Former Georgia state senator Kasim Reed on Monday took the oath of office and became Atlanta’s 59th mayor, succeeding Shirley Franklin, who could not run again after serving two terms.
In his inaugural address, Reed, a 40-year-old Atlanta native, reiterated his campaign promises to improve public safety, create new opportunites for the city’s youth, ensure fiscal responsibility, and improve services to residents.
“As we strive to create a new healthy environment where entrepreneurs can flourish, we must also take responsibility for and solve the unfulfilled challenges of our past, one of which is the city’s pension situation,” Reed said. He noted that “one out of every five tax dollars is currently going to fund a pension system that is strangling our city.”
Atlanta had an unfunded pension liability of $1.23 billion as of Jan. 1, 2008, in addition to $1.1 billion in unfunded other post-employment benefits, according to Standard & Poor’s.
Reed, who appointed retired Cox Enterprises executive John Mellott to head the city’s Pension Reform Panel, enters office as Atlanta struggles with a structurally unbalanced budget.
The city’s declining financial position prompted rating agencies last March to downgrade Atlanta’s general obligation credit.
Moody’s Investors Service dropped the city to A1 from Aa3 and assigned a negative outlook to $296.9 million of GOs and $343.1 million of contractual obligations secured by an unconditional GO pledge. Standard & Poor’s lowered its rating to A from AA-minus and assigned a stable outlook.
As is customary, most of the city officials serving under Franklin resigned, including chief operating officer Gregory Giornelli and chief financial officer Jim Glass.
While Reed has not named a new CFO, he has appointed Peter Aman, an executive at Bain & Co., to be COO.
