Days after making public the utility's perilous financial and operational situation, and weeks after its bond rating was downgraded, Central Alabama Water (CAW) has announced a drastic workforce reduction.
Management says it was "absolutely necessary" to make the cuts and that without them, CAW would be forced to implement a substantial rate increase of approximately 10%.
Effective Friday morning, 135 employees representing 23% of CAW's workforce have been part of a reduction in force. Additionally, 76 vacant, funded positions have been eliminated, resulting in a total reduction of 211 funded positions, or 32% of total jobs, the board said in a statement.
"This was an extremely difficult decision, but it was absolutely necessary to maintain the organization's financial viability," CAW CEO Jeffrey F. Thompson said. "We developed this plan after months of deliberation, careful analysis and assessing both the utility's immediate and future needs. This reorganization has obviously impacted the lives of these employees and their families. I greatly appreciate the significant efforts that each employee made to serve our customers."
The reorganization is estimated to save the utility approximately $20.1 million per year in labor-related expenses. Both leaders and human resources advisors are meeting with affected employees to discuss the reorganization process and the terms of their severance.
The layoffs impacted all divisions. After Friday's actions, CAW will employ 449 people.
To avoid increasing rates, CAW needs to reduce both its capital and operating expenditures. Without taking these actions, CAW would be forced to implement a substantial 10% rate increase. Several other factors necessitated the reorganization.
- Alabama Code §11-50-300.06(a) requires CAW to operate the system efficiently and exclusively for the benefit of its customers. Staffing levels must reflect what is necessary to operate the system effectively. This reorganization brings CAW's staffing levels in line with peer water utilities of similar size and scope.
- The history leading to the utility's current financial condition is detailed in CAW's Voluntary Notice filed Wednesday to MSRB's EMMA System. Click here to view the press release. This reorganization and associated reduction in force demonstrate that management is taking these concerns very seriously and is making changes to improve the utility's financial standing.
"Our enabling legislation makes it clear that CAW must take a markedly different course from our predecessor organization," Thompson said. "Our customers are counting on us to take the steps necessary to reverse financial trends established over many years and to emerge stronger and better equipped to provide the world-class service they deserve."
Among the impacted areas is payment modernization. As part of the reorganization, CAW's physical payment center, like those of many other utilities, is closed.
Customers are strongly encouraged to establish service, pay bills, and handle other matters via CAW's secure website at caw-al.gov. Those who wish to make payments in person may conveniently utilize any local Walmart's Money Center. Customers can pay online without incurring any fees simply by logging in to their account and connecting their checking account. Click here for more information about payment options.
The Cahaba Museum & Conference Center will temporarily close as part of the reorganization. CAW will reach out to those with scheduled events.
The revised 2026 budget is scheduled to be presented to the board of directors on March 20.
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