Whitehorse taxpayers could be paying more on their municipal bills this year, as the city's latest operations budget is calling for property tax and water and sewage rate increases.

The 2011 operations and maintenance budget, which calls for a four per cent property tax increase, passed first reading at Monday night's council meeting.

The proposed tax hike would bring the average residential property tax bill to more than $2,100 this year. On top of that, the budget is calling for a 7.3 per cent increase in water and sewage fees.

City administrative director Robert Fendrick said the city wants to raise property taxes again over the next two years, in order to accommodate Whitehorse's growing population.

"We're predicting at this point a four, four and four [per cent tax increase], so four for 2011, four for 2012 and four for 2013 … largely due to the continuing growth and robustness of Whitehorse," Fendrick said Monday.

Coun. Doug Graham was the only city councillor to vote against the budget at first reading, arguing that the four per cent tax hike is unjustified.

"It's completely out of line, especially given the inflation rate over the last 10 years and then the same increases in taxes over the last 10 years," Graham told reporters.

Despite the proposed tax increases, Whitehorse residents continue to pay some of the lowest municipal taxes in Canada for a city of its size, according to city officials.

Transit route revamp proposed

The $63.4-million operations budget includes $276,000 earmarked for Whitehorse Transit to introduce new routes and make its current schedule more convenient.

"The new service is going to provide more consistent schedules, so if the bus comes to your stop at 10 after 4, it's going to come at 10 after, 10 after [and] 10 after," city transit manger Dave Muir said.

"The current schedule, based on a 35 minute loop system, is very confusing and basically requires you to have a schedule with you at all times."

The schedule changes will start on July 1. However, Muir said there will still be no transit service offered on Sundays.

The budget also proposes hiring two dispatch officers and an additional city firefighter.

"I think the average Whitehorse person is going to notice that the taxes went up as predicted," Fendrick said.

"They will also notice that they're going to get a new transit system out of it, and they're also going to notice that their fire service has increased."

City officials will hold a public meeting on March 14 so residents can give their feedback on the proposed budget.