City Controller: Problems Everywhere We Turned At PWSA

Feb 16, 2017

Pittsburgh City Controller Michael Lamb on Thursday released a draft of the performance audit of the Pittsburgh Water and Sewer Authority Thursday with 53 recommended changes.

The audit was concurrent with widespread customer billing and meter problems, issues of lead in drinking water and inconsistent leadership.

Lamb said the audit revealed mismanagement at every level. In 2014, the PWSA contracted a company to change water meters across the city. Those meters were installed incorrectly and incompatible with the billing system, Lamb said. That's what led to discrepancies such as excessively high water bills or no reading at all, he said. 

“This was a perfect storm of mistake and incompetence when you think about what happened,” he said.  

The audit recommends future PWSA contracts include inspection of work upon completion and before payment.

In 2012, PWSA contracted with Veolia Water North America to manage the system and create a long-term plan for a permanent director to follow. There still isn’t a plan.

Lamb said the problem with the Veolia contract stemmed from the company creating profit-driven savings measures that weren't ultimately in the best interest of the authority. According to the audit, Veolia was "paid a percentage of any cost savings." 

In one incident, the company decided to stop staffing the microfiltration plant in Highland Park. It's a decision he said he wants answers for. 

Last month, the PWSA issued a flush and boil water advisory for about 100,000 customers in the central and eastern part of the city after tests near the Highland Park filtration plant showed low levels of chlorine. Lamb wouldn’t connect the lack of staff to the chlorine issue.

“But we do know that prior to Veolia, there was full-time staff there,” he said. “Veolia recommended as a savings measure to discontinue having full-time staff there and one of their jobs was to monitor the chlorine levels.”

The city filed an arbitration lawsuit against the Boston firm in October for recovery of money lost when Veolia approved a switch in the water treatment process. In 2014, PWSA moved from the soda ash it was using for corrosion control to a cheaper alternative – caustic soda.

Lamb said evidence could come out in litigation showing whether Veolia made that decision without the Department of Environmental Protection’s approval.

“If that was done in an attempt to generate savings, and they thought they were going to benefit from that savings, obviously that is money they shouldn’t receive,” he said. “We should be seeking money back from them for that.”

The audit recommends the PWSA avoid hiring companies like Veolia that promote the company’s profits over the operation of the authority.

Pennsylvania Auditor General Eugene DePasquale also announced Thursday that his department will conduct a separate PWSA audit. He said his audit will determine if the PWSA’s governance structure is adequate to provide effective oversight. In the past four years, the PWSA had three different interim executive directors.

“If you cannot maintain good, quality staff and you have consistent leadership turnover, the mission and the professionalism are going to continually be in flux,” he said. “So we’re going to look into that.”

Lamb said he will meet with PWSA management next week to review and take feedback on the audit.