Since Alabama lawmakers refused to assist Jefferson County by approving a bill that would have helped the county restructure $3.2 billion of troubled sewer debt, a new hearing has been scheduled in the quest by the county’s bond trustee and insurers to have a receiver appointed for the sewer system.

Judge David Proctor will hold an evidentiary hearing beginning at 9:30 a.m. Monday at the federal courthouse in Birmingham, which is the county seat.

Lawmakers ended their regular session May 15 without providing financial relief for Jefferson County’s sewer system. They also failed to reauthorize an occupational tax that supports more than a third of the county’s general fund budget.

Proctor held a teleconference May 18, apparently to get an update on the end of the legislative session. The judge had said in previous hearings that he was reluctant to act on the request for a receiver, because a political solution was being considered.

A federal suit was filed last fall by the county’s largest bond insurers, Syncora Guarantee Inc. and Financial Guaranty Insurance Co., and the bondholder trustee, Bank of New York Mellon.

Proctor already has received the names of possible receivers from attorneys for the county and the bond insurers. But the judge also has said that if he appointed a receiver, he or she would not have the ability to set sewer rates.

The insurers have paid a number of claims made by Jefferson County with regard to the sewer debt, and in court documents, they have said they stand to pay significantly more.

Adding to the pressure on the county is the fact that Syncora suspended all claims payments April 27 while it attempts to complete a comprehensive restructuring.

In addition, forbearance agreements delaying sewer and swap payments are scheduled to expire tomorrow. At press time no information was available about whether attorneys were working on extensions of those agreements.

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