Pittsburgh, Allegheny to review steam-heat contract
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Controllers for Allegheny County and the city of Pittsburgh are reviewing a steam-purchasing contract with Pittsburgh Allegheny County Thermal Ltd. to determine whether continuing to buy steam from the cooperative is a good deal for taxpayers.
The county and the city paid $2.5 million last year for natural gas-generated steam to heat and cool the county courthouse, City-County Building, County Office Building, the Municipal Courts Building, the jail and the former morgue.
The contracts with Pittsburgh Allegheny, which also provides steam for various Downtown commercial clients as well as the convention center and the federal courthouse, expire at the end of this month.
City Controller Michael Lamb and his counterpart at the county, Chelsa Wagner, said they're concerned that Robert Fazio, president of Pittsburgh Allegheny, has "resisted" their review.
They said he canceled a scheduled meeting on May 23 at the last minute when Ms. Lamb, Ms. Wagner and their staffs showed up at Pittsburgh Allegheny's office.
"We have been trying to meet with them since last year, since before Chelsa took office," said Mr. Lamb. "They agreed to the meeting on the 23rd. On the day of the meeting, he canceled. He said he had something else to do."
He said Mr. Fazio later called him and explained that his lawyer indicated the controllers do not have authority to conduct a review of a private, not-for-profit entity.
The two did then meet on Thursday, although Mr. Fazio has yet to meet with Ms. Wagner.
Mr. Fazio reiterated Tuesday that he canceled the May 23 meeting because of legal advice that the controllers don't have review authority.
"That was the reason for this 'resistance,' " he said.
Ms. Wagner and Mr. Lamb both said their offices have the authority and the obligation to review any entity with contracts involving public money. He said the review is not technically an audit but an examination of finances and operations, including infrastructure.
"We're asking very basic questions," Mr. Lamb said. "Everything we want is public information."
Mr. Fazio said the data the controllers seek is already available to representatives of the city and county who sit on the cooperative's board.
But Mr. Lamb said his office and that of his county counterpart are independent and collect their own information instead of relying on another part of government to provide it.
Ms. Wagner said Allegheny County is Pittsburgh Allegheny's largest customer and that she has a duty to make sure the county is getting its money's worth on any contract.
"He needs to be answering to the taxpayers," she said.
She and Mr. Lamb also said that the city's Office of Sustainability and Energy Efficiency questioned Pittsburgh Allegheny's viability in 2010-11 and concluded that the cooperative's steam is expensive compared to market rates and that its infrastructure is costly to maintain.
First Published June 11, 2012 12:00 am