Jefferson County close to bankruptcy
Stacey Vanek Smith: Officials in Jefferson County, Alabama will meet today (Thursday) to consider two options — settle a $3.2 billion sewer debt with creditors, or file for Chapter 9. The county’s bankruptcy filing would make it the largest municipal bankruptcy in U.S. history. Gigi Douban reports.
Gigi Douban: The county has actually flirted with the idea of bankruptcy for the last three years. Today, commissioners hold out hope that last minute talks with Wall Street creditors will bring a settlement. The sticking point in negotiations has been sewer rate increases — creditors want a 25 percent rate hike. But County Commission President David Carrington says that’s too high.
David Carrington: The rate payers have experienced more than a 300 percent increase over the last five or six years. Basically, our citizens are tapped out on this regard.
Melissa Woodley teaches finance at Samford University in Birmingham. She says filing Chapter 9 wouldn’t surprise anyone.
Melissa Woodley: The damage is done, it’s not like we’re keeping it a secret that we’re in financial distress and that bankruptcy is going to tip everybody off. Everybody realizes that the credit rating has been cut to junk.
County Commission President David Carrington says at this point, he’s not worried about the county’s reputation. He says without a reasonable settlement offer, he will vote for bankruptcy today.
In Birmingham, I’m Gigi Douban for Marketplace.
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