Alabama County Officials Travel To NY To Negotiate With Creditors
23 Agosto 2011 - 11:34AM
Dow Jones News
Two top officials from debt-laden Jefferson County, Ala. are
traveling to New York City this week to restart talks with sewer
creditors in an effort to avoid filing what would be the largest
municipal bankruptcy in U.S. history.
Commissioner David Carrington, the president of the five-person
county commission, and Commissioner Jimmie Stephens, who oversees
the county's finances, will be in New York Tuesday through Thursday
to meet with county sewer debt holders.
The meeting is the first face-to-face gathering between the
groups since early this year when Carrington and Stephens traveled
to New York for a "meet-and-greet" session, according to
Stephens.
The goal is "to try and get this settled once and for all," he
said. "We are going to relay to them the desires and the needs of
the citizens of Jefferson County."
A spokesman from J.P. Morgan (JPM), the county's largest sewer
creditor, declined to comment on the matter.
The meetings come after Jefferson County leaders vowed earlier
this month to engage in negotiations directly with creditors
instead of through a court-appointed receiver, who they said didn't
represent their best interests in the most recent round of
negotiations. At that time, commissioners also rejected a
settlement offer from creditors, which included roughly $1 billion
in debt forgiveness as well as annual rate increases starting at
just under 9% a year.
Sewer rate increases are a sticking point for the commission,
who worry that unreasonable hikes would hurt the county's economic
development and unfairly punish its poorest citizens. Jefferson
County is home to the state's largest city, Birmingham.
Since 2008, Jefferson County has struggled under the weight of
just over $3 billion in sewer debt, the result of soured sewer bond
financing. The bond dealings were also tainted with corruption,
with several former county officials convicted of wrongdoing
related to them.
Separately, Jefferson County has also been hurting from the loss
of a key revenue source, an occupational tax that brought roughly a
third of its general fund revenue. A state Supreme Court ruled the
tax unconstitutional in March, and the county has laid off hundreds
of employees to try to make up for the shortfall. The loss of the
tax, though separate from the sewer debt, has caused county leaders
to consider bankruptcy more seriously in recent months.
- By Kelly Nolan; Dow Jones Newswires; 615-679-9299;
kelly.nolan@dowjones.com