The rating on Philadelphia, Pa.'s bonds reflects: * A trend of sound financial operations, producing six consecutive years of balanced operations; * A demonstrated trend in budgeting and long-term financial planing; and * The presence of the Pennsylvania Intergovernmental Cooperation Authority (PICA), the fiscal oversight authority. These factors are constrained by the city's: * Below-average economic trends; * Tax base that has been slow to recover from the past recession, * Large unfunded pension; and * High debt burden, which is due in part to deficit financing. Since fiscal 1992, the administration and city council have cooperated to pursue a structural balance that was necessary for the city to emerge from its fiscal crisis. Philadelphia has been successful in its
