Wednesday morning the Birmingham Water Works Board (BWWB) voted to approve the 2023 operation & maintenance (O&M) and capital budgets.
Attached to these budgets is a 3.9% increase for ratepayers to fund a total BWWB budget increase of roughly $5 million and support revenue loss from a predicted 2.3% drop in demand in 2023.
“Another critical factor [for the rate increase] is demand for consumption, which like the rest of the country, we see continue to slowly decline,” said BWWB General Manager Michael Johnson in a press release following the meeting. “Our 10-year trend for demand is down an average of 2.7%, and we see that continuing at roughly a 2.3% decline in 2023. This means higher revenue requirements must come from a smaller consumption. Unfortunately, it’s not just a local issue, it’s a national one as well.”
While BWWB was able to decrease their 2023 capital budget by 6.2% in an attempt to mitigate rate increases, the O&M budget will see an increase of 8.12%, or nearly $9.5 million.
As the Lede previously reported, a third of this increase comes from a $1 million jump in BWWB’s consultant fund and an additional $2 million chemical cost that Johnson previously said is due to chemical vendor price hikes.
BWWB member George Munchus acknowledged that although the average customer would only see a $1.55 increase to their water bill, most Jefferson County residents would be paying an average of roughly $20 extra due to bill increases from Alabama Power and the Jefferson County sewer system.
The sewer system confirmed last month that bills would be increasing 3.5% next year and every year following until Jefferson County’s bankruptcy debt has been paid off.
Munchus, BWWB customers, and other local officials said that the cost of the rate raises is not as much of a concern as paying extra for service they feel is unsatisfactory.
“I don’t think people mind paying it [the extra cost] if they feel like there’s trust,” said Munchus. “Now don’t ask me if I trust Spire or Alabama Power or Alabama Gas. Don’t even ask me if I trust the water works or Jefferson County sewer. But to me it ought to be some way that these four utilities… can sit in a room in a townhall meeting and listen to what these people have got to say.”
Munchus made a similar point previously at the townhall meeting held by Jefferson County Commissioner Sheila Tyson where BWWB customers asked board members questions and worked with customer service representatives on billing issues that have been resulting over the past year in overcharges and missed bills.
At the townhall BWWB was able to assist 41 customers with their bills.
Tyson originally dubbed the meeting a “success” but rescinded that sentiment in this week’s meeting due to continued billing problems. She also referenced board members Carl Nesmith, Thomas Henderson, and BWWB Vice Chair William Burbage who failed to attend the townhall without giving a reason.
“I’m asking you that didn’t show up to be concerned about the citizens that receive water from Birmingham Water,” said Tyson.
She added that since the townhall earlier this month she has received reports of at least five more water/sewer bills totaling $500-$600.
“Still ain’t no way somebody’s bill should be that high,” said Tyson. “Still five, six hundred dollars that’s too much. That’s too much, so there still is a problem.”
Johnson said that starting Nov. 30 customers who were overcharged due to estimated bills over the last year should be receiving billing credits or checks for amounts over $50 as BWWB continues to work to remedy the errors of the last year.
‘We know it’s [problem solving] continuous,” said Johnson. “We’ve got to work continuously to work with our customers.”
The 2023 budgets with the attached rate hike were approved with a vote of no from BWWB member Ronald Mims and an abstention from Munchus.
“Each day, we carry the serious responsibility of continuously providing clean drinking water to more than 770,000 customers in five counties, 24 hours a day, seven days a week,” Johnson said in a press release following the approval. “We are totally devoted to this mission. We are an award-winning water utility company, and we operate within the framework of the Effective Utility Management system established by the American Water Works Association and partnering organizations. I can’t emphasize enough how important it is for us to bring the highest quality water at the lowest possible prices to our customers.”
Following the budget’s approval BWWB also approved a six-month extension for their Joint Billing and Collection Agreement with Jefferson County.
This decades long agreement allows Jefferson County’s sewer system to use BWWB’s water usage data and the utility’s billing system for a cost of roughly $15 million each year.
As a result, customers receive a singular bill with combined water and sewer amounts owed each month.
Board members expressed a desire to eventually terminate this agreement due to public confusion over high bills due to BWWB rates and high bills due to sewer rates.
“My big concern is that we continue to be blamed for these outrageous bills when a majority of it is related to sewer,” said BWWB member Lucien Blankenship. “People just assume that it’s the utility, that it’s BWW that’s actually charging them all these rates and we’ve got to fix that message ‘cause that’s not true. The largest portion of any bill, if anybody looks at their bill, is the sewer bill. It’s not the water bill.”
Munchus requested a termination of the agreement during the meeting, but Vice Chairman William Burbage said he was voting yes for the extension so that BWWB had more time to work out the specifics of terminating their agreement with Jefferson County.
“As I’m sitting here today my opinion is we need to seriously consider cancelling this whole contract and letting the Jefferson County Commission take over sewer obligations,” said Burbage. “They’ve got the obligation; they should be doing their own collection. The same people who are coming here complaining about water, I suspect the complaints would be a lot less if they see only a $35 water bill as opposed to a $100 water bill.”
Former BWWB member William Muhammad raised a point of concern regarding the loss of revenue if BWWB terminates its contract with the county and said with the loss of millions of dollars further increases would be placed on ratepayers.
Tyson said the commission has discussed taking over their own billing and continued that she believes they have both the money and the manpower to handle it.
But, she said, that would not be quite the solution to customer complaints that water works officials think it would be. Jefferson County sewer bills are based on the same readings that the water system uses.
Therefore, Tyson said, if they separate the billing and BWWB’s billing system continues to have issues, customers will still receive high water bills.
According to BWWB spokesman Rick Jackson, these issues have been mostly resolved and should not continue for customers in the future.
“Without a doubt this has been a challenging year for Birmingham Water Works with billing issues due to shortages in our staff,” said Jackson. “We’re happy to say that we’re now back to what we consider normal operation. That means that 99% of our customers are receiving an accurate and timely bill and we’re very happy about that because it took a lot of hard work from our staff.”
