Portsmouth officials outline FY26 water, sewer budgets and proposed rate increases to shore up capital needs

City officials presented the proposed FY26 budgets for Portsmouth’s water and sewer enterprise funds at the council work session Wednesday, saying the plans include rate increases intended to stabilize finances ahead of major capital work and regulatory requirements.

The proposed water budget is $15,000,000 — a $1,000,000 increase year over year — and staff said the resulting change to most residential bills would be “not more than $2.25 per month.” City staff proposed a sewer budget of $27,200,000, an increase of $1,600,000, with an expected residential impact “not more than $3.45 a month” for most customers.

“The water and sewer is not supported by tax funds. It is solely a self supported effort,” said Peter Rice, director of public works, explaining the enterprise-fund model that relies on fees rather than property-tax support.

Why it matters: City presenters said they are planning in advance for capital costs and changing regulatory requirements — in particular new PFAS treatment obligations — and for aging infrastructure. Officials described their approach as a stabilized-rate model that smooths increases over time rather than imposing large, sudden spikes when expensive projects occur.

“We use a stabilized financial plan … which gives you a relatively straight line for rate increases over…