Toronto Mayor David Miller says the city will have a balanced budget by 2011 thanks to a budget surplus.

He told a news conference the surplus will be used to keep a planned four per cent property tax hike at 2.9 per cent instead, and to forestall another transit fare increase.

Miller said more accurate accounting revealed a $350-million surplus from 2009 - $100 million more than had been forecast.

He says the surplus resulted from cost controls, wage restraint and higher returns on investments.

Miller also said the city is now taking steps toward adopting a two-year budget plan instead of a one-year blueprint.

He says the city's budget committee will meet this week to draft a long-term spending plan for the country's most populated city.

Miller's office had described the announcement as “important” and invited television crews to bring their satellite trucks, sparking media speculation that he might leave office early.

Miller said last fall that he would not seek a third term.

There are more than a dozen candidates in the race to replace him in the Oct. 25 election, including former deputy premier George Smitherman.

Rocco Rossi, the former national director of the federal Liberal party, is also running.

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