Newport Council OKs $2.4 million construction loan for East Side water tower

The Newport City Council on Tuesday authorized a $2.4 million construction loan to finish a water tower project on the city's East Side.

City staff told the council the overall project is roughly $3.3 million and that the city has secured a separate $1 million grant and used local ARPA funds, leaving an estimated net financing need of about $1.4 million after grant reimbursement. Council discussion focused on lender options and the loan structure; materials presented to the council described the request as a construction loan to be drawn during completion of the project.

"It's roughly 3,300,000.0, I think, just off the top of my head," staff said during the presentation, noting prior ARPA allocations and a $1 million grant the city expects to receive once expenditures are made. Council members asked whether the request should be characterized as a construction loan versus a line of credit and pressed staff about which bank offers to accept; a friendly amendment clarified the council was approving a construction loan of $2,400,000.

Council also discussed interest rates and timing for offers; the council recorded an interest rate of about 5.06% during the vote discussion. The motion to authorize the construction loan carried on a voice vote.

The council's action authorizes staff to obtain financing to complete the tower; the project will be eligible for grant reimbursement after expenditures are submitted to the grantor. The city did not identify the final lender in the motion recorded in the public minutes.

The council scheduled no additional public vote on the underlying grant and will proceed with loan closing and construction draws consistent with the council authorization.