Jefferson County sewer debt crisis could be settled today
A sewer debt crisis is threatening Jefferson County, Alabama’s financial stability, which could lead to the largest government bankruptcy in history.
Barnett Wright of “The Birmingham News” wrote in “Settlement, bankruptcy on table for Jefferson sewer debt crisis today,” that the Jefferson County Commission had approved a resolution that includes bankruptcy along with other options for reaching an agreement with sewer system creditors. A conceptual agreement signed in September that would have included certain concessions and reduced the county’s $2.05 billion debt has now lost $140 million in value.
The commission is getting frustrated in getting concessions from the creditors and has threatened bankruptcy twice before, but extended the deadlines for filing. Some observers feel the threat is just a ploy to get creditors on board.
The commission has asked the state to hold a special legislative session, but the governor has not acceded to their request. The largest creditor, JPMorgan Chase & Co., has not responded to questions regarding its position on the debt negotiations.
Bankruptcy would impair the county’s ability to borrow funds, and county officials warned that it may harm other municipalities in the state by increasing interest rates and fees.
A court-appointed receiver who oversees the Jefferson County sewer system remained optimistic that an agreement would soon be signed with creditors holding billions in debt, but that there were no guarantees. Meanwhile, the commission is still considering its options, including bankruptcy.
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