Nat Gandhi is not leaving his job as DC’s chief financial officer as planned on June 1, and that’s fine by Wall Street.
Last week Gandhi led a contingent of political leaders on an annual pilgrimage to Manhattan to appeal to bond rating agencies. Mayor Vince Gray, DC City Council chair Phil Mendelson, and finance chair Jack Evans accompanied Gandhi to make the case for keeping the city’s bond ratings high and perhaps raising them.
The ratings affect the rate at which the District borrows money through municipal bonds for its capital spending and short-term needs. The higher the rating, the lower the interest rate and the lower the cost to the government.
In his 12-year tenure as the city’s chief bean counter, Gandhi has measured his success in raising the bond ratings, which were awful when he took over in 2000. The city’s finances were in shambles, and a federal control board oversaw the books. Every year Gandhi has made sure the city balances its books and has advocated keeping the District’s cash reserves flush. And the bond rating agencies have raised their ratings.
Last week Standard & Poor’s agreed to bump up the city’s rating from A+ to AA- on its general obligation bonds. On a grading scale, the improvement might seem slight, but it could save the District millions in borrowing fees, according to the CFO’s office.
“It’s a significant sign of approval for our finances,” says Jack Evans, “and it’s another affirmation of Gandhi’s work.”
Gandhi last month announced he would step down on June 1, less than a year into another five-year term. He cited personal reasons for his decision to retire. His agency also has come under scrutiny for its role in awarding lottery contracts and assessing real estate.
But it’s quite likely Gandhi will remain in office months beyond the June 1 deadline, perhaps into the fall.
Mayor Gray has appointed former mayor Anthony Williams and Brookings economist Alice Rivlin to head the committee to recommend Gandhi’s replacement. The committee is scheduled to hold its first meeting Wednesday.
“We are going to look internally, locally, regionally, and nationally,” Williams tells The Washingtonian. “We will use our own networks as well as the resources of a search firm.”
Given the time needed to come up with candidates and get them through the approval process, it could take until September, at the earliest, to fill Gandhi’s job.
Williams’s committee will recommend names to Mayor Gray. That’s not likely to take place until mid-summer. Once Gray chooses his candidate, he sends the name to the city council, which could be in summer recess if the nomination arrives in July. Evans’s finance committee must hold hearings and send the nomination up for a full council vote.
Then Congress, which created the independent chief financial officer, must approve the nomination, as well. Congress could hold hearings. Or it can let the nomination take affect after 30 working days, which would add another month.
After Gandhi resigned, he sent another letter to Mayor Gray saying he was willing to stay in place beyond June 1 until “my successor is legally authorized to take office.”