CHICAGO - Chicago Mayor Richard Daley yesterday tapped chief financial officer Paul A. Volpe to serve as his chief of staff, filling a position being vacated by Lori Healey, who will take on a leadership role at the Chicago 2016 Olympic organizing committee.

The announcement of Volpe's move follows the resignation of budget director Bennett Johnson 2d last week.

Daley dismissed concerns that the departures of both men from two of the city's three key fiscal positions would leave a void as Chicago faces what he has called its most challenging financial period. His suggested replacements would be announced before Volpe moves into his position and Johnson leaves Dec. 22.

The third position is comptroller, held by Steve Lux, whose office directly manages the city's bond deals.

"Paul has broad knowledge of city government and has proven himself to be a strong and innovative manager who can make tough, practical decisions," Daley said. "He is well-qualified to take on this demanding role."

Daley elevated Volpe from budget director to CFO in June 2007 after Dana Levenson's resignation to join the private sector. In the city's top fiscal spot, Volpe oversaw budgetary and capital spending, public-private partnership transactions, debt issuance, rating agency relationships, and pension issues.

During his tenure, he shepherded through the negotiating process the pending $2.5 billion Midway Airport lease and the pending $1.2 billion parking meter system lease. As budget director, he also helped manage the $1.8 billion Skyway toll bridge lease and the $563 million parking garage lease early last year. Market participants describe Volpe as professional, fair, and smart.

The lease deals have helped boost and protect Chicago's credit ratings and provided some assistance in balancing city budgets. Still, Volpe's tenure has been marked by a rapidly deteriorating revenue picture and growing personnel costs that prompted a record property tax hike in the 2008 budget, along with other tax and fee increases and layoffs in the $6 billion budget for 2009 recently approved by the City Council.

Fitch Ratings rates Chicago's $6 billion of general obligation bonds AA, Moody's Investors Service rates them Aa3, and Standard & Poor's rates them AA-minus.

Volpe first joined the budget office in February 2004 as a first deputy and was promoted in August 2005 after then-budget director John Harris departed to take a state post. Prior to joining the city, Volpe served as chief of operations for the Illinois State Toll Highway Authority, and before that spent eight years with the city's Department of Aviation.

In response to questions about his thoughts on Harris' arrest Tuesday along with Gov. Rod Blagojevich, Daley said the news saddened him. He called Harris a hard worker who had a good record with the city.

The governor and Harris, his chief of staff, were charged in a criminal complaint with federal corruption charges alleging pay-to-play schemes that included allegations Blagojevich sought to profit from his authority to fill President-elect Barack Obama's Senate seat.

Harris, who holds a law degree and was an Army intelligence officer, departed from city government in 2005 to work for the governor after Daley passed him over as a chief of staff. He started with the city in 1992 as an assistant commissioner for the Aviation Department. He later served as deputy superintendent for administrative services for the Police Department.

Harris became the first deputy aviation commissioner in 2000, managing the development of the $7.5 billion expansion of O'Hare International Airport. He became budget director in 2004.

Healey will serve as president of the Olympic bid organizing committee, reporting to chief executive officer Patrick Ryan. Chicago is preparing its final bid book in its competition to win the games. The International Olympic Committee will make its selection from the finalist cities in October.

Healey has served in the chief of staff position since April 2007. The position is considered a tough one and Volpe will become the 12th since Daley took office nearly two decades ago. Healey previously had served as commissioner of the city's planning department.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.