RESOLVING THE LEDGER
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Mayor Brandon Johnson is losing his chief financial officer just as Chicago prepares to host a crucial investors conference and an emboldened City Council gears up for a grueling election-year budget season.
Acting Chief Financial Officer Steven Mahr replaced Jill Jaworski, who left City Hall in January for a job at Navy Pier shortly after a renegade City Council majority rejected Johnson’s corporate head tax and muscled through an alternative city budget with major elements Johnson continues to battle.
Now, Mahr is also leaving after less than eight months as Jaworski’s interim replacement.
For Wall Street rating agencies and investors soon to arrive in Chicago for the annual investors conference, Mahr's departure could signal a level of instability — with an embattled mayor at the helm, facing an uphill battle for second-term if he chooses to seek re-election, and a City Council more independent than it has ever been.
Chicago is facing a $90 million mid-year budget shortfall, with a $1 billion-plus hole in next year’s budget and a $36 billion pension crisis.
Ald. Pat Dowell (3rd), chair of the City Council’s Finance Committee, said Mahr “stepped into a big job” when Jaworski left, was “really good at explaining complex finances” and took “tons of shots for the administration when they basically hung him out to dry during hearings” before the City Council.
His departure is “bad timing considering that the budget process is beginning,” Dowell said.
“When you step into a position like that and you’re fairly junior, you need to have support and I’m not sure he had that,” Dowell told the Sun-Times.
Asked whether it was Budget Direct Annette Guzman who pulled the rug out from under Mahr, Dowell said, “Who is more senior? I couldn’t even point to somebody.”
Ald. Matt O’Shea (19th) added, “It’s become apparent to me that the budget director doesn’t play well with others in the sandbox. And we need a budget director, a comptroller and a chief financial officer working together.”
The tension between Guzman and Mahr was on full display during a City Council hearing earlier this month on the city’s mid-year financial report.
After Guzman set the stage by citing late property tax payments from Cook County, Mahr said he was in the process of evaluating when the city could afford to make the second half of a $260 million advance pension payment that was at the center of the budget battle and, if so, how much that additional payment would be.
“Cook County indicated a few weeks ago that property taxes are likely to be delayed by about two months. Now that we have this news about Cook County property tax delays coming again this year, we are continuing the analysis to determine when and in what amount we will make the second installment of the supplemental pension payment,” Mahr said at the hearing.
Retiring Ald. Marty Quinn (13th) reminded Mahr that restoring the full $260 million pension advance was “one of the driving forces behind the budget battle last December” adding, “It’s not gonna go away. The promise that we made to our workforce isn’t gonna go away.”
Mahr said he was “acutely aware” of how important it is to Wall Street rating agencies to continue to make those advance payments.
“My goal, my commitment is to figuring out when we can make that payment in the context of all of the other things going on," he said.
Mahr could not be reached for comment. Sources said he is leaving without having landed another job.
“Being under that circus tent for eight months — he’s got a career ahead of him. He’s an impressive young man. I would suspect that he just got fed up with these folks,” O’Shea said. “Fed up with no clear plan. Fed up with mixed messages. Fed up with absolutely no communication at a time when, now more than ever, city leadership needs to be working together on a cohesive plan to get us out of the financial predicament that we’re in.”
Civic Federation President Joe Ferguson said what’s more concerning than the reasons for Mahr’s abrupt exit is the timing of his departure.
The CFO normally serves as “primary speaker to the investment community” at the annual investors conference next month.
“Last year, it was Jill Jaworski. This year, it appears that we’ll be headed into the investors conference without a [permanent] CFO. That is a very bad signal to the community,” Ferguson said.
A City Council that already lacks confidence in the Johnson administration's revenue estimates and recommendations on "levels of, and structuring of, debt" will have less faith in those statements, further complicating the budget season, Ferguson said.
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