March 23, 1999

Present:

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

Also Present:

Allan J. Martin, Office of the State Treasurer Jeanne Cushman, Office of the Attorney General Tim Kerr, Office of the State Treasurer Martin Johnson, Montague DeRose & Associates Nancy Adams, Office of the State Treasurer Forrest Walls, Preston Gates & Ellis Martin Reynoso, Office of the State Treasurer Darlene Cimino-DeRose Montague DeRose & Associates Mike Clarey, Office of the State Treasurer Harvey C. Childs, Office of Financial Management Kay L. King, Office of the State Treasurer Rob Shelley, Seattle-Northwest Securities Svein Braseth, Office of the State Treasurer Jay Kirkevold, Office of the State Treasurer

Chairman Murphy called the meeting to order.

Lieutenant Governor Owen moved the minutes for the March 2, 1999, meeting be approved.  Governor Locke seconded the motion.  The motion passed and the minutes were adopted.

Mr. Kerr introduced proposed Resolution No. 886 providing for award of sale of up to $300,000,000 state of Washington general obligation bonds, Series 1999B.  He stated it had been a busy morning in the market.  Before the state received bids there was a bond offering from Honolulu of nearly $500,000,000, South Carolina is in the market with $200,000,000, and later this morning Clark County School District, Nevada, will be selling $350,000,000.  Mr. Kerr said there is nearly $1.3 billion in bonds in the market this morning, plus other smaller issues.  The bids received today were submitted in a unique manner for the state.  The staff has been working on providing for submission of bids through electronic means.  Svein Braseth and Kay King from the Debt Management Team have been very busy qualifying the electronic bid providers and testing the system, so that the state can be assured of not getting a “pig in a poke,” as opposed to receiving a physical bid as in the past.

The state received bids from five underwriters, which in itself is rather unique, Mr. Kerr stated.  Usually a current issue of this size is combined and attracts three or four bidders.  Mr. Kerr read the five true interest cost (TIC) bids for the record:  Morgan Stanley Dean Witter, 4.947554 percent; Salomon Smith Barney, 4.950826 percent; Merrill Lynch & Co., 4.953946 percent; Lehman Brothers, 4.958054 percent; and Paine Webber Inc., 4.961439 percent.  Mr. Kerr said the bid forms submitted electronically included a listing of coupons, and the state was given the opportunity to independently verify the accuracy of each bid submitted.  The apparent winning bidder is Morgan Stanley Dean Witter with a bid of 4.947554 percent.  All bidders have met all of the bidding rules and have submitted the requisite good faith deposit through a surety.  The bid was received with a premium of just over $1 million, and the premium will be put into the construction fund.

Mr. Kerr presented proposed Resolution No. 886 to the committee.

Resolution No. 886 providing for award of sale of up to $300,000,000 State of Washington General Obligation Bonds, Series 1999B, authorized by Chapter 14, Laws of 1989, 1st Ex. Sess., as amended, Chapter 17, Laws of 1995, 2nd Special Session, Chapter 456, Laws of 1997, and Chapter 39.42 RCW.

Governor Locke moved to accept the TIC bid of 4.947554 percent from Morgan Stanley Dean Witter.  Lieutenant Governor Owen seconded the motion and the resolution was adopted.

Mr. Kerr mentioned that the briefing book provided for today’s meeting will also be used for the meeting next week on March 30, 1999.  At that time the state will be offering $38 million plus motor vehicle fuel tax bonds under conditions similar to today, including electronic bidding procedures.

There being nothing further to come before the committee, the meeting was adjourned at 9:10 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