The City aims to balance operational needs with the economic realities facing the community.
The fiscal year 2026 proposed City of Keene budget was delivered to the City Council at its May 1, 2025, meeting. The budget prioritizes essential services such as public safety and infrastructure maintenance, while allocating resources to key capital efforts.
The City Council reviews and adopts its fiscal policy annually to link the budget to their goals and priorities and those identified in the Master Plan. This policy limits property tax revenue increases to a rolling three-year average of the Northeast Region New England Consumer Price Index net of expenditures required by law, debt service, and capital leases. The proposed budget totals $481,686 under the limit allowed by the policy and a projected 2.06% increase to the City’s portion of the tax rate ($0.27 per thousand, or $6.75 monthly for a property valued at $300,000).
“The FY26 budget reflects our continued commitment to delivering high-quality services while carefully balancing fiscal responsibility. Despite rising personnel costs and ongoing operational demands, we have held increases to a minimum, resulting in only a 2.06% increase in the City’s portion of the tax rate. This proposal invests strategically in public safety, infrastructure, and the long-term resilience of our community all while remaining $468,506 below the City Council’s fiscal policy limitation based on a 4.1% three-year average of CPI,” stated Elizabeth Ferland, City Manager. “I am especially proud of the collaborative work by our finance team and department leaders to meet community needs while staying well below our fiscal policy limits.”
Property Valuation and Revenue Forecasting
The next property revaluation is scheduled in the coming year and is expected to increase assessed values and, thus, lower the tax rate. (A home assessed at $250,000 today is typically selling for approximately $374,000.) State-required utility value reductions estimated at $6,000,000 to $8,000,000, however, are likely to offset this impact and result in a level total assessed value for the coming year. Revenue increases are likely in interest income, motor vehicle registrations, and ambulance billing which will help offset the rising costs of personnel and operations.
Capital Investments
The budget includes year two of the 2025-2031 Capital Improvement Program which supports projects that enhance quality of life and economic development such as essential infrastructure, equipment, and planning efforts. For fiscal year 2026, that will include dam maintenance, building and parks maintenance, durable fire equipment, roof projects, and parking lot pavement projects.
Personnel & Wage Adjustments
The primary driver of the budget increase is the rising cost of wages. This includes an additional $648,000 in the Fire Department for both wage adjustments as well as four new firefighter positions (one per shift) as recently approved by the City Council in response to increased call volume. Additional increases across the organization include union-negotiated and non-union wage adjustments as well as an increase in Library part-time wages to align with staffing changes. Of the total $1,599,685 budget increase, $1,496,216 (93.5%) is tied to wages.
Water and Sewer Rates
Water and sewer operational costs have risen significantly since the last fees adjustment in 2022. Industry estimates indicate that costs have increased by ten to fifteen percent in that time period. Rates will have to increase in Keene to support the financial stability of water and sewer operations, but a significant increase in a single budget year would create undue hardship for many customers. Incremental increases will be implemented over time, starting with a 5% increase on most charges in the coming year, along with careful use of unallocated fund balance within compliance with the Council’s fiscal policy.
The fiscal year 2026 budget advances community priorities, maintains core services, supports necessary growth, and addresses immediate needs while positioning Keene for long-term sustainability. The administration remains committed to transparency, accountability, and adaptability in delivering the level of service Keene residents expect and deserve. The City encourages residents to review the detailed budget document and participate in the upcoming review process.
The proposed budget is posted at www.KeeneNH.gov/budget and will be reviewed at upcoming meetings of the Finance, Organization and Personnel Committee where public participation is invited and welcome. A public hearing will also be held at City Hall on June 5th at 7:00 P.M. The City meetings calendar at www.KeeneNH.gov/calendar includes time and location information for all of the meetings.
