Houston finance director Michelle Mitchell resigned last week, saying she wanted to re-enter the private sector after four years with the largest city in Texas.

Mitchell announced her resignation a day before Mayor Annise Parker asked city employees to volunteer to take a day off this month without pay. Houston is trying to fill a $30 million budget hole over the final six months of fiscal 2011.

Parker and Mitchell denied reports that the city's chief financial officer was asked to resign. Mitchell said she made the decision after reaching a "mutual agreement" with the mayor.

"Everyone in Houston knows the city is facing challenging times," Mitchell said. "I've always been very optimistic that we can reach the goals that we've set."

The voluntary layoff program is expected to save $1 million.

"The budget is tightening up," Parker said. "Some of the savings we are working on probably will not materialize this fiscal year."

The Finance Department is forecasting a revenue shortfall of $118 million in fiscal 2012 and budget gaps of more than $400 million over the next three fiscal years.

Mitchell attributed most of the projected shortfalls to the growing expense of city pension systems. She will remain in her post until Dec. 31. Mitchell said she had not found a job in the private sector before resigning.

Mitchell joined Mayor Bill White's staff in November 2006 after 18 years with Goldman, Sachs & Co. She was named finance director in December 2007 when White separated the Department of Finance and Administration into the Finance Department and the Administration and Regulatory Affairs Department.

Mitchell was a financial analyst with Merrill Lynch & Co. before joining Goldman Sachs, where her tenure included several years as CFO for its North and South American investment banking departments.

Parker, who has been mayor since January, said a search is under way for Mitchell's replacement. She praised Mitchell for her service during financially challenging times for the city.

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.