LEBANON — Dartmouth-Hitchcock Medical Center will fund two positions within the Lebanon Fire Department and increase its payments to the city by at least 2.5% every year for the next two decades, under a deal approved by officials last week.
The Lebanon hospital will pay a minimum of $1.7 million on its tax-exempt property next year as part of a payment in lieu of taxes, or PILOT, agreement OK’d by the Lebanon City Council and Board of Assessors.
Both groups voted unanimously Wednesday night to sign off on the deal, which replaced a 2002 agreement that saw DHMC pay $820,000 in its first year.
The nonprofit, which is headquartered on a 225-acre site off of Route 120, was scheduled to pay $1.27 million to Lebanon this year. Under the new deal, its payments will rise until 2040, when they’ll total $2.84 million.
However, officials expect Lebanon to collect more money because the PILOT includes a formula that adjusts payments for new construction, such as the $150 million patient tower now under construction.
Adele Fulton, the city’s attorney, said any additional square footage added to DHMC’s main campus or an expansion elsewhere in Lebanon would trigger higher payments.
The money, she added, will go toward city coffers and, unlike property taxes, isn’t shared with the Lebanon School District or Grafton County.
DHMC also has offered to fund two new positions as part of the PILOT agreement.
The hospital plans to pay $715,280 over three years for a full-time paramedic or advanced emergency medical technician position, along with 40 hours of staffing for a community nursing program in the city.
Fire Chief Chris Christopoulos has for years sought a community nurse, who would visit patients — including the elderly and at-risk populations — to provide care outside of 911 calls.
But while officials acknowledged the importance of funding the two positions and DHMC’s status as a major employer, some felt the hospital should shoulder a higher share of the city’s expenses.
“I find it interesting that we can assure the hospital that they’ll only have a 2.5% increase when we can’t assure that to our own residents,” Councilor Erling Heistad told colleagues during Wednesday’s meeting.
The City Council will decide this week whether to approve a $61.5 million municipal budget for 2021 that would result in a roughly 3% increase in property taxes.
Asking the city’s largest institution to pay a lower rate than taxpayers could be a tough sell to residents, added Brian Ware, a member of the Board of Assessors.
“It seems like we’re just putting a lot of the burden back on the Lebanon city taxpayer,” he said before voting for the PILOT agreement. “I just don’t think the city of Lebanon could endure the legal battle.”
The threat of legal action also won over other supporters who were reminded that the original 2002 PILOT only came after five years of negotiation.
“If we reject the agreement and we were to tax DHMC and send them a property tax bill, we do know for sure that they will fight that and we don’t know what would happen,” said Councilor Karen Liot Hill.
Liot Hill said that approving the deal would guarantee the city payments that a lawsuit would not and could prevent “sentencing the taxpayers of Lebanon to potentially indefinite legal costs.”
Although the PILOT agreement covers much of DHMC’s properties in Lebanon, some of its commercial enterprises — such as hospital cafeterias — are taxed, as are the nonprofit’s land holdings.
City Manager Shaun Mulholland told officials during Wednesday’s meeting that discussions about an Alice Peck Day Memorial Hospital PILOT agreement also are expected in the coming weeks.
That institution, located near Mechanic Street outside of downtown, is owned by the same parent company as DHMC.
Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.