Case Study

Philadelphia, PA
Comprehensive Financial Planning Support and Project Consulting

PFM played a key role in developing, researching, analyzing and writing the first Five-Year Financial Plan required under the Pennsylvania Intergovernmental Cooperation Act (PICA) in 1992 to launch Philadelphia's recovery from fiscal distress. Execution of the initiatives set forth in the initial Plan produced an operating surplus by FY1994, and multiple credit rating increases. That Plan and the subsequent annual editions (transitioned over this period to now be substantially produced by the City internally) have served as a guide for City managers, citizens, rating agencies, and investors. Philadelphia's approach has also become a model for industry analysts, government officials and academics alike in restructuring municipal operations. Fitch ratings has described Philadelphia's multi-year plan as a model "that can be emulated by local governments, large and small."

In addition to its support for each of the City's Five-Year Financial Plans, PFM has served as financial advisor for numerous City debt transactions totaling over $11 billion since 1992. In this capacity, PFM has interacted with rating agencies, institutional investors, and other market participants to help the City repeatedly make the case to increase its bond rating, which has risen from "highly speculative" in 1992 to medium quality investment grade today. Because of the need to remain knowledgeable about the City's activities, this effort has given PFM strong insight into the operations of the City and City-related agencies.

As a result, PFM has been able to undertake a variety of additional assignments for the City. In recent years these have included a financial analysis of the possible sale of the Philadelphia Gas Works; support for Gas Works labor negotiations; support for the Water Department's ratemaking efforts and wholesale service expansion; analysis of financing options for the Free Library of Philadelphia; policy development for the Office of Fleet Management; support for public safety interest arbitration proceedings; strategic planning support for the City's Fairmount Park System; coordination of a fleet cost reduction initiative; and reorganization of City housing agencies.