JeffCo Commission president calls bankruptcy plan "fresh start" - ABC 33/40 - Birmingham News, Weather, Sports

JeffCo Commission president calls bankruptcy plan "fresh start"

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BIRMINGHAM - AL -

Jefferson County Commission President David Carrington says the plan to end the nation's largest municipal bankruptcy filing of more than four billion dollars will save citizens millions. The plan eliminates more than 1.2 billion dollars in sewer debt alone.

 "The Plan solves both of the problems that prompted the Commission to file the largest Chapter 9 bankruptcy case in U.S. history: (1) more than $100 million of general obligation debt had become immediately due and payable and could not be repaid; and (2) a massively large, unsustainable sewer debt would have required sewer rate increases much, much higher than the negotiated rates included in the Plan," said Carrington in a statement less than an hour after the plan was filed in federal bankruptcy court.

 He continues by discussing the negotiations, which took place over the last year and a half in Atlanta, Birmingham, New York and Los Angeles. It resulted in seven agreements with various creditors holding a portion of the debt.

"Every part of the settlement is the product of very intense, hard-fought, arms-length negotiations.  All major stakeholders in the case are or are expected to be supportive of the County's Plan of Adjustment," he said. "The Plan resolves litigation that has been pending for years and has already cost the County millions of dollars."

Carrington also says the plan will finally end ten different legal cases involving the county in at least six different courts; thereby, saving the county several more year of legal battles and

"The Plan achieves the fundamental bankruptcy purpose of giving Jefferson County a 'fresh start'– allowing the county to put 'the sins of the past' behind us so that the Commissioners can shift our focus to creating a brighter future for our children and grandchildren," said Carrington.

The federal judge will hold a hearing on the plan August 6 and decide whether to accept it. If he does, 14 of 24 groups of creditors will vote on giving it final passage.

There will also be a public hearing about refinancing the now 1.89 billion dollar sewer debt. Repayment will involve higher sewer rates possibly starting this fall of 7.41 percent for the first four years and 3.49 percent after that. It's expected to take roughly 40 years to pay off the sewer debt.

Those sewer rates aren't set in stone. They could fluctuate based upon what fixed interest rate the county gets locked into on the refinanced sewer debt. Also, it could increase if the county does not grow and revenue projections for the sewer system are not reached.

A group of representing the sewer users plans to once again make a case before the federal judge against the sewer rates. The attorney says citizens should not have to pay for the sins of corrupt politicians.

The bankruptcy plan is expected to be implemented by late November or December.

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