1. This budget moved most of the administration from the City Manager’s office and the Treasurer and Clerk’s office from Water and Sewer back to the Operations Budget where it rightfully belongs. The total impact was close to $100,000 that the operating budget absorbed and an equal amount that was removed from Water and Sewer. 

2. The Department Heads worked cooperatively to cut costs wherever possible in a way that minimized negative impacts on City employees

3. The overall increase in the budget was limited to about 4.4% over the budget approved by Newport Residents last year. 

Short Answer: Deficit Water and Sewer budgets that carried inappropriate administrative overhead went unaddressed for six to eight years with no rate hikes.

Going Deeper: For a variety of reasons, there was effectively a deficit budget for Water and Sewer that could only have been rectified by raising rates which went unaddressed with no rate adjustments between 2016 and 2024, when the Council to action to raise the rates twice in the same year in order to address the deficit. That sustained deficit spending led to the use of the entire General Fund reserve (which seven or eight years ago was about 1.5 million), and then the increasing dependence on a line of credit that Council approved for up to 2.8 million last year, though the Line of Credit currently has about 1.4 million dollars on it.

Short Answer: Money that was committed each year to set aside for future “big ticket” capital expenditures was not protected. Instead, the assumption was that the City’s reserve fund could handle those expenses.

Going Deeper: For many years, the Department Heads have been in the practice of planning ahead for expensive capital expenditures they know are coming, and putting a capital expenditure line in the budget to save for that item. An example would be knowing that we will need a $75,000 truck in three years, and trying to put away $25,000 each of three years in advance so that the cash will be there when needed, and the City will be able to purchase the truck without borrowing. This worked fine as long as there was a capital reserve fund from which those items could be purchased, but the system has failed as the City has used up the reserve fund over the last number of years. It would be better to re-establish the practice of maintaining a “sinking fund” for each of those items and to move the money from the general reserve to the appropriate sinking fund each year so that the money is protected until needed. There are some sinking funds that have been established, but even in those instances, there has not been a consistent practice of protecting the money each year. The result is that there are not sufficient funds to purchase the items we need without borrowing to do so. Recently, the Council acted to uncommit funds that were committed to such capital expenditures in past budgets without moving the funds to appropriate Sinking Funds, which was necessary to assure that we can deal with our most immediate financial needs. Over the coming months and years, the Council will need to work with department heads to begin re-establishing the practice of saving ahead for expensive capital purchases. The goal must be to use Sinking funds or similar tools to plan ahead and avoid having to borrow money for such expenditures, which ends up costing the tax-payers significantly more because of interest payments.

Short Answer: It’s pretty simple, really. Council needs to assure that the Water and Sewer expenses are appropriately allocated and that the City is raising enough money to pay those expenses. 

Going Deeper: The City must ensure that the Water and Sewer facilities are managed as efficiently as possible and that our physical plants are maintained at a safe standard that will make the plant last many years into the future. Then, Council needs to determine the fairest way possible to bill both commercial and residential users to cover the full cost of maintaining and running the facility. We must stop the practice that has gone on for nearly a decade of running significant deficits in the water and sewer budgets that have contributed to the loss of the City’s cash reserve and our growing dependence on a line of credit to manage our cash flow - which adds a large expense to the cost of operations in interest payments.

This is no different than a household budget. We can’t keep spending money we aren’t making. Newport currently has some of the lowest Water and Sewer rates in the State, but it isn’t because it costs us less to operate our plant. In the long-run, the only way to control the cost of our taxes and our Water and Sewer rates in Newport is to have significantly more properties on the Grand List, which is why building a safe, walkable downtown with 400 more units of housing and thriving commercial and public spaces is so critical to our future.

Short Answer: So that the voters can decide whether this $50,000 expense makes sense for our City given our current financial condition.

Going Deeper: There are very few expenses in our operations budget that aren’t fixed expenses, meaning that they can’t be cut without dramatically hurting critical City functions. Given the relatively low numbers of City residents who take advantage of the recycling drop off center, and given the fact that there are other ways for our residents to manage their recycling at minimal cost, it was the Council’s judgment that this is an appropriate way to engage the residents in determining whether this particular service is worth the $50,000 it costs us to operate that facility. If voters approve the appropriation, the Center will continue to operate and the cost will still be borne by the residents through the appropriations tax.

Short Answer: A City Manager who has a positive relationship with the Mayor and Council and who effectively manages the staff, fairly implements City policies, and supports the Mayor and Council’s long-range vision is vitally important, and we should make every effort to lay the groundwork to support and hire for that position - hopefully by the end of 2025.

Going Deeper: In a healthy City, there is a strong and invested Mayor and Council that is responsible for setting policy for the city, ensuring good financial practices are in place, creating a plan that will ensure the City’s future needs are met, and managing the creation of a budget that is responsive to the needs and the concerns of the residents. In a City with a staff and budget the size of Newport’s, it is appropriate to have a City Manager who works cooperatively with the Mayor and Council to make sure that we have a good staff in place, the City’s day to day needs are effectively managed, strong financial management practices are used, residents’ specific needs are met, and the Mayor and Council’s long-term vision for the community is realized. The system breaks down when the Mayor and Council and the City Manager and Staff are not working cooperatively with one another, 

In my judgment, Newport needs that kind of a healthy balance in order to restore sound financial practices, manage a staff that is worn out from the high drama that has characterized Newport’s operations for years, and to plan effectively to realize our hopes and dreams for the future of our City. It will take some time to lay the groundwork for re-establishing that balance, but it should be a high priority for the new Council to address this matter and hire an effective City Manager in the next year.

Short Answer: There is a widely-shared sentiment in our community that Newport has been studied to death over the last decade and a half, and that all the studies ever do is gather dust on a shelf. In fact, I believe that taken together, nearly twenty studies and reports have laid important groundwork for the future, and some of the key foundational elements have been addressed, though they may be hard for the public to see. The Detailed Master Plan consolidates information from those studies and provides a detailed, property by property, proposal for each of nine property sites in our downtown core.

Going Deeper: The Detailed Master Plan, passed unanimously by City Council in December 2024, builds on the community engagement events like RUDAT in 2009/2011 and the Renewport event in the mid teens, the 2018 Downtown and Waterfront Master Plan, and the 2022 Municipal Plan. It takes us from the blue sky, 60,000 foot “visioning” level to the 10,000 foot level of detail for the redevelopment of Newport’s downtown, providing a guide that will be critically important to keep the Council on track for the next decade as we work to revitalize our downtown. The plan proposes nine specific development sites, 410 units of housing for all income levels (but especially focusing on the “missing middle” wage earners who are having such a hard time finding a place to live in our city), public parking, commercial spaces that encourage a thriving, walkable downtown, and necessary space for public services for our community like City offices, a regional public recreation facility, and courthouses.

Short Answer: The only thing more risky and expensive than following the recommendations of the Master Plan would be to do nothing.

Going Deeper: The reason Newport’s taxes are so high is that we have a fairly small city and most of our land is already built out, which limits room for expansion. As costs of operating the basic City functions continue to climb for reasons that are not in our control, there must be more taxpayers and public utility ratepayers to share the cost of those services. There is no quick solve for the high cost of taxes in Newport, but if we work this plan, we will end up with a City that continues to serve Newport’s historic function as the economic and social hub for the villages of the northern NEK, and we will have a more densely populated downtown to support the businesses on Main Street and E Main Street. Over the next decade, if we follow the plan affirmed by the Council in December 2024, we will significantly increase the number of properties on our Grand List and the current high cost of taxes will even out. This work will require both patience and perseverance.

Short Answer: Tax Increment Financing (TIF) is designed to allow public investment to support development projects that otherwise will probably not take place. TIF projects are designed to benefit the community and provide a more stable and predictable investment opportunity for private developers. 

Going Deeper: If a developer could have made the numbers work on the Hole (which is more appropriately called the “development opportunity”) on our Main Street, they would have done it over the last decade. The problem is that developers really can’t make the high cost of development work financially. In other words, it costs them more to develop a property than they can justify based on the rents or sale prices they will receive when the development project is finished. This isn’t just true in our downtown, by the way. It’s also true across the state for both commercial and residential development projects, and it is the primary driver of the statewide and nationwide housing crisis.

A Tax Increment Financing District is a proven method by which Vermont cities have made public infrastructure improvements to lower both the cost and the risk for developers in order to ensure that the construction that is needed in our communities can take place. Basically, the State approves a ten-year plan in which the City agrees to take out bonds (loans) to pay to build infrastructure. Those loans, when managed carefully and appropriately, are not paid back by the residents, though the City is agreeing to forego increased tax income on the newly developed properties for fifteen to twenty years to pay back the loans. After that point, the newly developed properties remain on our Grand List and pay into the City’s coffers long-term.

Just to be clear, long-term means something different for a City like Newport. Most of us think long-term is a five or six year note for a car, or a 30 year mortgage for a house. Businesses often make investments that are looking twenty to thirty years out. Cities are forever. We need to have a one hundred year outlook to ensure that we are making decisions that will protect our children and their children for generations into the future. 

A TIF ensures that the City will continue to receive the current (before development) taxes on the property, but the City agrees that the value of the higher taxes generated once that property is developed will go to pay back the bond for infrastructure development without which the project never would have happened. This is called the “But-For” clause: But-for this investment, the property is not likely ever to be developed in a way that will meet the City’s long-term needs.

Short Answer: Newport needs housing at every level, and we need hundreds of units of it to create a vibrant downtown and serve the needs of surrounding region.

Going Deeper:  Right now, even “affordable” housing is a stretch for many of our residents like seniors who are on a fixed income. Our goal must be to create housing that rents from $800 per month to $2,000 per month, and the bulk of what we build should be in the $1,000 to $1500 per month range. Houses and condominiums in the $200,000 to $300,000 range need to be available to first time home buyers or seniors looking to downsize, though there will likely always be a market in such a beautiful location for a modest amount of more expensive homes - even in our downtown core. The trick is balance, and to pay attention to the missing middle that is so desperately needed by young professionals and many older adults who are living in three to four bedroom homes that they no longer need and that could be made available for young families as our kids and grandkids build lives of their own here.

After a year on Council, this seems fairly straightforward:

1. I would continue the current Mayor’s and Council’s effort to fully understand and address the City’s dependence on deficit spending and the resulting lack of a cash reserve that forces us to depend so heavily on loans to manage our cash flow.

2. I would work hard to help our residents understand the risks and benefits associated with both action and inaction in terms of developing our downtown, and I would do everything I can to help build a strong consensus in our City about the importance of embracing the new Detailed Master Plan and implementing it - step by step - over the next decade. 

3. I would try to lower the temperature on some of the public debate by modeling a strong commitment to collaboration on our Council, with our staff, and among passionate residents who bring good ideas to the table and want to work constructively with one another to create Newport’s future. 

4. I would work to create a stable, low-drama environment for our City staff, make expectations about job performance crystal clear, and do everything possible to support their work on behalf of the City of Newport.

Newport has been on the verge of greatness for decades. The only way to actually realize our dreams and our potential is to commit - together - to put our heads down, focus on the work, and take appropriate and measured risks to create a liveable, affordable city that offers the amenities that our kids and grandkids will want in order to stick around and be a part of Newport’s future.