Rather than sharpen the knives and commit to cuts, city council on Wednesday decided instead to ease Ottawa's budget crunch by shuffling around the one-time monies coming courtesy of the provincial government and the sale of Telecom Ottawa.

On the day that was supposed to see council finalize the 2008 city budget, a budget that included a 4.9-per-cent tax hike as well as other increases to user fees, city treasurer Marian Simulik told council the tax hike may have to be closer to 7.7 per cent.

By the time the dust settled, that figure was scaled back to 5.4 per cent. City council will continue to ponder additional ways to reduce it further Thursday before finalizing the budget.

To arrive at 5.4 per cent, council decided to apply at least $10 million of the infrastructure cash coming from the province to make up some of the $23-million deficit in the city's snow removal budget. Another $12 million to plug the hole will come from the sale of Telecom Ottawa, which is expected to wrap up early next month. However, to get at that money now, the city will have to borrow against reserves and pay it back in 2009.

Council decided to take that route after quashing Mayor Larry O'Brien's proposal for a one-time $50 snow removal levy. Ms. Simulik told council the city is not legally allowed to charge such a levy. A proposal to reopen the entire budget and look for as many as 200 job cuts was also rejected by the majority. In the end, most councilors believed it was better to wait till the end of the year for the final word on the city's budget shortfall before taking more drastic action.

A handful of councilors and the mayor weren't happy with the outcome, especially with the plan to redirect provincial infrastructure money at a time when the city has complained that it can't keep up with infrastructure repair.

"I don't think the most prudent decisions were made for the City of Ottawa today," Mayor O'Brien said.

"We have already built a lot of risk into this budget, and what we did today just adds to that," Alta Vista Coun. Peter Hume told local media. "I think what we did is going to make things tougher next year, and we might find ourselves staring in a hole with little flexibility to get out of it."