Families at Sunset Beach Christian School watching their children graduate yesterday had extra reason to celebrate, with the repeal of a controversial report and a guarantee that the North Shore school will remain open in August.

The report, prepared in May by a team of educators from the Mainland, recommended that the school — a ministry of Sunset Beach Christian Church — either remain connected to the church and undergo major reforms, including firing the current part-time principal; or that it separate and either lease its half of the property it shares with the church or relocate after one year.

The report, which was prepared in anticipation of a new pastor being voted on by the congregation, said the school had "fallen on hard times" and that it "continues to struggle with multiple systemic issues," including insufficient leadership, lack of academic standards and failure of teachers to adhere to and promote orthodox views of the Christian faith.

Sunset Beach Christian School has about 70 students from pre-kindergarten through 8th grade.

The congregation had been scheduled to vote tomorrow on the future of the school, but that vote has been cancelled.

Interim pastor David Miles, who organized the diagnostic team, said he withdrew the report at a meeting of church members and parents on May 28 because "it hurt a lot of people."

"I would rather be reconciled than be right, and that's the most important thing," Miles said.

Parents and school officials, who had been worried they would have to relocate, were relieved at news of the decision.

"I think it's really drawn us together and made us realize what we have to do to ensure the future of the school," said Caryn Houghton, who has two children in the first and fifth grades at Sunset Beach Christian.

Fearing the school would close, Houghton and other parents reached out to the congregation last month with juice, refreshments and kind words before Sunday services.

"It was eye-opening to them, too," she said. "I don't think they looked at the school as something that was vibrant and alive because when they come for service, it's been closed. They didn't realize (it was a) living entity of students and teachers."

On Sunday, the congregation was also scheduled to vote to confirm a new pastor, Tom Bauer, head of Surfing the Nations, a nonprofit organization that helps at-risk youth and promotes Christianity throughout the world through surfing missions.

However, Bauer withdrew his candidacy last month. Miles said Bauer did not give a reason for withdrawing his name.

Some parents and church members had been wary about an increased presence by Surfing the Nations on the campus, and wondered whether the school might be forced to share its facilities with the nonprofit.

A six-person team of church members had selected Bauer from about two dozen candidates from Hawai'i and the Mainland during a year-long search. The church will have to start a new search, Miles said.

Many challenges remain for Sunset Beach Christian School, principal Bob Prassar said this week.

One concern is enrollment numbers. The school has a capacity of 120 students and will start on Aug. 4 with 65 students. Enrollment hovered around 130 students in the early 1980s, but has since declined.