Pittsburgh Water and Sewer Authority (PWSA) has undergone a renaissance over the past several years. PWSA provides water supply and distribution and wastewater conveyance services to more than 300,000 residents and businesses in the Pittsburgh metropolitan area. As a result of several decades of neglect, the water and wastewater conveyance systems need significant amount of repair and replacement, resulting in a current five-year capital improvement plan of more than $1 billion. In the midst of this ramp up of capital and operations spending, PWSA has also become the only municipal water authority in Pennsylvania to be regulated by the Pennsylvania Public Utility Commission (PAPUC). To address this, PWSA has fostered significant management and culture changes, and are analyzing all aspects of their business to implement best practices. PWSA has engaged Raftelis for multiple projects since 2016.
Raftelis has been PWSA’s primary rate and financial consultant since 2016. During that first year’s engagement, Raftelis developed a brand new comprehensive long-term financial plan and supporting model. Additionally, Raftelis evaluated cost of service by class to determine equitable user rates and charges. Raftelis assisted PWSA with a rate and financial plan update during 2017, which was ultimately approved by the Board. In 2018, PWSA became the first municipal water authority to be regulated by the PAPUC and was directed by the PAPUC to file a rate case that year. Raftelis fulfilled most of the financial responsibilities for the first rate filing, and after 8 months of rate case proceedings, such as testimony, rebuttal, and surrebuttal testimony, settlement negotiations and more than 1,200 interrogatories, the PAPUC approved rates for 2019. PWSA has filed its second rate case filing with the PAPUC, and again, Raftelis assisted with the financial plan and cost-of-service analysis. The second rate case proceeding is ongoing.
PWSA engaged Raftelis to serve as Interim Finance Director for six months during a transition period for the Authority. Raftelis managed all financial aspects of the Authority, including relaying monthly financials to the Board, managing the spending for all departments, developing the FY 2019 budget, expanding PWSA’s capital financing line of credit, application for PENNVEST (the state revolving fund), and drafting new financial policies.
Raftelis is working side-by-side with PWSA leadership to address major organizational challenges. The Raftelis team provided an aggressive Compliance and Organizational Plan that convinced business leaders and community officials that PWSA had a framework for success. Raftelis is now assisting PWSA to implement elements of the Compliance and Organizational Plan including the creation of a new PWSA performance improvement office called Watermark, aligning PWSA practice with Pennsylvania Public Utility Commission (PA PUC) requirements, and fixing a series of onerous legacy rules about hiring, resource sharing, and metering that limited performance. PWSA is rapidly gaining the confidence of its customers.View Report
Another recent activity is the development and implementation of a stormwater utility and fee. Pittsburgh has seen an unprecedented number of significant rain events during the past several years, and to address this, PWSA is forming a stormwater utility with a dedicated financing source, a new stormwater fee. Raftelis is assisting with program development and short- and long-term financial planning. Raftelis is also leading the development of an equitable fee based on impervious area. Raftelis has participated and is scheduled to participate in several public meetings and workshops with key stakeholder groups to convey and discuss the program details. Ultimately, the stormwater program and fee will be submitted to the PAPUC for approval in 2020.