The Providence water supply is one of the city’s biggest assets, and the city’s bean-counters are eyeing it as a way to fix the city’s underfunded pension system. But selling the water supply would be difficult, opening a bigger debate about who owns the water.
This is the second piece in a three-part series. Read the first piece, on Providence's options for fixing its underfunded pension system here, and the third piece on Scituate's stake in the future of the water supply here.
When you turn on a tap in Providence that water is actually coming from Scituate. Specifically from a reservoir built where the Moswansicut and the Ponaganset Rivers join to form the north branch of the Pawtuxet. The reservoir holds 37 billion gallons of water, and it’s almost completely surrounded by rolling forested hills. “It’s absolutely amazing. I mean I’m sitting here looking across the causeway right now and I see water and I see a road,” says Kim Smith. “If you look at the historic photographs, you’ve got like church steeples almost at the elevation of the road today.”
To understand the history of this water supply, I met up with Kim Smith on the side of Route 114, one of the few places where you can get close to the reservoir. Smith is an archaeologist who moved to Scituate a couple years ago. She says what happened in Scituate happened all over the country.
“It’s kind of the classic story, in my opinion, of turn of the century public works programs across the country.”It’s a story of public good and private loss. In the early 1900s, Providence was looking for a new source of drinking water. At the time, the city was pulling from the Pawtuxet River in Cranston, but a population boom and pollution from mills upstream was causing problems.
The city petitioned the General Assembly for permission to buy land in Scituate to build a reservoir. And they got it in 1915. The city bought 1,195 buildings - churches, schools, dance-halls and dairy barns. They relocated graves, and built a series of dams. Just 12 years later the project was complete.
Now, Providence city officials are eyeing the water supply as a way to plug the billion-dollar hole in the city’s pension fund.
Former City Councilor Sam Zurier sees the water as one of the city’s key assets, and its best option for reaching financial stability. He helped write a 2018 report on potential tools for funding the pension system.
Zurier says, “The most significant tool involves some sort of return on the city’s water supply. So if that were taken off the table, it would be very difficult to come together with a package that would relieve the stress that the pension system will have in the city.”
Mayor Jorge Elorza tried to do just that. He asked legislators from Providence to introduce a bill that would allow the city to sell or lease its water supply. And in January, the city started accepting preliminary bids from private companies.
That set off a wave of public outrage. At community meetings this year, Cristina Cabrera was among the most outspoken opponents.
“You just cannot gamble, you cannot put that up for monetization or privatization or leasing or capitalization, commodification, or whatever you want to call it,” Cabrera said. “When you report to shareholders, profit is the bottom line. It is not the environment; it is not the people,”
Facing widespread opposition both in the city and the General Assembly, Elorza backed off the plan. But selling to a private company is just one of the ways the city could try to make money off the water supply.
Another idea that’s still on the table: creating a state-run public utility that would buy the water supply. Lawmakers from Providence proposed a version of that plan in the General Assembly in 2017. But it too hit a political brick wall.
Cynthia Wilson-Frias is chief of Legal Services for the Public Utilities Commission, the state-run regulatory body.
She looked closely at bills, and she said, “All of the versions of legislation that we’ve seen would have that transfer occur with a payment to the city of Providence. And that would come from ratepayers in other communities.”Sixty percent of the state gets water through the Providence Water supply. And it’s easy to see why those customers would resent this plan. They’d pay more for water to bail the city of Providence out of its pension obligation. And towns like Cranston, Johnston, and Warwick have their own pension issues.
Given that, getting the required legislative approval for such a move is a Herculean task. But there is one other way Providence could try to make money off the water supply.
“The simplest one in my opinion is just to treat this utility like every other utility, where owner gets return,” commented former City Councilor Sam Zurier.
His point is that privately-owned utilities, like National Grid, charge a rate that’s lets their investors make a profit.
This plan has the same political problem - that ratepayers would see their increases in their water bills. But there is a legal precedent for it. For the first half-century of the Scituate Reservoir’s history Providence did charge other towns a higher rate, and put the profits into the city’s general fund.
“This is something that the city of Providence did for years and years before 1980,” said Zurier.
In fact, even when Providence was getting water from the Pawtuxet River, the city was profiting off the water supply.
That started to fall apart in 1977 when the Providence Water Supply Board said it was planning to raise rates by 60%. Following a three-year legal battle, the General Assembly stepped in, giving the PUC the power to set the price of the water.
Since then, the PUC has blocked the city from making a profit. The commission says that’s because the Providence Water supply is different than a privately-owned utility.
Wilson-Frias explained, “In the situation of an investor-owned utility, the rates for those utilities need to be able to attract investment from shareholders. In the case of the municipal utilities in Rhode Island, the investors are the ratepayers.”
In other words, the PUC says the ratepayers have an ownership claim over the water.
To some, the conclusion that Providence doesn’t own the water supply is ridiculous. The city bought the land and built the dam.
“The legislature gave the city of Providence the right to condemn and buy the land,” said Michael Marcello, a former State Representative from Scituate. “Even though maybe that money came from ratepayers I do believe that the land and the assets are owned by the city of Providence through their quasi-public entity known as the Providence Water Supply Board. But that’s never been tested in the courts, and only the courts can decide who owns the land.
As it stands, the city and the state are locked in a battle for control of the water supply. The city’s attempts to sell the water supply have stalled in the legislature. And the General Assembly gave the Public Utilities Commission the power to prevent Providence from making a profit by raising rates.
The dispute could end up in the courts. And any of the options raises an important legal question: who ultimately owns the water?
Does the city own the system because it built the infrastructure? Or - as is increasingly being argued in the courts - is the water a public good, owned by the people who use it?
Cities across the country are looking to water supplies as a financial resource and moving to privatize. But there’s growing push-back from activists like Dr. Mona Hanna-Attisha, who helped bring Flint’s lead-contamination crisis to light.
“The water should be a public good,” Hanna-Attisha commented. “It should be owned by the people. I think there’s some innovative things happening nationally about protecting our water, preserving it as a public good that should not be privatized for profit.”
Baltimore recently passed a ballot measure making it illegal to privatize the city’s water supply. And other cities, like Pittsburg, are taking note. In Providence, representatives for the mayor say all options are on the table.