Back to the Public Sector

CHICAGO - Chicago's former chief financial officer Walter Knorr, who left city government 18 months ago to take an investment banking job at Citigroup Global Markets Inc., will return to the public sector as comptroller in Cook County government, according to market sources.

The sources said the county would announce Knorr's hiring today. County officials declined to comment. Knorr was not in his Citigroup office here to comment Friday. Citigroup's manager of public finance in Chicago, R. Ray Kljajic, referred calls for comment to media relations, and a company representative did not return calls to comment.

In the spring of 2002, Knorr announced he was leaving the city after 13 years to join Citigroup, but he remained with the city until late summer to work on closing a budget deficit that had developed. At the time, Knorr said with his two children nearing college age he needed to make the leap to the private sector to earn a higher salary.

He described the Citigroup job at the time as a good fit. In addition to working as co-head of the office with Kljajic, he led its national governmental strategic planning and services effort, which provides clients with long-term financing planning advice. Knorr, however, was still expected to bring in deals, and market sources said that despite his previous experience as a banker at Chicago-based Northern Trust, Knorr had a difficult time making the transition from client to salesman.

It was widely known in public finance circles here that Knorr wanted to return to the public sector. He had lobbied for the state budget director's job early last year following the election of a new governor. Late last year, market participants said it was expected that Gov. Rod Blagojevich would name him to a top post at the newly created Illinois Finance Authority. "It's logical for him to go back to government because that's what he loves," said one public finance source.

Knorr, an accountant by trade, worked as city comptroller under former Chicago Mayors Jane Byrne and Harold Washington. He was ousted from the position during Washington's tenure and returned when Richard M. Daley won the mayoral race in 1989. He was elevated to the CFO's post in 1995.

At the city, Knorr earned $130,000. The county comptroller's post is budgeted at $150,000. At Cook, Knorr will serve as chief accountant and manager of financial records. He will replace retiring Comptroller John Chambers, who has held the job for 14 years.

In his new job, Knorr will report to county chief financial officer Thomas Glaser, who has managed the county's finances for nearly nine years. Some local participants questioned how Glaser and Knorr would adjust to the situation and whether the hiring was a signal of other future changes in the finance team. On the other hand, several sources who have worked with both suggested that although it might be uncomfortable at first, both men like and respect each other.

The county has often fallen under the shadow of the city and Knorr built a national reputation during his tenure as CFO of Chicago. Glaser, too, is well respected, is considered a talented financial manger, and has seen his national profile rise as a member of the Government Finance Officers Association's executive board and the ex-officio member of the GFOA debt committee.

"Tom has done an excellent job in reorganizing the county's finances and has been instrumental in increasing the accountability of the government, but he still has considerable challenges, and Walter is a talented guy with a lot of experience who can complement him," said Fitch Ratings' Joseph O'Keefe.

In recent years, the county has seen its ratings boosted but has come under increasing criticism both for the Cook County Forest Preserve budget and for its delay in approving the nearly $3 billion 2004 budget. Currently, Standard & Poor's and Fitch carry AA ratings for the county and Moody's Investors Service rates Cook Aa2. Standard & Poor's and Moody's upgraded the county in 2002.

While the county's finances have been praised overall, recent public debates over the Cook County Forest Preserve and the county's nearly $3 billion budget opened the county and county board president John Stroger's administration to public scrutiny.

A handful of so-called "reform" Cook County Board commissioners questioned the method that Stroger and his finance team used for balancing the budget, including a call to raise sales taxes and create a new lease tax. Some board members argued that the administration padded the budget and accused Stroger of hiring people loyal to him. In the end, Stroger withdrew the tax increases and found additional revenues and cuts, while commissioners pulled various proposals they had made to gut programs and cut across the entire budget.

Board members have said they have confidence in the finance team under Glaser's leadership. However, sources familiar with the situation have said that Glaser has expressed frustration with the county's budget process.

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