LEBANON — The City Council on Wednesday approved a final 2025 general fund budget of $44.3 million, which was nearly $1 million less than originally proposed.

As a result, residents are expected to see a 7.8% increase in the municipal portion of the property tax rate in 2025. That is down from the 11.9% that was expected with the initial proposal.

The municipal budget, which will go into effect Jan. 1, accounts for 37% of the total property tax rate; the school, county and state budgets make up the remainder.

The City Council also approved transferring $300,000 from tax incremental finance district funding to offset the tax rate.

“We’re facing an impossible decision. We have heard that this is a maintenance budget; this is not a budget that is necessarily going to improve anything,” Councilor Devin Wilkie said during Wednesday’s meeting in the Lebanon High School gymnasium. “This is to keep what we have. This is to keep what we have from crumbling.”

While the council was forced to cut some things its members would have rather not, Wilkie said they did so in order to avoid pushing more people out of the city due to rising costs. “If we’re doing these efforts for nobody who can stay, there’s not much value to doing them,” he said.

To bring the tax rate down, the council eliminated $966,000 in spending from the general fund. Cuts included the cost of the energy and facilities manager position, and a vacant position at the library.

In response to public comments, the council decided not to eliminate vacant police patrol positions.

While the library funding was attached to a vacant position on paper, the use of library funds is ultimately determined by its Board of Trustees who may decide to find the funding in other areas.

The council also decreased spending for paving and other infrastructure improvements, and cut lower cost items such as fireworks and the afternoon summer concert series.

Members of the public Wednesday night once again urged City Council to make deep cuts to the budget ahead of their vote, arguing that an 11.9% increase is untenable and will force people out of the city.

Many residents requested City Council reach between a 0% to 3% tax rate increase.

The council opted not to reduce the budget to get to those levels of increase. Driving the city’s cost increases are debt service payments for previous projects that the city manager said Wednesday cannot be consolidated or deferred, and a more than 18% health insurance increase.

Residents also spoke out against making cuts to the police or fire departments, after City Council suggested eliminating at least one vacant police patrol position at a Dec. 12 meeting.

“Let me emphasize this point; cutting police resources to bolster fire services is not a sustainable solution,” resident Joshua Flanders said. “Police and fire services are the backbone of our community. They are not optional services, they are essential.”

Police Chief Phil Roberts, Cpl. Jeremy Perkins, who also headed the police union this year, and residents all argued that cutting these positions would increase burnout on the police force and shift ongoing fire department understaffing to police.

The council also voted to add three firefighter positions to the final budget, which already included one additional position, at $388,000, with $201,000 of that cost covered by Alice Peck Day Hospital.

Throughout the meeting, residents encouraged the City Council to “get creative” and “think outside the box” to decrease the budget. Many suggested finding ways to increase revenues, especially from non-Lebanon residents who use city services.

“We’re the metropolitan area of the Upper Valley ... let’s capitalize on that,” resident Joan Townsend said, noting that the city has a variety of amenities, including an airport, a landfill, stores, medical services, a new casino, “great” fire and police departments, and Advanced Transit. “Come on over but you’ve gotta pay to play. We need to start looking at that.”

Both Councilor Doug Whittlesey and Mayor Tim McNamara agreed that the city should increase revenues, especially through costs from programs and resources offered through the Recreation, Arts and Parks Department.

“That is a potential revenue source,” McNamara said. “I recognize that we also don’t want to disenfranchise the young peoples whose families can’t afford that and I would strongly recommend that the Friends of Recreation Arts and Parks try to raise some money outside to subsidize that.”

Despite their support, Whittlesey said the revenue change did not have to be made as part of the budget discussion and will likely be addressed in the new year.

Many residents adamantly opposed the city’s policy of offering a 3% general wage increase for 2025 and optional merit-based increases of up to 3%, arguing that this is not typical for private sector employees.

“No employer in the Upper Valley is giving 6% to anybody, especially if their employer is in trouble,” resident Henry Mossell said.

Nancy Sansevere, a resident who said she is also a human resources professional, repeatedly spoke out against the city’s salary policies and argued that the budget should not move forward until the city outlines their hiring plans for the next several years with a clear impact on the budget.

“I do recognize that collective bargaining agreements are tough and that you are in the throes of them,” Sansevere said.

She attributed taxpayers’ “heartbreak” to the 3% increase, plus an additional cost of living adjustment, for a total of 6%.

Still, in the last minutes of the five and a half hour meeting when only a handful of the more than 250 people originally in attendance remained, City Council approved a separate motion to accept these wage policies.

The majority of city employees are represented by unions.

Contracts were all up for renegotiations this year and representatives have been working with city staff for months to reach three-year deals.

City Manager Shaun Mulholland told the council that to change the wage increase policies would require renegotiating all of the union and non-affiliated employee contracts which are set to go into effect Jan. 1.

Clare Shanahan can be reached at cshanahan@vnews.com or 603-727-3216.