Water rates are going up, up, up
PWSA’s prices surge to pay for upgrades
Pittsburgh Post-Gazette
Pittsburgh Water and Sewer Authority customers will have to pay nearly 50 percent more for service by 2020, a pricing surge meant to restore the city’s flagging water infrastructure.
PWSA board members approved a three-year rate plan Wednesday, along with a four-year blueprint to bolster the leaky, failure-prone system. No members dissented.
Their decision came just hours before a consultant made his recommendation — months in the making — that the entire water system be transferred from the city and into an independent entity, in part to prevent political influence. More immediately, the rate increases mean the average residential PWSA charges will climb about $15 a month starting in January, up from about $60 a month now.
For households, the price for 1,000 gallons of water will jump from $7.71 — the current rate — to $9.41. Expected rate increases will add about $7 and $9 more to residential monthly bills in 2019 and 2020, respectively, although the board can revisit those plans later. PWSA rates went up about 13
percent in early 2017.
“It’s still a painful jump for us to be raising the rates. But we know there are decades of deferred maintenance,” said board member Deborah Gross, who is also a Pittsburgh City Council member. “The most important thing is to protect the public health and keep the [water] running on a daily basis.”
Board member Paul Leger, the city finance director, seconded her thoughts. A state order last month prioritized several PWSA projects to ensure adequate water pressure and volume within the system.
“None of us likes to increase a bill. We don’t have any other choice here,” Mr. Leger said. “If we want to supply reliable water, we have to pay for what we do. Unfortunately, I’m going to get a higher bill next year just like everybody else.”
At times over the past year, PWSA has struggled with core functions. A key water pipeline that burst in February released about 10,000 gallons a minute. Two boil-water advisories affected thousands of customers in two areas of the city. Meanwhile, the authority is working to bolster customer service, billing practices, water treatment and the removal of lead service lines, which have been linked to contamination.
Robert Weimar, the interim executive director retained this year, said the PWSA system had gone about 20 years — since the mid-1990s — with only four major infrastructure projects, three involving reservoir covers. The authority should have been putting $100 million to $200 million annually into capital investments during that period, he said.
Instead, he estimated, the total allocation in that period was probably in the $100 million range, excluding repair work and some routine tasks.
“Basically, all we’ve been doing is fixing leaks” until recently, Mr. Weimar said. “We haven’t made any real, major investment in any of our infrastructure except those four projects.”
He said PWSA will ramp up infrastructure work on a gradual basis, including a $75 million capital allocation in 2018. That’s up from about $45 million this year. Higher service rates are expected to fuel a 28 percent increase in receipts next year, putting the figure at about $181 million.
Operating expenses are due to increase, too, up more than $20 million, to $110.8 million, in 2018. That’s driven in part by hiring plans, including workers for lead line replacements and other technical jobs. Mayor Bill Peduto has said the PWSA system needs more than $1 billion in immediate capital improvements.
Even with the planned rate increases, board members stressed that PWSA water rates should remain lower than those charged by Pennsylvania American Water Co. in Pittsburgh’s suburbs.
The board also approved Wednesday an assistance program for qualifying PWSA customers. It will reduce minimum monthly charges by 50 percent for customers at or below 150 percent of the federal poverty level. Customers will need to apply for the reduction on an annual basis, PWSA officials said.
Detailed notifications about the assistance are expected to appear with PWSA billing statements. The authority put more information on its website: www.pgh2o.com.
Later Wednesday, several board members joined the crowd for a Downtown presentation by Washington, D.C.-based Infrastructure Management Group. PWSA and the city hired the consultant this year to explore options for a possible restructuring at PWSA.
IMG chairman Steve Steckler said PWSA likely ranks among the worstperforming public water systems in the country. His group suggested moving the water system under a new public trust. A selfperpetuating board could oversee the organization, eliminating the need for the existing board.
Current practices hold that the mayor appoints — and City Council confirms — each PWSA board member. A state audit last week urged greater independence in PWSA’s governance.
“Politics has clearly caused some of the problems we have at PWSA,” said Kevin Acklin, the mayor’s chief of staff. PWSA had been hosting no-show jobs for politically connected people when the Peduto administration took office in 2014, Mr. Acklin said.
He said the trust approach is worth considering as an expert panel weighs PWSA’s future. The panel, appointed by Mr. Peduto, is due to give him final recommendations for PWSA in the coming weeks, Mr. Acklin said.
IMG also suggested the city explore whether to partner with a private entity to handle infrastructure improvements. The consultant’s presentation is to appear at www.pwsablueribbon.org.
“The private sector, in infrastructure, has a lot of different techniques that are not really available to municipalities,” Mr. Steckler said.