Woodhall Spa Parish Council has voted to increase its share of council tax bills in 2015 to help pay for a Neighbourhood Development Plan.
The rise - which equates to around 46p for an average Band D property - will come on top of anticipated increases in County Council, District Council and Lincolnshire Police Authority levies.
The parish council has set aside £10,000 towards the cost of a development plan, a document which has led to fierce criticism in neighbouring Horncastle.
However, councillors have rejected the idea of taking responsibility for the public toilets in the centre of the village amid fears that would have led to a much bigger increase in bills.
Parish clerk Amanda Bushell revealed the council had applied for a grant to help fund the cost of the development plan.
However, she said the council had yet to hear whether the application had been successful.
As a result, she said councillors had voted for the ‘small increase’ in tax bills.
She said it was hoped bills would not have to go up again in 2016 - provided the grant funding comes through.
The precept - the amount the council needs to raise to cover projected expenditure in the coming 12 months - has been set at £54,100.
The figure for the last financial year (2013-14) was £53,040.
That equates to a 3.5 per cent increase. That means the parish share of bills for a Band D property will go up from £34.35 to £34.81.
Neighbourhood Plans are proving to be a highly contentious issue.
A steering committee responsible for Horncastle’s plan has been forced on the defensive amid criticism it does not identify specific development sites.
Woodhall Spa’s plan will also be none site-specific.
The problem for all local councils is that ELDC has still to reveal housing supply numbers for towns and villages.
That, in turn, means council do not know how many sites need to be identified for potential housing,
Meanwhile, Mrs Bushell confirmed the increase in tax bills would probably have been higher, if the council had taken responsibility of the public toilets in Spa Road.
The council has been in discussion with ELDC about the future of the toilets which are seen as a key part of the village’s tourist economy.
However, Mrs Bushell said councillors felt the cost of maintaining the building would be excessive.
She explained that if the council had taken responsibility, it would have added to increase the precept.
She added: “That means we would be asking residents to pay for something that they probably don’t use much themselves.
“Councillors did not think that was fair. We are aware the toilets are well used but mainly by visitors.”
Mrs Bushell admitted the future of the toilets was in doubt but she said ELDC had still to indicate whether they would close permanently.
She said the parish council hoped to have further discussions with ELDC about the toilets. She also confirmed talks were continuing about the future ownership of Royal Square.