As Atlanta grapples with a projected $140 million budget shortfall for the fiscal year that starts next month, the city's chief financial officer abruptly announced Thursday that she is resigning.

Janice Davis said she has accepted a similar position in Texas and is leaving effective July 9. Davis would not say where the job is located.

In an interview with The Atlanta Journal-Constitution, Davis said she was not asked to resign. Davis has a son and daughter and six grandsons who live in Texas and said she wanted to be closer to them.

"I've been anxious to get back [to Texas]," said Davis, saying she declined a similar offer in November when she discovered the city's budget problems. "The opportunity came up."

Franklin, who leaves office in January 2010, must find a replacement capable of implementing several financial reforms she wants.

The new financial officer also will have to deal with the city budget woes. In addition to the projected shortfall for fiscal 2008-09, Atlanta is facing a $60 million deficit for the year ending June 30.

"I think it's going to be very difficult, considering [Franklin's] administration is coming to a close," said Councilwoman Felicia Moore, a member of the council's finance/executive committee. "It would have been better if she was able to hang in there and stay longer, but I certainly understand her accepting a position where she can actually be the CFO."

Davis has expressed her frustration in recent months about her lack of control over city spending, saying she had more power when she worked for city governments in Dallas, Houston, New Orleans and Philadelphia.

Davis said during a January council finance committee meeting she'd rate Atlanta a "F" in comparison to other past employers in terms of financial management practices.

City Council President Lisa Borders said she is optimistic the city will find a qualified replacement.

"There are good people out there," she said.

Davis' annual salary is $202,000, city records show.

Critics argued that Davis, hired in August 2004, should have had a better handle on the problems by now. Some Atlanta taxpayers and community activists demanded her resignation in recent weeks.

City officials say part of the budget problem is that the city didn't adequately foresee higher fuel costs. Officials also concede they made budgeting errors, such as not including $8 million in the budget for Underground Atlanta.

Unpaid invoices to vendors are another issue, critics say. Davis released information last month showing nearly $5 million in invoices were more than 90 days past due.

"[Davis] was only one part of the problem for whatever reason the accounting for the city was problematic at best," said state Sen. Vincent Fort (D-Atlanta), who had called on Davis to resign. "There are structural problems that need to be resolved so that the citizens' tax money is being protected."

Davis said the city's financial problems are a combination of the sluggish economy and rising pension and health care costs.

"I would ask what created the same problem for all those private sector companies," she said. "We just aren't agile enough in [being able to create more revenue sources] to adjust."

Davis also defended herself against criticism that she should have been aware of budgeting errors by city workers.

"If you can't rely on the people you pay to do their job, then why do you have them?," she asked.

Franklin issued a statement Thursday afternoon crediting Davis with raising the city's finances "to a new level of accountability and performance."

"As much as I respect her decision to leave, I wish it were not so," the mayor said.

Davis helped lead the recent implementation of computer software that city officials credit with exposing some of Atlanta's financial problems.

Councilman Howard Shook, chairman of the council's finance/executive committee, said he wonders how engaged Davis will be in the budget process now that she's leaving.

"My first question is [whether Davis is] 100 percent committed to getting us through the budget or does her departure schedule preclude her to that?" Shook said. "The budget is about to go through open heart surgery and she's one of the only people with a medical degree."

Not to worry, Davis said.

"I'm going to stick it out," she said. "I will be here."

The council has until the end of June to adopt Franklin's budget proposal or make changes that the mayor can agree with. State law requires the city to approve a budget by July 1.