CHICAGO -- Ronald Bean, the longtime executive director of the Illinois Development Finance Authority, has resigned to explore job opportunities in investment banking.
Bean said he is weighing offers from two investment banking firms to do both tax-exempt and taxable deals.
"I found a couple of investment banking firms that are interested in looking at some new product ideas on how to raise capital," said Bean, whose resignation was effective Sept. 20.
The resignation came two months after Peter Gidwitz, who had served as authority chairman for nearly 10 years, a that he did not want to serve another term. Edward Czadowski, a board member and a Chicago attorney, was elected chairman on July 21.
Czadowski said Bean's announcement caught the board by surprise. It followed a notice of layoffs and salary reductions at the authority that were precipitated by a $1.5 million budget deficit.
Effective today, six of the authority's 32 professional and support staff members were laid off and "some salary adjustments" were made, Czadowski said.
Bean said he resigned because he wanted to make a change after nearly 10 years with the authority and before that five years with the Illinois Environmental Facilities Authority, where he also served as executive director.
"Given the fact [that the board] wanted to do a reduction in force, I felt it was a good time to do something different," Bean said. "I wanted to make a change for a while," adding that it was "a good opportunity for [the board) to cut [staff] and refocus."
Czadowski said the board has appointed Philip Howe, the authority's general counsel, as acting executive director until a permanent replacement can be found.
In the meantime, a nationwide search has begun for a new executive director. Czadowski said an executive search firm has been hired to work with a hiring committee made up of four members of the board's executive committee.
Czadowski said the authority ended fiscal 1993 on June 30 with a $1.5 million deficit. The authority's budget was $4.5 million. He blamed the deficit on the authority's spending more money than it was taking in."
Since July, the authority has been operating on quarterly budgets. This month, the board incorporated a new sliding fee structure for nonprofit organizations seeking to issue bonds through the authority.
Czadowski said that with the leadership changes, the board has an opportunity to examine the authority's role in Illinois and possibly reposition it for the future.
The Illinois Development Finance Authority was created in 1984 with the merger of the Illinois Industrial Development Authority and the Illinois Environmental Facilities Authority. The new authority's main purpose was to facilitate the issuance of industrial development revenue bonds. However, restrictions on IDBs contained in the Tax Reform Act of 1986, as well as the subsequent expiration of IDB authorization, led the authority to expand its horizons.
In recent years, the development finance authority has issued bonds for both nonprofit organizations and pooled and lease debt programs for local governments, and has assisted distressed cities.
The authority also agreed to be the conduit issuer for a controversial call waiver and interest rate swap-like transaction planned by Chicago last year. The deal was canceled after tax law issues were raised and bond counsel declined to give an opinion.