Mayor Rahm Emanuel’s chief financial officer said Wednesday she was asked to stay on under Mayor-elect Lori Lightfoot, but declined the offer, paving the way for her counterpart at Chicago Public Schools to make the jump to City Hall.
“When Mayor Emanuel asked me to take the job four years ago, I told him I’m from the private sector and that’s why I always planned on returning to the private sector,” said Carole Brown, a chief proponent of Emanuel’s stalled plan for $10 billion in pension borrowing.
“I never wanted to stay permanently. I knew I could help the mayor achieve what he wanted to do. But I knew that I was probably not gonna stay [even] if he decided to run for a third-term. It was just time. … I was asked [to stay] by the people running [Lightfoot’s] transition and I told them that I had already decided I was leaving.”
Brown’s decision to return to her roots in the world of finance could pave the way for Jennie Huang Bennett, CFO of the Chicago Public Schools, to make the giant leap to City Hall.
The Bond Buyer trade publication has identified Bennett as a “top candidate” to lead a financial team under Lightfoot that will confront a $28 billion pension crisis that will impact virtually everything else the mayor-elect does.
City Hall sources confirmed Bennett is the leading candidate for the CFO’s job.
Lightfoot is staring down the barrel of an immediate $277 million spike in pension payments — payments that will rise by $1 billion in 2023 — as a five-year ramp to actuarial funding ends and the road to 90% funding begins.
The corporate fund has a two-year gap of at least $613.9 million — even before the cost of police and fire contracts, retroactive pay raises for the rank-and-file and the eighteen-month jump in police salaries for 1,000 newly-hired officers are factored in.
The mountain of debt heaped on Chicago taxpayers continues to climb, with debt service payments to match. So do settlements and judgments tied, primarily, to allegations of police wrongdoing.
No wonder Lightfoot came away from a meeting with Emanuel’s financial team calling the situation infinitely worse than she anticipated.
Bennett spent 12 years at Morgan Stanley before joining the Chicago Public Schools as treasurer at a time when the school system appeared to be on the brink of bankruptcy.
Massive borrowings, devastating mid-year budget cuts, strike threats and bond rating drops were par for the course during those difficult years.
Bennett spent nearly four years as treasurer before being promoted to the CFO’s job, where she continued to play second-fiddle to Ron Denard, senior vice-president of finance hand-picked by Schools CEO Forrest Claypool, who was forced out for attempting to cover up an ethics scandal.
Civic Federation President Laurence Msall called Bennett a “respected and competent fiscal leader.”
Asked whether she’s ready for the brighter spotlight and higher stakes at City Hall, Msall said: “She’s navigated a pretty difficult situation at the Chicago Public Schools and they are in better shape than they were when she got there in 2013. A lot of that is a result of what Mayor Emanuel was able to get out of Springfield, which is primarily in the form of property tax increases.”
Ald. Scott Waguespack (32nd), a leading candidate to chair the City Council’s Finance Committee, said he was impressed with Bennett during his two encounters with her during City Hall briefings about CPS finances.
“When we asked questions of her, she was pretty straightforward. I liked the way she approached things,” he said.
“I talked to a couple of people who said she understands how that [Wall Street] system works and how to navigate it and how the muni market would react” to certain budget initiatives.
As for the budget shortfall Lightfoot will inherit, Waguespack said he’s been told by the mayor-elect’s chief of staff, Maurice Classen, that it could be “a couple hundred million” dollars worse than anticipated.
Brown said she has no idea what Lightfoot learned about city finances since the April 2 election that she didn’t already know.
“We’ve been very open and transparent about the increase that was going to be needed to fund the police and fire pensions,” Brown said.
“We knew we were going to have to negotiate a contract and fund that contract. It shouldn’t have been a surprise. Unless there’s something new that I don’t know about, the cost of a new contract is going to be consistent with what we were anticipating.”
Last week, Lightfoot told the Sun-Times she will disclose the size of the deficit she’s inheriting — but only after she has a plan to fix it.