The Monterey Peninsula school board has concluded its painful budget-cutting process, only to find itself in a battle over whether to extend Superintendent Daniel Callahan's contract.

Between contentious budget hearings, the sharply divided board has spent numerous closed meetings over several months evaluating Callahan's performance. Veteran school board member Robert Eggers said the evaluation process normally takes only about three sessions.

Some Callahan supporters say they fear the Monterey Peninsula Unified School District board majority, four former teachers, is preparing to either dismiss the district's top administrator or not extend his contract past next June.

Though the majority is saying little publicly, rumors emanating from the district have sparked a quiet lobbying effort to counter an anti-Callahan sentiment expressed by some parents and teachers troubled by the district's direction.

Among those rallying behind Callahan are CSU-Monterey Bay President Peter Smith and his wife, Sally, who serves on a district advisory committee.

"I think he's one of the three best superintendents I've ever worked with," said Peter Smith. "He's just an extremely capable person."

Of the evaluation, which is scheduled to continue Monday evening, Callahan said, "I'm sure I'll have a process that has full integrity to it and is consistent with our mission and beliefs."

The board majority--board President Regena Lauterbach and trustees Resa Foss, Marjorie Troutman and Terri De Bono--shied away from commenting on Callahan's status this week, saying the evaluation process is a confidential personnel matter.

"We are taking our time and that's all I can say," De Bono said.

Privately, though, others in the district say the long, slow evaluation is a clear sign that Callahan's job is on the line, though no one expects him to leave without a fight.

Troubles early on|

Callahan joined the district in 2002, starting with an annual salary of $155,000. He had worked at school districts in Southern California and was superintendent in the East Bay city of Martinez. Near the end of his time with the Martinez district, community members there initiated a petition drive to recall district trustees, and high school students staged a well-attended walkout to protest a popular principal's resignation.

Moving to the Peninsula, Callahan, 57, took over a district that had suffered severe budget problems for several years. Declining enrollment, much of it caused by the closure of Fort Ord a decade ago, coupled with a steady series of accounting blunders, had put the district in perpetual budget-cutting mode.

The district was forced to close four schools in 2002 and even tighter finances led to the decision this spring to close two more. While Callahan and his staff, with the help of committees, crafted a budget plan, the school board majority went off in its own direction, raising and rejecting various school-closure scenarios before deciding to shut Monterey's Monte Vista Elementary and Seaside's Manzanita Elementary.

Throughout the process, relations were clearly tense between Callahan and the board majority. At times, it appeared to be a power struggle resulting in a power vacuum.

Some in the community say Callahan privately accused the board majority of micromanagement, especially after the board took away a fair amount of his spending authority.

In the midst of it all, the teachers union, the Monterey Bay Teachers Association, published a teacher survey criticizing Callahan for, among other things, not raising salaries.

The union said 51 teachers were satisfied with Callahan's performance and 276 were not.

Assigning blame|

Ron Woods, the union president, said last week that blaming the board majority for the district's troubles would be a mistake.

"The district office has led the public to believe that the board is responsible for this mismanagement, and I don't believe that to be entirely the case," Woods said.

"I think that the blame should go to the district office for the misinformation that comes out of there sometimes."

Parents, too, have expressed dissatisfaction with Callahan's administration.

During one school board meeting this spring, a group of community members silently waved signs displaying Callahan's likeness covered by a circle with a slash through it.

Liz Reisenbichler, a Foothill Elementary School parent, was among them.

"I feel like his leadership has just caused a huge polarization of our citizens and among cities and fractured the board and led to the school district's negative reputation," Reisenbichler said. "We have a serious public relations problem."

Reisenbichler said Callahan should have developed implementation plans early for every school-closure scenario. She also said he responded inappropriately to public questioning.

Helping illustrate how strongly feelings are running, the district's highly regarded chief budget officer, Jim Burnis, publicly announced his retirement last week in a long letter highly critical of the board majority and complimentary of Callahan.

Burnis, who joined the district shortly before Callahan, is credited with modernizing what had been a back-of-the-napkin budgeting process.

Among other things, Burnis said in his retirement letter that the board majority had systematically undermined the administration and was more concerned about community politics than the district's well-being.

Burnis joined a long list of senior administrators who have departed from the district in recent months, including John Lamb, associate superintendent; Shelby Garrison, support services director; Tad Kumagai, adult education director; John Ward, special services director and Bob Riefe, regional occupation program coordinator.

Exodus triggers fears|

Some fear that the exodus, coupled with a rash of teacher retirements, could leave the district poorly equipped to deal with all the logistical issues it faces before classes resume in the fall minus two campuses.

Reacting to Burnis' departure, trustees Eggers and Shanda Le Boeuf called last week for the board majority to simply step down.

Trustee Carlos Noriega said it appears the four former teachers on the board have their own agendas and aren't seeing how much Callahan has done.

"We have accomplished a lot in the district," Noriega said. "This really isn't a district in poor shape. It's just we have a board that's micromanaging and causing things to take forever."

Le Boeuf said the majority's extensive questioning of Callahan during the evaluation process has amounted to a personal attack. She added, though, that she hadn't heard any talk about dismissing him.

Le Boeuf said she believes Callahan probably has grounds to sue the district, but she would not elaborate.

"We're not being professional about this whole thing," she said. "His evaluation has become a subjective document. That's what is taking so long and causing the conflict between the majority and the minority."

Callahan's current contract expires in June 2005, but it allows for his dismissal, with up to a year's severance pay, for failure to perform his duties, for conduct "seriously prejudicial to the district" or for receiving an "unsatisfactory" evaluation. The contract doesn't define "unsatisfactory."

Smith, the CSUMB president, said the community would lose out if the board lets Callahan go. He said he and other area educators "see the continuous inability or unwillingness of the school board to hire good managers and let them lead as being a real blow to the quality of life we are trying to establish."

Callahan confidant Richard Grahlman, president of the district's charitable foundation and a member of the district's Business Advisory Committee, said he thinks Callahan deserves a satisfactory evaluation and a contract extension.

"To change leadership at this point," Grahlman said, "would be one of the dumbest things I've heard of."