CHICAGO — Minnesota-based financial advisory professional Kathy Kardell will leave the private sector next month to take over management of the state’s debt following the retirement of Minnesota’s long-time debt steward, Peter Sausen.
Kardell, a 23-year veteran of public finance, is leaving her position at the independent financial advisory firm Ehlers & Associates Inc. to take the state job as assistant commissioner for treasury, starting Feb. 6, according to Tom Hanson, the state’s finance commissioner.
Kardell, a well-respected member of the local public finance community who has worked with the state as an adviser, joined Ehlers in May 2007. She previously had worked at Public Financial Management Inc. in its Minneapolis office. She was one of three managing directors at the former financial advisory firm Evensen Dodge that stayed with PFM after it acquired the firm in 2003. Kardell had worked at Evensen Dodge since 1988.
During her career, Kardell has worked with local, state, agency, and education clients on deals that span the transportation, student loan, and infrastructure sectors. She is a native of Minnesota and holds a master’s degree in public administration from Hamline University in St. Paul.
Hanson said in an e-mailed announcement: “We are excited to bring her experience, energy, and enthusiasm into state government, particularly in such a pivotal role.”
State finance officials had launched a search for a new debt manager following Sausen’s retirement last spring, although he has continued to oversee state debt activities as a consultant. Officials sought recommendations from local finance professionals who submitted Kardell’s name.
“It’s an honor and a unique opportunity that comes along very infrequently,” she said yesterday. “It’s an opportunity to make a real impact not just on the state’s practices, but also to continue to set an example for local issuers and serve as a voice for best practices in the market.”
Sausen’s career with the state has spanned 25 years and he was aided throughout that time by his assistant Sue Gurrola. He started as debt management director and later was promoted to assistant commissioner responsible for both cash and debt management.
He’s served under not only Democratic and Republican administrations but also the independent former governor and professional wrestler Jesse Ventura. He steered the state’s debt practices through stellar fiscal years that saw multibillion-dollar surpluses to years where the state struggled with multibillion-dollar deficits.
Sausen, a native of the state who attended Macalester College in St. Paul and holds a master’s of business administration from the University of Minnesota, called the restoration in the late 1990s of the state’s triple-A ratings, lost in 1982, a highlight of his tenure.
“We worked for a lot of years to get the triple-A back,” he said yesterday.
Sausen remembers as a proud moment the creation of the school district credit enhancement program in 1993, which provides a state guarantee behind qualified school bonds. “It’s helped school districts lower their borrowing costs and we’ve never had a default,” he said.
Sausen oversaw the settlement negotiations last year that allowed the state to retire, at no loss, $36 million of state-backed bonds that helped finance a Northwest Airlines’ maintenance base in Duluth. The airline pulled out of the base after its 2005 bankruptcy filing.
Managing the state’s debt capacity calculations, as debt service is limited to 3% of revenues, has changed significantly. “Back then it would take a day or two to perform debt capacity scenarios. Now with computers, we can do them every five minutes,” he said.
The state’s $4 billion of general obligation debt carries AAA ratings from Fitch Ratings and Standard & Poor’s and a Aa1 with a positive outlook from Moody’s Investors Service. It sells nearly all of its debt competitively.
“Peter was the consummate professional, always professional in his approach, and was viewed as a professional who was never caught in partisan bickering,” Kardell said.
Hanson thanked Sausen for continuing to work with the state as it searched for a permanent replacement and said Sausen would continue working in a consulting role on an as-needed basis.
“We have been fortunate to have Peter’s expertise throughout these last months, allowing for a careful and thorough search for his successor,” he said.
