Bankruptcy plan could mean higher sewer rates in JeffCo - WBRC FOX6 News - Birmingham, AL

Bankruptcy plan could mean higher sewer rates in JeffCo

Jefferson County Commissioners discuss the bankruptcy plan in Tuesday's meeting. Source: Alan Collins Jefferson County Commissioners discuss the bankruptcy plan in Tuesday's meeting. Source: Alan Collins
BIRMINGHAM, AL (WBRC) -

Jefferson County Commissioners indicated Tuesday their plan to exit bankruptcy could lead to even higher sewer rates.

The commission voted to back one plan earlier that called for 7.41 percent increases for the first four years of a 40 year refinancing plan. The sewer rates would drop to 3.49 percent for the remaining years of the debt.

Commissioners discussed the plan in committee on Tuesday.

"The impact of the plan affects the ratepayers. Their bills will continually go up for the next 40 years," Jefferson County Commissioner George Bowman said.

Jefferson County commissioners are looking to refinance their sewer debt, moving from more than $3 billion to $1.9 billion, but commissioners are looking to refinance their debt to include $3 billion of capital improvement to the sewer department. This will increase their total refinanced debt to about $5 billion.

"If the revenue that comes in as a result of this plan are not sufficient then the rates can be increased even higher," Bowman said.

Commission President David Carrington said some ratepayers in his district would like to see the big 30 percent increase up front the first year rather than the gradual increases.

"You know, more people have talked to me about considering one lump sum, pulling the bandage off and moving on," Carrington said.

But Carrington and other commissioners don't believe a big increase will be politically feasible.

The commission is expected to go into executive session Thursday to discuss the bankruptcy plan with their lawyers. Commissioners could also vote on a new agreement with liquidity banks to pay off another part of the sewer debt.

The plan will have to be filed with the U.S. Bankruptcy Court by the end of Sunday. The sewer rates will also depend on what favorable interest rate the county can receive. If interest rates go up dramatically, it will affect the sewer rates ratepayers pay.

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