Nearly 20 years after Moody sold its sewer system to Birmingham, the city has taken control of its sewers once again.
The Government Utility Service (GUS) Corp. of Moody recently approved a resolution to terminate an operation agreement with Alabama Utility Services (AUS), and approved a $2.975 million settlement with the company, $1.8 million of which will be withheld for back franchise payments. A temporary service agreement with Southwest Water was also approved.
AUS has administrated over Moody's sewers since they were purchased back from Birmingham in recent years.
“[We terminated the contract] due to the way they were running the system and having to go up on rates to satisfy bond issues,” said Mayor Joe Lee, who also serves as chairman of the GUS board. “It just wasn't working with AUS, so we needed to terminate the contract and that put the city back in control of the system.”
The city has taken control of the system as of Aug. 1, and looks forward to a more direct responsibility for the service. A large portion of the problems with AUS stemmed from franchise payments never materializing — a problem which has been eliminated in the new, temporary arrangement with Southwest Water.
“Due to the way they operated it, they were never able to pay us what they should have paid us, so we never received any money from the sewer business under AUS,” he explained. “Now, we have a set contract with Southwest Water to operate the sewer for us for $49,800 per month, so we know exactly what the cost will be, and that's budgeted into the operating cost of the sewer system. … The way it's being operated now, we control the money and we pay the contract with Southwest Water.”
Over that time period, Lee said the city is looking forward to “making the system whole again,” and refinancing the bond on the sewer system to control costs for consumers.
At the end of the temporary contract, Moody could consider hiring licensed personnel to operate the sewers as city employees, or to extend a contract with Southwest Water or another similar firm.
“Our long-range goal right now is for Southwest to continue operating the system, and to lower rates for people who are on the system,” Lee said. “We're not looking to hire more employees for the city at this time, but it's an option if we need it.”
While the arrangement with Southwest Water still puts another entity in charge of the day-to-day operations of the sewers, Lee said the city of Moody will benefit from their involvement.
“What we get from Southwest is knowing that the system will stay in compliance,” Lee said. “They've been in the sewer business for years, and they understand the day-to-day operations. It relieves us from having to worry about permits and staying in compliance, and we can make sure the customer base is satisfied.”