* City Controller Jonathan Saidel predicted the city pension fund, a consortium of local banks and private investors would buy the rest of the notes. "The priority has to be no missed payrolls," Saidel said. "I would bet there will be no missed payrolls."
* State Treasurer Catherine Baker Knoll, who last week refused to lend money to the city, agreed to deposit state funds owed the city into a special account earmarked to repay those who buy the loan notes. In a legal opinion last week, Knoll's office said it would be illegal for the treasurer to establish such an account, called an "intercept," but it did not address the question of whether the city could set up its own "intercept." Such an account is considered a crucial selling point for the notes.
* Mayor Goode said a "formal proposal" for a note sale had been sent out to the city pension fund, the local banks, Merrill Lynch Capital Markets and other potential investors. Goode said he hoped the sale would be completed ''not later than the end of next week."
The Casey administration official said a loan proposal would be presented to the 11-member Public School Employees Retirement System board tomorrow and Friday by board member G. Davis Greene Jr., special assistant to the governor.
The board has retained the law firm of Morgan Lewis & Bockius, the city's largest, to advise it on the legality of such an investment.
Although board chairman Bernard Freitag said this week that he didn't see how a proposed loan could be approved at the board's Friday meeting, the Casey administration official said representatives of the governor and others working on behalf of the city successfully approached enough board members over the weekend to ensure approval of the loan.
