The Lake Purdy Dam is in urgent need of structural repairs, but because of high costs and uncertain financing, the City of Birmingham Regional Water Works Board may halt a $88 million dam-stabilization project.

The board is set to debate the issue in its meeting Monday. Failure of the dam could threaten thousands of homes and risk loss of life, experts said.

Board member Phillip Wiedmeyer, a retired engineer who was involved in dam-safety inspections during his career with Alabama Power, brought up the Lake Purdy Dam project in last week’s work session of the Water Works’ new regional board, which is less than 2 months old. A representative of the Water Works’ engineering consulting firm, Arcadis North America, echoed Wiedmeyer’s comments about the dam’s strength.

“This dam is not safe enough, right, based on national best practices for dam safety,” said Patrick Flannelly, senior vice president for Arcadis.

Areas that would be affected by a dam failure include Cahaba and Brook Highland.

“The water will flow down the Little Cahaba River,” Flannelly said. “It’ll then primarily go downstream on the Big Cahaba River. The wave stream goes about 40 miles downstream. There are thousands of homes within that wave stream.”

In addition, 20% of customers in the system can’t get their water from any source besides Lake Purdy, he said.

Wiedmeyer said excavation work completed since the dam-rehabilitation project began in November necessarily weakened the dam in the first step in what was supposed to be a four-year project. He said the Water Works has told the project contractor, Thalle Construction Co., to halt any additional work that would worsen the dam’s integrity while the board decides whether or how to proceed.

A major driver of the Lake Purdy dam project, Wiedmeyer said, was a recent flood study.

“Only 40% of the increased flows could pass through the existing spillway, so that means the other 60% would overtop the dam, and that would erode the earthen structures on the buttresses on each side of the dam,” Wiedmeyer said.

Another problem is something called underground “seepage,” which Wiedmeyer said happens with all dams but should be monitored to ensure it doesn’t pose a threat.

“I was a little concerned that adequate monitoring has not been done in the past on the dam to record the quantity of flows,” Wiedmeyer said.

Derrick Murphy, assistant general manager of engineering and maintenance for the Water Works, said the utility has now begun a dam-inspection program.

A third issue Wiedmeyer brought up was geological. The rock foundation on which the dam is built is primarily limestone, which dissolves in water and creates cavities underneath the dam, resulting in upward pressure that places an additional load on the structure, he said.

The underground seepage and limestone geology problems with Lake Purdy Dam are analogous to problems at Logan Martin Dam, about 30 miles east of Birmingham, Wiedmeyer said. He said Alabama Power addressed those issues at Logan Martin with a three-pronged program that included installing a clay blanket to reduce seepage and limestone dissolution, drilling beneath the dam to install a grout curtain and building a “dam in front of the dam.”

Financial Concerns

The previous Water Works board in September approved the four-year dam-stabilization project that’s underway. The project was supposed to be financed through bonds and an approved loan of up to $171 million through the federal Water Infrastructure Finance and Innovation Act.

Some new board members now say bond financing isn’t possible.

“We can’t go to the bond market right now, so we’re limited in financing the cost of that project with the WIFIA loan and reserves – pay-as-you-go reserves – and we don’t have a formal analysis on what the impact of that is going to be on rates,” Wiedmeyer said.

Wiedmeyer and interim board Chairman Tommy Hudson said they have concerns about the WIFIA loan’s terms. The cost-share requirement allows that only 49% of project costs can be borrowed. And, Wiedmeyer said, the repayment terms are no payments for 10 years, interest-only payments for the next 10 years and then payments of principal and interest. Total repayment costs on the $171 million loan would be more than $500 million, Wiedmeyer said.

“What was most concerning to me about some of the non-bond financing was the ultimate cost to the ratepayers down the road was very substantial,” Hudson said. “That was a very concerning aspect of moving forward beyond just replacing the excavation that has taken place to date.”

Mac Underwood, general manager of the Water Works, said staff have inquired about whether the WIFIA loan’s repayment schedule can be modified so payments are not delayed 10 years and always include principal as well as interest repayment. He said he expects an answer before the board’s Monday meeting.

“I have never recommended a project or a bond issue where we capitalized interest for 10 years,” Underwood said, adding that he was not working at the utility when the WIFIA loan was negotiated.

Project Options

Wiedmeyer proposed two scenarios for the rest of the board to consider: halting the project, which would entail a contract-termination penalty of approximately $10 million, or completing an initial phase at a cost of $28 million.

Flannelly said additional expenses besides the cancellation fee would be involved in stopping the project.

“We can’t stop because the contractor has already begun excavation into the slope downstream of the existing dam, which makes the dam actually less safe than it was when we started,” he said. “What we then would have to do is go back and remediate the site and spend more money putting it back the way it was before we started, which is not money that you can use WIFIA for or anything else, because it’s not progressing the work of the project.”

Completing the first phase of the project would mean using roller-compacted concrete to construct buttresses, which are structural supports, on the downstream side of the dam to increase its strength.

Work would need to begin soon to take advantage of the weather and could be completed by January or February, Wiedmeyer said.

“You have time to make this decision, but you need to proceed with the buttress work,” Flannelly told the board.

Board member Sheila Tyson asked whether people in the areas that could be affected by failure of the dam know what’s happening with it.

Murphy responded that two community meetings were held, in Cahaba and at Brook Highland Church, before construction. He said the goal is to provide annual public updates, as was requested by a homeowners’ association president.

Other Dams and Inspections

Wiedmeyer said all dams in the Water Works’ system need ongoing inspection programs.

He said he and Murphy recently visited a dam at the Shades Mountain Filter Plant, and there are trees growing in the earthen structure.

“That’s not a good thing for a dam,” he said. “Trees and animals are affecting the integrity of the structure.”

Murphy said two dam inspections have been completed now, and the utility has two more to go.

“So we are starting on the cycle of doing that,” he said.