Two nice, older ladies in the charming little village of Carmel are locked in a nasty political battle.

Sue McCloud, mayor of deliberately quaint Carmel-by-the-Sea, graduated from the federal government''s institute of strategic thought, the National War College. Marine colonels, elite Secret Service agents, spy plane pilots, covert operatives and Sue McCloud have studied the art of war at this Washington, DC campus.

It was back in the mid-''80s, when America still had a visible foe in the Soviet Union. At the time McCloud was a CIA case officer, living for years under cover as a benign government employee installed in various U.S. embassies.

To prevent burnout, the government sends its most promising stars to the War College (now called the National Defense University) to smell the roses for a year and dive into a curriculum heavy on the bellicose, with some world history and an overseas field trip thrown in.

Also, "They have war games," McCloud says, sitting in the austere City Hall office that the councilmembers share. War games were in another life. But today, as she approaches the end of her two-year term as mayor, McCloud is in the midst of another battle-a strangely personal battle waged by a former interior decorator-to keep her job.

As McCloud sits at a compact table in the cramped office, her sidekick, Bruce, curls up on a pillow at her feet. He''s a squat, elongated beast with a hairy pieface and a fresh haircut-a Dandie Dinmont terrier that trundles along everywhere with the mayor. Mellow for the usually yappy terrier breeds, Bruce has appeared in campaign literature, in an official photograph and as a cartoon, bounding about with a "Vote McCloud" banner stuck in his maw. This is a bit of political symbolism. Dogs, like so much else, are sacred in Carmel.

McCloud has been back in her childhood hometown since 1994 after spending most of her adulthood coordinating Cold War spooks. She loved the life.

"It was a wonderful experience in that you felt like you were doing something with merit," she says. "And you got to know yourself."

These days, McCloud has been called on to defend herself from a campaign led by current three-term city councilwoman Barbara Livingston.

McCloud and Livingston are fellow alums of Carmel High School and Stanford. Unbelievably, Livingston is McCloud''s childhood babysitter.

The angle of attack has taken McCloud somewhat by surprise. In several public addresses, Livingston has accused McCloud of running Carmel like the CIA-shrouded in secrecy. She''s accused McCloud of suffering from "analysis paralysis" and lacking "courage." She makes derogatory comments about McCloud to reporters and later pleads that they be considered off-the-record.

It''s a risky gamble, and the behavior has been criticized by other Carmelites as "negative." Of paramount importance, Livingston''s modus operandi is the kind of stuff that''s considered "un-Carmel," ironically perpetrated by a candidate for whom politics is largely about determining what is and isn''t "Carmel."

As the incumbent, McCloud has the luxury of not responding to these attacks in kind. She sums up the race simply: "I think it''s a question of power," she says. "There aren''t any real issues. It''s all personal attacks."

There are, however, real issues. To outsiders, quandaries such as whether the city should allow mail delivery may seem trivial. But in Carmel, this issue, and others like it, mean a lot. Last year McCloud signed an ordinance which allows mail delivery by private courier to about 130 residents. The deal costs Carmel taxpayers about $40,000 a year. Livingston was firmly against the courier service, claiming that a neighborhood volunteer service already in place worked just fine.

Livingston is worried that the city won''t be able to afford the service as demand increases, and that the next step may be delivery by the U.S. Postal Service. That would necessitate street addresses and mailboxes, which Livingston believes would erode part of the tradition and character of Carmel.

A more heated issue involves the many applications for permits to "remodel" single-family residences-which frequently call for the demolition of the village''s quaint old cottages. Livingston and McCloud are at opposite ends of the spectrum on their council votes on demolitions-with Livingston regularly voting no while McCloud votes yes.

The dozens of demolitions in the past two years have been enough to raise the ire of the California Coastal Commission, which asked the city to pass a moratorium on demolitions until the local coastal plan was certified. Twice Livingston voted for such a moratorium on demolitions, and McCloud and the council majority voted against.

"Carmel enjoyed a categorical exclusion from the Coastal Act because the Coastal Commission was confident that Carmel had policies in place to protect it," Livingston says. "The Coastal Commission has now put a de facto moratorium in place until the local coastal plan is certified."

Carmel politics have always been notorious. In 1986, Clint Eastwood ran for mayor in a vendetta against a City Hall that had stymied his development plans. His victory over the popular (but not internationally popular) Mayor Charlotte Townsend made the news from Hackensack to Hong Kong. The leathery Dirty Harry as the mayor of one of America''s most charming communities was irresistible stuff. Would Clint kick ass?

The Eastwood victory was significant not so much in its novelty-Ronald Reagan had already paved the path from silver screen to political office-but in what it meant to the city.

Like the massive tourist influx and subsequent development of motels and shops in the years following World War II, the late ''80s marked again a time when Carmel had to question its core identity-to decide whether to be a town for residents or a town for visitors. Must the strict Carmelian Code of anti-progress and natural preservation be bent periodically to keep the town viable?

Somehow Carmel has learned to bend just a bit and live with the ice-cream-cone-eating hordes. Today 60 percent of the municipal budget is funded through visitor dollars.

And for the people who live there (4,081 citizens in one square mile; median age 54, and 95 percent white, according to the 2000 Census), the reliable formula can mean easy money for those lucky or smart enough to own property. The median sale price of a home there has risen from $755,000 to $887,500 in the past year. The tiny town has an assessed property value of $1.4 billion. Pacific Grove-with a population three times the size of Carmel''s-has an assessed value of $1.35 billion.

As ably outlined in the 1992 book Creating Carmel: The Enduring Vision, Carmel was founded primarily for peaceful living at the edge of the Pacific. It is written that Carmel is "primarily, essentially and predominantly a residential city wherein business and commerce have in the past and are now, and are proposed to be in the future, subordinated to its residential character... ."

Carmel as it is known today has its roots in the early 20th century, when it became a popular hideout for bohemian types, artists and writers. The cottages they built among the pines and cypress are the nostalgic spine of the village.

But today, these charming dwellings are themselves a political issue. Their demolition and replacement with new, often larger homes that crowd sideyard setbacks and loom over neighbors is a hot controversy. From 1979 to 2000, 151 houses were demolished in Carmel-by-the Sea, according to figures from the California Coastal Commission.

Preserving the old homes goes to the spiritual root of a village where even the trees are beloved. There''s a forest commission and an urban forestry department. Anyone who wants to lay a hand on a twig had damn well better have permission from just about everybody. Carmel is Carmel because it vigorously fights change.

When Barbara Livingston announced her candidacy back in January, it was a closely-guarded affair. Reporters got phone calls urging them to show up at City Hall at 9am on Jan. 10 without being told why. A crowd of Carmelites had gathered, appearing as though they''d all been to the same cocktail party the night before. Then from down the street rolled a red 1955 Ford Thunderbird flowing with patriotic bunting. Seated in the back were Livingston, avuncular former mayor Ken White, and Jim Wright, a former Carmel councilman who had bucked Mayor Eastwood, earning the nickname "Lone Wolf."

Fast forward to the final weeks before election day, April 9, and Livingston is buzzing. On a bright, early-spring afternoon, she pads around the kitchen of her large Carmel home in comfortable black fleece pants and vest, making a pot of tea and an egg salad sandwich while simultaneously talking to her partner, Bob Kohn, and trying to push her enthusiastic dog Chloe off the legs of a visitor.

The phone rings as Livingston''s trying to find sugar and exclaiming about the increasing neurosis of her aging pup. The answering machine goes off every few minutes, picking up more calls as Livingston studies faxes, greets unexpected visitors at the door, talks to a reporter and manages to eat a few bites.

Livingston seems perfectly comfortable in the center of this whirlwind. A phone call comes from next door, and she walks quickly through her garden into her elderly mother''s house to consult with a caregiver. Life has speeded up since Livingston entered the mayoral race.

Livingston and McCloud grew up as family friends, with the five-year-elder Livingston (then Barbara Timmins) babysitting for McCloud and her sister. The girls led parallel lives-both going to the same Carmel schools, both working downtown for their summer jobs, both going on to Stanford.

"I''m sure she got much better grades than I did," Livingston chuckles.

But the two are hardly on speaking terms any more.

After college, their paths diverged. While McCloud worked for the CIA, Livingston worked in the San Francisco retail world, married, had two sons, and started her own interior design business.

Livingston won a seat on the Carmel City Council in 1992. After McCloud returned to town in 1994, Livingston suggested that she, too, run for local office. She did so successfully, and shortly thereafter the two had a falling out, which neither will discuss.

Livingston''s got an easy, chatty manner, talking happily about her childhood in Carmel and her eventual return to the "village." But it''s soon clear that her every comment-no matter how trivial-has a studied relevance to her platform.

The 1924 chocolate-brown home that Livingston identifies with so closely is comfortable but not fancy. The character of the house-and the rest of Carmel-by-the Sea-lies at the heart of her campaign.

"We fixed this house up instead of tearing it down," she says. "There were mushrooms growing out of the walls when we bought it. We could have bulldozed it and put up two houses and made millions of dollars on each one. That''s the problem."

The problem, as Livingston sees it, is the changing look of Carmel, as older beach cottages are demolished and often replaced by sanitized representations of "Carmel cottage style."

Livingston is not alone.

"We are radically changing the special eclectic architecture of Carmel," warns Enid Sales, director of the Carmel Preservation Foundation. Sales believes the city has acted illegally at times, allowing demolitions without public hearings.

"We are the only pure Arts and Crafts city left in the country," she says. Livingston and her supporters believe that McCloud and a majority on the city council are allowing property owners and businesses-especially developers and Realtors-to undermine the historic character of the village by mowing down trees or houses that get in the way of profit and individual desire for expansion.

"There is frequently a 4-1 vote split on the council, with me dissenting," Livingston says. "I''m not voting against the majority of the council to be ornery, obstinate, disagreeable or contrary. I''m doing it because I have an obligation to represent my constituents who elected me to office."

For her campaign, Livingston has formed a "team" with Ken White and Jim Wright to unseat council members Gerard Rose and Paula Hazdovac.

"I give these two men a lot of credit for re-entering politics," she says of her teammates. "If everything was going really well with this city, we''d be happy as clams not to challenge the incumbents."

"I think Carmel is fortunate to have this caliber of candidates-I know their records," says Sierra Club Chapter Chair Rita Dalessio. "Barbara Livingston is such a nurturing, warm person who loves this town."

Indeed, with her ashy blonde hair, hugs-and-kisses approach and affable mannerisms, Livingston projects a grandmotherly charm. But beneath that sweet exterior beats the heart of a fierce political fighter who doesn''t pull any punches.

After all the tea-sipping and smooches, it comes as a bit of a shock when Livingston bluntly attacks her opponent, whom she rarely speaks of by name.

"The mayor is calling all the shots at City Hall," Livingston says matter-of-factly. "She never questions herself."

Livingston believes that McCloud''s years in the CIA have led her to be an alienating and rigid mayor.

"They are trained to spread disinformation and collect information," Livingston says seriously. "McCloud is bullying to the people on the commissions. The mayor runs everything."

Some of Livingston''s charges of "secret government" seem exaggerated. She claimed in a public forum that she was forced to "invoke" the Freedom of Information Act in order to get a piece of council information because the city clerk refused to give it up without consulting the mayor. The clerk points out that she was brand new on the job, and that she ended up turning the information over as soon as it could be copied.

Yet some former public servants substantiate Livingston''s frustrations that citizens'' commissions are being left out of the loop and long-term city employees who don''t fit in with McCloud''s philosophies are being axed.

Clayton Anderson, who spent five years on the Forest and Beach Commission, says he was frustrated by being ignored by the council. He says Forest and Beach denies about 20 percent of applications for tree removal, and that the current council regularly overturns its reccommendations.

"Time after time people say, ''I want to cut down this tree, I can''t sleep at night, I''m so afraid of it,''" says Anderson. "But what they''re really doing is clearing it for construction."

Allan Paterson, former chair of the planning commission, says he was removed after speaking out against the mayor. He says the Community and Cultural Commission was cut out of the planning procedings for the Sunset Center renovation.

He doesn''t mince words when painting a picture of McCloud. "McCloud''s got an autocratic way of governing-she micromanages and governs in secret," he says. "I don''t know how you want to put this, but she''s a control freak."

Antonia Verleye, who resigned from the Community and Cultural Commission, did so to protest "the erosion and minimization of all commissions in the City. Over the past two years, all of these city bodies have been weakened or relatively ignored."

Livingston is endorsed by the Ventana chapter of the Sierra Club. "The current administration is more pro-growth, and the Sierra Club doesn''t necessarily support that record," says Chapter Chair Dalessio. McCloud is endorsed by the Monterey County Association of Realtors Political Action Committee, which at press time had not responded with a comment.

At the campaign kick-off in January, much was made about the three candidates forming a "slate," creating an impression they''d vote as bloc-something for which they''ve criticized the incumbents. Subsequently, the word "team" has been substituted.

Almost two months later, at the last of their candidates'' forums at the Carmel Women''s Club, in her closing remarks, Livingston got up and discussed increasing city revenues by increasing fees on her fellow citizens, as proposed by city staff. She mentioned an "Epicurean Service Fee"-a 25-cent tax on every meal served in Carmel eateries, which she said would generate $300,000 a year; a utility tax designed to raise $225,000 a year; a paid-parking program for $1 million a year; and a "special tax" of $75 on each home in Carmel, which she said would raise $275,000 annually. She also proposed increasing city fees "across the board," telling the mostly elderly audience, "these are things for you all to think about."

The next morning she left a voicemail message at the Weekly office asking to keep the information from voters until after the election.

In a subsequent message she asked again that the paper not report about "those little revenue thingees I brought up at the meeting yesterday."

In the days leading up to the final public debate on Tuesday night, March 26, hosted by The Carmel Pine Cone, the brewing controversy in the village was over the Livingston ticket''s campaign signs, which had been staked into soft ground everywhere the eye could see.

To some the spread of red, white and blue political advertising was decidedly "Un-Carmel." The police and City Hall got hammered with complaints and questions. Then one morning, signs were found torn up or defaced with anti-littering stickers. Someone tore up the sign in front of Livingston''s house and threw the scraps over her front gate.

"It''s organized by the opposition," she claimed.

Maybe, maybe not. City police say an 80-year-old man who had been seen disturbing signs was questioned by officers, but would not say if an arrest was made.

That 80-year-old man might have been one of the 180 or so mostly senior-aged folks who packed Carpenter Hall at the Sunset Center on the night of the 26th for an actual live debate.

The candidates did not go toe-to-toe, presidential-style, but it did get mildly feisty. Through the event, which lasted almost two hours, some in the audience hissed, quietly heckled and made low-breathed insults. Others got a huge kick out of it. Quite a few laughed heartily at some of the claims made by candidates. Applause and cheers were particularly strong for McCloud, the target of what many see as a negative campaign.

On one side of a podium sat Livingston, White and Wright; on the other, Mayor McCloud and councilmembers Rose and Hazdovac. The debate was moderated by Pine Cone publisher Paul Miller, who put Carmel politics in perspective, noting that politics elsewhere-say, Israel-can get a person killed.

In her opening comments, McCloud, the former Cold Warrior, sought to define the role of mayor as one that must confront outside threats. With widespread Peninsula issues like affordable housing putting pressure on the city, she said, a mayor must look beyond Carmel''s insulated confines.

"The responsibility of your mayor transcends city boundaries," McCloud said. She thanked the city council for its work in the last two years, even thanking Livingston by name.

"I have always felt we get more done with honey than with vinegar," she said.

She drew loud applause.

Each candidate made his or her opening comments, which were followed by questions from the audience asked by Miller. The first question out of the gate was as "Carmel" they get: Each candidate was asked to tell everyone how large a house they own. Living in a house hand-hewn by an ancestor apparently scores high points; the remodeled history of Jim Wright''s house seemed to embarrass him. "I don''t remember what the square footage of the house is. If someone wants to come over and measure it, they''re welcome!" he said, scowling.

The issues of this race were evident and the differences among candidates were slight-all agreed they love their town. Each spoke about establishing the Local Coastal Plan; whether or not two homes on one lot should be rented, and whether that amounted to affordable housing; how promotional funds should be spent to bring in more tourists; whether or not cutting down two dozen dangerous eucalyptus trees was the right thing to do, and so on.

One question that got to the criticism of McCloud''s management style asked why five city administrative heads have departed in the last two years. McCloud offered reasons for each one leaving, but when pressed by Miller about the seeming high number of exits, she said, "They retired! That was their natural plan."

Livingston, who has bemoaned the unionization of city employees, claimed they''re being mishandled by the current regime, and stated her claim that morale among city employees is low.

Hazdovac replied that the negative campaigning-not current management style-was hurting morale.

"I work with these people," she said. "They''re very upset about it and it isn''t right."

Finally, each candidate made closing remarks, noting that in such a town, where everyone is a neighbor, political distinctions can be practically subliminal.

But Livingston, seeking to distinguish herself one last time, asked, "How do you think this town got to be this way, by letting anyone do anything they want, or by everyone following the rules?"

Livingston''s comment summed up her position. Will Carmel stay the same, or will it change just a little, or as she says, become a place where people do "anything they want?" That is something that won''t happen in Carmel-not with Barbara Livingston as mayor. And if it were to happen with Sue McCloud as mayor, it would happen one sideyard setback and one mailbox at a time.