BIRMINGHAM, Ala. — A blistering new state audit of the former Birmingham Water Works Board has laid bare a culture of loose oversight, questionable payouts and weak financial controls that customers say tracks with years of sky‑high bills, bad service and little accountability. The findings land on a utility already dogged by ethics scandals, warehouse theft, repeated billing crises and some of the highest water rates in the region, and now at the center of a fierce political fight over who should control its future.
The Alabama Department of Examiners of Public Accounts released a limited audit this week covering May 1–31, 2023, just before lawmakers dismantled the old Birmingham Water Works Board and shifted the system into a new regional authority now known as Central Alabama Water. Auditors said a former general manager collected roughly $245,000 in sick‑leave cash‑out they contend was not allowed under board policy, and they faulted the board for paying members for meetings they did not attend, ignoring state bid law and operating with ineffective internal controls. The report also notes the lack of written policies for purchasing cards and inventory, gaps that coincided with at least two theft cases and a broader pattern of poor oversight.
For customers, the audit reads like an official stamp on grievances that have piled up for years as residents complained about inexplicable bills, threats of disconnection and phones that rang without answers. BirminghamWatch and other outlets have documented waves of “implausible” bills, missing bills and heavy reliance on estimated readings, with some customers shocked by invoices in the thousands of dollars while others went months without being charged at all. Even as leaders touted progress on billing, the board repeatedly considered or approved rate hikes — including a proposed increase of nearly 5 percent last year — further eroding trust among ratepayers who said they were paying more for less reliability.
Governance problems at the utility long predate the latest audit and restructuring push. State lawmakers and editorial writers have pointed to a history of costly errors, opaque decision‑making and high turnover, and at least three former board members have been convicted in ethics cases tied to their service on the Birmingham Water Works Board. In recent years the utility has carried roughly $1 billion in debt and charged rates that some business leaders and legislators say are among the highest in the Southeast, warning that they hurt economic growth and push a basic necessity out of reach for low‑income customers.
Those failures paved the way for a sweeping overhaul at the Alabama Legislature, which approved a bill this spring to strip Birmingham of majority control and create a regional board with new appointments for state leaders and suburban communities. Proponents argued that only a structural shake‑up could force long‑delayed investment in leaking pipes and basic customer service, while critics — including Birmingham city officials now suing in federal court — say the state used the board’s missteps as cover for a partisan and racial power grab. Even as the new authority and a separate forensic review move ahead, residents across Jefferson County and beyond are left to wonder why it took years of crises, criminal cases and now a scathing state audit for the region’s largest water system to be treated as the essential public trust it has so often failed to be.