Concerns Grow Over Future of Providence Water
Tuesday, May 02, 2017
The delay of the valuation of Providence Water is drawing criticism from city and state leaders, as the General Assembly has legislation pending that would create a regional water authority which would allow for the sale of Prov Water - that has drawn opposition as well.
At a recent meeting of the Board of Contract and Supply, City Treasurer Jim Lombardi raised concerns that the Prov Water valuation needed to be due by April 24 in order to be valid. However, City Finance Director Larry Mancini in a letter dated April 21 allowed the vendor - MR Valuation Consulting in New Jersey, who was paid $175,000 to do the valuation - to take more time to change its proposed scope.
"If you see the letter, the one asking for the extension, that's problematic in itself. But now they more narrowly define what a transaction looks like and the value is based on that," said City Council President Luis Aponte.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"If you had a house and you wanted to move, what would you want to know? Before you made a decision on how you price it -- sell outright, rent and keep it and keep your mortgage -- the first thing you want to know is what it's worth," said Aponte."But once you start to narrowly define it, there are issues."
Latest Prov Water Drama
In the spring of 2016, a 167-page report conducted by the National Resources Network, who Providence Major Jorge Elorza partnered with to develop a plan to implement long-term budgeting solutions in the city, cited “Monetizing PWSB, Proceeds to Retiree Liability” of the sale of the approximately $370 million asset as one prospect to address the city’s long-term financial outlook -- and immediately drew opposition.
Now, with a bill to create a regional water board before the General Assembly -- and awaiting a valuation of Prov Water -- Aponte warned that time is running out this session.
"The problem is we're up against a legislative session, and I'm not sure there's the willingness to allow this move forward. If it requires some state assistance, I'm not sure they're going to do it this year. And if it doesn't happen this year, it's likely not going to happen next year," said Aponte.
"In order for the state to look at this seriously, it has to be credible, and timely," said Aponte. "I don't think it's something they'll take up in the waning days, it we get [the valuation] too late."
GOP Opposition
On Monday, the Rhode Island Republican Party raised concerns about the construct of the legislation, pointing out that a sale of ProvWater would only benefit residents of Providence - not ratepayers throughout the state.
The RI GOP stated the following in a release:
On Tuesday, there will be a hearing at the House Corporations Committee on House Bill 6122. This bill will create a regional water authority but it really aims to give more money to the City of Providence by increasing the water bills of any customer who purchases water from Providence Water directly or indirectly in such communities as Providence, Cranston, North Providence, Johnston, Smithfield, East Providence, Bristol, Warren, Barrington, Warwick, Coventry, East Greenwich, West Greenwich and West Warwick.
The proposed legislation specifically prohibits state regulators from using "any purchase payment, lease payment, or management fee payment" for the Providence Water system "to benefit directly or indirectly of the ratepayers" of the Providence Water system. Instead any payment will go the City of Providence although the customers of the Providence Water in fact paid for the water system.
"This ridiculous bill is just a scheme to bail out the City of Providence by hiking up the water bills of customers across Rhode Island," said Rhode Island Republican Party Chairman Brandon Bell. "Speaker Nicholas Mattiello and Governor Gina Raimondo should speak out against this bill. Rhode Islanders pay enough in taxes. We do not need to pay a hidden water tax to bail out the City of Providence."
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