A city financial briefing on July 21 laid out the short-term cash position and near-term audit schedule as Newport prepares for several capital and grant deadlines.

Chip Stearns of Nemrick presented a balance-sheet update showing roughly $887,000 in the city checkbook while $850,000 has already been drawn on the tax-anticipation line of credit. Stearns and Clerk/Treasurer Jim Johnson told the council that the Walmart reserve remains listed on the balance sheet but the city has used a portion of those funds to meet recent obligations; the reserve total and its cash status are still being reconciled.

Stearns summarized other fund details: water and sewer funds have seasonal cash flows tied to quarterly billing and have carried temporary deficits for the early fiscal year; the water tower construction line of credit was reported at approximately $1,438,003.75 and should decline as project bills are processed and paid. Stearns told the council that many routine bookings (depreciation, interfund receivables and payables) and the FY25 audit adjustments will affect these balances.

The council has contracted with KBS to perform the FY24-25 audit and a potential single audit if required. The auditors will be on site beginning Monday; staff reported they had provided roughly 95% of the requested documentation ahead of the visit. Council and staff discussed the federal single-audit threshold: if the city spends more than $1,000,000 in federal awards during the fiscal year, a single audit is required. City staff and the finance task force are working to reconcile grant flows (including a $240,800 NBRC grant match question) to determine whether a single audit will be triggered.

On water and sewer operations, the council's Water & Sewer Task Force reported a plan to begin meter installations within the currently approved budget, aiming for completion of initial installs by mid-October. The task force asked the public works department to prepare standard specifications and plumbing diagrams to support larger-scale bidding and to revisit rate and five-year cash projections tied to capital plans.

In other finance actions the council approved a Vermont Bond Bank revolving loan document (loan RFI-384-1) in the amount of $20,200 to support a stormwater/Gardner Park-related project; the loan is structured with the possibility of forgiveness if funds are spent per the program terms.

Why this matters: The city is managing short-term cash needs while preparing for capital borrowing related to water infrastructure and determining whether federal grant activity will trigger the extra audit requirements. The audit outcome and reconciled fund balances will be necessary inputs for upcoming financing decisions and bond-bank or state applications.

What to watch next: KBS auditors will be on site the week after the July 21 meeting; staff expect audit deliverables by mid-October. The council and finance task force will continue reconciling interfund receivables and restricted reserves and will report further on the water tower loan and any decision about a single audit.

Sources: Financial briefing by Chip Stearns (Nemrick) and Clerk/Treasurer Jim Johnson; council approvals recorded July 21, 2025.