Five Questions With William J. Fazioli

The senior managing consultant with PFM Group talks about giving financial advice to Rhode Island towns and cities. More

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Five Questions With William J. Fazioli

AS THE ECONOMY HAS SOURED, municipalities have a greater need for financial advice, according to William J. Fazioli, a consultant with Public Financial Management, a municipal financial services advisory firm.
Posted 1/24/12

William J. Fazioli is a senior managing consultant for PFM Group, an independent financial and investment advisory services provider to state and local governments, as well as a manager of money-market mutual funds for municipal entities and nonprofits. PFM opened an office in Providence in December after working with Rhode Island towns and cities from its Boston office.

Fazioli has worked as a financial adviser to Newport, Keene, N.H., and the Hartford Metropolitan District Commission in Connecticut. He served as city manager of East Providence and is currently vice chairman of the city’s Waterfront District Commission. He has also been treasurer of Charlestown and finance director for North Providence.

PBN: Did PFM open a Providence office because there were requests from potential clients. Of did the firm just believe that existing financial advisers were not filling the market needs in the same way that you can?

FAZIOLI: We opened the Providence office with PFM because it offers a much broader range of services to municipalities. Namely, our strategic consulting group works with cities and towns across the country developing financial programs to deal with some level of fiscal distress.

Although PFM is the largest such firm in the nation, most Rhode Island communities have not dealt with them. We can bring together a number of tools and experts in the areas of budgeting, financial forecasting, labor relations, pension reform and organizational studies.

In fact we are making a presentation at the Rhode Island League of Cities and Towns Annual Convention on Thursday about Financial Forecasts and Budget Balancing Strategies.

PBN: What is the difference between what PFM does and what other advisers do?

FAZIOLI: PFM is an independent financial advisory firm – meaning that we do not engage in any underwriting or trading of municipal securities. SEC regulations are changing pursuant to Dodd-Frank which will effect who can serve as an issuer’s financial adviser.

Being independent means that our fiduciary duty is to our clients that are issuing the debt - and not to investors buying the debt.

PBN: What problems do your clients share?

FAZIOLI: As you very well know, Rhode Island communities are facing very difficult fiscal conditions. [One major problem are potential] additional credit rating downgrades in 2012.

Because of that, there is reluctance among some investors to purchase municipal bonds from Rhode Island communities. This market effect has become widespread, affecting all Rhode Island municipalities, not only those coping with financial difficulties.

As we enter 2012, it will be a critical time to pro-actively address these investor concerns. At this point municipal leaders must re-examine past solutions and consider taking bolder actions.

PBN: How has the economy affected your business?

FAZIOLI: In terms of total bonds issued, 2011 was the lowest level since 2001, down 32 percent from 2010. So transactions were down. However, as the economy continues to challenge local governments, the need for our services becomes greater.

PBN: What do you see for this year, a good economy or bad, and why?

FAZIOLI: Generally the outlook is still grim. However, with recent pension reforms and other fiscal reforms, we are hopeful that Rhode Island will turn the corner economically. Improvement to employment and housing are the keys to Rhode Island.

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