Torontonians could see a nearly two-per-cent property tax increase next year if the proposed city budget gets the green light.

The 2013 capital and operating budgets were unveiled at city hall on Thursday.

The $9.42-billion operating budget will be balanced if Toronto Police meet the city’s savings demands.

The operating plan includes a 1.95-per-cent residential property tax increase to bring in $33 million — Mayor Rob Ford was aiming for a 1.75-per-cent hike instead.

And a 0.65 per-cent non-residential tax increase is being proposed to bring in an additional $13 million.

The staff-recommended budget states any shortfalls in the 2013 operating budget shouldn’t rely on surplus but should be made up through tax increases or cuts. However, there will be a one-time use of $47 million in surplus funds next year.

The city is currently studying how to find savings in various departments, including Toronto Fire, EMS, court services, children’s services and museums.

The city has proposed cuts in other areas. Fire services staff reductions could save just over $6 million and the TTC could save $4.5 million by scrapping WheelTrans service for ambulatory dialysis patients.

A five-cent TTC fare hike also takes effect Jan. 1, 2013.

Read the budget plan here.

The proposed capital budget would include up to $500 million in new spending, with $25 million earmarked next year for repairing the Gardiner Expressway.

Also on Thursday, city council is tying up loose ends on the third straight day of its monthly meeting.

On Thursday, councillors debated and then voted in favour of a nine-per-cent water rate hike that takes effect Jan. 1, 2013.

For the average household consuming 300 cubic metres a year, a nine-per-cent hike would represent an increase of $67 to $814 in 2013 from $747 in 2012.

Even with the yearly hikes, “Toronto is amongst the lowest water cost jurisdictions for residential consumers in southern Ontario,” a Toronto Water staff report stated.

Rates in Toronto are lower than other parts of the GTA, such as Vaughan, Markham and Richmond Hill.

Coun. Mike Layton attempted to increase financial penalties for companies that pollute, but his motion was defeated.

Coun. Shelley Carroll tweeted after the vote, “So you will pay more for Wwater Aagain but businesses no longer have to pay for their own pollutants. I voted against.”

Councillors adopted a motions to pin down priority locations for high-resolution security cameras on Toronto Community Housing properties, and use QR (quick response) codes for smartphones on city signs, in buildings and parks.

A court ruling ordering Mayor Rob Ford out of office garnered the spotlight at city hall on Tuesday, when the city’s top lawyer outlined various scenarios depending on the outcome of his conflict-of-interest appeal. An application for a stay of the order will be heard Dec. 5, and the appeal will be heard Jan. 7.

Read our full Rob Ford coverage.

On Wednesday, councillors voted down a proposed ban on retailers handing out plastic shopping bags. They also voted to leave holiday shopping rules in their current state. There was a proposal to allow all stores to open for business on Victoria Day.