After wrapping up a 23-year career in public finance two years ago, Paul Kuhns, a former managing director of underwriting at Merrill Lynch & Co. in New York City, is now pursuing life as a public servant some 200 miles away from Wall Street at a job he describes as both challenging and rewarding.
Instead of helping issuers structure complicated financings and bring those deals to market, Kuhns, 52, now has a hands-on role in helping a small Northeast city manage its growing fiscal and social needs as one of six commissioners Rehoboth Beach, Del.
Kuhns was elected in August 2006 to a three-year term as a commissioner of the popular beach resort locale that he fondly recalls spending summers at with his parents and siblings while growing up in the nearby Washington, D.C., area.
The $600-a-year part-time position pales in comparison to his prestigious Wall Street career, yet he values the work he is doing as part of the legislative branch of a city of 1,300 full-time residents — working on quality-of-life issues, enforcing city ordinances and laws, and making necessary changes to the city’s charter. In addition, he helps oversee local city personnel, such as the police department, the staff of the mayor’s office, and local utilities.
“It’s small-town America, which is how America got started,” Kuhns said during a recent interview.
Besides his job as a commissioner, Kuhns also wears several other hats — he is a partner in two local restaurants, he’s trying his hand as a builder in a home construction venture, and he does charity work for local community groups.
It was back in 2005 when he and his wife, Anne Michele — a former derivatives trader at Bear, Stearns & Co. — relocated to Rehoboth Beach permanently after leaving the hustle and bustle of New York City behind to tend to health concerns affecting Kuhns’ parents.
He said “retiring” from the financial industry and New York City was a bold move that he faced with some trepidation. “When I left life in New York and the industry, I thought, ‘What am I going to do?’ But, we have never really looked back,” Kuhns said.
“The biggest thing I miss is the people I worked with at Merrill and other firms that I dealt with,” he said. “But the hectic pace of New York and Wall Street I really don’t miss.”
After his marriage in 2000, Kuhns and his wife began spending more and more time at Rehoboth — especially on the weekends — and he assumed he would eventually retire there, perhaps to play golf, spend time at the beach, and take on a part-time job.
Now, the reality is completely different — yet more fulfilling — than he ever imagined, he said. Between his commissioner post, the restaurants, and his other commitments, his life is anything but dull.
“I thought when I came down here maybe I would get a nine-to-five job in real estate, but now I don’t have time,” he said.In February 2006, he became a partner in the Summerhouse restaurant — a steak and seafood restaurant he worked at 30 years ago as a salad boy before applying to graduate school. The previous year, he became a partner in a local sandwich shop and restaurant called Arena’s Deli, six months after he moved to Rehoboth permanently.
He said politics was always something he assumed would be in his future, but his other endeavors were completely unexpected. “I never thought of going into the restaurant business — it just happened,” he said.
He admits that when he relocated to Rehoboth two years ago, the idea of running for a commissioner’s seat more than appealed to him — especially after friends and family gave him a little nudging.
His interest in local government had been growing over the years while Kuhns was a part-time resident, he said. It increased further after years of public finance work with state and local officials.
“In New York, [politics] was always something I thought about. Working in city and local government gave you a real good insight on what communities’ needs are, and working with the treasurers and governors made the political side sound pretty interesting to me,” he said.
He began his campaign for commissioner in April 2006 and was elected four months later in a race in which three candidates vied for two seats. An incumbent won one of the seats and he beat the other opponent by three votes for the second available seat.
His career and experience in municipal finance is what won him support from voters concerned with the city’s financial needs, he said. “I wouldn’t have this opportunity if it hadn’t been for Merrill Lynch and the municipal bond industry,” he said.
Between now and the time his term runs out in 2009, Kuhns will be involved in issues both large and small, ranging from new building and development and the future of the wastewater disposal system spurred by changing environmental mandates, to the pros and cons of creating a local dog park.
A new wastewater system “is an issue that could come up in the next three to four years that the city could spend $30 to $40 million on, so we will be discussing how to accomplish that — either through bond issues or federal grants,” Kuhns said.
Kuhns is also eyeing other parts of city government in the future — but for now is committed to his commissioner post. “I want to establish myself and do as much as a commissioner as I can, but there are other things to consider around the state,” he said
So far, his transition has been mostly positive. One of the toughest obstacles, however, has been dealing with people of different opinions.
“It’s amazing how people come out the woodwork to be your friend and your opponent. They find things you do and praise them, and they find things you do and criticize them,” he said. “It’s been a great learning experience for me, and you find out what people are all about.”Kuhns said as far as the municipal bond market is concerned, he has been keeping abreast of some of the larger issuers — such as the recent $4.7 billion California general obligation refunding deal — if they are important enough to make it onto to the pages of the New York Times.
“Ten years ago Merrill was out of California because of Orange County, but now doing this deal says so much about Merrill’s sales and trading effort. It’s a testament to what Merrill has done to instill the confidence of issuers in California and around the country,” he said.
Overall, though, Kuhns is otherwise far removed from the daily routine of the market, such as the level of interest rates, market volatility, and municipal volume.
Apart from his many jobs around the city, he also spends his days gardening at home, playing some golf — but not nearly as much as he would like — and spending time with family and friends. His parents and siblings live close by and friends frequently visit the popular resort town in the summer.
When asked if he would ever consider returning to the market should life present the opportunity, Kuhns had a quick response. “Maybe on the other side of the table as a borrower,” he said, but going back to Wall Street as an executive is out of the question.
“I never see that happening again,” he said.
His friends and colleagues in the industry say he was a hard-working, dedicated, and well-respected leader in the municipal market — characteristics that will suit him well in his new career path.
One of his closest friends and oldest colleagues, David Andersen, managing director of trading and underwriting at Merrill, said Kuhns’ expertise and friendship is sorely missed around the office.
“Once he left, it quadrupled my respect for what he did. I couldn’t replace him with just one person,” Andersen said of his colleague of 22 years. “He was a tremendous asset to the firm and he was a critical part of the underwriting effort.”
Andersen said Kuhns was a force to be reckoned within the municipal market, from issuers to financial advisers, and even to his competitors.
“He had a large following of issuer clients that would call from time to time to talk about the climate of the market and the structures of their deals,” Andersen explained.
“FAs would call on a regular basis just to tap into his expertise,” he added.
Another former colleague said Kuhns took great interest in his work and the people he worked with.
“I’ll always remember Paul as the guy at the podium in a large crowded conference room at Merrill Lynch describing the logistics of the first retail order period employed by New York City,’’ said Greg Finn, a vice president of municipal trading at Roosevelt & Cross in New York City, who has known Kuhns for over 20 years.
“That was a watershed moment in our industry,” he said. “Paul always had a thoughtful demeanor and he spoke in a judicious tone that served him well that day, and I’m sure will serve him well in his new career in public service.”
Roger Hershey, president of the investment advisory firm R.N. Hershey & Associates, recalls Kuhns and Andersen as the two “young bucks” that came up in the ranks in Merrill’s underwriting department back in the late 1980s and early 1990s when he was a managing director of institutional trading there.
Hershey said he finds it ironic that Kuhns is working for city government after a long career generating underwriting business on the other side of the equation, but applauds his new career path.
“I think it’s terrific for the city to have someone with the experience that can find innovative ways of financing,” he said.
Andersen agreed, noting that an accounting degree from Georgetown University, a master’s degree from Columbia Business School, and a career in municipal finance provide a solid foundation for his new role as an elected official. “He wants to give back and this is a big win for his community,” he said.
Hershey said he was not surprised at Kuhns’ move to Delaware. “I don’t think he was ever totally married to the concept of being a New Yorker,” he said, adding that he believes people should reinvent themselves as Kuhns did.
“I don’t think people ever retire — people evolve,” Hershey said.
