Barrie maintains good credit rating

By Janis Ramsay Barrie Advance Mar 02, 2011

BARRIE – Barrie was given the thumbs-up to keep borrowing money at a low interest rate.

Standard & Poor’s, a company that reviews municipal finances, gave the city an AA-Stable rating when reviewing its credit situation.

On the plus side, the report said the local economy is diverse and fared better than other municipalities over the past few years. However, the company had a concern with the city’s increasing debt load.

Two big projects stand out among the rest: a surface water treatment plant and water pollution control centre expansion.

The city spent $75 million on the water pollution control centre, an amount to be repaid over 20 years ending in 2030.

And over the course of this year, the city will spend $150 million on the water treatment plant. It will take 40 years to repay that debt.

The Standard and Poor’s report said the city’s growth potential, which will follow with more taxes being paid, would balance the financial situation.

And as council approaches budget talks, members are ready to slash projects.

“We have to make sure the city is running in a conservative way,” said Ward 5 Coun. Peter Silveira.

He frequently questions the way council spends taxpayers’ money.

“(Standard & Poor’s) is worried about if Barrie is going to be able to pay the deficit, and what council has to do is the balances and checks,” he said.

Bringing more jobs to Barrie will help ease the strain to the city’s bottom line, said Silveira. “When more companies come to Barrie, we’ll have more revenue. We have to make sure this happens.”

Mayor Jeff Lehman said the city has a policy not to borrow more than 18 per cent of what it makes in a year. And last year, it only borrowed 4 per cent.

“But this will increase in the next few years as we issue debt on the surface water plant and the pollution control plant,” said Lehman.

To put it into terms residents can understand, Lehman compared it to a mortgage. He said if Barrie only earned $40,000 a year, our mortgage loan could only go as high at $10,000 a year. Given those figures, Lehman said last year’s payments would have cost $1,600 total. “I think most people would be pretty comfortable with that level of debt,” he said.

Lehman said staff lowered the city’s income predictions to ensure a comfortable financial future.

But that also means saying no to some of the big-ticket budget items this year.

“While we actually need to spend more than we have been on fixing roads and pipes, we need to take a very hard look at other projects to ensure we’re making fiscally responsible decisions,” he said.