Possible PWSB lease will not affect tax agreement

Possible PWSB lease will not affect tax agreement

SCITUATE – Providence’s request for qualifications to lease out the Providence Water Supply Board may not affect the town’s tax income from the agency, but it will remain a priority for the council-elect going into the new year.

Councilor-elect Tim McCormick said Scituate needs to be at the table with the PWSB and Providence during these discussions, though he said a request for qualifications from companies poses no threat to the tax treaty or payments to the town.

“As proposed, the transaction does not contemplate any sale or transfer of assets and therefore, it has no impact on the town of Scituate’s tax agreement with the PWSB,” McCormick said.

The current council extended a tax treaty with PWSB to run through Dec. 31, 2019. According to tax assessor Karen Beattie, the PWSB paid $6.5 million in taxes to the town last year.

Town Treasurer Ted Przybyla said if this lease is similar to other contracts, the expenses, including property taxes, will be paid by the leasing company. With Scituate going through a revaluation process, Przybyla said capital improvements to PWSB buildings and structures should hopefully “bump up” tax payments.

The city of Providence issued a request for qualifications seeking a private operator to lease the Providence Water Supply Board with applications due on Jan. 8, as part of Providence Mayor Jorge Elorza’s plan to stabilize the underfunded pension.

Scituate residents asked for more involvement in the leasing process during a June 2018 House Finance Committee meeting, saying Scituate needs protection for tax rates. The Scituate Reservoir the PWSB gets its water from takes up about 40 percent of Scituate including wetland, leaving the remaining tax base to be mostly residential. Scituate relies on the 20 percent of tax revenue PWSB pays each year.

At a Dec. 3 presentation by Providence’s director of sustainability, Lean Bamberger, and Providence Solicitor Jeff Dana, those in attendance asked why Scituate was left out of the meeting.

“Two years ago, we reached out to Scituate leadership. Last year I don’t believe they were there,” Dana said.

According to the request for qualifications, “the primary concern of the lease is to secure long-term, full-risk asset management for the system in the most economically efficient and environmentally friendly manner possible,” with “lump-sum monetization or annual long-term revenue stream, or some combination of the two.”

It asks respondents to provide full-risk management, operations, finance, repair, replacement and capital improvements necessary to continue PWSB provision of services to wholesale and retail customers.

Project responsibilities include:

• Management, oversight, planning, scheduling, auditing and development of the physical, financial and human resources:

• Develop, design, engineer, permit, construct and commission all capital improvements and repairs;

• Perform routine, predictive and preventative maintenance of machinery, equipment, structures and all other property constituting the leased facilities

• Provide metering, billing, collection, customer service and 24-hour emergency response;

• And recognize and negotiate in good faith with existing collective bargaining representatives for employee unions.

Protections were added into the request for qualifications, prioritizing short-term and long-term rate stability, protection of watershed, water quality, and collective bargaining, according to Dana.

With that in mind, Bamberger said the request is not particularly attractive to all, but the right respondent is out there.

“Basically the main categories are rates, safe drinking water and environmental protection and labor protection. Highlights tried to lay out there for potential operators,” Dana said.

Providence wants to ensure the water supply is protected for now and for future generations, Bamberger said, adding that at no point will officials there propose selling the water system.

At a Dec. 12 PWSB meeting, Chairman Xaykham Khamsyvoravong said the board does not have a position on Providence’s plans.