With a tight deadline ahead, the Jefferson County Commission Tuesday voted to declare the entire county a recovery zone to qualify for the issuance of recovery zone bonds under the federal stimulus program.
The county received a volume cap allocation of $26.8 million of recovery zone economic development bonds for public capital projects and $40.2 million of recovery zone facility bonds for private sector projects.
While Jefferson has long-delayed capital projects that are ready to be financed, a city official said it’s highly uncertain whether the government could issue the $26.8 million given the severe financial problems with its debt-laden sewer system, its junk-rated credit, and a legal action that threatens a new occupational tax that supports the general fund.
However, by designating the recovery zone the commission could hand over its allocation to other qualifying cities within the county.
The designation also potentially makes available the other $40.2 million of facility bonds to businesses with qualifying projects but that most likely would require a conduit issuer.
Whether any of the allocation is used depends on meeting looming deadlines. Proposed, shovel-ready projects have to be presented to the governor’s office by March 31.
In addition, the bonds must issued by June 1 or the bond authorization will be returned to the state for allocation to another area.
Jefferson County treasurer Jennifer Parsons Champion said Monday she would not sign the recovery zone document, calling a sale of bonds by the county a “reckless acquisition of debt.”
The Birmingham City Council on Tuesday also designated the city a recovery zone. The city has been allocated $12.3 million of recovery zone economic development bonds and $18.5 million of recovery zone facility bonds.