PHILADELPHIA — What started as an off-the-cuff discussion in New York over the summer has blossomed into the Philadelphia Municipal Analyst Society, which attracted 50 people to its kickoff event in Logan Square on Thursday night.
"A few of us realized there are a lot of analysts in this city but no constituent society," said Eric Friedland, head of municipal research at Schroders Investment Management. Many Philadelphia analysts are already members of the Municipal Analysts Group of New York, but often find it difficult to attend MAGNY events.
"We thought perhaps the time is right. We thought it would be best to hold one event and see the reaction," Friedland added.
Assured Guaranty Municipal Corp. sponsored the event at the Top of the Tower meeting room. Philadelphia city treasurer Nancy Winkler, the 2013 recipient of the Freda Johnson Award for Trailblazing Women in Public Finance, was the keynote speaker.
Friedland heads a planning group that includes William Bonawitz, director of Municipal Research at PNC Capital Advisors; Tom Kozlik, a director at Janney Capital Markets; Jean Lu, a principal and senior analyst at Vanguard Group; and Stephen Winterstein, chief municipal strategist at Wilmington Trust Investment Advisors.
"This is a great turnout. We started out with five to 10 and it's nice to see 50 people," said Kozlik.
According to Friedland, society meetings could focus on networking, information, advocacy and community service. The group's ultimate goal is to become a constituent society of the National Federation of Municipal Analysts and have representatives on the NFMA board.
In her presentation, "Why Philadelphia is not Detroit," Winkler told the assembled analysts that Philadelphia's financial outlook is much brighter than the bankrupt Motor City's.
"You'll see a very stark difference in financial condition, demographics, size and importance to the region," she said. "If you are not from Philadelphia and have an image from five or ten years ago, take a look around. We have levels of vibrancy that are attracting people."
Winkler said roughly 235,000 people come into Philadelphia daily, including commuters and tourists.
Winkler, the city's treasurer under Mayor Michael Nutter since January 2011 and a former managing director and partner at Public Financial Management Inc., cited encouraging trends in the city's finances, including an unaudited positive fund balance of $260 million for fiscal 2013, up $127 million. The city will apply nearly $85 million of the surplus toward labor settlements, she said.
Other bright spots, she added, include a diverse economy with industries positioned for growth, private sector employment above 2008 levels, and more than $3 billion in new construction activity. New construction, she said, reflects investment across multiple sectors.
Philadelphia has also benefited from major investment from educational and medical institutions, according to Winkler. "We've transformed to a knowledge economy," she said.
A report from the Pew Charitable Trust, which cited statistics from the Pennsylvania Center for Workforce Information & Analysis, reported that 12 of the 15 largest private-sector employers are in education or health care.
Standard & Poor's upgraded Philadelphia's bond rating from BBB to BBB-plus in April 2012, then to A-minus in April 2013. Fitch Ratings also assigns A-minus while Moody's Investors Service rates them A2. The ratings apply to both general obligation and city service agreement bonds.
Pension funding levels pose the biggest financial challenge for Philadelphia, according to Winkler. "We continue to tell the mayor and the City Council that it's a very serious challenge for the city," she said. Philadelphia under Nutter's tenure has lowered the assumed rate of return of its pension funds from 8.75% to 7.95%, Winkler said.