Steinbach city council approved its 2017 Financial Plan Tuesday night. The $28.5 million budget includes a five percent tax increase. Mayor Chris Goertzen says all of the money from that increase will go to policing after the city passed the population threshold of 15,000 in the last census.

"There's $630,000 that is going to be raised through the mill rate increase and those monies are directly going towards the increase in costs for policing. Part of the contract with the federal government is that we move from 70% to 90% of the costs of RCMP in our community. We're happy with our RCMP but we have to pay an additional $630,000 this year and so that's included in the budget."

Goertzen notes two items in the budget are contingent on receiving grants from the provincial and federal governments.

"Those are the added water supply in the northwest corner of the city which is a $10 million project and the Performing Arts Centre where we've committed a maximum of $7.5 million. These won't proceed unless we get those partnerships. They are part of the Financial Plan, but really the bulk of what we have in the Financial Plan is about our day-to-day operations and the many other smaller infrastructure challenges that we're meeting this year."

Councillor Cari Penner moved approval of the budget.

"As councillors, we need to have a vision for the future. We need to think not just of today but also 20-25 years from now and what the needs of the city will be. We're the third-largest city in Manitoba and we need to step up to the plate when we plan for what the needs of the city are as far as, not only infrastructure, but recreational and cultural needs as well."

The Financial Plan was approved by a narrow margin of 4-3. Councillors Earl Funk, Susan Penner and Michael Zwaagstra voted against the budget. Zwaagstra explains that's because it contains funding for the Performing Arts Centre.

"There are many good components to the Financial Plan. In every financial plan there's a balancing act, but I fundamentally disagree with the largest capital item in the Financial Plan and that is the proposed $24.3 million Performing Arts Centre. I do not support the project at that scope and that was a very clear central part of the capital plan of this budget. And so, because I disagree with that central component, the largest component of the Financial Plan, I therefore voted against."