A good test of whether your Facebook friends are up to delivering your news is whether you’ve already read this must-read Guardian expose on Pittsburgh’s problems with “dookie water”, and Brian O’Neil’s piece in the P-G on how local authorities are in way over their head.

Here is some background to open up just how much deeper these water problems go, and how greed and corruption are a factor. First:

In 2008, PWSA borrowed more than $400m in variable rate bonds just as the market collapsed. This year, debt payments alone accounted for 44% of the authority’s operating budget. (Guardian)

Imagine falling so far behind on your student loans to a predatory lender that almost half your income goes to penalties and fees. Now try to pay rent, utilities, eat, and whoops fix your truck or buy medicine. That’s more or less going on with the fancy “Swaptions” deal that our Water Authority signed, and it’s hard to imagine our water pipes getting fixed under that sort of handicap. 

Here are “Swaptions”, a portmanteau of “Swap” and “Options”:

Dowd for Mayor, 2009

Basically, the investment banks JP Morgan and Merrill Lynch said, “Here is $400 million you can borrow, Pittsburgh! Now, since you owe us that money, we basically have it, right? So let us invest it for you. You pay some fees, but as we both make money the cost of your loan repayments go down. Sure if we lose money investing it, it will cost you, but that will never happen!”

Then the market melted down, and has never been the same.

“They need to find a way out of this deal, and they need to find a way to not enter into these kinds of deals into the future,” said Mr. Lamb. (P-G, 2009)

At the time, it sounded like the City was going to decide they were cheated and hornswaggled by the banks and break the deal that will otherwise last until 2047. Then somebody asked then-mayoral candidate Patrick Dowd, “Who pitched the deals to the city?” Dowd answered “Greg Zappala and Mossie Murphy,” the record scratched, and nobody talked about that idea again.

Deeper still:

After Veolia took over management of the city’s water, the chemical used to control corrosion of metals, such as lead, was changed. Typically, it takes months for a water department to change corrosion control methods, because changes can cause lead spikes. Feasibility studies must be conducted, rounds of testing completed, state agencies notified and their approval sought.

Instead, PWSA changed the corrosion control to save money in violation of state law, state authorities said. (Guardian)

And:

The decision to switch this week appeared to surprise Executive Director Jim Good, who said Tuesday that the authority was looking at changes to how it controls corrosion.

“I guess we were further along than I thought,” Good said after an authority board of directors meeting Friday. (Trib)

Sounds weird, right? How come Veolia, a global corporation that sells water like the villains from Tank Girl or Fury Road, was in charge of Pittsburgh’s water — and how come they apparently weren’t?

By 2011, there were so many scandals at PWSA, including a no-bid insurance deal that smacked of insider trading (resulting in resignations)  that the Ravenstahl administration tapped Veolia to come in and manage things underneath our public board. Everybody rejoiced, because at least some Very Serious People From Outside ™ were coming in, instead of the yokel political cronies who it was starting to seem always had been.

Bringing in a management firm with no political ties to Pittsburgh is part of a larger effort to restore confidence and trust in the authority, said state Rep. Dan Deasy, D-Westwood, chairman of PWSA’s seven-member board. (Trib)

However, the new leadership was not granted any power to replace managers or other employees. That just seems to me redolent of an Authority that can somehow alter its chemicals without notifying its director.

Now:

No wonder they’re protesting in North Dakota. Pittsburgh shows that once something big goes wrong with the water supply, it won’t be easy to fix.