After receiving public comment during a public hearing held on Nov. 10, the Birmingham Water Works Board approved an Operating & Maintenance (O&M) Budget of $115.3 million and a Capital Budget of $77 million for fiscal year 2022 during a board meeting held today.

In keeping with the organization’s strategy to reduce its reliance on long-term debt, Birmingham Water Works will fund its entire 2022 Capital Budget with cash and without issuing debt during the fiscal year.

While Birmingham Water Works lowered its Capital Budget from $81.5 million in 2021, it increased the Operating & Maintenance Budget by 6.4% to cover higher chemicals and energy costs for water treatment and distribution and increased labor and related expenses to maintain adequate staffing.

“We strive to set rates that are fair and reasonable while maintaining standards for high-quality drinking water and reliable service our customers expect,” said Michael Johnson, General Manager of Birmingham Water Works. “In order to keep up with the increased cost of filtering and delivering water and satisfy our financial obligations, a rate increase is necessary for 2022.”

Approval of the budgets will result in a 3.9% rate increase effective January 1, 2022 for Birmingham Water Works residential customers, in accordance with its currently adopted Rates Stabilization and Equalization (RSE) model. The rate increase is below the national average of 4.6%.

The rate increase means an average household using 4,500 gallons per month (6 CCFs) can expect to see an increase of approximately $1.50 per month on their bill. However, approximately 65,000 customers who use less than 3 CCF will see lower bills due to a decrease in the base charge fee from $26.26 to $25.92 per month.

In addition, wholesale customers will see a rate decrease from $3.61 to $3.42 per CCF, while raw water rates will not change. Current fire hydrate rates will remain in effect until Oct. 1, 2022.