County’s Reed Leaving to Head DMV, Sources Say

Sally Reed, Los Angeles County’s chief administrative officer, whose strong will and tight-fisted fiscal approach reshaped the nation’s largest county government but created tension with her elected bosses, is resigning to head the Department of Motor Vehicles, state and county sources confirmed Thursday.

Reed, who could not be reached for comment, informed the Board of Supervisors late Thursday of her decision to become DMV director beginning June 1.

Her 2 1/2-year tenure as the county’s top administrator has been marked by a determined effort to bring financial stability to the troubled government at a critical time in its history. She is leaving just as the county is beginning the process of constructing next year’s spending priorities.

Her efforts succeeded in scaling back numerous county programs, but she ran afoul of the county’s powerful labor unions, whose members’ jobs were on the line. Reed’s tough stance on balancing the books sometimes put her at odds with the supervisors, who faced severe pressure when confronted with decisions that could cost county jobs and cut popular services.

Despite Reed’s clashes with the board, Supervisor Yvonne Brathwaite Burke praised her for her performance during the county’s worst-ever fiscal crisis.

“She had a tough job,” Burke said, after learning of Reed’s imminent departure. “We hired her to come here and make some tough decisions.”

Reed was “very responsible in her approach,” Burke said. But she added that the supervisors must “balance the financial arguments against the human needs, and that is where it becomes very difficult.”

After a dozen years as the top administrator of Santa Clara County, Reed in October 1993 brought her bottom-line approach to troubled Los Angeles County just as it was careening toward the fiscal rocks. She was selected to replace former Chief Administrative Officer Richard Dixon, who resigned after a string of controversies from boosting pensions to lavish remodeling of his offices.

In blunt terms, Reed told the powerful supervisors what they may not have wanted to hear: that they had to make tough decisions about cutting social programs because the county could no longer afford to spend more than it takes in.

It was an unpopular message, and never more so than last summer after she unveiled her proposed budget that called for elimination of one out of every five county jobs and closure of the nation’s largest public hospital, County-USC Medical Center, to erase a $1.2-billion budget deficit.

Those proposals earned the wrath of Supervisor Gloria Molina, whose district includes the hospital, and the unions. At the time, Molina clashed openly with Reed and expressed a lack of confidence in her performance.

But on Thursday night, Molina said Reed’s contribution to the county was her “fiscally conservative approach.”

“By being so conservative on the budget she was able to provide assurance for a lot of people,” Molina said. “A severe philosophy was needed at the time, and she provided that. She brought more effective, rational reasoning and recommendations than prior CAOs. She did a better job than her predecessors.”

Molina, however, added that Reed was inflexible. “Her solution to everything was: “ ‘Just say no.’ Her attitude was, ‘If we don’t have the money, we just won’t do it.’ ”

Supervisor Zev Yaroslavsky said he was “very disappointed” that Reed is leaving.

“She has played a pivotal role in backing the county away from the brink of insolvency,” he said.

Supervisor Deane Dana declined to comment on Reed’s decision, saying only: “I have a lot of respect for her.”

Reed’s departure comes at a crucial time for the county. After making deep cuts particularly in health programs the county faces the prospect of more downsizing in the years ahead.

But in her soon-to-be-released proposed budget for the fiscal year that begins July 1, Reed is not taking the same hard line as last year. Early indications are that she will rely on one-time surplus earnings from the county’s pension fund and gamble on more federal money for the health care system, rather than calling for more hospital closures and layoffs.

Gilbert Cedillo, general manager of the Service Employees International Union Local 660, which represents more than half of all county workers, said the county should look for a new type of CAO.

“Cutting can’t be your only approach,” he said.

Reed will fill a vacancy at the DMV created in October when former Director Frank Zolin resigned, citing irreconcilable differences with top Wilson administration officials.

Reed will take a substantial pay cut from her $180,133 salary at the county to $107,390.

Times staff writer Miles Corwin contributed to this story.