By Steve Klamkin WPRO News
A bill to permit the sale or lease of Providence’s water supply to offset soaring pension obligations is being pulled by legislators at the request of the mayor, acknowledging a lack of support for the plan, but leaving a more than $1 billion in pension debt unresolved.
“There’s no easy solution here,” Elorza said in a news conference in his City Hall office, flanked by members of the City Council and members of the city’s legislative delegation. He had proposed special legislation to “monetize” the city’s water supply, including the Scituate Reservoir, which provides water for more than half of Rhode Island’s residents.
“Often times, folks would want their elected officials to always have good news. But that’s just not always the case and we’d be doing a disservice to all of our constituents if all we talked about were good news. Some very difficult decisions have to be made.”
Elorza, a Democrat now serving his second term in office called for what he called a community conversation about ways to solve the city’s pension shortfall, but ruled out suggestions that he declare bankruptcy or seek a receivership arrangement to try to erase the city’s debts.
“If you think things are difficult now, then you have no idea the pain that would be inflicted if we do going receivership or bankruptcy. Under every, every scenario, bankruptcy should be avoided.
Elorza cited Central Falls, which has not yet regained full city services since declaring bankruptcy in 2011, and slashed benefit payments to retirees.
Between direct pension obligations and what are called “other post-employment benefits”, which can include health care benefits, life insurance or other benefits, the city’s outstanding pension deb has been estimated at close to $2 billion.
