Pressure on PWSA

The auditor general zeroes in on the problems

While it’s widely acknowledged that the Pittsburgh Water and Sewer Authority has been poorly run over the years, state Auditor General Eugene DePasquale puts leadership and governance failures at the center of the agency’s woes, saying they contributed to the financial and operational problems that customers know only too well. His new audit speaks to the importance of a coming overhaul of the PWSA’s organizational structure.

The agency must become independent of city government and empowered to make tough, expensive decisions to keep quality water flowing to homes and businesses.

PWSA’s customers have endured leaks, poor service, inaccurate billing, elevated levels of lead in the water and steadily rising bills, even as the infrastructure deteriorated, debt mounted and the politicians on Grant Street used the agency as a dumping ground for political hacks.

By now, there is all but unanimity on the need to overhaul PWSA. But there is anxiety about how to do that, with some customers and other voices demanding the agency stay in public hands.

Mr. DePasquale said the agency’s seven-member board — made up of the city treasurer, city finance director, a city council member and four others appointed by the mayor — has left the agency answerable less to consumers than Grant Street politicians. “We found that the board’s bylaws do not address the fiduciary responsibility of each board member; nor are the board members required to sign an acknowledgement of their understanding and willingness to fulfill their fiduciary duties,” he said. In 1995, Mr. DePasquale noted, the cash-strapped city insisted on renegotiating the lease under which the PWSA operated the water system, an arrangement that brought an infusion of cash to the former but required the latter to take on debt. This, Mr. DePasquale said, “was a bad deal for PWSA.” While public management clearly hasn’t worked, the decision to bring in Veolia Water, a company that managed the PWSA from July 2012 through December 2015, didn’t pan out, either. The PWSA’s problems continued to mount under Veolia, which was hired by and reported to the agency’s board. Veolia was paid partly on the basis of cost efficiencies it achieved, and Mr. DePasquale cited a possible conflict between the company’s profit motive and obligations to the agency, its board and customers.

Mr. DePasquale is the latest to weigh in on PWSA’s woes. City Controller Michael Lamb cited leadership failures among other problems in a report he released in February and a consulting firm, Infrastructure Management Group, issued a draft report in August in which it outlined various restructuring scenarios, such as spinning the PWSA into a private nonprofit utility, transferring ownership to an investor-operated utility or turning it over to another government entity. The firm’s final recommendations are due this week to a panel assembled by Mayor Bill Peduto.

Whatever the new structure, the agency must begin to operate independently of city hall so that it is free to hire the best candidates for all jobs and make other decisions in the best interests of consumers — and that may mean higher rates for urgently needed infrastructure improvements.

Meanwhile, the Legislature should follow through with House Speaker Mike Turzai’s proposal to put the agency under the oversight of the state Public Utility Commission. The more eyes on the agency’s problems, the better.