Saint John is pushing forward with its 2011 budget on the assumption the provincial government will agree to relax pension rules, according to Mayor Ivan Court.
The city would like to delay topping up its employee pension fund, which faces a $129-million deficit, but that requires permission from the provincial government.
City workers are already facing wage freezes and the watering down of their pension benefits as the city tries to tackle the fund's massive deficit.
If the provincial government does not come through with the changes, Saint John property owners could face a tax hike combined with cuts to services as the city tries to make up the extra $8 million to $10 million.
But Court said on Tuesday that he believes those drastic measures won't be necessary.
"We're planning on concessions being made. We're hoping that the cabinet will do the right thing. It doesn't cost them anything," Court said.
"Allow us to consolidate, allow us an extension to 25 years, and allow us to defer for one year. And that happens in other jurisdictions. So it's not something new, it's not something that's going to cost the government anything, but it's going to save the taxpayers."
The council's decision came following a statement by Premier David Alward in late December that he couldn't guarantee he'd have a decision before the city's 2011 budget vote.
Saint John council voted to ask Saint John Harbour Tory MLA Carl Killen, who left his council seat to run for provincial politics in September, to sponsor a private member's bill to allow the necessary pension reforms.
Saint John's pension deficit is increasing by about $750,000 a month.
In November, the city said it was at risk of having assets seized if it does not make an overdue $5-million payment on its pension fund.