Concord manager presents FY2026 proposal featuring 3.9% city tax increase, police headquarters placeholder and $5.85M golf clubhouse request

The Concord City Manager presented the city’s Fiscal Year 2026 proposed budget to the Finance Committee on May 15, saying the proposal would require a 3.9% city tax-rate increase — an estimated 39¢ on the city portion that the manager calculated would make the city portion of the tax rate $10.23. The presentation included a $38,400,000 line for a new police headquarters in the capital program (funding not requested at this time), a $5,850,000 budget request for a redesigned golf clubhouse, and recommended monthly water and wastewater rate increases of $1.65 and $3.15 respectively.

The presentation, the City Manager said, is a “road map for continued development” and a starting point for council review. He noted Concord’s Standard & Poor’s bond rating of double-A plus and that the city’s unassigned fund balance stood at 21.6% as of June 30, 2024. The manager warned that large, sustained reductions in the unassigned fund balance could prompt a rating downgrade by agencies that use that metric.

Why it matters: the proposed tax and utility rate changes affect households and municipal revenues, while the police headquarters figure—though shown in the capital plan—has not been brought to the council for appropriation or design approval. The manager said final design, funding proposals and public hearings would be required before any appropriation for the police facility.

Key budget details and fiscal context follow. The manager said the FY2026 proposal would raise the city portion of the tax rate by 39¢ (3.9%), which he calculated would be $156 for a $400,000 house under the examples used in the presentation. He described the FY2026 total budget across all funds as roughly $154.9 million, with the general fund at approximately $86.9 million. The capital program proposed in the budget is smaller than the prior year’s request by $21.4 million, and the manager said $550,000 of unassigned fund balance is proposed for use in order to help limit the immediate tax-rate increase.

On revenues the manager highlighted motor vehicle registration receipts (second-largest revenue source) and presented FY24 actual motor vehicle revenue at about $7.8 million, a FY25 revised estimate of $8.3 million, and a FY26 budgeted figure of $8.525 million. Rooms-and-meals tax receipts were shown at $4.1 million for FY24 actual, a $4.3 million revised FY25 estimate, and FY26 estimates near $4.297 million. He warned that ongoing state and federal legislative changes could affect some of those flows.

Capital and project highlights: the proposed budget lists $38.4 million for a new police headquarters but does not request funding in this budget cycle; the manager said any subsequent vote to accept state or federal funds or to bond for the project would return to the council for approval. The city manager proposed a reduced golf clubhouse building (6,000 square feet) with a total project cost of $6,636,538, of which $460,000 had previously been approved. The current budget request is $5,850,000; the manager proposed financing via a 20-year bond with a plan that would transfer $250,000 per year from the golf course’s excess revenues and fund balance and included a $250,000 donation committed over 10 years by a local supporters group. He said the plan would aim for a $0 tax-rate increase in the first year of the golf clubhouse bond and estimated an average homeowner impact of roughly $3 in fiscal year 2028 if the project proceeds as proposed.

Rates and user charges: the manager recommended water and wastewater rate increases to address rising costs tied to compensation, reduced investment income and capital needs. He presented the water recommendation as a 7.75% increase (estimated at $1.65 per month for the average residential customer) and a wastewater increase of 9.5% (estimated at $3.15 per month). He said the wastewater increase was driven partly by reduced leachate-processing revenue after the city stopped accepting leachate to avoid ammonia discharges to the Merrimack River.

Service and staffing changes: the City Manager proposed two new public-safety–related staff additions as part of the operating budget: one outreach social-worker position (adding to existing outreach staff) and one assistant fire marshal to address workload and succession planning. Overall the budget adds two full-time equivalent regular positions and included roughly 34.99 FTEs of seasonal/temporary staff across departments.

Fund balance, debt and ratings: the manager emphasized Concord’s strong S&P rating (AA+), and he walked the committee through the city’s fund-balance policy and lifecycle that the Fiscal Policy Advisory Committee had provided. He noted total fund balance of $27,810,000, up from $25,984,000, and an unassigned fund balance of about $15,645,535 (21.6% of expenses as of June 30, 2024). He cautioned the committee that substantial one-time use of fund balance to suppress rates in the short term could increase long-term borrowing costs if rating agencies reduced the city’s bond rating; staff estimated that a half-percent increase in interest rates over the life of outstanding debt would add roughly $6,000,000 in additional interest costs on approximately $125,000,000 of outstanding bonds (the manager used that as an example to illustrate risk to longer-term borrowing costs).

Other notable capital items and funding mixes: examples provided included airport taxiway signage/lighting ($164,500 using federal, state and airport capital transfer funds — manager said no general-fund dollars would be used for that project), runway crack sealing, water- and sewer-plant projects (bond-eligible), bridge design funded 80% federal/20% city trust funds, and a $1,000,000 proposed Kiwanis skateboard-park construction funded 50% by a Land and Water Conservation Fund award and 50% by donations (the manager noted the city will not appropriate those dollars until grants or donations are secured).

Committee action: the Finance Committee closed the public hearing with no members of the public testifying. The committee then voted to adjourn the public meeting (motion moved and seconded; committee voice vote: ayes 5, nays 0) and immediately voted to enter nonpublic session under RSA 91-A:3, paragraph II to discuss compensation adjustments (motion moved and seconded; voice vote: ayes 5, nays 0). The manager confirmed that if and when the council votes to appropriate funds for large capital projects (for example a police headquarters), the timing of appropriation determines the fiscal year in which principal and interest payments would begin; the manager said that whether the council votes in June or later in the year, debt-service payments typically would begin in the fiscal year when the bonds are issued.

The Finance Committee will continue detailed department and capital reviews in subsequent meetings. The City Manager and staff indicated they will return with more detailed cost, design and funding proposals for major projects before any appropriation vote.