A proposal by Rhode Island officials for a municipal road and bridge revolving fund has brought an under-the-radar quasi-public agency to the forefront.
Legislation that House Speaker Gordon Fox, D-Providence, and General Treasurer Gina Raimondo offered would expand the Rhode Island Clean Water Finance Agency. That quasi-public agency would administer a municipal road and bridge revolving fund.
According to Raimondo, this would create a predictable and sustainable funding source for municipal road and bridge repair and maintenance -- not unlike a state infrastructure bank.
“The current system in Rhode Island for fixing local roads and bridges is ad-hoc, or on a one-time basis. Municipalities are dependent on the General Assembly authorizing money in any given year,” Raimondo said in an interview Thursday after the announcement.
Earlier this week, the American Society of Civil Engineers, in its state-by-state report card on infrastructure, said 70% of Rhode Island’s roads are of poor or mediocre quality. According to the report, 156 of its 757 bridges, or 21%, are structurally deficient while a further 255, or 34%, are functionally obsolete.
“Rhode Island’s roads and bridges are in terrible shape. If we are to have a bright future and a vibrant economy, this work has to be done. It’s what the state should be doing,” Raimondo said.
According to the proposal, the revolving funds for roads and bridges would provide access to capital for municipalities at below-market interest rates. Although particulars are sketchy for now, a consistent amount would be loaned annually, in perpetuity.
The General Assembly created the agency in 1989 to administer federal and state programs relating to municipal or community wastewater and drinking water financial assistance. Its operating expenses are funded solely from loan service fees generated from managing its programs.
Since 1996, it has issued more than $1 billion in subsidized loans through the Clean Water State Revolving Fund and the Drinking Water Revolving Loan Fund, and more than $10 million in loans through the smaller programs and roughly $100 million in conduit-financing loans.
It enjoys triple-A ratings from Fitch Ratings, Moody’s Investors Service and Standard & Poor’s.
While the agency is extending itself beyond its core function of clean water, Raimondo expressed confidence in an organization noted for its continuous management.
“They have said they have adequate staff to handle the additional work. They know what they’re doing. They have an excellent management team and a triple-A bond rating. They work extremely well with cities and towns,” she said.
Raimondo championed a pension overhaul bill in 2011 designed to save Rhode Island $4 billion over 20 years, although a judge has ordered mediation talks regarding a challenge to that law. Raimondo said savings through the pension law will help free state money to fix roads and bridges.
“This wouldn’t be possible but for pension reform. The reason we’re doing this is because we have room in the budget,” she said.
The proposal appears to have strong legislative backing. Fox is backing the bill, as is Senate President M. Teresa Paiva Weed, D-Newport, who joined Fox and Raimondo at Thursday’s press conference in Providence.
