Standard and Poor’s bond-rating service is watching Barrie closely – especially as the city reaches buildout and relies on intensification to boost its tax revenue.

In a report released to city council June 30, the company commented on the city’s economy, but also on its politics – and the city’s inability to negotiate a boundary change with Innisfil.

“Barrie’s economic prospectus could be affected by a relatively small and diminishing supply of good-quality land for new developments. Growth will depend on the city’s ability to use intensification strategies and obtain additional land through agreements with neighbouring municipalities. Although Barrie is actively pursuing negotiations on the matter, it hasn’t yet made substantial progress,” wrote credit analyst Yousef Siddique.

Growth is costing the city, however, as the city issues debt to finance a variety of capital projects.

“This expenditure will put an end to the city’s long history of extremely low debt,” he said, as he reaffirmed the city’s AA rating, with a stable outlook. “We will closely watch Barrie’s debt profile.”

As of Dec. 31, 2007, the city’s debt was $15 million, said city treasurer Sharyn Ross.

This year, however, the city will issue $40 million in debentures for a series of projects – including the Holly Recreation Centre, the city’s contribution to the return of the GO train and the Collier Street parking garage.

Municipalities issue debentures to fund projects after they are completed; this year, projects underway include an $81-million upgrade to the sewage treatment plant, $25 million for a bio-solids plant expansion and $150 million for the surface water treatment plant, which will treat lake water to drinking-water standards for the city’s south end.

Other projects include work at the landfill site, as well as upgrades to the Lakeshore Drive sanitary sewer – a project that is $11 million over budget.

Once those are wrapped in, the city is expected to use up 73 per cent of its provincially imposed debt capacity.

The bond-rating service gave the city good marks for its economic base, which is diversifying as the city becomes more tied into the Greater Toronto area through improving roads and public transit, including the return of the GO train just before Christmas.

“The recent rail service re-introduction from GO Transit will further strengthen the integration, providing employment opportunities to the city’s residents, spurring population growth and stimulating private commercial activities,” Siddique added.