News - Local

Sunday, Jul. 12, 2009

Faces of the economy: How the recession is affecting SLO County residents

In their own words, local professionals talk about how the ailing economy has touched their lives

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If there’s one thing that can be said about this economy, it’s that it has left no one behind.

The recession has cut across a wide swath of our community, affecting relatives and neighbors, colleagues and friends. Some have seen the worst of it, losing their jobs, homes and savings. Others wonder if they are next, and they count their blessings that, at least for now, they have an income to buy the basics and pay the bills on time.

Business owners, too, are taking a hit, seeing their profits shrink with every customer who chooses to spend less or not at all. But as heartbreaking as it is for many San Luis Obispo County residents, this is also a time for re-evaluating and soul searching.

In recent weeks, Tribune reporters interviewed local professionals — from retailers to school administrators — about how the ailing economy has touched their lives. These are their stories in their own words.

JIM DEE, owner of The Palm Theatre in San Luis Obispo

“This has been something that many theaters across the nation have been discussing for the last months: Where is everybody? A friend from New York called it an epidemic.

“Adults aren’t going to the movies. They use our schedules to make their Netflix lists.

“I think we’ve shown some pretty great stuff. (But) it’s been a very dry spell. We were doing pretty great up until February or mid-March. It’s been very, very slow since then. …

“The blockbusters are very big. ‘Up’ was huge. ‘The Hangover’ cost $35 million to make and it’s doing very well. ... The 18- to 25-year-olds are going to movies. There’s a must-see mentality. I don’t think Hollywood’s having any problems right now. The more adult fare is suffering. …

“It’s a little dicey right now. We’ve been here before, but not to the extent of how long it has been. It has been four months of really dead business.

“I’m hopeful that people will be able to pry themselves out of their houses and actually see a movie with an audience.”

— Sarah Linn

DORIAN MICHAEL, a musician and music teacher living in Templeton

“So much of my work is out of the mainstream in the first place that it’s always been tough.

“As far as my solo touring, I haven’t yet been greatly affected, but so much of what I am being paid is coming from previously created budgets. Communities in the Midwest, where public funds are scarce, places like Michigan, have less to offer in terms of summer parks gigs and art centers since business tax revenue isn’t there as it was in the past.

“I do a fair number of concerts in libraries, and they are having budgets cut all around the country.

“How much that will affect my income will become known as the year goes on. For (mandolinist and musical partner) Kenny Blackwell and I, it’s pretty random. Sometimes, the house is full and sometimes the audiences are smaller if there are too many choices of concerts in the same week, and people are going to choose one concert instead of buying tickets to a couple of events.

“We have been affected by the economy in the Midwest. California has been better. We’ll see how long that lasts, won’t we.”

— Patrick S. Pemberton

LOIS KELLY, director of financial aid at Cal Poly

“We’re seeing families with higher incomes who thought they’d be able to afford paying for their child to attend college now seeking financial aid. Some moderate-income families who used to depend on some loans say they’re going to need more aid now.

“Sometimes, it’s a parent losing a job or a family member getting sick and having to pay a lot in medical bills that changes a student’s circumstance. They’ll say, ‘I know I applied for this much, but my family’s income has dropped, and I’m strapped.’

“Sometimes, a student will come in and say they think they’ll have to drop out of college, but we’re here to find ways to keep them enrolled. “Whenever possible, we try to make them cautious of their borrowing and suggest federal loans over private loans, which can carry much higher interest rates.

“Also, federal loans may be paid back after a student finishes college instead of right away. Federal Pell grants are available to those who qualify, and the maximum amount has increased to $5,300 per year now, which helps. State grants are available, too.”

— Nick Wilson

KATRINKA STEFFENAUER, Atascadero resident and owner with her husband, Gary, of Steffenauer Painting

“We have lived here for over 50 years and have a small family business. We are finding it increasingly difficult to purchase the goods necessary to keep the business going.

“This last year has taken its toll. Our retirement is gone, along with all our savings. We used it to pay bills.

“After working hard for decades and raising four children who have given us eight grandchildren, it feels like we are starting over.

“As a painting contractor, the prospects are limited. Decorating is one of the first things people let go of in this kind of economy. We’ve given up our home to live in our fifth wheel. We now rent the home out as a vacation rental, so hopefully we can make the mortgage payment.

“The cost of gas for our vehicle restricts our social output/input. … Who can afford to drive? We combine trips or just decline to drive, and that means relationships with others are on the back burner.

“When we were first starting out, young, with young bodies, we were happy to scratch for a living. Our responsibilities were not many. Looking at the time we live in now, we find it difficult to keep a stiff upper lip when retirement was supposed to be just around the corner.”

— Bill Morem

RHONDA MAYEDA, owner of the Budget Café in San Luis Obispo

“During Cal Poly graduation weekend, it was busy. But there have been really slow days as well. I’ve been trying to hang on tight, and I’ve tried hard not to cut employees or cut back on the quality of the food.

“I’ve had to cut back on advertising, which seems counterproductive, but something has to give. I’ve watched inventory very closely, and I never order more than I need to.

“We have a loyal group of regular customers, and everyone here works really hard to provide the best customer service possible. Some customers tell me that they want to eat out, but they are on a tight budget themselves.

“I do little things to attract people like offering more economical specials that customers would like … baked oatmeal with raisins and toast special. I haven’t raised prices in almost a year now, but the expenses keep going up. When I first started and it was brand new, it was difficult, but I had control over what I did.

“Now, with the economy, I have no control. It’s a sense of helplessness. But I’m grateful for where I am, and I don’t complain about it much. You know, I think the American people are very resilient. I think that we’ll hang in there.”

— Julie Lynem

ROBIN O’HARA, Realtor with Keller Williams Realty Central Coast

“Our owner, Gary Keller, came out with a book called ‘Shift,’ which teaches anyone in any business how to survive and thrive. There are models and systems to follow, and one of them is re-margining your business.

“Before, I might have had an assistant helping me with data entry, or with fliers and brochures. Now, I’ve had to do everything myself. You have to make adjustments.

“My take-home pay, or what we call gross commission income, has been almost cut in half because the average sales price of a home is down by that much. You must sell twice as many homes to make the same income you made in a sellers’ market.

“Realtors in this market must change their attitude to one of seeing opportunity and work their real estate practice like a business. They need to seek out the motivated (clients) and work to achieve their goals.

“This is my passion, my profession and career, and this is how I feed my family. I am more motivated because of this market, especially when I work with first-time homebuyers. I am passionate about helping them realize their dream and stimulating the overall economy. It’s exactly what we need to be doing right now.”

— Julie Lynem

HEATHER TRIMBLE, owner of Casa de Oro jewelry shop in Cambria

“We used to have at least two employees plus the owner, and usually a part-timer besides. Now, it’s just me and my son, Kellen. He works for me two days a week.

“It’s obviously worse this year, but the slowdown hit way before that. People who are buying are doing so very carefully. There’s been more activity lately, but it’s been sporadic.

“There was a rug-hooking convention in town recently that brought people in from all over the country. Some of the teachers and students were really good customers. And we are seeing more foreigners and people from the Midwest.

“The prices of gas, shipping, gold and other materials keep going up. I’ve reduced my gold buying and encourage people to recycle their old gold coins and dental work for refining. Or, they can redo old pieces of jewelry.

“Customers, especially local people, say it’s important for them to support local businesses, to purchase handmade pieces from local artists. They really appreciate the small businesses in Cambria. We’re very grateful.”

— Kathe Tanner

LISA ION-MANKINS AND JOHN MANKINS, owners of Mankins Plumbing of Cayucos and the Cayucos Sunset Inn Bed & Breakfast

“We sold our house (in Cayucos) and moved into the inn. We have more equity here. That’s why we kept it. We have a fixed rate, a better rate than my bank would give me.

“We’re actually financed by an insurance company now. My dad always told me, ‘A bank is like an umbrella. When you need one, it’s not there. When you don’t, it’s there.’

“I’m putting things off now. I go to the dermatologist. Even though he says, ‘Come back and see me, I want to check you for skin cancer,’ I say no. I want to pay my bill first.

“They said raising the insurance deductible (from $2,500 to $5,000) would drop the premiums to $1,200 a quarter. We were paying $2,200. For one payment, it was $1,200 until they raised it to $1,658. When I said this is wrong, the woman said, ‘They went up.’

“I’m working six to seven days a week for 3½ days’ worth of pay. Everybody in construction is in the same boat. People go, ‘Look, here’s your bid — $17,000. Here’s what we have — $12,000. Do you want to do it?’ You take it because there is nothing in front of you.

“We feel fortunate we do have businesses. We only have to work 10 to 12 hours a day, but at least we have a job.

“If you are going to be struggling anywhere, why not here? The littlest things in life now are so fun and so good. When we go over to Morro Bay, out to the movies, it’s only, like, $7, and we can get popcorn and a Coke. We can get out of there for $20.”

— Sally Connell

GARY HOSKINS, assistant superintendent at Paso Robles Public Schools

“It is very likely that I will soon have a reduction in pay or work furlough, but at least I have a job. My biggest worries are the students and employees in our district. Like most school districts in the state, we face unfathomable revenue reductions that will change the nature of education as we know it well into the foreseeable future.

“Contrary to what some people might believe, schools cannot meet the revenue reductions by buying cheaper crayons or using less paper. Over 85 percent of our expenditures are for employees. School districts are in the people business, and it takes good people to educate our kids.

“One-hundred nineteen employees have been laid off so far in Paso schools. Will they return to work in the near future? Given the state budget crisis, probably not. These layoffs create life-changing disruptions for our employees, their families, as well as negatively affect the economic conditions of our community.

“Furthermore, these layoffs greatly affect our clients, the students. Reduced programs, increased class size and fewer materials will touch every one of our 6,875 students. The impacts of these cuts will negatively affect student achievement and untapped student potential.

“This is what gives me sleepless nights, daily agony and long workdays. The decisions that my fellow district administrators and I have to make are extremely difficult and heartbreaking because we know that children and families are being harmed.”

— Tonya Strickland