PROVIDENCE, R.I. (WPRI) – It won’t make his inauguration speech when he is sworn in for a second term Jan. 7, but Providence Mayor Jorge Elorza has a message for whomever wants to succeed him in four years.
“If this water transaction isn’t consummated, it’s going to suck to be the next mayor,” Elorza said during a wide-ranging interview with Eyewitness News earlier this month. “It’s going to suck. It’s going to be all about what are we going to cut? Who are we going to piss off? It’s terrible.”
That’s why the Democrat says he will continue to pursue a deal to sell or lease the Providence Water Supply Board in exchange for a windfall of cash that would be earmarked for the city’s ailing pension fund, which has less than 30% of the money it needs to cover $1.35 billion in future payments to retirees.
Elorza, who breezed to re-election in November, said the proposed water transaction and a plan to implement a free universal pre-kindergarten program for children in the capital city are his top priorities over the next four years. (He will be term-limited in 2022, and isn’t ruling out running for higher office.)
The ambitious proposals Elorza is putting forward are attempts to tackle two quintessential challenges his peers in cities across the country are facing: the ever-growing tab for retirement benefits and underperforming schools that send middle-class families searching for alternatives and too often allow poor children to fall off track.
When it comes to water, Elorza is offering a complicated solution to a straightforward problem.
Providence is required to contribute $83 million to its pension fund in the current fiscal year, a payment that eats up 11% of the entire city budget. That annual deposit is projected to grow by 3.5% a year through 2040, when the payment will hit $172 million. (It’s likely the city will reamortize the debt at some point, smoothing out payments while extending the amount of time it will take to have a fully-funded pension system.)
While the largest pension contributions will come long after he leaves office, Elorza has repeatedly warned that every new dollar that goes toward retiree benefits is a dollar that can’t be spent improving schools or city services, let alone lowering taxes.
“The real bill isn’t going to come due during my time,” Elorza said. “The city’s going to be fine for the next four years. But the reason I’ve chosen to take this on is because we cannot kick the can down the road. This is not just a looming threat. This is an existential threat that the city has.”
Elorza contends that Providence should be allowed to generate a profit on the water supply it controls, possibly through a lease deal that would involve the quasi-public Narragansett Bay Commission to oversee the system. He has said a transaction could generate nearly $400 million for the pension fund, but he has faced resistance from lawmakers, other municipalities and environmental groups.
Some critics, including state Treasurer Seth Magaziner, have questioned whether Providence owns the water system. Others have warned against the idea of privatizing the water supply (Elorza maintains the system would not be privatized). At least eight members of the incoming City Council have publicly stated they oppose a water transaction.
Elorza acknowledges “I need to do a better job” explaining why he supports a water deal, but he maintains simply “disagreeing with the proposal we’ve put forward isn’t sufficient.” On the campaign trail this year, he repeatedly challenged his opponents to offer other solutions for the pension system, but none of them did.
“There are no other assets,” Elorza said. “If there was another option out there, you would think that either my administration, [Angel] Taveras’s administration, [David] Cicilline’s administration, would have identified it by now. That easy option, that easy alternative, is just not out there.”
Universal pre-K is likely to generate widespread support from the City Council and Providence residents, but finding the money to pay for it won’t be easy.
Elorza said he believes the program could cost between $8 million and $12 million a year, a portion of which could come from the state if Gov. Gina Raimondo follows through on her pledge to implement universal pre-K across the state. But Providence school officials have warned the district could face a $37-million shortfall by 2023, which may force the city to make deep cuts in programming in the coming years.
“We can do it,” Elorza said of his pre-K plan. “We can absolutely do it. Other cities have done it. It’s a matter of identifying the resources and getting it done.”
At the same time, Elorza said he wants to take a more holistic approach to improving educational outcomes for students. He regularly points out that children spend just 20% of their waking hours in classrooms, but he wants to make further investments in out-of-school opportunities, like summer camps and after-school programming.
“The 20% gets hundreds of millions of bucks,” he said. “The other 80% gets peanuts.”
While he stands by his year-long contract dispute with Providence’s teachers – the two sides recently came to terms on a new agreement – he said the battle proved how difficult it is to change education policy through a collective bargaining agreement.
“It’s frustrating that the leverage doesn’t exist to bring about the change immediately that we know our kids deserve,” he said. “On the flip side of that, you identify areas where you can make a difference and you work your tail off the make sure to build the systems in those specific areas so that kids aren’t slipping through the cracks.”