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Advisory team to oversee possible PWSA restructuring

The restructuring of the Pittsburgh Water and Sewer Authority is moving forward.

Mayor Bill Peduto’s office announced Tuesday that the Infrastructure Management Group will manage a possible restructuring of the utility.

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The group was of four finalists who made presentations to the Blue Ribbon Panel and the mayor’s office.

"After decades of disinvestment and neglect the PWSA is in need of billions of dollars of long-term infrastructure improvements. It can't borrow its way out of the problem, or implement giant rate increases by residents," Peduto said in a news release. "IMG will help us study the best way to keep the city's water asset public, while addressing the improvements that have been ignored for the better part of a century."

The final contract and projected costs have not been finalized. The PWSA board is expected to vote Friday on a joint financing agreement with the city to cover half the contract costs with IMG.

The first phase of IMG's work will be an evaluation of the PWSA's operations and needs, according to the news release. That work is expected to be completed by the end of the third quarter of 2017, and will contain a series of public meetings to consider full community input on the future of PWSA.

Channel 11 learned that all options except an outright sale of the utility are on the table.

In addition to bringing the management group on board, the city and PWSA will soon receive advisory help from the nonprofit Mayors Innovation Project, a national network that provides mayors with best practices in public policy. The Innovation Project will be a third-party neutral advisor on work by IMG and the Blue Ribbon Panel on the changes needed at the water authority.

The Mayors Innovation Project plans to send Howard Neukrug, the retired CEO of Philadelphia Water and a national expert in drinking water and utility management, to study Pittsburgh's water system challenge. The group also plans to send Mel Meder, an expert in water management and resilience projects.

With tentative funding from the Heinz Endowments the Mayors Innovation Project plans to coordinate with IMG and conduct site visits to meet with the city and PWSA officials, as well as community stakeholders, to study the water system, and will further study best practices that can be adopted by the authority as well as insight on its governance structure, and financing options.

Once completed, their collective findings will be publicly released and presented to the Blue Ribbon Panel, the city and PWSA.

The decisions come as several investigations into the PWSA are ongoing, including some by the Pennsylvania Auditor General's Office after Target 11 investigations.

"There are comprehensive problems across the board, whether it's high billing practices, high staff turnover, the contract with Veolia or even concerns about how healthy the water is," said Pennsylvania Auditor General Eugene DePasquale.

Some worry what a full-scale change could look like.  Several nonprofits formed the Our Water Campaign earlier this year to make sure the PWSA stays a public utility.

"Our campaign is going to fight tooth and nail against privatization. We don't think it's the best option for ratepayers or water quality," said Aly Shaw of One Water Campaign.

IMG management said they will evaluate various options involving the private sector, but selling the utility is off the table.

"We are a little concerned. We have to do more research into (IMG). We don't want a consultant group with a history of privatization to recommend the same thing for PWSA," Shaw said.

IMG expects to start working on restructuring the utility in June. Stay with Channel 11 News and WPXI.com for continuing coverage.

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