Firm returns criticism of PWSA
Authority accused of defaming company
A contractor accused of mismanaging the Pittsburgh Water and Sewer Authority returned the criticism Monday, charging that PWSA defamed the Bostonbased company through “reckless and false statements.”
Veolia North America-Northeast LLC also withdrew from mediation with PWSA and is initiating formal arbitration, the company announced. The parties had been in talks since January, after PWSA claimed in October that Veolia “grossly mismanaged” operations.
A company spokesman said Veolia lost faith in the mediation before resorting to arbitration under the auspices of the American Arbitration Association. Both sides are seeking damages.
“We don’t take such a step lightly, because we work with municipalities throughout the country and view them as our partners. But after PWSA’s unceasing attempts at blame-shifting for their errors, and their complete mischaracterization in the media of the problems at PWSA, we must take steps to publicly defend our work and our reputation,” Veolia vice president Keavin Nelson said in a statement.
The company didn’t have a specific monetary claim Monday for the alleged defamation,
although it will present “relevant information” at an arbitration hearing, spokesman Paul Whitmore said. PWSA contracted Veolia to help run the authority from July 2012 to December 2015.
Veolia also is seeking unpaid amounts from PWSA, which declined to comment amid pending litigation. Still, Mayor Bill Peduto’s spokesman, Timothy McNulty, vented disappointment.
“This is a disappointing move by Veolia, and these actions will give PWSA no option other than to pursue its claims in court,” Mr. McNulty said in a statement. Mr. Peduto appoints the seven-member PWSA board.
As early as October, the authority claimed Veolia had “misled and deceived PWSA as part of its efforts to maximize profits for itself to the unfair detriment of PWSA and its customers.” PWSA said failures during the company’s tenure included “the botched procurement and implementation” of an automated system to read water meters; improper billing of PWSA customers; and a mishandled change in chemicals used for corrosion control.
The utility has indicated it would seek up to about $12.5 million in damages — the maximum under agreedto terms.
But Veolia has said it never assumed control over PWSA, asserting that the authority, through its board, retained ultimate decisionmaking power over key matters. The company argued that it helped PWSA to institute financial controls and to “realize at least $5.5 million in annually recurring revenue and efficiencies.”
Veolia said it remains proud of its work and will mount an aggressive defense, with arbitration to begin by late August. A company website at www.veoliapwsatruth.com outlines its arguments, including that it was not involved in the 2014 decision over corrosion-control chemicals.
That switch — since reversed — has been eyed as a potential contributor to elevated lead levels that PWSA is working now to subdue. During a news conference Monday, Allegheny County Controller Chelsa Wagner said her office would audit county health department programs that monitor and investigate elevated bloodlead levels in children.
She requested that the health department meet with her staff by Friday, suggesting she could have initial findings within about six weeks. Ms. Wagner said she’s especially interested in how well the health department evaluates water as a potential lead source.
“We certainly acknowledge that lead can come from a variety of sources — paint, dust, soil and water. But we know we have a significant water crisis in Pittsburgh,” Ms. Wagner said.
She renewed her claims that city and health officials haven’t moved with enough urgency on the lead issue. Health department spokeswoman Melissa Wade said the agency would participate in the audit “with full cooperation and professionalism.” County and city leaders have rejected suggestions of an acute crisis.
At an earlier briefing at the health department, expert panelists said overall lead-poisoning rates among children have fallen. The county should announce soon a task force to explore lead data along with policy and intervention strategies, said Karen Hacker, the county health director.
She listed several ongoing efforts to undermine lead contamination, which is often linked to lead-based paints. Ms. Wade said the health department relies on a state reporting system to identify youngsters with elevated lead levels, and offers to investigate confirmed cases — including water sources.
Health officials have not identified any Pittsburgh children for whom water has been a primary source of lead poisoning, Dr. Hacker has said. An estimated 17 percent to 18 percent of Allegheny County youth are tested for the metal, which is linked to developmental problems and other ailments.
County health board chairman Lee Harrison said the testing figure isn’t nearly high enough. He said the board should vote next month on mandatory testing — once at 9 to 12 months of age and again at 24 months.
“We think that’s going to generate an enormous amount of data so that we can target our interventions,” Dr. Harrison said.