Peninsula Takes Stock to Plan for Future : Community: The loss of population and changing demographics present new challenges for the four cities, which some say should merge.

The Palos Verdes Peninsula--wealthy, remote and long a refuge from the economic and social riptides tearing at other communities--is undergoing dramatic changes and faces an uncertain future.

That, in part, is the consensus of a grass-roots community organization that is seeking to address problems the peninsula faces in the years to come. Halfway through a three-year study, the organization reports there are indications of hard times and changes ahead.

The peninsula is losing population, schools have closed and the largest of the area’s four cities is nearly broke. In addition, striking demographic changes are occurring as whites grow older, and their children marry and leave the area because they can’t afford the high cost of housing there.

Other changes include a newly emerging ethnic mix of wealthy Asian immigrants who are moving into the upscale neighborhoods, bringing with them a rich cultural diversity never before experienced by the area.

Those are just some of the trends identified by the broad-based citizens’ group, called PV-2000. Its study is being sponsored by the privately funded Community Assn. of the Peninsula.

For years the peninsula’s upscale, country-club suburbs have been considered a haven from many of the economic and social forces that are ripping through other communities. But things are changing.

“Finally, there is a growing awareness that we are vulnerable here, too,” said Lea Ann King of Rolling Hills Estates, who chairs PV-2000. Among other things, the project’s initial findings show the area has been buffeted by defense cuts and the loss of aerospace jobs in the nearby South Bay cities where many peninsula people work.

Isolated from the rest of the South Bay by mountains and canyons and served by no freeways, the Palos Verdes Peninsula is a remote suburban area with some of the most spectacular ocean views in Southern California.

Thirty years ago, the peninsula offered a country gentleman’s existence, complete with equestrian trails, horse shows and golf courses. The richest moved to the very top of the hill, creating a tiny, gated enclave of multimillion-dollar homes. They called it Rolling Hills.

By 1980, there were 70,995 people living in the peninsula’s four bedroom cities--Palos Verdes Estates, Rolling Hills, Rolling Hills Estates and the largest, Rancho Palos Verdes, with a population of 42,000. It was Ronald Reagan country, where Republicans outnumbered Democrats 3 to 2, and taxes were low. People there were generally white and affluent, and they commuted off “the hill” to aerospace jobs in El Segundo or dentist and doctor offices in Redondo Beach or Torrance.

In the real estate boom of the 1980s, however, property became so expensive that only the wealthy could buy into the area. Many of the new peninsula residents were Japanese executives, Chinese businessmen, Indian or Korean investors seeking good schools and the same, insular values the peninsula cities had always offered.

The latest census figures show Asian populations have almost tripled in the last decade, jumping to 11,839 in 1990, up from 4,736 a decade earlier. But although the Asian population grew, the overall population of the peninsula was falling, down to 67,508 by the 1990 census.

The effect on schools was dramatic: enrollment has plummeted, falling to less than half the 17,600 students registered in the late 1970s. Peninsula schools, facing the double burden of lower enrollment and state budget cutbacks, have in turn been forced to slash their own expenditures.

The Palos Verdes Peninsula Unified School District, for one, has had to close nine of its 21 schools and has laid off scores of teachers and staff over the past few years.

Demographic studies show that with the white population aging, there are more widows living alone in the large homes, and fewer young families buying or renting homes. Asians make up a third of the school enrollment, bringing a wide variety of language and cultural differences, and creating a need for more bilingual education. One of the organization’s primary goals is to identify and respond to these cultural differences in a positive way, King said.

Although the challenges for schools and municipal governments are great, one aspect of peninsula life that presents no problem is crime: the area is relatively crime-free and police issues are not a major concern there, the project’s sponsors said.

The project is a community attempt to fashion a crystal ball that will not only reflect the problems created by change, also will give residents and government officials a glimpse into the next century.

“Our goal is to define these emerging issues and help shape the future,” said Shirley Borks, a retired teacher from Rancho Palos Verdes who is one of King’s assistants in PV-2000.

The project has the support of all four peninsula cities, officials report.

“It’s a great idea,” said Rolling Hills Estates City Manager Douglas Prichard, adding that organization volunteers have done a good job identifying the issues. “We’re very interested in seeing how the whole thing comes out.”

Launched in November, 1990, the project involves nearly 200 peninsula residents, businessmen and women, civic leaders, aerospace engineers and retired people. The volunteers have been divided into seven working groups and each is investigating specific problems that were identified earlier in the project, King said.

Operating on a $7,000 to $10,000 annual budget, the group hires consultants and university experts to assist in the effort to identify problems and find ways to solve them. The money is raised locally through donations.

“A project like this has never been done quite like we’re doing it,” King said, adding that such projections are usually funded and staffed by government agencies. “We’ve had to do it strictly grass-roots.”

One of the most difficult issues facing the group is how to help near-bankrupt cities, such as Rancho Palos Verdes, survive.

Already hard hit by the loss of property taxes as a result of Proposition 13, Rancho Palos Verdes faces a $3-million projected shortfall in its current $7-million budget. The city has made drastic budget cuts already. But without new taxes, officials say they will have to shut down most city services.

The peninsula’s other three cities have not been as hard hit by the recession but still face similar problems, King said. The project group studying governmental finances is trying to answer questions such as:

* What kind of tax base can be developed to adequately finance these peninsula cities?

* Should the property tax restrictions imposed by Proposition 13 be repealed?

* If Proposition 13 is repealed and property taxes go up, as expected, how will it affect retirees on fixed incomes?

These are the kind of questions that must be examined without taking political sides, said Ronald H. Stankey, an insurance executive from Rancho Palos Verdes who chairs the government finance study group.

“What we need to do is to find a pay-as-you go tax base,” Stankey said, adding that any other approach “would be unrealistic.”

Another issue being studied is the politically charged question of whether the peninsula should continue to be governed by four small cities.

“Some people sense that it isn’t economically feasible to maintain four city halls in one area,” King said. These single government proponents feel a single municipality for the peninsula would simplify government and cut out a lot of duplication, she said.

However, previous suggestions that the cities be merged into a single unit have met with stiff opposition.

At this point, the seven working groups are only asking questions and gathering facts, King said. By late summer, preliminary reports will be drafted and presented during a series of community workshops.

Out of these workshops will come a series of “issue papers” that will define the emerging problems and make recommendations, King said.

“The whole effort is like a big think tank,” she said. “Our hope is that we can help the cities and the schools get ready for the next century.”