PROVIDENCE – Mayor Jorge O. Elorza threw in the proverbial towel Thursday on a state legislative proposal he spearheaded to lease out the city’s water supply system to a private operator to raise money to help meet the city’s employee pension payment obligations.
The mayor indicated he and others will explore other ways to raise money.
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During a news conference at City Hall, Elorza said the city has withdrawn its support of the proposed Municipal Water Supply Systems Transactions Act, effectively cancelling the initiative. The plan’s chances for approval by the R.I. General Assembly were questionable from the start, as the legislators quickly turned down a similar proposal from the city last year.
“Putting Providence on solid financial footing has been a priority for my administration since day one,” the mayor said in a statement. “We’ve listened to community members and we want to ensure that we take our next steps together, as a city.”
Despite pulling out of the proposal, Elorza said, “We will continue to meet with residents to discuss the city’s financial challenges and to put forth new and different ideas to address them. We believe that doing nothing is not an option and we look forward to working together with the City Council, our state [legislative] delegation, and our residents to find solutions to make our city stronger and more vibrant.”
In addition to providing water to Providence, the city’s system has retail customers in Cranston, Johnston, North Providence, and Smithfield. It also has eight wholesale customers that resell water in communities around the state.
Opponents have argued the proposal amounted to privatization of a public-operated resource that could lead to increased water rates and other drawbacks for cities and towns served by the system. They also argued that surrounding communities shouldn’t have to take such risks for Providence’s own dilemma.
In laying the groundwork for the proposal, the city had issued a request for qualifications for a contract to run its water system and three companies had responded.
Following the announcement, Elorza spokeswoman Emily Crowell said the administration stills want to focus on a reworked proposal involving the water system, but will not try to submit anything for legislative approval until next year. One option, she said, could be to create a “regional cooperative” for owning or operating the water system, instead of that responsibility solely falling on Providence.
After the lease proposal was filed on the state level last winter, some Providence City Council members came out against it in February. They surmised it also wouldn’t be good for Providence.
“It’s a false choice to pit our water supply against the city’s fiscal health,” said Councilman Seth Yurdin. “No one disagrees that the city faces long-term financial challenges, but the water-transfer scheme is yet another one-time fix with serious long-term costs to our community.”
Councilwoman Katherine Kerwin said: “Water monetization is being presented as the only option in a financial crisis. There are options we have not yet taken, and after hearing countless members from our community, I feel selling water, one of our most precious assets…should be our last resort.”
A group named the Land and Water Sovereignty Campaign, representing Native Americans, other minorities and environmentalists, also spoke out against it.
“Water is an inalienable human right and shouldn’t be commodified,” the group said.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com
