Jefferson County bankruptcy - one year later - ABC 33/40 - Birmingham News, Weather, Sports

Jefferson County bankruptcy - one year later

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BIRMINGHAM - AL -

Just one year ago today, Jefferson County Commissioners filed for the largest Chapter 9 municipal bankruptcy in American history. It's been a year of cuts, courtroom wins, and plenty of uncertainty. 

We're talking about $4.3 billion. That's how much Jefferson County owed for sewer and general obligation debt. We sat down with County Manager Tony Petelos to find out where this past year left them and what the future holds.

"I guess we're all going to learn," Commission President David Carrington said on Nov. 9, 2011 last year. "We're plowing new ground."

It was unchartered territory.

"Today is the end of one era in Jefferson County and tomorrow will be the beginning of a new era," County Manager Tony Petelos told us one year ago today.

Just one year ago, on November 9th of 2011, 4 out of 5 commissioners decided bankruptcy was the right move. 

"We're going to look out for ourselves and the citizens of Jefferson County because if we don't, from what's apparent, no one else is going to," Commissioner Jimmie Stephens said in 2011.

Bankruptcy meant the loss of 1,000 employees, shifts in services, the threat of courthouse closures, and big attorney bills - about $1 million each month. 

"There is a lot of money at stake and the fact that Jefferson County lost the occupational tax, we were having to lay people off," Petelos told us today.

But there have been some benefits: back in the Summer, commissioners rejected the high lease on the Bessemer courthouse then renegotiated a lower payment - saving money. 

They also now have control over the sewer system and just a few days ago, the commission approved a new higher sewer rate with an increase of just under $2 - a rate lower than expected.
 
But bankruptcy disabled the ability to borrow money and bring in new businesses....

"It's very important that we exit out of bankruptcy," Petelos said. "It's very important that we use economic development to recruit businesses."

So what does the future hold?

"You'll see a much leaner Jefferson County, one that is more efficient and one that will live within its budget," Petelos said.

Next week, Commissioners Carrington and Stephens will meet for a negotiation with creditors in Los Angeles. The County Manager says  it will likely be another year or even as late as 2014 before the county is out of bankruptcy. 

 

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