Council pauses vote on new Newport Tourism Improvement District after ethics, governance debate

The Newport City Council on a 6–1 voice vote moved to continue consideration of a proposed Newport Tourism Improvement District after extended debate over board makeup, liability language and whether sitting councilors should serve on the district board.

The resolution would replace the city’s existing tourism improvement arrangements with a new district proposed by Discover Newport. Councilor Napolitano said Discover Newport had amended its petition to add a community grant program, boost the city’s administrative fee and assume some legal costs. “They will be making a, they’ve added a community grant…in the amount of 5%,” Napolitano said, and the administration fee to the city would increase “from 3 to 4%.”

Why it matters: lodging businesses backed the petition and told council members the district is designed to fund year‑round marketing and workforce development to stabilize hospitality jobs. Opponents and several council members said they needed assurances that the city’s role and potential conflicts of interest were resolved before final approval, and some sought a formal ethics opinion before a final vote.

Council debate and amendments The proposal drew sustained questions about who sits on the district board and whether a city council member would hold a seat. Allison, identified as a Discover Newport representative, told the council the current draft of the petition removes a city council seat from the board: “The city council person has been removed from the new plan,” she said. City Solicitor Behan advised counselors that conflict‑of‑interest questions are typically personal and are best decided with the Ethics Commission’s guidance. He told the council, “conflicts of interest are a personal matter” and recommended members seek an Ethics Commission opinion if they were unsure.

Several council members urged caution so that future legal challenges could not be based on procedural or ethical grounds. One councilor said the city’s role in enforcing collections for the district made the question of conflicts especially important and urged recusal if a member sat on both the council and the district board.

Petition changes and outstanding numbers Discover Newport representatives described three substantive changes made after earlier feedback: (1) an increased administration fee to the city (3% → 4%), (2) a new 5% community grant pool the city could apply for, and (3) language in the petition asserting the district would bear legal costs for overdue charges. The petition’s exact membership figures were debated in the meeting: council packets included 13 letters of support and speakers referenced a petition list of 18 properties; councilors noted 11 of the 13 letters in the packet were from properties within the Third Ward. The number of properties on the final petition was described aloud as “not specified” in the packet and disputed in council commentary.

Outcome and next steps Councilors voted to continue the matter to the next meeting to allow additional outreach to lodging stakeholders, to encourage individual councilors to seek ethics guidance if appropriate, and to give staff time to confirm petition membership and any outstanding operational details. The motion to continue passed; the date for the continued item will be set on the council’s docket.

What’s next: Discover Newport and city staff will return with any additional revisions or clarifications requested by councilors. Councilors and the solicitor recommended that any counselor uncertain about a possible conflict of interest consult the Ethics Commission and consider recusal if that guidance warrants it.

Votes at a glance - Motion to continue consideration of the Newport Tourism Improvement District: continued to next meeting (voice vote; recorded as passed).