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.