City of Pittsburgh officials are counting on $7 million from the Pittsburgh Water and Sewer Authority for the 2019 budget. But PWSA can’t write any checks until there’s a new cooperation agreement.
For years, PWSA sent $7 million to the city each year without either party really knowing what that money was for. When Pennsylvania’s Public Utility Commission, or PUC, began regulating PWSA last year, officials said that kind of arrangement wouldn’t cut it anymore.
In February, PWSA’s board voted to negotiate a new contract with the city to outline the obligations between the two entities. That document was introduced to City Council on Tuesday, and establishes which services the city can charge PWSA for, including street cleaning and meter installation.
“The understanding is that business relationship is what can be used to legitimize the 2019 payment in the eyes of the PUC,” said Dan Gilman, Mayor Bill Peduto’s chief of staff. “So once we have those numbers we expect it be close, whether it’ll be a penny here or there.”
Those services only have to account for $3.2 million, as PWSA expects to contribute $3.9 million to the city’s pension fund. A number of PWSA employees have pensions through the city, an arrangement that harkens back to the time before the authority was spun out from the city.
Council has little choice but to find a way to approve the agreement, said PWSA board chair Paul Leger.
“Things like this happen all the time,” he said. “You make adjustments for new wages, you make adjustments for the way that you operate.”
Council and PWSA’s board must pass the new agreement before any money can change hands. Gilman said he hopes council will vote before the August recess, but a public hearing has to happen first. The current agreement runs out July 5, so it's possible that PWSA will operate without a cooperation agreement for a period of time.
Mayor Bill Peduto said if there is a hole in the 2019 budget, the city has the surplus to cover it.