L.A. Unified CFO Reilly leaves for Santa Clara job

Los Angeles schools Chief Financial Officer Megan Reilly, who insisted for years that the school district must do more to confront a perilous financial future, is stepping down after a decade to accept a similar job with the Santa Clara County Office of Education.

Reilly’s salary in her new position will be $260,000, and she’ll have a three-year contract. At L.A. Unified, she was earning $237,820, according to public records, under a contract that would have expired in June.

There is no indication that Reilly, 51, left L.A. Unified under pressure, unless it was the toll of worrying about future financial shortfalls. L.A. Unified faces budget challenges from declining enrollment, high fixed costs, rising pension obligations and costly retiree health benefits.

As befitting her role of financial steward, Reilly spoke publicly of potentially dire consequences to come and spoke even more bluntly behind the scenes, sometimes warning that current spending practices and union contractual obligations were unsustainable. Sometimes her arguments carried the day; sometimes not.

“It’s scary,” Reilly said about looming retiree healthcare obligations in 2015. “It has been a growing concern that our liabilities have been increasing year after year and slowly becoming larger than our assets. We’re not there yet, but we probably have a couple of years to go.”

That same year, she warned internally that the district’s first pay raise in years was too generous. She lost that argument.

She later oversaw the work of an independent panel of experts that, in the end, essentially agreed with her concerns about the future.

In going to Santa Clara, she will oversee a sizable organization with an annual budget of $348 million, but it pales next to L.A. Unified, whose general fund is $7.6 billion.

Reilly was one of the school district’s last major imports from the Navy, hired in 2007 during the administration of Supt. David Brewer, a retired admiral. The Navy connection was well established before Brewer’s arrival; by then, the district had brought in a fleet of former naval officers to resurrect the district’s building program and manage the bulk of the nation’s largest school construction and modernization effort.

Reilly’s previous job was executive director of business services and comptroller at the Naval Postgraduate School in Monterey.

One of her more difficult roles at L.A. Unified was helping steer the district through a statewide recession that resulted in massive budget cuts and layoffs.

“With her steady hand and level head, Megan helped us navigate difficult financial times,” L.A. schools Supt. Michelle King said in a statement. “Thanks to her strong leadership over the last nine years, Megan leaves behind a highly capable finance team that will allow us to make a smooth transition.”

In a statement, Santa Clara County Superintendent of Schools Jon R. Gundry praised Reilly’s “wide range of experience.”

In the same release, Reilly said she is “committed to providing students and our schools with the necessary resources to learn and grow.”

Reilly did not respond to a request for an interview.

She won’t begin her new duties until April 17 and has agreed to help with the transition in L.A. Unified through mid-March.

howard.blume@latimes.com

@howardblume