Jefferson County to go bankrupt? (Birmingham, Tuscaloosa: refinancing, credit, lawyers)

[tablemtn]

News story

Jefferson County's financial options are rapidly shrinking after a massive credit downgrade late Friday left the cash-strapped county with few options and increased the chances of bankruptcy.

Ouch... how'd they end up in this position, and what is the state's position here?

[cpg35223]

The problem is, so much of this happened under the table without the realization of Jefferson County citizens. One morning, we wake up and see all kinds of sewer projects going on, sewer projects that we find aren't going to go anywhere because they were ill planned.

[Bama`s Port]

wow tha is unbelievable how can the state`s largest county go bankrupt . That is just hard to believe does the sprawl of B-hama suburbs have anything to do with it ?

[MullinsCurve]

I would guess the answer would be the abject mismanagment by a succession of mentally inadequate and morally reprehensible mayors.

[Historic Bessemer]

Originally Posted by MullinsCurve

I would guess the answer would be the abject mismanagment by a succession of mentally inadequate and morally reprehensible mayors.

His name is Larry Langford!

He has been personally bankrupt several times himself!

[Reactionary]

Refinancing... the county's $3 billion in... bonds, which would entail millions in added costs and fees - some of which would end up in the pockets of bankers who steered the county toward risky investments... The crisis stems from the collapse of Jefferson County's sewer bonds... In the past few years, investment banks led by New York-based JP Morgan persuaded Jefferson County commissioners to sell bonds whose interest rate changed at least every few weeks at an auction.

"It's very simple - you got snookered by the investment banks," said Peter Morici, a finance professor at the University of Maryland. "They told you they could minimize your risk, but they took your money and now they are laughing at you."

Sen. Shelby remarks:

...the Security and Exchange Commission, which has been investigating the method the Jefferson County Commission used in the early part of this decade to finance billions of dollars in sewer debt. Some commissioners, present and past, along with bond lawyers have been under SEC investigation.

"We know that there is a Securities and Exchange Commission investigation and they will answer to us on the Banking Committee," Shelby said.

al.com: Everything Alabama

[Bravo35223]

Originally Posted by Bama`s Port

wow tha is unbelievable how can the state`s largest county go bankrupt . That is just hard to believe does the sprawl of B-hama suburbs have anything to do with it ?

Not at all....Birmingham has several suburbs in Jefferson County that are in outstanding fiscal condition. These include: Homewood, Vestavia, Mountain Brook, Trussville and parts of Hoover. All of these communties have excellent schools, police and fire protection with balanced budgets.

Jefferson County's problem has been bad leadership at the County Commission level. They have been involved in corruption on the sewer project and mismanagement of debt on the sewer project.

AS it relates to the day-to-day operating budget of Jefferson County - it is in good shape.

It's time for a County Manager or County Executive.

[Reactionary]

IMO lots of people need to be in jail for this...

[Frankie117]

The money is obviously being embezzled. There is no way one of the sprawl-iest (is that even a word?) suburban counties of Birmingham is going bankrupt. Usually the suburban counties are the wealthiest.

[Lodger]

I used to read the Birmingham News back when this sewer fiasco was still booming. Every few weeks there would be some big article about how the sewer folks were spending borrowed money like drunken sailors, no offense to drunk sailors. I kept thinking at the time 'how are they ever going to pay this back?' and 'boy am I glad I don't live in Jefferson County.' It seems the whole thing was justified at the time by a court order that the sewers be improved, and the next thing you know money is flying everywhere. Some folks have gone to jail, but I think so far only the small fry has been nailed. I know one contractor from Tuscaloosa that got busted. I canceled my Bham News subscription and haven't been keeping up with the latest.