BRADENTON, Fla. - Coming almost 11 months after the close of fiscal 2013, Jefferson County, Ala.'s most recent audit sheds little light on the county's financial condition after emerging from bankruptcy in December.
While the financial information in the audit is based on conditions that existed as of Sept. 30, 2013, as pointed out in the auditor's letter, the county opted to forego the management's discussion and analysis required by Governmental Accounting Standards Board as it has for at least the last six years.
Birmingham-based Warren Averett, the county's long-time auditor, states that no adjustments to the financial statements have been made as a result of the county emerging from bankruptcy on Dec. 3.
Among 118 pages of notes to the financial statements are several sections discussing the issuance of sewer and general obligation warrants late last year as part of the reorganization process.
The audit is difficult to follow in places because some of the information pertaining to the bankruptcy plan, and current events, are woven among details that relate to the fiscal 2013 year end.
The document does show that the county is still facing expenses related to lawsuits and financial claims from its Chapter 9 filing.
A host of lawsuits dismissed as part of the bankruptcy plan are recounted in the audit, in addition to legal cases the county is currently defending.
Those cases include the continuation of a federal hiring discrimination case in which the county entered a consent decree in 1982. In 2007, a motion was filed to hold the county in contempt for failing to abide by the consent decree.
On Aug. 20, a federal judge appointed a receiver to take control of the county's human resources department.
The receiver is expected to require certain actions to rectify hiring practices that are expected to be "financially burdensome," said the audit.
There are also other pending matters pertaining to the hiring suit, which include potential claims for attorneys' fees and costs.
The audit does not mention sanctions the court is currently considering against the county and several of the county's attorneys based on allegations that information was withheld during the long-running suit.
Jefferson County is also defending an appeal of its action in December 2012 when 210 employees were laid off after downsizing the county-owned hospital. A circuit judge upheld the process used by the county to lay off the employees, but an appeal is still pending.
Since emerging from bankruptcy, the county faces additional expenses such as administrative claims related to the case.
One claim has been filed by the group of local officials and residents that are appealing the county's bankruptcy plan, also known as the Bennett ratepayers. They are seeking $311,300 for attorneys' fees and costs under a filing that allows claims for creditors that provide "substantial contribution" in a Chapter 9 bankruptcy case. The ratepayers are represented by Calvin Grigsby.
The commission has objected to the Bennett claim contending, among other things, that the "Bennett plaintiffs had not provided any contribution whatsoever in the bankruptcy case" and that they are not eligible to assert a claim because they are not creditors, according to the audit.
The Norfolk Southern Railway Co. also filed for an administrative claim totaling $1.63 million seeking a refund of sales taxes on the retail sale of diesel fuel.
An appeal of Jefferson County's bankruptcy exit is still pending in federal court. The judge in the case ordered briefs following a hearing in late July, but has yet to rule as to whether the Bennett ratepayers can proceed with their case.
