Strategic Consulting and Capital Planning

The professionals of AFG have been able to apply our quantitative expertise to strategic consulting engagements such as multi-year plans, management assessments, early retirement feasibility studies, energy conversation analysis, regionalization studies, acquisition studies, economic impact studies and capital/budget planning and development. Our professionals’ experience and ability to analyze operations and services, along with their associated fiscal impacts is clear, as demonstrated by the engagements described below. All of the following projects were delivered with fees and on a timetable consistent with those agreed upon with the client.

Multi-Year Financial Plan, City of East Orange, NJ
The Essex County Improvement Authority (ECIA) engaged the professionals at AFG to establish a multi-year plan for the City of East Orange. AFG developed a dynamic, quantitative model that allowed the City to project budget balances over a five-year period, applying a number of “what if” scenarios of particular concern to the City’s leadership. The Plan identified for the Administration the many causes of its structural imbalance on the revenue and expenditure sides of the budget. Labor contracts were thoroughly reviewed, and a workforce strategy articulated. Department operations and costs were weighed against current needs and comparable spending elsewhere, with outsourcing and reorganization proposed for many agencies. The Plan spelled out initiatives that, if implemented, could cut costs or increase non-tax revenue by $129 million over five years. The executive branch embraced the Multi-Year Plan, using it to frame the FY1999 Budget proposal to the City Council. Since then, the Plan has served as a framework document to support the efforts of the State of New Jersey and East Orange to guide the City toward economic recovery. The Mayor cited the Plan’s implementation as an important reason for the City’s achievement of a $7 million budget surplus in FY2000. AFG’s professionals produced an updated plan for the period FY2003-FY2007; this work included an assessment of the management structure of the Police Department as related to City governance.

South Jersey Port Corporation (State of New Jersey)
The professionals at AFG were hired in 2001 by the State of New Jersey to conduct a review of the South Jersey Port Corporation’s (the “SJPC”) mission statement, perform a review of management practices and SJPC organizational structure. The objectives of the management assessment were to present findings, conclusions and recommendations regarding the SJPC’s mission, performance, and internal operations as well as a means to clarify or improve them. The assessment included conducting meetings with SJPC executive and mid-level managers, SJPC auditors and officials involved in the Region’s development, a review of personal responsibilities, management documents, information technology, comparable ports’ financial practices and budgets. It also included telephone interviews with the Port’s largest clients. In addition, AFG collected 90 documents pertaining to financial, organizational, operational, and the industry for analysis. AFG also used benchmarking to assess how the SJPC compares to other ports. AFG’s professionals recommendations to the SJPC included: assessments through independent analysis, establishment of a process to define the SJPC’s mission and to prioritize and measure goals and powers, development of a Multi-Year Strategic plan, restructuring outstanding debt, and various recommendations on improving internal business operations and controls.

Camden County Improvement Authority – Pennsauken Twin Rinks Project
In our on-going capacity as Financial Advisor to the CCIA, AFG professionals worked with the CCIA in assisting the Township of Pennsauken (“Township”) to finance the purchase of an indoor ice skating facility. Known as the Twin Rinks of Pennsauken (“Facility”), the Facility features two National Hockey League regulation size ice skating surfaces, a pro shop, entertainment arcade, game room and snack bar. In addition to the purchase of the Facility, the project also included the creation of a Municipal Recreational Utility within the Township to operate and maintain the Facility as a self-liquidating public utility. The advice of the professionals of AFG to the CCIA and the Township with respect to this transaction included a comparative cost analysis designed to determine the most cost-effective method for the CCIA and Township to finance the proposed transaction. AFG professionals also reviewed a cash flow analysis, prepared by the Township’s auditor, intended to (1) examine the financial impact of the acquisition of the Facility on the local tax rate and (2) to provide the economic information required to demonstrate that the Project can operate as a self-liquidating utility. Following the CCIA’s and Township’s decision to finance the project via a public bond sale and our confirmation of the results of the feasibility study, AFG professionals prepared and submitted an application to the Local Finance Board seeking approval with respect to (1) the proposed financing, (2) a municipal guaranty of the timely repayment of principal of and interest on the bonds and (3) the creation of the Municipal Recreational Utility (i.e. self-liquidating utility). The LFB application received positive findings by the LFB and, in September 1998, AFG’s professionals advised on the issuance of $4,000,000 CCIA Township Guaranteed Lease Revenue Bonds (the “Bonds”). The Bonds are secured by a Lease Purchase Agreement between the CCIA and Township. The agreement calls for the Township to make lease payments to the CCIA in an amount sufficient to pay debt service on the Bonds. At the end of the lease term ownership of the Facility will revert to the Township.