State Bails Out Mismanaged PWSA with Taxpayer Dollars
HARRISBURG – Speaker Mike Turzai (R-Allegheny) responded to the state bailout of the Pittsburgh Water and Sewer Authority (PWSA) with $50 million in taxpayer money from the Pennsylvania Infrastructure Investment Authority (PENNVEST).

“While no one has been held accountable, the state today bailed out the PWSA, which has been grossly mismanaged for decades,” Turzai said. “In fact, it was this mismanagement that resulted in the General Assembly unanimously voting to put the PWSA under Public Utility Commission (PUC) jurisdiction.

“City officials have stated that no one should interfere with the authority’s operations, but those same officials went to the governor to seek a bailout from the state to address years of city and PWSA mismanagement. This $50 million bailout is taking much-needed money from water and sewer projects across the state.”

The bailout is 10 times larger than the average award from PENNVEST last year.

Act 65 of 2017, which was signed into law on Dec. 21, 2017, placed the PWSA under PUC oversight and required the PWSA’s board of directors to bring the system into compliance with the requirements of Title 66 of the PA Statutes and PUC regulations applicable to investor-owned water and wastewater utilities. This bipartisan legislation was sponsored by Speaker Turzai and Rep. Harry Readshaw (D-Allegheny).

A consultant’s report issued in August by Infrastructure Management Group called the PWSA “a failed organization atop a dangerous and crumbling structure.” The report noted a dysfunctional culture at the authority and exposed the fact that about 20 percent of PWSA’s 250 employees are out of work on short-term disability.

In addition, a November 2017 performance audit released by the state auditor general’s office highlighted several of the deficiencies with the PWSA’s operation. They include:
• Under a 1995 agreement with the city, the PWSA is required to provide 600 million gallons of free water each year. However, the PWSA does not track how much water the city uses annually because many city-owned properties are not metered.
• Between 2012 and 2016, PWSA’s financial position went from a positive balance of $7.7 million to a negative balance of $15.7 million.
• As of Dec. 31, 2016, PWSA had a debt load of $842.5 million, which has grown by $43.2 million since Dec. 31, 2012.
• PWSA is not able to bill for approximately 50 percent of clean water its system produces due to leaky pipes and unbilled accounts.
• Since 2014, four individuals have served as executive director.
• Billing irregularities frequently occur, including a complete lack of billing for thousands of customers for a period of several months arising from changes in PWSA’s billing.

Representative Mike Turzai
Speaker of the House
28th District
Pennsylvania House of Representatives

Media Contact: Paul Engelkemier
717.783.1315 (office) / /
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