest Securities Donna Lawrence, Office of the State Treasurer Cynthia Weed, Preston Gates & Ellis Jay Kirkevold, Office of the State Treasurer Rusty Fallis, Office of the Attorney General Tim Kerr, Office of the State Treasurer

Chairman Murphy called the meeting to order and mentioned that there were two documents contained in the Governor’s and Lieutenant Governor’s information packets.  The first document was a copy of the recently completed annual report for the Local Government Investment Pool, for which the State Finance Committee is the policy-setting body.  The second document was a copy of a November 25, 1997, press release stating that Fitch Investors Service, Inc., had raised the state of Washington’s general obligation bond rating to AA+ from AA.  The state is now only one notch from the top of the Fitch rating system.  The rating upgrade for the state reflects several factors, including increasing diversification away from aerospace dominance, sustained economic growth, and continuance of good debt and financial policies.

Chairman Murphy also noted that the Department of Transportation had informed him that the maintenance work being done on State Route 18 was scheduled for completion in the 2009-2011 biennium.

Lieutenant Governor Owen moved the minutes for the October 31, 1997, meeting be approved.  Chairman Murphy seconded the motion.  The motion passed and the minutes were adopted.

Mr. Kerr introduced proposed Resolution No. 870 which provides for the acceptance of a bid for the purchase of Various Purpose General Obligation Bonds, Series 1998A of the State in the aggregate principal amount of $100,000,000; fixing the interest rates and designating serial and term bond maturities for the bonds; all in accordance with Resolution No. 867.  Information soliciting competitive bids for this financing has been circulated through publication of a preliminary official statement and advertising in the local and national financial press.  Notice has also been given to the market electronically through the Bloomberg Financial Information network and the State Treasurer’s Web Page on the Internet.

Mr. Kerr stated the apparent low bidder was Prudential Securities, Inc., with a true interest cost of 5.1023.  Goldman Sachs submitted a true interest cost bid of 5.1077, Smith Barney submitted a true interest cost bid of 5.10821, and Merrill Lynch submitted a true interest cost bid of 5.129.  Mr. Kerr also stated that all bids conformed to the official notice of sale.

Mr. Kerr presented proposed Resolution No. 870 to the committee.

Resolution No. 870 providing for the award of sale of $100,000,000 State of Washington General Obligation Bonds, Series 1998A, authorized by Chapter 14, Laws of 1989, 1st ex. sess., amended, and Chapter 17, Laws of 1995, 2nd Special Session, and Chapter 39.42 RCW.

Chairman Murphy moved to accept the bid from Prudential Securities, Inc., and adoption of Resolution No. 870.  Governor Locke seconded the motion and the resolution was adopted.

Mr. Kerr introduced proposed Resolution No. 871 which provides for the acceptance of a bid for the purchase of Motor Vehicle General Obligation Bonds, Series 1998B of the State in the aggregate principal amount of $65,000,000; fixing the interest rates and designating serial and term bond maturities for the bonds; all in accordance with Resolution No. 867.  Information soliciting competitive bids for this financing has been circulated through publication of a preliminary official statement and advertising in the local and national financial press.  Notice has also been given to the market electronically through the Bloomberg Financial Information network and the State Treasurer’s Web Page on the Internet.

Mr. Kerr stated the apparent low bidder was Smith Barney, Inc., with a true interest cost of 5.105074.  Prudential Securities submitted a true interest cost bid of 5.113, Goldman Sachs submitted a true interest cost bid of 5.115, and Merrill Lynch submitted a true interest cost bid of 5.1195.  Mr. Kerr also stated that all bids conformed to the official notice of sale.

Mr. Kerr presented proposed Resolution No. 871 to the committee.

Resolution No. 871 providing for the award of sale of $65,000,000 State of Washington Motor Vehicle Fuel Tax General Obligation Bonds, Series 1998B, authorized by Chapters 39.42, 47.10.761, 47.10.812, 47.10.819, 47.10.834, and 47.60.800 RCW.

Chairman Murphy moved to accept the bid from Smith Barney, Inc., and adoption of Resolution No. 871.  Governor Locke seconded the motion and the resolution was adopted.

There being nothing further to come before the committee, the meeting was adjourned at 9:17 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