City Manager Presents the Fiscal Year 2026 Proposed Budget

The Fiscal Year 2026 (FY26) Proposed Budget for all appropriated City funds was distributed to the City Council on April 28, 2025. This budget document and accompanying interactive user guide are posted to the City website.

The release of the FY26 Proposed Budget marks the start of presentations to the City Council and the public. The City offers multiple opportunities for the public to comment on the budget, including:

• Monday, May 12 at 6 pm: Budget Work Session – General Fund (General Government, Fire, Police, and School Departments)
• Wednesday, May 14 at 6 pm: Budget Work Session – Enterprise and Special Revenue Funds (Water and Sewer Departments, Stormwater, Parking, Prescott Park, Community Campus, and Indoor Pool)
• Monday, May 19 at 7 pm: Council Meeting – Opening of Public Hearing on the Proposed Budget
• Wednesday, May 28 at 6 pm: Budget Work Session – City Council discussion of the Proposed Budget
• Monday, June 9 at 7 pm: Council Meeting – Reopen Public Hearing and adoption of the Budget

The FY26 Proposed Budget, both Operating and Non-Operating, is presented at $149,894,940, a net increase of $5,033,593 or 3.47%, which responsibly 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 15 full-time equivalent positions (FTEs).

With the budget as presented, this will result in an estimated tax rate of $11.57, which represents an increase of $0.39 or 3.49% over FY25. This is approximately half the increase from FY24 to FY25. The estimated tax rate would result in an annual increase of $301.12 or $25.10 per month for the median single family residential home valued at $772,100. 

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 FY26 total Operating Budget, which represents 82% of the total budget, is $123,291,398. This is an increase of $4,737,105 or 4.00% over FY25. 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 FY26, the proposed non-operating budget is $26,603,542. This is an increase of $296,488 or 1.13% from FY25. Approximately 75.3% includes the continued investment in the City’s program and infrastructure needs, as identified in the CIP through Debt Service, Capital Outlay, and IT Equipment Replacement. The remaining 24.7% includes Rockingham County tax, property & liability coverage, and interest expense related to overlay.

Estimated revenues, excluding Property Tax Levy and use of Fund Balance, are estimated to result in a net increase of $1,136,505 or 3.8% over FY25 for a total of $30,889,010.

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 major capital requirements while mitigating unexpected spikes in user rates.

The FY26 user rates for water consumption reflect a $2.25 per month increase over FY25 rates for the average residential customer. The rate increase is due to 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 continues its proactive, conservative approach in planning for water source protection and regional interconnection. 

The FY26 user rates for Sewer reflect a $3.45 per month increase over FY25 rates for the average residential customer. The Sewer Division has also seen increases in chemical, material, and project costs. Additionally, this rate increase forecasts for near-term costs associated with the Pease Wastewater Treatment Facility and Mechanic Street Pump Station upgrades.

“The budget theme this year is dedicated to celebrating City services provided by our dedicated and talented staff members as we uphold the City's proud tradition of delivering high-quality services to our residents, businesses, and visitors,” said City Manager Karen S. Conard in presenting her budget to the City Council. “Our primary goal is to preserve and enhance the quality of life for Portsmouth's citizens by providing top-tier services, and I am proud to say that City staff deliver an exemplary level of service with a focus on safety and efficiency. The continued implementation of long-term financial policies and planning, put into place decades ago, continues to play an integral part in our ability to navigate challenges in the economy and in the financial market, and sets us up for financial success in the years to come. We look forward to working with the City Council and the public throughout the Fiscal Year 2026 Budget process.” 

For more information, including the FY26 Proposed Budget, the Capital Improvement Plan 2026 – 2031, and the budget process timeline, visit the City website.