County in Alabama is Bankrupt, Just Like the U.S.

By:  Bob Adelmann
08/01/2011
       
County in Alabama is Bankrupt, Just Like the U.S.

At the very last minute, county commissioners in Jefferson County, home to the metropolis of Birmingham, Alabama, decided to postpone a final decision on whether or not to declare bankruptcy over their excessive indebtedness. The bonded indebtedness incurred to build a state-of-the-art sewage treatment plant exceeds $3 billion, far beyond what the county can afford to service. And raising sewer fees for a fourth time in ten years isn’t an option as the outrage from the last increase still reverberates.

The proximate cause of the difficulty goes back to December of 1993 when three citizens of the county sued the county commissioners over untreated raw sewage being dumped into nearby rivers. The suit, which was picked up by the Environmental Protection Agency in 1994, forced the commissioners to build a new sewer system. In 1997, the county began selling municipal bonds to pay for the project, with the help of a broker at Raymond James & Associates. By November of 2002, the county had raised $2.9 billion and began construction on the project.

At the very last minute, county commissioners in Jefferson County, home to the metropolis of Birmingham, Alabama, decided to postpone a final decision on whether or not to declare bankruptcy over their excessive indebtedness. The bonded indebtedness incurred to build a state-of-the-art sewage treatment plant exceeds $3 billion, far beyond what the county can afford to service. And raising sewer fees for a fourth time in ten years isn’t an option as the outrage from the last increase still reverberates.

The proximate cause of the difficulty goes back to December of 1993 when three citizens of the county sued the county commissioners over untreated raw sewage being dumped into nearby rivers. The suit, which was picked up by the Environmental Protection Agency in 1994, forced the commissioners to build a new sewer system. In 1997, the county began selling municipal bonds to pay for the project, with the help of a broker at Raymond James & Associates. By November of 2002, the county had raised $2.9 billion and began construction on the project.

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