The City of Winnipeg is pitching a property tax increase of 2.95 per cent to support its major budgets of $1.35 billion.

The tax bump works out to about $45 more on the average homeowner’s bill — based on a home assessed at $262,780 in 2014.

The city on Friday tabled a proposed operating budget of $967.8 million and a capital budget of $379 million.

The latter covers the city's spending on infrastructure matters like roads, buses, bridges, buildings and sewers.

City council reviews the city's preliminary budget on Friday. (Sean Kavanagh/CBC) The operating budget covers the expense of running city services — everything from the police service to garbage pickup and recreation facilities.

It’s the third consecutive year the city has increased property taxes after 13 years of holding the line. Since the freeze melted, homeowners have seen their taxes go up by 3.5 per cent, 3.87 per cent and now, if approved, 2.95 per cent.

Of the proposed tax increase for the coming year, one per cent will be dedicated to a new Regional Street Renewal Reserve. That will generate $4.7 million in new revenue as the city flexes its road-rebuilding muscles.

Mayor Sam Katz said a total of two per cent of the 2.95 per cent hike would go to infrastructure funding.

"That is 100 per cent transparent. All of those monies go to that infrastructure," said Katz.

The capital budget calls for $48.9 million to be spent in 2014 on fixing local streets and $35.3 million on fixing regional streets. Together, the $84.2 million is a 173 per cent leap ($53.3 million) in spending over 2012.

The city lists the priorities for spending in the next year as:

Fixing city streets

Investing in parks and recreation

Rapid transit

Improving public safety

To that end, some operating budget highlights include:

Increasing the Winnipeg Police Service budget by $20 million (8.6 per cent) to $257.9 million

Increasing the Fire Paramedic Service budget by $4.8-million (2.9 per cent) to $167.6 million

Increasing the snow-clearing budget from $31 million to $32 million.

An increase of $300,000 (11 per cent) for library materials

Increasing the city portion Winnipeg Transit’s operating budget by $47.6 million (3.8 per cent)

Doubling the aboriginal youth strategy to $2 million

Reducing the business tax to 5.7 per cent from 5.9 per cent

The city is also looking for efficiencies and cost savings in its own operations and to that end, is scaling back every councillor’s ward allowance by $37,000.

City mandates unpaid leave for some workers

It is also mandating unpaid leave of 3.5 days between Christmas Eve day and New Year’s Day for non-essential services. That is expected to save $1.5 million.

CUPE's Mike Davidson angrily reacts to proposal for a mandated 3.5 days off between Christmas Eve and New Year's Day proposed in the City of Winnipeg's preliminary budget on Friday. (Darren Bernhardt/CBC) Coun. Scott Fielding said he supported that motion, as not much business was done by the city during that time period.

But CUPE's Mike Davidson was not happy about the motion and sounded off about it after the plan was revealed on Friday.

“At Christmas time, this is going to dig us deeper in the hole in terms of how we can deliver services to citizens of Winnipeg,” said Davidson. “It’s really hard to accept when you see that we have cost overruns.”

Davidson was referring to the recent handling of the fire hall land swap deal and the construction of the new police headquarters on Graham Avenue, which both saw cost overruns. The land swap deal was also the subject of a scathing audit report that cited gross mismanagement by top City of Winnipeg officials.

“What’s going to happen? Are arenas going to be shut down? Is 311 going to shut down?” said Davidson. “These are all questions that I think citizens have a right to know, and I think they should be talking to their councillors and telling them that they value public services.”

City councillors sound off

Coun. Paula Havixbeck came down on the same side as Davidson. She said councillors' ward allowances should be cut by $50,000, and there should be equal cuts in the mayor's office, where she said things are staying status quo.

Coun. Scott Fielding tells reporters he supports mandated time off for some city workers proposed in the city's preliminary budget on Friday. (Darren Bernhardt/CBC) “[There are] nearly $100 million of overexpenditures due to mismanagement, incompetence or perhaps corruption, and we are going to put this on the backs of taxpayers?” said Havixbeck.

Havixbeck said the 3.5 mandated days off were "ludicrous," adding if the city was practising true fiscal management, those savings would have already been made.

"Overall I think this is a complete embarrassment for this mayor and for this executive policy committee,” she said. “I think it is a complete sham."

Coun. Russ Wyatt tempered those concerns by saying choosing what to cut wasn’t easy.

“We have to find savings, and we have to find efficiencies in our existing operations,” he said. “There is no doubt those are not easy decisions.”

City positions to be cut

The preliminary budget also called for the elimination of 25 city positions, but it remains to be seen if anyone will be out of a job. The city is hoping to cut most of the positions through attrition and by not filling current vacancies.

It also expects to save $14.1 million through management vacancies in various departments city-wide.

In addition to the focus on road repairs, some of the capital budget highlights include:

Boosting the budget for athletic fields improvement to $1 million from $200,000

Doubling the funding for the active transportation corridors to $1 million

The city is also creating a new Parks and Recreation Enhancement Program by amalgamating two former programs. It is also increasing the budget for the new program to $6.3 million from $3.3 million last year.

Taxpayers react

Winnipegger Lisa Richard has lived in her River Heights neighbourhood for 15 years. She said she loves everything about it – except for the high taxes.

“I already find that our property taxes are pretty high, so [a tax hike] doesn’t make me very happy,” she said. “Kids already cost a lot of money, so when property taxes go up it adds to the household expenses.”

Homeowner Maureen Neudorf agrees but said she understands the city needs to fix crumbling infrastructure.

“We need things – our roads need help,” she said. “It’s kind of hard when everything’s going up, but I understand it has to happen.”

Neudorf said it is a bit hard to swallow when projects are being mismanaged and cost overruns are eating up tax dollars.

The Canadian Taxpayers Federation agrees.

“The roads are terrible because the mayor doesn’t make them a priority. Every time a luxury project comes along, he finds money for it,” said Colin Craig, who heads up the Manitoba faction of the group. “Someone wants to expand the Convention Centre? He finds money for it.”

Craig said the hike in taxes is just a way for the city to compensate for its own mismanagement.

Fielding, who has hinted at a possible mayoral run in next year’s election, said he would’ve rather seen the money raised without hiking taxes.

“I think you can do that by using internal dollars to fund the infrastructure that’s there and put more money in while freezing taxes,” he said.

Council will vote on the proposed operating and capital budgets on Dec. 17.