Michael Kenney, who resigned Friday morning as executive director of the Pittsburgh Water and Sewer Authority, listens at a March meeting as City Councilman Patrick Dowd discusses the problems with the authority's opt-out line insurance program. Mr. Dowd called for Mr. Kenney's resignation.
By Joe Smydo and Rich Lord Pittsburgh Post-Gazette
Michael Kenney resigned today as executive director of Pittsburgh Water and Sewer Authority in advance of a report expected to detail his personal ties to a vendor providing line insurance to PWSA customers.
Mr. Kenney's resignation, which is effective immediately, was confirmed this morning by state Rep. Dan Deasy, D-Westwood, chairman of the PWSA board. Mr. Kenney has been executive director since April 2008.
The matter was addressed at a PWSA board meeting this morning in the Strip District. Mr. Deasy said the board will launch a special search for a new executive director. He said Mr. Kenney did not give a reason for his resignation and said the report on the line insurance contract was not completed.
Some board members thanked Mr. Kenney for his service.
"He was a hard-working guy for the authority," Mr. Deasy said. "If he chose to step away at this point, I respect that decision."
Mr. Deasy said Mr. Kenney told him he was resigning for personal and family reasons. "I didn't ask him any questions," Mr. Deasy said.
Finance director Stephen Simcic and water operations director Thomas L. Palmosina will share day-to-say oversight of PWSA until Mr. Kenney's successor is named.
PWSA this year began charging customers $5 a month for water and sewer line insurance. The coverage is provided by Utility Line Security of Forest Hills.
The monthly charge is automatically added to bills unless customers "opt out" -- an arrangement that's received widespread criticism and spawned a lawsuit.
In his previous position as operations director for the Municipal Authority of Westmoreland County, Mr. Kenney worked under Resource Development and Management, which oversees the authority. He reported to Christopher Kerr, a Resource Development vice president who later founded Utility Line.
Utility Line shares some owners with, and is located in the same offices as, Resource Development. Also sharing some owners is Utilishield, a 13-year-old company that offers warranties similar to those sold by Utility Line. Mr. Kenney once held an ownership interest in Utilishield.
In June, the PWSA board hired a Downtown law firm, Farrell & Reisinger, to review PWSA's contract with Utility Line and Mr. Kenney's role in the process.
While the report isn't complete, it's expected to be unflattering to Mr. Kenney and could provide additional details about his involvement with Utility Line and the other companies.
Last year, PWSA invited companies to vie for the opportunity to provide line insurance to PWSA customers. At the time the plan was for customers to opt in to the program.
The only proposals came from Linebackers Inc. of Wexford, which already was providing opt-in insurance for customers PWSA, and Utility Line, which won the deal.
After only a few thousand customers opted in to the program, PWSA changed the service to an opt-out.
In February, Squirrel Hill property owner Jody Steinberg launched a class-action suit against PWSA and Utility Line in Common Pleas Court, alleging "unreasonable and unfair billing practices" that violate the state Municipal Authorities Act and the state Unfair Trade Practices and Consumer Protection Law. The suit is pending.