DALLAS -- Kansas yesterday named Public Financial Management Inc. as financial adviser for an $890 million highway bond program after the selection was delayed for two months.
Michael L. Johnston, secretary of the Kansas Department of Transportation, named Philadelphia-based PFM to plan the state's first major bond-financed program in two decades. The decision, originally expected in June, was put off because a new transportation secretary was named.
"We will work with PFM to develop a plan for how we should proceed," said Robert Haley, director of administration for the department. "We do not have any specific thoughts on how to issue the bonds right now."
Public Financial Management was chosen over seven other applicants after more than 200 firms had inquired about the issue. Officials at the firm did not return several telephone calls yesterday seeking comment on the selection.
The firm will advise the state on its $890 million bond program that will be part of a $2.6 billion highway improvement plan approved by lawmakers in 1989.
The bonds must be issued by the June 30, 1997, foscal yearned.
Mr. Haley said the secretary of transportation has wide discretion in how and when the bonds are issued. He can direct that they be sold competitively or through negotiation.
He also will decide the security pledge for the bonds, which could include a pledge of motor fuel taxes, vehicle registration fees, and a portion of the state sales tax. Kansas does not sell general obligation debt.
Asked about security of the bonds, Mr. Haley said which pledges will be made "depends on what kind of rating we are looking at."
The state highway department last went to the bond market in 1985, when it refunded nearly $300 million in two sales.