As Initial Deadline Passes, City And PWSA Officials Say They’re 'Very Close' To A New Contract

May 7, 2019

After more than three months of negotiation, city of Pittsburgh and Pittsburgh Water and Sewer Authority officials say they hope to present a new cooperation agreement to council and PWSA’s board of directors within the month. The deadline for the agreement was extended 60 days, from May 4 to July 5.

“There’s no question we have a lot of detail to work out as we move forward,” said Bob Weimar, PWSA’s executive director. “But I think that the agreement, by and large, will meet both the city and our needs.”

PWSA’s board voted in February to dissolve the existing contract. Board chair Paul Leger characterized it as outdated, noting a full page of services the city agreed to provide PWSA, such as cleaning catch basins and repairing manholes. “They no longer provide any of them,” said Leger.

Written in 1995, the cooperation agreement governed the fledgling partnership between the city and its fresh-faced municipal authority. Contending with mounting debts, Mayor Tom Murphy’s administration cut loose the Department of Water to make PWSA. The agency then borrowed money to rent water and sewer infrastructure from the city, thus plugging Pittsburgh’s budget holes.

The arrangement has grown obtuse with age, but Mayor Bill Peduto’s chief of staff, Dan Gilman, said the parties quickly worked out the majority of their issues within the first couple months of negotiations.

However, two central questions remain to be thrashed out, and both boil down to “how the city is going to be treated,” he said.

The water and sewer systems managed by PWSA are sprawling and complicated. In 2025, when PWSA finishes its rent-to-own agreement and can purchase the infrastructure for $1, the city would become just another customer. Gilman said government customers should have their own rate class, different from commercial, industrial or residential rates.

City government has different financial responsibilities from that of say, a private developer, he said, and so should pay different costs for water and sewer. But, “ultimately, that’s the [Public Utility Commission’s] decision, not PWSA’s or the city’s.”

PWSA and the city have also disagreed on who should bear the responsibility to maintain the smaller water and sewer lines that feed into city property, said Gilman.

The new agreement is drawing nearer to the kind of “arms-length” relationship requested by the Pennsylvania Public Utility Commission, said Weimar. For decades, the city and PWSA have been closely linked, in part because the governing documents left room for interpretation, creating the need for more ad-hoc discussions between the two parties.

“But it also provides some pretty clear definition of what parts of the system we have full responsibility for and what parts we might have a shared responsibility for.”

PWSA has a lot of investment to make, such as replacing lead lines and updating the water filtration plant, and wants to keep costs as low as possible for their customers, said Weimar.

The parties agreed to meet this week and next to continue finalizing a draft to send to City Council and PWSA’s board of directors.