Birmingham is working on a plan to issue $75 million of general obligation bonds for various capital projects, according to the Birmingham News.
Mayor William Bell told the newspaper this week that he would like to ask voters to approve the issue in a referendum as early as the first quarter of next year.
Bell announced the plan less than a week after surrounding Jefferson County filed the largest bankruptcy in the United States, with the support of the Birmingham City Council.
In addition to urging the county to submit a Chapter 9 petition, the council set aside $10,000 to hire a retired federal judge to research potential litigation against Jefferson in hopes of stopping sewer-system rate increases that were proposed as part of a settlement to restructure the county’s $3.14 billion of troubled sewer warrants.
The council also said it planned to petition the U.S. Justice Department to initiate criminal proceedings against JPMorgan “for its criminal conduct” and to seek reimbursement from the firm of all expenses paid by the sewer system’s ratepayers.
It is not clear if the city still intends to pursue criminal proceedings against the bank, which is the county’s largest creditor.
Birmingham is the county seat and Alabama’s largest city.
Jefferson County commissioners rejected a proposed settlement of the sewer system debt on Nov. 9 and immediately filed for bankruptcy. It includes a total debt portfolio of $4.2 billion.
Bell said Birmingham can plan for a referendum early next year, and the bond issue because it has “strong credit ratings, we have managed city finances responsibly, and we are paying down debt rapidly,” he told the paper.
Birmingham’s GOs are rated in the double-A category by all three major rating agencies.
The city last sold $63.5 million of GO refunding warrants in November 2010.
