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Newport City council hears that water and sewer shortfall may require rate increases and borrowing
Summary
Council was briefed on a multi-year shortfall in the city's water and sewer funds, with available cash described as roughly $900,000 and an estimated interfund due of about $1.6 million; treasurer urged a combination of rate increases and borrowing and the council agreed to prepare a special meeting and detailed financial packets.
Council members in Newport City were warned Thursday that the city faces pressing cash-flow challenges tied to its water and sewer enterprise funds and may need a combination of rate increases and borrowing to restore reserves.
Treasurer Johnson told the council the city had about $900,000 in available funds that must last until mid-November and said the water and sewer funds were carrying roughly $1.6 million in overdue amounts to the general fund. "There's no money missing," he said, adding that outgoing payments require two signatures and that recent audits did not show theft. He recommended both raising water/sewer rates and borrowing to begin repaying the shortfall.
Council members pressed staff for more precise accounting. One councilor who has reviewed the budgets at length said the last rate increase brought in about $120,000 but added that closing a multi-year deficit would probably require multiple rate adjustments and clearer allocation of salaries and administrative time across funds. "We just year after year... budgeted as if that revenue would materialize," the councilor said, urging an overhaul of how personnel costs are assigned between funds.
City manager Jonathan Delabrio and staff said they will prepare detailed cash-flow statements, revised capital budgets and allocation spreadsheets for a follow-up meeting. The council agreed to schedule a special session before the end of the month to focus solely on water and sewer finances and possible rate-change timing; staff noted that to affect March billing any rate change must be adopted before Nov. 1.
Public commenters also weighed in during the meeting's public-comment period, with one resident urging the council to hold the budget discussion before the budget process advances so the public can contribute to revenue and expense options.
Next steps: the city manager and treasurer will provide the requested financial packages for the next meeting and the council will hold a targeted special meeting to consider rate and borrowing options.
