Newport City Council Budget Workshop: FY2027 Proposed Budget and Capital Improvement Plan – April 7, 2026
Newport City Council Budget Workshop: FY2027 Proposed Budget and Capital Improvement Plan – April 7, 2026
On April 7, 2026, the Newport City Council held a budget workshop to review the proposed Fiscal Year 2027 budget, including the Capital Improvement Plan (CIP), community grants, and overall financial outlook. The session covered a roll-forward of the CIP, enterprise funds, civic support grants, and detailed revenue and expenditure projections. No votes were taken; the workshop was advisory to inform council deliberation before formal adoption.
Discussion Items
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Capital Improvement Plan (CIP): Director of Finance Jim Nolan presented a proposed $6,243,533 general fund CIP for FY2027, funded by $3.87 million from committed fund balance (reducing that balance to zero) and $2,373,000 from taxpayer dollars. Notable projects include technology upgrades, HVAC at Brick Market (already completed), roadway/sidewalk improvements, playground upgrades, and a structural assessment of the Cottage Street vault ($175,000). The CIP defers $7,427,000 in projects from earlier requests. Councilors noted discrepancies between presentation slides and detailed schedules; staff committed to reconciling numbers.
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Enterprise Funds: Water fund CIP is $4,169,000 for FY2027 (five-year total $28,698,000), with $114 million in unfunded projects over five years. Water Pollution Control fund projects total $25,666,000 for FY2027 (five-year $60,996,000). Maritime CIP is $14,382,000 (five-year $15,652,000); parking fund CIP is $1,575,000 (five-year $3,125,000). The City is issuing a $35.6 million infrastructure bond for projects including Easton’s Beach demolition, road improvements, public safety land acquisition, Elizabeth Brook daylighting, and seawall repairs.
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Community Grants: Civic support grants (Sears Trust) proposed at $151,000 for 18 organizations (down from $168,430 in FY2026). Civic services grants (general fund) proposed at $98,000 for 11 organizations (down from $104,000). The new application process uses objective scoring rubrics; some caps were reduced due to loss of ARPA funds. Councilor Smith questioned the Eastern Rhode Island Conservation District’s value; staff detailed its work on composting and Elizabeth Brook daylighting. Councilor Sabetta asked about the Newport City Development Council (noted as part of the Chamber).
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Budget Overview and Tax Rates: The proposed total general fund budget is $133,506,000 (up from $122,270,000). The tax levy increase is 1.87% ($1,725,257), bringing the levy to $93,739,039—well below the statutory 4% cap. Proposed tax rates: owner-occupied residential $7.32 per $1,000 (up from $7.18), non-owner occupied residential $8.86 (up from $8.69), commercial $10.97 (up from $10.77), tangible property fixed at $14.88. For an average home valued at $1,185,000, the owner-occupied tax bill would increase by $125 to $6,589; non-owner occupied would increase by $200 to $10,498.
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Two-Tiered Tax Program: Owner-occupied exemptions stabilized at 52% of residential properties (4,352 properties, $1.2 billion exempt). The exemption amount remains $284,433. Councilor Napolitano queried the legal maximum differential between owner and non-owner rates; the solicitor indicated no specific cap, but commercial rates must be 1.5 times the lowest residential rate. A hypothetical raising non-owner residential rate to the commercial rate of $10.97 would yield an additional $2.3 million in revenue.
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Revenue Drivers: Significant increases include $3.468 million from room tax (legislative changes effective Jan 2026), $900,000 net from traffic camera tickets, and $323,000 in building permits. $3.87 million in committed fund balance supports CIP. The budget assumes $3.9 million in short-term investment income, which Director Nolan called “aggressively conservative.”
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Expenditure Highlights: Salaries and overtime proposed at $36.495 million (up from $33.904 million), largely due to union contracts. School transfer is $31.12 million (4% increase). Police and fire pensions fully funded at $12.949 million. Debt service increases to $11.143 million (from $9.26 million) due to new infrastructure borrowing. Capital budget transfer is $6.243 million (up from $3.123 million).
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Personnel: Two new laborer positions (ASME union) proposed at $90,824 each (salary+benefits). Non-union grades adjusted: City Engineer (Deputy Director of Public Services) upgraded from grade 10 to 12; Affirmative Action Officer downgraded from 8 to 7 to align responsibilities (position vacant since August 2025). No additional non-union staff proposed. COLA for non-union employees set at 3%. Union contracts: Fire (ratified through June 2027) with 3.5% COLA in FY27; Police (FOP, ratified through June 2028) with 5% COLA in FY27; ASME and NEA still in negotiations with budgeted COLA estimates.
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Department Presentations: Finance Department (22 employees) budget $1.9 million salaries; notable achievements include GFOA “Triple Crown” awards. Canvassing office budget shows increased temporary staffing for 2026 primary/general election. City Clerk office budget $466,000 salaries; processed 13,000 filings, 11,481 land evidence documents. City Manager’s department budget includes $50,000 annual commitment for Newport-Education Community Learning Center program director, and $78,805 in overtime for eight special events.
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Infrastructure Debate: Councilor Napolitano expressed frustration that the city is not maximizing the 4% tax levy cap to fund critical infrastructure (roads, sidewalks, seawalls) and questioned why commercial and non-resident rates are kept low when residents face rising utility rates. He argued that raising non-owner residential rates to the commercial level could generate $2.3 million for sidewalks without burdening year-round residents. City Manager noted bandwidth constraints in the engineering office and stated the administration chose to “split the difference” on the levy increase amid collective bargaining costs and utility rate increases. Councilor Sabetta warned against increasing taxes further given economic pressures on families. Councilor Smith supported holding the line on resident taxes but favored exploring differentials on non-resident properties.
Key Outcomes
- No formal votes were taken; the workshop was for discussion and guidance. Council directed staff to reconcile CIP presentation numbers with detailed schedules.
- Councilor Napolitano requested a calculation of revenue if non-owner occupied rate were raised to the commercial rate ($10.97); staff provided estimate of $2.3 million additional.
- Staff noted that the tax rates may see slight adjustments as the certified tax roll is finalized.
- The budget timeline includes: Council formally receives budget April 8; departmental workshops continue (Resilience & Sustainability April 9; Water/WPC April 16; Schools April 15); public hearings May 6 and May 13; tax bills generated week of June 16 with first quarter due August 5.
- Council is expected to discuss potential amendments, including restoring cemetery restoration ($35,000), tree conservancy funding (Councilor Sabetta proposed $25,000 line item), and possible sidewalk funding increases, at future meetings.
Meeting Transcript
CIP schedule. We'll just go right in order of the uh the slides that we have. So Jim, you want to start this off? Sorry, CIP. Good evening, counselors. Jim Nolan, Director of Finance. We're gonna start out with uh with CIP. So what I'd like to start with is I think everyone should have a schedule that looks like this. And essentially what this schedule is, it's just a roll forward schedule. So that column to the left with the numbers, that's going to be what was in our CIP document that we reviewed uh back in January. All right. The items in red, those are going to be the items that we're proposing to defer until future years and not include in the 2027 budget. And then that column to the right, the proposed budget 2026-27. That's going to tie out to what we have in our proposed budget. All right. So purpose of the workshop, why are we here? We're here to present comprehensive list of identified fiscal year 2027 budget needs from department directors, they believe require funding to protect public health and safety or maintain current facilities and infrastructure. We're here to discuss with council in workshop workshop format to get council thoughts and ideas as it regards as it relates to the fiscal year 27 budget. And what we're going to focus on tonight is we're going to focus on the general fund, uh, the funding requests, which are supported by taxpayer dollars. And I just want to note, similar to what it would just piggyback on what we were talking about with this schedule here, uh, consistent with prior years, the fiscal 2027 proposed budget has deferred projects, which were identified in the CIP document, which were which was workshopped in January. And uh the following proposed projects are outside of any bond funding uh that we have in place for for uh infrastructure. Okay, uh CIP funding trend. So this is gonna uh tell us really what we've done over the the last uh handful of years. So starting in 2001, our adopted budget, we funded capital at about 1.6 million dollars. Uh as you can see over time through 22 to through to the fiscal year 26, we've been in that four and a half million dollar range to you know as low as 1.6 million. Um, and we all know that that we have a we do have a significant amount of uh capital needs within the city. Uh and this year, what we're proposing for uh fiscal year 2027 is a total CIP amount of six million two hundred and forty-three thousand five hundred and thirty-three dollars. And what that's really comprised of, um thanks to council. Uh we we do have that committed fund balance that was uh really surplus from last year that we're able to have in addition to our unassigned fund balance. So what we would what we are proposing is we'd like to use uh three million eight hundred and seventy thousand from committed fund balance. What that will do is that will bring that committed fund balance to zero. So that's putting the money right to use. Um, and then the balance would come from uh taxpayer dollars in the amount of two million three hundred and seventy-three thousand. Uh so what we're looking at here is our fiscal year 27 and 26 CIP comparative. Um, so when you look at the column to the left, the CIP requested in fiscal year 27. Uh, that's that's going to be what we discussed in January of this year. So we had we identified uh $13,670 worth of worth of projects. In order to balance our budget, we have to defer seven million seven million four hundred and twenty-seven thousand, and what we have proposed for paygo, what we with um a combination of our committed fund balance and uh taxpayer dollars will be six point two million. And that compares to last year's adopted budget of three million one hundred and twenty-three thousand. Um looking at kind of looking at this document here, it's really in the format of the CIP document that we discussed in January. And what I'm gonna do is I'm gonna run through just those high-level categories and um really just notable projects that we will be that are proposed to be funded in fiscal year 27. So information and communication systems, the notable projects that are proposed to be funded are technology upgrades, harbor Wi-Fi, uh GFOA compliant budget and popular finance annual report and reporting software, which includes implementation, and a police investigative uh technology equipment. And that total proposed funding is six out six hundred and fourteen thousand dollars. Uh moving on to facilities improvements, uh the notable projects that are uh proposed to be funded was the brick market HVAC HVAC system. Um and that work's already been completed. So that was that project was approved in advance. All right, and uh school capital fund, uh library boiler, fire station five building improvements, city facility security, recreational improvements, and carousel uh storage, and that under facilities improvements, the proposed funding is two million and four hundred and fifty-nine thousand. Transportation improvements, the notable projects are roadway and sideway sidewalk improvements, uh transportation pilot programs, and that's uh proposed funding of 1 million 75,000. And um areas areas of note uh would be the city was recently awarded approximately four million dollars for the street safe streets for all um grant, and that's uh funding to design design and implement safety improvements supporting Newport's commitment to safer, more accessible streets for all users, and also investing in sidewalk repair and maintenance is uh is funded through the operating budget. So that does not come through capital.
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