Alabama’s largest water utility cut a $63,890,906 check Tuesday, retiring the 2024 revenue anticipation bond it inherited from the Birmingham Water Works Board.

Central Alabama Water borrowed $62,715,000 in September 2024 at a 3.750% fixed rate, due September 1, 2026. The other $1,175,906 was interest.

“Paying off the RAB on its scheduled maturity date is a clear sign that we are properly managing the utility’s finances,” said Jeffrey F. Thompson, CEO of Central Alabama Water.

“Central Alabama Water’s staff has been strongly focused on fiscal responsibility, and I thank them for their commitment. While we continue to seek ways to further reduce our debt and operating costs, today we celebrate this milestone towards becoming a world-class water utility.”

CAW paid the balance out of cash reserves because it had no other option.

The board’s accountant projected in December that the utility’s reserve would drop from $48.3 million at the start of 2026 to roughly $24 million the moment the bond was paid.

Then it got worse.

S&P Global cut CAW’s rating to AA- from AA in February and placed it on CreditWatch Negative, citing a weakening liquidity position, aging assets and the management overhaul. The utility’s cash reserves were projected to bottom out in August at 62 days of cash on hand.

Thompson’s team responded in March with revised budgets that cut operations and maintenance spending to $123.8 million from $139.9 million, slashed the capital budget to $34.9 million from $75.7 million, and reduced budgeted positions from 688 to 463, a net reduction of 225 jobs.

The revision carried no rate increase and stated flatly that the revenue anticipation bond funds were fully reserved for payment Sept. 1.

Wall Street noticed.

In May, S&P removed CAW from CreditWatch Negative, affirmed the AA- rating and revised the outlook to stable, crediting the revised budgets.

In accordance with its financial policies, CAW sets aside funds each month to cover its annual principal and interest obligations.