CHICAGO — Chicago-based financial adviser Lois Scott — a co-founder of Scott Balice Strategies LLC — will leave the firm to join Chicago Mayor-elect Rahm Emanuel’s administration as the city’s top fiscal officer when he takes office next month, several public finance sources said Monday.
A public announcement could come as soon as Wednesday.
Emanuel courted Scott for the position during several meetings and she told employees of her firm on Monday that it was a difficult decision but she could not miss out on the opportunity to join Emanuel’s administration, sources said.
It was not yet clear how her departure would affect the firm. Scott did not return telephone calls or emails seeking comment.
Emanuel’s spokesman Ben LeBolt insisted Monday that a finance team had not yet been selected. “We’ve not made any decisions,” LeBolt said.
Emanuel takes the reins of the city from retiring Mayor Richard Daley on May 16.
“It’s a great choice. Lois is one of the most disciplined and one of the smartest public finance professionals out there and will be dogged in finding solutions for the city’s fiscal problems,” said one public finance source.
Scott’s banking experience includes positions at L.F. Rothschild & Co., Donaldson, Lufkin & Jenrette Securities Corp., and later at BA Securities Inc., where she re-established that firm’s presence in the region. Scott left banking to be a White House Fellow during the Clinton administration. She returned to Chicago in 2002 and worked on Rod Blagojevich’s transition team after he won the governor’s office. In 2003, she co-founded Scott Balice with Dean Balice, a veteran of the corporate banking business.
Scott has led the firm through a period of steady growth, adding a dozen staff members and opening offices in Anchorage, Columbus, New York City, and New Jersey while building a national client list. In addition to basic advisory work, the firm also specializes in restructuring, public-private partnerships, and swap services.
The firm ranked first among financial advisers in Illinois last year, advising on 54 deals worth $4.1 billion. It ranked second in the Midwest to Public Financial Management Inc. advising on 58 deals worth $4.5 billion, according to ThomsonReuters. The firm ranked 10th last year nationally, advising on 75 deals totaling $6.2 billion.
Scott Balice is advising on Chicago’s sale next week of $1.1 billion of O’Hare International general airport revenue bonds. The firm was one of two advisers on the Metropolitan Water Reclamation District of Greater Chicago’s 2009 Build America Bond sale. That transaction is the subject of a Securities and Exchange Commission inquiry, possibly over its pricing and secondary market profit-taking.
Several sources said they were surprised she would take the position given her firm’s success and the daunting task facing the city’s new CFO, who will need to tackle a $500 million operating deficit in the next budget. The city also faces a $500 million increase in its annual bill for pension payments in the coming years under a state legislative mandate.
Last fall, Fitch Ratings downgraded Chicago’s $6.8 billion of general obligation bonds one notch to AA-minus with a stable outlook and Standard & Poor’s dropped the credit to A-plus with a stable outlook. Moody’s Investors Service in August lowered the GOs to Aa3 with a stable outlook. They cited the city’s dwindling reserves and growing debt burden and employee costs, and weak pension funds.
Emanuel has outlined proposals that he said could achieve $500 million in savings. The city’s current CFO is former public finance banker Gene Saffold. The city’s other fiscal positions include a budget director and a comptroller.