Wednesday, August 25, 2010
By Joe Smydo, Pittsburgh Post-Gazette

Pittsburgh Controller Michael Lamb offered qualified support for the Pittsburgh Water and Sewer Authority’s controversial line-insurance program but skewered the agency’s customer-service operations in an audit he released Tuesday.

Mr. Lamb said the line insurance program, the subject of two lawsuits and an internal review, is a “pretty good deal” for authority customers because it provides a valuable service at a competitive price.

However, he said authority Executive Director Michael Kenney should have been more candid last year about his ties to the company selected to provide the insurance.

He also said the program is so lucrative — with revenue of up to $6.6 million a year — that PWSA should consider cutting out the middleman and offering the service itself.

“The authority already owns much of the equipment needed to perform these line repair jobs,” the audit said.
Under the agreement ironed out last year, Utility Line Security LLC of Wilkinsburg provides individual line warranties to about 110,000 customers. People must opt out if they don’t want the $5-per-month coverage, something that rankled some customers and led to two lawsuits.

Mr. Kenney has personal and professional ties to ULS President Christopher Kerr.

In July, the authority hired a law firm to review the insurance program. PWSA Chairman and state Rep. Dan Deasy, D-Westwood, called the study necessary for the agency’s integrity. The board is still awaiting the results of that study.

While Mr. Lamb suggested that the agency capitalize on the revenue potential and provide the insurance directly, authority spokeswoman Melissa Rubin said it doesn’t want to assume liability for homeowners’ lines, which she described as “private plumbing.”
“The liability is just too great,’ she said.

Mr. Lamb said the authority’s customer-service efforts “were not up to the standards we would expect.”

Auditors called the agency with billing questions 90 times from Feb. 22 to March 19, only to find they were at least 19th in line for service 49 percent of the time.

Online service wasn’t a positive experience, either, for the auditor who sent e-mails with billing questions. “Three months went by without a response,” Mr. Lamb said.

Ms. Rubin said the agency already has added a person to the customer phone bank and taken other steps to improve customer service.