PROVIDENCE, R.I. (WPRI) — Providence Mayor Jorge Elorza is scrapping a plan to monetize Providence’s water supply, asking two state lawmakers from Providence to pull a bill that would have enabled the plan.
In an about-face Thursday morning, the mayor said the city will no longer try to sell or lease its water supply, which he had proposed as a way to fund the $1.1 billion unfunded pension liability.
The bill would have given the local water systems the authority “to enter into transactions with other municipal water supply systems, regional water quality management district commissions, and public or private operators of water supply systems or water quality management systems to facilitate the coordination of their operations.”
The Narragansett Bay Commission had been interested in acquiring the water supply in the Scituate reservoir, which has an estimated value of $400 million and supplies water to 60% of the state.
The Providence Water Supply Board controls the reservoir, but is currently barred from making a profit off its sale of the water to other cities and towns. The legislation, introduced multiple years in a row at the State House, never gained traction.
“Pulling this off would’ve been massively complicated,” Mayor Elorza said at a news conference about pulling the proposal. “Politically, financially, logistically, from an environmental standpoint there were really significant concerns.”
Multiple city council members and a representative from the Audobon Society of Rhode Island also said they agreed with the decision to scrap the proposal. There were also concerns that rates would increase for customers if the water supply’s control changed hands.
“It didnt have a chance at the State House if the city wasn’t behind it,” Elorza said.
The abandonment of the water monetization plan means city leaders will need to come up with another way to shore up its finances, and Elorza acknowledged there isn’t a new plan yet.
He said he wouldn’t rule out floating pension obligation bonds, and said they might need to do “15 smaller things in aggregate” rather than one major proposal like the water monetization.
He did say he has no current plans to declare bankruptcy, which he described as a last resort.
“If you think things are difficult now, then you have no idea the pain that would be inflicted if we do go into receivership or bankruptcy,” Elorza said. “Under every scenario, bankruptcy should be avoided.”