Birmingham Water Works executives during a public hearing Monday evening presented reasons for a proposed 4.9% rate increase in 2025, and area residents expressed opposition to the move, questioning why customers must shoulder higher costs every year.

If approved at the Water Works Board’s Nov. 20 meeting, the rate hike would be the ninth rate increase in 10 years for customers of Alabama’s largest water utility, which serves approximately 770,000 people in Birmingham and Jefferson, Shelby, St. Clair, Blount and Walker counties. A residential customer who uses the average amount of water would pay $2.14 more per month in 2025, compared to 2024, under the proposed rate increase.

“My concern with the rate increase is, as it is now, we’re having people that are choosing to pay their sewer bill or their water bill,” Reshonda McNeal, a Birmingham resident and president of the Killough Springs Neighborhood Association, told the board. “Our seniors, they are hurting. We, as consumers, are hurting. Please reconsider your decision.”

Reasons for Increase

During a presentation of the Water Work’s proposed 2025 budget, interim Deputy General Manager Mac Underwood said key budget drivers for 2025 include increased costs for labor, chemicals and electricity. Regulatory compliance is costing more because of a new lead and copper regulation that will require increased sampling and testing, and the BWW is starting to pay expenses related to buying equipment for an automated meter-reading system set to begin operating in 2028.

“Inflation has hit us just like it’s hit everyone else in America,” said BWW interim General Manager Darryl Jones. “All of our expenses to produce the same volume of water that we produced a year ago have gone up.” He pointed to fuel, vehicle and infrastructure costs.

“The amount we charge is strictly to make sure we can provide the service to our customers,” Jones said.

Underwood noted in the budget presentation a five-year trend of decreased per-capita water consumption in the residential market and projected decreases in both residential and non-residential consumption in 2025.

Some residents who later spoke said this information made them feel they were being penalized for using less water.
“Because we’re using less water, you’re increasing it (rates) to pay the difference,” said Sheri Zimmerman, a Trussville resident. “So, it really doesn’t matter whether we use a lot of water or decrease the amount of water, we’re still losing as a public because we’re paying the same thing.”

Seven members of the public and Jefferson County Commissioner Sheila Tyson addressed the board. Hearing organizers gave each person three minutes to speak, and there was no question-and-answer session.

Residents Suggest Ways to Raise Funds Without Raising Rates

Residents asked why Birmingham Water Works couldn’t generate revenue through means such as investments, grants, cost savings and reducing reserve funds rather than increasing rates.

“The economic-development piece is missing,” said Tiffany West. “You got to have something else other than raising customer rates. I’m interested in knowing, what is the interest off those deposits that you are depositing in the bank? Is there a way that we can use those proceeds in order to increase interest, if we move our deposits to another institution?”

Jones said BWW’s main focus is to produce quality drinking water.

“People always have an opinion on what we can do to generate more revenue,” he said after the hearing. “We’re not in the process of competing with other industries. Our lane is drinking water, and that’s what we do, and we do it well. All we sell is water.”

Jones said it’s also important for the utility to maintain its strong AA bond rating, which requires reserves on hand of 150-250 days of operating expenses.

Carl Tonitis, a Hoover resident, asked whether the automated-meter-reading system would reduce labor costs.

“Along those lines is, with the infrastructure act that’s in place, there are a lot of opportunities to acquire funding for grants which might help offset some of the cost of the meters,” Tonitis said.

Through the Bipartisan Infrastructure Law, the federal government has allocated $43.7 million to the state of Alabama for 2025 to upgrade water infrastructure. Jones said in an interview last week the Water Works is constantly looking at grant opportunities and is aware of the 2025 BIL funding.

“We’re going to be applying to some of that money, he said. “Every time there’s an opportunity to apply for money, from a federal standpoint, we’re in the process of doing that. A lot of times, these funds may only be provided for a smaller system.”

Jones said BWW was successful this year in gaining a low-interest loan through the Water Infrastructure Finance and Innovation Act. He said the loan provides up to $171 million that will assist in three major areas: rehab of the Lake Purdy dam, upgrades to aging pipelines and updates to and maintenance of water storage tanks.

Billing Complaints Continue

Residents who spoke at the meeting also voiced ongoing grievances about excessive bills and unread meters.

McNeal gave the example of two residences having the same water bill when one residence was vacant.

“I’ve been charged $500 a month for a one bedroom, one and a half bath apartment with no leaks because I checked it out myself,” said Jackie Gordon of Birmingham.

Tyson said she came to the hearing because she’s received numerous calls about water bills from constituents.

“It’s a great concern, and I would like for this board to address these problems, because even though we come down here, you don’t give us a reply back from the questions that are being asked,” Tyson said. “And if someone could give me a reply back from the questions that have been asked, I would at least have a way to communicate with the people that call me.”

Water Works staff met after the hearing with some speakers who expressed issues with their bills

Recent improvements

At the Oct. 23 Water Works Board meeting, executives reported recent billing department improvements. The number of implausibles – bills outside of normal parameters for their respective accounts – dropped from 25,230 in July to 13,121 in September. The number of bills estimated because meters weren’t read also fell, from 8,430 in July to 1,263 in September.

Jones, who began serving in his current role in June, said Water Works leaders will continue increasing efficiency. The utility also appointed four interim managers in September, “to work collaboratively to address customer issues,” according to a press release.

The automated-meter-reading system is expected to further reduce billing problems.

“The plan is to install automated meters over the next three, four, five years,” Underwood said. “So, we budgeted $10 million for 2025, and that’s a project that’s really going to help us make sure that we are billing all our customers and that the billing and meter reading is accurate.”