From Pittsburgh to Flint, the Dire Consequences of Giving Private Companies Responsibility for Ailing Public Water Systems

Source: Sharon Lerner and Leana Hosea, The Intercept, May 20, 2018
 
The lead crises in Flint and Pittsburgh have many unfortunate parallels. Residents of both cities unknowingly drank water with high levels of the potent neurotoxin, which has long-term health consequences. The rise in lead levels was preceded in both cases by a miscalculation related to chemicals used to control corrosion in water pipes. And in both places, officials have faced criticism for their inaction and failure to alert the public. The two lead crises have another important thing in common: a private water company named Veolia. The world’s largest supplier of water services, Veolia had contracts with both Flint and Pittsburgh around the time that lead levels rose in their drinking water. And in both places, Veolia wound up in legal disputes over its role in the crises. …

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Pittsburgh’s Water System Is Why We Shouldn’t Run America Like a Business
Source: Jordana Rosenfeld, The Nation, November 30, 2017

Pittsburgh, in an attempt to deal with entrenched infrastructure problems, turned to the private sector in 2012 when it partnered with the French management firm Veolia North America, the same water-management company that would fail to disclose Flint’s lead-contamination problem in 2015. … The organization lauded Veolia for identifying $2.3 million in new PWSA revenue and $3 million more in operating savings, a move incentivized by their contract that stipulated the company could keep 40 percent of every dollar it saved the city. The Pittsburgh Post-Gazette published a glowing account of PWSA’s partnership with Veolia, despite reports that it laid off 23 employees, many of whom were longtime employees with critical institutional knowledge. … But this August, a consulting group hired to assess the organization’s current state announced in a public meeting that PWSA was “a failed organization atop a dangerous and crumbling structure” with “an aging system in demonstrably worse condition than any water utility of its size in the country.” Not only that, water tests showed that since the partnership began, Pittsburgh’s water had been tainted with dangerously high levels of lead. …

Veolia’s US growth hopes run into trouble
Source: Luc Olinga, AFP, September 23, 2017

Veolia’s hopes of taking advantage of municipal privatizations and promised Trump administration public works projects to expand its US presence, are being strained by its role in water crises in Flint, Michigan and other cities. … A push by more US local governments to privatize water systems and promises by President Donald Trump of a $1 trillion public infrastructure investment are seen as opportunities to Veolia to expand. … But Veolia’s operations have not been without controversy, especially in Flint, where a lead contaminated water system became a notorious symbol of American social injustice. Veolia issued a study of the city’s water quality before the scandal erupted but did not flag any issues with lead, an issue it says it was told to exclude from the report since city and federal authorities already were looking into it. … Veolia continues to face numerous investigations and class-action lawsuits connected to the crisis. … Veolia also has run into controversy in Pittsburgh, Pennsylvania, which also suffered from elevated levels of lead in its water system. The Pittsburgh Water and Sewer Authority has accused the French company of mismanaging the infrastructure system, including botching a shift in chemicals used in corrosion control. The Pittsburgh authority is in mediation with Veolia, according to two people familiar with the matter, but if that process fails it could result in another protracted court battle. …


Pittsburgh Tries to Avoid Becoming the Next Flint
Source: Kris Maher, Wall Street Journal, April 30, 2017

As its soot-filled skies cleared, this city built on the steel industry gained a reputation as one of the nation’s most livable places. But it now has another environmental issue to contend with: It is one of several major American cities with lead levels in drinking water above the federal limit.  A total of seven U.S. water systems, which each serve more than 100,000 people, had lead concentrations above the federal action level of 15 parts per billion in recent months, according to Environmental Protection Agency data. They include Portland, Ore., and Providence, R.I., which both exceeded the limit at least one other time in the past five years.  Since the lead crisis in Flint, Mich., cities have been under greater scrutiny from regulators and pressure from residents to reduce lead in drinking water. In most cases, there is no easy fix, and more cities are looking at the costly prospect of replacing vast networks of pipes buried under streets and private property. …

Flint And Pittsburgh Have More In Common Than Lead In Their Water
Source: Donald Cohen, The Huffington Post, March 10, 2017

… Around the same time, the city’s water utility was laying off employees in an effort to cut costs. By the end of the year, half of the staff responsible for testing water throughout the 100,000-customer system was let go. The cuts would prove to be catastrophic. Six months later, lead levels in tap water in thousands of homes soared. The professor who had helped expose Flint, Michigan’s lead crisis took notice, “The levels in Pittsburgh are comparable to those reported in Flint.” The cities also share something else, involvement by the same for-profit water corporation. Pittsburgh’s layoffs happened under the watch of French corporation Veolia, who was hired to help the city’s utility save money. Veolia also oversaw a change to a cheaper chemical additive that likely caused the eventual spike in lead levels. In Flint, Veolia served a similar consulting role and failed to detect high levels of lead in the city’s water, deeming it safe. … On Wednesday, Pittsburgh Mayor Bill Peduto announced the city would provide filters for drinking water, which is the right thing to do. But he’s also considering partnering with another for-profit water company to clean up Veolia’s mess. … For-profit water corporations will always have a financial incentive to cut service, shrug off maintenance, and fire employees. When they’re in charge, the high costs of doing business are passed on to residents: privately owned water systems charge 59 percent more than those that are publicly owned. …

Activists press Pittsburgh Water and Sewer Authority to oppose any privatization of its public assets
Source: Bob Mayo, Pittsburgh’s Action 4 News, February 24, 2017

Some activist groups and residents of neighborhoods affected by Pittsburgh Water and Sewer Authority problems are urging the PWSA board to oppose any fix for water authority problems that would involve privatizating the water system. During public comment at the board’s meeting Friday, they also criticized the PWSA over recent health and safety issues, including chlorination concerns that led to a boil water advisory and ongoing concerns about the detection of lead in the water of some customers. …

Pennsylvania Auditor to Probe Pittsburgh Water and Sewer
Source: Paul Burton, Bond Buyer, February 17, 2017 (Subscription Required)

Pennsylvania Auditor General Eugene DePasquale has ordered a performance audit of the Pittsburgh Water and Sewer Authority, citing governance-related problems for city residents and businesses.  “The trust and confidence of city residents has been eroded by a series of problems originating with the Pittsburgh Water and Sewer Authority,” DePasquale, a former state representative from the city, said during a news conference at which city Controller Michael Lamb released a performance audit of the authority. …

Privatizing Pittsburgh’s water system is not a good idea, officials say
Source: Don Hopey, Pittsburgh Post-Gazette, February 17, 2017

Despite his scathing draft audit of the Pittsburgh Water and Sewer Authority’s water-supply operation and management, City Controller Michael Lamb still sees much to like about the publicly owned system and said recent talk about selling it is a bad idea. Mr. Lamb, speaking at a news conference Thursday where he released a draft audit containing 53 deficiency findings, said that despite its problems, the city’s water system remains a valuable asset. Thoughts of privatization, he said, are “wrong-headed.” “That’s just not the right answer,” said Mr. Lamb, who noted that the structure of the authority’s almost $1 billion debt likely makes it unmarketable anyway. … Mr. Lamb said ratepayers likely would be shortchanged if a private water supplier — he mentioned Pennsylvania American Water as a suitor — were to buy the system. … State Auditor General Eugene DePasquale, who attended the Lamb news conference and is about to start a PWSA performance audit of his own, said he’s also wary of going the privatization route. …

This Major City’s Drinking Water Was Fine. Then Came the Private Water Company.
Source: Julia Lurie, Mother Jones, October 26, 2016

This summer, 81,000 homes in Pittsburgh received a worrisome letter about their water. The local utility “has found elevated levels of lead in tap water samples in some homes,” it said. Seventeen percent of samples had high levels of the metal, which can cause “serious health problems.” … This was surprising because until this year, Pittsburgh’s lead levels had always been normal. So what happened? First, a bit of background: In 2012, the city faced a dilemma. Though it had clean water, its century-old water system desperately needed repair. And its utility, Pittsburgh Water and Sewer Authority, was plagued by administrative problems. Residents complained of bad customer service and unfair fees. And after a series of poor financial decisions in the 2000s, PWSA was hundreds of millions of dollars in debt. … Pittsburgh’s utility called in Veolia, a Paris-based company that consults with utilities, promising “customized, cost-effective solutions that reflect best practices, environmental protection and a better quality of life.” Veolia consults or manages water, waste, and energy systems in 530 cities in North America, with recent contracts in New York City, New Orleans, and Washington, DC. Last year, the company, which operates in 68 countries, brought in about $27 billion in revenue. Pittsburgh hired Veolia to manage day-to-day operations and provide an interim executive team, helping the utility run more efficiently and save precious public dollars. Under the terms of the contract, Veolia would keep roughly half of every dollar the utility saved under its guidance. … But by the end of 2015, the utility had laid off or fired 23 people—including the safety and water quality managers, and the heads of finance and engineering, according to documents obtained through a Right to Know request. The PWSA laboratory staff, which was responsible for testing water quality throughout the 100,000-customer system, was cut in half. Stanley States, a water quality director with 36 years of experience at the utility (employees referred to him as “Dr. Water”) was transferred to an office-based job in the research department. Frustrated with the move, he retired. … As the lab staff shrank, PWSA made major changes to its water treatment system. For decades, the city had been adding soda ash—a chemical similar to baking soda—to its water to prevent the pipes, many of which are lead, from corroding and leaching into the water. (Lack of corrosion controls caused lead to leach into the water in Flint, Michigan.) In 2014, PWSA hastily replaced soda ash with another cheaper corrosion control treatment, caustic soda. Such a change typically requires a lengthy testing and authorization process with the state’s Department of Environmental Protection, but the DEP was never informed of the change. Nearly two years later, as news spread about the disaster in Flint, the utility switched back to soda ash.

Pittsburgh Mayor Bill Peduto puts the blame for the treatment change squarely on Veolia, saying the company never informed the utility’s board or the city. Veolia denies responsibility for the change, saying it “did not and would not prioritize cost savings ahead of effective corrosion control methods or water quality.” … Earlier this month, the utility announced it was suing the company. According to a press release, Veolia “grossly mismanaged PWSA’s operations, abused its positions of special trust and confidence, and misled and deceived PWSA as part of its efforts to maximize profits for itself to the unfair detriment of PWSA and its customers.” Pittsburgh isn’t the first municipality to sue Veolia this year. In April, Massachusetts officials sued Veolia, which was managing Plymouth’s sewage treatment facility, for allowing 10 million gallons of untreated sewage to spill in and around the town’s harbor last winter. Two months later, Michigan Attorney General Bill Schuette charged Veolia with fraud and negligence for failing to discover Flint’s enduring lead contamination problem after the city hired the company in 2015 to consult on water quality. …