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Advisory Firm Delivers Initial Review of PWSA Challenges to Blue Ribbon Panel

Advisory Firm Delivers Initial Review of PWSA Challenges to Blue Ribbon Panel

In its first public session IMG highlights work done to date, provides initial observations on PWSA troubles, and provides materials on various ways water systems can be restructured

PITTSBURGH, PA (August 28, 2017) The advisory firm tasked with studying possible ways to restructure the Pittsburgh Water & Sewer Authority held its first public session with a Blue Ribbon Panel of experts named by Mayor William Peduto.

The authority is faced with enormous challenges including crumbling, 100-year-old infrastructure; massive debt; lead in service lines; and poor organization. The City, PWSA and the Blue Ribbon Panel in April selected Infrastructure Management Group (IMG) to study those issues and recommend ways to solve them.

Today was the first of three public sessions scheduled through the remainder of the year. IMG – led by chairman Steve Steckler -- described its work to date, its initial observations on the PWSA's shortcomings, and a list of restructuring options used by other cities and utilities, with accompanying backup materials.

Today's session was an introductory look at restructuring options. Another session will follow September 12 to take a deeper look into the PWSA's finances and operations, and a final session will be held where IMG will issue its final findings.

Materials issued to the panel are available for review here.

The materials include an overview of eight common restructuring options for officials to consider.

"The restructuring options for PWSA range from modest to extensive, and from public to private. It is fair to assume that each has their unique advantages and disadvantages for Pittsburgh’s water and sewer ratepayers," reads a summary of the options.

"As the Panel reviews these options, it is important for it to separate PWSA’s enormous organizational problems from the physical problems of its water and sewer system. They are two different but related issues. The latter will require more money than Pittsburgh’s water ratepayers are likely to grant to any restructuring partner until the PWSA’s organizational problems – governance, management, staff, systems and procedures -- are addressed. Moreover, the quality of the organization -- public or private -- strongly influences the efficiency and effectiveness of the capital program: high-performing utilities are consistently better asset managers, with consequently lower water and sewer rates for the same level of service.

Accordingly, they are more respected stewards of their ratepayers’ money. Pittsburgh’s water rates will increase over the coming decades, but the size of the increases, like the cost of the long-term capital improvement program, are not invariant. The restructuring option chosen by the Panel will make a big difference."

The options are:

  • Transfer to/Creation of a Private Non-Profit Utility
  • Transfer to a Local Regulated Investor-Owned Utility
  • Transfer to an Existing Regional Government Entity
  • Aggressive Internal Improvement
  • Outsourcing of Selected Services
  • Short-Term Internal Improvement, Eventual Regionalization
  • Operations and Maintenance Contract
  • Concession Lease

"The PWSA is at a crisis point after decades of neglect and mismanagement, and bold action is needed to save this asset and preserve safe drinking water for Pittsburgh residents for generations to come," Mayor Peduto said. "We're not running from these problems any longer. This work by IMG, with support by the PWSA board, City Council and the Blue Ribbon Panel will find the solutions the public deserves. We are far from finding the right solution for Pittsburgh but today marks an important first step."

Further information and resources for the public on the work by IMG and the Panel will soon be available online. That work will be detailed at a later date.

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Published

08.28.2017

Contacts

Katie O'Malley
Communications Coordinator
mayor
(412) 925-1990
katie.omalley@pittsburghpa.gov