Central Alabama Water is moving forward with plans to replace lead service lines in accordance with a federal mandate.
The utility’s board of directors voted Monday to take steps to secure federal loans for the project, despite heated discussion over minority-business participation and concerns about meeting federal requirements without violating state law.
“There's a huge number of lead service lines and unknown service lines within the city of Birmingham and in some areas outside of Birmingham as well,” said Jeffrey Thompson, chief executive of CAW. “So it's a tremendous benefit to all of our residents.”
There is no safe level of lead in drinking water, according to the U.S. Environmental Protection Agency and medical research. Consequences of exposure include permanent brain damage and developmental harm in children and cardiovascular disease as well as kidney and reproductive problems in adults.
Lead service lines are typically the most substantial source of lead in drinking water, per the EPA. Service lines connect main lines, which run under streets, to individual water meters and then to homes and buildings.
Project survives budget cuts
CAW’s replacement of lead service lines is a rare capital-improvement project advancing as planned. The utility is grappling with financial challenges and recently slashed its 2026 capital budget by 54%. Cuts have involved no longer fluoridating water, scrapping a project to install automated meter-reading infrastructure, halting work to stabilize a high-hazard dam and significantly slowing replacement of aging pipelines that leak approximately 40% of treated water.
The project to replace lead service lines is both required under federal regulations and comes with opportunities to secure EPA loans with partial principal forgiveness and/or low interest rates.
Under the EPA’s Lead and Copper Rule Improvements, finalized in 2024, public water utilities must replace all lead and some galvanized service lines by 2037. Galvanized metal service lines that are downstream of lead pipes can absorb and release lead. Starting in 2027, utilities must replace at least 10% of those pipes per year.
EPA required water utilities to provide a baseline lead service line inventory in late 2024, and the agency set a deadline of late 2027 for them to identify all service lines in their systems that must be replaced. CAW’s inventory is available here, along with its customer guide to lead safety.
According to information the water works provided last year, the system had identified 471 service lines as lead or galvanized requiring replacement. The material used for about 40,000 service lines remained unknown. The utility said the rest of the approximately 180,000 lines are believed to be free from lead. CAW has not yet provided updated numbers in response to WBHM’s request.
“We have worked really closely with ADEM [Alabama Department of Environmental Management] to create a funding mechanism for us to undertake this initiative,” Thompson said. “It's a very extensive initiative. It takes a lot of investigative work, a lot of construction work.”
ADEM announced last year it had set aside up to $292.6 million for CAW to replace service lines made of lead or galvanized metal requiring replacement under the Lead and Copper Rule Improvements. ADEM administers the funding, which comes from the federal bipartisan infrastructure law passed in 2021 through EPA’s Drinking Water State Revolving Fund. States provide a 20% match.
On Monday, CAW’s board cleared the way to accept two loans. One loan is for $45.7 million, with principal forgiveness of $13.8 million and an effective interest rate of 1.99%. The other loan, for $10.7 million, has an effective interest rate of 2.2%.
Legal hurdles over public work on private property
Board member Jeff Brumlow asked managers and attorneys if they had looked into legal issues surrounding public work on private property in Alabama.
The Lead and Copper Rule Improvements require public water systems to replace all service lines under their control, and it states service lines are under a system’s control when it has legal and physical access to them.
It’s unclear whether CAW has legal access to lines on private property.
An Alabama attorney general’s opinion from 2001 states that a city can’t, through a water utility it owns, perform work on water lines on private property unless enabling legislation permits it, there’s a health hazard and the cost is charged to the property owner. The situation for CAW is somewhat different since the city doesn’t own the utility.
The EPA regulation also strongly encourages water systems to replace service lines at no cost to the customer. Last year, a former general manager for CAW estimated costs at $8,000 per service line.
In response to Brumlow’s question, Jonathan Wilson, chief engineering officer for CAW, said the utility will draft a waiver for property owners to sign, giving CAW or its contractors permission to work on their property.
“I'm more concerned about the expense of public funds for private use,” Brumlow said. “I want to make sure we don’t run afoul of the Alabama Constitution in what we’re doing.”
Thompson answered that it’s a complex issue.
“I don't know how easily that can be resolved,” he said.
Board members question minority-business participation
CAW will hire contractors to complete the service-line replacement work, Wilson said.
The board’s two Black members, who are also the only members of the seven-member board appointed by Birmingham officials, questioned the minority-business-participation requirements attached to the loans.
Attorney Frank Long with Balch and Bingham LLP said the loans’ objectives include a minimum of 2.7% minority participation and 3.82% woman-owned firm participation for construction activities and a minimum of 3% minority participation and 12% woman-owned firm participation for non-construction activities.
Board member Sheila Tyson recommended amending the loan documents to increase the percentages, and Long said he didn’t know if that would be possible. Another board member, Jarvis Patton Sr. polled the five other members, asking if they were comfortable with the existing minority-participation percentages while noting Birmingham’s population, which is at least 70% non-white, according to the U.S. Census Bureau. Board members said they were comfortable because the numbers aren’t upward limitations.
“We can go well above those thresholds,” board Chairman Tommy Hudson said. “We can go 100% minority and women-owned businesses.”
Patton said he doesn’t believe that’s going to happen. He pointed to CAW’s rescission in December of its historically underutilized business policy that encouraged companies owned by women, minorities and other disadvantaged groups to bid on contracts with the organization.
“If you all are comfortable with it … then you know it's going to pass,” he said of Monday’s agenda items, adding that he’s in favor of taking the loans and replacing the lead service lines. “I just wanted to express my opinion as a Black man concerned about equal opportunities for everybody.”
How to find out if your residence has a lead service line
To learn how to identify what material your home’s service line is made of and how to protect your household from lead in drinking water, see this article from WBHM partner BirminghamWatch.
