Financial future bleak for Franklin County Water Service Authority

Either by broken promises from two municipalities or overambitious expectations from its board, the Franklin County Water Service Authority financially bit off more than it could chew (or finance) when the plant was completed in 2006.

Capable of producing more than 780 million gallons of water per year, the plant has never operated anywhere near that capacity, and FY2024 numbers show the plant to be only 30% utilized, with only 240 million gallons produced and used in the previous fiscal year.

Today, the FCWSA Board is at a financial fork in the road: either it must obtain debt relief or refinancing from the United States Department of Agriculture, its primary debt holder, or cease operations due to lack of sufficient income and no working capital to make necessary improvements and maintenance on the 20-year old facility.

FCWSA Board Chairman Randy Schultz presented a financial status update to the Franklin County Commission at the commission’s September 2025 work session. 

Additionally, Schultz said the FCWSA just completed a five-year review of expected capital needs, and the outlook is bleak.

“The unfavorable financial condition of the Franklin County Water Service Authority dictated inadequate maintenance and a need to replace aging equipment,” Schultz told commissioners.

“While none of this impacts our ability to produce high quality water, without additional funding sources, customer growth, or grants, will have a serious problem,” he added.

The Water Service Authority Board consists of Schultz, Lesley Cantrell, JT Lawler, J.R. Glasgow, Billy Entrekin and Barry Winsted, with one open seat. Its manager is Steve Swinney.

Although it didn’t solve the Authority’s financial crisis, all Franklin County residents and businesses benefited from the board’s ability to bring high-speed fiber-optic broadband internet across the county as a result of its securing Freedom Fiber, a subsidiary of the Tombigbee Electric Cooperative, to complete the county-wide buildout. 

Through local legislation enacted by the Alabama Legislature in 2014, statutory authority to provide broadband internet services to Franklin County.

The FCWSA Board’s tireless effort to provide this essential utility was a driving force in convincing Freedom Fiber officials to come to Franklin County. There were other entities and individuals whose work also went into county-wide broadband services, but without the FCWSA, nowhere near 93% of county addresses would have access to high-speed broadband internet (100/20Mpbs).

While the Authority hopes to benefit financially from last mile Franklin County broadband internet, that isn’t expected to be a major revenue generator in the near future. And the Authority’s financial benefit would be indirect at best, as its hopes for an increase in customers when or if new businesses and residences come to Franklin County as a result of fiber-optic broadband availability.

But the reality of the FCWSA in 2025 shows its future is in jeopardy. And the financial constraints date back to what the board says were broken promises from the Cities of Red Bay and Hodges prior to the plant’s construction in 2006.

Schultz said the Board received commitments from both cities they would get ‘100%’ of their water from the plant if it was built, but that never happened, as Red Bay and Hodges city officials decided to make improvements to their own plants rather than using the FCWSA plant. And that created a messy financial situation for the Authority.

“This caused and continues to cause a significant cash flow shortfall available to retire debt and operate the plant,” Schultz said in his report. 

There was no written agreement committing either Red Bay or Hodges to using the Franklin County Water Service Authority plant to provide its water, so the Authority moved forward on a verbal commitment in building the plant. 

Annual use from Red Bay and Hodges would generate ‘as much as $9 million additional positive cash flow’ since the plant was completed, Schultz said, and would have resolved FCWSA’s financial shortfall.

With limited operational funds, there are concerns that Authority employees may leave for higher paying jobs with other water authorities because FCWSA could not match higher salary offers.

But the main panacea remains customer growth, perhaps the only solution for saving the Authority and resolving its financial crisis.

The Town of Vina recently announced it will purchase additional water from the FCWSA, generating as much as $50,000 annual positive cash flow but that move will be made gradually over a three-year period, Schultz explained.

The FCWSA has 1,722 customers, with 1,128 using FCWSA plant water, and 594 using water the Authority purchases from Russellville and Phil Campbell Water Boards.

And an already high customer water rate compared to other water boards means FCWSA customers are already shouldering more than their fair share of the load.

For a low usage customer (avg. 2,150 gallons per month), the Franklin County Water Service Authority total annual bill is $555.92. Compare that to Phil Campbell ($401.31 annually), Red Bay ($347.40) annually, Vina ($368.12 annually), Russellville ($304.15 annually) and Hackleburg ($304.80 annually), using provided rates from those utilities.

The same is true for high usage customers averaging 5,722 gallons per month, with all five neighboring water boards lower by a range of $132.54/annually to $416.46/annually. 

The FCWSA plant needs critical maintenance and equipment replacement, with pumps and filter membranes with expected 10-year use maximums still in service from 2006.

Board members stress that all maintenance required to ensure an adequate amount of clean drinking water has been performed, so water quality is not an issue. But the Authority’s eight full-time employees operating a 24-hour plant and maintaining almost 240 miles of water line are pushed to the limit already.

The FCWSA estimates more than $6 million is needed over the next five years to replace aging equipment and lines and correct a faulty plant design issue. And if the existing equipment fails, water production could certainly be slowed if multiple pieces of equipment fail at the same time.

Will the USDA provide relief? That’s one hope for FCWSA board members. There is pending federal legislation that could provide debt relief, but there are no guarantees there. Large customer growth is needed, but remains unlikely. There are no easy solutions.

So while the FCWSA continues to provide clean, safe drinking water, its financial condition, and its future, remain cloudy.