Birmingham Water Works

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The Birmingham Water Works is a public utility supplying drinking water to around 770,000 customers in Birmingham, most of Jefferson County and parts of four other counties. From the 1870s to 1950, the system's main components were constructed by the Elyton Land Company under the auspices of the Birmingham Water Works Company as part of their work to promote the City of Birmingham. The utility and its assets were acquired by the city in 1951 and placed under the management of a Birmingham Water Works Board. Since 2025 it has been overseen by a new Birmingham Regional Water Works Board created by the state legislature.

The Water Works presently delivers 100 million gallons of water per day over 3,858 miles of main pipes. It has been recognized as one of the top five water systems in the United States and rates consistently high in water quality.

The utility's headquarters offices are located in the Birmingham Water Works Building at 3600 1st Avenue North. It operates four filter plants and several pump stations to draw and purify water from the Warrior and Cahaba River basins. Its primary reservoirs are Inland Lake and Lake Purdy.

Between 2019 and 2024, it was estimated by engineering consultants from Arcadis that about 48.5% of the water that the utility puts into circulation generates no revenue, due to leaks, theft, maintenance and other losses. The national average for unbilled municipal water was said to be between 20% and 30%. In 2020, using The Water Works began an accelerated program to replace the 14% of obsolete cast-iron and galvanized steel pipes which account for as much as 2/3rds of the leakage.

In 2025 the Alabama State Legislature passed Act of Alabama 2025-297 reorganizing the Birmingham Water Works Board as a "regional authority," which assumed ownership and management of the utility, renamed the City of Birmingham Regional Water Works and rebranded as Central Alabama Water. The City of Birmingham has filed a federal suit challenging the law.

History

Elyton Land Company

The city's first water reservoirs, pump stations and distribution systems were constructed and maintained by the Elyton Land Company. In 1888 the city signed a 30-year contract with the American Waterworks and Guaranty Company of Pittsburgh, Pennsylvania (later renamed the American Waterworks Company) to maintain and operate the municipal water system, with individual users paying a relatively high fixed fee.

Over time complaints about the fee and quality of the system arose. In 1900 Mayor Mel Drennen called for ending the contract and putting the system under public control. He had the support of the Birmingham Board of Aldermen and the Birmingham Board of Trade, but was opposed by the Birmingham News and the Commercial Club of Birmingham.

By 1903, however, the Commercial Club changed its position, claiming that the slow expansion of water service was to blame for failed recruitment of new industrial plants. That year saw the first filter plants added to the North Birmingham and Shades Mountain reservoirs.

A joint committee of the Commercial Club and Board of Trade recommended that both Birmingham and Jefferson County should pursue public water utilities. In January 1907 a newly-formed Birmingham Municipal Ownership League promoted a public referendum for a $3 million bond issue to purchase or construct the necessary plants and infrastructure. Voters were promised lower rates and a petition with more than 750 signatures was delivered to the Birmingham Board of Aldermen. At that time, though, the board declined to pursue the matter. A new committee began approaching members of the Alabama State Legislature to lobby for a bill allowing the city to operate both a water system and an electrical utility. The News publicized the benefits that came to other cities that had shed their private water contracts and labor groups applied additional pressure at City Hall.

A major investment in a new reservoir on the Little Cahaba River, now known as Lake Purdy after Municipal Management Company engineer W. H. H. Purdy, was made in 1909. A new round of negotiations with the American Waterworks Company began in 1912, but after a series of threats, the only result was a new 25-year contract with lowered rates, which was overwhelmingly voted down in a public referendum. The Board of Aldermen passed a resolution attempting to set its own rates, but the company ignored the move and filed a federal suit. The Municipal Ownership League joined with the Birmingham City Attorney to prepare a series of countersuits, even encouraging individual customers to take legal action. A Water Consumers Protective Association was formed to organize public opposition. Various suits proceeded in the courts, resulting in a settled agreement by which rates would be lowered and a joint appraisal committee would determine a fair purchase price for the system. Subsequent disagreement arose about whether to pay the asking price or use bond money to construct a new system from scratch.

The Putnam Filter Plant was constructed at Inland Lake with funds from the Public Works Administration in 1939. The reservoir served the Birmingham Industrial Water Board

Public Corporation

The City of Birmingham purchased the water system in 1951 and established an independent Waterworks and Sewer Board of the City of Birmingham to govern its operation. Ownership of the system's assets were then transferred to that board.

The Western Filter Plant at East Thomas was built in 1962 and has been expanded twice since. The Carson Filter Plant in Pinson was added to the system in 1972, and expanded in 2008.

In 1986 the city annexed the Industrial Water Board's property at Inland Lake and renovated the dam and spillway. In the 1990s the city sold the Industrial Water Board, which then became a supplier to the Birmingham Water Works. Mayor Richard Arrington proposed to use funds from the sale to develop a 300-acre "Ecoplex" to replace the Birmingham Zoo.

From the 1950s until 2017 the Water Works also collected payments for sewer fees under contract to the Jefferson County Sewer System. In December 1986 ownership and operation of the sewer system was turned over to Jefferson County.

Birmingham Water Works acquired the water system developed by the city of Moody in St Clair County in 1992.

In 1997 a legal complaint filed by John Rockett and others, alleging that the Water Works Board misused public funds, reached the Alabama State Supreme Court, but it was dismissed.

Bell Plan

In 1998 Mayor Richard Arrington and the Birmingham City Council developed a plan to sell the assets of the Birmingham Water Works to private investors in order to generate a capital improvements fund to benefit Birmingham City Schools. To further that plan, the Water Works Board voted on September 2 of that year to transfer its assets to the City for $1. Despite a $2 million public relations campaign headed by Edmond Watters of Strada Professional Services, voters rejected the proposed plan in a November 1998 Birmingham Water Works referendum.

After the referendum, Council president William Bell introduced another proposal, dubbed the "Bell Plan" to borrow against the Water Works assets in a $200 million bond issue to fund school construction. As part of the deal, the city borrowed $185 million to retire the water system's debts, with that loan secured by future water revenues. Donald Watkins, then with the Chapman Company of Baltimore, Maryland, and Porter, White & Co. were commissioned to structure those deals.

Despite serving as interim mayor and running as the incumbent, Bell lost the 1999 Birmingham mayoral election to challenger Bernard Kincaid, partly on the perception that Bell's financial schemes were corrupt. Kincaid proposed operating the Water Works as a city department, but the City Council did not approve the proposal. Instead the Council negotiated for the Water Works to buy back its assets for $471 million ($275 in assumption of debts, and $196 million in cash). The sale was approved by the council in July 2000, over Kincaid's veto.

In an attempt to scuttle the sale, Kincaid filed a lawsuit claiming that when the Water Works' debts had been assumed by the city, that the independent board no longer met the legal requirements to continue. Then Attorney General of Alabama Bill Pryor acted as defendant in the suit on the basis of representing the public interest, and also filed countersuits against the mayor and City Council. Those suits were settled in an agreement dated January 29, 2001 under which the Water Works agreed to formally protect its landholdings under a permanent conservation easement. It also clarified that the Birmingham Water Works Board was entirely independent of the city's government and not under the authority of the Alabama Public Service Commission, but that the State, through the Attorney General's office, could take enforcement actions on behalf of ratepayers for a 50-year period.

The City of Birmingham and Birmingham Water Works Board signed an "Acquisition Agreement" on February 23, 2001.

Public Authority

The Birmingham Water Works began operating under an independent board in 2001, and since that time water service rates have doubled. The growing reputation for misuse of funds and the awarding of non-competitive contracts led to efforts in the Alabama State Legislature to "reform" the board in 2016. Representative Paul DeMarco and State Senator Jabo Waggoner sponsored controversial legislation, which was debated at length before a compromise version was passed and signed by Governor Robert Bentley in May 2016. The Board filed a legal action in opposition to the law, but that suit was dismissed by Judge Robert Vance Jr.

In 2002, 2006, and 2022 former meter reader Fred Randall led petition drives to force the Birmingham City Council to either take over the Water Works, or put the matter up to a public referendum. Each of those efforts was opposed by BWWB attorneys, and each was dismissed by Jefferson County Circuit Court judges as proposing ordinances incompatible with the Council's powers.

Until 2009 the Water Works owned 3,200 acres of undeveloped property bordering the Locust Fork River in anticipation of constructing another reservoir. The board eventually determined that the project was not feasible, declared the land to be "surplus", and sold it for $4.5 million to Jeffrey Palmer. Palmer made a $500,000 donation to the H2O Foundation and agreed to accept contract stipulations preventing clear-cutting, coal-mining, landfills and hazardous waste storage. He agreed to maintain a 50-foot buffer around all tributaries on the land, and also indicated he would create a conservation easement on the land abutting the river. Despite those protection, the Cahaba River Society and Cahaba Riverkeeper have argued that the sale violated the utility's 2001 consent decree.

On February 12, 2009 the board approved a $329 million expansion plan to cover capital projects over the next 12-15 years. The plan called for a new pump station on the Black Warrior River, about three miles south of Bankhead Lock and Dam, and two pipelines, adding 60 million gallons per day to the system's capacity. The expansion was proposed to accommodate projected demand through 2075. At the same time, the system began a switch-over to SAP enterprise application software, the implementation of which cost more than $10 million and was still causing major problems when it was applied to customer billing in 2017.

In 2010 the Board hired Raftelis Financial Consultants to report on the feasibility of the system acquiring the Jefferson County Sewer System out of a possible bankruptcy. The report recommended against the purchase, concluding that rates would have to be increased too much to be worthwhile. Four years later it asked Raftelis to evaluate a proposal to sell off the Moody water system.

In 2011 the utility approved the first of several bids to replace aging water mains throughout its service area. In 2021 the utility was awarded a $147 million low-interest loans from the U.S. Environmental Protection Agency's Water Infrastructure Finance and Innovation Act (WIFIA) program. The loans are expected to fund rehabilitation projects at the Lake Purdy Dam and to repair and replace storage tanks and water mains.

In 2017 the Water Works began moving its operations and billing onto the SAP centralized data management platform, which was installed under a $10 million contract awarded to Utegration LLC of Houston, Texas.

By 2019 the utility was carrying $957 million in public debt, despite having raised water usage rates every year since 2012. That same year, board member Sherry Lewis was convicted at trial of violating the 2010 Alabama Ethics Law.

In 2024 the utility was approved for a $171 million loan from the U.S. Environmental Protection Agency to finance improvements to Lake Purdy Dam and to consolidate existing debts at an improved interest rate.

2021 lawsuit

On March 8, 2021 the Cahaba River Society and Cahaba Riverkeeper jointly filed a civil suit in Jefferson County Circuit Court seeking a ruling that the utility had failed to establish the conservation easement required by the 2001 settlement agreement.

Attorney General Steve Marshall filed a motion to intervene, claiming that his office, not the courts, had sole authority to enforce the terms of the 2001 settlement for the benefit of ratepayers, and that his office was satisfied with the utility's compliance. That motion was granted by the Circuit Court on June 2, after which the plaintiffs appealed. The Alabama Supreme Court overturned the circuit court's ruling on February 25, 2022, finding that while the Attorney General's office did have a contractual right to enforce the terms of the 2001 agreement, that it was not an exclusive right.

The suit was returned to the Circuit Court, where the parties agreed to a new settlement agreement strengthening the Water Works' duty to protect 7,000 acres surrounding Lake Purdy, the Cahaba River and the Little Cahaba River from development through the establishment of 75-year "watershed protective covenants".

Lead and Copper Rule

The U.S. Environmental Protection Agency began enforcing a "Lead and Copper Rule" (LCR) with public health requirements for drinking water distribution systems in 1991. The rule was revised in 2021 and improved in 2024, with the later guidance intended to confront the fact that lead service lines, connecting from the water main to individual meters, and from the meters into individual buildings, are the most substantial source of lead in drinking water, and that no amount of lead is safe to consume. Galvanized pipes are also considered a hazard, as the material can absorb and release lead.

The Birmingham Water Works' has begun conducting surveys of more than 220,000 service lines, and identified 471 which are lead or galvanized and in need of replacement. As of 2025 39,035 service lines remained to be surveyed. Between 2020 and 2025 the utility partially replaced 59 lead service lines; 1,105 galvanized service lines; and 2,424 service lines made of unknown materials. Partial replacement included the line from the main to the meter, but just a short section downstream of the meter. That practice has been disallowed in the newest version of the LCR because disturbing the line for partial replacement can release lead from the older connecting pipes.

The Birmingham Water Works was awarded $43.5 million from the 2021 American Rescue Plan Act and the 2022 Bipartisan Infrastructure Law through the Alabama Department of Environmental Management (ADEM) to replace lead pipes in its water distribution system. Legal issues regarding access to private property to replace service lines have not been resolved.

In addition, ADEM created another $292.6 million fund to offset the cost of replacing service lines deemed hazardous, also funded by the Bipartisan Infrastructure Law, through the EPA's Drinking Water State Revolving Fund. Other sources of potential federal funding include loans obtained through the Water Infrastructure Finance Innovation Act of 2014, and grants authorized by the Water Infrastructure Improvements for the Nation Act of 2016.

Meanwhile, U.S. Representative Gary Palmer and others in congress have lobbied to block the EPA from administering the LCR. The American Water Works Association (AWWA), of which the Birmingham Water Works is a member, has filed a lawsuit seeking to reduce the financial burden on water utility customers. Efforts to change the regulation are bound by the text of the Safe Drinking Water Act of 1974, which makes it illegal to revise drinking water rules that would make them less protective.

Billing controversies

In December 2021 three employees of the billing department were fired with an allegation of falsifying documents. One of them subsequently told a news reporter that managers had instructed them to change billing dates and that they had reported the issue before being terminated. That claim was supported by copies of emails obtained by WBRC-TV.

In August 2022 the Water Works Board contracted with Underwood Financial Consultants, headed by former general manager Mac Underwood, to help it resolve problems with consumer billing which had been occurring since January and affecting around 6.5% of customers. A shortage of meter readers had led to many customers not receiving bills and later being billed for longer service periods at estimated rates of usage that were far higher than actual usage.

Later that month a pattern of improper purchasing agreements was uncovered. The purchasing manager and two other employees in the purchasing department tendered their resignations together on August 24.

2022 AFFF suits

In November 2022 the Water Works filed a civil lawsuit against several manufacturers of Aqueous Film-Forming Foam (AFFF) in the U.S. District Court for the District of South Carolina, alleging that per- and polyfluoroalkyl substances (PFAs) in those products, used in firefighting, introduced toxic substances into drinking water sources, requiring extra expense to mitigate. The board voted to drop the suit in March 2023. The City of Birmingham had already filed a similar suit, regarding AFFF used at Birmingham-Shuttlesworth International Airport, in 2021.

2024 operations assessment

In October 2024 the BWW Board commissioned former Defense Intelligence Agency director and Auburn University chief operating officer Ron Burgess Jr to perform a comprehensive review of the Water Works' operations. Late that year, the utility renewed efforts to identify as many as 3,300 "phantom customers" who were receiving water service without a billing contract, either through error or illegal connections, leaving as much as $2 million in revenues uncollected.

The board also tapped Truity Partners of Madison, Wisconsin to conduct a national search for a new general manager. Former GM Mac Underwood was re-hired in February 2025.

The utility has planned a switchover to automated meters, which they predicted would reduce billing mistakes caused by estimated and erroneous readings. They began budgeting for the change in 2025, with an expected overall cost of around $120 million, to roll out in 2028. In order to accomplish the changeover, the Water Works contracted Cognizant of Teaneck, New Jersey to update its SAP installation to a newer, cloud-based version at a cost of $7 million.

In 2025 Water Works executives were informed of possible organized copper thefts from the utility's warehouse. An internal investigation identified a group of employees believed to be involved in such a scheme, which could have embezzled as much as $2 million, and passed their findings to the Birmingham Police Department for further criminal investigation.

Leadership

Board

Main article: Birmingham Water Works Board

The independent Birmingham Water Works Board was created in 2001 to administer the system. It was originally made up of five members appointed by the Birmingham City Council to staggered six-year terms.

The Alabama State Legislature modified the board structure in 2016, increasing its size to nine members. Six are appointed by the Birmingham City Council, one by the Jefferson County Mayor's Association, one by the Shelby County Commission and one by the Blount County Commission.

General managers

Birmingham Water Works Employee Association

The bulk of the utilities approximately 600 employees are represented by the Birmingham Water Works Employee Association, last chaired by Derrick Maye. In 2005 and 2023 the Association issued formal letters notifying the board of votes of "no confidence" in executive leadership.

In the 2023 letter, the Association cited inconsistent policies with regard to discipline, compensation and promotions for fostering fear and sapping morale. In February 2025, after a series of management changes and improved relations with the board, the Association reported significant improvements.

After the state's takeover of the utility, the association continued to meet and act as the Central Alabama Water Employee Association.

Facilities

Current

Former

Rates

The Water Works levies a "monthly base service charge" which is a function of the diameter of a customer's service line. Typical 5/8" diameter residential lines are charged $27.16 per month.

In addition, residential users are charged a tiered rate based on usage. The first 400 cubic feet (4 ccf, or 2,992 gallons) is charged at the lowest "tier 1" rate. Usage above that and up to 12 ccf is charged at a "tier 2" or "middle rate", and any additional water delivered is charged at the highest ("tier 3") rate. Commercial and wholesale users are charged a flat rate per ccf delivered.

Rates are set by the Water Works Board as part of their budgeting process, and have increased every year since 2020 by about 4 to 5%. As of 2025 the residential tier 1 rate is $2.96/ccf, the tier 2 rate is $4.91/ccf, and the tier 3 rate is $8.58/ccf. The commercial rate is $4.69/ccf and the wholesale rate is $3.90/ccf.

For the years 2026 through 2029 the board has approved rate increases of 2% per year minimum, or the consumer price index reported by the U.S. Bureau of Labor Statistics, whichever is higher.

  • 2019 - 0%
  • 2020 – 3.9%
  • 2021 – 3.9%
  • 2022 – 3.9%
  • 2023 – 3.9%
  • 2024 – 4.8%
  • 2025 – 4.9%
  • 2026
  • 2027
  • 2028
  • 2029

References

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