Council hears improved finances, debt schedule and submits bond application for water tower project

City finance staff and consultant Chip Stearns told the Newport City Council on Monday that the city’s cash and interfund positions have improved since this summer, while also presenting a newly compiled debt schedule and a streamlined budget‑to‑actuals report.

Stearns said the general fund’s checkbook were holding cash and delinquent taxes were down; the interfund report showed the sewer fund owed the general fund and the water fund was owed funds being held in the general account. Stearns cautioned that some numbers change by the day (for example, today’s water/sewer payments had been due). He also explained that accounting for a recent $1.3M short‑term loan for deficit recovery and a roughly $500,000 tax‑anticipation note has been incorporated into the new reporting.

Council discussed a bond application submitted to the Vermont Bond Bank to replace short‑term bank borrowing for the water tower project with long‑term financing. The chair summarized the project: the water tower final cost was reported at about $4.3M (roughly $600,000 below earlier projections) and grants and in‑kind funding reduced the long‑term borrowing need. The bond application submitted Friday requests roughly $2.603M to cover the remaining project cost and to finance about 400 water‑meter purchases; that amount is approximately $225K below previously authorized short‑term borrowing capacity.

Councilors and members of the public pressed staff on how water meters would be purchased and installed if some residents decline installation; staff said meters will be bought as needed (they will not be stockpiled) and the water & sewer task force is considering incentives and consequences ('carrot and stick') including higher non‑metered rates for residents who do not accept meters. The council also discussed capital reserve funds, how they must be established under statute (including voter approvals in some circumstances), and concerns about making reserve funds transparent and protected from ad‑hoc transfers.

The finance presentation also covered departmental budget performance (many lines around the expected 45% of fiscal year elapsed), public safety and debt service categories, and capital improvement planning intended to smooth tax impacts by establishing committed reserve transfers in the accounting system.

What’s next: Staff will pursue Bond Bank review in January and, if approved, expect funds in early spring to pay off short‑term indebtedness. The water & sewer task force and finance staff will return with more details on reserve fund statutory requirements, meter installation strategy and a finalized debt schedule.