The Birmingham Water Works Board voted 5-3 Wednesday to approve a 2025 budget that includes a 4.9% rate increase for residential customers.

The rate hike is the ninth annual increase during the past decade for residents in the five-county greater Birmingham area served by Alabama’s largest water utility.

Birmingham Water Works interim General Manager Darryl Jones said the 2025 rate will translate to a bill of $2.14 more per month, compared to 2024, for a customer who uses the average amount of water.

“No one likes a rate increase, not even this board,” said Tereshia Huffman, chair of the Birmingham Water Works Board. “But this board and leadership have the tough and necessary conversations to make sure we do everything we can to make sure we don’t bring a burden on our customers. So, with this rate increase, we did all that we could to make sure we gave them the lowest rate to make sure we did not compromise the quality of water we provide.”

The vote to approve the 2025 budget with the rate increase came after the Water Works Board approved a preliminary budget plan on Oct. 23 and residents expressed opposition to the move during a Nov. 4 public hearing.

Jones said the rate increase is needed to cover higher operating costs related to equipment, vehicles, fuel, labor, electricity, chemicals and increased testing for regulatory compliance.

The $258.1 million budget for 2025 is up 19% from $216 million in 2024. It includes $10 million to begin buying the meters needed to switch to an automated-meter-reading system – a shift slated to happen in 2028. Automated meters are expected to reduce billing problems associated with estimated bills and implausible readings.

Major improvement projects set to be covered by the $115.6 million capital portion of the budget include stabilization of Lake Purdy Dam ($22 million), Highway 79/Kiowa Road distribution improvements ($13 million) and an ongoing program to replace 592 miles of aging galvanized steel and unlined cast iron steel pipelines ($20.1 million).

Board members Lucien Blankenship, George Munchus and Mashonda Taylor voted against approving the budget.

Munchus said he could not approve the budget because of unanswered questions he posed in September surrounding the Lake Purdy Dam stabilization project and because of concerns about the rate increase.

The board in September approved $85 million in funding to stabilize and stop millions of gallons per day in leaks from the century-old Lake Purdy Dam. The lake is a major water supply for the Birmingham area, and the rehabilitation project is scheduled to begin this year and end in 2028.

Munchus said questions he emailed to Jones about BWW management’s timeline for discussing the dam stabilization project and about previous cost estimates, amounts spent on engineering and design, and details regarding historically underutilized business participation have gone unanswered.

“There’s little transparency and accountability surrounding that particular project,” Munchus said. “That’s an $80 million budget item. I think the public deserves to have those six questions that I submitted some time ago answered.”

Munchus also said the nearly 5% rate increase is significant for some residents, including senior citizens.

“There are things they could do to offset some of these rate increases, but you don’t have the will to do it,” Munchus said of the Water Works. “There’s some economic-development activities that this organization could engage in to generate revenue.”

Jones has said previously that the Water Works’ focus is producing quality water, not competing with other industries.

William Muhammad, a former Water Works board member, addressed the board and brought up the Water Works’ debt of approximately $1 billion. In speaking to the press after the meeting, Jones said the debt-service cost is about $65 million per year and part of each year’s budget covers that cost.

Other agenda items the board approved during the meeting include:

• Paying $9.25 million to B.L. Harbert International to finish the renovation on the Shades Mountain Filter Plant and to settle a lawsuit with the construction company. The project, which was supposed to be completed in 2020, is finishing four years overdue and $8 million over budget, WBRC reported.
• Allowing employees to sell unused vacation time in excess of 80 hours back to the utility, at an estimated cost of $500,000 to $600,000.
• Settling an employment lawsuit for $100,000.
• Approving the spending of $1.8 million in American Rescue Plan Act funds through Jefferson County to install more than 6,000 feet of water pipeline to customers in unincorporated Jefferson County who are currently using wells.
• Setting job descriptions for senior management, which Jones said paves the way to do a national search for a new, permanent general manager. “We look forward to entertaining a new general manager in the very near future,” Jones said.