Houston's finance director quits amid budget crisis
City Finance Director Michelle Mitchell, a former Goldman Sachs veteran who has helped guide Houston through consecutive years of severe budget problems, is leaving her post.
Mitchell said she offered her resignation Wednesday after coming to a "mutual agreement" with Mayor Annise Parker so she could "go back to the private sector."
"Everyone in Houston knows the city is facing challenging times," said Mitchell, who was hired in 2006 by former Mayor Bill White. "I've always been very optimistic that we can reach the goals that we've set. ... The mayor is on the right path to reaching those goals."
She does not have another job lined up, and sources close to the matter say Mitchell was forced out, although she denied it. She will stay on until Dec. 31.
A spokeswoman for Parker would not answer a question about whether Mitchell had been forced out. In a statement, Parker thanked Mitchell and said she has started a search for her replacement.
"We are nearing the end of a productive and intense year," she said. "Time is of the essence as we work diligently on fiscally responsible approaches to our budget situation."
The city is in the middle of one of the worst fiscal crises it has faced in decades as it has cut jobs, reduced services, slowed infrastructure improvements and continues to face multi-million-dollar deficits in coming years.
Mitchell, a former financial analyst for Merrill Lynch who served at one time as chief financial officer for North and South American investment banking departments at Goldman Sachs, often has been the driving force of millions of dollars in departmental budget cuts over the past two years.
As revenues from property and sales taxes continued to decline, Mitchell would set targets for department heads and work through cuts with each of them on an individual basis.
Occasionally, she rankled a few City Council members who chafed at being told to cut their budgets, believing Mitchell had overstepped her authority.
Still, many were complimentary of her efforts.
"Michelle has served the city in an exemplary fashion," said Councilwoman Anne Clutterbuck, who chairs the council's Budget and Fiscal Affairs Committee. "It's the mayor's decision and I honor and respect that. ... I'm going to be sorry to not be working with her in the future."
Mitchell said that when she asked for cuts, she always was operating on instructions from the mayor.
"I don't ask or tell departments to do anything without the mayor telling me to do it," she said.
She predicted that 2012 would be a far more challenging budget year than 2011, as it would begin with a nearly $120 million deficit and far less money in reserves.
Proud of her work
Mitchell warned the city was facing projected budget deficits totaling around $600 million during the next five years, in large part because of the costs of contributing to employee pensions.
"We have to do something about those pensions. You can't be anything but pessimistic when you have numbers like that," she said.
"You cannot sustain those kind of numbers and give the services needed in the fourth largest city in the United States."
Mitchell said she was proud of her work for the city and her efforts to reorganize the department as White requested, giving more "corporate structure" to a team effort that keeps watch on a $4.1 billion budget.
"My integrity is the most important thing that I'll ever have in my life," she said. "I brought a good, strong reputation to the city and I want to leave with that same reputation intact."
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