By Alan Collins
BIRMINGHAM, AL (WBRC) - A Russell County Judge has decided to appoint a receiver to oversee Jefferson County's sewer department.
Circuit Judge Albert Johnson, who was appointed to hear a trial where a New York bank is suing Jefferson County, on Tuesday refused to throw the case out and indicated he would appoint a receiver. An attorney for Bank of New York Mellon welcomed the news.
"I hope today represents the first day in a series of improvements for the Jefferson County Sewer System," Larry Childs said. "So it can be improved to operate efficiently and effectively as possible."
Attorneys for the bank, which holds most of the county's $3 billion sewer debt, said Jefferson County is not doing all it can to pay off the debt.
Jefferson County Commissioners were surprised by the quick decision.
"Of course we resisted it," Bettye Fine Collins, Jefferson Co. Commissioner said. "We didn't think a receiver was necessary but the judge thinks otherwise. That is it."
The judge will be interviewing candidates for receiver. Attorneys for Jefferson County are not calling the decision a setback.
"We don't know yet what authority a receiver will have," Joe Mays said. "That still has to be resolved by the court. That is something we will have input on and the trustee will have input on too."
Most of the sewer customers live in Birmingham. Jefferson Co. Commissioner say they will oppose dramatic sewer rate increases.
"We will definitely try to avoid any increase in rates as much as possible," George Bowman said.
Sewer customers said Tuesday they do not like the idea of paying higher rates.
"I don't like it," Charles Lewis said. "I don't want to pay more. I don't want to pay this amount. I've got to do what I can to keep the water on."
There is also a concern about having to pay a receiver out of the proceeds from sewer customers.
"I wouldn't like it," Joan Kilgore said. "Seems like we would have to pay them. That would increase our sewer rates."
"A receiver who comes here, a receiver will have to cost a million dollars. That comes off the top. Instead of a $103 million operating revenue we will have $102 million," Jim Carns, Jefferson Co. Commissioner said.
That would mean less money to pay off the sewer debt.
Judge Johnson said he will ask both sides what sort of power a receiver should have.
Copyright 2010 WBRC. All rights reserved.