UC Chief Expected to Announce Retirement : Education: Jack W. Peltason, former chancellor of UC Irvine, will resign effective Oct. 1, a source says.

University of California President Jack W. Peltason, who has shepherded the nine-campus, 162,000-student system through 2 1/2 troubled years, is expected to announce next week that he will retire when his contract expires this fall.

A source has told The Times that Peltason, 71, plans to inform the UC Board of Regents of his decision when it meets in San Francisco next week. His resignation will be effective Oct. 1, the source said.

On Friday, Peltason issued a statement that neither confirmed nor denied the rumors that several board members said have been whispered about for months.

“I did not take this job as president of the University of California for life,” said the statement, which was faxed to every member of the Board of Regents. “I did sign on with the intention of helping the university work its way through a difficult transition period. We’ve reached a period of relative stability, but I don’t have any announcement to make today. When the time comes for me to do so, you won’t have to ask. I’ll announce it happily.”

A political scientist and longtime administrator, Peltason was named to head the beleaguered university system in 1992, and from the beginning he was seen as a caretaker president for a difficult time. His three-year contract lists Sept. 30, 1995, as his last day of work, though UC officials have repeatedly said that could be extended.

“As president, I think he’s gone a long way to restore confidence in the office of the president,” said William Sirignano, an engineering professor at UC Irvine. “He’s handled a very tough situation with the fiscal crisis, and he’s managed the resources well.”

Bill Parker, UC Irvine’s associate executive vice chancellor, said Peltason also helped improve the public perception of the UC system, after the retirement of his controversial predecessor, David P. Gardner.

“David Gardner retired in a climate of distrust, and Jack eliminated these tensions,” Parker said. “He also presided during the university’s greatest financial challenge since the great depression.”

Peltason became UC’s 16th president as budget concerns worsened. Since he took over, UC has lost about $300 million in state revenues, and student fees have risen by more than a third.

His subdued style is described by some as conciliatory and by others as too passive, but Peltason has been praised for keeping the confidence of the UC faculty, despite two years without cost-of-living pay raises, followed by a year with a 3.5% pay cut.

This week, when Gov. Pete Wilson proposed a budget that plots out four years of increased appropriations for higher education, some speculated that Peltason may have decided he had completed his mission: to steer the UC system into calmer seas.

On Friday, several regents reacted to Peltason’s noncommittal statement as if his resignation from the $243,500-a-year job were already a done deal.

“We all knew that Jack was taking this as a transition, if you will,” said regent and San Rafael lawyer William T. Bagley, noting that on Oct. 1, Peltason will have completed three years as president. “Transitions last three or four years. You don’t want the man to strain his golden years.”

“The timing is right for him,” said regent Clair W. Burgener, a former five-term congressman from Rancho Santa Fe.

Regent Ward Connerly, a Sacramento land use consultant, called Peltason “a quiet hero” who has brought stability to the university.

“If he announces (his retirement) next week, we all should be grateful for the service he has rendered to this university. He brought wise counsel. He brought a sense of where we need to go to position ourselves for the future,” Connerly said.

When he assumed the presidency, Peltason chose to forfeit the $41,710 he was to receive annually to support his private Irvine residence, where he and his wife, Suzanne, eventually plan to retire, he said then. The home is in the University Hills neighborhood.

Peltason became president of UC in the wake of controversy over the large severance package received by his predecessor, David P. Gardner. A respected constitutional scholar, Peltason had been chancellor of UC Irvine for eight years and had spent the previous five years as president of the American Council on Education, a lobby group for higher education. Before that, he was chancellor of the University of Illinois at Champaign-Urbana for nine years.

Parker said Peltason’s greatest accomplishment as UC president was keeping the university system steady during a very difficult time.

“We could have lost a lot of faculty due to the lack of morale and a lot of students,” Parker said. “But he managed to maintain the quality and morale of the institution.”

In picking a predecessor, Parker said UC Regents must be cognizant of the fact that the president of the University of California is a national leader.

Longstanding rumors about Peltason’s retirement were given new credence by a report Friday in the San Francisco Chronicle that predicted his departure. The report prompted spirited discussion about possible successors, as well as some speculation that Peltason might reschedule a planned announcement if he feels undercut by advance publicity.

According to several regents, the short list of candidates from inside the UC system includes UC San Diego Chancellor Richard C. Atkinson, UC Berkeley Chancellor Chang-Lin Tien and UC Provost Walter E. Massey. UCLA Chancellor Charles E. Young, who along with Atkinson was considered for the UC presidency in 1992, was not likely to be a front-runner this time, some regents said.

“He’s senior in terms of service by far,” Burgener said of Young, 63, who is currently in his 26th year at UCLA. “And he’s a first-rate guy. But I think he’s probably fairly close to retirement.”

Times staff writers Diane Seo and David Reyes contributed to this story