Finance consultant outlines Newport’s interfund balances, sewer deficit and budget pressures

Chip Stearns, the city’s finance consultant, delivered a detailed review of Newport’s interfund balances, balance sheets and budget status at the March 9 council meeting.

Stearns said the general fund checkbook holds approximately $2.29 million on the balance sheet, but about $676,000 of that is owed to other funds on a net basis. He noted that several funds do not have separate cash accounts and that some enterprise funds (notably sewer) owe cash to the general fund. He explained that certain receivables—such as a Causeway grant reimbursement—remain outstanding and affect apparent cash positions.

On enterprise finances, Stearns said the sewer fund’s expenditures exceed revenues on a cash basis by roughly $151,000 but that expected collections and recent rate increases should improve the position. He also reviewed that water-fund construction in progress (not yet depreciating) will shift to capital assets once the water tower is placed in service.

Stearns identified several budget pressures: police personnel benefits and some unbudgeted debt-service and capital items that are pushing some departments above typical percent-of-year benchmarks. He advised the council to review reimbursement timing and to expect accrual-based adjustments at year-end.

Council asked for and was told that staff can provide unsuppressed detail reports on request, and that some zero-balance legacy funds will be closed at fiscal year end. Stearns also said the city had drawn part of (and paid down part of) a tax anticipation line of credit and expects to pay off the remainder after May tax collections.