City council passed its annual budget Monday night, a month after it was voted down with a 3-3 split vote in the absence of Coun. Dave Austin.

Coun. Doug Graham registered the only opposition last night in the 5-1 vote. He maintained his belief that council didn't need to include a two-per-cent increase in property taxes.

Coun. Mel Stehelin was absent.

The 2004-2005, $54.4-million budget calls for $28.6 million in expenditures to cover annual operation and maintenance cost, as well as $25.9 million in capital expenditures, including $13.9 million for multiplex construction.

When the budget went before council for approval last month, Graham and councillors Yvonne Harris and Mel Stehelin voted against it, forcing the tie vote. Bylaws, resolutions and motions before council can only be approved by a majority.

Graham and Stehelin expressed concern with the tax increase. Harris explained she registered her opposition because council had not provided what she felt was enough support for the city's transit system.

Harris did receive a concession from council last night when she proposed an amendment that would see an additional $10,000 taken from the transit reserve fund and placed into the transit department's capital budget.

The money, Harris told council, can be used later to assist the city's recently-formed transit review committee with research costs and consulting fees.

'Ten thousand is not a lot of money, but it will help,' she said.

Harris' motion passed with a 4-2 vote.

Mayor Ernie Bourassa and Graham voted against it. They suggested it was unnecessary because council could take the money from the reserve fund later in the year if the transit review committee indicated it was needed.

While Coun. Dave Stockdale agreed it wasn't necessary to make the $10,000 a line item in the transit budget, he supported the motion.

'It is a show of good faith,' Stockdale said.

Council has come under heavy criticism for last year's cuts to transit services.

Graham also cautioned council that it had better start taking a serious look at the annual operating and maintenance costs of running the city.

The additional cost of operating the multiplex is coming on-line soon, and the city had best be prepared for it, Graham cautioned.

'Unless we start looking critically at our budget, we are going to be in trouble.'

Graham told his council colleagues it's not the capital spending they should be worried about, but the day-to-day costs of operating the city.

This year's $28.5 million O & M budget represents a 3.25-per-cent or $900,000-increase in operation and maintenance costs for this fiscal year.

The capital budget has more than doubled from the $11.5 million set aside for this fiscal year due to the addition of the multiplex project.

In addition to the multiplex, other large capital projects include the $2.5- million replacement of the fire hall on the top of Two Mile Hill and $1.8 million for phase-one development of the old Motorways trucking property along the waterfront.

A further $681,000 has been earmarked for more work on the Shipyards Park. There is also $2.2 million for road improvements in the city, such as the construction of a traffic circle at the intersection of Fourth Avenue and Robert Service Way.

Another $500,000 has been set aside for computer replacement and licensing and replacement of software.

In addition to the two-per-cent boost in property taxes, the city is raising water and sewer fees by two per cent. There will be increases in users' fees for the swimming pool and arenas as well.

Tipping fees at the dump are also going up, in some cases by as much as 100 per cent.

The fee for one pickup load of construction waste will be going from $8 to $16, for instance, though a pickup load of residential solid waste, excluding construction materials, is increasing to $5 from $4.