PROVIDENCE, R.I. (WPRI) – Two Providence lawmakers have again submitted legislation that would pave the way for the Elorza administration to monetize the city’s water system, a transaction the mayor claims could serve as a “once-and-for-all solution” for the city’s underfunded pension system.
The bill would give agencies like the Providence Water Supply Board the authority to enter into a transaction with public or private entities that manage other water systems. The city has been discussing a potential deal with the quasi-public Narragansett Bay Commission for more than a year.
Known as the Municipal Water Supply Systems Transactions Act, the bill also prohibits the R.I. Public Utilities Commission or the Division of Public Utilities and Carriers from having a say over rate changes in the five years after a deal is made. During that period, any rate increases would be capped at the same percentage as in the five years prior to the transaction.
After five years, the new entity would be regulated by the PUC.
“For more than 100 years, Rhode Islanders have relied on Providence to be the stewards of most of the state’s water supply,” Elorza said in a statement. “It’s time for us to protect our asset and continue to modernize our system. We can no longer kick the can down the road. This legislation is critically important to maintain a vibrant and optimistic future for our state, preserve the quality and affordability of the water source and to address our long-term finances. We’ve explored many options and if we do not take action now we may not be able to later on.”
Elorza, a Democrat who just started his second term, has repeatedly said a transaction involving Providence Water is the city’s only option for improving the health of the pension system, which had just 25% of the money it needs to pay for benefits the city has promised to retirees as of June 30, 2018. The unfunded liability is pegged at $1 billion.
The mayor has struggled to gain support for his plan from state lawmakers in recent years, and there has been no sign this year will be any different. Identical legislation was submitted last year by the same sponsors, state Rep. Scott Slater and Sen. Maryellen Goodwin,
“What we’re proposing with this legislation is in the best interest of the entire state,” Slater said. “It’s unsustainable for Providence to continue to operate, and pay for, the water system that serves the majority of Rhode Islanders. This is an opportunity to make sure that decision-making for our water supply remains at the local level for years to come and to puts Providence on a sustainable financial path.”
Goodwin said the bill represents a “collaborative approach that will safeguard reliable, low-cost and high-quality water while providing the capital city an opportunity to address its pension obligation once and for all.”
Elorza has said the water system could fetch between $300 million and $400 million in a lease deal, although Narragansett Bay Commission officials have said they are only interested in a purchase.
The Elorza administration has also announced three community forums where it plans to discuss its plan for the water system:
- March 4, 2019, 6:00PM – 7:30PM
Nathan Bishop Middle School, Auditorium
101 Sessions St, Providence, RI 02906
- March 11, 2019, 6:00PM – 7:30PM
Dr. Jorge Alvarez High School, Cafeteria
375 Adelaide Ave, Providence, RI 02907
- March 21, 2019, 6:00PM – 7:30PM
Nathanael Greene Middle School, Auditorium
721 Chalkstone Ave, Providence, RI 02908