PROVIDENCE, R.I. (WPRI) – Providence City Council President Luis Aponte said Friday he’s not ready to support the Elorza administration’s proposal to create a regional board that would have the power to purchase or lease local water supply systems, in part because he’s not sure the city has explored all of its options when it comes to generating revenue from the water supply.
The mayor is asking the General Assembly to establish the Rhode Island Cooperative Water Authority, an 11-member board that would be given “broad powers” to acquire local water assets. The city hopes the board would be the first step toward monetizing its water system, which includes the 37-billion-gallon reservoir in Scituate.
“This legislation clearly sets the stage for the monetization of the Providence Water Supply Board,” Aponte, a Democrat, said in a statement. “I’m concerned that this legislation has been introduced so late in the session, and I am not convinced that the proper due diligence has been done in the process.”
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Aponte has repeatedly said he wants a “thorough exploration of a larger set of options” when it comes to the city’s water system, including the return Providence would see if it sold the asset to a private entity. The council president has not advocated for privatization, but has said Providence should at least know how much a sale could generate.
Both Aponte and Elorza have said they want the proceeds of any monetization of the water supply to improve the funding of city’s struggling pension system, which was just 25% funded with a shortfall of $985 million as of June 30, 2016.
Administration officials said they don’t know how much Providence couldn’t eventually generate from the water system, but a valuation firm hired by the city earlier this year is currently conducting an assessment of all of the Providence Water Supply Board’s assets. That report is expected to be completed by April 24.
Behind the scenes, Aponte has been voicing concern that the administration might not consider all of its options with the water supply for several months. That’s one reason he hired Jeff Britt, an ally of House Speaker Nicholas Mattiello, to lobby lawmakers on behalf of the City Council. He also asked internal auditor Matt Clarkin to run numbers on what a windfall of cash could mean for the city’s pension system.
Clarkin’s review found that a $400-million cash infusion to the pension system would bring the pension system’s funding ratio to 57%, potentially lowering the city’s actuarially required contribution by more than $30 million in the 2019-20 fiscal year. A $300-million contribution would bring the fund to 50% funded and a $200-million contribution would bring it to 43% funded, according to Clarkin.
“We need to be deliberate and thoughtful when considering the value of an asset of this size, and realize that this is a one-shot deal,” Aponte said. “I’m hesitant to endorse a plan that might leave desperately-needed dollars behind for the city because we did not explore every possible option when it came to the future of this precious asset.”