News Summary
The Birmingham Water Works Board is under fire for awarding lucrative contracts just before significant governance reforms were enacted. Following the board’s controversial vote to sell the utility to the City of Birmingham for $1, legal challenges have emerged. Local leaders and the Alabama Attorney General question the legality of the transactions, asserting that the former board acted outside its authority post-dissolution. The Birmingham City Council is pursuing legal action against the state law, SB 330, while seeking to protect local oversight of the water utility.
Birmingham, Alabama – The Birmingham Water Works Board has been embroiled in controversy after making efforts to secure control of the utility prior to the enactment of significant reforms by the State Legislature. On the eve of Governor Kay Ivey’s signing of legislation aimed at overhauling the board’s governance, the board held a closed-door meeting where it awarded extensive contracts to several officials, sparking legal challenges and public outcry.
In a last-minute bid to maintain influence, the board, which had already been officially dissolved, voted to sell the utility to the City of Birmingham. However, State Representative Juandalynn Givan emphasized that the former board had no legal authority to make such decisions post-dissolution, putting the legitimacy of these actions into question. A total of $2.6 million in contracts was granted without sufficient notice, raising transparency concerns among watchdogs and city officials alike.
The contracts issued included multi-year agreements for general managers, who will now receive salaries ranging from $250,000 to $334,000 and enjoy a one-year severance guarantee. The board also provided a full-time position to their attorney, Mark Parnell, at a remarkably high base salary of $660,000. Parnell’s contract is notable for its “golden parachute” provisions, which require future board approval for any termination and also guarantee severance pay.
As these controversial contracts were being finalized, the former board justified the decisions by claiming they were essential for ensuring continuity amid uncertainties regarding governance following the new law’s passage. This reasoning has been challenged, with Alabama Attorney General Steve Marshall asserting that the former board lacked the authority to sell the utility after the new law, known as SB 330, took effect.
In a swift move following the legislation’s enactment, the Birmingham City Council ratified a purchase agreement, agreeing to acquire the utility assets for just $1 while assuming all associated liabilities. This agreement reflects the city’s intention to oversee the water utility amid concerns about the former board’s rapid dissolution and the subsequent actions it took before disbandment.
The enactment of SB 330 has faced significant criticism from local leaders, including Birmingham Mayor Randall Woodfin, who labeled the law unconstitutional. The Birmingham City Attorney has confirmed that the city is exploring legal action against the new law and the Governor, suggesting that it could jeopardize ratepayers and has not included sufficient public input in its formation.
In addition to pursuing legal challenges, the Birmingham City Council is actively taking steps to preserve local oversight of the water utility. This includes hiring outside legal counsel to navigate the complex legal landscape surrounding SB 330 and its implications for governance over the water system.
The situation remains fluid as Birmingham officials continue to confront the changes enacted by SB 330. The newly appointed Regional Water Board faces the daunting task of navigating the aftermath of the controversial contracts and managing the governance of the utility amidst ongoing legal scrutiny and local discontent.
With the transition from the old board to the new structure underway, city leaders are working towards establishing a robust system of oversight, seeking to ensure that the interests of Birmingham residents and water utility ratepayers are duly represented and safeguarded in the face of legislative upheaval.
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Additional Resources
- Al.com: Birmingham Water Works Board Approves Contracts
- ABC 33/40: Birmingham Sues Over Water Board Law
- 1819 News: Birmingham Water Works Contracts Before Restructuring
- WBRC: Birmingham Water Works Board Controversy
- Wikipedia: Birmingham, Alabama
- Encyclopedia Britannica: Birmingham, Alabama
