Birmingham Updated

Proposals Due March 19, 1999

excerpts from Public Works Financing
(call 908-654-0397 to subscribe for full story)
and Birmingham RRFP

Birmingham, Ala., reissued its Dec. 4 call for proposals from four prequalified firms that were seeking a chance to buy and operate the capital city's AA-rated water system as a regulated private utility. City voters had defeated that plan aby a 60-40 margin on Nov. 3 As a backstop, Mayor Richard Arrington had hoped to move ahead quickly to solicit proposals for a long-term management contract that would protect all 530 water department workers. However, the City Council was still reviewing options prepared by Malcolm Pirnie Inc. and the law firm of Haskell, Slaughter & Young at the end of November. The deadline for proposals from the new RFP is March 19, 1999.

The four competitors on Sept. 22 were selected from among 16 firms that submitted qualifications to buy and operate its AA-rated water system, which serves the capital region’s population of 900,000, about one third of the state’s residents.

Finalists selected to receive the city’s RFP on Oct. 1 include:

  1. United Water Resources;

  2. American Water Works Co.;

  3. CH2M Hill/OMI/Thames Water; and

  4. Birmingham Clean Water Co. LLC (Severn Trent Environmental Services/Merrill Lynch & Co. with a group of local cable t.v., cell phone and home security system investors)

American Water Works owned the system until 1951 when the city exercised on option to buy it for $20 million.

The RFP required firms to agree to no forced layoffs of the 530 city workers for the first three years after the sale.

Advising the city are consulting engineer Malcolm Pirnie Inc., the local law firm of Haskell, Slaughter & Young, and financial advisor, Porter, White and Associates.

The system carries $170 million in debt and netted $10 million in pretax income in calendar 1997. It will generate $30 million in cash flow before $11 million in interest expenses this year, says James H. White III, a principle at Porter, White.

Click Here for Summary of Reissued Request for Proposals