June 11, 2021
City Manager Karen Conard submitted a preliminary FY22 budget for the City in March, estimating $124,259,033 that included an unanticipated $1.65 million (20%) increase in the City’s required NH Retirement System contribution to the State. The final FY22 budget approved by the City Council at their June 7, 2021 meeting is $123,209,033, a 3.44% increase over FY21.
Although the tax rate cannot be set until the State reports revenues Portsmouth will receive in the fall, this FY22 budget represents a 37-cent increase in the tax rate, 26-cents of which is due to the retirement savings amount. Compared to the preliminary budget, the final approved budget reduced the tax rate from an originally-estimated increase of 66 cents to an increase of 37 cents.
The City worked to hold down increases while restoring some costs deferred in last year’s budget to offset the $1.65 million retirement fund increase with the following measures:
- $650,000 reduction in allocations to the Health Insurance Stabilization Fund
- $400,000 reduction in Capital Outlay expense for projects that may be funded through the American Rescue Plan*
- $300,000 increase in the revenue estimate for Inspection Permit fees
- $480,000 reduction in General Operating Funds assigned for the maintenance of the McIntyre Building. These costs for mothballing the buildings after it is transferred from the Federal General Services Administration will be paid from the Unassigned Fund Balance.
City Manager Karen Conard commenting on the FY22 Budget Strategy noted, “The budget must align with goals developed in partnership with Portsmouth’s citizens and businesses, formalized through committees, internal policies and master plans and City Council resolutions. This budget funds all services currently provided to the taxpayers of Portsmouth, restores the commitments adopted in the FY22-27 Capital Improvement Plan and rate stabilization models for the Water and Sewer funds and lowers operating salaries not related to salaries and benefits while reducing the overall FTE count through attrition and reallocation of resources and not reductions in force.”
Ms. Conard continued, “It is important to mention the pandemic-induced, strategic measures and temporary reductions that City staff and City Council chose to take for the FY21 budget resulted in a nearly flat budget with FY20 and a 16-cent reduction in the tax rate. I am pleased that working together, the City Council recognized that trying to maintain another year with a flat budget to FY20 was not sustainable without jeopardizing current services, delaying more capital project and rolling stock replacement needs, and deferring necessary maintenance to the City’s infrastructure. The FY22 budget as adopted is fiscally sound, conservative and prudent as the City returns to some sense of normality.”
The FY22 City budget sets a 4% increase in Sewer user rates and a 2% increase in Water user rates for those customers.
The final FY22 budget will be posted to the City website,
*American Rescue Plan Funds Work Session on June 14
The potential to cover $400,000 in Capital Projects with American Rescue Plan grant money is dependent on the City’s understanding of the Federal guidelines for use of the $6.44 million Portsmouth has received as its first tranche of two years of funding and the Treasury Department’s approval of the City’s plan to apply them. The two projects identified in the budget – City Hall HVAC improvements and citywide storm drainage improvements would seem to qualify under the very specific definitions of eligible projects. According to US Treasury guidelines, these include:
- Support public health expenditures;
- Address the negative economic impacts caused by the public health emergency;
- Replace lost public sector revenue;
- Provide premium pay for essential workers; and
- Invest in water, sewer, and broadband infrastructure.
The City Council is holding an American Rescue Plan Work Session on Monday, June 14 at 7 pm to discuss these and other opportunities. Public comment is welcome. The Council will meet in person in the City Council Chambers but public participation is by Zoom. For the Agenda and Zoom registration, click here.