Jefferson County, Ala., plans public hearings on sewer rate increases from June through the fall, according to the Birmingham News.
The county has not raised sewer rates since 2008, when its $3.2 billion of sewer warrants failed in the wake of the credit crisis.
Most of the debt remains outstanding in variable- and auction-rate mode. The sewer debt is a signifcant factor behind the county filing the largest municipal bankruptcy in U.S. history in November. The county also lost a significant source of general fund revenue when Alabama courts struck down a job tax.
“It’s important that the public understands the impact that the decisions we make will have on their lives,” County Commission President David Carrington told the paper, referring to the sewer rate hearings. He said sewer rates would go up just like other area utilities increase rates, including the Birmingham Water Works Board.
Rate increases have been controversial because many of the sewer system’s customers are some of the poorest in the county.
The county revealed in April court documents that the Chicago-based Galardi Rothstein Group had been hired as a rate consultant in response to a motion by Financial Guaranty Insurance Co.
FGIC had asked federal bankruptcy Judge Thomas Bennett in March to order sewer rates increased. The insurer said the county had not taken action on rates since Jan. 6, when the judge returned control of the sewer system to the county after stripping that power from a state court-appointed receiver.
FGIC insures $1.6 billion of outstanding sewer warrants, and backs another $19.8 million though debt-service reserve fund policies. Bennett still has not ruled on FGIC’s motion.
Monday is the deadline for the filing of general claims in Jefferson County’s bankruptcy case. The deadline applies to creditors with claims that arose prior to the Nov. 9 bankruptcy filing by the county.
Governmental units have until Aug. 31 to file claims.