Ottawa Mayor Jim Watson says he's keeping his election promise to keep the annual tax increase at no more than 2.5 per cent in the upcoming budget.

A 2.5 per cent property tax hike would mean the average homeowner would have to add an extra $77 to their bill.

Watson says keeping his campaign pledge will mean some tough decisions when it comes to funding for some of the city's services.

"As a council, we understand the importance of living with a tighter fiscal environment. Families in our communities live within their means, and they rightfully expect their municipal government to do the same," Watson said during a speech to the Ottawa Chamber of Commerce on Tuesday.

The mayor says families in Ottawa can't afford to pay any more in property taxes, which means some belt-tightening will be necessary.

"Families want us to hold the line on taxes and we need to make the right decisions now," he said.

However, user fees aren't included in the property tax bill. Water fees alone are set to go up 4.5 per cent, which means the average water bill will be $540.

The city's budget will be tabled on Wednesday.

Residents will have the chance to provide feedback at a town hall meeting on spending control which will be held March 1 at 7 p.m. at Ottawa City Hall. Public consultations will also be held across the city in February and March.