Homeowners in Edmonton are facing a 3.6 per cent property tax increase for 2018, the city said Thursday.

The proposed increase is lower than the 5.0 per cent increase that was expected when council last reviewed budget numbers in April.

The city released its 2018 supplemental operating budget adjustment Thursday. 

"We're headed in the right direction," said Coun. Tim Cartmell.

"Really, this is the tail end of a four-year budget cycle, so changes are modest," he added. 

Linda Cochrane and Todd Burge

City manager, Linda Cochraine and chief financial officer, Todd Burge, said Thursday that 1.1 per cent of the tax increase is to maintain and add new city services. (CBC)

City manager Linda Cochrane and chief financial officer Todd Burge said the tax increase is necessary to cover growth in infrastructure and services, neighbourhood revitalization, the Valley Line LRT and inflation and growth for police services.

"It's obviously better than what we had originally approved a few years ago," Coun. Andrew Knack said.

He said council will look at the budget adjustments in depth next week and see if there are other areas where they can find savings.

"There's not a lot of flexibility beyond what administration has already found. So I think for us, really, the goal is to say, 'Let's not add to it,' " he said.

"I'll never say never but it's certainly going to be tougher to find that."

The Neighbourhood Renewal Program has been a big part of the property tax increase over the past 10 years, Knack said. That program is in its final year.

Tim Cartmell

Coun. Tim Cartmell said it's unlikely the city will be able to lower the tax hike even further this budget session. (CBC)

Councillors and city administrators said the new budget cycle next year will give them a fresh start to focus on modest, if any, increases in property taxes.

Offsetting the need for more money in those areas, the city said it has realized more than $47 million in "savings and efficiencies," nearly $15 million more than the savings achieved last year.

The budget adjustment includes $20 million coming from Epcor. "These increases are offset by a 1.3 per cent tax decrease related to the incremental Epcor dividend resulting from the transfer of drainage services from the City to Epcor," the document says.

Council is scheduled to review the budget supplement at a meeting Nov. 14, ahead of budget debates starting Dec. 6.