Key state lawmaker calls for new scrutiny of Birmingham Water Works following WBRC reporting

Water leak issues for Birmingham Water Works Board
Water leak issues for Birmingham Water Works Board
Published: Jul. 28, 2022 at 3:57 PM CDT
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BIRMINGHAM, Ala. (WBRC) - A powerful state senator is calling for new scrutiny of Birmingham Water Works Board operations after WBRC reporting that finds the utility isn’t making money on at least 41% of the water it treats, and finding the utility won’t be able to catch up on sending bills to some customers until fall.

J.D. Power was hearing frustration about infrastructure at the BWWB from customers in its annual survey about utilities taken even before our reports.

“We have a real simple question: ‘Does your utility do a good job maintaining infrastructure?’ And that’s one of those areas where BWW is scoring lower than most other water utilities,” reports Andrew Heath of J.D. Power & Associates.

The BWWB did raise its customer satisfaction scores this year, but is still near the bottom of the regional and national rankings.

BWWB is one of the few utilities in the state that doesn’t answer to anyone but itself: board members are appointed by the Birmingham mayor, city council, Jefferson County mayor’s association, and the Shelby and Blount County commissions.

We reached out to those groups to see if they think the utility is providing adequate protection to you, the ratepayers, in light of our new reporting.

Birmingham’s mayor appoints two of the nine board members and Mayor Woodfin’s office tells us “The mayor appoints two of the nine board members with other entities appointing additional members. The city is not involved in day to day operations of Birmingham Water Works. It would be appropriate to direct your questions to the board. As for the council, legislature or attorney general, you would have to seek their positions concerning your question.”

None of the board members responded to our questions individually, but the BWW did send a response defending its record and saying, “sure we are not satisfied with the level of non-revenue water and we make it a priority to reduce it.”

As for billing issues, the Water Works statement says it’s asking customers who haven’t gotten a bill to pay your average monthly amount until you do and says it still projects to be back to “normal operations” by fall.

State Senator Jabo Waggoner (R-Vestavia Hills) chairs the powerful senate rules committee and sponsored a law in 2015 that expanded the board’s membership and put in new accountability measures and a cap on board members pay.

He said in a statement “There should be no exceptions--the BWWB has an obligation to be transparent about the problems that face their infrastructure. Ratepayers deserve the highest quality services at affordable prices. The public must have complete confidence in the BWWB. As I see it, they don’t have that confidence in BWWB’s services or management. In light of WBRC’s excellent and thorough reporting, I will be encouraging the whole Jefferson County delegation to ask very serious questions of BWWB. We need clarity on why capital projects like the Shades Mountain treatment plant are 2 years overdue and dramatically over budget. What timelines are we looking at in replacing old pipelines? Why is potential revenue being lost?”

So far we haven’t heard from any of the Jefferson County mayors, and we reached out to the Shelby and Blount County commissioners but haven’t heard from any except one Shelby County commissioner who says he’s happy with the Water Works board member they appointed but doesn’t have an opinion on the utility overall.

We’ve also learned the Water Works and its contractor for the Shades Mountain treatment plant project (B.L. Harbert) that’s now 2 years overdue and still not finished are suing each other in court. That case is supposed to go to trial next year.

Here is the complete response from the BWWB to our questions sent to individual board members:

Do you believe the current structure of the BWWB provides the maximum available protection for ratepayers? Do you believe 41% is an acceptable level for the amount of non-revenue water? If so, why? If not, what is the board doing to more aggressively address this?

Yes. Birmingham Water Works (BWW) has been recognized by S&P Global and Moody’s Investor Services for its strong governance, board structure, operational and financial management and policies and procedures. In addition, BWW follows industry standards and best practices for budgeting to ensure the utility has sufficient resources while keeping water rates as low as possible for our customers.

BWW is an approximately 130-year-old system that has over 4,000 miles of pipe, which consists of over 540 miles of undesirable galvanized steel and unlined cast iron pipe, including much that is more than 100 years old. A system this age will experience a high level of non-revenue water. Furthermore, we serve 770,000 customers in a growing metropolitan area, so we are also expanding to accommodate that growth.

Sure, we are not satisfied with the level of non-revenue water and we make it a priority to reduce it. Prior boards have committed to increasing the capital budget to replace aging pipes in our system at a faster pace without placing an undue burden on ratepayers, and this board is committed to doing the same. Proposed projects like automated meter reading will also help reduce non-revenue water.

How would you respond to thousands of customers who haven’t gotten a bill in months and may still be waiting weeks or months to get a bill that will be multiple times higher than what they’re accustomed to because of delays caused by the BWWB?

We are asking customers who have not received a bill to pay their average monthly bill based on their recent available payment history. Also, we want to let them know that we will not disconnect service for accounts with delayed bills until we are able to return to normal operations. In addition, we are continuing our practice of providing payment arrangements for those who may need more time to pay. We’ve shared this information with our customers and we will continue to communicate with them through various means until we are able to return to normal operations, which we project to reach by fall.

How much do you believe the Shades Mtn. treatment plant project will end up costing, including the costs of litigation associated with BL Harbert and Arcadis over this project and was this a wise investment of ratepayer funds?

The contract price was $49,900,000. As with any large capital project there are approved change orders. So far, there have been a total of $1,431,617 in approved change orders. At this time, the BWWB expects the SMFP project to cost $51,331,617.

Yes, it is a wise investment of ratepayer funds, as it is necessary to upgrade BWW facilities to meet federal regulations and to continue to provide high water quality to customers. The Shades Mountain Filter Plant is the largest and one of the oldest filtration plants in the State of Alabama. Upon completion of this filtration upgrade project, Shades Mountain will operate more efficiently, which will result in a reduced cost of treating water and allow BWW to continue delivering high quality water throughout its five-county service area for many years to come.

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