PROVIDENCE — The city has already gotten some nibbles from buyers interested in purchasing the city’s Water Supply Board, said a city councilman, although he would not identify the potential purchasers.

Council members acknowledged this week that they are considering selling the Providence Water Supply Board, which includes the Scituate Reservoir system, and putting the proceeds toward paying off the debt to the city’s pension system. The Public Utilities Commission regulates the water board in such a way that the city cannot make a profit off the sale of water, and city officials have long looked for a way to make money off the system.

They hope to glean $400 million to $600 million from the sale.

Last night, the council established an appraisal subcommittee of the Finance Committee to obtain an appraisal of the system and determine the next step.

Councilman Michael A. Solomon, who was named chairman, said that he has heard from several interested buyers since the potential sale became known on Tuesday.

“We have gotten calls. There are people who are interested. There’s definitely interest,” he said.

Solomon said his committee, which includes Councilmen Joseph DeLuca, Terrence M. Hassett, Seth Yurdin and Council President Peter S. Mancini, will sit down with those who were involved the last time the council seriously discussed a sale, in 1992 and 1993.

They will also seek to obtain an appraisal that the Water Supply Board itself reportedly had done in roughly 2004 and talk to the board’s legal counsel to determine the legal vagaries of a sale, he said.

But Councilman John J. Lombardi said he is worried that this is a more complex issue than some realize.

He said that it is not clear whether the city or the ratepayers actually “own” the water board, and thus if the city has the ability to sell it.

He also worried that a sale would necessarily lead to a hefty rate hike for water customers. While the PUC would still regulate the water price, Lombardi suggested that the guarantee of a rate increase would need to be part of any sale arrangement, because a buyer would want to make money off the system, rather than be locked into Providence’s break-even rates.

“Will the sale price be based on the current price of water? Why would you buy it at $500 million if you could only sell water for X dollars?” he asked.

Roughly 40 unionized Providence water board employees were present last night at City Hall to argue against unrelated pay raises for Water Supply Board members.

Those employees are represented by Local 1033 of the Laborers International Union of North America. The union’s business manager, Donald S. Iannazzi, said he had concerns about the possible sale, ones that he would air in greater detail once the City Council gets further down the road.

He did say that the council may not have thought out the ramifications of a sale on employees — and that water board employees might rather leave than work for the owners under different terms.

“I don’t think they’ve realized that it would de facto cause the layoff of 140 employees,” Iannazzi said.

City Council Finance Committee Chairman John J. Igliozzi said that he knew the union would have issues with the chance of a sale, but said that he thinks he can defuse many of its potential concerns by working out an arrangement where current employees are kept in the city pension system.

dbarbari@projo.com