The Providence Water System

The City of Providence has an underfunded pension system which amounts to a debt that threatens to bankrupt the city. Providence also owns an asset that most states only wish they had – the Providence Water System. With a reservoir and watershed in Scituate and water mains that serve two thirds of the state, the water system is worth a billion dollars. An extremely valuable asset, with no debt. And it is a huge temptation. With General Assembly approval, the city could raise money by selling the water system to any entity authorized to issue bonds, such as the sewer commission. The sewer commission could sell bonds, give the money to the city, and then raise the rates to pay off the bonds. Issuing bonds would involve all the expenses of bond counsel, the Wall Street bond brokers, and of course the interest that would have to be paid off over many years. Much better to cut out the middleman and devise a way to help Providence without bonds that would burden rate-payers all across the state. This is a bad idea, and the governor owes us a much better and more honest plan.

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