Atlantic City hired two financial advisors to assist in coming up with a financial recovery plan needed to avoid state intervention.
Mayor Donald Guardian announced Friday afternoon that Philadelphia-based PFM Group Consulting LLC, a subsidiary of the PFM Group, will provide analytical work in support of a five-year financial plan that the state must approve. NW Financial Group, which has advised New Jersey municipalities for over 20 years, was also brought on board to provide guidance on how the cash-strapped city can redesign current and future debt service obligations.
The hiring of the advisory firms comes after the city brought on Roseland, N.J.-based McManimon Scotland & Baumann as bond counsel in June to help restructure $240 million in bonded debt.
"With these three groups taking a firm grasp on the inner workings of our municipal government and the issues we are facing, I am confident that a strong, practical and innovative recovery plan will be created that will show the viability and fortitude of our local government and the people we represent," said Guardian in a statement.
PFM has experience developing multi-year financial plans for governments facing budgetary stress, and is currently the state-appointed overseer for Pittsburgh and several smaller cities in Pennsylvania's distressed municipalities program. The firm has worked on turnarounds around the nation, including with Philadelphia, Washington, D.C. and Miami.
"We have worked with many cities to address fiscal difficulties, but every community has its own unique considerations," said PFM managing director Michael Nadol in a statement. "We look forward to working with the many stakeholders who care about and have advanced ideas to help Atlantic City, as we work to help draft the recovery plan required by state legislation."
Guardian noted that NW Financial will be determining how to plan debt payments that match Atlantic City's ability to pay when meshed with a budgetary restructuring plan being formed by PFM. The Hoboken. N.J.-based firm will also assist the city in discussions with bondholders, bond insurers and rating agencies as well as advising on any potential market transactions that may be undertaken to refinance a portion of its debt obligations.
Atlantic City is rated CC by S&P Global Ratings and Caa3 by Moody's Investors Service. If the city's five-year plan is not accepted by the state, New Jersey's Local Finance Board will be empowered to alter municipal contracts and debt over a five-year period.
