Old Birmingham Water Works Board gave management millions in contracts on last day of existence

BIRMINGHAM, Ala. (WBRC) — The former Birmingham Water Works Board agreed to millions of dollars worth of new contracts for senior management, including a contract worth more than $3 million for its board attorney on what turned out to be its last full day of existence.

The former water works board voted on Tuesday, May 6, to allow new GM Mac Underwood to negotiate new contracts with its Assistant General Managers (AGMs) and create a new Assistant GM/General Counsel job for board attorney Mark Parnell. The move to add Parnell to the utility’s staff comes after he has spent almost 38 years representing the utility while maintaining his own practice and billing the BWWB for his services.

All told, the contracts given to Parnell and four other assistant GM’s that day amount to more than $2.6 million, even if all of those agreements were terminated almost immediately by the new Birmingham Regional Water Board, which the utility converted to the next day, May 7, with a stroke of Governor Ivey’s pen.

“We really want to make sure that we can keep our leadership team intact,” Underwood said by way of explanation on May 6 when asked about the move to enter into the new contracts. “We have made a lot of improvement since last year. Lot of the billing errors and issues have gone way down, so those contracts are to protect the management team and allow us to continue to do our jobs and improve the operations of the waterworks.”

Parnell’s agreement is, by any measure, the most generous of the new contracts. It includes, among other provisions:

• A 5-year term running through Dec. 31, 2030 with the possibility of a 2-year extension.
• A base salary of $660,000 per year with raises to follow.
• A guarantee that salary can’t be cut during his tenure.
• A requirement that, outside of a felony conviction or violating the contract’s terms, it would take five of the seven board members voting to fire him to terminate the contract.
• If the contract is terminated for reasons other than cause, he’s guaranteed a minimum of two years’ pay, or $1.3 million, paid within 30 days.
• He is immediately fully vested in the utility’s pension plan, with longevity pay to reflect 18 years of service to the board.
• If the board votes to sue to try and terminate the agreement, the utility agrees to pay Parnell’s legal fees to fight it in court.
• A $1,000 monthly vehicle allowance.

Underwood’s contract, agreed up on in March, contains a provision requiring seven votes to remove him from his position, a 2-year salary severance package, and the same vehicle allowance.

Assistant General Managers Derrick Murphy, Barry Williams, Phillip King, and Michael Parker also received new contracts on May 6, entitling them to new 5-year terms with a 1-year salary severance guarantee at a pay rate between $250,000-$334,000, with at least two of them guaranteed the highest end of that scale.

The BWWB says the board authorized Underwood to negotiate the terms of the contract with Parnell, and Underwood declined a request for comment on the terms of that or any of the AGM contracts.

“I believe the employment agreement is fair given my nearly four decades of representing the Birmingham Water Works Board and my extensive institutional knowledge of the system,” Parnell said in a statement to WBRC. “The agreement was designed to ensure continuity of the management of the water system during a period of transition. The ability of the former Board of Directors to authorize and enter into my employment agreement is not in doubt. The agreement was unanimously approved while the former Board still governed the utility and before SB 330 was signed into law.”

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