Smells Like a Sewer To Me
Unless you’ve been hiding under a rock — or aren’t from around here — you know that Jefferson County is facing imminent financial ruin because of a combination of bad decisions and bad luck surrounding sewer bonds. How much of each is a subject of some dispute, but I fall on the bad decisions side of the line.
A majority of the County Commission has bought into a recovery plan that will require a special session of the Legislature and a statewide vote for approval. Good luck with that.
Commission Chair Bettye Fine Collins and her supporters Shelia Smoot and George Bowman will hold a dog and pony show public hearing tomorrow morning, 10AM, at the Wright Center at Samford University. They will, apparently, be assisted by the PR firm that they haven’t yet hired. They’ll be pushing the Slaughter plan, thus named because it was designed in part by a local attorney who helped get us in this mess to begin with. The public will be allowed to ask questions, but only in written form, submitted in advance. Wow, thanks, Ms. Collins, for permitting the public to participate. /snark
Commissioner Smoot, at least recognizing the reality that most people can’t take off work to go to a weekday public hearing, has scheduled another one for 6 PM tomorrow night in Room 370 of the Jefferson County Courthouse.
Meanwhile, Commissioners Jim Carns and Bobby Humphryes, who are not happy with the Slaughter plan, have scheduled meetings of their own to inform the public of alternative approaches — at this point, taking the sewer system into bankrupcty and allowing the Retirement Systems of Alabama to buy it out or going with a plan promoted by Jim White that would require a bit more sacrifice from the attorneys, investment bankers, and Wall Street gurus who led the Commission down the garden path in the first place. (For basic details of each plan, and some childish snarking from Bill Slaughter aimed at David Bronner, click here.) Carns is holding a meeting TONIGHT at 6 PM at the Homewood Public Library, while Humphryes has tentatively scheduled one for Wednesday, August 13, 7PM, at the Bessemer Civic Center.
If you’re on the sewer system in Jefferson County, or if you pay property, sales, occupational taxes or business license fees — okay, that’s pretty much everyone — you owe it to yourself and your checkbook to be informed. Pick a meeting and go. Take notes. Ask questions — even if the Commissioners don’t want to answer them.
August 7th, 2008 at 6:40 pm
Kathy, do you have any bankruptcy lawyer friends? I’ve heard two diametrically opposed explanations about chapter 9 recently.
1. Smoot claims that bankruptcy would not absolve ratepayers or taxpayers of the debt; i.e., if the county bankrupted and bond holders got only 50 cents on the dollar from available funds, Jeffco citizens wouldn’t be off the hook for the rest.
2. Carns and Humphryes claim that if the county bankrupted, the sewer system (through negotiations) could be segretated from other county operations and that the sewer revenues would be all that bond holders are entitled to. So if the bond holders had a shortfall of 50% (or whatever amount) after a judge divvied up the assets, they (bond holders) would have to get the rest from the bond insurers.
I don’t know who’s right, but I know that I’ve heard alot of folks ask, “So what were the bond insurers paid for again?”
August 7th, 2008 at 7:11 pm
I don’t know who’s right, but I know that I’ve heard alot of folks ask, “So what were the bond insurers paid for again?”
And well paid, I might add.
I don’t know for sure, but I heard Patricia Todd speak to this issue today, and she said bankruptcy would encompass the entire county government and not just the sewer system. She said she had spoken with a bankruptcy attorney, but she gave the caveat that she is not one.
According to her, if the county defaults on its next payment, bondholders would demand payment from the insurers, who would in turn sue the county, which would be forced to declare bankruptcy. The county would then have pretty much unlimited time to come up with a repayment plan, and the judge could simply tell creditors that they will get X cents on the dollar. That seems to fall in between the two scenarios you’re hearing, and Patricia emphasized that some of the answers simply depend on whom you ask.
That’s about as clear as mud. Sorry!
August 7th, 2008 at 11:40 pm
From a strictly political point of view, nothing to do with the finances of the situation, it seems that bankruptcy is the best option.Then all the commissioners can just blame the bankruptcy court for whatever happens.
I have been to the last two meetings (a freelance reporting gig) and every single commissioner is frozen like a deer in the headlights. They’re sniping at each other politically because 1) it’s in their nature and 2) there is really nothing else they can do.
Carns admitted in a press availability after the Commission meeting that whatever people might say at his meeting or any other, would make no difference in what the Commission would go from here. It’s basically just to make the people feel good.
As far as blame, there’s plenty to spread around. LaLa listened to the courtiers telling him how smart everyone would think he was if he refinanced the sewer bonds with all these esoteric financial products. Bettye Collins and Mary Buckelew were dead set on expanding the sewer and wasted a lot of our money before projects like the Super Sewer were shut down. The basic concept of fixing what we had, which was what the consent decree was intended for, just got thrown out the window.
I’m seriously going to move to Shelby County.
August 8th, 2008 at 7:48 am
I’m seriously going to move to Shelby County.
I suspect you won’t be alone, but all this mess will make it even harder to sell houses here. Ugh.
It sounds like the Commissioners are taking an “it’s not my problem” approach; the public won’t be allowed to speak at this morning’s meeting, and Shelia Smoot isn’t planning to hang around for the meeting she planned for tonight. Collins clearly doesn’t see why she should be bothered to listen to citizen input:
“The commissioners’ attendance is certainly welcomed, but it’s not as if we are going to be a part of the program,” Collins said. “There is no presentation from commissioners. … This is for the public.”