North Jefferson News, Gardendale, AL

September 16, 2011

Commission approves terms of settlement for sewer debt

Bankruptcy avoided for now

By Ben Montgomery
North Jefferson News

NORTH JEFFERSON — After about a month of meeting with creditors directly, the Jefferson County Commission has approved terms of settlement and refinancing for the county’s $3.14 billion sewer bond debt.

After passing a resolution to adopt it, the commission released a term sheet to the public, outlining a framework for settlement. Sewer rated will increase 8.2 percent on Nov. 1, and will increase that much each year for three years. After that, projected annual increases would be no more that 3.25 percent until the debt is paid, according to the term sheet.

“Everyone should not suffer for the mistakes of the few,” Commissioner George Bowman. Bowman was the only commissioner to vote no during the resolution adoption.

The commission deliberated for nearly two hours in executive session, a special meeting that the public is not allowed to attend, before reconvening in the county courthouse to make their official vote.

“There’s no bright line delineating which path we should take. Both paths are shrouded in gray,” said District 4 Commissioner Joe Knight, whose district includes Warrior, Gardendale, Fultondale and other north Jefferson municipalities. “It’s time for a resolution of this lingering debacle.”

Knight said the commission did not discuss whether or not to exempt “non-users” from paying sewer fees, and has not discussed it for some time. Much of north Jefferson County is not directly connected to the Jefferson County Sewer System, and some politicians, including Rep. Allen Treadaway, R-Morris, have attempted to introduce legislation that would bar the county from charging fees to non-users.

“It’s fundamentally unfair to require someone to pay a fee when they can’t connect to the county sewer system,” said Treadaway. “The vast majority of people [in north Jefferson] are on septic tanks and don’t even have the option to connect to the sewer system.”

Commission members said Governor Robert Bentley had agreed to convene a special session of the Alabama Legislature to discuss the crisis. Commissioner Sandra Brown said no rate increases would happen until the legislature goes into the special session.

"The vote today was the result of months of hard work and deliberation by the commissioners. It may have been easier for the Commission to file for bankruptcy, but this settlement will result in a much better deal for the ratepayers and citizens of Jefferson County and for the state, with more than a billion dollars in debt reduction for the county,” said Bentley in a release issued shortly after the commission’s vote.

The term sheet is not a binding agreement, yet, but if both creditors and the commission can agree on the terms, settlement would be an option and would avoid the largest bankruptcy in U.S. history.