CHICAGO — Minnesota's debt manager Kathy Kardell recently resigned to take a newly created position on Hennepin County's finance team, a loss for the state's finance team that comes as the executive and legislative branches are set to change party hands following the election last week.
Kardell started last week in her new position as a senior departmental administrator and financial projects manager. She reports to finance director Dave Lawless. One of her primary responsibilities will be serving as the county's liaison to the Counties Transportation Improvement Board.
The board's work in advancing transit projects aimed at connecting the region and easing congestion is supported by a quarter-cent sales tax and a $20 motor vehicle sales tax. The participating counties include Anoka, Dakota, Ramsey and Washington. "I felt I had accomplished the goals I set when I took the state job, and the county offered a great opportunity to take on new projects," Kardell said.
Kardell had a long-standing relationship with the county's finance team during two decades as a financial adviser to major Minnesota issuers while she worked at Ehlers & Associates Inc., Public Financial Management Inc. and Evensen Dodge, which was acquired by PFM in 2003. Kardell left Ehlers to become assistant commissioner for the treasury in early 2008.
During her tenure at the state, Kardell was credited with modernizing the state's debt management guidelines, revamping documentation, and revamping tax compliance deadlines. Kardell also won legislative support to use negotiated sales to issue general obligation bonds during fiscal 2010-11 due to market turmoil. While continuing to prefer competitive bidding for most state sales, she ushered in the first use of negotiation on two state GO sales. State rules had required all GOs be sold competitively.
Kardell said she is proud that the state maintained its ratings during the recession. Ahead of a summer sale, all three rating agencies affirmed Minnesota's ratings on its $4.2 billion of GO debt. The state is rated AAA with a stable outlook by Fitch Ratings and Standard & Poor's and Aa1 with a stable outlook by Moody's Investors Service.
The Office of Management and Budget has launched a search for Kardell's replacement. In the interim, debt management will be handled by Commissioner Tom Hanson, the deputy commissioner Jim Schowalter, and financial analyst Sue Gurrola.
Minnesota public finance sources said Kardell was frustrated with the political process and ready for a change. Gov. Tim Pawlenty, who did not seek re-election, is a Republican, and the legislative chambers were controlled by the state's version of the Democratic Party, known as the Democratic-Farmer-Labor Party. The two sides frequently butted heads, and state finances were often at the center of the conflicts.
Little is expected to change as Republicans captured control of the legislative chambers in the race last week, and the DFL candidate for governor, Mark Dayton, holds a narrow lead over Republican challenger Tom Emmer, although an automatic recount was triggered. The recount will begin Nov. 29 and take until Dec. 14, when an official winner would be certified. The DFL, which has controlled the Senate for 40 years, lost nine seats to Republicans who now control the chamber with a 37-30 majority. The House lost 15 seats, and Republicans now hold a 72-62 majority.