Municipality of Norristown: Five-Year Financial Plan
In September 2017, the Municipality of Norristown submitted its application for assistance, citing “a population that is getting less affluent” and three specific challenges that hurt Norristown’s efforts to attract and retain residents and businesses: a decrease in home ownership, concurrent with the rise of transient rental housing; a persistent stigma of being a crime-ridden community, despite falling crime rates; and unsightly littering and poor property maintenance, which exacerbates the perceived lack of safety. Norristown’s poverty rate increased from 16.6 percent in 2010 to 22 percent in 2015.
From a financial perspective, the Municipal government itself was relatively stable. Prior to the Network engagement, Norristown leadership had cleared a backlog of outstanding year-end financial audits, bolstered its reserves and returned to the credit market with a rating that sat within the high grade of the Standard and Poor’s scale. But the Municipality anticipated drawing down its financial reserves by at least $1 million each year in 2018 and 2019 to cover regular operating expenditures.
Looking beyond the walls of Municipal government, Norristown as a community had several opportunities within the next five years to attract and retain residents and businesses. As evidence of this momentum, a recently completed market-rate housing development was filled to capacity and there was reported interest from private developers in rehabilitating properties along the Schuylkill River water front. The County government was undertaking a $281 million renovation to the downtown Courthouse and the Commonwealth announced that it would build a new highway slip-ramp to improve accessibility to Norristown.
While there was still work to do ensure that Municipal government finances were structurally balanced, and the Municipality needed to invest in basic infrastructure, Norristown was poised to do more than meet the basic standards for competency and credibility. If Norristown’s leaders made smart, hard decisions within the first three years of the planning period, they could become more creative, cooperative and constructive partners in remaking Norristown as a vital urban hub within Montgomery County.
The Network partnered with Norristown to develop a multi-year financial plan to address the interconnected issues related to public finance, public safety, community development and economic development. Recognizing the Municipality’s goal to become more economically competitive, and to successfully attract and retain more residents and businesses, the Network developed a plan to improve the Municipality’s financial position; allocate resources effectively to address critical community and economic development issues; and make needed investments in public infrastructure.
The multi-year financial plan took a comprehensive look at the government’s operations and finances projected over several years to identify future gaps in resources so that leaders could proactively identify and execute strategies to fill those gaps in a way that would advance their vision for what Norristown should be. The Plan recommended eight specific goals (three related to finance, three related to operations and two related to economic development) that would serve as guideposts for Council’s future budgetary, hiring and policy decisions. The Plan then offered a series of recommendations to advance those goals, phased over a five-year period. To underscore the dynamic nature of the planning process, the Network also provided a multi-year financial projection model that the Municipality could update and use on an ongoing basis to project the financial impact of its decisions during the budgetary, debt issuance and collective bargaining processes.
The Network’s engagement team in Norristown was led by Network consortium member PFM, with assistance from Enterprise Community Partners.
Municipality of Norristown: Five-Year Financial PlanDownload