Council adopts new tax rates after finance update; special meeting set to address water tower debt

Newport — The Newport City Council voted Sept. 15 to set the 2025–26 municipal tax rates after receiving a detailed financial briefing that showed significant interfund obligations, a large outstanding tax‑anticipation line of credit and several budget imbalances that staff said will require near‑term loan activity and ongoing rate planning.

Financial snapshot: financial consultant Chip Stearns told the council the general fund is owed about $1,365,000 by other funds as of a recent snapshot and that the city currently carries a tax‑anticipation line of credit of $1,800,000. “The top fund is your general fund... it is owed a cumulative amount of a million $365,000 from other funds,” Stearns said. He and other staff warned that because the first property tax payment is not until November, the city’s revenue picture at this time of year shows a large cash shortfall.

Council action on tax rates: Clerk‑Treasurer James Johnson presented the calculations for setting the tax rates. The council approved the proposed rates by motion: the residential rate will increase by 14 cents (from last year) and the nonresidential rate will increase by 18 cents; the rates presented to the council were residential 3.5248 and nonresidential 3.6201 (figures shown in the clerk’s memo). The council decided not to waive late homestead filing penalties as part of this action.

Debt and near‑term borrowing: staff said the council will need to arrange several borrowings to shore up cash and address capital needs. Mayor Rick Ufford Chase and Stearns outlined a plan to seek a short‑term line for the water‑tower construction loan and to pursue two other loans: an approximately $1,800,000 borrowing for the general fund and roughly $1,000,000 for the sewer fund. Chase said those actions would reduce the outstanding tax‑anticipation borrowing and improve cash flow; council scheduled a special meeting for Sept. 29 to take the decisions and legal steps needed before an Oct. 6 line‑renewal deadline.

Other finance steps and policies: Stearns reiterated a recommendation the finance task force has discussed to consider moving the municipal tax schedule from two payments per year to four to smooth cash flow, and staff proposed reclassifying a $49,000 recycling appropriation currently shown in the appropriations line back into public‑works operating lines to improve future budget comparability.

What to watch: the council’s Sept. 29 special meeting and the water and sewer task force’s upcoming work on 10‑year cash‑flow projections and potential rate adjustments for water and sewer funds.