Skelly, who was hired by the district in 2007, will not get a pay raise.
With an annual salary of $287,163, he is the 11th highest paid school chief in the state, coming behind heads of the San Francisco, Los Angeles and Fresno districts as well as the Cupertino Union School District, Fremont Union High School District, the Santa Clara County Office of Education and several southern California districts.
He previously worked for the southern California district of Poway, where he had been associate superintendent for learning-support services.
Following a closed-door evaluation of Skelly last week, which board President Camille Townsend described as "very healthy and very productive," school board members Tuesday voted unanimously for the contract extension, with hearty praise.
"Thank you for the good work," Townsend said.
"We're very aware of the challenges and joys of the job, and its very public nature. Your style reflects a genuine enjoyment of students of all grades, and we appreciate the time you spend on all the campuses, your accessibility, good humor, resilience, knowledge and skills."
Board member Barbara Klausner — who two weeks ago publicly chastised Skelly for what she described as his failure to accurately communicate the board's direction on counseling issues to Gunn High School staff members — Tuesday went out of her way to praise him.
"In light of my recent commentary about the board-superintendent relationship, I want to take this opportunity to express my profound appreciation to Dr. Skelly," Klausner said, citing Skelly's "considerable body of sterling work and leadership.
"I look forward to continuing to work together with you."
Skelly's recent years have been marked by challenges on stiffening high-school graduation requirements, managing significant turnover in senior staff and initiatives to address student emotional health following student deaths by suicide in 2009 and 2010.
Skelly said: "I love this job; I love this community; I love this work. Obviously it's hard work, and there are times when we have conversations like you do when you're passionate about stuff, but it's really, really fun work, and I can't imagine doing anything different."
Skelly has been criticized by a parent group, We Can Do Better Palo Alto, which has lobbied the district to do more to directly address issues of academic stress. We Can Do Better co-founders Ken and Michele Dauber 17 months ago called on the board to replace Skelly.
In response to Public Records Act requests from the Daubers as well as from Palo Alto Weekly Publisher Bill Johnson, Skelly in the past month has released hundreds of emails and "Confidential Weekly" memos he sent to the board.
Calling for a halt to the confidential weeklies, Johnson said the practice might have violated the prohibition on policymaking by serial communication in California's open-meeting law.
Skelly, board members and school district counsel Louis Lozano maintain no violation occurred but have referred the issue of communication protocols to a board committee for review and possible revision.