Pawtucket, Rhode Island: A Drinking 

Water State Revolving Fund Success Story

Office of Water (4606M)

www.epa.gov/safewater

EPA 816-K-08-003 September 2008
Executive Summary

Despite providing water for over 100 years, by the end of 

the 1980s the City of Pawtucket, Rhode Island was struggling 

to provide safe drinking water and keep its customers 

happy. The water system faced the same challenges faced 

by many other water systems across the country, including 

a treatment plant that was approaching the end of its useful 

life and an aging distribution system that was literally falling 

apart. With strong political and technical leadership and working 

effectively with the state, the system received the largest Drinking 

Water State Revolving Fund (DWSRF) assistance package in state 

history and pursued an innovative design-build-operate (DBO) 

procurement strategy. 

Aided by over $70 million in DWSRF funding, Pawtucket embarked 

on a comprehensive overhaul of its water system. The project was 

a partnership between the water system, local politicians, and 

the state and overcame substantial financial, legal, and political 

obstacles. Pawtucket now enjoys a state-of-the-art surface water 

treatment plant and is nearing completion of a project to rehabilitate 

or replace parts of its distribution system.

The severity of the problems started becoming apparent in 1987 when an EPA sanitary survey found 

major system deficiencies related to the old distribution system and the water treatment plant (built 

in 1938). In 1992, the system had an acute violation of the Total Coliform Rule (TCR) that resulted in a 

2-month boil water order. Taste and odor issues related to the system’s old pipes (some of which date 

to the 1800s) and a perpetual lack of funding added to the system’s problems. 

Pawtucket and its local government made the decision to move from a passive, repair-and-maintain 

mentality to actively address the root of the system’s problems with large-scale improvement projects 

that included a new state-of-the-art treatment plant and the rehabilitation of approximately 204 miles 

of the distribution system. To make this plan a reality given its limited funds Pawtucket turned to the 

state to help obtain the necessary financing. Working together, Pawtucket and the state found a way to 

restructure the system’s existing debt and secure low-interest DWSRF funding for the infrastructure 

improvements.

Despite setbacks along the way, Pawtucket’s source-to-tap overhaul is now nearing completion. The 

new treatment plant came on line in March 2008 and has received positive feedback from customers. 

The distribution rehabilitation is approximately 73% complete, and customer complaints about water 

quality have decreased dramatically. Pawtucket has not had a TCR violation since 1992 and has been 

able to decrease its chlorine use and the level of disinfection byproducts (DBPs) in its water. 

Pawtucket faced staggering obstacles but chose to deal with them proactively rather than wait for 

them to get worse. The system worked with the local government and the state to find flexible, lowcost financing for an ambitious project. The DWSRF was integral to the project’s success. The belowmarket rate loans from the DWSRF made the overhaul possible by making the improvements affordable 

to Pawtucket and its ratepayers. Together, the state, city, and system have made investments that, with 

proper asset management and operation, will ensure safe drinking water for decades to come.

Office of Water (4606M)

www.epa.gov/safewater

EPA 816-K-08-003 September 2008

Disclaimer: Mention of companies, trade names, or commercial products or interests by EPA or any other party profiled in this 

document does not constitute endorsement or recommendation for their use.
1

Pawtucket is actively promoting its arts community 

and cultural activities. The successes of the annual 

arts festival and the Pawtucket Red Sox baseball 

team (AAA affiliate of the Boston Red Sox) are 

evidence of the city’s revitalization. The “PawSox” 

play in the newly renovated McCoy Stadium and 

draw record numbers of fans, frequently leading 

their league in attendance. 

Pawtucket is also working hard to upgrade its 

infrastructure and municipal facilities. Projects are 

underway to improve the city’s recreational areas; 

a senior center, library, and a new passenger train 

station have been proposed. Improving the quality 

of the city’s drinking water is an integral part of 

Pawtucket’s revitalization plan. 

The water system has operated for more than 100 

years with a strong record of protecting public health, 

but in recent decades Pawtucket has struggled with 

taste and odor issues and Safe Drinking Water Act 

(SDWA) compliance incidents. City leaders hope 

that the source-to-tap overhaul of the water system, 

including construction of a new water treatment 

plant, will not only resolve the problems created 

by aging, deteriorating infrastructure but also help 

attract and retain residents and businesses.

Pawtucket, RI

The City of Pawtucket was founded in 1671 at 

the falls of the Blackstone River and the upper 

tidewaters of Narragansett Bay. “Pawtucket” is 

the Algonquian word for “river fall,” and the 

Blackstone River and its falls helped power the 

industries that located there. Many consider 

Pawtucket to be the city that started the American 

Industrial Revolution when the Slater Mill began 

using machines to spin yarn in 1793. Industry 

continued to expand in Pawtucket throughout the 

19th century, and Pawtucket remains an important 

manufacturing center. The city is home to a diverse 

array of industrial businesses, including toymaker 

Hasbro.

With 73,000 residents, Pawtucket is the fourth 

largest city in Rhode Island. The city’s average 

household income is $31,775, well below the Rhode 

Island average of $45,000. In addition, 16.8% of 

the city’s population lives below the poverty line, 

compared to 11.3% in Rhode Island and 12.5% 

nationwide (2000 US Census).

Community leaders hope the local economy 

will improve as a result of the city’s economic 

revitalization and urban renewal effort. Old vacant 

factory buildings are being converted to attractive 

condominiums, offices, and retail space in an effort 

to bring new residents and revenue to the city. 

“The key to development is infrastructure. 

The Pawtucket Water Supply Board 

(PWSB) has had the foresight to 

undergo aggressive redevelopment of the 

infrastructure to revitalize the City.” 

— PWSB
2

History of the Drinking 

Water System

When Pawtucket began supplying water in 1878, 

the city provided, on an average day, 3.75 million 

gallons of water to 50,000 persons in Pawtucket 

and surrounding towns. (Pawtucket’s population at 

the time was less than 20,000.) By 1924, the system 

had doubled its service population to 113,000. In 

1938 Pawtucket built a filtration plant at Happy 

Hollow Pond in nearby Cumberland. For 70 years 

this plant was the system’s sole treatment facility. 

In the early 1970s, the Pawtucket Water Supply 

Board (PWSB) was created to take over management 

of the water system from the city’s public works 

department. The PWSB acts as a semi-autonomous 

extension of the city and is run by an appointed 

board of directors. 

There were two major events that set the stage 

for the system rehabilitation that is now nearing 

completion. The first was a 1987 sanitary survey 

that pointed out major system deficiencies. The 

second was the system’s 1992 Total Coliform Rule 

(TCR) acute violation, which resulted in a 2-month 

boil water order. 

In December 1987 U.S. EPA conducted a routine 

sanitary survey of the Pawtucket water system. The 

report had the following findings and garnered 

significant attention in the communities served by 

the system.

•	 The system needed to get activities within its 

watershed under greater control. 

•	 Although the filtration plant was able to produce 

water of good quality most of the time, it was 

strained to do so and was approaching the end 

of its useful life to produce safe drinking water 

consistently and reliably. 

•	 The distribution system was creating serious 

water quality challenges and operation and 

maintenance concerns.

In the face of these challenges, the sanitary survey 

noted that the Pawtucket water supply staff was 

doing an excellent job of keeping the system 

operational and producing good quality water. 

As the sanitary survey pointed out, by the 1980s 

Pawtucket’s water system was struggling, and 

Pawtucket could no longer afford the maintenance 

and investments the water system needed. The city 

created a separate entity, the Pawtucket Building 

Authority (PBA), in 1988 to manage the system’s 

finances. Although the PBA was responsible 

for financing system improvements, the PWSB 

remained responsible for day-to-day system 

management. Ownership of the system’s assets was 

transferred to the PBA so bonds could be issued 

without burdening the city with additional debt. 

In turn the PBA leased the water system back to 

the city. The PBA’s financing capacity was limited 

by a debt ceiling of $50 million. 

In 1990, prompted by sporadic bacteriological 

contamination, Rhode Island Department of 

1870 1900 1930 1960 1990 2020

Pawtucket Water System Timeline

City of Pawtucket 

begins to supply water

System purchases 

Cumberland Mills dam

System builds

treatment plant

PWSB created

PWSB decides on

source-to-tap overhaul

Vendor selection 

lawsuit begins

Lawsuit resolved, DBO 

contract to Earth Tech

State awards

DWSRF loans

Cleaning and lining and 

replacements complete

Distribution system

rehabilitation begins

PWSB receives conduit 

loans, PBA dissolved

New plant and storage 

tank in full production

Earth Tech DBO 

agreement expires

PBA created, floats

$30M for infrastructure

Acute TCR violation requires 

2-month boil water order

EPA sanitary survey documents

need for improvements
3

of Pawtucket appointed a commission to investigate 

the cause of the coliform contamination, and it was 

concluded that distribution pipe relining and poor 

maintenance of the Central Falls’ transmission 

system (which connects to Pawtucket’s) were to 

blame. 

When James Doyle was elected mayor in 1997, he 

made improving Pawtucket’s water a high priority. 

Mayor Doyle reorganized the PWSB and appointed 

several new board members, including Mary 

Tetzner, who chaired the board until June 2007. 

The mayor and the PWSB agreed that improving 

water quality required a comprehensive renewal of 

the system. 

Because of the debt cap, the PBA could not 

borrow enough money to fund all of the 

necessary infrastructure upgrades. The city 

had the debt capacity to borrow the muchneeded funds, but could not access lowinterest loans through the DWSRF unless 

it owned the system’s assets. Therefore, in 

2003 the city council dissolved the PBA and 

transferred ownership of the water system, 

including its debt, back to Pawtucket.

Snapshot of the 

System

Today, Pawtucket’s water system provides 

drinking water to approximately 100,000 

customers in Pawtucket, Central Falls, and the 

Valley Falls section of Cumberland. Central 

Falls does not have its own source and, until 

the PWSB purchased its distribution system 

Public Health (RIDOH) conducted a survey on 

the Stump Hill Reservoir, the main storage storage 

facility of the Pawtucket Water Supply at the time. 

The State survey team found major deficiencies, 

including infiltration of rainwater, easy access for 

birds, insects, and animals via cracks, vents and 

seams, and structural integrity of the reservoir 

was a major concern. (Note: Stump Hill Reservoir 

was constructed in 1879, covered in 1957, and 

last cleaned in 1959.) In late 1990, RIDOH 

required that the water from Stump Hill Reservoir 

meet 3-log Giardia lamblia inactivation rate until 

the deficiencies found in the facility had been 

corrected. It was recommended that Stump Hill 

Reservoir be replaced.

To address some of the problems highlighted in 

the 1987 sanitary survey, in 1991 Pawtucket began 

the long process of rehabilitating its distribution 

system. The project, which is scheduled to be 

complete in 2014, involves either replacing or 

cleaning and relining approximately 77% of the 

system’s pipe.

Based on test results and follow-up testing, 

Pawtucket’s water was declared unsafe to drink in 

the summer of 1992 due to high counts of fecal 

coliform bacteria which constituted an acute 

violation of the TCR. Customers were required to 

boil water for approximately 2 months. The Federal 

Emergency Management Agency (FEMA) declared 

a state of emergency for the community, and it was 

estimated that the city spent $20,000 per day to 

provide bottled water for its customers. The mayor 

Pawtucket Water Supply Board 

(PWSB) Chair Bill Masuck

Chief Engineer/ 

General Manager

Assistant 

Chief Engineer

Water Treatment

Contract

Operations to

AECOM

Source Water Finance

Finance

Customer

Service

Information 

Systems

Transmission & 

Distribution Engineering
4

which can be increased to 30 MGD. The system’s 

three finished-water storage tanks have a total 

capacity of 18 million gallons. 

Pawtucket has a 260-mile network of distribution 

mains, including 160 miles of 6- to 8-inch mains 

and approximately 100 miles of 12- to 36-inch 

mains. Many of the system’s pipes date back to 

the 1800s. Pipes installed prior to 1958 are made 

of unlined, tar-coated cast iron. Since 1958, the 

system has used cement-lined ductile iron pipe. 

Pawtucket has approximately 1,700 fire hydrants, 

6,000 line valves, and 22,000 service connections.

The PWSB’s sole source of income 

is its water rates, which were the 

lowest in Rhode Island before the 

infrastructure improvement 

projects began—an average 

household paid roughly 

$164 annually in 2000.

An appointed, all-volunteer 

board of directors oversees 

the system. The PWSB’s 

staff of 53 includes engineers 

and staff members assigned 

to administration and 

customer service, source 

water protection, and the 

operation and maintenance 

of the transmission and 

distribution system. Some individuals have worked 

for the utility for more than 30 years. The water 

treatment plant operators are no longer employed 

by the PWSB; they now work for AECOM 

(formerly Earth Tech), the design-build-operate 

(DBO) contractor for the new treatment plant.

Problems Faced

With the system’s aging infrastructure, the PWSB 

had to wage an uphill battle to consistently provide 

safe water to its customers. The system faced 

major challenges in meeting increasingly stringent 

federal standards designed to protect the public 

against microbial disease. The system’s water 

quality problems included a TCR acute violation, 

high turbidity, main breaks, and taste and odor 

issues related to rusty pipes and the high chlorine 

in 2007, rented its distribution system to Pawtucket. 

Prior to the acquisition, Central Falls was responsible 

for maintaining its own distribution system, which was 

in worse shape than Pawtucket’s. 

Pawtucket’s source water comes from surface water 

and groundwater in the Abbot Run watershed and 

its underlying aquifer. The watershed, which drains 

into the Blackstone River, is located in Cumberland 

and several neighboring towns in Massachusetts. The 

system owns about 10% of the watershed. The PWSB 

operates eight groundwater wells and four surface water 

reservoirs, which have a combined storage capacity of 

5 billion gallons. The oldest reservoir dates back to the 

1800s.

Source water from Happy 

Hollow Pond in Cumberland 

has a high level of total organic 

carbon (TOC), a precursor 

to disinfection byproducts 

(DBPs). Groundwater from 

the watershed has 

elevated levels of radon, 

manganese, and arsenic. 

The system relies 

primarily on its surface 

source and mixes in 

groundwater during 

periods of high demand 

during the hot summer 

months to manage DBP 

formation. Overall, the quantity of the source water is 

not a concern, and the quality, although not great, is 

manageable. 

Three pumps deliver water to the system’s sole 

treatment plant. The new plant, which came on 

line in March 2008, uses state-of-the-art treatment 

processes, including up-flow clarifiers, deep-bed 

granular activated carbon (GAC) filters, and ultraviolet 

(UV) disinfection. It replaced a 1938 treatment 

plant that used conventional treatment processes 

including aeration, chemical addition, flocculation, 

sedimentation, filtration, and chlorination. The old 

plant produced an average of 13.5 million gallons of 

finished water per day and a maximum of 25 million 

gallons per day (MGD). Although Pawtucket’s average 

daily demand has decreased in recent years (demand 

was 11.4 MGD in 2007) due to loss of industry, the 

new plant has a maximum production of 25 MGD, 

“We couldn’t just keep replacing everything in the plant. [Because of the age of the 

plant], all the replacements had to be custom-made—the parts just weren’t around.” 

—Mary Tetzner, former PWSB chair
5

levels needed to control biofilm buildup in the 

distribution system. These issues and ratepayer 

frustration about the estimated cost to fix the 

problems, which increased dramatically as the years 

dragged on, led to the customers’ low opinion of 

Pawtucket water.

Heavy rain caused turbidity problems for the old 

plant. Turbidity is the cloudiness of water caused 

by suspended solids and is an indicator of water 

quality. In October 2005, a boil water order was 

issued after a heavy rain caused extremely high 

turbidity levels in the source water. The system 

worked closely with the state after this incident 

and was quickly able to restore the provision of 

safe water.

The water leaving the old plant was usually of 

good quality but degraded as it traveled through 

the old, leaky distribution system. The system’s 

unlined cast iron water mains are prone to rust 

and tuberculation, which causes discoloration 

and poor taste in the finished water. High water 

demand during the summer causes the entire 

system to experience rusty water for extended 

periods. In addition, these old pipes are prone to 

breaks, disrupting service and raising public health 

concerns about the intrusion of chemicals and 

biological contaminants. 

The older pipes in the Pawtucket system also have 

biofilm buildup. Biofilm, a layer of biological 

and mineral material on the inside of distribution 

pipes, consumes disinfectants and can pose health 

risks. 

To maintain an adequate level of disinfectant in the 

water and control biofilm buildup, the PWSB had 

to add large amounts of chlorine, which ensured 

that the water was disinfected but caused customers 

to complain about the taste and odor of the water. 

High chlorine levels also led to high levels of 

DBPs, carcinogenic byproducts of the chemical 

reaction between disinfectants and natural organic 

matter in water. Although the system’s DBP levels 

are low enough to comply with the federal Stage 

1 Disinfectants and Disinfection Byproducts Rule 

(Stage 1 DBPR), the Stage 2 DBPR would have 

presented significant compliance challenges. 

In addition, the vintage 1938 plant’s treatment 

processes, while adequate to meet the original 

Surface Water Treatment Rule (SWTR), would 

have had problems consistently meeting newer 

surface water treatment regulations such as the 

Interim Enhanced SWTR (IESWTR) and the Long 

Term 2 Enhanced SWTR (LT2ESWTR).

Customer dissatisfaction was exacerbated by 

financial issues. In 1989, ratepayers were given 

an extremely low estimate of $30 million to fix 

and replace aging infrastructure. Voters approved 

a $30 million bond issue, believing it would fix 

all the problems, and the PBA subsequently issued 

bonds for that amount. 

A few years later, system leaders began to discuss the 

need for a new water treatment plant in addition 

to major distribution system improvements that 

included relining or replacing approximately 160 

miles of 6-inch and 8-inch mains. New estimates of 

the total cost to cover all necessary improvements 

raised the price tag by $40 million. 

This increase frustrated customers 

who had previously been told that 

$30 million was sufficient. 

Retrofitting Old Plant vs. Building New Plant

Pros

•	 Less expensive in short 

term

•	 Cost effective in the long term

•	 Would meet upcoming regulations

•	 Greater capacity

Cons

•	 Would not meet upcoming 

regulations

•	 Limited capacity

•	 Disruption of service

•	 More expensive in short term
6

Options Considered

In 1998, the PWSB commissioned a $300,000 

feasibility study (paid for by a grant) to determine 

the costs and benefits of retrofitting the 1938 

plant. The study determined that it would cost 

$25 million to upgrade the old plant so it could 

continue to meet current regulations. Even with 

the upgrade, however, the plant could not meet 

the most recent regulations, such as the Stage 2 

DBPR and LT2ESWTR, and would have limited 

capacity. 

Later engineering studies commissioned by the 

PWSB found that the walls of some pipes in the 

treatment plant had deteriorated to less than 1/16 

inch thick, making them vulnerable to breaks that 

would disrupt service and potentially endanger 

the plant staff. 

The water system’s engineers agreed that the system 

needed a new treatment plant to avoid structural 

failures, comply with drinking water standards, 

and ensure continued public health protection. In 

1998, the PWSB decided to build a state-of-theart treatment plant.

To help fund the necessary improvements, 

Pawtucket realized that it had to raise its water 

rates, which were the lowest in the state at the 

time. Pawtucket asked the state’s Public Utilities 

Commission (PUC), which regulates the PWSB’s 

rates, to adjust the system’s water rates. The 

PUC recognized the need for improvements and 

approved a rate increase in 2002. PWSB water 

rates were raised again in 2003, the same year the 

PUC published the study “Investigation Into the 

Adequacy of the PWSB’s Treatment Plant.” The 

study noted several structural concerns, including 

the potential for: pipeline failures, equipment 

failure of major plant components, electrical 

short circuits, and pump failures at system pump 

stations. The most recent rate increase was in 2005. 

With these increases an average houshold’s annual 

water bill increased from roughly $164 before the 

investment in infrastructure to $372. 

The PWSB considered two locations for the new 

plant: in Cumberland near the source, and in 

Pawtucket near the administrative offices. The 

Cumberland site was larger, but the Town of 

Cumberland was proposing to levy heavy taxes on 

the plant and the land. Instead, the system chose 

to build the plant on a 1.36-acre, tax-free site 

adjacent to the PWSB’s Branch Street Headquarters 

in Pawtucket. This parcel, sandwiched between 

a major interstate highway and a railroad track, 

was owned by the state. As part of the cooperative 

effort to improve Pawtucket’s water, the state gave 

the system the land.

Pawtucket Chooses a 

DBO Contractor

Pawtucket hired the Eisenhardt Group, a consulting 

firm, to help choose a procurement method for 

construction of a new plant. The consultants 

recommended that the system hire one contractor 

to design, build, and operate (DBO) the new plant, 

an arrangement that can reduce construction costs 

by up to 25%. Although the DBO contractor would 

be responsible for the operation of the new plant, 

the city would own the plant and the distribution 

As part of the DBO agreement, Pawtucket’s treatment 

plant operators and staff could transfer their employment to 

AECOM and continue working at the PWSB plant. AECOM 

worked with the PWSB and two Rhode Island unions to 

ensure a smooth employee transfer and low turnover. First, 

AECOM signed a Memorandum of Understanding (MOU) 

with the PWSB employees that accepted the terms of the 

current union contract and fostered good communication 

and an easy transition. The union employees were given 

incentives to transfer, including retirement compensation, 

a 25% salary increase, pension rights, and a guarantee not 

to be laid off for 8 years. In February 2003, 15 employees 

transferred to AECOM (three employees chose to not 

transfer and continued to work for the PWSB in another 

capacity). The early results from the transition were 

positive, and AECOM and the unions recently negotiated a 

new contract. Although the negotiations were contentious 

at times, AECOM was able to retain all incumbent staff 

members.

Municipal Employee Transfer
7

system. After operating the plant for 20 years, 

the contractor must return it to the PWSB in its 

original condition. This requirement gives the 

contractor an incentive to perform exceptional 

plant maintenance and asset management. The 

PWSB voted unanimously to follow its consultant’s 

recommendation. 

The PWSB worked with The Eisenhardt Group 

to develop a request for proposals (RFP) for the 

DBO contract for the new plant. The detailed, 

400-page RFP was advertised in February 2001. By 

August 2001, four potential vendors had submitted 

proposals. The Eisenhardt Group evaluated the 

proposals on a point scale based on technical plans, 

risk assignment and assessment, management, 

employee transition plans, and cost. 

After an 18-month process, Pawtucket’s engineers, 

including chief engineer Pam Marchand, chose the 

engineering firm AECOM. The PWSB felt that 

AECOM had the strongest proposal based on its 

experience, reputation, and proposed treatment 

technologies, which included GAC and UV light. 

AECOM’s total bid was $42 million over 20 years, 

$3.5 million less than its closest competitor. In 

January 2002, the PWSB voted to recommend 

AECOM’s proposal to the city purchasing board. 

Although the PWSB and the purchasing board 

unanimously supported AECOM’s DBO bid, 

Pawtucket’s city council passed a resolution 

approving a different vendor for the new treatment 

plant. The PWSB, backed by Mayor Doyle, hired 

special legal counsel to fight this choice.

The lawsuit eventually went before the Rhode 

Island Superior Court for a declaratory judgment 

to interpret Pawtucket’s charter and resolve whether 

the purchasing board or the city council has the 

final decision in vendor selection. On October 1, 

2002, the Superior Court ruled that the purchasing 

board has the authority to select the DBO vendor. 

Moving Forward: 

Implementing the Grand 

Plan

Once the vendor dispute was settled, Pawtucket 

was able to move ahead with constructing the 

new treatment plant. In addition to the new water 

treatment plant, AECOM’s contract called for a 

pump station, residual lagoons, and a 5 million 

gallon storage tank. A source water protection plan 

and distribution system rehabilitation round out 

Pawtucket’s comprehensive plan. 

Pawtucket’s source water protection plan is 

funded by Clean Water Act grant money, and the 

water system has worked closely with the state 

and neighboring towns to implement the plan. 

Pawtucket assisted the Town of Cumberland in 

rewriting ordinances (which are pending) to create 

Due to rising construction costs, Pawtucket has had to rely increasingly on cleaning and lining, 

rather than replacing, its pipes to rehabilitate the distribution system and keep costs down. 

Since the project began in 1991, the average cost per foot for pipe replacement has increased 

from $103 to $155; cleaning and lining one foot of pipe costs an average of $72. The price of 

raw materials has also increased due to global economic conditions. The PWSB is concerned 

that the rising prices will drive up the total cost of the infrastructure improvements. 

Pipes installed before 1920 are replaced, while newer pipes are cleaned and relined. Cost per 

foot for cleaning and lining has not risen as dramatically as the cost of line replacement. Life 

expectancy of new ductile pipe is over 100 years, while the life of distribution pipe less than 12 

inches in diameter is approximately 80 years. The PWSB emphasizes that cleaning and lining can 

add many additional years to the useful life of a pipe, which reduces the burden on the water 

system and minimizes the cost of distribution system rehabilitation.

The PWSB expects to complete its pipe rehabilitation projects by 2014 at a cost of $80 million.

The PWSB recommends cleaning and lining as an overlooked and cost-effective alternative for 

many systems. 

Cleaning and Lining

10%

Cleaning & 

Lining

50%

Pipe

Replacement

Cost Increases: 1991-2006 
8

an overlay district prohibiting underground storage 

tanks and certain industries, such as gas stations, 

from being built in the watershed, and requiring 

cesspools to be removed. The water system worked 

with the owner of a pond along the Abbot Run 

stream because the owner was willing to donate 

the pond to the PWSB, allowing it to restore the 

surrounding wetlands and nearby dam.

Pawtucket’s new water treatment plant is designed 

to meet EPA drinking water standards. The plant’s 

capacity can be increased from 25 MGD to 30 MGD. 

Its treatment processes include up-flow clarifiers, 

deep-bed GAC filters, and UV disinfection. The 

GAC filters remove particles (lowering turbidity) 

and extract organics, which can cause DBPs as well 

as taste and odor problems. The PWSB believes 

the GAC provides an extra measure of protection 

against synthetic organics, such as pesticides, that 

may be found in the watershed. The plant’s UV 

disinfection adds another barrier against pathogens 

such as Cryptosporidium and Giardia. The UV 

technology gives the system enough additional 

disinfection capacity to safely reduce the amount 

of chemical disinfectants used, further reducing 

DBPs. In addition, the system plans to eventually 

switch to using chloramines instead of free chlorine 

for disinfection, further reducing DBP formation.

Pawtucket continues the exhaustive rehabilitation 

of the distribution system that began in 1991. 

The project includes replacing all water mains 

installed before 1920 and cleaning and relining 

the remaining mains with a fresh coat of cement. 

The system engineers have worked diligently with 

the Pawtucket Department of Public Works to 

minimize disruption of traffic by coordinating 

paving projects to ensure that streets are left in 

pristine condition after their work is complete.

To gain public support for its infrastructure 

improvements, the PWSB conducted numerous 

outreach activities. The PWSB issued press releases 

to local newspapers and cable television stations, 

sent letters with consumers’ water bills, and held a 

series of public meetings to which elected officials 

from the surrounding towns were invited. The 

PWSB took the sparse attendance at the public 

meetings as a good sign; as one PWSB official noted, 

“You only see people when there’s a problem.”

Financing

The cost of the capital improvements for 

Pawtucket’s water system is significant, but the 

city and its customers will save money in the long 

run by not waiting until their aging infrastructure 

undergoes a crisis. In addition, the public health 

benefits and customer satisfaction are immediate. 

Overall, the PWSB has undertaken projects and 

investments that total over $135 million. Here’s 

the breakdown:

Although the amount borrowed could be 

overwhelming for a city of Pawtucket’s size, the 

leadership of the water system worked closely with 

the state’s financing experts to tailor solutions to 

the city’s situation. The result was a flexible package 

of financing assistance structured to minimize the 

impact on customers while maintaining the bond 

rating for the system and city.

$27 M Refinancing the remaining PBA 

debt, which paid for much of the 

distribution system improvements

+ $30 M Additional funds borrowed to 

complete the distribution system and 

transmission main improvements

+ $44 M Funds borrowed to finance the new 

treatment plant and storage tanks

+ $32 M Pay-as-you-go financing for 

infrastructure replacements

+ $2 M Water Resources Board

$135 M Total Financed

“It’s been nice to have a partnership with the Rhode Island Department of Health. They 

can see issues as they come up and have been a good source of technical and financial 

expertise.” —PWSB
9

that enabled the system to pay only interest for the 

first 20 years (when the PWSB would be repaying 

the DWSRF loans) and then pay down the principal 

during the following 10 years. By staggering debt 

repayments, the state helped the system lessen the 

impact on its rate payers. 

A second issue arose when Pawtucket was considering 

assuming the PBA’s debt and taking out additional 

debt. A local ordinance required that all borrowing 

had to be approved by voters, which would have 

restricted the system to general obligation pledges. 

Pawtucket leaders were concerned that the voters 

would be unwilling to approve the money needed 

to restore the water system for several reasons. 

For one, voters remembered promises by the 

PBA that additional 

borrowing would 

not be necessary 

to rehabilitate the 

system. In addition, 

many of the system’s 

customers were not 

voters in Pawtucket 

because they lived 

in neighboring communities. 

Therefore, the system and 

the state worked with the 

Pawtucket city council to 

change the ordinances to 

enable the system to issue a 

revenue pledge that did not 

need voter approval. The 

system was able to issue revenue pledges, which 

improved its bond rating and lowered its interest 

rates. 

Financing Debt for New 

Infrastructure

Most of the money that the PWSB borrowed from 

the state is being used for the new treatment plant, 

waste residual lagoons, storage tanks, transmission 

mains, and distribution system upgrades. The 

PWSB worked with the state to complete the 

necessary DWSRF application and approval steps 

and, just 4 months after the PBA dissolved, the 

state awarded the system the first of two DWSRF 

loans. The low interest rates and flexible terms of 

the DWSRF loans, combined with limited grant 

Legacy Debt from PBA

Of the $30 million borrowed in 1999, the PBA 

had $27 million in outstanding debt when the city 

decided that a more comprehensive strategy for 

upgrading the water system was needed. The PBA, 

however, had a debt ceiling of $50 million, which 

meant it could not access the financing needed to 

build a new treatment plant. The state was ready 

and willing to make DWSRF loans to cover the 

treatment plant and much of the other infrastructure 

costs, but it could not loan the money to the city 

(which had sufficient borrowing capacity) because 

the city did not own the infrastructure. 

Working together, the 

city and state found 

a solution: the city 

would reacquire the 

system’s assets from the 

PBA. The city, which 

has a much higher debt 

limit than the PBA had, 

structured the PWSB’s 

debt so that the water 

revenue was pledged to cover 

all debt. City ownership also 

allowed the PWSB to access 

state DWSRF funds. But for the 

city to reacquire the system’s 

capital assests, it would also 

need to take over the PBA’s 

capital debt.

In 2003, Pawtucket reacquired its water system, 

used two conduit loans from the Rhode Island 

Clean Water Finance Agency to discharge the PBA’s 

debt, and dissolved the PBA. The $27 million was 

refinanced outside the DWSRF through two bond 

issuances. One loan was for $19,340,000 at 4.94% 

interest to cover the tax-exempt portion of the 

debt. The other loan was for $7,655,000 at 6.13% 

to cover the taxable debt. The state charged a 1% 

origination fee and a 0.5% agency service fee on 

each loan. 

The system and state were pleased with the interest 

rates for both loans, which were below the initial 

estimates and the market rate at the time. The 

state worked with the system to create a flexible 

repayment schedule for these non-DWSRF loans 

“The good thing about the DWSRF is the flexibility the State was able to 

demonstrate to help stabilize the rates and minimize rate shock .” —PWSB
10

funding ($748,400) for planning and supplemental 

funds from revenues, gave the PWSB the stability 

and support needed to implement its ambitious 

plans. Without assistance from the state’s DWSRF 

program, the PWSB would not have been able to 

affordably finance its capital improvements. 

In 2004, Rhode Island awarded the City of 

Pawtucket a two-part DWSRF loan for:

• $41,875,000 at 2.4% interest

• $31,909,000 at 2.8% interest

The DWSRF interest rates were far below the rates 

available from other financing sources considered 

at the time. The below-market interest rate will save 

the PWSB and its customers more than $10 million. 

Those savings were made possible by the DWSRF 

program as well as safeguards, such as repayment 

insurance, that the state and city worked to put in 

place and that improved the PWSB’s credit rating. 

Refinancing the PBA’s debt also expedited the loan 

process and improved the system’s credit rating. 

In addition to the significant savings from the 

below-market interest rates, the PWSB has 

benefited from the flexible terms of the DWSRF 

assistance. The state gave the city 3 years to draw 

Before Pawtucket began its rehabilitation project, its water rates were the lowest in Rhode Island. In 2000, an average household paid 

just $164 for water for the year. Rates have increased since the project began, but financing from the Rhode Island DWSRF has helped 

to minimize the project impact on customer water rates. 

The PWSB hired financial consultant Chris Woodcock of Woodcock 

Associates, Inc. to assess the effect of the infrastructure improvement 

projects on the water system’s rates. Mr. Woodcock concluded that 

consumer rates would have had to triple over 3 years without the lowinterest (2.4% and 2.8%) DWSRF loans. With funding from the DWSRF, 

which will save the city and its customers $12 million over 24 to 26 years, 

Mr. Woodcock predicted the system would only need to double its rates. 

DWSRF financing also allows the system to spread out the rate increases 

over 10 years, lessening the pinch on consumers and reducing public 

resistance. 

In April 2002, the PWSB raised water rates by 40% to pay for the 

increased debt service for the new infrastructure; the PWSB raised rates 

another 28% in January 2003. Rates were raised again in 2005, and in 

2008 an average household paid $372 for water for the year. The PWSB 

has heard complaints about rate increases from its customers, but expects 

less resistance with the improved water quality and service. 

Impact on Rates

down the loan funds, which reduced the loan costs 

because interest does not accrue until funds are 

drawn.

Debt Service

Pawtucket borrowed almost $108 million from 

the state, making the rehabilitation of its drinking 

water system the largest state-financed municipal 

project in Rhode Island history. Pawtucket has 

worked closely with the state to develop an 

affordable repayment plan for the DWSRF and 

conduit loans. During the first 20 years, Pawtucket 

will repay its DWSRF loans (which have a 20-year 

repayment period) and will pay only interest on the 

conduit loans. After the DWSRF loans are repaid, 

Pawtucket will repay the principal of the conduit 

loans, which have a 30-year repayment period. 

Without this flexible repayment schedule and 

the savings provided by the DWSRF, Pawtucket’s 

yearly combined conduit and DWSRF debt service 

would have climbed from $2 million prior to the 

borrowing to $9 million. With assistance from 

the state, annual debt service will increase to $8 

million.

$100

$200

$300

$400

$500

‘00 ‘01

Projected Rates without 

DWSRF Financing

Rates with 

DWSRF Financing

Approximate Average Household Annual Rates

 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08

$164

$372
11

that caused brief periods of rusty water. Despite 

these challenges, the transfer to the new plant has 

been relatively smooth and the public response 

has been positive. Since the new plant came on 

line, the PWSB has received calls from customers 

praising the water’s taste. 

AECOM has also completed Pawtucket’s new 5 

million gallon storage tank and two new drinking 

water residual lagoons. AECOM is constructing a 

new raw water intake and converting the original 

plant’s finished water line into a redundant raw 

water intake.

The cleaning, lining, and line replacement projects 

are approximately 73% complete. At the current 

pace and using pay-as-you-go financing, the PWSB 

expects to finish the remaining distribution system 

Other Financing: Pay-as-You-Go

In addition to loans and bonds, Pawtucket is 

using “pay-as-you-go” Income Fund Reimbursable 

(IFR) funding to finance the system’s remaining 

pipe replacement projects. (Funds from the Rhode 

Island DWSRF are used for the cleaning and lining 

projects.) Prior to 2003, the replacement projects 

and the cleaning and lining projects were funded 

by the PBA through general obligation bonds. By 

paying for some of the infrastructure improvements 

out of current revenue, the PWSB is able to keep 

its debt load from becoming too large.

Current Status

Pawtucket is making progress in all aspects of its 

source-to-tap improvement plan. The system is 

working with surrounding towns to implement 

its source water protection plan. The watershed 

zoning ordinances are pending, and the system is 

seeking a Clean Water Act Section 319 grant to 

restore a degraded pond that was donated to it. 

Pawtucket’s new 25 MGD treatment plant was 

completed in early 2008, nearly 2 years behind 

schedule. The project faced many setbacks that 

contributed to the delay, including complications 

at the plant site. The site, which is adjacent to 

the PWSB headquarters, is small and bordered 

by a railroad and an interstate highway. This 

location poses liability and security issues, and 

soil contamination added to the project’s cost and 

delayed construction. Additional setbacks included 

problematic pumps and a malfunctioning valve 

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1988 1991 1993 1995 1998 2001 2003 2005 2007 2009 2011 2013 2016 2020 2024

PWSB Distribution System Rehabilitation

Estimated Project Footage
12

“There was a time when I had as many as 100 phone calls a day due to main breaks and 

rusty water. Now, well, I think I had one on Tuesday.” —Allen Champagne, PWSB

day. After years of effort, the system now receives 

at most a few complaints a week. 

In the past, biofilm buildup in the distribution 

pipes forced the system to rely on high levels of 

chlorine to maintain a disinfectant residual. The 

distribution system rehabilitation has significantly 

reduced biofilm levels, allowing the system to 

reduce the amount of chlorine in finished water 

from 1.8 mg/L to 1.0 mg/L. The distribution 

system upgrades have also helped to eliminate total 

coliform-positive bacterial samples. 

Since the beginning of the rehabilitation project, 

DBP levels have dropped by 60%, and there have 

been no violations of the TCR. To further reduce 

DBP levels, the system plans to switch from chlorine 

to less reactive chloramines for disinfection. 

The PWSB’s pumping costs have decreased 

because water passes easily through the new and 

smoother pipes in the system. The water system 

reports lower electricity use and a 10% decrease 

in pumping pressure. AECOM estimates that the 

DBO arrangement will enable the system to save 

an additional 15 to 20% in operating costs.

Next Steps

In addition to completing the projects 

currently underway, Pawtucket has plans for 

further improvements, which include capital 

improvements to dams, wells, and expansion of 

projects by 2014. The PWSB considers age, watermain upsizing, dead-end looping, accessibility, 

and paving issues in deciding whether to clean 

and line or replace pipes. Since 1988, 112 miles 

of pipe have been cleaned and lined and 37 miles 

have been replaced (approximately 55 miles remain 

to be cleaned and lined or replaced; 56 miles of 

the system’s pipe did not need rehabilitation or 

replacement). 

Results/Benefits

The PWSB’s aggressive rehabilitation project has 

created significant benefits for the system and its 

customers. The distribution system improvements 

have increased the city’s water quality, reduced 

customer complaints, and lowered pumping and 

pipe repair costs. 

Although the system’s surface water source 

remained the same after the new treatment plant 

was constructed, the PWSB has implemented 

significant safeguards that are improving source 

water quality. Proposed regulations of activities in 

the watershed will further improve source quality 

and should decrease the likelihood of turbidity 

problems.

Before the rehabilitation project, the entire water 

system regularly experienced rusty water for 

extended periods; now, thanks to cleaning and 

lining and pipe replacement, only small areas of 

the distribution system have chronic rust problems, 

and they are being rapidly addressed. The PWSB 

staff has noticed a dramatic decrease in the number 

of customer complaints. The water system used to 

receive up to 100 complaints about rusty water per 

DBPs and Chlorine Reductions

Since Project Began 

30%

Chlorine

60%

DBPs
13

wholesale options. The projects will improve the 

city’s infrastructure, benefit both the city and 

its neighboring communities, and contribute to 

Pawtucket’s revitalization.

Now that the new plant is complete, portions of the 

original plant will be converted to a facility for the 

distribution system operations and maintenance 

crew; the remainder might be turned into offices 

or decommissioned. The distribution system 

rehabilitation project is scheduled for completion 

in 2014, followed by several years of low-level line 

replacements. The PWSB plans to implement a 

preventive maintenance program to prolong the 

life of its new infrastructure once the distribution 

system upgrade is complete. 

Pawtucket will continue to implement programs 

to improve source water quality. The PWSB also 

wants to create and implement public education 

and public relations programs. The system hopes 

these efforts will raise awareness about its water 

and customer service. 

The PWSB is installing radio read meters, will 

implement monthly billing, and will eventually 

allow electronic debiting. Pawtucket hopes 

monthly bills will reduce the sticker shock that 

comes with traditional billing practices and help 

customers better understand the impacts of water 

consumption. The project should also help the 

system detect leaks and reduce unaccounted for 

water (currently 8 to 10% of the system’s water).

Pawtucket’s water system would like to sell water 

at wholesale rates to neighboring communities 

and perhaps develop a regionalization plan. The 

expandable capacity of the new treatment plant 

will enable the system to meet additional demand 

from new wholesale customers. The PWSB 

also recently acquired and consolidated with 

the Central Falls system. Pawtucket previously 

supplied water to Central Falls, but did not own 

the distribution system. In April 2008 the PWSB 

began rehabilitating the distribution system, which 

is old and degrades water quality in Central Falls 

and some other areas served by the system.

Central Falls is a small, separate community surrounded by Pawtucket and Cumberland. For years Pawtucket supplied all of Central 

Falls’ drinking water, but the PWSB did not own or operate the Central Falls system. Central Falls did not have a municipal entity devoted 

to operating the water system, and its distribution system is old and deteriorating. The city’s public works department operated and 

maintained the water system in addition to plowing the roads and paving the streets. Central Falls budgeted for the replacement of one 

valve per year, often salvaging components from the PWSB’s discards. 

The failing Central Falls distribution system affected more than just Central Falls’ customers; finished water from Pawtucket is pumped 

through the Central Falls system to customers in the Valley Falls section of Cumberland and some areas of Pawtucket. Clean water 

from Pawtucket degrades as it travels through 20 miles of deteriorating pipe in Central Falls, eliminating for these customers many of 

the benefits of Pawtucket’s infrastructure renewal.

For years, the PWSB wanted to buy the Central Falls water system and rehabilitate its distribution network to improve water quality 

and service for its Central Falls and Cumberland customers. Under a contract signed in 1938, Pawtucket paid Central Falls an annual 

fee equal to 25% of gross water sales in Central Falls to use the community’s pipes. Central Falls sued the Pawtucket water system 

after Pawtucket failed to pay the franchise fee for several years; Pawtucket withheld payment because of the unacceptable condition 

of Central Fall’s water mains. The franchise agreement ended in 2002, and Pawtucket attempted to buy the Central Falls system. The 

deal fell through, but negotiations resumed in 2005. In June 2007, the PWSB purchased the Central Falls system for $1.1 million. The 

acquisition was paid, in part, from funds that the PWSB had set aside with the approval of the state PUC. The PWSB began rehabilitating 

the Central Falls system in the spring of 2008, which should improve the quality of water for customers down-line. 

Central Falls
14

Lessons Learned

The challenges facing Pawtucket’s drinking water 

system are familiar to communities across the 

country. Pawtucket’s years of hard work suggest 

lessons for others facing similar challenges.

Primary Lessons

1. Rhode Island’s DWSRF Program played a 

central role in facilitating Pawtucket’s drinking 

water system rehabilitation. The state worked 

closely with the city, the PWSB, and water system 

staff to make the ambitious plans to renew the 

water system a reality by finding creative, flexible 

funding solutions to finance the system’s existing 

debt and pay for improvements. The low-interest 

DWSRF loans provided by the state kept the 

project affordable and softened the impact on rate 

payers. In addition, the state kept the projects 

from getting derailed by using a mix of DWSRF 

debt and other financing tools.

2. Pawtucket’s water system problems had been 

building for decades, and like many systems and 

communities, it took years for leaders and the 

public to recognize the full scope and scale of the 

system’s problems. 

3. The city and system needed the technical 

leadership at the water system and the political 

leadership in the community to move away from a 

repair-and-maintain mentality to a comprehensive 

rehabilitation and replacement of the entire water 

system.

Other Important Lessons

 

•	 The state’s health department was open to 

innovative technology that allowed the system 

to shoehorn a state-of-the-art treatment plant 

onto a very small parcel of land. 

•	 The PUC recognized the need for the significant 

infrastructure investments and approved the 

rate increases the system needed to pay for the 

improvements.

•	 The water system decided to clean and reline 

significant portions of the distribution system 

rather than just replace all the mains. Cleaning 

and lining has proved to be a very cost-effective 

way to improve water quality for customers.

•	 By including an element of restructuring 

(acquiring the Central Falls water system), 

Pawtucket was able to improve the efficiency 

of water provision to both communities and 

improve public health protection for the 

residents of both communities. 

•	 Pawtucket was open to using any and all options 

including an innovative DBO procurement 

approach and ultimately decided to pursue a 

public-private DBO partnership.

“I’ve learned that everything takes longer than thought or planned. It takes patience. It 

requires not giving up.” —Mary Tetzner, former PWSB chair

From left to right: Fred 

Ramos, Mary Tetzner, Rich 

Antonelli, Allen Champagne, 

William Masuck, Gary 

Chobanian, James DeCelles
•	 MGD – million gallons per day

•	 Aeration – water treatment process in which the turbulent exposure of water to air 

removes volatile contaminants

•	 Flocculation – one step in a large-scale water treatment process in which stirring 

is used to collect small particles into larger particles, whose weight causes them to 

settle to the bottom of the treatment tank 

•	 Sedimentation – the settling of heavy solids to the bottom of a treatment tank after 

flocculation

•	 DBPs – disinfection byproducts; carcinogens formed when disinfectants used for 

water treatment react with naturally occurring organic matter in water

•	 TTHMs – total trihalomethanes (chloroform, bromoform, bromodichloromethane, 

and dibromochloromethane); DBPs

•	 HAAs – haloacetic acids; five DBPs

•	 GAC – granular activated carbon; medium used to filter water

•	 UV – ultraviolet; a form of disinfection in which biological contaminants are 

inactivated by ultraviolet light

•	 Turbidity – a measure of organic matter suspended in water

•	 General Obligation Pledge – a municipal bond that will be repaid through any tax 

source or revenue; requires no assets for collateral

•	 Revenue Pledge – a municipal bond that is repaid from revenue streams, but not 

from tax revenues

•	 Conduit Financing – a financing arrangement for a large capital project in which a 

government uses its name to back the issuance of a fixed income security for another 

public entity

Technical Terms

Finance Terms
Rhode Island Drinking Water State Revolving Fund

85% of available RI DWSRF funds have already been committed to water systems

The Safe Drinking Water Act (SDWA) Amendments of 1996 established the Drinking Water 

State Revolving Fund (DWSRF) to provide drinking water systems with below-market-rate 

loans to finance infrastructure improvements that can boost the quality of drinking water 

and better protect public health. The DWSRF gives each state flexibility in managing its SRF 

program so it can be tailored to the state’s needs. 

The Rhode Island Clean Water Finance Agency (RICWFA) works with the Rhode Island 

Department of Health (RIDOH) to manage the Rhode Island Drinking Water State Revolving 

Fund (RI DWSRF). Before a project can receive funding, it must be placed on the state’s 

Project Priority List (PPL), which ranks projects based on a point system. Priority is given 

to projects that address the most serious risks to human health, are necessary to ensure 

compliance with the SDWA, and assist the systems most in need. Rhode Island updates its 

PPL at least once a year. 

The State of Rhode Island has never declined DWSRF funding to any project on its PPL that 

met all the funding criteria. To increase the money available to water systems, Rhode Island 

chose to leverage its capitalization grants by issuing tax-exempt bonds. Pawtucket was the 

first community to borrow from the leveraged program. Pawtucket’s new treatment plant 

and distribution system rehabilitation, which cost over $100 million, is the largest project 

ever funded by RICWFA.

Special Thanks To:

Allen Champagne, PWSB

Jim DeCelles, PWSB

Fred Remos, PWSB

Mary Tetzner, Former PWSB Chair

Gary K. Chobanian, PE, RIDOH

Anna Coelho-Cortes, RICWFA 

Anthony Simeone, RICWFA

Office of Water (4606M)

www.epa.gov/safewater

EPA 816-K-08-003 September 2008