The debate about the lease or sale of Providence’s water supply is heating up, with significant potential consequences for Rhode Island’s capital city and ratepayers in other communities.
While Providence Mayor Jorge Elorza painted a mostly upbeat picture during his annual budget address last week, he acknowledged that the city’s severely underfunded pension fund poses a “seismic” challenge to the future of Rhode Island’s capital city. That’s why Elorza is renewing his quest to extract hundreds of millions of dollars in “trapped equity” from Providence’s water supply.
The result is two bills in the General Assembly. A House version backed by the city would prevent state regulators from having authority over a transaction involving Providence’s water system. A Senate bill, due for an initial hearing in the Senate Committee on Environment and Agriculture on Wednesday, would allow the Narragansett Bay Commission to make agreements to acquire additional water treatment facilities.
Rhode Island Republican Chairman Brandon Bell used a statement Tuesday to criticize the bills
“Here we go again,” Bell said. “Another ridiculous scheme to bail out the City of Providence by increasing the water bills of customers across Rhode Island. To make the idea more appealing to State House politicians, Narragansett Bay Commission is now involved. Providence and State House politicians will love this idea.
“Providence politicians get bailed out of the mess they have created in their own city and State House politicians will have an even bigger pot of money from which to scoop at the Narragansett Bay Commission at budget time,” Bell said. “Unfortunately, the average consumer will get stuck paying higher bills.”
Speaking to reporters after his budget address last week, Mayor Elorza said any increases in water rates would be kept below the average hike over the last five or 10 years.
“It’s natural that rates increase over time, but we want to keep those rate increases below what they’ve been in the past,” Elorza said. “Anyone who’s concerned about this massive increase in rates, we’re addressing that in our piece of legislation, so that folks need not be concerned.”
Narragansett Bay Commission spokeswoman Jamie Samons added, “The Narragansett Bay Commission’s goal is to not enter into an agreement that would cause our rates to go up. That is first and foremost.”
Providence’s pension has less than 30 percent of the money needed to meet its long-term obligations, largely due to changes made during the era of former mayor Buddy Cianci.
“If we don’t do something about our unfunded pension liability,” Elorza said, “it’s only a matter of time where we’re going to be running out of cash. It might be 10 years, it might be 12 years, but we know we’re headed in that direction. The longer we wait to do it. the more difficult and more expensive it’s going to be. So that’s why we’re pushing to make sure that it happens ASAP.”
Providence’s water supply, most of which comes from the Scituate Reservoir, provides water for about 60 percent of Rhode Islanders.
Last year, a proposal to monetize the water system failed to attract support from House Speaker Nicholas Mattiello and it went nowhere at the General Assembly.
This time around, “The bills will go through the normal legislative process and then [Mattiello] will review the public testimony,” House spokesman Larry Berman said.
In related news, Charles Ruggerio, a lawyer whose father is Senate President Dominick Ruggerio, has been nominated by Gov. Gina Raimondo to the Narragansett Bay Commission. The Senate’s Committee on Environment and Agriculture is slated to confirm the appointment Wednesday.
Asked why Raimondo made the nomination, a spokesman for the governor, Josh Block, said, “Charles cares deeply about our state. He is a dedicated public servant and accomplished attorney with extensive experience working with Rhode Island municipalities and small businesses. He will be a strong addition to the NBC.”
The NBC runs sewer treatment facilities in metropolitan communities around Providence. The quasi-public agency is chaired by Vincent Mesolella, a former state rep and longtime influential player in state politics.
