Newport approves $1.3M bond sale, maintains strong credit rating
The Newport City Council unanimously approved the sale of $1.335 million in improvement bonds on July 17, securing a favorable 3.31% interest rate while maintaining its AA credit rating from Standard & Poor's. The city is using grant funding and strong financial management to pay for major infrastructure projects without relying solely on property taxes.
The council's approval of Resolution 2026-59 came after the city received an affirmation of its AA credit rating with a stable outlook from Standard & Poor's. Financial advisor Jason Arzvald noted that the rating reflects the city's "strong management practices and financial policies." The bonds will help fund ongoing street and utility improvements across Newport.
The meeting also featured a presentation of the city's 2025 audit, which received an unmodified opinion—the best possible result. Auditor Jim Iikton noted one procedural issue: the city filed its annual unclaimed property report to Minnesota late, though the problem has since been corrected. He also highlighted that Newport, like most small cities, has limited staff to handle financial controls, but compensating oversight by the city council mitigates any risks.
Mayor Elliott emphasized that significant grant funding is helping pay for infrastructure work, reducing the burden on property taxpayers. "When you see these big dollar figures, it doesn't necessarily mean it's all city of Newport money," the Mayor said. The council unanimously approved partial payments for two ongoing projects: Meyer Contracting's storm sewer work on 17th Street and Geisinger and Sons' water and sewer main installation on Third Avenue. Both projects are progressing on schedule.
Council Member Sumar raised questions about the city's credit rating methodology and economic metrics, noting that Newport's economic indicators are "on the lower end" compared to other AA-rated communities, though still within acceptable ranges. The city's economic profile is primarily determined by property values and resident incomes. The council also heard that a water system interconnect with Cottage Grove will soon provide PFAS-free water for the next 3-5 years while Newport develops its own long-term water treatment solutions. Additionally, the city received a $486,000 grant to develop its first riverfront park on Cedar Lane, which will include a picnic shelter, trail, and accessible canoe launch.
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Votes (4)
2025 Audit Presentation
Dissent: None
Moved by N/A · Seconded by N/A
Jim Iikton from LB Carlson presented the 2025 audit. An unmodified opinion was issued. Reportable items included limited segregation of duties (common for small cities) and a late filing of the unclaimed property report. The general fund declined due to an EDA land transfer, but overall city finances showed significant growth in net position and adherence to fund balance policy.
2025 Street and Utility Improvements Project - Partial Payment Number Nine
Dissent: None
Moved by Council Member Sumar [0h16m53s] · Seconded by Council Member Ingamman [0h16m55s]
John Herdigan presented on Meyer Contracting's progress, specifically the storm sewer installation along 17th Street. The project is nearing completion for Meyer Contracting's portion. The Mayor noted that significant grant funding is helping to pay for the work, reducing reliance on property taxes.
Third Avenue Improvements Project - Partial Payment Estimate One
Dissent: None
Moved by Council Member Ingamman [0h19m29s] · Seconded by Council Member Sumar [0h19m30s]
Engineer John Herdigan reported swift progress by Geisinger and Sons on water and sewer mains. Storm sewer construction involving bedrock excavation will begin soon. Council Member Sumar inquired about resident complaints regarding extended work hours due to heat; none had been received.
Resolution 2026-59 Authorizing the Issuance and Awarding the Sale of General Obligation Improvement Bonds, Series 2026A
Dissent: None
Moved by Council Member Taylor [0h33m39s] · Seconded by Council Member Ingamman [0h34m12s]
Jason Arzvald of Ellers presented on the sale of $1,335,000 in Chapter 429 improvement bonds. The city maintained its AA rating with a stable outlook from Standard & Poor's, securing a 3.31% interest rate. Council Member Sumar extensively questioned the S&P rating methodology, specifically on the meaning of the Institutional Framework and Individual Credit Profile scores, and how economic metrics contribute to the city's rating, noting areas for potential future improvement.
Notable Quotes (9)
The city is does have limited segregation of duties and relies on a limited staff to prepare and complete the controls of the city. The city council should be aware of those controls. We do uh find compensating controls in place uh related to that process that allows for the city to operate effectively and efficiently.
The the city is required on an annual basis to prepare and submit an unclaimed property report to the state of Minnesota that lists out any unclaimed property. ... that particular report uh uh was was not filed on a timely basis uh this year.
I think again it's very positive. We know we have a lot of infrastructure work to do. So, it's good to see those balances be in a place where we're going to be able to continue that work and um continue rebuilding some of those things.
I would mention as our auditor said, we are bringing in a lot of money to help pay for these things to try to keep that off the property taxes. And um you know, as a result, when you see these big dollar figures, it doesn't necessarily mean it's all um city of Newport money. I mean, it's ours as it comes in uh through the grant process, but um it's not necessarily property tax dollars doing it.
We've talked in in several different locations about expanded hours for the people to operate. You just mentioned that they're only down to 10 because of the extraordinary heat that these guys are facing and just to be out there that number of hours is commendable. Have we had any concerns expressed from people when they are working these extra hours?
They came back uh with an affirmation of the city's double A rating with a stable outlook. ... they've highlighted uh the things that they have historically which are, you know, strong uh management practices and financial policies.
What is that on a scale of that? Is the scale of 1 to three, a scale of 1 to 5? A scale of 1 to 10?
your economic metrics are on the lower end of those double A rated communities, but still within that, you know, within that framework. ... the economics are primarily market values of your of your property in the community and the incomes of the people that live here.
The better the bond rating, the lower the interest rates we get. Correct. And so there's a direct correlation there between how we're managing ourselves financially, um, you know, assets, all of those things all affect uh that.
Ordinances & Resolutions (11)
Presentation of the city's financial audit results for the year ended December 31st, 2025.
Required document prepared by the city and audited annually.
Part of the audit report summarizing findings and financial results.
Annual report required by the state of Minnesota, not filed timely in 2025.
Policy in the general fund to maintain a balance of 40-50% of operations/expenditures.
Authorizing the issuance and awarding the sale of general obligation improvement bonds, series 2026A.
Federal grant through EPA for 12th Street Area Improvements Project.
Grant providing funding for dead or dying tree removal and new tree planting for residents.
Grant received for the design phase of a future city water treatment plant(s).
Grant of $486,000 received for the creation of a riverfront park.
Documents for 12th Street project needing adjustments for federal grant compliance.
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Other Topics from This Document
Street and Utility Improvements Projects
Water System Interconnect Project with Cottage Grove
12th Street Area Improvements Project Delay
Authorizing Sale of Bonds for Improvements
Community Environmental and Development Initiatives
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