BRADENTON, Fla. — Commissioners in Jefferson County, Ala., planned to meet Thursday to continue discussions about settling with creditors who own $3.14 billion of troubled sewer debt, or else file the largest-ever municipal bankruptcy in U.S. history.
There was a possibility that the meeting could be postponed, though such an announcement was not made by press time.
County Commission President David Carrington added a special closed-door meeting of the board following the commission’s regular meeting next Tuesday if needed for further legal discussions.
A counterproposal by the county or state was being developed this week, according to published reports, though that could not be confirmed.
While Jefferson County commissioners have the final say over any settlement, proposals to creditors are being developed with the assistance of Alabama Gov. Robert Bentley and state finance director David Perry. Perry did not respond to a request for an interview this week.
Details have not been officially or publicly released about debt restructuring proposals from the first offer submitted by the county and the state last month or the first counteroffer submitted by creditors last week.
Some individuals involved in discussions have spoken generally about single-digit sewer rate increases necessary to support the issuance of restructuring debt and the haircut being discussed for creditors: $1.3 billion proposed by the county and $1 billion reportedly offered by the creditors.
Along with restructuring the sewer debt, county officials are seeking a resolution to an operational funding shortage created by the loss of revenue from a legislatively authorized occupational tax, which was struck down by Alabama courts earlier this year.
The loss of tax revenue supporting the general fund has required the county to lay off 500 workers and has widely been viewed as the major factor that could finally force it into bankruptcy.
State lawmakers refused to provide the county with relief during their regular session this year.
The County Commission postponed a much-anticipated meeting last week that was to discuss legal strategies, including preparations for a potential bankruptcy filing.
The meeting was delayed a week so negotiations with creditors could continue after they submitted a counteroffer.
Carrington stressed last week that while talks were continuing, a settlement had not been reached. The governor released a statement that said the offer submitted by creditors “deserves serious consideration.”
No public meetings or hearings have been held.
