County Executive Takes Helm in Eye of Storm : Government: Excitement marks arrival of Sally Reed as chief administrator. She will need all her skills to run a crisis-plagued giant.

The worst fiscal crisis in recent memory. Layoffs of hundreds of employees. Thousands of angry county workers marching through the streets. The resignation, under fire, of the top manager. It has been one of the most tumultuous years in the long, storied history of Los Angeles County.

But in the midst of the turmoil, the corridors of the Hall of Administration are buzzing with excitement and expectation at the arrival today of the plain-spoken but, by all accounts, commanding woman who will become the county’s eighth chief administrative officer.

Sally Reed, formerly Santa Clara County’s top executive, will tell you that she has been trying as best she can to keep up with events in that octopus of a metropolis called Los Angeles County: the battles with Sacramento over money, a threatened general strike, the racially charged trial of two men accused of beating Reginald O. Denny. Yet she insists that she still wants to come to work here.

She is the type to hit the ground running, Reed says, but it will be a bumpy, if not downright hazardous road. The county’s patchwork budget remains a paramount concern and could be thrown into chaos again if Proposition 172--a sales tax initiative that would fund public safety services--fails.

The county is being sued by welfare recipients for paring grants and faces the threat of litigation by its art museum over not living up to contractual obligations. It must strengthen its relations with Sacramento if it is to avoid the rough treatment it endured from lawmakers this year, while at home, it needs to restore public confidence in its tarnished reputation.

Added to the mix is the not inconsiderable challenge for its top manager of keeping five unpredictable bosses happy.

Reed enters the job with humor and good spirits--for now. “I’m hoping everybody will give me the benefit of the doubt, at least for a while,” she said with a laugh.

Reed built a reputation during her 12-year tenure in Santa Clara County as a woman willing to immerse herself in the intricacies of the budget process, unafraid to pare programs and services to cut costs. She is known to be dogged and demanding, but is also viewed as an engaging boss, accessible to rank-and-file workers as well as top administrators.

She will need to bring all her skills to bear on the problems facing Los Angeles County, the largest and most complex county government in the nation with an 84,000-member work force and a $13.5-billion annual budget that outstrips all but eight states.

“The new CAO really won’t have a grace period to settle in and learn the lay of the land--she’s going to be in the hot seat almost immediately,” said Jack Kyser, executive director of the Economic Development Corp. of Los Angeles County, a private, nonprofit group that charts county growth trends.

Chief among the concerns is the budget. County officials began budget deliberations this year needing to cut nearly $600 million in programs and services. The decisions made by the Board of Supervisors in meeting that goal and adopting a budget are still reverberating.

Assumed in the budget is the passage of Proposition 172, which would provide for permanent extension of the half-cent sales tax surcharge. If the initiative fails, the county will be forced to cut an additional $400 million from public safety services such as the Sheriff’s Department and district attorney’s office.

Among those taking the hardest hit in the budget were general relief welfare recipients, who saw their monthly grants reduced from $293 to $212. Legal aid groups charged that the cuts are illegal and are appealing a decision in favor of the county.

The county’s public library system was also a big loser, with nearly $30 million trimmed from its budget. The cuts forced more than 300 layoffs and severely reduced service hours. Library supporters received a further blow when Gov. Pete Wilson vetoed legislation that would have provided funding to keep open 43 of the county’s 87 libraries that are scheduled to close by the end of January if no other funding sources are found.

Harry L. Hufford, the interim chief administrative officer, calls the budget “perilously balanced,” but said Reed faces other important challenges in the near term, such as repairing the county’s tattered relations with Sacramento, which has been critical of the way the county handles its finances.

“In the final outcome, we had help from our delegation that resulted in a tremendous coming together,” Hufford said. “If the bridge is starting to be built, it just needs to be completed.”

Reed will also need to acquaint herself almost immediately with the county’s vast emergency response system, which given the risks of earthquakes, floods and civil disorders can assume critical importance.

One area of good news is the county’s calmer, more settled relationship with its labor unions, which only a few weeks ago were threatening a general strike over contract terms. Negotiations were settled and the strike avoided, but union leaders say they are eager to establish a close union with the new chief administrative officer.

“We’d like to have a constructive dialogue and work jointly in the areas we can,” said Gilbert Cedillo, general manager of the largest employee union, Local 660 of the Service Employees International Union.

But there are less tangible sides to the role of top manager, the most sensitive of which is gaining the support and confidence of the five supervisors.

“It’s important, especially in coming into a large urban county, to clearly understand where the board, as individuals and as a group, is coming from,” said Steve Szalay, chief administrator of Alameda County. “You need their respect and trust. The politics (in Los Angeles County) will be difficult, but I would venture to say not much different than that in Santa Clara County.”

Reed will have to adapt to personalities that range from the conservative restraint of Supervisor Mike Antonovich to the more liberal, aggressive style of Supervisor Gloria Molina.

County insiders say Reed also may run up against the lingering influence of former CAO Richard B. Dixon, who stepped down this year after being criticized for his handling of public funds, including a decision to increase pension benefits for himself and other top officials.

“There are still people who are very loyal to Dixon, who have adopted his style of operation and who might make it very hard for a new CAO,” said a county employee familiar with the office who asked that his name not be used. “One of the first things she might have to do is clean house.”

If Reed is concerned with the magnitude of the task she faces, it barely registers in her conversation, which is lively and friendly. Reached at her Saratoga home before she headed south, she said she is relieved that she will be settled when she assumes her post today, her husband having found a home in Pasadena “completely furnished down to the dishes.”

She believes that one of her strengths, the ability to work closely with her staff and other officials, will hold her in good stead here.

“I think my work is relationships,” she said. “When I think of things that need to be tackled I need to be able to pick up the phone and say: ‘I don’t understand why things are happening this way’ and influence that if need be. Obviously the board will have a lot to say about priorities . . . but the budget is my strength and that will be my focal point.”

At a time of immense economic and social changes in the county, how she handles the task will have far-reaching impact.

Said the Economic Development Corp.’s Kyser: “If she deals with the county’s problems in an effective fashion, if she does a good job, she’ll be viewed as a hero.”