Newport city officials are responding to criticism surrounding the upcoming $98.5 million bond referendum, set for a vote on November 5.
The bond, which would fund various infrastructure projects, has been criticized by former Newport City Council Third Ward Councilor Kate Leonard, current School Committee member Bobby Leary, and other members of the community.
Leonard and Leary have publicly opposed the bond, saying that it lacks transparency and prioritization. In a political advertisement, they urged voters to reject the referendum, citing concerns about unclear ballot language and the need for project prioritization.
Leonard and Leary’s ad claims that Newport “continues on its spending spree of hiring new employees, adding many new projects, increasing water/sewer bills, etc.” They warn that if the bond passes, residents should “prepare for your new tax increase or higher rent payment.”
What’sUpNewp reached out to City of Newport officials to get the facts on the bond and asked them to address several key points of contention.
The city confirmed that while the Rogers High School construction project has exceeded original estimates, all additional funding requests have been properly vetted. “Any and all requests for additional funding are required to be brought before the City Council in open session and voted upon by a majority of Councilors,” the statement read.
To date, the City Council has approved $23,713,145 in additional funding for the Rogers project. Officials attribute these increases to high inflation and pandemic-driven supply chain issues.
While it’s true that the Rogers High School construction project has been more expensive that originally estimates, like any expenditure, any and all requests for additional funding are required to be brought before the City Council in open session and voted upon by a majority of Councilors.
In the case of the new Rogers, high inflation and pandemic-driven supply chain issues have resulted in the City Council approving in $23,713,145 in additional funding in order to meet budget gaps. Thankfully, over the last 25 years, Newport has been able to position itself on strong financial footing and thus far have been able to meet those requests with minimal impact to property taxpayers and City operations.
Addressing concerns about grouping multiple projects under one bond, the city explained the decision was made to reduce borrowing costs and maintain flexibility. “The decision to combine multiple projects stems from a desire to bring down the cost of borrowing, allowing the City the ability to be flexible enough to respond to changing conditions,” the statement said.
Going out to bond is an expensive proposition no matter the size of the offering. Similar to the State’s proposed Green Bond (Question 4 on the ballot), the decision to combine multiple projects stems from a desire to bring down the cost of borrowing, allowing the City the ability to be flexible enough to respond to changing conditions, and to make needed investments that can be paid for over decades through a predictable debt service rather than through more immediate property tax increases.
Officials emphasized that all bonded projects will still require additional approvals and public input, including City Council approval, before any funds can be spent.
It’s also important to note that all bonded projects will require additional approvals and public input, including City Council approval before any funds can be spent or projects approved. In this way, each project is inherently separate and distinct. Remember: even though the City would be given permission to borrow up to $98.5 million in bonds, the actual amount of bonds sold and projects pursued may actually be less. In addition, having additional bonding authority optimizes the City’s ability to respond to contingencies and emergencies in the event of a catastrophic infrastructure failure.
Responding to claims of “unestimated, unprioritized projects,” the city pointed to its annual Capital Improvement Plan process. This plan “details estimated costs, timeframes, and project descriptions for other infrastructure projects that we’ve identified across the City,” according to the statement.
Some projects, like the Perrotti Park bulkhead replacement and Elm Street Pier, are described as “shovel ready.” Others, such as Cliff Walk funding, represent matching funds for secured state and federal grants.
While some projects will need to be further developed and go out to bid before final hard costs can be assigned, others such as the Perrotti Park bulkhead replacement and Elm Street Pier are shovel ready. Others, like funding for the Cliff Walk, represent matching funds for state and federal funds that we’ve been awarded. In the case of the Cliff Walk, we’d be using roughly $3.75 million to secure more than $13 million in federal funds that we’ve been awarded to rebuild the collapsed section between 40 Steps and Webster.
As to how projects are prioritized, you needn’t look much further than the City’s annual Capital Improvement Plan process, which not only served as the basis for developing the bond but also details estimated costs, timeframes, and project descriptions for other infrastructure projects that we’ve identified across the City. Information on the Capital Improvement Plan can be found at www.CityofNewport.com/CIP
The city also provided clarity on potential tax impacts. If the entire $98.5 million is issued, the average residential taxpayer can expect to pay about $346 more in property taxes annually, or 95 cents per day. Non-resident homeowners would see an average increase of $531 per year.
Officials noted that properties assessed under the city’s average of $1.19 million would see smaller increases. They also emphasized that the full $98.5 million may not be issued, depending on final project costs.
We can’t really speculate on what a tax increase would look like should the bond fail, but if the bond passes and the City issues the entire $98.5 million, the average Residential taxpayer can expect to pay roughly $346 more in property taxes per year, or roughly 95 cents per day. The average Non-resident homeowners can expect to pay $531 per year above their current rates. Note that because the average property value in Newport is roughly $1.19 million, properties that are assessed under that number would see a smaller tax increase. And even though the City will be authorized to issue $98.5 million in bonds, the actual amount of bonds sold may in fact be less, depending on final costs.
Addressing calls for voters to choose specific projects, the city reiterated that each project will undergo a full public vetting process.
See above. Each project will have to go through a full public vetting process before any funds can be spent or projects approved. Transparency and public feedback is baked into the process for all projects that the City undertakes, with the City Council – and the community at large – serving as the ultimate decision makers.
The city confirmed there are 9,746 taxable properties in Newport: 8,697 residential and 1,049 commercial.
What The City Manager Had to Say
Newport City Manager Colin Kennedy spent a significant amount of time discussing the $98.5 million bond referendum during a conversation with What’sUpNewp on October 16. Kennedy framed the bond as “insurance” against potential future costs, particularly climate change and infrastructure repairs.
“Within one to three years, because of all the impacts of climate change, that bulkhead is going to fail,” Kennedy said during the discussion, referring to the Perrotti Park bulkhead. He estimated the cost to replace it at about $20 million.
Kennedy argued that passing the bond would spread costs over 30 years, resulting in a smaller tax increase compared to potential emergency funding scenarios. “I would much rather be able to borrow funds from an authorized bond referendum and spread that cost out over 30 years at a very small rate of tax increase,” he said.
The city manager highlighted several projects that could benefit from the bond, including beach nourishment at Easton’s Beach and stormwater control in the north end. He emphasized the potential for leveraging bond funds to secure additional grants, potentially doubling or tripling available funds for some projects.
Addressing concerns about the bond’s similarity to the 2020 Rogers High School bond, Kennedy clarified, “This is a general obligation bond. It is not a bond that’s for a single project.” He stressed that the allocations are “just a roadmap” and that the City Council would approve each bond sale individually.
In a Fiscal note memorandum to Newport City Council dated October 2, the City Manager outlines some of the outcomes that could occur if the bond fails.
The bond referendum will appear on Newport’s November 5 General Election ballot.
Voting In Rhode Island
Early in-person voting continues until 4 pm on November 4, allowing Newport County residents to cast their ballots before Election Day on November 5.
Eligible voters can find their early voting location online at vote.ri.gov or by contacting their local board of canvassers.
The deadline to request a mail ballot was 4 p.m. on October 15. However, voters who cannot vote in-person can still request an emergency mail ballot from their local board of canvassers.
All mail ballots must be received by the Board of Elections by 8 pm on Election Day, November 5, to be counted.
For those planning to vote on Election Day, polls will be open from 7 am to 8 pm across Newport County and the rest of Rhode Island.
For more information about voting in Rhode Island, visit vote.ri.gov or contact your local board of canvassers.
