Fearing impact on rates, Solomon objects to Providence Water request to transfer funds

Posted 6/5/18

In a release issued Thursday, Mayor Joseph J. Solomon disclosed the city has filed an objection with the state's Public Utilities Commission relative to the Providence Water Supply Board's (PWSB) request to transfer funds from a restricted revenue

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Fearing impact on rates, Solomon objects to Providence Water request to transfer funds

Posted

In a release issued Thursday, Mayor Joseph J. Solomon disclosed the city has filed an objection with the state’s Public Utilities Commission relative to the Providence Water Supply Board’s (PWSB) request to transfer funds from a restricted revenue reserve to its operating account. Solomon maintains this act would undermine the financial integrity of the board’s operations and lead to increased costs for its water customers.

The city purchases its water from the PWSB.

The board is seeking to transfer $2,394,651.28 from its restricted revenue reserve fund – over 50 percent of its entire account. As proposed, the act would have no immediate effect on retail, wholesale, or other consumption rates. However, Solomon noted, the action would establish a structural deficit, which would need to be made up in the next fiscal year, likely through expenditure reductions, revenue increases and/or a combination of these actions.  

He also noted that the PWSB has offered no evidence that options to reduce/eliminate expenses in order to offset the need for additional revenue have been examined as an alternative to halving the revenue reserve fund. 

Further, Solomon noted, testimony by the PWSB’s senior manager of finance provided in an October 2017 letter states that retail consumption has decreased, following a trend from the past decade.  

“It only stands to reason that if consumption is declining and expenses are not accordingly reduced that revenue will need to be increased, and that will have a direct impact on the City of Warwick and its water customers,” Solomon said in a statement. “The proposed transfer does not address the PWSB’s management of its finances and sets the budget up for a structural deficit for at least the next fiscal year, if not years subsequent to that. Given the financial repercussions that would extend beyond the PWSB alone, the City has asked the PUC to deny this petition.”

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