The incident was raised as a health and safety concern at a Ross-on-Wye Town Council meeting.
The town clerk, Sarah Robson, said: “A threat of violence was made to a grounds maintenance contractor by a homeless man. He threatened the contractor with a hammer.”
This caused shock among councillors, who had earlier in the meeting expressed concerns about policing in the town and a lack of resources to deal with crime.
The clerk added: “We are currently undertaking a lengthy process to help the man with his homeless problem, a solution to which would be to everyone’s benefit.”
She confirmed that police had been informed but that the town’s Safer Neighbourhood Team had not been clear about what was being done in response to the alleged incident.
West Mercia Police have been approached for comment.