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Alcosan's projected sewer upgrades could cost 'mind-boggling' $50B

| Friday, April 3, 2009

Alcosan could need as much as $50 billion to complete federally mandated improvements to the water treatment system it runs in Allegheny County, according to a review by Pittsburgh and county auditors.

County Controller Mark Patrick Flaherty and city Controller Michael Lamb released an audit of the authority Thursday to bring early attention to the bill expected from what likely will be the biggest municipal project in the history of Western Pennsylvania, they said.

Alcosan must find outside sources of money to avoid laying huge bills on customers to pay for construction, likely not to start until 2016, they said.

"The numbers are really mind-boggling," Flaherty said at a news conference. "This is one of the most frightening economic projects facing us."

The Environmental Protection Agency gave Alcosan 20 years to triple its capacity and reduce sewage discharge into rivers. That means the authority might need to run new pipes, update pipes or build holding tanks in the 83 communities it covers.

The final cost likely will be between $10 billion and $50 billion, Flaherty and Lamb said. The sanitary authority will not have its own estimates until it finishes a plan for its regulators due in 2013, Executive Director Arletta Scott Williams said. She complimented the auditors' work, but she said evolving technology could change the cost estimates.

Without outside money, the average household could have to pay between $425 and $3,104 annually just for rate hikes, the audit found. Businesses could have to pay $3,516 to $25,684 more annually. And there could be municipal tax hikes on top of that, as Alcosan's communities try to pay billions more in their fees.

"The authority will make every effort to minimize impacts on ratepayers," County Executive Dan Onorato said in a statement in which he called the repairs an "unfunded mandate. "We will work with federal and state legislators to obtain funding and employ new technology, sustainable practices and green infrastructure to reduce costs."

The need for repairs arises from a 2007 federal court agreement to stop billions of gallons of untreated sewage leaking into rivers and streams every year because Alcosan doesn't have the capacity to handle surges of storm water during rain.

The authority already paid a $1.2 million fine and started tracking water in its system to find out where it all comes from.

Auditors reviewed 19 months of work by the authority, in part to determine its compliance with the mandate. Now they will turn their findings over to Onorato and Pittsburgh Mayor Luke Ravenstahl so they can work on a plan to fund the project, Flaherty said.

The authority has followed the federal orders, Lamb said. Its only problem came in failing to properly document some decisions while awarding contracts. However, officials had justifiable reasons for those rare decisions, Lamb said, and they agreed to better document such decisions in the future.

"We think they've done a pretty good job," Lamb said.

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