By Laurie Watt 

Barrie’s most-ambitious construction program is setting the city up for a financial challenge – reassuring bond raters the city’s not borrowing too much, and not raising taxes enough – city CAO Jon Babulic warned council this week.

In his third-quarter report, Babulic highlighted the city’s “unprecedented” investment in renewing roads, bridges, sewers and watermains.

“That is unprecedented. Previously the largest expenditures were under $100 million and typically, about $80 million. There is a significant catchup this year,” he told council Monday in his third-quarter report.

“If we look at 2009, the work will total $180 million, and a lot of that work, it would be impossible to stop it. Next year, you will see our performance in meeting targets will be sterling.”

The city had set its most ambitious capital budget ever this year; it called for work on almost $232 million worth of projects, some carried over from last year.

This year, the to-do list included the twinning of the Big Bay Point Road bridge, repairs and expansions to Mapleview Drive and Anne Street, the realignment (and new water and sewers underneath) of Lakeshore Drive, a $100-million expansion to the sewage treatment plant and the beginning of the $150-million surface water treatment plant and its associated low-lift pumping station on the city’s south shore.

But that comes with a price tag. And the city’s plan is to issue debentures, rather than raise taxes.

Standard and Poor’s did note the municipality is “borrowing money at an unprecedented rate,” acknowledged Babulic.

“For us, it’s a different track, driven by the two necessary projects (the sewage treatment plant and water treatment plant). In their mind, our taxes have not kept pace with our spending. It’s a cautionary note at this stage,” he said.

Details must still be finalized on the 2009 construction program, although some projects (particularly the sewage plant and the water plant) will continue next year. City council is working to approve its capital and operating budgets before Christmas and details on next year’s agenda should be released shortly.

Councillors, however, are concerned the economic downtown will emphasize the need to minimize a tax hike.

“The overall concern is the potential for a tax increase is there when people can least afford it,” said Ward 7 Coun. John Brassard.

Babulic acknowledged the economic downturn will affect the city, but the city must also work to expand its boundaries and bring new business to Barrie, to insulate homeowners from tax increases, and to bring in new investment and more in development charge revenue.

“Our growth economy is becoming more limited and we need to find ways to monitor the level of service. You cannot slash and burn your way to prosperity,” he said.