May 4, 1999

Present:

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

Also Present:

Allan J. Martin, Office of the State Treasurer Jeanne Cushman, Office of the Attorney General Kay L. King, Office of the State Treasurer Tim Kerr, Office of the State Treasurer Cynthia Weed, Preston Gates & Ellis LLP Nancy Adams, Office of the State Treasurer Harvey C. Childs, Office of Financial Management Martin Reynoso, Office of the State Treasurer Susan Musselman, Susan D. Musselman, Inc. Svein Braseth, Office of the State Treasurer Greg Pierce, First & Goal, Inc. Jay Kirkevold, Office of the State Treasurer Dick Thompson, Office of Financial Management Mike Clarey, Office of the State Treasurer Dan Gottlieb, Gottlieb Fisher & Andrews PLLC Susan Melvin, Office of the State Treasurer

Chairman Murphy called the meeting to order.

Lieutenant Governor Owen moved the minutes for the March 30, 1999, meeting be approved.  Chairman Murphy seconded the motion.  The motion passed and the minutes were adopted.

Mr. Kerr introduced proposed Resolution No. 888 amending State Finance Committee Resolution No. 881 to increase the amount of Series 1999S-3 bonds authorized for issuance and sale from $7,800,000 up to $12,000,000.  Mr. Kerr stated at its December 18, 1998, meeting, the Committee adopted Resolution No. 881 which, in part, authorized the issuance and sale of the Series 1999S-3 bonds.  Proceeds of this series of bonds, combined with cash from other revenue sources, were intended to fund a deferred sales tax escrow account.  Funds deposited in the account plus interest earnings will repay the state in the years 2008 through 2017.

Mr. Kerr explained the Brower petition to the U.S. Supreme Court delayed the sale of the stadium bonds.  To keep the project going, all cash on hand has been made available.  The Public Stadium Authority expects to disburse cash originally reserved to fund the sales tax deferral.  To make the deferral escrow whole, more bonds must be issued than previously expected.  Adjustments have been made in the Facility Funding Plan to reflect the change in the mix of bond and non-bond cash.  The proposed amount is an “up to” maximum, and the actual Series 1999S-3 bond issue is likely to be lower.  The par amount of the Series 1999S-2 bonds will be adjusted downward so that total May 1999 stadium financing will stay at approximately $99.8 million.

Mr. Kerr said it should be stressed that this reconfiguration is consistent with the $300 million public share budget, and that the ultimate amount of bonds issued will be reduced to take into account non-bond cash sources used for the project during the first five months of 1999.  Sale of the Series 1999S-3 bonds is scheduled for May 26, 1999.  Mr. Kerr stated that he knows of no cause or controversy relating to this proposed amendment.

Mr. Kerr presented proposed Resolution No. 888 to the committee.

Resolution No. 888 amending Resolution No. 881 to authorize the issuance and sale of up to $7,800,000 $12,000,000 State of Washington General Obligation Bonds, Series 1999S-3, authorized by Chapter 220, Laws of 1997, and Chapter 39.42 RCW.

Chairman Murphy moved adoption of Resolution No. 888.  Lieutenant Governor Owen seconded the motion and the resolution was adopted.

Mr. Allan J. Martin introduced proposed Resolution No. 889 authorizing the issuance and sale of an amount up to $6,119,210 plus financing costs and reserves of state of Washington Certificates of Participation.  Mr. Martin stated proceeds of the sale will be used for South Puget Sound Community College to expand and redevelop the main campus parking lot (the “Parking Lot Project”) and to develop a student union facility (the “Student Center Project”).  The parking lot expansion and redevelopment involves re-grading an existing parking lot with approximately 81 spaces and combining it with adjacent land to add approximately 151 spaces, for a total of 232 parking spaces.  The student center will be constructed on land owned by the college, which is part of its main campus.  Completion is expected in August 2000. The Department of General Administration will serve as construction manager for the projects.

Mr. Martin said the COP is scheduled to be sold by competitive bid in late May 1999.  It is anticipated the student center financing term will be 20 years, the parking lot project a 10-year term.  It is estimated that actual project costs will total $5,351,010.  Authorization of a COP by the State Finance Committee is pursuant to an internal policy of the college whereby no projects in the over $4 million category will be financed without approval of the State Finance Committee by resolution.  Mr. Martin asked Cynthia Weed, bond counsel, to make a further clarification.

Ms. Weed stated that internally, each of the community colleges has a process for the approval of capital projects in their capital budget.  The college internally approves the projects, and then the projects are referred to the State Board for Community and Technical Colleges for approval.  With respect to this specific financing contract, the college treasurer’s office internal procedures treats this as a lease that implements the college’s existing capital budget.  Authorization has been delegated to the college president to execute leases in connection with the acquisition of financing to implement authorized budget projects, so ordinarily we would not expect a separate board resolution specifically authorizing this expenditure.

Mr. Martin presented proposed Resolution No. 889 to the committee.

Resolution No. 889 authorizing the issuance and sale of up to $6,119,210 State of Washington Certificates of Participation (South Puget Sound Community College Student Activity Center and Parking Projects) plus financing costs and required reserves pursuant to Sections 53(h) and 53(i), Chapter 235, Laws of 1997, and Chapter 39.94 RCW, as amended.

Lieutenant Governor Owen asked why the proposed resolution amount of $6.1 million was so much higher than the estimated project amount of $5.3 million.  Ms. Weed indicated that the $6.1 million was the maximum amount contained in the capital budget.  Mr. Martin said that the financing would be closer to the estimated project amount plus project contingencies, capitalized interest, and required reserves.

Lieutenant Governor Owen moved adoption of Resolution No. 889.  Chairman Murphy seconded the motion and the resolution was adopted.

There being nothing further to come before the committee, the meeting was adjourned at 9:12 A.M.

	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