Sun

VANCOUVER — Vancouver‘s Convention & Exhibition Centre is the first repeat winner of an award for “World’s Best Convention Centre.” It won the same award in 2002. “I congratulate the convention centre on its success in this global marketplace. With an expanded facility opening in spring 2009, even more delegates will be able to attend larger conventions in a showcase facility,” said Bill Bennett, Minister of Tourism, Culture and the Arts. The International Association of Congress Centres (AIPC) announced the award earlier this month at its annual conference in Singapore. It’s based on survey responses by customers about their experiences in convention centres around the world, including initial sales contacts, event management, customer relations, technology, food and beverage and the building facility itself. Vancouver‘s convention centre expansion — now under constructions will triple the size of the facility.

© The Vancouver Sun 2008

 

Your financial future may depend on it

Jim Yih,
Sun

Most people would agree that finding a good financial adviser is pretty important. Sound financial advice can make big differences in your financial future.

It can be the difference between financial freedom and just making ends meet; or the difference between early retirement and working in the golden years; or maybe the difference between peace of mind and financial disaster.

Unfortunately, finding a good financial adviser can also be difficult. Here are some simple tips to help you find good, professional advice:

– Be prepared. Start with knowing what you want and don’t want from an adviser. Everyone is at different financial stages of life.

Some people need financial advisers to help with life insurance because they have young families. Others need investment advice for their sizable portfolios. Some want to create retirement income in their golden years.

Whatever the case may be, you can’t get proper help without being able to articulate what you are looking for.

– Get a referral. There are thousands of advisers in your area. Picking an adviser from the Yellow Pages is like finding a needle in a haystack.

The better way is through word of mouth. If you want a great adviser, ask your friends and family if they are dealing with a great adviser.

– Interview multiple advisers. Even if you get a good referral, how do you know if that adviser is right for you? Increasing your chances of finding the right adviser requires meeting more than one. You should never feel obligated to deal with the first one you interview. It’s better to interview multiple advisers because it allows you to compare their strengths.

– Recognize that there are generalists and specialists. The term financial adviser is too generic these days.

One-stop shopping with a generalist has some advantages but recognize there are times when you should be dealing with experts.

If you are looking to invest in some mutual funds, wouldn’t it make sense to talk to a financial adviser who really understands investing as opposed to someone who specializes in insurance and estate planning? Don’t be afraid to ask a financial adviser what they are good at. In fact, you should ask if they have a specialization.

– Focus on the person and not the company. Far too often, I hear people deal with a company like a bank as opposed to an adviser. Every company has good advisers and bad advisers. That’s just the law of averages.

Most advisers will change companies from time to time. Staying loyal to a company may mean changing relationships from time to time because your adviser changes. Sometimes you may luck out and get one of the good reps.

Other times, you may not be so lucky. It is more important to find someone you can develop a long-term relationship with regardless of what company they work for. It’s better to have a relationship with a person than a company.

Finding the right adviser might be hard work, but it is worth it.

– – –

Jim Yih can be reached at [email protected] or through his website www.wealthwebgurus.com

© The Vancouver Sun 2008

 

Consumer confidence falling, drop in export earnings forecast

Eric Beauchesne
Sun

Lagging business investment, falling consumer confidence and a worsening trade performance are darkening the outlook for Canada‘s economy, separate reports warned Thursday.

This is troubling “both for Canada as a whole and for many provinces,” C.D. Howe Institute said in a report that showed companies here are investing much less in productivity-enhancing plants and equipment than any other major industrialized country, while marketing research firm TNS Canadian Facts said “waning consumer confidence is further evidence of softening domestic demand and bad news for Canadian business.”

Export Development Canada added to the gloom with a forecast that export earnings — which have been sustained by rising oil prices — will fall next year as oil sinks to just $84 US a barrel amid weakening U.S. and global economies.

“Since our spring global export forecast, there hasn’t been much good news for Canadian exporters,” said EDC chief economist Peter Hall, who said this year’s 4.2 per cent gain in export earnings was due to high energy prices, and that without that support export sales will fall one per cent in 2009.

And the drop in exports will be despite a retreat in the value of the Canadian dollar to the mid-90 cents US range, the EDC said. The currency ended trading at 98.68 cents US on Thursday, down 30 basis points from the previous day.

The reports came as North American stock markets were in full retreat, with Bay Streets’ benchmark S&P/TSX composite index plunging more than 300 points and Wall Street’s blue-chip Dow Jones industrial average fell by almost the same amount on news that U.S. home sales have plunged more than expected and that jobless claims have increased more than anticipated.

On the domestic front, TNS Canadian Facts said its consumer confidence index slipped to 96.5 this month from 97.8 in June, leaving it down a “significant” 11.5 per cent from its 109 peak last November.

“Recent declines reflect a deterioration of current conditions rather than just expectations for the future,” TNS vice-president Richard Jenkins said in releasing the results of the market research firm’s July survey.

Only 29 per cent of Canadians currently think this is a good time to make a major purchase, the mid-July survey found.

“Although confidence has not completely evaporated, we expect more and more consumers to retreat from making major purchases and scale back discretionary spending,” Jenkins added.

The C.D. Howe Institute, meanwhile, warned that Canada‘s long-term prosperity is also at risk.

Businesses in Canada are expected to continue to invest less per worker in plant and equipment than other industrial countries, especially its major competitor and trading partner, the U.S., the think-tank said.

Over the past decade, it said, business investment in capital in Canada has been consistently below the average of the other industrial nations and projections suggest that will continue through this year and next. Even in the face of economic weakness and credit market turmoil in the United States, Canada is not closing the gap with its southern neighbour, it added.

For every dollar businesses in industrial countries invest in new capital this year, Canada will invest only 96 cents, it said. Compared with its G7 counterparts, Canadian businesses will invest just 94 cents for every dollar that G7 member countries do, and compared with the U.S. just 89 cents.

“Improving Canadians’ prosperity depends critically on investment in new plant and equipment,” it said.

“By speeding the adoption of new technology, higher rates of capital investment make Canadian products more competitive, and raise living standards,” it said. “Countries with more capital per worker have higher incomes per worker.”

While the average Canadian worker can expect some $11,100 in new capital investment in 2008, rising to $11,400 in 2009, the average worker in the world’s 30 industrial countries will likely see the equivalent of $11,600 in Canadian dollars worth of such new investment, rising to $11,800 in 2009, it said.

The gap with the other G7 countries, which include the U.S., Britain, France, Germany, Italy and Japan, is even greater. The average G7 investment this year is projected at the equivalent of $11,800 rising to $11,900 in 2009. And the gap with the U.S., where investment is expected to amount to $12,500 this year and next, is greater still.

Provincially, the capital investment picture is mixed, with relatively high levels of capital investment in the resources rich provinces of Alberta, at $2.45 in new capital investment per worker this year for every $1 in such investment per worker in the U.S., Saskatchewan and Newfoundland and Labrador, at more than $1 each per worker more than in the U.S.

In Manitoba, new capital investment per worker is expected to be equal to 96 cents of the level in the U.S. and in British Columbia it is expected to be 76 cents.

However, in Ontario, Quebec and the Maritime provinces the level of new capital investment is no more than two-thirds of that in the U.S.

“Canadians need more state-of-the-art tools to preserve their competitive edge,” the C.D. Howe report said. “New machines and equipment, moreover, are likely to cut waste, reduce environmental stress and raise living standards as well as produce better goods and services.”

The report argues that Canada‘s failure to improve its competitive standing against other developed countries, despite a healthy economy and robust saving, underscores the need for tax and regulatory policies that would spur private investment.

© The Vancouver Sun 2008

 

Oil continues a slide to its lowest point since May, gold also declines

John Morrissy
Sun

OTTAWA — Investors eager to pounce on the recent dip in commodities may be buying into a bursting bubble rather than an overdue correction, says National Bank Financial chief economist and strategist Clement Gignac.

With everything from oil to gold to corn plunging in value in recent weeks, many analysts are advising that these declines may be the beginning of the end for the world’s multi-year commodity boom.

Gignac traces the market’s moves in recent years from one bubble, the dot-com era, to the next, housing, and asks: “Will the commodities theme perceived as the ultimate safe haven asset class since last fall also prove to be a bubble?”

Bullish camp observers continue to push the argument that supplies will remain strained, driven by demand from emerging nations, Gignac said. But recent price declines in the face of record-high values tell a different story, one of demand destruction.

Evidence of that is cropping up across North American energy markets, as consumers cut back on driving in the face of record-high gasoline prices.

Subsequently, since hitting a multi-year high on July 3, the UBS Bloomberg Constant Maturity Commodity Index has fallen to its lowest level in almost seven weeks, and has fallen 12 per cent in the past two and a half weeks.

Oil continued its recent slide Wednesday, falling $3.98 to $124.44, levels not seen since May 29. Gold lost $25.70 to fall to $922.80.

At the same time, demand from emerging nations shows signs of weakening as second-quarter growth in China, the largest of the lot, advanced at its slowest pace since 2005.

“Time will prove that Economics 101 still applies to commodities with an eventual demand destruction and technological innovations,” said Gignac, who is sticking by his recent call for crude to fall to $75 to $80 a barrel in the next 12 to 18 months.

Recent research by National Bank shows the highest negative correlation between oil and U.S. bank stocks in a generation, Gignac said.

This suggests oil’s run to a peak of $145.86 on July 3 had more to do with safe haven buying by speculators and hedge funds than it did with fundamentals, as sharp concerns about the U.S. dollar, the U.S. economy and its financial institutions permeated the market.

As confidence has begun to return to U.S. financials, however, oil and other commodities have fallen sharply.

“The bubble is starting to burst,” said Gignac. “Think twice before buying the recent pullback on commodities as the ultimate cyclical trough may be much lower than current levels.”

While that limits a Canadian investor’s prospects, considering the market’s near-50-per-cent weighting toward energy and materials, Gignac he is now bullish on Canadian financials, transportation and consumer discretionary stocks.

“I believe in six months from now Canadian bank stocks will be higher and oil will be lower,” he said.

© The Vancouver Sun 2008

 

Marketing your rental unit

Sun

Every landlord wants to find the ideal tenant — the person who always pays rent on time, never disturbs others, doesn’t complain or cause conflicts and keeps the premises in better condition than when he or she moved in. While this theoretical ideal may be unattainable, the way you maintain and market your property will affect what type of tenants you attract.

Effective marketing will increase your chance of attracting the ideal tenant for your situation. The more clearly you state the benefits of your premises, the greater the odds of attracting appropriate prospects.

Someone offering a tiny bachelor apartment will have a different market than someone renting a spacious penthouse with extra features, such as a fireplace and a fantastic view. Consider the profile of the people you are trying to reach and then advertise in the places where they would be likely to look for rental premises.

If you are renting a fairly basic basement apartment, you have a good chance of attracting people willing to live in a basement for the benefit of a lower monthly rent. University campuses, postings in local supermarkets or “accommodations available” advertisements in newspapers might be the best place to advertise this type of rental.

If you have an expensive condo to rent, advertise where people with the appropriate income might search. The business-focused newspaper classifieds, or working with a rental locator at a real estate agent’s office might work best.

If you are not sure where people look for rentals, ask. Talk to several people in the same demographic as prospective tenants.

EVALUATING PROSPECTIVE TENANTS

Every landlord wants to find good tenants – ones who pay the rent on time and take care of their rental property. Finding the best tenant can be offset by the need to have the premises rented within a narrow timeframe. While time to show the unit, accept and review applications and do background checks may be limited, a hasty decision could cost you money in the long run. If the wrong tenant moves in, you may end up losing money due to damages or disputes.

CHOOSE WISELY

If you can afford a possible rent loss while waiting to fill the unit, take the extra time to make the right choice of tenant.

You should thoroughly research a prospective tenant before making a final decision. Getting candidates to fill in a rental application and properly screening for applicant suitability before accepting a new tenant are vital. If you accept tenants without screening and verifying their information, terminating the rental agreement may be difficult even if you discover that they provided false information.

Beyond credit information, try to discover what kind of tenant will be living in your unit. Ask former landlords about the tenant’s character and past rent-payment patterns. Consider talking to even the last two or three landlords to get a clear idea.

CHECKS FOR SCREENING TENANTS

? Check the applicant’s credit bureau history and banking history.

? Confirm the applicant’s employment situation.

? Check the applicant’s tenancy history/evictions, if available.

? Check court records, if available.

? Check the applicant’s references and consider contacting previous landlords going back two or three tenancies.

Information provided by CMHC. For more landlord/tenant information visit www.cmhc.ca or the Residential Tenancy office at www.rto.gov.bc.ca

© The Vancouver Sun 2008

Sun

Is it fair, I asked B.C.’s revenue minister, to charge property transfer tax on someone’s own assets — on improvements they’ve long since paid for, and paid the sales tax on — when, after a period of leasing, they finally buy the land?

Is it rational, I asked the small business minister, to nail some start-up businesses with an extra tax that richer competitors don’t pay just because a cash-strapped owner must lease land for a few years until he can afford to buy?

I asked these questions a dozen different ways on Monday. And the minister I asked — in both cases Kevin Krueger, who took over both portfolios a month ago today — assiduously ducked.

Krueger’s rationale for dodging is that these issues relate to a case that may come before him on appeal.

He’s right, of course, to assume I’d report on and interpret his answers in the context of at least one specific case. I wrote last week about how theme park owner Gary Semft of Harrison Hot Springs was hit with $3,700 in extra PTT on the value of improvements he had made to leased land he eventually bought.

Readers have also told me about several more PTT injustices, including the particularly offensive practice of charging PTT on people’s own cottages when they buy formerly leased recreational land from the Crown. Talk about sharp business practices — the government nails its own clients with a spurious charge just because it can.

This is a bully’s tactic. No private firm could pull it off, and most would be ashamed to try. So I understand why Krueger might not want to give a writer grist for a column on these issues.

But I still think his excuse for ducking my questions is a crock. Taken at face value, it would mean he could never say anything about any tax, because every tax his department collects could conceivably lead to an appeal that comes before him.

On the plus side, Krueger did talk a bit — in very general terms — about his duty to be fair.

He made the point, no doubt true, that sometimes legislation gives him and his staff absolutely no leeway, even if they think an outcome is unfair. But he also conceded — and this is significant, if he follows through — that when inflexible legislation leads to an unfair outcome, he and his colleagues have a duty to fix it.

He even gave an example — a first-time homebuyer who, thanks to a technicality that wasn’t his fault, lost his eligibility for a tax break. Although the law left no room for him to intervene, he said, it did convince him the law needs amending to make it flexible enough to deal with similar cases in future. This may be cold comfort for the poor sap who got stuck with a few thousand dollars in extra expenses, but it’s a much better outcome than when the bureaucracy shrugs at an unfairness and does nothing.

Krueger refused, however, to signal whether he thinks the property transfer tax law is too inflexible, too prone to unfairness, and thus due for reform.

I’m guessing that, if he hasn’t already felt a lot of pressure on this already, he soon will. My in-box these days is reflecting a heightening concern with the PTT, which seems to be the latest area where tax auditors are throwing their weight around in ways that are, at best, hard-nosed and, at worst, arbitrary and mean.

Businesses, especially, seem to have legitimate gripes. They’re supposed to pay PTT on “fair market value,” but that’s an elusive number that BC Assessments often doesn’t get around to calculating until a year after a sale. Even then, the assessment is often an “estimate” (i.e., an assessor’s wild guess). Thus the business must — usually at the cost of considerable time and money — fight to have it reduced to a realistic amount. This adds not only costs but also an unnecessary amount of uncertainty to business property transactions.

In a perfect world, the property transfer tax would be scrapped. It’s an ill-conceived policy. It’s a drag on business start-ups, and an extra cost on the already daunting cost of home ownership.

These problems are made worse because the law hits at the worst time, when people who’ve just made a big investment can least afford it.

it so perverse — sky-high property prices — also makes it a cash cow for the government, which is not going to stop squeezing this teat any time soon.

That leaves the moral issue: Fairness. Government should feel obligated to spurn the kind of sharp practice that makes most voters squirm. Even if I had the power to do so, I simply would not try to impose on people whom I do business with a charge for retaining assets they already own. I think it’s wrong. And I’m betting a big majority of my readers — i.e., other voters — agree.

If we wouldn’t do it, Mr. Minister, neither should you or your colleagues do it on our behalf. So add this to the list of bad tax law that you guys have a duty to fix.

© The Vancouver Sun 2008

Dollar predicted to reach $1.06 US by end of ’09

Eric Beauchesne
Sun

OTTAWA — The weakening U.S. economy, the strong Canadian dollar and competition from offshore companies are draining the energy out of the Canadian economy, according to Scotiabank.

“The Canadian economy is rapidly losing steam,” it said Monday in its latest global, domestic and provincial forecast.

And the Canadian dollar — buoyed by continuing strong resource prices, as well as Canada’s twin budget and trade surpluses — will strengthen even more, it warns, projecting that the currency — now just below parity — will reach $1.06 US by the end of next year, while the U.S. economy will weaken further.

“Without another injection of fiscal and/or monetary stimulus … recent economic resilience will likely give way to a broad-based weakening in U.S. conditions by year-end,” said Warren Jestin, Scotiabank’s chief economist. “The temporary palliative to consumer spending provided by Washington’s flood of tax rebate cheques will be followed by a relapse in sales once this fiscal stimulus recedes.”

U.S. growth is expected to be 1.5 per cent this year and one per cent next year.

Reinforcing that warning was news of a further slide in a U.S. index of leading economic indicators last month, and a drop in another index of overall business activity there.

“The drop in the index in June, when combined with the downward revision to last month’s … and the Chicago Fed National Activity Index, which remains in recession territory, suggests that the U.S. economy remains fairly weak,” said TD Securities economist Millan Mulraine.

Scotiabank, meanwhile, forecast that Canadian economic growth will slow to just 1.1 per cent, a notch above what the Bank of Canada now expects, and will edge up to only 1.6 per cent in 2009, well below the 2.7 per cent projected by the central bank.

Not only can’t Canada count on a quick U.S. recovery to boost growth here, but the drag from the strong dollar will also intensify, it suggests, projecting that the currency will move above parity this summer and edge up steadily to $1.06 US by the end of 2009.

And the regional economic divide between the robust West and the rest will continue through this year and next despite a modest recovery in all provinces east of Manitoba in 2009.

This year and next the four western provinces will post growth of between 2.4 and three per cent each, led this year by Saskatchewan with three-per-cent growth and next year by Alberta with 2.9-per-cent growth, it predicts.

In contrast, most of the other provinces will post growth of less than two per cent this year and next, with Ontario expanding by just 0.4 per cent this year, the second-weakest next to Prince Edward Island, which will grow just 0.3 per cent, and followed by Quebec, which will expand by only 0.7 per cent. Next year, Ontario will post the weakest expansion at one per cent, followed by Quebec and Prince Edward Island at 1.2 per cent each. New Brunswick will see the strongest growth of the central and eastern provinces, expanding by 1.5 per cent this year and 2.1 per cent next year.

© The Vancouver Sun 2008

 

Town’s bankruptcy filing may be a bad sign for other cities

Edward Iwata
USA Today

VALLEJO, Calif. — His roots run deep here. As a kid, 55-year-old contractor Randy Golovich played baseball, worked at the corner gas station, chased girls at the local soda counter. He helped his late father, a foreman at the old Mare Island Naval Shipyard, rebuild the family house.

The chummy, fast-talking Golovich also earned a good living in this waterfront suburb an hour’s drive northeast of San Francisco. As Vallejo grew, his contracting business, Randu Originals Ceramic Tile, hauled in millions of dollars in sales over the years. The jobs kept coming. The economy kept booming. Traffic filled Tennessee Street outside his showroom.

Not now. The mortgage crisis, the limping economy and a recent bankruptcy filing by Vallejo — the first municipality to do so since Desert Hot Springs, Calif., in 2001 — have hobbled this town of 120,000. Golovich’s business is hurting. Jobs and phone calls from customers have dried up. He’s cut his staff and fleet of trucks in half, to six employees and four vehicles.

Golovich also could lose his home. When the interest rate on his $500,000 adjustable-rate mortgage rose to 10% from 7%, his monthly payment shot up to $4,000, and he could not afford it. Hoping to ward off foreclosure, he and counselors at the non-profit Vallejo Neighborhood Housing Services are working with his lender on a new payment plan.

Despite his woes, Golovich is hopeful.

“Driving through this town is depressing. It tears your heart out,” he says. “But Vallejo‘s going to come back big, and when it does, I’m going to be the last tile store standing. I’ve just got to hold on and keep my house.”

Vallejo‘s closely watched Chapter 9 bankruptcy filing in federal court in Sacramento may be a warning sign of dangers that could befall other cash-strapped municipalities.

Bankruptcy Judge Michael McManus will hear arguments starting Wednesday on whether to let the case go forward.

Vallejo‘s attorneys say the city faces a $17 million deficit and cutbacks in public services for the fiscal year started July 1. The city’s police and fire department unions contend that Vallejo is not insolvent but that city officials are trying to dodge labor agreements and obligations to union members and retirees.

Vallejo‘s financial woes aren’t unique, according to municipal-bond analysts and bankruptcy attorneys.

A convergence of forces — the housing bust and credit crunch, tax revenue shortfalls, pension fund costs for public employees and the shaky economy and financial markets — are making it increasingly hard for municipalities to balance their budgets.

“We’re seeing a lot of governments around the country entering a period of flat or declining revenues,” says Gabriel Petek, a municipal-bond analyst at Standard & Poor’s. “I don’t expect this to turn into an avalanche, but there may be isolated instances of distress.”

Defaults’ damage rises

Across the USA, 59 bond issues of $1.2 billion have defaulted this year, according to Richard Lehmann, publisher of Distressed Debt Securities newsletter and president of Income Securities Advisors, an investment research firm. The dollar total is almost higher than the past two years combined, he says.

Over the past 20 years or so, 1,100 municipal issuers defaulted on their debt, according to Standard & Poor’s. Orange County, Calif., endured the largest municipal bankruptcy in U.S. history in 1994 after suffering $1.6 billion in investment losses.

Despite the defaults, Petek observes that most local governments in recent years have adopted strong financial-management practices, such as building up cash reserves that will cushion their municipalities during economic slumps.

Vallejo‘s $119 million in bonds in the bankruptcy case aren’t in danger of defaulting, Lehmann believes. Most of the city’s debt is backed by bond insurers or letters of credit, he says.

Even amid harsh economic times, the majority of municipalities manage to avoid bankruptcy, says Chris Hoene, director of policy and research at the National League of Cities.

Typically, states have stepped in to oversee municipalities such as New York City, Detroit and Camden, N.J., that were on the verge of bankruptcy in the past.

“I don’t think we’re going to see a rash of municipal bankruptcies nationwide,” Hoene says.

But Vallejo may be different. California cannot take receivership of its municipalities. The strong anti-tax movement and laws in the Golden State limit local government bodies from raising tax dollars. And Vallejo‘s high labor costs for its public employees make it tougher to deal with its budget shortfall, Hoene says.

Fading opportunities

Long before its bankruptcy filing, Vallejo had been an economic haven and a thriving bedroom community known as the City of Opportunity.

Through the 1980s, thousands of commuters were enticed by the town’s affordable homes, the fresh bay breezes, the nearby wine country of Napa Valley. A Six Flags theme park and the naval shipyard, which built hundreds of warships and nuclear submarines since the 19th century, anchored the local economy.

But after the shipyard closed 10 years ago, the economy sputtered and, some say, never fully recovered.

Then the mortgage crisis struck last year. The weak housing market throttled Vallejo‘s revenue growth to 3%, while labor costs for the city’s police officers and firemen rose 11%.

Vallejo has cut 87 jobs and slashed funding for parks, a library, a senior citizens’ center and other public services. City and labor leaders agreed this year to temporarily roll back union salaries 6%, but it wasn’t enough to hold off the bankruptcy filing.

Meanwhile, the housing crisis seems to worsen in some regions.

According to RealtyTrac, an online foreclosure research firm, foreclosures in California have doubled to 381,000 this year compared with the same period in 2007. In Vallejo, foreclosures rose 61% to 2,900 in the first six months of this year, compared with the same time in 2007.

Carol Hardy, interim executive director of Vallejo Neighborhood Housing Services, says that phone calls from financially strapped homeowners in Vallejo have poured in by the hundreds recently.

Many have received foreclosure warnings from lenders, or they’re having trouble making higher mortgage payments when their adjustable interest rates rise.

“They were refinancing their homes like ATMs,” Hardy says. “They weren’t thinking two steps ahead, to what happens when their loan readjusts.”

While residents wrestle with possible foreclosure, the city and its unions — the Vallejo Police Officers Association, the International Association of Fire Fighters and the International Brotherhood of Electrical Workers — gird for legal battle this week.

In court papers, the unions contend that Vallejo is not bankrupt, that it still is paying bondholders and that it had $136 million in cash when it filed for bankruptcy. The filing, the unions allege, is a ploy to force the unions to renegotiate their contracts.

Harvey M. Rose Associates, a San Francisco accounting firm hired by the unions, states in a court filing that Vallejo could balance its budget and build a surplus of millions of dollars by slashing costs, selling city land and increasing fees and assessments.

Unlike similar nearby towns, such as Richmond, that boast more diverse and thriving economies, Vallejo did not rejuvenate its economy and tax base enough to ward off financial woes, says Dean Gloster, an attorney at Farella Braun & Martel, who represents the unions.

“The truth is that Vallejo has been in serious financial trouble for over a decade,” he says. “It’s a very poorly managed city.”

Vallejo officials say in court filings that the mortgage meltdown and high labor salaries and benefits, rising to $79 million in the current fiscal year, have forced the city to file for bankruptcy. The city, they argue, cannot balance its budget unless the unions make concessions.

Marc Levinson, a lawyer at Orrick Herrington & Sutcliffe, who represents Vallejo, denies that the city is sitting on $136 million in cash and assets, or that Vallejo “deliberately manufactured bankruptcy to break its labor contracts.” He contends that the Rose report is flawed.

Says Levinson, “The city can’t afford to pay the contracts. The city has cut to the bone. There is nowhere else to go.”

A tough fight ahead

If similar bankruptcy cases are any indication, the unions face a tough legal fight, according to Bruce Bennett, an attorney at Hennigan Bennett & Dorman, who worked on the Orange County bankruptcy and is not involved in Vallejo‘s case.

“There were extensive negotiations prior to the case,” says Bennett, who read the key bankruptcy filings, “and it does not appear the city has misrepresented its actual, current financial condition.”

Beyond the filing, Vallejo‘s economy — mostly retailing, business services and manufacturing — could get a boost from development projects and a $300 million cancer research center planned by Touro Universityon Mare Island.

Back on Tennessee Street, the quiet main road from the highway to Mare Island, contractor Golovich waves at friends and business people driving by. The economy, he believes, will start rumbling soon.

“This street is going to be booming again, I’m certain of it,” he says. “You can see the traffic picking up now.”

Official criteria for diagnosing autism spectrum disorders apply specifically to children, not grownups

Sharon Kirkey
Sun

Was the young doctor autistic?

He didn’t think so: “I don’t walk on tippytoes or get hypnotized by Wheel of Fortune,” he explained.

But he did get upset when people didn’t say what they mean. He loved math. “And then there’s this odd thing I do with my hands and my nose when I’m excited and I think nobody’s looking,” he once wrote in the Canadian Medical Association Journal.

He thinks he may be on “some distant end” of the autism spectrum.

At the other end are people like the man who organized his wife’s CDs by the composer’s date of birth and fell asleep on the floor during social events; his wife thought he was eccentric.

Or the office clerk who beat up a woman on his way to the bus stop one morning for the simple reason she was in his way. He was obsessed with not walking on the cracks between the tiles on the sidewalk.

Autism in children has never been more in the news. But few are talking about the adults, experts say, and few therapists are available to treat the illnesses in adults just as more are seeking help.

The official criteria for diagnosing autism spectrum disorders apply to children. Some adults only recognize autism in themselves when their child is diagnosed.

On the high-functioning end of autism is Asperger’s disorder, “and that’s the group that’s coming to people’s attention,” says Dr. Deborah Elliott, assistant professor of psychiatry in the division of developmental disabilities at Queen’s University in Kingston, Ont.

Even Asperger’s is listed under the category “usually first diagnosed in infancy, childhood or adolescence” in psychiatry’s official guidebook, the Diagnostic and Statistical Manual of Mental Disorders, and it was only in 1994 that the syndrome was added.

Adults with Asperger’s have normal or above normal intelligence, but their social skills are disastrous. They avoid eye contact, have difficulty forming relationships and can’t pick up on normal social cues.

Some are diagnosed with social anxiety disorder or depression. “You treat the depression but then you’re left with somebody who still is a bit odd and eccentric,” Elliott says. “That may be the first time they actually come to somebody’s attention. … the reason he’s depressed is because he can’t develop relationships. Even though we’ve treated his depression, he’s still stuck with disability.”

Many more men than women are affected. Asperger’s has been described as the extreme of male thinking, says Dr. Rutger Jan van der Gaag, a professor of clinical psychiatry at Radboud University Nijmegen in The Netherlands. “Very much detail, very little empathy.”

© The Vancouver Sun 2008

Ouch! That tax letter can sting

Ray Turchansky
Province

One part of Canada Revenue Agency’s job is to confirm or correct the amount of personal income tax you are supposed to pay. The other part is to collect that money and apply it toward the amount owed. And that’s where things have been breaking down.

This year my wife, Lorraine, and I netfiled our tax returns, with her getting a refund and me waiting to pay my amount owing on April 30. Then we were among the many thousands of taxpayers receiving a late-arriving T3 slip, for dividend income received. I immediately filed T1ADJ adjustment forms, attaching a cheque for the additional $147.26 owed by my wife to her form, and increasing my payment by the appropriate amount.

CRA later wrote Lorraine saying they had processed the adjustment, and she owed $147.26 plus interest. When she phoned to say the cheque for the required amount attached to the adjustment form had in fact been cashed by CRA on April 30, they said they thought she sent that cheque as a head start on next year’s tax payment and created a 2008 installment account. Wrong.

Similarly, more than a year ago one of my tax clients owed more than $2,400 in taxes for 2006, which she remitted. Alas, she received a letter from CRA asking for payment, and when she questioned them she was told they had applied her 2006 payment to her 2007 installment account.

People who do not have sufficient tax withheld at source, often the self-employed or seniors who no longer work, are usually required to make installment payments. If you owe more than $3,000 in the current tax year, plus one of the two previous years, you will likely be asked to pay quarterly installments. There are three ways to determine those amounts.

The most common is the installment reminder method. CRA sends out a notice in February for amounts due March 15 and June 15, based on your tax owed two years ago. Then it sends out another notice in August for amounts due Sept. 15 and Dec. 15, based on the tax return you filed in spring for last year. If you use this method and the total year’s installments prove to be insufficient, you will not be subject to penalties or interest.

A second option is the prior-year method, where you pay installments based on the previous year’s income. This is advantageous if your previous year’s income is less than your current year’s income.

A third choice is the current-year method, where you pay installments based on an estimate for your current year’s income. It’s advantageous if that income is less than your previous year’s income. However, if your current-year income estimate is too low, you may have to pay interest on the shortfall.

A word of caution: Use projected future installment amounts calculated by your tax preparer as a guide only; watch for the actual amounts on CRA’s installment reminders.

You may make installment payments using the CRA remittance forms, issued with the installment reminder, directly to CRA or at a financial institution. Or you can fill out form T1162A allowing CRA to withdraw installments from your bank account on the due dates.

A mistake that some people make is simply ignoring the CRA reminders. This can cause you to be charged a significant amount of interest, as well as facing a large tax bill when you prepare your return.

Whether it’s installment or non-installment payments, make sure CRA is applying them to the taxation year you intend them for.

— Edmonton Journal

Ray Turchansky, a freelance writer and income tax preparer, may be contacted at [email protected]

© The Vancouver Province 2008