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  1. #1
    Senior Member JohnDoe2's Avatar
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    Jefferson County AL. bankruptcy would top $4.1 billion

    Jefferson County bankruptcy would top $4.1 billion

    10:58 PM, Jul. 27, 2011
    Written by The Associated Press

    BIRMINGHAM -- Leaders in Alabama's largest county said Wednesday a potential bankruptcy filing that could be days away likely would top $4.1 billion.

    The current record for a municipal bankruptcy in the United States, set in 1994 by Orange County, Calif., is $1.7 billion.

    The primary problem in Jefferson County is sewer debt of some $3.14 billion that the system can no longer afford to pay. But Commission President David Carrington said the county has another $1 billion in additional debt for school construction and other projects.

    "It all must be included," Carrington said.

    But Jefferson County is still trying to find a way to stay out of bankruptcy court.

    Commissioners said they still had an offer on the table to settle the debt with Wall Street and had yet to receive a formal response just a day before what could be a vote to file for bankruptcy. Talks are ongoing between lenders, county attorneys and state officials, they said.

    But commissioners also said it would be better to file for bankruptcy than accept a deal that would dramatically increase costs for customers of the county's sewer system, which had to undergo massive renovations and expansions in the 1990s to meet federal water standards.

    "We're certainly not going to settle just for the sake of settling," said Carrington.

    Carrington and Commissioner Jimmie Stephens, who oversees county finances, said they expected to receive a proposal from creditors before a meeting today at which officials could decide on filing for bankruptcy.

    Should settlement talks fail and bankruptcy become impossible to avoid, Carrington said it would be filed within days.

    Jefferson County has some 658,000 people and includes Birmingham, Alabama's largest city. The county financed court-ordered sewer upgrades with risky transactions later shown to be laced with bribes and influence-peddling. A court-appointed receiver has recommended sewer rate increases of 25 percent to get the system out of financial trouble, but commissioners want any increases capped in the single digits.

    County government has been trying to avoid filing bankruptcy since 2008. The deal it offered to JPMorgan Chase and other creditors would erase more than $1 billion of its debt with the promise of repaying the remaining amount through a combination of modest sewer rate increases and loans.

    Separate from the debt problem and possible bankruptcy, Jefferson County already has laid off about 550 of its 2,300 workers and scaled back government services because courts struck down an occupational tax and business license that provided more than $74 million annually for its operating budget.

    Bankruptcy would cost the county about $1 million a month in legal bills, accounting fees and expert charges and could go on as long as 18 months, Carrington said, but the county should be able to avoid additional layoffs or service cuts directly related to the sewer debt.

    http://www.montgomeryadvertiser.com/art ... -1-billion
    Last edited by JohnDoe2; 07-01-2017 at 03:56 PM.
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    Senior Member JohnDoe2's Avatar
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    46 U.S. cities have filed for bankruptcy

    http://www.alipac.us/ftopict-243090.html
    Last edited by JohnDoe2; 07-01-2017 at 03:55 PM.
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    Super Moderator Newmexican's Avatar
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    I think that Birmingham has a very liberal City Council and is seems that some of them wanted to redistribute the wealth to themselves, not unlike a few other politicians we all know.
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    Senior Member JohnDoe2's Avatar
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    Quote Originally Posted by Newmexican
    I think that Birmingham has a very liberal City Council and is seems that some of them wanted to redistribute the wealth to themselves, not unlike a few other politicians we all know.
    It's Jefferson County that is bankrupt, not the City of Birmingham.
    The county is run by The County Commission.
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