Updated: May 6, 2019
By Jacqueline Tempera Journal Staff Writer
Posted Aug 9, 2017 at 4:32 PM | Updated Aug 9, 2017 at 4:32 PM
The valuation by a New Jersey consulting firm also ID’s 4 potential buyers amid proposals to privatize or regionalize the water system that serves 600,000 people in Rhode Island.
PROVIDENCE, R.I. — The Providence Water Supply Board and its assets are worth $404.2 million, according to a valuation analysis sought by the city.
The $200,000 city-commissioned report was completed by MR Valuation, a New Jersey Consulting firm.
The Providence Water Supply Board supplies water to 600,000 people in the state, says the report, using water from the Scituate Reservoir Complex — a network of reservoirs that feeds into the main complex and flow through the Philip J. Holton Water Treatment Plant.
The valuation is based on the consulting firm’s estimate of what it would cost to build a new water system or rebuild the current facilities, the report said.
Emily Crowell, the director of communications for the mayor’s office, said the valuation was done to “explore different scenarios and to provide a comprehensive look at the entirety of the physical infrastructure.”
The report identifies four “hypothetical willing buyers or lessors,” including: the State of Rhode Island, the Narragansett Bay Commission, SUEZ Rhode Island, and surrounding water board districts.
This follows an April 2016 analysis from the National Resource Network, a federally funded program that helps cities develop tools and strategies to build their economies.
Among the group’s suggestions last year: Sell or lease the water board to a private operator, and use the hundreds of millions of dollars in revenue to help the city’s $1-billion retirement debt.
However, both the valuation and the suggestion by the National Resource Network are hypothetical. A Rhode Island statute bans the city from earning a rate of return on the water supply, and any change would require action by the General Assembly.
Mayor Jorge O. Elorza has opposed privatizing the system. But, the Democratic mayor has backed legislation that would regionalize the state’s water supply with the Rhode Island Cooperative Water Authority. He has suggested that while he does not plan to privatize water, a future mayor might.
A bill, introduced by Rep. Scott Slater D-Providence, in April, would have given this new board power to acquire, lease, manage, sell and deal with the land and water supply systems currently controlled by only Providence appointees.
The proposed 12-member statewide board would include: four members picked by the governor, with the advice and consent of the Senate, three people selected by the Providence mayor, two people picked by the Cranston mayor, one person picked by the Johnston mayor, and another selected by the North Providence mayor. The chairperson of the Rhode Island water resources board would be an ex-officio member of the board.
The current board only has appointees from the city of Providence and controls 60 percent of the state’s water supply. The legislation never made it out of committee, and Speaker of the House Nicholas Mattiello opposed the measure.
Crowell added: “The mayor has said on the record that privatization is not an option. This continues to be true. We will continue to pursue regionalization and other options in the future.”
“There are various ways to judge value,” Stoldt said. “It’s going to be a process.”