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Alcosan delayed rate hikes board members knew were needed

Friday, Oct. 25, 2013, 10:17 p.m.
 

Allegheny County Sanitary Authority board members knew a year ago that they would need to raise sewer rates to tackle multibillion-dollar, federally mandated upgrades.

But the board voted to wait until 2014 to start hiking fees, sticking ratepayers that year with the third-largest increase since 1997.

Board members voted Thursday to raise rates 17 percent for 2014 and 11 percent annually in 2015, 2016 and 2017 for an overall increase equal to 60 percent.

The increases occur as board members call for tighter internal controls and more transparency from the authority.

Alcosan plans to spend more than $2 billion over 20 years to comply with Environmental Protection Agency mandates to stop raw sewage from flowing into rivers during heavy rain.

Black and Veatch, an international consulting firm with offices in Pittsburgh, presented Alcosan board members with a study in 2012 suggesting 10 to 12 percent rate increases over several years of the EPA mandates, known as the consent decree, said Nancy Barylak, spokeswoman for the authority.

Board members responded by asking Alcosan to tighten its budget and operate for one year without a rate increase.

“Because the board decided to forgo the rate increase last year, hence the 17 percent this year,” Barylak said. “There is always angst with rate increases. They don't like to do that.”

The board's vice chairman, county Treasurer John Weinstein, said he and other members felt uncomfortable in approving an increase last year. Weinstein, member Joe White and former members Theresa Kail-Smith and Kristen Baginski were appointed that year. Kail-Smith, a Pittsburgh councilwoman, and Baginski resigned in July.

“There were new people that were not as familiar with the inner workings,” Weinstein said. “Personally, I wanted to see some cost-tightening and belt-tightening measures.”

Weinstein abstained from Thursday's vote on the rate increase, in part because he wants to see the results of an internal efficiency study Alcosan is conducting. He wants Alcosan to be more open about its operations by posting contracts up for bid on its website.

The efficiency study should be completed by January or February, Barylak said. Board members had to act on the rate increase in order to secure $70 million in bonds for capital projects related to the consent decree. The authority was at risk of running out of money for capital projects by March, Barylak said.

In addition to the efficiency study, Alcosan is hiring in 2014 a procurement and contract compliance officer to supervise spending. Before he voted for the rate increase, White praised Alcosan for funding the position.

The 17 percent and then 11 percent increases will be passed along to most of Alcosan's more than 320,000 ratepayers through municipal sewer bills.

Other sewer authorities facing the consent decree raised rates. The North Eastern Ohio Regional Sewer District board voted in 2011 to raise rates by an average of 13 percent for five years.

“Everyone is in the same boat,” said Executive Director Julius Ciaccia.

Aaron Aupperlee is a staff writerfor Trib Total Media. He can be reached at 412-320-7986 or aaupperlee@tribweb.com.

 

 

 
 


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