Administrator Will Need a Political Focus

With Sally Reed’s tenure as Los Angeles County’s chief administrative officer ending this week, the Board of Supervisors may seek a successor more closely attuned to political realities than the bottom line when it comes to repairing the county’s troubled finances.

During the past 2 1/2 years, Reed has mapped out a tough road to financial stability. To restore the nation’s largest county government to financial health, she bluntly warned that the county had to stop spending beyond its means, quit borrowing to pay its bills, take a hard line against pay raises and cut social programs to balance the books.

Now there are signs that the five supervisors, who face not only the voters but also well-heeled special interests and powerful county unions, won’t stay the financial course.

Reed will join the Pete Wilson administration, becoming director of another well-known bureaucracy, the Department of Motor Vehicles, on June 3.

At her last regular board meeting Tuesday, she was presented with a resolution commending her service to the county.

Even her harshest critic, Supervisor Gloria Molina, praised Reed in an interview afterward. “She has an awful lot of talent. She did her job,” Molina said. “I have to do my job. We have very, very different roles.”

Although the board is far from choosing who will be next at the helm of county government, Molina said: “Whoever sits at that table has to be keenly aware of the politics that are involved in how we make decisions.”

It is likely that whoever is selected for the top job will have to water down the message Reed delivered so often: The county cannot afford to continue to live beyond its means.

The supervisors selected Reed, Los Angeles County’s first female chief administrative officer, in 1993 because of her reputation for bringing fiscal discipline to an undisciplined government accustomed to spending far more than it received.

“She gave the board and the public the stark truth about county finances,” said Supervisor Zev Yaroslavsky.

The board cautiously endorsed a series of financial principles shortly after Reed arrived from a dozen years as Santa Clara County’s chief executive, but delayed putting them into practice.

Soon the supervisors learned that the goal of balancing their $12-billion budget was in conflict with demands that public safety be protected, social programs saved, libraries and parks kept open and union jobs preserved.

Reed said in an interview that she believes the board wanted her to find all the hidden pots of money that could be tapped.

When she couldn’t close last year’s $1.2-billion budget gap without recommending huge cuts, including closing County-USC Medical Center and eliminating one of every five county jobs, the supervisors were stunned.

“I don’t think they envisioned an outcome that was going to require significant reductions in services we provide,” she said.

Protests mounted when it became clear that Reed was determined to dramatically downsize county government, and the supervisors distanced themselves from her sharp focus on the bottom line.

Her recommendation to close County-USC, which earned the wrath of Molina and others, was left on a siding. Instead, the board took a chance on winning a federal waiver to rescue its hospital-heavy health system by promising to shift emphasis to primary care at community clinics.

In hindsight, Reed marvels at what she calls the “miracle” of President Clinton bailing out the county’s health system, but she wonders how long those miracles can continue.

Reliance on Washington is addictive, she said, suggesting that it is a dangerous dependence, particularly when the federal government is “more and more likely to say no” to spending on health and welfare programs.

“In spite of the miracles that occurred with the health department,” Reed predicted, “eventually there will be cuts again.”

Although it was her toughest decision, Reed defends her suggestion of closing County-USC, saying that she still does not know how the county can afford to finance a $1-billion replacement hospital, despite promises of $410 million from the federal government.

But after last year’s wrenching budget battles, Yaroslavsky said, Reed decided not to fight again. “She knew she was leaving.”

Her $11.9-billion budget proposed last month abandons some of her basic principles by relying on one-time revenues from county pension funds and carry-over balances to support ongoing programs. Her goal was to minimize the county’s reliance on potential risky revenues to pay for ongoing operations.

One of her strongest supporters, Supervisor Deane Dana, said he has the highest regard for Reed. “I don’t mind people being blunt,” he said, “but this is a political job. We are here to meet the needs of our constituents.”

“The dollars aren’t the only thing,” Dana said. “There are so many social problems.”

Supervisor Yvonne Brathwaite Burke credited Reed with restoring public trust in the county’s top non-elected official after the forced resignation of former Chief Administrative Officer Richard Dixon.

“She raised the visibility of the need for long-term financial planning,” Burke added. “The role of the CAO is to take the extreme position and push the system,” she said.

Ultimately, however, the supervisors must take into account the social needs of the community. “We have a constituency that cries out for services,” Burke said.

What the board needs now, she said, is someone who can keep the county financially secure, has a sensitivity to social needs, has the ability to think creatively, knows the importance of Sacramento and Washington and has “the ability to get along with five very diverse and different personalities.”

County personnel director Mike Henry said nearly 140 applications for the job had been received in advance of today’s deadline.

Sandra Davis, Reed’s top deputy, will be acting chief administrative officer. Davis, the county’s former treasurer-tax collector, decided not to seek the permanent job for personal reasons. She pledged to follow Reed’s example as the supervisors wrestle with putting together the 1996-97 budget.

Board Chairman Mike Antonovich presented Reed with Tuesday’s resolution:

“She has earned widespread recognition and respect for her leadership in providing sound and prudent guidance to the board as the county faced the most pressing fiscal crisis in its history. These efforts have been instrumental in maintaining the county’s solvency and its ability to continue providing critical services . . . while restoring essential confidence in the county’s fiscal stability.”

Yaroslavsky was more direct. He credited Reed with assisting the board in avoiding the pitfall of bankruptcy.