BRADENTON, Fla. – Recent embezzlement charges filed against three people at the Birmingham Water Works Board are not expected to affect the agency’s finances, according to an official.

Alabama Attorney General Steve Marshall and the Federal Bureau of Investigation investigated corruption at the BWWB that led to the indictments and arrests of the three Dec. 6, including board chairwoman Sherry Lewis.

Birmingham Water Works General Manager Mac Underwood
Birmingham Water Works can make bond payments amid a corruption investigation, said General Manager Mac Underwood.

Jerry Jones, a former vice president for the board’s engineering firm, Arcadis, and Mount Vernon Mayor Terry Williams, whose firm Global Solutions International subcontracted for Arcadis, were also arrested. No details about the embezzlement scheme were released, including whether it could affect the agency's finances.

A special grand jury remains empaneled for an ongoing investigation, according to Marshall and the FBI.

“The recent indictments of the chairwoman of the Birmingham Water Works Board and others doing business either directly or indirectly with the BWWB, are anticipated to have no material impact on the financial strength or long-term viability of the system,” said General Manager Mac Underwood.

The BWWB has $1 billion of outstanding bonds as of its Dec. 31, 2016 audit.

“The Water Works’ ability to pay its existing bond indebtedness and to issue bonds now and in the future will go unchanged,” said Underwood, manager of the agency since 2001.

The BWWB’s senior bonds are rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings. The subordinate bonds are rated Aa3 by Moody's and AA-minus by S&P.

Underwood also said operations, engineering projects and capital improvement programs will not be adversely affected by the indictments. In addition, he said the system is currently supported by “substantial” financial reserves of about $126 million and a balanced budget for 2018. A rate increase of 2.9% takes effect Jan. 1.

The BWWB supplies water to more than 600,000 residents in Birmingham, and the county seat - Jefferson County - as well as other cities in the county.

The agency has more than 600 employees and is governed by a nine-member board of directors.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.