Bankruptcy avoided, for now

Published 11:41 am Monday, August 15, 2011

From left, Commissioners George Bowman and Joe Knight speak with administrative assistant Horace Huntley before the commission meeting on Friday.

“Lord, watch over us as we gather together in the most important moment in the history of our county. We ask forgiveness for the mess we have made… We pray for wisdom.”

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Shades Mountain Baptist Church administrative pastor Bryan Gunn prayed these words during his invocation at the Jefferson County Commission meeting on Friday. The commission was meeting again after delaying a decision to either declare Chapter 9 bankruptcy, settle with creditors or find a third option to attempt to solve the county’s sewer debt crisis.

After much deliberation and hours of meeting behind closed doors at executive session, the commission chose to reject a proposal by sewer receiver John Young, but did not decide to declare bankruptcy. Instead, the commission has agreed with a Sept. 16 deadline, mentioned in the proposal, to come up with a definitive agreement on a solution.

“We’re reasonably close on some terms, and not close at all on others,” said Commission President David Carrington. “The proposal, as presented, is unacceptable.” One of those “unacceptable” terms was a proposed 6-8 percent rate increases over the next three years, and three percent for the rest of a 40-year period. Commissioner George Bowman called the figures “excessive.”

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“The only tool we have as a commission is Chapter 9,” said Commissioner Sandra Little Brown.

The commission said the delay is at the behest of Governor Robert Bentley, who wants another 30 days for talks with creditors. Bentley is planning on holding a special session for Alabama legislation in September to decide, among other things, whether or not to grant a state moral obligation bond to the county, which would divert state funds to help pay the debt. A tax would likely be levied in the county later to pay back the state funds.

One of the options the commission is looking at is to make the sewer system a separate entity from the county; the sewer system could go bankrupt without bringing the entire county down with it, but the commission would lose almost all its power over it, save for appointing directors to a board, to a third party.

Near the end of the proceedings, District 4 Commissioner Joe Knight, whose district is comprised almost entirely of north Jefferson County, expressed a determination to negotiate directly with Alabama legislation and creditors.

“I’m tired of hearing things second or third hand,” said Knight while gradually raising his voice to almost a yell. “I’ve not seen one creditor in this courthouse or in this city.” Knight said he became agitated when somebody during the meeting forwarded him a Wall Street Journal article erroneously stating that the commission had reached a settlement.

“We don’t have a deal,” said Knight. “But we’re going to get it done, and we’re going to do it right.”

Several commissioners, including Carrington and Brown, echoed Knight’s opinion to handle negotiations directly. The commission ended the meeting by passing a resolution, part of which stated that the commission would no longer deal with the governor’s office via Young.

“You probably won’t see us around here too much over the next few weeks,” said Carrington. “We’ll be in Montgomery and New York… and maybe Orange Beach.”