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Pittsburgh Water & Sewer Authority drowning in debt, state audit finds

Bob Bauder
| Wednesday, Nov. 1, 2017, 2:54 p.m.
Pennsylvania Auditor General Eugene DePasquale
Bob Bauder | Tribune-Review
Pennsylvania Auditor General Eugene DePasquale

State Auditor General Eugene DePasquale released an audit Wednesday of the Pittsburgh Water and Sewer Authority that echoed numerous problems that city officials have highlighted for years.

The authority is drowning in debt, beset with leaky water and sewer pipes that date back more than a century, has a dysfunctional management structure and needs a complete organizational makeover to right itself.

DePasquale said city government exerts major influence over PWSA operations. Each of the seven board members has ties to government operations, and four work for the city: Pittsburgh Finance Director Paul Leger, Personnel Director Debbie Lestitian, Treasurer Margaret Lanier and City Councilwoman Deb Gross.

“Either PWSA should be a separate independent authority and operate as such, or the city should operate the water and sewage system as part of the city's functions,” DePasquale said.

Mayor Bill Peduto noted that the city owns the water and sewer systems.

“While the audit expresses concern with city government's influence on PWSA, it is my duty to protect this valuable city asset and the safe water owed to the people I represent as mayor,” he said.

The findings came as no surprise to PWSA officials.

“The audit released today sheds light on the historical and structural conditions that have placed PWSA in a difficult position today,” said interim Executive Director Robert Weimar. “Fortunately, PWSA and its board of directors are currently taking action to stabilize infrastructure, invest in needed capital improvements, and adding to our leadership team who is committed to advancing the organization.”

The audit covered PWSA's performance from 2014 through June.

Major findings include:

• A renegotiated lease agreement with the city in 1995 cost PWSA $101 million that went to plug holes in Pittsburgh's operating budget. That bill added to PWSA's debt — now more than $750 million — and it's questionable whether a bank would offer it another loan.

• The authority invests about $31.4 million each year on average to repair aging infrastructure when it should be dedicating up to $200 million annually on capital improvements.

• PWSA provides city facilities — including the Pittsburgh Zoo & PPG Aquarium — with up to 600 million gallons of free water each year. Authority officials are unsure exactly how much each facility uses because nobody meters it.

• Constant turnover of management and staff adds to the dysfunctional nature of PWSA.

PWSA needs an infusion of money — which can come only through rate increases — to fix its problems. DePasquale recommended a partnership with a private company to help offset the burden to ratepayers, but DePasquale acknowledged finding an interested, private partner could be difficult given the authority's problems.

Bob Bauder is a Tribune-Review staff writer. Reach him at 412-765-2312, bbauder@tribweb.com or via Twitter @bobbauder.

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