The relevance of the topic is due to the need for improvement and further development of scientific and methodological provision of portfolio management processes within the portfolio management introduction in the field of project management of local (territorial) self-government, including projects of public participation (PP projects). The purpose of the study is to improve and further develop the scientific and methodological provisions of portfolio formation group processes under the conditions of PP projects' implementation, which are considered as the corresponding portfolio components. The study's objectives are as follows: 1) to establish a conceptual research foundation and to identify project management knowledge bases relevant to the research topic;2) to analyze the interrelated scientific and methodological approaches to: structuring categories; defining criteria for evaluation, selection and prioritization; optimization of PP project combinations as those presented in portfolios; 3) to formulate and check, using the database of public projects of Kyiv city, hypotheses relating to the insignificance of differences in the combination of PP projects, separated by thematic direction, which determine the feasibility of presenting projects of thematic areas in the relevant sub-portfolios of the overall PP project portfolio; 4) to propose the model for the formation of the optimal composition of the PP project portfolio recommended for implementation. The methods of the study The method of scientific identification was applied while forming the conceptual basis of the research; the method of comparative analysis was applied in the analysis of scientific and methodological approaches to structuring, definition of criteria (evaluation, selection, prioritization) and optimization of the PP project portfolio; to test the hypothesis of insignificance of differences in the combinations of PP projects, separated by thematic areas, the non-parametric criterion (test) of significance of Kruskal-Wallis was used; while building a model for the formation of the optimal composition of the PP project portfolio, the method of cost-benefit analysis, the time value of money concept, and an integer programming problem were applied.