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Portsmouth staff projects preliminary FY26 budget above 6%; outlines timeline, cost drivers
Summary
At a Jan. 15 City Council work session, city staff presented a preliminary FY26 budget outlook showing a potential >6% increase and identified major cost drivers including health insurance, collective bargaining, debt service and energy; staff also laid out the public hearing and adoption timeline.
Deputy City Manager for Finance Administration Nathan Lonnie told the Portsmouth City Council at a Jan. 15 work session that staff expects a preliminary FY26 budget that would exceed 6 percent and asked the council for guidance as departments build detailed proposals.
Lonnie said the city’s FY25 budget under which it is currently operating is $144,861,347 and that non‑operating items account for roughly 18 percent of the budget while operating expenses account for about 82 percent. He described a preliminary projection that the FY26 operating budget “could land around 6.7%” while non‑operating items are modeled at about 3.5 percent, producing a combined preliminary increase above 6 percent.
The presentation outlined why staff sees upward pressure on costs: health‑insurance premiums (staff reported a guaranteed maximum rate of 9 percent for the city’s Health Trust plan and an 8.9 percent increase for the school…
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