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City seeks $1 million to refinance sewer-fund shortfall tied to years of low rates and lost leachate revenue
Summary
Article 4 on the ballot would authorize up to $1 million in borrowing to refund an accumulated deficit in the sewer fund; officials traced a key cause to lost leachate revenue when a contract with Casella ended and to years of suppressed rate increases.
Article 4 on the Aug. 12 ballot asks voters to authorize general-obligation bonds or notes not to exceed $1,000,000 to refund an accumulated deficit in the city’s sewer fund, Newport officials said at a special meeting Aug. 11. Mayor Rick Alfred Chase and council members described a pattern of deficit spending over several years without corresponding rate increases, leaving the sewer fund owing money to the general fund.
Council members and residents identified the end of a leachate contract with Casella as the single largest source of lost revenue, with an estimated first-year shortfall of about $185,000 when that contract ended. Officials said sewer and water rates were held artificially low for several years and fixed costs rose, producing recurring deficits. Mayor Chase said the borrowing would “pay off the sewer deficit that is owed to the general fund and basically allow us to pay the bills this year and spread the pain of the accumulated deficit out over the next 10 years.”
Discussion vs. decision: The council did not vote on Article 4 during the Aug. 11 meeting; the presentation was intended to inform voters ahead of the Aug. 12 special town meeting. Officials said a Water and Sewer Task Force and monthly financial reviews will examine rate-setting and future adjustments; the next formal rate decision must be made by Oct. 31 to affect billing for the quarter beginning Nov. 1.
Ending: Officials told residents they will review rate adjustments and capital needs with the Water and Sewer Task Force and said that longer-term capital and rate-setting decisions will be subject to future council votes.
