Acting Chief Financial Officer Steven Mahr and Deputy CFO Noor Shaikh have left the administration of Chicago Mayor Brandon Johnson as internal battles between the CFO's office and the office of Budget Director Annette Guzman broke out into public view.
The city's finance team did not respond to requests for comment by press time. Mahr, whose departure was reported by the Chicago Sun-Times, did not respond to messages seeking comment. Shaikh confirmed to The Bond Buyer her departure as of late June.
"Steven deserves a tremendous amount of credit," said Justin Marlowe, research professor at the University of Chicago's Harris School of Public Policy and director of the Center for Municipal Finance. "The market saw his appointment as a continuation of the very measured, thoughtful, reasonably transparent debt management that had been happening when Jill Jaworski was CFO."
Muni market participants "saw Steven as a continuation of that, and I think it showed," he said. "Spreads widened a little bit, but no measurable deterioration in investor sentiment toward Chicago when that handoff happened. And I think (Mahr) deserves a lot of credit for that."
Jaworski
Debt Manager Brendan White will take over as acting CFO, Marlowe said.
White has served the city as debt manager for three years after serving as a senior fiscal policy analyst for six years. A University of Chicago graduate, he also worked for RBC Capital Markets and William Blair as an analyst, according to his LinkedIn profile.
The finance team has a good bench, Marlowe said, and the market may well "be willing to take a chance and see how the next weeks and months unfold here," he said.
"At the same time, there's no denying that the biggest challenges Chicago has with respect to its debt management strategy in the coming weeks and months are not technical challenges of the sort that a really good market operator like Steven can address," he added. "They're really policy challenges, and when you have conflicting or ambiguous policy guidance coming from the mayor, it makes it difficult to take those kinds of transactions to the market and execute."
The departures come about two weeks before the city's annual investor conference and as budget negotiations are getting underway.
"It's hard to get a candidate who has both the familiarity with the City Council and the investment community," said Howard Cure, partner and director of municipal bond research at Evercore Wealth Management, noting that he hasn't received notice of any change or delay in the city's Aug. 13 investor conference.
"The past selections were people very well versed in the investment community," he added, pointing to Jill Jaworski, Jennie Huang Bennett, Carole Brown and Lois Scott in particular. "The bond buying community had a familiarity with these people and were predisposed to listen to them."
It's a tough job, especially now, Cure said, heading into a budget with potential structural deficit issues and facing a City Council with a renewed sense of agency after aldermen passed their 2026 budget
The city has a calendar-year budget cycle, and the next mayoral election is in February.
"Any time the buy-side sees management turnover in key roles (across any sector), it raises questions as to what is happening internally," Mohammed Murad, head of municipal credit research at PT Asset Management, said by email. "We also have to be mindful that turnover could potentially lead to better outcomes."
It was not the former finance officials' intent to leave the city at a vulnerable moment, Marlowe said.
But in addition to the long-running conflict between the City Council and the mayor, which has seen aldermen accuse the Johnson administration of slow-rolling the implementation of budget components the mayor didn't propose, there was also conflict within the mayor's team.
Budget Director Guzman may have had more access to the mayor and "pulled the rug out from under" Mahr, the
The departures also come as aldermen are pushing the Johnson administration to make the second half of Chicago's advance pension payment, which was budgeted for in 2026 but for which the mayor's team has thus far refused to commit to a deadline.
Murad said the leadership turnover "comes on the heels of open questions regarding pension liability management" — in particular, the second half of the
The upshot of all these developments may be to "increase the market's focus on the credit over the next few months," he said.
"If they delay that payment, if they don't fully fund it, I think the ratings will be in jeopardy," Cure said. "The warning's out there. I think his opponents will jump on that… There are candidates already attacking the mayor for his financial stewardship."
Chicago GO bonds carry ratings of BBB-plus from KBRA, BBB-plus from Fitch Ratings, BBB from S&P Global Ratings, with negative outlooks, and Baa3 with a stable outlook from Moody's Ratings.
Another manifestation of the governance conflicts facing Chicago is the question of how to execute transactions for outstanding debt authorizations, Marlowe said.
"There are still some lingering questions about the timing and the structure" of some of the transactions "that they've had on the on the drawing board for a while now, and all of this is happening as the fiscal 2027 budget fight is already underway, and that will only make it that much more difficult to think about how debt management fits into what is going to happen in the next year or 18 months," he said.
And with a City Council "fully prepared to do all of their own analysis, fully prepared to do their own forecasts and estimates, fully prepared to staff up a de facto budget office of their own, fully prepared to make decisions completely independent of the mayor," he said, the next CFO will need to act as a liaison to aldermen in addition to his other duties.
"I think the market will notice this one in a way that it maybe has not noticed some in the past," Marlowe said of the resignations.
