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PWSA management company earns performance bonuses

| Friday, April 5, 2013, 2:03 p.m.

A private firm hired last year to run the Pittsburgh Water & Sewer Authority earned some “early wins” that led to a $1.3 million uptick in revenue for the authority and unlocked incentive bonuses for the management firm, officials said on Friday.

“It's really important when you're trying to reorient an organization to have early wins because they build momentum,” Rob Nicholas, vice president of development, said during a meeting with reporters. “We think that's really been accomplished in the first nine months.”

PWSA hired Chicago-based Veolia Water in July at a rate of $150,572 a month, or about $1.8 million a year. The authority had gone about two years without an executive director after Michael Kenney resigned amid a scandal over a water line insurance program that forced customers to participate and pay a fee.

Bringing in a management firm with no political ties to Pittsburgh is part of a larger effort to restore confidence and trust in the authority, said state Rep. Dan Deasy, D-Westwood, chairman of PWSA's seven-member board.

Jim Good, the interim executive director, said customer service call center wait times were halved — from an average of eight minutes to four minutes — and the authority avoided laying off employees from its 270-member workforce, as some unionized employees feared.

Rates did not increase this year, Deasy said.

Nicholas said Veolia worked to change the culture of the authority by inviting employees to share ideas to improve efficiency with Good and other executives over pizza at lunchtime or at a company cookout.

Some employees voiced concerns about Veolia's takeover.

The Pittsburgh Joint Collective Bargaining Committee, a labor union group that represents about 125 PWSA employees, in February rejected contract offers. A representative of the group did not return a call Friday.

Roughly $1 million more in annual revenue came from persuading a new customer in the food processing industry to stop using water wells it drilled and use PWSA's system instead, Good said. He declined to identify the customer, citing a confidentiality agreement, but said the customer will be online Monday.

The authority also generated revenue by enforcing an overlooked fire hydrant line fee on about 1,000 high-capacity commercial and industrial users that have large fire protection systems in their buildings.

Veolia can earn up to $1.5 million in bonuses and 50 percent of any money it saves the authority, according to its contract.

The company said it earned bonuses worth a few hundred thousand dollars. It could not immediately specify the amount but offered to provide figures soon.

PWSA has the option to extend its contract with Veolia by six months in July. Deasy said he would vote to do so.

Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or jboren@tribweb.com.

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