City Manager Presents the Fiscal Year 2027 Proposed Budget

The Fiscal Year 2027 (FY27) Proposed Budget for all appropriated City funds was distributed to the City Council on May 1, 2026. This budget document is posted to the City website.

The FY27 Proposed Budget, both Operating and Non-Operating, is presented at $157,971,390, a net increase of $7,676,450 or 5.11%, which allocates limited resources, maintains current services, meets federal and State mandates, and protects the City’s strong financial position, while reducing the total headcount by over nine full-time equivalent positions (FTEs). Of this 5.11% increase, 2.21% represents an increase in health insurance and 2.9% represents an increase in all other costs.

Citywide health insurance rose a total of $3.3 million or 21.4%, with the School Department’s increase through SchoolCare at 26.2% and General Government, Fire, and Police increases through HealthTrust at 11.4%. This is the single largest driver of the budget increase.

The budget as presented will result in an estimated tax rate of $12.07 per $1,000 of valuation, which represents an increase of $0.56 or 4.88% over FY26. The estimated tax rate would result in an annual increase of $435.24 or $36.27 per month for the median single family residential home valued at $777,200. 

It is important to note that the final tax rate is set by the New Hampshire Department of Revenue Administration (NHDRA) in the fall, once all State revenues, property valuations, and county tax obligations are finalized. The City typically announces the final tax rate for the fiscal year shortly thereafter and issues tax bills for the first half of the fiscal year in December.

The FY27 total Operating Budget, which represents 82% of the total budget, is $130,189,240. This is an increase of $6,897,842 or 5.59% over FY26. The Operating Budget finances the services provided by the General Government, Police, Fire, and School Departments as well as General Fund obligations to the Indoor Pool, Prescott Park, and Community Campus. 

For FY27, the proposed Non-Operating Budget is $27,782,150. This is an increase of $778,608 or 2.88% from FY26. Approximately 1.43% includes the continued investment in the City’s program and infrastructure needs, as identified in the CIP through Debt Service, Rolling Stock, IT Equipment Replacement, and technology innovations and software. The remaining 1.45% includes Rockingham County tax (estimated at $6.2 million) and municipal property & liability coverage.

Estimated revenues, excluding Property Tax Levy and use of Fund Balance, are estimated to result in a net increase of $833,173 or 2.7% over FY26 for a total of $31,722,183.

Fund Balance is used each year by the City to help mitigate the effect on property taxes. The FY27 Budget proposes to use $3.5 Million from Fund Balance. The City has used an average of approximately $3.74 Million per year over the last eight years. 

Water and Sewer Enterprise Fund Divisions are strongly impacted by the capital costs associated with federal and State regulatory issues and the ongoing need to upgrade and maintain infrastructure. The City’s comprehensive rate model, first implemented in Fiscal Year 2014, created a financial plan to address the current and future major capital requirements while mitigating unexpected spikes in the user rates. The City Council voted to approve a new and updated Water and Sewer Rate Structure at its May 4, 2026 Meeting.

Water Division: The FY27 average residential customer’s monthly water bill will reflect a 4.5% ($0.29/unit) increase over FY26, assuming 5 units of water consumption. For comparative purposes, customers saw a 9% increase in FY26. Due to inflation, which continues to force major increases in chemical, material, and project costs, as well as pending costs associated with EPA’s Lead and Copper Rules and new PFAS regulations, the City must follow the new rate structure to provide additional financial support for water operations. The City continues its proactive, conservative approach in planning for water source protection and regional interconnection.

Sewer Division: The FY27 average residential customer’s monthly sewer bill will reflect a 5.9% ($1.07/unit) increase over FY26, based upon 5 units of water consumption. This compares to a 4% increase experienced by customers in FY26. The Sewer Division is similarly impacted by inflation and corresponding increases in chemical, material, and project costs. This rate increase also forecasts future costs associated with the Pease Wastewater Treatment Facility and Mechanic Street Pump Station upgrades.

When presenting the budget, City Manager Karen S. Conard said, “This proposed budget protects the essential services our residents rely on every day while recognizing the real economic pressures facing households and local government alike. I am proud of our staff for finding efficiencies, controlling costs where we can, and continuing to deliver high-quality service with a smaller overall headcount.”

The release of the FY27 Proposed Budget marks the start of presentations to the City Council and the public. The City offers multiple opportunities for the public to learn about and comment on the budget, including:

• Monday, May 11 at 6 pm – City Council Work Session on the General Fund: General Government, Fire, Police, and School Departments
• Wednesday, May 13 at 6 pm – City Council Work Session on Enterprise and Special Revenue Funds: Water, Sewer, Parking, and Stormwater Departments
• Monday, May 18 at 7 pm – City Council Meeting and opening of the Budget Public Hearing
• Thursday, May 28 at 6 pm – City Council Work Session, Budget Review
• Monday, June 8 at 7 pm – City Council Meeting, continuation of the Budget Public Hearing, and proposed adoption of the Budget

Details and meeting materials can be found on the City website. Participation may be in-person or via Zoom. 

For more information, including the FY27 Proposed Budget, the Capital Improvement Plan 2027 – 2032, and the budget process timeline, visit: portsnh.co/budgets.