mike cluett

Are you worried?

Mike Cluett

I had an opportunity to talk with a friend today that I havent spoken with for some time. Getting passed the usual questions about how are you and the family etc he asked what I did. “I sell leasing!” I replied.

You would have to have your head under a rock for the past several months not to realize our economy is going through some “interesting times” as the old saying goes. Especially in this industry.

I started working for a leasing company back in November of 2006. It was a smaller outfit, just getting started in the equipment leasing industry as a funder. They hired an aggressive sales staff (yours truly included) and we made our way out into the field…feet in the street. For a few months things were going quite well. New vendors were being signed up and deals were getting booked. The company was beginning to grow in leaps and bounds as the staff total ballooned from 10 core employees to close to 30 in a short time.

Then the brakes hit. Back in August as many avid readers of the financial newspapers know, the asset backed commercial paper industry took a nose dive into the sewers. Strong companies like Coventree took a huge hit and their stock price plummeted from a 52 week high of $ 16.30 to currently $ 2.50 per share.

Funding lines dried up faster than a glass of water in the desert and we were left with nothing really. The company tried its best over the coming months to secure some more funding, all the while selling off leases to other companies to make sure the lights stayed on. Needless to say, it didnt work and this young upstart of a company closed its doors officially in January of this year. Many of the staff have found other jobs, mainly in the leasing industry and we still keep in touch.

One of the things ive been asked is, why stay in it. Asset backed commercial paper still is in flux and other financial institutions are going through some massive changes. Recently GE purchased several divisions of Citifinancial and even one of the biggy’s in the industry CIT has now drained its $7.3 billion credit line. Why stay in it?

From a business sense, the leasing industry is going to go though more ups and downs over the next year or so but I think it offers up an opportunity for growth. With many of our current and potential customers trying to make plans over this tumultuous period of time, conserving cash will be paramount. Many people feel that during a recession (yes the ugly dreaded R word) is the perfect time for expansion and growth. While others close up their doors or scale back what they do in their business, others can reach out to grab more market share. To do this you can do a few things. Tap into your reserves and make acquisitions. But with uncertainty in our economy, do you really want to drain your savings in the hope something might work out? Other options include going to your bank to extend or use your credit lines.

This can be a lengthly process and with the tightening of the money supply by many of the big financial institutions, it will be a tall order to get more credit from your banks. Many of the major banks in Canada have been hit, whalopped, or just smacked around by the sub prime credit mess in the US and will be a little apprehensive to increase the credit lines of companies.

Leasing looks to be a very viable option for many companies looking to expand, get more equipment and prepare to take more market share. Now depending on what your product is, leasing might not be the right thing for you. If you sell individual widgets it wont be the right course of action to offer leasing to your customers to help you sell. If youre a company whos looking to increase the amount of equipment used to produce your widgets, then this can be looked at.

If youre a company looking to offer their customers another option to purchase your equipment, than leasing is something that you need to look at. The benefits to customers are great as they can acquire your equipment, conserve their capital and improve their cash flow. Payments are fixed over a period of time so you can properly budget out payments and also potentially take advantage of some tax benefits that come with leasing.

A company properly positioned in this “interesting” market can take advantage of these opportunities and thats why I think theres definitely room for growth. Thats why I guess I stay in the leasing business.

Needless to say the few months are going to be “interesting” to say the least but it keeps you on your toes. No one can say for certain whats going to happen with the asset backed commercial paper market in the next 6 months. More companies can fall, more can be sold and many more will be in limbo. Theres the impending real estate bubble burst in real estate that might throw a monkey wrench into the mix. Some out there are talking about impeding doom in that market, some others are taking a wait and see.

Theres just so much going on in the financial industry, how CAN you leave? Its fun when the market stumbles a bit. Thats it, Im done. My “leasing commercial” is done. In case you need to know more, you can check out HERE for more information.

150th Kudos

Mike Cluett

150th Group

As many of my blog readers are aware, I was heavily involved in Milton’s 150th Anniversary Celebrations for 2007.  It was an amazing time in my life as I got to learn more about our town and its rich history and we got to celebrate the town and the people who made it what it is today.

I can tell you from personal experience that a lot of work goes into planning these events.  It started back in 2005 during a selection process where a number of Miltonians signed up to volunteer their time and efforts.  We first met with the council committee in charge of organizing the team and after what seemed to be a very grueling interview process, I along with a number of others were chosen to head the master committee.

At our first meeting I was appointed the chair of the committee along with Karin Muller and other volunteers who represented the Town of Milton, Mayor Gord Krantz, Lorrie Ferrante, Janet Davidson and council member Cindy Lunau.  We also had members of the Milton Historical Society come on board which included Bruce Carlin.  It was back then where we came up with the idea for our core events to mark the amazing achievement of 150 years.

The committee came up with 4 main events to be held during the 2007 year which included a Winter Fun Fair at the Thompson arena, a summertime street party, Canada Day celebrations and the finale of the Amazing Race.

Part way during the spring of 2006 I had to step down as Chair of the committee due to some increased responsibilities at my employer, as well as the fact I had launched my municipal campaign for town council in Ward One (which has been outlined here in the blog).  At that point in my life, time was very limited and with the celebration plans underway, I didnt want anything to slip through the cracks.  Karin Muller stepped in as chair and along with her hard work and dedication she continued the efforts that were started and brought the celebrations to a reality.  I of course stayed on as a member of the master committee and with the rest of the group we came up with a year full of highlights.

Some of the highlights for me include the Canada Day Celebrations where we had created the Milton Walk of Fame.  During our several meetings in 2005 and 2006 we wanted something memorable to come from this committee and the idea of honouring the people who made an impact on our town, our province and our country was perfect.  With the Town Hall being expanded to include a more modern facility while maintaining its roots, we devised a walk of fame that would bridge the new part of town hall with the older part.

The deliberations for the first inductees to the Walk of Fame were very long as the number of people who we felt made that kind of an impact on Milton were many.  Even the most knowledgeable people in town didn’t realize a number of people who had roots in Milton who were a big part of our culture.

From artists like Albert Casson , to high profile members of the media like Susan Delacourt and Ernie “Mr Dressup” Coombs, to political leaders like Senator Betty Kennedy, to many noteable names in town like Jim Dills, Chris Hadfield, PL Robertson and professional athletes like Tiger Jeet and Tiger Ali Singh, Bruce Hood, John Toneli, Leon Stickle and others , the names were many.

On a beautiful Canada Day in 2007 hundreds of Mitonians showed up the the fairgrounds and watched as each inductee was introduced and given the honour of being the first people to grace the Walk of Fame.  The speeches were emotional, funny and thought provoking but the main theme of all of them was that they were incredibly proud and honoured for this achievement.

Out of all the events that we organized from the ground up, this to me was the most gratifying.  There were other events of course.

The summertime street party in June that brought out thousands to the downtown core of Milton with games, events, fun times, music and most importantly the opportunity to celebrate this amazing town of Milton and its people.  The weather was perfect and many people called and emailed the town to find out if this was going to be a regular event.

This past budget the Town of Milton allocated funds to preparing for this summers street party, so stay tuned to www.milton.ca for more information on that event.

Selling merchandise

Another great time was the Winter Fun Fair where many people braved the sub zero temperatures to join us for a family skate at the Thompson area.  We were joined by the legendary NHL hockey player Johnny Bower and the Milton Ice Hawks team had a very brief and very cold game outside as well.  Kids were there to enjoy the games and activities in the warmer area and lined up to get their hockey sticks signed by members of the Ice Hawks and Johnny Bower.  We knew then that this was going to be a great year.

And it was.  The final event of the year was the Amazing Race where many teams registered and showed their town spirit in an event that would take them all around downtown Milton.  The teams were, forgive the pun, amazing and very creative.  This event was organized by Karin Muller who replaced her dining room furniture and decor with organizational charts and paper to make sure the event went off without a hitch.  There were untold numbers of hours put into that event and Karin did an incredible job.

I say all of this because on April 5th at the Granite Ridge Golf Club, the Milton Chamber of Commerce Community Awards Gala will be honouring Miltons volunteers and businesses in one night.  In the coveted Presidents Award, 3 integral members of the committee will be honoured.  Karin Muller and Bruce Carlin from the Milton Historical Society will receive the 2007 Presidents Award for their leadership on the 150th Master Committee.

Karin “took the ball” as the old saying goes and ran with it to help create an incredible celebration to mark a very significant part of Miltons history.  They deserve it for all their hard work.  Congratulations!

Federal Budget Benefits Municipalities

Mike Cluett

A couple of days ago, Finance Minister Jim Flaherty released his third budget. This is something unheard of for a minority government being able to have this many budgets without being defeated. In many cases, they’re doing a good job and while most Canadians don’t want an election, they seem comfortable with our MP’s in this minority situation.

Some of the big highlights for towns and cities are as follows:

  • Strengthening Public Transit

    Public transit plays an important role in easing traffic congestion in urban areas and contributing to cleaner air and lower greenhouse gas emissions. In Budget 2006, the Government set aside $1.3 billion in support of public transit infrastructure and introduced a new tax credit for public transit passes.

    Budget 2008 sets aside up to $500 million in 2007–08 to be paid into a third-party trust, allocated on a provincial-territorial per capita basis, for public transit infrastructure. Funding will be paid into the trust, once legislation has been passed, for only those beneficiaries that have made public commitments before March 31, 2008 to undertake investments in public transit. The beneficiaries of the trust will have the flexibility to draw down the funding as they require over the next two years. They are encouraged to report publicly on the expenditures financed and outcomes achieved.

    The trust will be used for specific projects of capital infrastructure such as rapid transit, rail, transit buses, and high occupancy vehicle and bicycle lanes.

This means more federal money will be available to municipalities to invest in public transit improvements. What the GTA desperately needs is a seemless transit system that will allow a Milton resident who works in Brampton or Hamilton to be able to take a bus from here to there with minimal difficulty. As it stands right now, that person would have to drive.

  • Permanent Gas Tax Fund

    The Government recognizes the need for long-term funding for infrastructure to help drive economic growth and productivity, to achieve our environmental goals, and to build strong, competitive communities.

    To this end, in Budget 2007 the Government announced the historic seven-year $33-billion Building Canada Plan. More than half of this investment under the plan will flow to municipalities. For example, municipalities can access the $8.8-billion Building Canada Fund and benefit from the increase from 57.14 per cent to 100 per cent in the rebate of the Goods and Services Tax they pay.

    The largest component of the Building Canada plan is the Gas Tax Fund, which provides municipalities with funding for priorities such as public transit, water and wastewater infrastructure, and local roads. Under the plan, the Gas Tax Fund will grow and reach $2 billion by 2009–10 and stay at that level through 2013–14.

    In response to ongoing requests for stable, long-term funding, the Government announces that the Gas Tax Fund will be extended at $2 billion per year beyond 2013–14 and become a permanent measure. This will allow all municipalities, both large and small, to better plan and finance their long-term infrastructure needs. A permanent $2-billion-per-year Gas Tax Fund will help put in place the world-class infrastructure Canada needs.

With Milton being the fastest growing municipality in Canada, this should benefit us as we wait patiently (or impatiently as it may be) for our roads to be developed to accommodate its growing numbers. The town of Milton is now over 70,000 and counting and we need the Region of Halton to keep up with the growth and ensure minimal delays while widening roads in the area like this summers plan for Derry Road to Trafalgar. The Region of Halton and the Town of Milton cannot keep relying on Mattamy Homes to bail them out.

These are just a couple of items that I pulled from the budget. All in all, it is a pretty sound plan for the coming years. Using a good portion of the surplus to pay down the national debt, make these kinds of investments and reductions in taxes like the GST cut, it looks like Canada can weather some of the impact of the US economy with minimal effects.

Thanks for reading and feel free to comment here or send me an email at mike@mikecluett.ca

Champion Reader responds to the "tax and spend advocate"

Mike Cluett

Merry Christmas everyone! I certainly hope that everyone’s holiday went well and continues to be happy and memorable.

Many of us know are off for the holidays and there are still lots of things to do. We have to visit some more friends, organize the presents we received and enjoy spending time with our families. I was looking through the most recent edition of the Milton Canadian Champion and I came across a letter to the editor from Milton resident Mike Rank in response to Ward 4 Councillor Wendy Schau’s letter where she tried to justify her reasons for raising taxes.

Here is her letter, followed by Mike Ranks letter.

TAX INCREASE IS MANAGEABLE

In last Friday’s Town budget story, the Champion did a good job summarizing two long nights of discussion. I’m writing because there’s one small, but important, correction and one further explanation I would like to put forward.

Firstly, the $4,000 for subsidy support for individuals and families that need assistance paying user fees for Town programs wasn’t an increase but the reversal of a proposed cut.

It was one of the reductions in service listed to bring the proposed tax increase down from 8 to 6.6 per cent. I was pleased that my fellow councillors voted to restore the funding.

Secondly, your readers may have found it strange that I’m quoted as saying that council should stop behaving as though the people of Milton are impoverished. In the past, I have often written about the need for more affordable housing in our community, so it follows that I do know that there are Miltonians who are in financial difficulties.

My statement to council was about the ability of the community, as a whole, to provide the financial support necessary for this to be a strong, vibrant and healthy place to live.

Milton‘s tax rate has been far below that of surrounding municipalities for many years. Even with the 6.6 per cent increase, Milton will continue to have the lowest tax rate in the GTA, except for Toronto. Mississauga’s rate is 19 per cent higher than ours and Halton Hills is 40 per cent, or $300 on a $300,000 assessment, more.

The argument has been made that Milton taxpayers can’t afford the increases necessary to provide a good level of service to our community as it grows.

My argument was that Miltonians are capable of contributing a fair and reasonable amount, one that’s still well below what’s asked of taxpayers in other communities.

When a tax increase is mentioned, people often ask what happens to the money that Milton receives from the proceeds of the Mohawk Slots. Milton usually receives about $5 million a year.

That $5 million should be used only for capital expenses or the Community Fund, and not in the operating fund, which is the money used to run Town services. To do so would be like a family relying on lottery winnings to pay for their groceries — not wise or prudent.

WENDY SCHAU, WARD 4 COUNCILLOR

***

NOT MUCH VALUE SEEN FOR OUR TAX INCREASES

So our very own tax and spend advocate, Ward 4 Councillor Wendy Schau, doesn’t understand the “compulsion” that people have for low tax increases and feels that “wonderful communities cost money.”

Well the fact of the matter is that people are willing to pay if they see value for their money, and unfortunately I’m not seeing a lot of value for these tax increases — given the mismanagement of this whole growth process. I’m sorry, but I need someone to explain to me why the growth demands and resulting revenue charges and increases don’t stay in sync, and if they actually don’t, maybe then we’ve gotten to the real issue.

After all, pretty much all of the expansion involves homes that are relatively higher in value combined with a higher density of residences per kilometre of road.

With respect to Schau’s comment that money makes things wonderful, well then I guess I’m teaching my son all of the wrong values in life, as I really thought that a community or a society could be wonderful and happy, regardless of whether it was rich or poor.

MIKE RANK

MILTON

Try to focus on the good.

Mike Cluett

Its Sunday afternoon and its less than 2 days before Christmas.

The last thing on the minds of people in the Town of Milton is a 6.6% tax increase and what the money was spent on. Most people are rushing around from store to store picking up those last minute presents for people on their lists, extra bottles of wine for those unexpected guests, snacks for friends and family to munch on over the holidays and wrapping paper (myself included)…lots of wrapping paper.

I recently received an email from a friend who mentioned “the inmates are now running the asylum” at Town Hall. They had mentioned that taxes were going way too high, slot funds are being uses to balance the budget (Mike notes: which is very risky and a bad precedent to set for the future) and “the community fund is being savaged!”

In the coming entries, I am going to be going through the budget and showing where the money the town is planning to spend is going. There are many worthwhile projects on the docket for 2008 including some more money to improve roads in town and others like a new library on the east side of town. Whether you agree or disagree where the money should go, most people don’t know where ANY money is going.

The tax measures were made official by town council with only Mayor Gord Krantz, Ward 2 Councillor Mike Boughton, Ward 1 Councillor Rick Day and Ward 4 Councillor Paul Scherer voting against the increase.

Which means Regional Councillor Colin Best, Ward 4 Councillor Wendy Schau, Ward 3 Councillor Jan Mowbray, Ward 1 Councillor Brian Penman, Ward 2 Councillor Greg Nelson, Ward 3 Councillor Cindy Lunau and the other Regional Councillor Barry Lee all voted for the increase in taxes.  Merry Christmas right?

I know, I know…tis the season.  What needs to be done is a careful look at what the money is being spent on for 2008.

Some examples are $1.4 million for an overpass on Main Street by Milton Mall. I have met with some people who told me that the Town of Milton could have done this project much sooner and for less money a few years back, but those plans were sidelined.

This past year the Town of Milton spent $1.6 million on 4 new buses for Milton Transit. This was an item that was approved last year for the 2007 budget but a decision that should be called into question now seeing how Milton Transit ridership hasn’t increased over the past couple of years. They can show some statistics of increased ridership, but when you really look at the numbers, the increases are due to the Milton Transit “FREE RIDES” days which they have held several times throughout the year. It shows that when the fare’s are full price, the ridership drops back to its previous levels.

Why do I bring up that decision from 2007 budget? There was a further $865,000 in funds allocated to Milton Transit to supposedly purchase more buses. I don’t know about you (and this can be debated ad nausea ) but should’nt the town do more to increase the ridership first before allocating funds for more buses?

There is something wrong with our transit system if the only way we can increase ridership is by making it free. From a business standpoint it makes no sense. Incur expenses while taking in no revenue. Nope, double checked and it doesn’t make sense.

Another topic we can bring up is the Slots revenue from Mohawk. For those in Milton who don’t know, the Town gets a portion of the revenue from Mohawk Raceway just outside of town in Campbelville. Its an agreement that was reached awhile ago and those funds were always to go towards special projects or infrastructure needs of Milton. Apparently the Town of Milton gets roughly $ 5,000,000 from the revenues of the raceway.

That’s just some of the things that I will talk about in the coming days. But for know, I just want to go out and get those stocking stuffers I promised Pat, snacks and wrapping paper (I haven’t even started wrapping presents yet!) and get into the Christmas spirit.To everyone out there, please have a happy holidays and a Merry Christmas. Be safe!

It happened again

Mike Cluett

I was getting ready to go to the last official meeting of the Milton 150th Anniversary committee around 630pm when I heard some weird sounds and then a smash.

Oh no, not again I thought and hoped for the best as I made my way to front porch. So much for hoping.

There was another accident at Yates Drive and March Crossing last night between 2 vehicles…one coming out of March Crossing turning east towards Bennett and the other traveling on Yates towards Bennett. One driver was taking her family to the Hawthorne Village PS Holiday Sing a Long when, according to her, the car came through the stop sign and hit her on the drivers side front wheel, causing some significant damage.

Road conditions were fine at that time with little no snow and the roads were a bit wet.

My neighbour Wally and I did what we could to help them out and thankfully no one was hurt in this case.

We have had several near misses and now 3 accidents in the last year at this intersection and nothing seems to have been done. You might remember an article in the Champion about this intersection and how the town was going to do some further studies.

Its only a matter of time before something worse happens or someone is injured or killed.

Changing rules takes time…I understand that but as I mentioned last night “you cant legislate common sense.”

Its been said so many times here on this blog and in letters to the editor that our residential streets are not raceways and yet still people fly down the street. Just after the cars were moved to the side of the road a car few up our street at way over the speed limit and drove through the stop sign at Bennett. Unfortunately we didnt get the plate number, but from our location I did see that same car go down Irving Terrace just after.

When youre driving towards an intersection, regardless of stop signs or not, you have to approach it with caution and look out for other cars. This was a totally avoidable accident and shouldnt have happened.

I know that the majority of people I have spoken with over the course of the last year after the election have told me they agree with my stand on doing something, whether it be stop signs, speed bumps or reducing speed limits. But something has to be done.

Maybe reducing speed limits wont accomplish much, but if they get nailed by the police doing 60km/h instead of 40km/h, the fine will be a lot more, and MAYBE they might think twice. Sad to say but I feel I’m losing faith that something will change.

If you agree that something has to be done at this or any other location in town, please do your part. Write a letter to the editor of the Milton Canadian Champion and the Halton Compass…write a letter to your councillors and the Town of Milton…take down the plate numbers of people who you feel are not driving safely and send them to the Halton Police department…go to the website www.haltonroadwatch.ca and find out what more we can do to stop this. The more people get away with this the more it will continue.

***NOTE*** The link to Halton Road Watch seems to be down and not working.