October 29, 2001

New By-Law changes sparked debate at the United Association of Equipment  Leasing Association  Business Luncheon at the San Antonio, Texas Hyatt Riverside Hotel, Saturday, October 27

Richard Walker, CLP, president of Capital Equipment Leasing, La Jolla, California came to the microphone to both question the by-laws and particularly object to this phrase:  "even if such information becomes known to us after the funding of a transaction."

The change would then read: " We will never knowingly make false or misleading statements or withhold information vital to a business decision even if such information becomes known to us after the funding of a transaction, and we will correctly represent our relationship with all parties to the transaction."

Walker said it was, "...inserted expressly aimed at brokers." He both objected

to the inference, the attitude, and legality. ( After the meeting, he talked off the record about many other concerns, but said they appeared academic as he felt no one understood the changes and members were being "railroaded".)

Another objection centered around raising filing fees for complaints for

non-members versus members from $100 to $250.  Executive Director Joanie

Dalton told the audience their office gets a dozen calls per week about

complaints from non-members, and this was necessary to pay for staff's time, and the higher fee would lower the amount of  telephone calls, she said in explaining

why there should be a "yes" vote on this time.

The by-laws concerned changes in making complaints, dispute resolution procedures, and response time. Long time UAEL Standards Chairman Victor Harris, Esq., moved to the microphone and spoke from five to ten minutes about the effort and purpose, stating a lot of work went into the formation of making the procedures "more workable" and "enforceable" and considered it an improvement over the existing bylaws.

Kit Menkin, American Leasing, Santa Clara, California, went to the microphone, saying he was not indicating how he was voting, but called for a point of order, requesting that the matter be sent to all the members with a better explanation.  President Chuck Brazier CLP,  Centerpoint Financial Services, Denver, Colorado, responded from the podium that ballots were sent out to all members in April, and as per Roberts Rules of order, called for all ballots to be marked at the luncheon, with results to be released in thirty days on the UAEL web site.

Abel Reyalso, Hyatt Banquet Room Manager, said they had set up for 97 persons,

but only served 70 dinners due to the actual attendance at the Saturday luncheon meeting. There were an estimated 40 members who could vote ( this including incoming and outgoing board members present.)  A UAEL spokesman was unable to state how many ballots were collected.

The financial condition of the organization as of December 31, 2000, was given

to everyone in attendance.  Bette Kerhoulas, CLP, Pacifica Capital, Irvine, California,

secretary-treasurer gave the report.

Membership dues income was down from $362,727 to $310,465. Conference and meetings income were down from $911,074 to $549,452, and to sum up revenues, they were down from $1,359,747 to $937,336.

On the expenses side, general and administrative expenses were up from $485,685 the prior year to $624,428.  The previous year had gone from a positive $131,666 in change in unrestricted net assets to a loss of $236,787.  As important, unrestricted assets went down from $394,911 to $158,124, the audited financial statements new net worth.  It looked like the "burn" rate in 2001 would reduce this amount again.

Another key factor was the cash going from $152,507 the prior year to $9,350,

and assets to liabilities from $508,644 to $113,733 in 1999to $368,849 to $210,725 in 2000, quite a change in ratio's.

The audited financial statement was for the year 2000, under the regime of

Bob Rodi, CLP, Lease Now, Warrendale, Pennsylvania.

Bette Kerhoulas, CLP, Pacific Capital, Irvine, Ca., reported there was a one-time ,perhaps

extra-ordinary expense,  in the general administrative expenses. She did not go into detail. Leasing News has reported about this in several past issues.

President Brazier explained that the association has a $100,000 line of credit from " a bank", which has reportedly not be utilized.

President Chuck Brazier in his excellent farewell speech, answered many questions and appeared quite thorough and forthright.

" There was a crack on our foundation a year ago, " he began. 

 He was very positive in his attitude and statements, proud of three major achievements,

"Involvement---Events and Networking---Educational material, we are a leader in this."

He referenced the seven funding retreats, twelve regional events, and two conferences during his watch.

" The bottom line is we are going into this conference with $100,000 in cash, " he said." We have our slow months of October, November, December coming up, but we have planned for it."

He said the association will count on its members to create profit.  There are now

382 members . He stated there are 107 new members this year. He thanking Ginny

Young as Membership Chairman and noted the work of Membership Director

Bill Grohe.  He thanked the board of directors for their support and regional

chairs for their efforts to keep members informed. He was appreciated of the regional

chairmen, and thanked many for their support.

" The web site is a new vehicle to talk with our members, and incoming president

Bob Fisher will tell about his plans to create chat rooms. There were 117 who registered on the internet. 

"We have built a foundation to grow upon.  We have an excellent staff and basic foundation to grow upon. The foundation is strong and now is the time to build upon the foundation with a great year for the entire association."

There was standing applause.  Conference Chairman Terey Jennings, Financial Pacific, introduced incoming President Bob Fisher, CLP, Fisher -Anderson, Des Moines, Iowa..

He thanked outgoing president Chuck Brazier for his hard work, including all the meetings, time at the Oakland headquarters, and "...especially for the Town Hall meetings, a concept I will continue to meet with all members on all issues."

He began by saying he had joined the organization in 1989 and was proud to become its president in 2002. 

"Networking will be our number one focus," he announced.

 " Networking, Involvement, and Education.." will be his theme. He has plans

for a national telephone chain, regional chat rooms on the web site, and other

programs to get members involved, including a special Summer CEO conference.

The slate of 2002 officers were elected:

   President, Bob Fisher, CLP-Fisher-Anderson

   Vice-President, Bette Kerhoulas, CLP-Pacifica Capital

    Secretary/Treasurer, Jim Coston ---Coston & Lichtman

    Immediate Past President-Chuck Brazier, CLP-Centerpoint Financial Services

Board of Directors

Brent Hall, CLP-Pinnacle Capital

Victor Harris---Law Offices of Victor Harris

Terey Jennings, CLP---Financial Pacific Leasing

John Kruse--- CapitalStream

Larry LaChance, CLP---Bankers Capital

Christopher Menkin---American Leasing

Troy Molitor-Manifest Funding Services

Jerry Newell, CLP---Bank of the West

Peter Stommel, CLP---Ascente Financial

Bob Teichman, CLP---Teichman Financial Training

Joe Woodley, CLP---Westover Financial

While attendance appeared "light" to the exhibits, all the exhibitors

contacted said they were happy with the turn out and interest in

their product..  There were 29 sign-up sheets by count and only eight had all the appointment taken ( They were the funding exhibitors).

Portfolio sales were up, one negotiant told me, as funders were not making

their quota, and buying another's portfolio, added business for them.

One small lessor said they still had fifty accounts, paying pretty well, but had not added many this year.  They were living off the profits, and could continue this way, but there was no growth.

Many of the members told me their business was off as much as 80%.  Sales

were the number one concern, and they were worried about the future. 

They had come to the right place as the Friday morning opening speaker was

dynamite, and the Saturday Luncheon speaker the best I have seen in

all the conferences I have attended for twenty-five years.  The workshops we visited were well attended with excellent participation. 

D.J. Harrington, CSP, lead the parade with "Noble 'No Bull'.  There were

200 in attendance.

Harrington is a well-known sales trainer, writer, audio tape, and speaker extraordinaire with a tremendous sense of humor.  It was in short order that he had everyone laughing, shouting back: U-A-E-L.  He uses props and gets the audience involved, from a group puzzle contest to having all attendees wear a "link" attached to their clothes to show everyone is linked together in their industry. He is a great motivation teacher with a

terrific sense of humor; also quite a showman.

He said his books are available to UAEL members for $10.00, not what

Amazon sells it for, he said, and his audio tapes were available at www.djharrington.com or contact him at djharrington@mindspring.com

Saturday's Luncheon Speaker was Professor Morton Marcus, University

of Indiana.  He has been called the "Don Rickles of the business schools."

He writes for business newspapers, serves on the board of a bank, is the

director of the Indiana Business Research Center, and has taught economics at the Indiana University, Kelley School of Business, since1970.

He believes the economy is on the rise.  The comeback started two to six

weeks before the shock of September 11.  He believes the stock market

was over bloated for two years, and that assets were inflated such as houses,

stocks, with the major consequences in the overpricing of stocks due to

government subsidies in IRA,401, and other government backed subsidies.

He believes the government should not have given money to the airlines,

but should have given tickets to consumer to spend on airline tickets,

and found other incentives to help the airline industry that also would

have put more money to use in the economy.

His hour talk was so good the late Saturday workshop on "What the Numbers

Mean" was almost standing room only.  Usually these late Saturday  afternoon classes are very poorly attended ( I attended one where there were only six

to hear past UAEL president Oren Hall unabashed and no holds barred- brilliant view of the state of  the leasing industry).

He said the potential for Christmas sales is enormous. Goods that make people

feel good, warm, and secure will be best sellers. He said business will

focus on security products for industry and explained how the GNP worked.

Information on these statistics he said are located at bls.gov.

A key factor to him, he said would be Halloween sales.  Last year it was 8 ½

billion dollars.  He said to read the Wall Street Journal and see what it is this

year as an indication for not only Christmas sales, but the economy overall.

Professor Marcus notes to this workshop will be available in a week,

he said, at www.ibrc.indiana.edu/it/ibrc   His direct e-mail address is:

marcus@indiana.edu

The Friday luncheon consisted of three separate legal workshops.  The one I

attended was " Roundtable of a Deal Gone Bad and How to Minimize the Loss"

with Andrew Alper, Frandzel Robins, Bloom & Csato, Los Angeles; Victor

Harris, Law Office of Victor Harris, San Rafael, California, and Daniel Heald,

Hermar, Rousso & Heald, Encino, California

Much was discussed including using the internet to see if the lessee had

other lawsuits or problems, review of contract as all $1.00 and PUT purchase

options are security agreements, and review the lease ending for "economic

recovery value".

It was reported this downturn was different than others, in that money is available

in defaults.  It was noted there was a lot of fraud involved in losses, including does

the equipment exists, did it ever exist, what other creditors are involved, and learn

what to do before hiring an attorney to get involved to save you money.

A "first class" workshop was held by Brad Peterson, U.S. Bancorp

Manifest Funding Services, Executive Director of Sales, West, and Brian Bjella, U.S. Bancorp

Manifest Funding Services, Executive Director of Sales, East, titled "Characteristics of the Most Successful Leasing Sales People."

U.S.Bancorp provides three free training courses for their brokers and discounters

each year, has conducted sales studies that has found that 55% of the people earning a living in sales should be doing something else.  Another 20-25% have what it takes to sell, but they should be selling something else.

They went over the success rate, where they found 66% of the leasing companies

hiring decisions will prove to be mistakes in the first twelve months.  One of

the other studies they mentioned was published in the Harvard Business Review

that found 90% of hiring decisions are based on the interview.

They handed out a lamented material about the characteristics of top sales

people and went over the items one by one; all thorough and fascinating.

Manifest did a top sales person profile before September 11, and the

compilation of 40 top producers nationwide was:

-College Education         89%

-prior sales experience    51%

-#years with company    3-4 average

-Monthly volume            $320K

-Monthly Gross Profit     $31K

-Salary & Bonus            $121K annually

In addition to the laminated  two side chart, they handed out a 12 page

workshop paper.  Perhaps in a future edition or special report, with the

permission of U.S.Bancorp Manifest, we will print this.

Another "Concurrent Educational Workshop" was "Hiring and Retention"

by Barbara Spector, president of Smartmoves (www.smartmovesconsulting.com ).

Finding top people was the number one problem of those in attendance.

The first approach was to find out exactly who you were looking for

that would fit in with your company and the way you do business.

This was not a "requirement list" but looking for a performance profile,

object evaluation, wide range sourcing, emotional control, and most

important, energy level.  Work style and environment were also

mentioned.

Barbara Spector calls it the POWER Hiring Principles:

Performance Profiles:

   To hire superior people, first define superior performance.

Objective Evaluation:

    The best predicator of future performance is past performance.

Wide-Ranging Sourcing:

     Treat candidates as customers not subordinates.

Emotional Control

       Remain objective.  Measure performance first-then personality.

Recruiting Right

       Recruiting is marketing, not selling.

The measurement test, after a twenty minute telephone interview,

and then a person-to-person interview with a series of specific questions

to go to the final level where 80% or better rating means this person

scores best for you.

On line is a test and costs for hiring people.  A free eight panel brochure outlines

the approach, plus covers much of what was talked about in her well-participated

workshop.  She also passed out a free audio tape: Power Hiring, How to Find, and Hire Great Talent, based on Lou Adler's "Hire With Your Head." You may call her at 415-456-1990 or fax 415-456-2880 for more information.

Another tip, don't write boring ads.  Treat your employment ad as if you

were selling leasing,  selling the advantages of your company, and not

just seeking a set of attributes.

Another very interesting workshop was by Gary Mendell, Meridian Finance

Group, Los Angeles.  He is basically an insurance broker for vendors

and lessors who have equipment in foreign countries.  He also acts as a

referral service for U.S. companies who have offices overseas and need

to located equipment on lease there.  He is not a funder.  He says financing

for export deals is becoming available from more leasing companies, banks,

and specialized lenders.  His talk was on how to get these deals done, and

how you can access these resources for your vendors.

gmendell@meridianfinance.com   www.meridianfinance.com

310-442-3600, Ext. 4  Fax: 310-207-2810

Errata:

Terey Jennings, CLP, Conference Chairman was everywhere.  He visited

all the workshops, was busy behind the scenes all the time, and made

every effort for things to run smoothly and to have the conference

a success.  He is an executive he is also not afraid of doing work,

running errands, solving problems, getting things done. I think he was

glad when it was over.

The anthrax scare at the NBC Kron-TV East Bay News office located

below the UAEL office in Oakland, California was a hoax.  The white

substance turned out to be talcum powder.

The Saturday luncheon was  sponsored by American Express Business Finance, who did not have a  booth, but a mistake in putting out a sign-up sheet received appointments for every period on the form. ( Earlier they had announced they were out of the lease broker business.) Richard Anderson and Daniel Ciocca were reportedly in attendance, allegedly because they had non-cancelable airline

tickets.  Leasing News was unable to locate them at the conference for a comment.)

Kit Menkin accepted the board position on the condition it would not interfere

with "objectivity" and "unbiased" opinions.  The reason he did not state how

he would vote on by-laws would conflict with this "independent"  ability.

Should it interfere, he will not serve on the board, but believes he can "handle"

the independent nature and remain "objective", especially in supporting

and reporting about all leasing associations.

Leasing News had an advisory board meeting, followed by a Chaine des Rotisseur

dinner at Las Canarias, La Mansion del Rio Hotel, within walking distance

down the Riverwalk.  This is an historical hotel and perhaps San Antonio's

finest restaurant.  King Phillip stayed here, President Bush has dinner

here.  The advisory board had a Champagne reception followed by a four

course dinner and dessert with wine from Texas, Russian River, Beaune, W

and Napa Valley. Advisory Board member Phil Dushey calls "Leasing

News, the conscious of the Industry".

If you are ever in San Antonio, I recommend the Las Canarais, and the Landing

at the foot of the Hyatt Riverside.  They have a great Dixieland band there, and

I was there every night until the band stopped playing. 

                Kit Menkin, Leasing News Editor

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