St. Paul has a new finance director: Margaret Kelly, who had served as assistant commissioner and chief financial officer at the Minnesota Department of Health.

She replaces Matt Smith, who left the city this spring to take a similar job in Dakota County.

Tough times await the new director: Local budget problems compounded by economic woes and state mandates — along with a string of no increases in property tax levies under the previous two mayors — have  left the city coffers in need of serious adjustments. Mayor Chris Coleman believes Kelly will fill the bill, if not the coffers.

"Margaret's experience and skills will be a great benefit to St. Paul," Mayor Coleman said. "I am happy that we could attract a professional with her background. The economic climate and state mandates have created challenges for the city, but as we bring structural balance to St. Paul's budget in the near future, Margaret's talents will help us overcome those challenges."

As assistant commissioner and chief financial officer, Kelly managed the Department of Health's budget process and oversaw an annual budget of about $450 million, city officials said. She also managed the divisions of financial and facilities management, information systems and technology management, and human resources management.

Earlier, Kelly held financial positions with the state Department of Human Services and Department of Finance. She has a master's degree in public administration from Hamline University and a bachelor's degree in history from Carleton College.

She begins her duties Aug. 11. — Joe Kimball