LEBANON — The Department of Human Services is seeking a 45% increase in its annual operating budget next year and added staffing to help serve an exponential increase in residents seeking assistance with housing, fuel and other needs.

On Wednesday, the City Council will hold a public hearing to consider a proposed operating budget of $115 million for next fiscal year, which begins Jan. 1.

The spending plan relies on $24.6 million in local property taxes. It includes $61 million in capital expenditures, including a new downtown fire station.

The new estimated city portion of the property tax rate would be $9.39 per $1,000 of assessed property value, or the equivalent of $2,347 in taxes on a $250,000 home.

(The municipal budget represents 37% of the revenues collected from the city’s local property taxes. Of the remaining tax revenues, 56% fund the schools and 7% pay for county services.)

The proposal increases total spending by 15% from the current fiscal year, including a 10% increase in the costs of personnel and departmental services. The drivers include significant increases in health and dental insurance and contributions to the public employees retirement plan.

The budget includes a $22 million bond to pay for a new central fire station across from Colburn Park.

The city’s Department of Human Services provides residents with rental assistance, temporary housing and access to programs such as food and fuel assistance. The department is requesting an increase of $302,000, for a total operating budget of $973,000 in 2024.

While representing only 2% of the city’s operating budget, the increase in human services funding reflects a rapidly growing need. In the first six months of the year, the department had 409 appointments with individuals or families, more than three times the number of appointments for the same period in 2022.

At a City Council meeting on Nov. 14, Human Services Director Lynne Goodwin said the department provides direct financial assistance to about 100 households who need help to afford rent, medication, utilities or other daily needs. In addition, the department has seen a surge in requests from people to help access federal and state assistance programs.

“We are really becoming a one-stop location for a lot of different support,” Goodwin said.

When councilors asked the reason for the recent increase, Goodwin said it was the high cost of living and a lack of affordable housing options.

Goodwin requested to change the position of Assistant Director Rebecca Desilets from part-time to full-time to help manage the growing needs for services. A full-time staff member would also free up Goodwin to attend to her other administrative responsibilities.

Making the position full-time would result in an additional budget impact of $55,000 to $60,000 to cover salary and benefits. Goodwin told the council that she did not include this added staffing in her official budget request because City Manager Shaun Mulholland had asked departments to refrain from seeking new positions in next year’s budget.

The council has not decided whether to make the assistant director job full-time, though some councilors indicated a willingness to support it.

“I know why it’s hard to find the money, but I’m very concerned that we aren’t putting the money into the full-time position (so) that the city can better meet its obligations and maybe even save some money in the long run,” said Councilor George Sykes.

New Hampshire RSA 165 requires each municipality to provide shelter or temporary housing to people seeking that assistance.

Other increases in the department’s budget include an additional $45,000 in direct rental assistance, $37,000 to the Listen Center to support its assistance to city residents and $210,000 to fund the operation of a seasonal emergency shelter on Mechanic Street.

Lebanon’s lack of a homeless shelter creates a sizable financial burden for city taxpayers, Goodwin said. The department frequently has to pay for hotel rooms for unhoused residents because the nearest homeless shelters — the Upper Valley Haven in White River Junction and the Sullivan County shelter in Claremont — are often at capacity. So far this year, the department has spent $98,000 on motel room rentals to house families or individuals, according to Goodwin.

Rental assistance, Goodwin said, saves the city money while helping residents maintain a stability.

“(It) is far more cost-effective to help someone with, say, $1,000 toward their $1,500 a month rent than to have them become homeless and we house them in a hotel for $5,000 a month,” Goodwin told the Council.

Most of the $37,000 increase in the Listen Center contribution is to fund a second year of a transitional housing program that the nonprofit developed in partnership with the city. The program covers the cost to rent and maintain an apartment year-round to provide temporary housing, along with transitional services to individuals or families.

To date, the program has provided transitional housing to five households, according to Goodwin. Last year, the city funded the program using leftover funds in the department budget.

The seasonal shelter will open on Jan. 6 in a renovated commercial building that the city purchased in September on the intersection of Mechanic Street and Slayton Hill Road. The city spent $175,000 to renovate the shelter and is budgeting $210,000 to operate it. The shelter will be open daily from 4 p.m. to 8 a.m., through March.

The city expects to offset some of the operating costs through donations.

On Wednesday, the City Council could also decide whether to defund the city’s annual contribution to Tri-County Community Action Partnership, or Tri-County CAP, and to spend that money on city assistance programs instead.

Tri-County CAP, which provides community assistance to residents of Grafton, Carroll and Coos counties, is requesting a $28,600 contribution from Lebanon to help provide services.

Jeanne Robillard, chief executive officer of Tri-County CAP, told city councilors at a Dec. 6 meeting, that 12% of Tri-County’s programs serve Lebanon residents, including for fuel and energy assistance, weatherization and food distribution. Robillard said there were $428,000 in total benefits and services last year to city residents.

However, Goodwin told the council that the city has had difficulty communicating with Tri-County due to the program’s high rate of staff turnover. Though Tri-County has an office in the city for outreach services, it has been unstaffed since October. Also, Tri-County has switched to a centralized phone system, which has resulted in long delays to receive assistance, Goodwin said.

Mayor Tim McNamara suggested at the November meeting that the council shift the city’s contribution to Tri-County to the city’s department.

“It seems like we’ve given it a chance (for several years) but it just never pans out,” McNamara said.

Local contributions from municipalities make up about 25% of Tri-County’s funding, though these contributions are not conditional for residents to access Tri-County’s services, according to city staff.

Mulholland cautioned the City Council that Tri-County provides services such as fuel assistance that are beneficial to city residents.

“If they don’t provide those, we are going to have to do that,” Mulholland said.

The City Council’s public hearing on the budget will take place on Wednesday at 6 p.m. in City Hall.

Patrick Adrian may be reached at padrian@vnews.com or at 603-727-3216.