PROVIDENCE, R.I. (WPRI) – With Providence officials preparing to ask the General Assembly to help the city generate revenue from its water supply, a New Jersey-based company has been tapped to determine how much the water system is worth.
MR Valuation Consulting, LLC will be paid $175,000 to issue a valuation report “that will be vital to the interests of the city as it relates to soon-to-be filed legislation,” according to a document filed with the Providence Board of Contract and Supply.
MR Valuation Consulting was one of three companies that submitted proposals to the city. FirstSouthwest, a division of Hilltop Securities Inc., handled the RFP process. A final report is due to the city April 24.
The city is seeking a valuation of the city-controlled water supply as part of its effort to craft legislation that would help generate more revenue for the city. Mayor Jorge Elorza, a Democrat, has said he doesn’t want to sell the water supply to a private company, but he has expressed interest in the creation of a regional water authority in the state.
Last year a consultant’s report outlining ways Providence could improve its finances suggested the city should consider a one-time asset transfer worth at least $372 million – the value of the water supply’s assets in 2015 – or smaller annualized payments over time that could come as a result of a sale or lease. The study recommended the proceeds be used to improve the funding of the city’s struggling pension system, which was just 25% funded and faced $985 million in liabilities as of June 30.
In its winning bid, MR Valuation Consulting said its analysis would include all tangible assets that comprise the city’s water system, including the 37-billion gallon reservoir in Scituate, 27 square miles of watershed property, all of the water mains and pipes in the distribution system, more than 6,000 fire hydrants and a water treatment facility. The review will also include all equipment and property controlled by the Providence Water Supply Board.
The review will be led by Mark Rodriguez, a managing partner with the firm. In the application, Rodriguez highlighted his expertise by pointing to his appointment to commission tasked with determining with value of a water system Peoria, Illinois, which the city was considering purchasing back from a private company.
The firm’s Rhode Island experience includes a 2015 appraisal of Landmark Medical Center in Woonsocket, appraisals of the Pawtucket Power Associates for tax years 2008 through 2013, and a 2002 appraisal of a power plant in Tiverton.