When Fred Sheffler was touring the McNeil Island Corrections Center during a business trip about 12 years ago, an inmate asked to speak with him. Sheffler didn’t recognize him at the time, but after talking, he realized they’d served in the Army together in Vietnam.

Then the inmate told him something he’d never forget.

“He said, ‘Sir, if I had a job when I came back, I don’t think I’d be here,’” Sheffler said.

That moment was a turning point in Sheffler’s life that compelled him to join veteran service organizations such as the American Legion. Now, he chairs the Kitsap County Veterans Advisory Board, a county committee that advises the Board of Commissioners on issues related to homeless and low-income veterans and the use of the county Veterans Assistance Fund.

“You have a civilian society that doesn’t have any clue as to what they’ve gone through,” Sheffler said.

Now Sheffler is concerned history may repeat itself. In the years following Vietnam — like now — he saw many returning servicemembers without the support to begin their lives anew.

The past few years have seen an increase in assistance given to Kitsap veterans to meet rising demand. The number of veterans receiving help with rent, bills and other services has increased from 160 in 2004 to 370 in 2010.

But Sheffler says the advisory board and the assistance fund have limits on how much they can help indigent veterans. And if the fund’s income holds steady in 2012, it may have to reduce the assistance it can offer, unless a levy lid lift is put on the ballot in the fall.

Because homeless veteran counts are self-reported, there is no way of knowing exactly how many veterans in the county need assistance. Leif Bentsen, human services planner for the Kitsap County Veterans Assistance Program, said that out of approximately 1,500 homeless people in Kitsap County, about 87 of them are veterans.

Coupled with the number of low-income veterans struggling to pay living expenses in a down economy, demand for the assistance fund’s services is expected to rise.

“The needs are pretty significant,” County Commissioner Josh Brown said.

The Veterans Assistance Fund started in 1888 by the territorial government created has been around since 1888, with the money allocated by service groups such as the American Legion and Veterans of Foreign Wars.

In 2006, the current Veterans Advisory Board was established to advise county commissioners on veterans’ issues and uses of the money. The fund is paid for by property taxes ‚Äî one and one-eighth cents of every $1,000 of assessed value goes to the fund.

The fund has helped pay for programs benefiting homeless and low-income veterans, such as the Stand Down events at the Kitsap County Fairgrounds that provide dental care, hair cuts and social services information to attendees. The money has also helped veterans attend the Washington Community Alliance for Self-Help program, which trains people to own and manage their own businesses. Most of its budget, however, goes to Kitsap Community Resources, which contracts with the county to provide individual case management to veterans seeking financial assistance with living expenses. People making less than $2,100 per month can qualify for such help, said Gary Hughes, the family development specialist at Kitsap Community Resources who evaluates incoming veterans. And regardless of whether people qualify for veterans assistance, Hughes refers them to additional programs they may be eligible for, such as Kitsap Community Resources’ energy program or American Financial Solutions for mortgage help.

In addition to the $332,700 in help veterans received from the Veterans Assistance Fund, veterans may also be eligible for other social programs, Bentsen said.

What makes veterans especially vulnerable to joblessness, homelessness or other struggles, Sheffler said, is that society does not understand the experiences they face in combat and veterans have trouble assimilating into the civilian world when they come home.

“The reality is they’ve got to come to grips with a lot of things our society hasn’t prepared them for,” he said. “They cannot reintegrate into society. They’ve gone through experiences that do not make them candidates for going back into normal life.”

The Veterans Assistance Fund isn’t necessarily a quick fix for veterans looking to escape a financial bind, but rather a last resort, Sheffler said.

“It’s a stop gap. It’s not a solution,” he said, adding that people who seek help from the fund have typically reached “rock bottom” in their personal lives.

Though he feels the fund and Kitsap Community Resources help give veterans a step up, Sheffler wishes there was more they could do, such as help provide work opportunities or job training.

But, due to legal restrictions on how the money is spent, only so much can be done. State law only allows the Veterans Assistance Fund to help indigent veterans, making it difficult for the money to go to related groups that serve veterans as well as other disadvantaged populations. Though the fund has given to a couple organizations whose services were specifically limited to low-income and homeless veterans, many other groups who have requested money could not guarantee that the donations they would receive would all go to veterans that fall under the fund’s eligibility requirements.

That restriction frustrates Dennis Olds, who has appealed to the Veterans Advisory Board for money for the Veterans Bunkhouse he opened in Bremerton last month, which houses homeless veterans. Though Kitsap Community Resources provided $1,200 of rent for two residents to move into the Bunkhouse last week, the advisory board is still considering whether the Bunkhouse, as a non-profit organization and not an individual veteran, could qualify for assistance. Olds, who lives on disability money, has paid $11,000 of the Bunkhouse’s expenses out-of-pocket and worries about the long-term existence of the shelter program.

“The people are still out there living on the street because I’ve got no way to pay the people I’ve got to pay,” Olds said of his struggle to pay the Bunkhouse’s bills.

Assistance may also be reduced, depending on next year’s budget. Though the assistance fund’s 2012 budget is not yet finalized, Bentsen foresees reducing the amount of assistance the fund can use to help each veteran, given that property tax income is projected to remain flat and demand is expected to increase. He hopes the county will put a property tax increase on the ballot this year, much like the Veterans and Human Services Levy passed in King County in 2005. It would not only raise more money, but also offer more flexibility on how the money can be used.

Brown said that currently, the only way more money can be allocated to indigent veterans would be to cut into other areas of the county’s operating budget, such as law enforcement. He said the county has tried to tell state lawmakers that counties need more flexibility in how they can distribute veterans assistance funds, but those requests have largely been ignored.

“I think the state is entirely focused on dealing just with their issues and I think it’s often lost on the legislators that local governments are partners,” Brown said. “In the past four years in terms of local flexibility, we really haven’t gotten very much help. It’s very disappointing.”

That’s why he supports lifting the levy lid on the property tax that pays for the assistance fund.

“The voters of the county have the final choice, but having that discussion with the public is important and we owe it to the veterans of this county,” he said.

The number of Stand Down events have already been reduced this year. While $330,000 is budgeted for assistance through Kitsap Community Resources this year, that money is projected to drop to $265,000 in 2012, according to a February report on the Veterans Assistance Fund.

“If we can’t meet the demand, there’s going to be a detriment,” Bentsen said.

Though Sheffler acknowledged the positive contributions of the Veterans Assistance Fund, he wishes such services weren’t needed at all.

“My greatest disappointment is to see someone come in because we’re their last hope,” he said. “I’m proud that we can do it, but there’s got to be more out in front of this.”