CHICAGO — Chicago Mayor Richard Daley yesterday filled the city’s vacant chief financial officer position with prominent public finance professional Gene Saffold, a former Chicago Board of Education member and long-time local banker who had previously co-managed JPMorgan’s municipal banking group.
Saffold most recently served as a managing director working on national pension fund and public sector client accounts at JPMorgan Chase & Co. Saffold is well-respected by the local public finance community for his professional acumen and his community involvement.
Saffold’s move had been in the works for some time, but it was delayed as he resolved various compensation issues at JPMorgan, sources said.
Saffold has long been close to the Daley family. The Midwest chairman of JPMorgan is the mayor’s brother, William Daley, and the mayor tapped Saffold to join the Board of Education in 1995 after the state handed control of the school system back to the city. Saffold resigned from the board in 2005 after completing several terms during which the system saw its investment-grade ratings restored and launched what has grown to a $5 billion capital program.
Saffold had spent much of his professional career, beginning in 1985, at Citi when its investment banking arm was known as Salomon Smith Barney. He left from 1991 to 1994 to launch the financial advisory firm LS Financial Group. When the company folded, he returned to Salomon, where he was a managing director.
In 2002, he left to become the national head of public finance at the former Banc One Capital Markets Inc., where he worked to rebuild that firm’s reputation and public finance team, which had seen an exodus of top staff. At the time, James Dimon was head of Bank One Corp.
In 2004, J.P. Morgan Chase merged with Bank One and Saffold was named a co-head of public finance. He served as co-head with Peter Hill who later left, and then with Mark Melio until last May, when Melio was named the sole head and Saffold was moved over to work in the national accounts group.
Later, Melio and Jeff Bosland served as co-head of the tax-exempt capital markets group, but the firm announced earlier this week that Bosland would assume sole responsibilities for that division.
Daley’s move to hire Saffold frees up former chief financial officer Paul Volpe to focus solely on his chief of staff duties. Volpe was named chief of staff last December but has been continuing to oversee the city’s finances.
Saffold’s hiring comes as the city’s revenue picture is growing gloomier by the month. Volpe recently boosted the shortfall in the current $6 billion budget to $64 million and warned it could grow to $200 million by year’s end.
“I’ve asked [Saffold] to continue our efforts to take a long-term view when it comes to understanding the economy and protecting our financial stability,” Daley said. “And I’ve asked him to help us protect our taxpayers and to put the people of Chicago first.”
Volpe has also warned that Chicago may need to further dip into a mid-term $325 million rainy-day reserve fund that was established with proceeds of the $1.2 billion lease of the city’s parking meters. The city is already using $150 million from the fund, which is supposed to support the budget through 2012.
Chicago closed a $469 million combined deficit last year in its 2008 and 2009 budgets through a combination of tax increases, layoffs, debt restructuring, and proceeds of the parking meter lease and pending Midway Airport lease.
Its $6 billion of general obligation bonds are rated AA by Fitch Ratings, Aa3 by Moody’s Investors Service, and AA-minus by Standard & Poor’s.
Saffold’s salary was not immediately known.