Press Release

FOR IMMEDIATE RELEASE

CONTACT: Binnie Myles

Birmingham Water Works

205-244-4220

Labor, Employee Benefits, and Purification Costs Drive the BWWB’s 2013 Budget

Water quality is still the system’s no. 1 priority

(BIRMINGHAM, Ala. – October 12, 2012) – The Birmingham Water Works Board (BWWB) announced today that its $94.107 million budget for 2013 will be driven primarily by labor costs; expenses related to employee benefits; and costs associated with water quality and energy, specifically chemical costs. The 2013 budget will go toward funding the operations and maintenance of the largest water system in Alabama.

The BWWB serves most of the residents, businesses, and municipalities in central Alabama—a population of more than 600,000 spread across five counties. This budget will continue to ensure 99% system reliability and provide the outstanding water quality that is the hallmark of the BWWB.

“As with most corporations in the new economy, labor costs and expenses related to funding employee benefits, along with costs associated with purification and chemicals, continue to have significant impact on our operating and maintenance budgets,” said BWWB General Manager Mac Underwood, CPA. “The expense notwithstanding, we continue to make water quality our primary priority. Achieving this priority in the face of the increasing costs mentioned above presented some challenges during our budgetary process; our management team has achieved a fiscal balance for 2013. We are pleased that our 2013 budget maintains our focus on water quality, while dealing with external variables that are beyond the board’s control.”

Michael Johnson, CPA, BWWB Assistant General Manager of Finance and Administration, explained that maintaining critical financial parameters, such as bond-coverage ratios, was very instrumental in determining the final budget. “The board’s current bond rating, of Aa2, is one of the highest among comparable water systems in the United States. We strive to maintain this high financial integrity year after year,” said Mr. Johnson, who also serves as the water system’s chief financial officer.

A summary fact sheet of the 2013 budget is provided in the attached “2013 Financial Highlights.” The major drivers and highlights of the 2013 budget are:

• Labor costs
• Expenses related to funding employee benefits
• Purification costs
• A system upgrade
• Energy costs
• Capital and regulatory requirements

BWWB Chairman Jackie Robinson Jr. expressed satisfaction that the board’s new budgeting process, which puts customers first, started off well. “We hope that our new budgeting process would allow us to use our newly developed operating matrices to guide our budgets, but our number-one focus must remain our customers: THEY ARE OUR BACKBONE,” said Mr. Robinson.

About the Birmingham Water Works Board

Founded in 1951, the Birmingham Water Works Board (BWWB) serves 600,000 people in Jefferson, Shelby, Blount, St. Clair, and Walker counties. The BWWB operates four filtration plants, a certified testing laboratory, and has more than 4,000 miles of pipe in its distribution network; it ranked among the top five water systems in the United States. For more information about your Birmingham Water Works Board, please call 205-244-4000 or visit www.birminghamwaterworks.com.

###