Lido Isle residents had protested a new home that the company opened there in October, and the city re-evaluated the count after initially saying it was within limits.
To comply with its agreement, Morningside could be required to somehow redistribute the beds. The city had sought a reason to force the recovery home operator to close its new Lido location, but City Atty. David Hunt declined to say Wednesday if this violation gave him that ability.
Generally, the city has the ability to demand that Morningside comply with the settlement terms; without compliance, the home would face fines and ultimately a revocation of the agreement, according to Hunt.
One of the stipulations in the so-called zoning agreement is that Morningside would not have more than 30 beds in the "Peninsula Zone," which includes Lido Isle, and 36 beds in the entire city.
Based on correspondence between the city attorney's office and one Lido Isle activist, Morningside may have hit 36 beds in the Peninsula Zone and 42 beds in the city, once it opened its location at 533 Via Lido Soud.
But the operator had empty beds when the city conducted its inspection, Morningside Chief Executive Officer Candace Bruce said in an e-mail.
The company was still within its client limit, Bruce said.
Another provision of the agreement says the company can only house 30 of 36 clients in the Peninsula Zone, drawing a distinction between clients and beds.
"Morningside Recovery is not in violation of its client cap," Bruce wrote in an email.
She said that the company has 29 clients in the Peninsula Zone and 34 citywide. Bruce added that the company was in the process of removing empty beds, to comply with the agreement.
While Morningside and the city signed the agreement in September, much of the provisions do not officially take effect until December.
Bruce indicated that the company would comply with the agreement in the meantime.
For the past four years Newport has been battling rehab home operators. In 2008 the city passed one of the most restrictive municipal ordinances in the state, officials have said, and they have spent nearly $2 million defending it in court.