Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Newport Council moves to close small restricted accounts to free cash address $1.8M line of credit
Summary
Council approved a motion to close multiple small restricted funds and transfer their cash into the general fund checking account to improve cash flow and help pay down an outstanding $1.8 million line of credit; the action maintains the underlying obligations on the books and establishes liability accounts for restricted uses.
The Newport City Council voted May 19 to direct the city treasurer to close a list of small restricted funds and move the cash into the city’s general fund checking account to improve cash flow and begin addressing an outstanding line of credit.
Council member Carter Finnegan said the task force and a NEMREC consultant had identified the need “to pay back $1,800,000 to the [line of credit]” as a precondition for taking out additional credit. Finnegan moved that several named accounts—reappraisal fund, bike path fund, vac/vactor sinking fund, tennis court fund, Coventry Street sinking fund, Gardner Park restoration fund, water tower sinking fund, water treatment facility replacement sinking fund, reservoir cover fund, wastewater treatment facility sinking fund and two vector sinking funds—be closed and the balances deposited into the general fund checking account. The council seconded the motion and approved it by voice vote.
City officials emphasized that closing the accounts is an accounting move to make cash available and does not remove the recorded obligations. Finnegan said some accounts are subject to restrictions and that staff and the city auditor (Chip/NEMREC) will create liability accounts so the obligations remain visible on the financial statements.
Residents and council members pressed for clarity about statutory authority and the long‑term safeguards for restricted funds. Council member John Manette and other members said that obligations would remain on the books and that the task force and staff are working with VLCT, the Vermont Bond Bank and legal counsel to ensure funds are handled consistent with legal restrictions. A public commenter urged that in future decisions the council be transparent about when it is acting in its capacity as water commissioners versus mayor and council.
The motion passed; council instructed the treasurer to implement the transfers and directed staff to record liabilities where funds were previously obligated. Council members said they view the move as an interim step to stabilize cash while developing a longer‑term budget and sinking‑fund plan.
