Difficult Days Continue for Palos Verdes School District : Education: The formerly wealthy system has seen steady declines in enrollment and funding. Teacher contract talks remain stalled. And the next round of budget cuts may wipe out elementary school reading programs.

Hard times in the once-wealthy Palos Verdes Peninsula Unified School District are putting students, teachers and school administrators alike between a rock and a hard place.

With a $30-million annual budget that has already been pared to the bone, the district now faces the loss of another $1.4 million in state funds, officials said. That means more budget cutting in the formerly upscale school district already hard hit by the recession and declining enrollments.

Events there offer a stark picture of a top-notch educational system in decline.

This next round of cuts may wipe out elementary school reading programs that are at the heart of the instructional policy. Five reading teachers have been notified that their jobs may be cut--two could be laid off, and the others would move back into the regular classroom to replace teachers who have left or been laid off.

The news comes at a time when labor contract negotiations between teachers and administrators are at an impasse. With each side blaming the other, talks have broken off and some teachers say they are mad enough to strike.

After getting no pay increase last year, the teachers are asking for a 10% raise. The district has offered a one-time, 1.5% bonus this year, a 1.5% raise next year, plus cost-of-living adjustments if more state money is received. But more state funding next year is an unlikely prospect, most agree.

Both sides walked away from the bargaining table late last month, no new talks are scheduled and the district is filing for state mediation, officials said.

“I’d strike now, yes, I would,” said one tenured teacher who did not want to be identified. Angered by broken promises of pay raises this year, she said teacher morale is at an all-time low. Whether a strike would be legal is open to argument, union leaders say.

The district’s most experienced teachers earn $48,530 a year, putting them in the bottom 25% of the unified school districts in Los Angeles County. Yet teachers angrily note that the superintendent’s salary is $115,000, fourth highest in the county.

District officials counter that they have offered teachers all that the district can afford, given shrinking enrollments, declining lottery revenues, and reduced state and federal funding. School board members also argue that the superintendent’s salary must remain competitive to attract a skilled administrator.

The fiscal crisis is occurring in an area of obvious wealth. In the gated city of Rolling Hills, for example, homes with ocean views sell for millions of dollars and the average household income tops $250,000 a year, Census reports show.

Nearby, in the pricey bedroom communities of Palos Verdes Estates, Rolling Hills Estates and Rancho Palos Verdes, the average household earns about $100,000 a year. Homes there start at about $400,000 and range up to $2.5 million or more.

This is a district of aerospace scientists, corporate executives, bankers and airline pilots. Excellence in education has been important; the dropout rate is less than 1% and almost all graduates go on to college. Here, vocational education means medicine, engineering or the law.

In the boom times of nearly 20 years ago, about 18,000 students attended three high schools, two intermediate schools and eight elementary schools in the district. But the numbers have plummeted over the past decade as youngsters grew up and moved away, many of them unable to afford the high price of housing in the area they called home.

Added to the declining enrollment are the problems posed by the recession and the free-fall decline in aerospace jobs. As people move out, fewer students means less state money doled out on the basis of average daily attendance.

The current enrollment is just under 9,000, down by half since 1974. In today’s dollars, that means a $30-million drop in state aid, based on average daily attendance.

To cut costs and shrink to size, the district has consolidated the three high schools into one campus and closed seven other schools, five elementary and two intermediate. The cutbacks have come hard--teachers and administrators have lost jobs, classes have grown larger, and students are now traveling longer distances to school.

During the consolidation, the teachers say they voluntarily deferred pay raises until this year. They were promised higher pay and better fringe benefits, they said. Now they find themselves at an impasse with district negotiators over what amounts to no raise at all.

“The teachers were told the savings from consolidation would allow for substantial salary schedule increases,” said Lauren Sanders, executive director of the South Bay United Teachers, the teachers’ representative. “Now they feel betrayed.”

School officials deny that they have betrayed the teachers, saying hard times and events have overtaken that promise.

The district’s enrollment is down by an unexpected 300 students, meaning that it will get $990,000 less from the state next year, Supt. Michael W. Caston reported. In addition, state lottery funds are way off and a drop in interest rates on district investment funds brings the total shortfall to $1.4 million, he said.

“We are scrambling just to stay solvent,” Caston said. In a moment of candor, he added, “This (lack of money) has gone too far. I can’t continue to run a school district without proper funding.”

A local tax increase is “a viable option” that Caston said will have to be considered by the community “at some point.” However, he noted, voters rejected a proposed parcel tax to support schools in 1987.

Marlys J. Kinnel, school board chairwoman, acknowledged that promises of teacher pay raises were made.

“But that was a year and a half ago. . . . The current recession has wiped out our resources (and) we’ve offered all we can,” she said.

Both she and Caston said that the cuts have already begun to hurt the educational process.

The loss of the reading teachers “would be devastating,” Kinnel said, throwing more work onto the regular classroom teachers, who are already carrying a heavy load. The reading specialists work in the classroom, in addition to the regular class teachers, providing extra help to students who need it.

But, Kinnel said, more cuts must be made because the board has a “fiscal responsibility” to stay within its budget.