The Governor and Cabinet - Florida Department of State

Cabinet Affairs

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AGENDA

DIVISION OF BOND FINANCE OF THE STATE BOARD OF ADMINISTRATION

(Contact person: J. Ben Watkins III - 488-4782)
The Capitol
September 14, 1999

This meeting is open to the public.

Approval of minutes of the meeting of August 24, 1999.

(Attachment #1)
ADOPTION OF 1) THE NINETEENTH SUPPLEMENTAL AUTHORIZING RESOLUTION AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $367,200,000 STATE OF FLORIDA, FULL FAITH AND CREDIT, STATE BOARD OF EDUCATION, PUBLIC EDUCATION CAPITAL OUTLAY BONDS, 1999 SERIES, AND OF 2) A RESOLUTION AUTHORIZING THE COMPETITIVE SALE AND DELIVERY OF NOT EXCEEDING $200,000,000 OF STATE OF FLORIDA, FULL FAITH AND CREDIT, STATE BOARD OF EDUCATION, PUBLIC EDUCATION CAPITAL OUTLAY BONDS, 1999 SERIES C (THE "1999 SERIES C BONDS").
The Nineteenth Supplemental Authorizing Resolution supplements the Public Education Capital Outlay Bond Master Resolution adopted by the Division of Bond Finance on July 21, 1992, and contains the authorization for bonds necessary to finance public education capital outlay projects authorized during the 1999 legislative session. The bonds will be payable from gross receipts taxes, and will be additionally secured by the full faith and credit of the State. The proceeds of the bonds will be used to finance capital outlay projects for school and community college districts and the State University System.

The 1999 Series C Bonds will be the first series of bonds sold pursuant to the Nineteenth Supplemental Authorizing Resolution.

Copies of the resolutions may be obtained from the Division of Bond Finance upon request.

(Recommend)
REPORT OF AWARD OF $30,355,000 STATE OF FLORIDA, DEPARTMENT OF MANAGEMENT SERVICES, FLORIDA FACILITIES POOL REVENUE BONDS, SERIES 1999B, TO THE LOW BIDDER FOR SUCH BONDS.

The Division of Bond Finance was authorized to receive bids for these bonds, and award them to the low bidder, by a resolution adopted by the Governor and Cabinet. Bids were received at the office of the Division at 11:00 a.m. on August 31, 1999, and the bonds were awarded to the low bidder, Salomon Smith Barney Inc., which submitted a bid at an annual true interest cost rate of 5.4833%. The bonds are scheduled to be delivered on September 21, 1999.

A report of award and tabulation of bids is attached.

(Attachment #2)
REPORT ON THE NEGOTIATED SALE OF $306,910,000, STATE OF FLORIDA, FULL FAITH AND CREDIT, STATE BOARD OF EDUCATION PUBLIC EDUCATION CAPITAL OUTLAY REFUNDING BONDS, 1999 SERIES D
Pursuant to a resolution of the Governor and Cabinet, on behalf of the State Board of Education, the Division of Bond Finance negotiated the sale of the above referenced bonds with a syndicate led by Salomon Smith Barney Inc. on August 19, 1999. The bonds were priced to yield an annual true interest cost rate of 5.925% and are scheduled for a delayed delivery on March 15, 2000.

The refunding will result in gross debt service savings of $61,575,338, average annual debt service savings of approximately $2,610,000 per year, and present value debt service savings of $33,734,324.

The report of sale is attached.

(Attachment #3)

The regular meeting of the Division of Bond Finance of the State Board of Administration was held on August 24, 1999, in the Cabinet meeting room of the Capitol in Tallahassee. Members present were:

Governor Jeb Bush
Attorney General Bob Butterworth
Comptroller Robert F. Milligan
Treasurer/Insurance Commissioner Bill Nelson
Agriculture Commissioner Bob Crawford
Education Commissioner Tom Gallagher

The following were considered by the Cabinet:

Item 1. The minutes of the meeting of June 22, 1999 were approved without objection.

Item 2. Mr. Watkins requested the adoption of a resolution authorizing the issuance of not exceeding $60,340,000 State of Florida, Board of Regents, University of Central Florida Housing Revenue Bonds, (various series).

Moved and seconded. Adopted without objection.

J. Ben Watkins III
Director
Division of Bond Finance

(Attachment #1)

J. Ben Watkins III
Director

STATE OF FLORIDA
Division of Bond Finance
of the state board of administration

Hermitage Centre, Suite 200
1801 Hermitage Boulevard
Tallahassee, Florida 32308
Post Office Box 13300
Tallahassee, Florida 32317-3300

(Address mail to P.O. Box; deliveries to street address)

telephone: (850) 488-4782
telecopier: (850) 413-1315

Jeb Bush
Governor
as Chairman

Katherine Harris
Secretary of State

Bob Butterworth
Attorney General

Robert F. Milligan
Comptroller
as Secretary

Bill Nelson
State Treasurer
as Treasurer

Bob Crawford
Commissioner of Agriculture

Tom Gallagher
Commissioner of Education

MEMORANDUM

TO:	Governor and Cabinet, as the Governing Board of the Division of Bond Finance
FROM:	J. Ben Watkins III
DATE:	September 14, 1999
SUBJECT:	Award of $30,355,000 State of Florida, Department of Management Services, Florida Facilities Pool Revenue Bonds, Series 1999B

Pursuant to authorization by the Governor and Cabinet by a resolution adopted on June 22, 1999, bids were received for the above referenced bonds at the office of the Division of Bond Finance at 11:00 a.m. on Tuesday, August 31, 1999.

Five bids were received and a tabulation of such bids is included herein. The low bid was from Salomon Smith Barney Inc., at an annual true interest cost rate of 5.4833%. The Bond Buyer 25 Revenue Bond Index for the week of sale was 5.89%. The bids were reviewed by representatives of the Division of Bond Finance and the bonds were awarded to the low bidder as authorized. The bonds are scheduled to be delivered on September 21, 1999.

The bonds are being issued for the purpose of financing a portion of the cost associated with the construction of facilities located at the Capital Circle Office Center in Leon County, Miami-Dade County and Alachua County, as approved by the legislature, and to pay certain costs of issuance. The buildings are to be primarily occupied by the Department of Management Services, Department of Law Enforcement, Department of Juvenile Justice, Department of Revenue and the Agency for Health Care Administration.

The bonds are dated August 1, 1999, with interest payable on March 1, 2000, and semi-annually on each September 1 and March 1 thereafter. The bonds consist of serial bonds maturing on September 1 in the years 2001 through 2019 and two term bonds maturing on September 1 in the years 2022 and 2028.

The bonds are secured by and are payable on a parity with the outstanding Florida Facilities Pool Revenue Bonds from the pledged revenues. The pledged revenues consist primarily of rents paid by State agencies from monies appropriated by the legislature for rent of facilities in the Florida Facilities Pool. The availability of the pledged revenues will be dependent on annual legislative appropriations for payment of rentals. The bonds are not secured by the full faith and credit of the State.

(Attachment #2 for item #3)

The bonds have been rated "AAA" by Moody's Investors Service, "AAA" by Standard & Poor's Ratings Services and "AAA" by Fitch IBCA, Inc., based upon the purchase of a municipal bond insurance policy by the underwriters from Financial Security Assurance, Inc., insuring the payment when due of the principal of and interest on the bonds. Without such insurance, the bonds would have been rated "A1" by Moody's Investors Service, "AA-" by Standard & Poor's Ratings Services, and "A+" by Fitch IBCA, Inc.

BID TABULATION

Bidder	Annual True Interest Cost Rate
Salomon Smith Barney Inc.	5.4833%
Merrill Lynch & Co. Inc.	5.4933%
William R. Hough & Co.	5.4977%
Morgan Stanley & Co.,Incorporated	5.5100%
Raymond James and Associates, Inc.	5.5733%

INTEREST RATES AND YIELDS FROM WINNING BID

Maturity Date	Principal Amount	Coupon	Yield
9/1/01	$540,000	4.00%	4.00%
9/1/02	560,000	4.00	4.05
9/1/03	580,000	4.10	4.125
9/1/04	605,000	4.20	4.22
9/1/05	630,000	4.30	4.32
9/1/06	660,000	4.40	4.43
9/1/07	690,000	4.50	4.55
9/1/08	720,000	4.60	4.67
9/1/09	750,000	4.70	4.80
9/1/10	785,000	4.875	4.95
9/1/11	825,000	5.00	5.05
9/1/12	865,000	5.10	5.15
9/1/13	910,000	5.125	5.22
9/1/14	960,000	5.20	5.28
9/1/15	1,005,000	5.25	5.33
9/1/16	1,060,000	5.25	5.38
9/1/17	1,115,000	5.25	5.42
9/1/18	1,175,000	5.375	5.44
9/1/19	1,240,000	5.40	5.46

$ 4,130,000 5.50% Term Bond maturing on September 1, 2022 (at a yield of 5.50%)

$10,550,000 5.50% Term Bond maturing on September 1, 2028 (at a yield of 5.60%)

J. Ben Watkins III
Director

STATE OF FLORIDA
Division of Bond Finance
of the state board of administration

Hermitage Centre, Suite 200
1801 Hermitage Boulevard
Tallahassee, Florida 32308
Post Office Box 13300
Tallahassee, Florida 32317-3300

(Address mail to P.O. Box; deliveries to street address)

telephone: (850) 488-4782
telecopier: (850) 413-1315

Jeb Bush
Governor
as Chairman

Katherine Harris
Secretary of State

Bob Butterworth
Attorney General

Robert F. Milligan
Comptroller
as Secretary

Bill Nelson
State Treasurer
as Treasurer

Bob Crawford
Commissioner of Agriculture

Tom Gallagher
Commissioner of Education

MEMORANDUM

TO:	Governor and Cabinet, as the Governing Board of the Division of Bond Finance
FROM:	J. Ben Watkins III
DATE:	September 14, 1999
SUBJECT:	Sale of $306,910,000 State of Florida, Full Faith and Credit, State Board of Education Public Education Capital Outlay Refunding Bonds, 1999 Series D

Pursuant to a resolution of the Governor and Cabinet adopted on June 22, 1999, the Division of Bond Finance was authorized to negotiate the sale of the above referenced bond issue on behalf of the State Board of Education to a syndicate led by Salomon Smith Barney Inc. The Division negotiated the sale of the bonds on August 19, 1999. The bonds are scheduled for a delayed delivery on March 15, 2000.

The proceeds derived from the sale of the bonds will be used to refund a portion of the outstanding Series 1989-A Bonds. The bonds were priced to yield an annual true interest cost rate of 5.925%. The refunding will result in gross debt service savings of $61,575,338, average annual debt service savings of approximately $2,610,000 per year, and present value debt service savings of $33,734,324.

The bonds are dated March 15, 2000, with interest payable June 1, 2000, and semi-annually on each December 1 and June 1 thereafter. The bonds consist of serial bonds maturing annually on June 1 in the years 2001 through 2019 and 2023, and one term bond maturing June 1, 2022.

Debt service payments for the bonds are secured by the gross receipts taxes collected within the State, and are additionally secured by a pledge of the full faith and credit of the State. The lien of the 1999 Series D Bonds on the gross receipts taxes will be junior and subordinate to the lien of the outstanding Public Education Capital Outlay Bonds, Series 1985 through Series 1992-A, and will be on a parity with the outstanding Public Education Capital Outlay Bonds, 1992 Series B through 1999 Series B and any additional parity bonds which may be issued prior to delivery on March 15, 2000.

(Attachment #3 for item #4)

The bonds have been rated "Aa2" by Moody's Investors Service, "AA+" by Standard & Poor's Ratings Service and "AA" by Fitch IBCA, Inc.

Pursuant to Rule 19A-3.003(5), the Division of Bond Finance is required to report, on a negotiated sale of bonds, the price and allocation of the bonds, the gross underwriting spread and the fees paid by the Division of Bond Finance, in addition to the award of the bonds.

Details of the pricing:

Maturity Date	Principal Amount	Coupon	Yield
6/1/2001	$595,000	5.00%	4.50%
6/1/2002	625,000	5.00	4.60
6/1/2003	655,000	5.00	4.70
6/1/2004	690,000	5.00	4.85
6/1/2005	725,000	5.50	5.00
6/1/2006	765,000	5.50	5.10
6/1/2007	805,000	5.50	5.20
6/1/2008	850,000	5.50	5.30
6/1/2009	895,000	5.50	5.40
6/1/2010	945,000	5.50	5.50
6/1/2011	995,000	5.50	5.57
6/1/2012	1,050,000	5.50	5.64
6/1/2013	1,110,000	5.50	5.73
6/1/2014	1,170,000	5.50	5.74
6/1/2015	1,235,000	5.625	5.80
6/1/2016	1,305,000	5.625	5.85
6/1/2017	1,380,000	5.75	5.88
6/1/2018	1,460,000	5.75	5.91
6/1/2019	35,540,000	5.75	5.93
6/1/2023	53,320,000	6.00	5.80

$200,795,000 5.75% term bonds maturing 7/1/2022 (at a yield of 5.97%)

Total Par Amount

$306,910,000.00

Less: Net Original Issue Discount

(4,888,527.25)

Less: Gross Underwriters' Spread

(1,032,803.00)

Purchase Price

$300,988,669.75

The Gross Underwriting Spread:

	Per Bond	Dollar Amount
Management Fee	$0.00	$0.00
Average Takedown	3.20	982,112.00
Underwriters' Risk	0.00	0.00
Underwriters' Expenses	0.17	50,691.00
Total Gross Underwriting Spread	$3.37	$ 1,032,803.00

Allocation of Underwriters' Compensation:

Pursuant to an agreement between the Division of Bond Finance and Salomon Smith Barney, Inc., the 1999 Series D Bonds were allocated such that each firm received the following percentages of the sales commission (known as the "takedown") of the issue:

Managers	Percentage of Total Allotments	Total Compensation
Salomon Smith Barney Inc.	50.43%	$495,248.00
Lehman Brothers Inc.	12.00%	$117,857.28
Goldman, Sachs & Co.	11.75%	$115,438.72
Raymond James & Associates, Inc.	10.34%	$101,540.48
Morgan Stanley Dean Witter	7.94%	$77,953.12
William R. Hough & Co.	5.11%	$50,221.60
Ramirez & Co., Inc	2.43%	$23,852.80
Total	100.00%	$982,112.00

Fees of Professionals to be Paid by the Division of Bond Finance:

Squire, Sanders & Dempsey, L.L.P. (Bond Counsel)

$50,000

Public Resources Advisory Group (Financial Advisor)

$5,000

Ernst & Young, L.L.P. (Verification Agent)

$7,000

A letter was provided by Public Resources Advisory Group, financial advisor to the Division for this issue, stating it is their opinion that the yields of the bonds, the gross underwriting spread and the timing of the sale were fair and reasonable to the State of Florida.