Narragansett Bay Commission in ‘serious discussions’ to acquire Providence Water

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PROVIDENCE, R.I. (WPRI) – The chairman of the Narragansett Bay Commission said Monday the agency is having “serious discussions” with Providence officials about acquiring the city’s water supply, but he acknowledged a deal has not been reached.

Vincent Mesolella also confirmed legislation was introduced at the agency’s request that would allow the commission to “enter into agreements with various entities for the acquisition, merger or consolidation of water treatment facilities.” The bill is currently before the Senate Environment and Agriculture Committee.

“We have had a continuous interest in acquiring the Providence Water Supply Board, which goes back over 25 years,” Mesolella told Eyewitness News. The Narragansett Bay Commission is a quasi-public agency that oversees wastewater treatment in Rhode Island. It is governed by a 19-member board appointed by the governor and the mayors or town administrators of eight communities.

The Senate panel is scheduled to hold a hearing on the bill Wednesday. The committee is also expected to consider the appointment of Charles Ruggerio to the Narragansett Bay Commission Wednesday. Ruggerio is the son of Senate President Dominick Ruggerio.

Emily Crowell, the acting chief of staff to Mayor Jorge Elorza, confirmed the city is having “preliminary conversations” with the Narragansett Bay Commission regarding a transaction, but said the two sides are not currently in negotiations. She said the commission is the only entity Providence is currently in talks with about the water supply.

The commission has held three discussions in executive session “regarding the potential acquisition and/or lease of the Providence Water Supply Board,” according to public meeting agendas dating back to December.                                                 

A separate bill introduced in the House by Reps. Scott Slater and Grace Diaz last week would prohibit the R.I. Public Utilities Commission or the Division of Public Utilities and Carriers from having “any jurisdiction, authority, or other power to approve, reject, review, or in any way affect” transactions involving water systems.

Crowell said the city supports the passage of both bills. Mesolella suggested it was “coincidental” that separate water-related bills have been introduced in the General Assembly. He said he has not reviewed the details of the House bill.

The commission’s water bill has not been introduced in the House, according to spokesperson Larry Berman.

Mesolella declined to say how much the commission would pay the city in a sale or lease agreement, except to say “we would pay as much money as we possibly can that would not impact the rate.” He said he believes an agreement would not result in a rate increase solely to fund the transaction.

“We view this acquisition as more about water quality statewide and water resources statewide,” Mesolella said. “We firmly believe we can play a pivotal role in the water resources discussion that the governor’s office is looking at right now.”

Elorza told reporters last week the city believes it could fetch between $400 million and $700 million as part of a sale or lease agreement for the water supply.

Providence Water sells water directly to approximately 75,000 retail customers throughout the state and provides water to eight other wholesale customers. A consultant hired by the city last year estimated that the assets owned and operated by the Providence Water Supply Board are likely worth $404.2 million.

The mayor has said he would use the proceeds from any water transaction to bolster Providence’s pension fund, which had only $348 million in assets available to cover $1.35 billion in promised retirement benefits as of June 30. A report co-authored by the administration and City Council released this month called the city’s increasing annual pension payments a “recipe for disaster.”

Mesolella acknowledged two of the key issues both the commission and city are researching are the ownership “title of certain properties” and labor relations. Nearly all of the Providence Water Supply Board’s employees are members of Local 1033 of the Laborers’ International Union, which represents city workers.

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Dan McGowan (dmcgowan@wpri.com) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan

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