Bankruptcy in the Balance After Jefferson County Election

BRADENTON, Fla. — Birmingham, Ala., welcomes new Mayor William Bell to office on Tuesday, which leaves a vacancy on the Jefferson County Commission as it continues to cope with $3.2 billion of troubled sewer debt.

Bell, a county commissioner who now must resign his seat, won the mayor’s office this week with 54% of the vote, defeating lawyer Patrick Cooper.

The mayoral special election was held to fill the remaining 19 months of former Mayor Larry Langford’s term. Langford was removed from office last October after being convicted on 60 federal corruption charges related to the refinancing of the county’s sewer debt when he was a commissioner.

On the same day Bell was elected mayor, a federal judge denied Langford’s request for a new trial.

Langford sought a new trial and requested his conviction be set aside because, among other reasons, he wasn’t allowed to enter certain evidence showing he was a generous gift-giver and because the jury didn’t deliberate long enough. The trial began Oct. 19 and ended eight days later after the jury deliberated less than two hours.

In a 23-page order handed down Tuesday, judge Scott Coogler repeatedly said no evidence was shown that required a new trial or for him to set aside the verdict.

“Further, it is obvious to the court that the speed of the verdict simply demonstrates that the jury concluded that the evidence of defendant’s guilt was overwhelming and that they needed no further deliberations to agree upon the verdict,” Coogler said in response to Langford’s complaint that the jury did not deliberate long enough.

Langford was found guilty on 29 counts of bribery, four counts of money laundering, one count of conspiracy, five counts of mail fraud, 18 counts of wire fraud, and three counts of filing false tax returns. He is currently scheduled to be sentenced March 5.

Langford’s removal from office prompted the special election Tuesday.

The Jefferson County Election Commission must now set a special election date for a county commissioner to replace Bell.

Bell was among three of five commissioners who opposed filing for bankruptcy as a way to resolve the crisis surrounding the sewer debt, which remains in variable- and auction-rate mode that is mostly held by banks.

For nearly two years the county has failed to restructure the non-recourse sewer debt. Only fees paid to the sewer system secure the debt, but they are not enough to meet the obligations that have soared to penalty rates since the market meltdown.

Two current county commissioners, Jim Carns and Bobby Humphryes, continue to support filing for what would be the country’s largest municipal bankruptcy. Two other commissioners, Bettye Fine Collins and Shelia Smoot, have consistently voted against bankruptcy.

But Bell’s departure from the commission could change the balance that has prevented a bankruptcy filing.

“I would love to have a third bankruptcy vote in here,” Humphryes told the Birmingham News on Thursday. “Hopefully, we can get someone here who thinks like Carns and I do about the sewer debt [and] how to handle it.”

County officials could not be reached yesterday to find out the status of sewer debt payments.

According to Digital Assurance Certification LLC, the county’s disclosure agent, Jefferson County has not filed a material event notice since last October, when it was disclosed there had been a payment default on some of the sewer warrants.

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