The Pittsburgh Water and Sewer Authority has a year and a half to figure out how to manage on its own.
The agency's board on Wednesday approved a contract extension expiring in December 2014 for its private management firm worth at least $2.43 million.
“The next 18 months is about ... getting PWSA employees ready to run the operation permanently,” said board member Patrick Dowd.
Chicago-based Veolia Water North America, which has managed the agency since last July, is responsible for about $3 million in new revenue and operational savings over the past year, said Robert P. Jablonowski, board vice president.
“They're doing an incredible job for us,” he said.
Under the new contract, PWSA will pay Veolia $135,000 a month — down from $150,000 required by the current agreement — through at least December. If PWSA hires chief operating and financial officers by year's end, the amount will decrease to $125,000 a month next year.
Veolia can also earn performance incentives and will share in any cost savings and new revenue the authority receives in the next three years.
“We feel there is also the opportunity (over 18 months) to find some additional savings for us and to continue to train our current staff and recruit the new staff that we will need moving forward,” said board Chairman Dan Deasy, who also serves as a Democratic state representative from Westwood.
PWSA had been in turmoil since at least 2010, when Executive Director Michael Kenney resigned during a scandal over a water line insurance program that he engineered. The authority also came under fire for risky bond investments, heavy debt, poor customer service and aging infrastructure.
The board hired Veolia to stabilize the authority and improve operations and customer relations. The board last year fired the engineering director and finance director.
Last month, the authority hired Florida resident Chris Alverson as engineering director to replace Thomas Gigliotti. PWSA also intends to hire a finance director to replace Stephen Simcic along with a human resources director and executive director.
“We have a national and international reputation of providing pretty good service and working closely with our customers, and that's attractive to a lot of people who take this profession seriously,” said interim Executive Director Jim Good, a Veolia employee.
Separately, Dowd resigned his board seat on Wednesday, the same day he gave up his City Council seat to head a new North Side nonprofit. He was one of the key advocates for bringing in outside help to run the chronically troubled agency.
Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.
