Newport workshop explores conveyance fee to seed resiliency fund; realtors urge caution

Fire Chief Hart Donnelly proposed at a city workshop that Newport create a legally dedicated Resiliency and Sustainability Fund funded by a conveyance (property transfer) fee paid by buyers of properties that do not qualify for the city’s lower, year‑round residential tax tier. Donnelly told the council the idea is to generate a predictable, one‑time revenue source the city could use for coastal protection, stormwater projects and other resiliency work without increasing the property tax rate.

“This would be only applied to properties that do not qualify for our lower residential tax rate,” Donnelly said, describing an exemption for people who make Newport their year‑round home. He added the fee would be charged to buyers at closing and could be administered with an affidavit requiring a buyer to attest the property will be a primary residence for a fixed period so that short‑term investors are not advantaged.

Donnelly cited recent local damage and rising tides in explaining the need. He pointed to Elm Street Pier’s loss after a storm and to routine flooding in low‑lying neighborhoods, and said tide projections call for about a foot to a foot and a half of additional sea‑level rise by 2060. He argued having funds ready would help the city match federal grants and be shovel‑ready for repair and mitigation work.

On mechanics, Donnelly said cities such as Block Island (New Shoreham) and Little Compton have used conveyance fees for decades and that those communities can set rates as high as 5 percent; he emphasized Newport’s council would set any annual rate and could lower it once needs were met. He offered a revenue example: “1% would bring in about $5,600,000 to win the last year's numbers,” which he framed as the equivalent of more than a 5% increase in property tax revenue that could otherwise be required.

Council members asked practical questions about enforcement, affordability and timing. Donnelly described a possible multi‑year affidavit (he referenced a five‑year example used elsewhere) and penalties modeled on Block Island—charging what was owed plus accrued interest for years of nonpayment—while noting the city could scale staff resources to investigate breaches if revenue justified more enforcement capacity.

During public comment, Tyler Bernadine, president of the Newport County Board of Realtors, said he supports resiliency work but warned that Newport’s housing market differs from Block Island’s and Little Compton’s. Bernadine asked the council to consider local sales volumes and school, labor and market differences before adopting large percentages, and offered to provide pro forma data and work with staff on mitigation measures. “I just think this is a very, very big decision,” Bernadine said, urging more analysis of impacts on second‑home buyers, retirees and small local businesses.

Other speakers included residents who said exemptions for year‑round buyers made the proposal more attractive; one renter said the exemption gave hope that owning in Newport might be more attainable. The council did not vote; the presentation was framed as an informational workshop and the administration said it would return with more detail if the council asked to proceed and, if supported, would seek enabling legislation at the state level.

Next steps: the council may request more data (sales counts, short‑term rental inventories, modeled impacts at different fee rates) and discuss whether to draft a resolution to send an enabling proposal to the General Assembly. No formal motion or vote was taken at the workshop.