All posts by Mike McCulloch

Timing of Region of Waterloo debt issue saved $1.4M

The Region of Waterloo estimates it saved about $1.4 million worth of interest payments by carefully timing its latest debt issue.

The region and the cities of Kitchener, Cambridge and Waterloo joined to issue $65 million of debentures at historically low interest rates over ten and 20-year terms on October 21.

Craig Dyer, the region’s chief financial officer, wrote in an email that the region and its advisers closely followed shifts in the bond market for weeks.

“Government of Canada bond yields increased in the first two weeks of September and then dropped significantly over the following four weeks.

“Had the Region launched the deal at the peak on September 18, the [weighted average] cost of borrowing would have been approximately 3.277 per cent,” Dyer said.

However, with patience and thorough analysis, the region was able to secure an overall weighted average interest rate of 3.022 per cent.

For comparison purposes, by issuing the debenture on October 21 rather than September 18, Dyer calculates the region saved approximately $1.4 million in interest payments over the 20-year term.

Region of Waterloo seizes record low-cost loans

The Region of Waterloo capitalized on a drop in the bond market to secure the lowest borrowing costs in the municipality’s history.

The region issued $65 million on ten and 20-year debentures for infrastructure spending at record low interest rates of 2.6 and 3.3 per cent.

The region will borrow about $53.4 million and the cities of Kitchener, Cambridge and Waterloo will carry the rest of the $65 million loan.

Moody’s Investor Service scores the region’s credit rating at AAA, the highest rating available. That gives the region access to the most inexpensive borrowing rates possible at any given time. The local municipalities in-turn piggy-back onto the region to enjoy the same rates.

October 21 debenture breakdown by municipality
The Region of Waterloo and the cities of Kitchener, Cambridge and Waterloo issued a combined $65 million in debentures. The deal closes on Thursday. (Region of Waterloo/ staff report)

Councillors received a staff report for information on Tuesday afternoon, detailing the interest rates and an overview of the spending plans for the previously approved debt.

The issue was priced and purchased through fiscal agents with CIBC World Markets on Tuesday, October 21, a day described in the staff report as a “quiet afternoon in the market relative to pending municipal and provincial,” borrowing.

In an interview on Tuesday afternoon, Craig Dyer, the region’s chief financial officer, said timing was critical.

“From the third week of September right through until a couple of weeks ago when we priced and placed the issue, bond yields came down significantly. So we tried to capture that low point as best we could.

“In terms of investing in infrastructure and financing it over a ten-year term, this has been a really good time period to do that.”

The region’s funds will be funneled into infrastructure projects approved in 2013 and 2014. Those projects are either complete, underway or about to begin, including:

  • $23 million for wastewater treatment plants
  • $7.1 million for waste management
  • $7.1 million for regional buildings
  • $6 million for Grand River Transit garage expansion plans
  • $4.4 million for courthouse renovations
  • $2.8 million for Waterloo Regional Police capital projects

The region remains on track to meet its year-end debt projection of $507 million, when factoring in debt repayment of $41.2 million, Dyer said.

Since 2009, the region has been able to secure interest rates on ten-year debentures from 3.74 per cent at the highest to the record setting low 2.6 per cent.

Waterloo Region has capitalized on historically low interest rates to make long-term infrastructure investments. (Region of Waterloo staff report)
Waterloo Region has capitalized on historically low interest rates to make long-term infrastructure investments. (Region of Waterloo staff report)

This latest debenture closes Thursday and the proceeds will be received that day, according to the staff report.

Woolwich mayor-elect Sandy Shantz is first woman to hold post

Sandy Shantz isn’t typically one to draw distinctions based on gender in politics, and yet she is the first woman ever elected mayor of Woolwich Township.

“There’s a piece of it that feels kind of good to say, ‘they haven’t chosen a woman before,’ but I’d like to think that they’re just choosing the best person, whoever that may be,” Shantz said.

Two of every three voters agreed that Shantz is indeed the best person for the job.

“It’s a big responsibility, I think, to win by that margin. But also it tells me people trust me, and they trust me to be who I am and that gives me confidence too.”

In an emailed statement, township spokesperson Devin Petteplace wrote, “The electors of Woolwich have given mayor-elect Shantz an impressive mandate through their overwhelming support on election day.”

Shantz said her victory was in-part the work of a great campaign team, “I had a whole lot of people helping me and it was just terrific. It was a great experience and really inspiring to have so many people who wanted to help me.”

Shantz said her team included good friends, acquaintances and some people she had never met before.

Shantz and her husband Brian have lived in Elmira for the past 30 years where they raised three sons, Adam, Brad and Luke.

Shantz believes there are two main factors that can, “skew the statistics,” with regard to the fact there are fewer women than men in politics: the need for women role models and individual family planning choices.

“For me, for example, the timing had to be right. When my kids were younger, I wanted to spend time with them … so you put things on hold as a woman,” she said.

Shantz realizes she is a role model for women with political aspirations.

“My son’s girlfriend had said that to me and I hadn’t really thought about [being a role model]. Because I had done some things as the kids were younger, what I could manage … working in the community and also being there for the boys.”

Shantz served one term as township councillor from 2006 to 2010. She also served two terms as  trustee for the Waterloo Region District School Board from 1997 to 2003.

Last year, Shantz was chair of the Woolwich Community Services capital fundraising campaign to build a new facility. The drive raised more than $1 million.

For the past three decades, Shantz also held numerous leadership roles in the Mennonite Church of Eastern Canada, the Mennonite Church of Canada and the St. Jacobs Mennonite Church.

The newly elected Woolwich township council will be sworn in on December 9th at the Elmira Lions Hall  located at 40 South St West, Elmira.

Women remain underrepresented in Waterloo Region municipal politics

Female representation Waterloo Region

The infographic tells the story: municipal politics continues to be a man’s game in Waterloo Region, in spite of the fact women make up half the population.

Regional council maintained five women, Kitchener and Cambridge each gained one woman and Waterloo city council lost two female representatives.

“We’ve seen great strides made in the last couple decades, but we still have a ways to go,” said Sarah Marsh, newly elected councillor for Kitchener Ward 10.

Marsh was undecided on whether to run and said she was encouraged to do so while attending the Waterloo Region Women’s Municipal Campaign School  organized by regional councillor for Waterloo, Jane Mitchell and the YWCA  earlier this year.

“More than a dozen local female politicians took time out of their day to come and encourage more women to run,” Marsh said.

At the February workshop, Marsh said a speech by Christine Elliott, Progressive Conservative MPP for Whitby-Oshawa, resonated with her.

“In [Elliott's] experience, a lot of women don’t have that initial confidence to just put themselves out there without that bit of encouragement.”

“For myself, I was asked by several people to run and that did help me to take the plunge,” Marsh said.

Marsh’s election win represents part of a slight shift on Kitchener council from two women to three out of eleven elected representatives.

Incumbents Kelly Galloway-Sealock and Yvonne Fernandes were returned to office.

“I’m definitely happy that we increased the number of females on council,” Galloway-Sealock said.

“It’s been a while since there has been three, even with the increase in council size last term, so I think it’s really encouraging to see that.”

“But I do still think that we need to have a few more just to have a more balanced approach,” Galloway-Sealock said.

Women who are interested in politics need to get involved in the community before they decide to run in order to raise their profile, she said.

Galloway-Sealock also suggests increased women’s municipal campaign school programming could help encourage women to run.

“We only run it once every four years. Maybe we need to start running that a little more.”

Beyond supporting women in running for office, Galloway-Sealock said there could be a benefit in getting youth of both sexes involved in the community at a younger age, “so that they can see the difference that they can make in the community.”

Fernandes said females currently in politics could help get more women involved by lending their time to mentor them.

“I see a lot of women doing more mentoring and I myself have taken on mentoring of a young girl who is here as an international student. I think that [mentorship] will definitely help more women consider a political career as an option.”

“We had an amazing number of female candidates. Recognizing that a number of them were under 40 tells me that women are trying to balance even more in their lives,” Fernandes said.

“Hopefully that means they have extremely supportive partners, because you have to have a very supportive partner to be able to be out in the public all the time and balance family.”

Last term, Waterloo city council was comprised of five women, including mayor Brenda Halloran, and three men. That split was reversed with the 2014 election. Angela Veith, Diane Freeman and Melissa Durrell were re-elected, while Halloran didn’t run and Karen Scian ran for a regional council position.

In Cambridge, Jan Liggett was elected in Ward 4, which was vacated by Ben Tucci. Donna Reid and Pam Wolf were re-elected, improving the balance from two to three women of nine city representatives.

Regional council retains the composition of five women and eleven men. Mayors-elect Sandy Shantz and Sue Foxton, from Woolwich and North Dumfries respectively, join the horseshoe. Jane Mitchell, and regional councillors-elect Helen Jowett in Cambridge and Karen Redman in Kitchener round out the bunch.

Voter apathy persists in Waterloo Region

The unofficial results are in from the 2014 municipal elections in Waterloo Region. In spite of vigorous mayoral races, a big-budget challenger for regional chair and online voting in Cambridge, the number of ballots collected at the polls reflects an electorate that continues to be disengaged.

Voter turnout in Kitchener improved slightly to 29.94 per cent compared to 28.55 per cent in 2010.

In Cambridge, notwithstanding the introduction of online and telephone voting, turnout was relatively unchanged. This year, 29.89 per cent of voters cast their ballot compared to  28.71 per cent in 2010.

City of Waterloo’s electorate was the most engaged of the three cities of the region, with 35.93 per cent voter turnout this year. However, last election the city saw 41.16 per cent turnout.

Bob Williams, a retired University of Waterloo professor of political science, expected competitive open mayoral races in Kitchener and Waterloo to boost voter turnout.

“But that didn’t happen, except in a very marginal way, and ironically one of the cases where there was not a competitive race was in Cambridge, yet there was a little bit of [an increase].”

The day after the election, Williams  who taught municipal politics for 35 years  is pondering why voter turnout declined in Waterloo.

“I don’t have a definitive answer just yet. I’m wondering whether this fairly vitriolic campaign that went on around the LRT spilled over into people basically saying, ‘I don’t believe anybody. Don’t vote, it only encourages them. I’m just going to sit on my hands.'”

“The whole issue of who to believe was very significant,” Williams said, “you probably sided with the viewpoint that you went in with. But if you went in with no opinion, you had sets of numbers, claims, accusation and whatever that just didn’t square.”

“I think for a lot of people it was a combination of ‘I just can’t figure this out,’ or ‘I’m just too overwhelmed by it and it’s just too much for me to waste any time on.'”

In addition, the polarizing ballot questions in Waterloo regarding water fluoridation and whether to discuss the merits of amalgamation with Kitchener, “probably were hidden factors,” that contributed to an increase in voter turnout in 2010, Williams said.

At the macro level, depressed voter turnout may be connected to dropping levels of community engagement, volunteerism, and membership in service clubs, churches and political parties.

Peter Woolstencroft, also a retired University of Waterloo professor of political science, suggests voter apathy is deeply seeded in today’s egocentric society, where individual satisfaction trumps community involvement.

“This leads people to not to want to participate in traditional social institutions. Traditional churches are in trouble, there’s been a norm breakdown, so that people think their happiness is what’s important. They want to be happy,” rather than lead engaged lives in the community, Woolstencroft said.

“The great majority of [politicians] are well intended. So we don’t a problem of a lack of people with good motivations wanting to serve in politics. But we have a problem with a lot of people who are not well motivated to be citizens.”

“It’s hard to be a citizen, because you have to actually think about stuff; you have to cut through the rhetoric and piffle and say ‘okay what’s really going on here, what’s important to me and how can I best express myself?'” Woolstencroft said.

“And it’s more fun to watch kitty movies on YouTube.”


An earlier version of this story erroneously listed Kitchener’s 2010 voter turnout as 24.5 per cent.

Jay Aissa’s wife Natalie lends voice to election day robocall

The campaign to elect Jay Aissa Waterloo Regional Chair enlisted Aissa’s wife, Natalie, to voice the anti-LRT candidate’s election day robocall:

“Every person who knows Jay, knows him to be a sincere, fair and honest man,” Natalie said of her husband.

There was no mention of the Aissa camp’s regional debt projection in the call. Most of Aissa’s messaging claims the region will be $1.5 billion in debt by 2024, which was proven inaccurate.

It appears annual debt repayments were omitted from the figure, which was based on the 2014 to 2023 capital plan. The annually reviewed spending framework calls for the possibility of taking on $1 billion of debt to pay part of the bill for $2.6 billion in projects.

With debt repayments, the actual debt owing by 2023 would be closer to $755 million, said Angela Hinchberger, the region’s director of treasury services.

“We are currently working on our 2015 to 2024 capital plan, and we are making significant changes in terms of timing of expenditures, other financing sources and we expect to actually issue less debt,” Hinchberger said.

Polling stations close at 8:00 p.m. tonight.

Niki Allerton’s campaign attacks of Scott Davey over Kitchener’s debt are unfounded

It recently came to my attention that a candidate for Kitchener city council in Ward 1 used my name to apparently try to discredit an opponent.

First, Niki Allerton wrote on her campaign Facebook page that she is concerned about Kitchener’s financial position and seemed to imply that incumbent Scott Davey – chair of the finance committee for the last three years – is somehow responsible for debt increases during the 2010 to 2014 council term.

Here’s Allerton, quoted unedited.

“The incumbent has shown forecasts of our debt going down without any source or details …”

“…our debt has gone UP by over $20 MILLION DOLLARS in the last 4 years!”


“…it’s time for someone with ACTUAL experience in banking and finance who can deliver efficiency AND value for your tax dollar.”

And later in a reply, she used my name:

“So Scott Davey tweeted that his source for the projection is Mike McCulloch… so let me get this straight: Our chair of finance has the Rogers debate moderator doing his financial projections for him?”

Again, the entire bizarre post is here. For the record, Allerton claims she was in no way trying to use my name to discredit Davey.

I wasn’t going to get involved in the high school-educated former banker’s apparently misleading campaign. However, when a candidate decides to use my name for political gain, they cross a line and I am left no choice but to set the record straight.

In order to understand the city’s current debt position, it needs to be viewed through the context of recent history and a full-slate of facts needs to be presented. Not just the convenient ones.

In 2004, after thorough public consultation, City of Kitchener council approved a $110 million stimulus package called the Economic Development Investment Fund.

The city funded EDIF through $89 million of debt and $21 million in tax levy increases averaging 1.22 per cent each year of ten years. From 2004 to 2013 the city issued $8.9 million in debt each year and raised an average of about $2 million in taxes to help pay for a number of strategic investments.

EDIF was designed to breathe new life into the city with emphasis on reviving the downtown core.

The stimulus package was originally approved by the 2003 to 2006 class of Kitchener council including mayor Carl Zehr and councillors Berry Vrbanovic, John Gazzola, Geoff Lorentz, Michael Galloway, John Smola and Christina Weylie. The vote was 6-1, Gazzola registered the opposing vote.

Rod Regier, the city’s director of economic development, recalls the economic climate in 2004:

“The Canadian dollar was rising dramatically against the US dollar, our manufacturers were losing market share, we were seeing a significant decline in manufacturing; and our only other plan was to build more industrial land and sell it to manufacturers from outside the region. We knew that was not going to happen.”

To top it off, downtown Kitchener was, as Regier said, “dramatically under-performing the rest of the city in terms of growth, job creation and its financial contribution to the city.”

“Dozens of vacant store-fronts, nobody wanted to live downtown, nobody wanted to be downtown,” Regier said.

Under the leadership of Carl Zehr and successive terms of council, the city made several key investments:

  • $30 million toward the University of Waterloo School of Pharmacy
  • $6.5 million for the Wilfrid Laurier University Faculty of Social Work
  • $32.5 million for major expansion and renovation of the Kitchener Public Library main branch, including parking
  • $13.9 million for centre block development, including land acquisition and demolition of the condemned Forsyth building
  • $5.5 million for a yet-built centre block parking garage
  • $5.1 million to redevelop the downtown streetscape
  • $2.7 million for Victoria Park improvements
  • $500,000 invested into the Communitech Hub

Complete EDIF spending breakdown on slide two of this .PDF file.

The EDIF investments acted as a catalyst and sparked private investment. In the 2014 EDIF impact analysis, the city said between 2010 and 2012, there were 863 startups associated with the Communitech Hub and 60 companies established through the University of Waterloo’s Velocity program. The Hub helped attract $350 million in investments while Velocity startups netted over $100 million in funding.

As startups graduate from the Hub, they are creating demand for office space. This has helped lead to private investment by Perimeter Development, among other substantial projects, to redevelop the Breithaupt Block. The development recently landed high-profile tenants in Square and Motorola, and it’s where Google is building a 200,000 square foot office facility.

EDIF investments have also made downtown Kitchener more attractive for large residential projects, first with the development of the Kaufman Lofts. More recently, large 17 and 19-storey condo towers City Centre and One Victoria broke ground. The city says these two projects alone will combine to generate about $450,000 a year in City of Kitchener property tax revenue.

“EDIF was transformative; it allowed us to be real partners in the development of a new economy. Without EDIF, we might have been whistling Dixie,” Regier said.

“Carl [Zehr] has provided absolutely invaluable leadership of the whole process, from conceptualization to the implementation,” Regier said.

With EDIF related debentures leading the way, Kitchener’s debt peaked at $112 million in 2013, the last year of the stimulus program.

Scott Davey, chair of the finance committee said he is, “ecstatic the debt is declining now for the first time in decade.”

“Based on the 2014 budget, Kitchener’s debt will continue to decline without the need to raise taxes one penny,” he said, “and by next year, the city’s debt should be $93 million.”

“The debt isn’t a beast that needs to be slayed. It’s something that has already been dealt with,” Davey said.

This City of Kitchener graph demonstrates how the city’s debt is projected to drop through 2023:

Kitchener debt projection
City of Kitchener projected total debt outstanding. (Kitchener financial planning department/ 2013 capital budget)

Download EDIF and debt related slides from the 2013 capital budget.

By the end of 2015, Kitchener’s debt per household is expected to drop below $1,000 – the upper threshold of the moderate range.

Meanwhile, the city has a brand new and burgeoning economic engine, improved assessment growth and rapidly growing population in the core.

While there is no doubt the EDIF investment is now delivering major economic returns to Kitchener and the greater region, the decision to take on $8.9 million in debt every year for the last ten years was made two councils and six years before this current group of eleven representatives sat down around the horseshoe.

Davey and his peers had little they could do about the city’s debt level when they took office in 2010; but ride the wave and try to stay afloat.

Director of financial planning, Ryan Hagey said:

“The current council had very limited ability to adjust the EDIF levy as it was part of a much bigger program that was put in place before they were elected.”

In closing, voters should be wary of misleading campaign material. In the age of spin, candidates are likely to attempt to present parts of facts that cast doubt onto the competency of their competitors.

Ask yourself, do you want a councillor who will tell you half the truth to get what they want?

It’s an important question.

There is no question, however, that Kitchener’s EDIF related investments in the core have transformed the city’s economy for the better.

Questions over the value of taking on debt to fund the historic economic stimulus package are long since answered and their onus does not belong to the 2010 to 2014 term of council.

They are however, as the 2014 to 2018 group will be, responsible for managing the debt.

Allerton was unable to be reached for further comment before this story was published.

Two other candidates are running in Kitchener Ward 1, Marcus Drasdo and Wayne Reihl.

‘A wolf is at our doors,’ analyzing Jay Aissa’s apparent attack ad

The campaign to elect Jay Aissa to Waterloo Regional Chair is running an apparent attack ad against Ken Seiling in the lead-up to Monday’s municipal election.

The Waterloo business owner’s latest ad – described by his team as a “political ad,” – seems to refer to Ken Seiling as “an old wolf,” and prominently features sound effects of the animal howling and growling.

Aissa’s ad:

Jay Aissa’s communications lead Ron Bowers said via email that Aissa is unavailable for comment on the content of the ad today as he is in outside meetings.

However, Bowers said the wolf reference is not aimed at Seiling.

“The Wolf is at Our Doors ad is clearly making reference to the Wolf being the LRT.  No where does this ad refer to Ken Seiling being a wolf,” he wrote.

Bowers stopped short of describing the piece as an attack ad.

“It’s a political ad asking the people of the Region to vote for Jay Aissa,” Bowers wrote.

The ad is in-line with other Aissa campaign material, in that it again states that regional debt will balloon to, “well over $1.5 billion,” in the next ten years.

In my capacity as a journalist, I have proven in a balanced and thorough investigation that this claim is categorically false.

As uncovered in the piece, Aissa’s figure is based on the 2014-2023 capital plan and appears to omit annual debt repayments. The region’s actual projected net debt level, even if councillors go ahead with 100 per cent of possible borrowing, is actually $755 million according to Angela Hinchberger, the region’s director of treasury services.

As a point of contrast to the Aissa ad, have a listen to Seiling’s spot.

There are five other candidates running for regional chair including Moira Magee, Oz Cole-Arnal, Robert Milligan, Paul Myles and John Wolf.

Fact check: Jay Aissa claims Waterloo Region’s debt to hit $1.5 billion by 2024

“The $1.5 billion is really a number pulled out of mid-air,” Region of Waterloo budget committee chair Tom Galloway.

With five days until Ontarians elect new municipal councils and school boards on October 27, it’s time to question some figures presented as facts in a series of advertisements commissioned by the Jay Aissa campaign for Waterloo Regional Chair.

The anti-LRT business owner behind a halted court injunction to stop the Region of Waterloo’s Ion rapid transit system is one of seven candidates running for the region’s top elected job, including incumbent Ken Seiling.

Aissa’s ads claim the Region of Waterloo is projected to be saddled with $1.5 billion of debt by 2024. An alarming figure to be sure.

But where does the number come from? Is it accurate?

In short, no.

Aissa’s claim is nearly double what the region projects.

Now, the long answer. Continue reading

New Jay Aissa robocall claims LRT can be stopped, infuriates resident

Waterloo Region resident Jennifer Adams is upset over a “disingenuous,” robocall she received from the Jay Aissa campaign Monday afternoon.

The message claims the “LRT is not a done deal, as [Ken] Seiling would have you believe. You will have the last word on the future of the LRT,” the pre-recorded message states.

“That’s outrageous,” Adams said as she finished playing back the message over the telephone on Tuesday afternoon.

“I think [the robocall] is disingenuous. I think that it’s the worst kind of Republican-crap that we need to get rid of in Canada.”

“If you have an alternate argument to present, fine. Present it accurately. But no-one is going to be able to get out of the contracts that have been signed, the arrangements that have been made without it costing more than the LRT is going to cost,” Adams said.

Municipal elections will be held on October 27 across Ontario to select new municipal councils and school boards.

Aissa is  is one of seven people running for the Regional Chair position, including long-serving incumbent Ken Seiling.