By Katie Northcott, News Director
During the Manchester Board of Mayor and Alderman (BOMA) meeting on Tuesday, May 5, Manchester Mayor Joey Hobbs read a statement he drafted about the city’s FY27 Budget.
Hobbs highlighted that the city’s sales and property tax revenue is projected to increase three to five percent over the next year.
Considering expenses, Hobbs said that the city’s highest expenditures are employee-related costs. He said that the city’s employee turnover rate has decreased from 35% to less than 10% during FY26, attributing the change to updates in the city’s classification and compensation plan.
Hobbs said that the city’s FY27 will feature continued investment in city employees. Full-time city employees will see six to eight percent pay increases. The city will also cover rising health care costs to prevent increases in employee health care premiums.
Hobbs said the FY27 budget will incorporate a 10% increase in general liability, a 1.7% increase in workers compensation, and a 10% increase in property insurance premiums.
Hobbs also highlighted the city’s investment in infrastructure during FY26, especially in the Water & Sewer Department.
The FY27 budget has not yet been proposed in a BOMA meeting. Peterson Media Group requested the proposed budget via email on Thursday, May 7, and has not received a response at the time of this article’s publishing.
Hobbs’ full statement is copied below:
“The FY27 Budget was developed under the Mayor and BOMA, with full consideration given to community-based priorities. These priorities are:
- Responsible budgeting and financial management
- Maintaining a high level of public safety
- Expanding the city’s infrastructure
- Building a positive city identity
“The 2027 Budget takes into account various economic challenges, and that community growth will further the demands for City services. Rising costs due to inflation continue to put pressure on capital projects, labor, and non-labor items across all City Funds. The City’s leadership remains dedicated to cost-effectively delivering these services.
“The City’s largest revenue sources are sales and property taxes. Revenues are conservatively projected over the next twelve months to increase 3-5%.
“On the expense side, the City’s most significant expenditure category is employee-related costs. The City’s compensation plan is market-based to attract and retain knowledgeable, highly productive employees in a cost-effective way.
“Due to a decrease in the high employee turnover rate from around 35% to less than 10%, the City has benefited from payroll savings associated with employee retention. During FY26, the City reviewed and updated its classification and compensation plan to strengthen employee recruitment and retention. As a result, the City achieved a turnover rate of under 10% across all departments.
“The focus in the FY26 General Fund Budget was to invest in City-owned equipment, technology, and employee retention.
“FY26 budget included over $5.2 million in reinvesting in the City from the General Fund
- $1.4 million Manchester Fire Department
- $750,000 Manchester Police Department
- $750,000 Manchester Public Works Department
- $1.3 million Manchester Parks & Rec Department
- $500,000 newly created city employee positions
- $750,000 increase to schools totaling $2.6 million annually from the City
“The focus in the FY26 Water Sewer budget was to spend the money received from the American Rescue Plan Act (ARPA) on sewer infrastructure projects that have to be completed by September 2026, and invest in department staff and equipment.
“FY26 Water Sewer Budget- $14 million in infrastructure spends
- $11 million in sewer projects – ARPA State / Fund Grant funds- with City match
- $1 million on Water/Sewer Treatment plant
- $500,000 new equipment for staff
- $ 2.5 million budgeted for repair and maintenance of water/sewer
“Over the past three years, the City has increased employee pay by 17%. With the proposed FY27 budget, total pay increases will reach 25% over the four years from FY24 through FY27. The City implemented a longevity pay benefit of $1,040 per year for employees after five years of service. Beginning in the FY26 budget, this same increase will be applied for every additional five years of service. Employees with 20 years of service received an increase last year of $4,160 ($2.00 per hour).
“FY27 Budget
“The proposed FY27 Operating Budget is balanced, and no tax increase is recommended. Last year, several initiatives were funded with the expectation that their expenditures would carry over into FY27. Those amounts are now reflected in this year’s Assigned Fund Balance. The FY27 Budget incorporates pay increases to full-time employees of 6-8%. In addition, health care expenses increased 11.2%. The City will increase its contribution to employee health care by $270,000 to cover rising costs. As a result, employees will not see any increase in their health care premiums for FY27.
“The FY27 Budget also incorporated a 10% increase in General Liability, a 1.7% increase in Workers Comp, and a 10% increase in Property insurance premiums.
“Credit is owed to many for their diligent work on this budget: the City Finance Department, the Directors of each department, and BOMA. Upon adoption of this budget, all staff will continue their dedication to maintaining the City’s strong financial standing. That dedication ensures that Manchester remains an excellent place to live, work, and visit.”
