Metro, News

Opposition mounts against water monetization

Mayor Jorge Elorza hopes to direct revenue from proposed water monetization to city pension debt

By
Senior Staff Writer
Friday, March 1, 2019

Three members of the city council introduced a resolution opposing the monetization project, citing troubles encountered by other cities. The mayor has advocated for water monetization.

Three City Council members introduced a resolution opposing the monetization of Providence’s water supply Feb. 21.

Ward 13 Councilwoman Rachel Miller, Ward 12 Councilwoman Katherine Kerwin and Ward 1 Councilman Seth Yurdin are advocating against legislation proposed by Mayor Jorge Elorza which would authorize the city of Providence to profit from its water supply through long-term leases with public or private organizations. Elorza hopes that this potential revenue from monetization will go toward addressing the city’s pension debt, while opponents fear passage of the bill would raise the price of water for ratepayers. The resolution was referred to the Committee on City Property.

Miller cited negative consequences from other cities that have attempted to monetize their water to explain her resistance to the bill. “What we know from previous proposals to privatize, to monetize water, is that rates go up for ratepayers, quality goes down and too often workers’ rights are eroded and infrastructure is eroded,” Miller said.  Kerwin and Yurdin expressed similar concerns, with Yurdin noting that monetization would be a “one time fix with unacceptable long-term consequences.”

R.I. Senate Majority Whip Maryellen Goodwin D-D1 and R.I. House Deputy Majority Leader Scott Slater D-D10 introduced the bill to the state house Feb. 14.  “We’re proposing a collaborative approach that will safeguard reliable, low-cost and high-quality water while providing the capital city an opportunity to address its pension obligation once and for all,” Goodwin stated in a press release.

The bill has been introduced in prior years without success. Rhode Island House Speaker Nicholas Mattiello “has not supported this legislation in the past because of the potential impact of higher rates impacting other communities in the water supply district,” Larry Berman, a spokesperson for Mattiello, wrote in an email to The Herald.

Alleviating the city’s $1 billion pension debt is vital to the Elorza administration, and a water monetization plan could play a key role in that. “Any revenue from the transaction would be applied to the city’s pension liabilities,” wrote Emily Crowell, chief of communications and senior advisor to Elorza, in an email to The Herald. “Revenue would come from a long-term lease or similar model.” According to WPRI, the lease could bring in $300 million to $400 million.

The city has explored other avenues to address the city’s debt, such as introducing legislation to increase the hotel tax and create non-profit taxation bills, Crowell wrote.

The legislation would also affect multiple communities outside of Providence, as 60 percent of the state’s residents get their water from the Scituate Reservoir, where Providence sources its water, according to the Providence Journal.

Some politicians outside of the city are opposed to the legislation, citing costs to their communities without any financial gain. For example, Mayor of North Providence Charles Lombardi is among the many representatives of municipalities that use Providence water and would not benefit from the revenue directed toward the city of Providence. He has advocated against Elorza’s legislation and has commented that the city should look for alternative sources of funding.

“They need to look at other ways of streamlining their government and cutting costs,” Lombardi said.

Elorza’s office also emphasized the time sensitivity of improving the city’s long-term financial state. “Providence cannot continue to provide and pay for a safe, reliable water supply for a majority of Rhode Island districts,” Crowell wrote. “If proactive steps are not taken now, there can be no guarantee of future reliability, quality and price in the event of a Providence financial crisis.”

The mayor’s plan has also elicited concern from advocacy groups. John Gonzalez, a core organizer of the Land and Water Sovereignty Campaign, spoke out against the bill, referencing times when indigenous communities have been “heavily impacted” by privatization of natural resources. “We’re here to maybe give a little bit of a historical education,” he said. “Water is life, and there’s nothing more precious to us than the land.”