Case Studies

  • City of Pittsburgh

     In 2003, Pittsburgh laid off 446 employees, including nearly 100 police officers. Along with credit rating downgrades to speculative levels, an independent financial audit even questioned the City’s ability to continue as a going concern. In response, the Commonwealth of Pennsylvania designated the City as “distressed” and placed it under state oversight. In 2004, the Commonwealth appointed PFM and a regional law firm to be the City’s Recovery Coordinators and to draft a multi-year turnaround plan. PFM’s plan was based on a multi-year budget model that projects the City’s revenues and expenditures absent corrective action, and included more than 200 specific deficit-closing recommendations. Passed by City Council and signed by the Mayor, the plan provided a comprehensive strategy to restructure City services, improve regional cooperation, control workforce costs, modify tax policy, and strengthen financial management. Using the plan as a guide, the City has since regained an investment-grade credit rating and turned persistent annual budget shortfalls into recurring positive operating results. As a Pittsburgh Post-Gazette editorial noted in 2009,“Pittsburgh was on the brink of bankruptcy in 2004 when…City Council adopted the first state-mandated five-year plan. Without the changes it required, Pittsburgh would have a $103 million deficit instead of a $53 million surplus today.” 






    These materials are based on factual information from actual projects that The PFM Group of companies has engaged in for a client. They are for general information purposes only and are not intended to provide specific advice or a specific recommendation. The results of individual projects will vary significantly depending upon the size and structure of each transaction, permitted investments, prevailing market conditions at the time of the transaction, and other events or circumstances beyond our control. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in these case studies is not an offer to purchase or sell any securities.