Reynolds Resigns as Chancellor : Education: Cal State system’s chief, under fire over pay raises, will leave office at end of the year.

W. Ann Reynolds tearfully resigned Friday as chancellor of the 20-campus California State University rather than face possible firing for her handling of controversial pay raises for herself and top administrators.

Reynolds, her staff and the Board of Trustees that governs Cal State were under intense pressure from legislators and faculty to restore public confidence in what is the largest system of higher education in the nation. The 21% to 43% salary increases and secrecy surrounding them had created such a political and publicity disaster that the trustees rescinded the raises Friday.

The chancellor, in the job since 1982, told an emergency meeting of trustees at the Oakland Airport Hilton hotel that her resignation would be effective at the end of the year but that she will take a leave starting Oct. 1. Executive Vice Chancellor Herbert L. Carter is to lead the 365,000-student system until a new chancellor is found.

Reynolds began to sob after reading to the trustees her resignation statement, which mainly listed her widely acknowledged successes in recruiting minority students and faculty and bolstering the system’s academic standards. Her formal statement did not mention the salary controversy.

Later, talking with reporters, she struggled to keep her composure as she said there was no direct link between her decision and the sharp rebukes she received from trustees during a special hearing Thursday about the raises. She said she had not been asked to resign but that she had been thinking of it for the last few weeks.

“Eight years in one of these jobs is a long time. . . ,” said Reynolds, 52. “I think it’s my honest belief that it’s time for another energetic person.”

However, most other knowledgeable sources described the resignation as a face-saving device for both Reynolds and the trustees.

“Rather than a vote of no confidence by the trustees, a better outcome was arranged,” Ray Geigle, chairman of the systemwide Academic Senate, a faculty group, said Friday at the meeting. Eleven campus faculties recently passed their own resolutions of no confidence in Reynolds’ administration and several more had been expected to follow, he said.

Kenneth O’Brien, executive director of the California Postsecondary Education Commission, said Friday that Reynolds had no choice but to resign because of criticism in Sacramento and among trustees. “Her ability to run the system faced problems and that was probably a detriment to the system,” said O’Brien, whose organization advises the Legislature.

Some Cal State insiders complained that Reynolds was a sacrificial lamb to appease angry legislators and that blame for the scandal should be shared by trustees and Reynolds’ top aides. Some officials said that Caesar Naples, vice chancellor for faculty and staff relations, and Mayer Chapman, vice chancellor and general counsel, are in danger of losing their jobs.

Lt. Gov. Leo T. McCarthy, an ex officio trustee, attended Friday’s meeting and stressed that trustees in closed session last September had authorized at least the general pattern of the Jan. 1 pay raises and delegated Reynolds and trustee chairwoman Marianthi Lansdale to formally decide specifics. McCarthy declined to comment on the resignation other than to say: “She’s trying to leave the place with dignity and peace.”

On Friday, Lansdale acknowledged for the first time that she was acting on explicit agreement among trustees when she gave Reynolds the 43% pay increase in a procedure designed to avoid scrutiny by employee unions. “We made a mistake,” Lansdale said, pledging more open action in the future.

However, several trustees, most vocally board Vice Chairman William J. Campbell, who headed the committees on personnel and collective bargaining, said they were given misleading information last fall by Reynolds’ staff. Campbell, who is expected to become board chairman later this year, declined to comment Friday on Reynolds’ departure.

In June, 1987, Reynolds--dubbed Queen Ann by critics--survived an attempt to oust her because of what some trustees called her autocratic ways and inattention to individual campuses. At that time, McCarthy and Assembly Speaker Willie Brown helped her beat back the challenge. The position of executive vice chancellor was created to ease problems.

But this week, Reynolds could not count on such influential aid. On Wednesday, Republicans and Democrats on the Assembly Ways and Means subcommittee on education unanimously called for a rollback in the pay raises and an audit of Cal State’s administrative costs.

Gov. George Deukmejian, also an ex officio trustee, had no immediate reaction to Reynolds’ move, according to press secretary Robert J. Gore. The governor’s absence from Friday’s meeting should not be seen as significant, Gore said.

Trained as a zoologist with expertise in fetal development, Reynolds has the option to take a Cal State professorship that would allow her a year of research before returning to the classroom. She said she did not know what her new salary would be.

In recent years, she has been mentioned for university leadership posts outside California. Asked if she might look for one, she replied: “I think all options are open right now.” Before becoming chancellor, she was provost at Ohio State University and a leading administrator at the University of Illinois’ medical school.

The trustees voted unanimously Friday to rescind the Jan. 1 raises, which had boosted Reynolds’ salary 43% from $136,248 last year to $195,000 and those of the six vice chancellors and 20 campus presidents 21% to 28%, to totals ranging from $130,000 to $150,000. Now their salaries will go up 4.18% from last year’s, reflecting the average raise for faculty and other staff.

The trustees promised to hold public discussions about whether executive pay at Cal State is not competitive nationally--the contention of Reynolds’ staff. Ironically, some officials noted, the chancellor’s pay may wind up back near $195,000 to attract a replacement for Reynolds.

A search committee is to be established next week to fill what many educators say is a difficult assignment. Meanwhile, Carter will preside over the sprawling system.

Carter was one of several vice chancellors when he was appointed by the trustees to serve as executive vice chancellor in 1987, after Reynolds’ choice for chief deputy, William E. Vandament, left under criticism and returned to teaching.

Carter has worked in the Cal State system since he was hired as its affirmative action officer in 1974, coming from a post as head of the Los Angeles County Commission on Human Rights. He earned a doctorate in public administration from USC in 1979 and has served as a lecturer at several UC and Cal State campuses and private colleges.

The Cal State system is enormous geographically--and enormously complicated--with a $2-billion annual budget and more than 20,000 teachers. Its 20 campuses--the latest, in San Marcos, is under construction--all have different problems and some resent central control from the system’s Long Beach headquarters. Humboldt State in the rural, mainly white north, for example, has very little in common with the urban, heavily Latino and Asian campus of Cal State Los Angeles. And Reynolds’ plan for up to five additional campuses is much debated.

Complicating matters, Cal State lives in the shadow of the more prestigious UC system. UC is research-oriented while Cal State’s emphasis is on undergraduate education and teacher preparation. UC is constitutionally protected from much legislative interference while recent events show that Cal State is not.

Edward R. Purcell, general manager of the faculty union, said Friday that the pay dispute was a symptom of “a hidebound bureaucracy which basically thinks it’s above the law and . . . would like to be running a private institution.”

However, he said it was “unfortunate” that Reynolds was singled out for blame, especially since her union relations had improved recently.

Very damaging to Reynolds was the disclosure that she had promised legislators in 1984 that future actions on executive pay would be in public. At Thursday’s hearing, Reynolds said she had forgotten about that earlier pledge and apologized.

Trustees also said they hadn’t known until recently that, in addition to her salary, Reynolds earned more than $90,000 last year by serving on corporate boards. In addition, Cal State was much criticized for using nearly $100,000 from an employees’ benefits fund surplus to buy new cars, with take-home privileges, for the vice chancellors. Those privileges were revoked last month.

Times education writer Sandy Banks in Los Angeles contributed to this story.