Jefferson County, Ala., commissioners decided Monday to move forward with a plan that is expected to increase sewer system rates for the first time in at least four years.
Commissioners said they will consider an extensive overhaul of the sewer system rate structure that is anticipated to result in an estimated average 5.8% rate increase.
The county said because of the new rate structure it is not possible to say exactly how much in new revenues will be raised. Net sewer revenues secure $3.14 billion of outstanding defaulted sewer warrants that are now part of the county’s Chapter 9 bankruptcy.
The commission has scheduled the only public hearing on the new rate structure for Tuesday.
At the hearing, commissioners will consider a 35-page resolution that discusses how rates were proposed and how it plans to value the sewer system, which will be used to figure future rate increases and how much the county will pay for debt service.
In complex detail, the commission’s resolution outlines numerous factors it plans to consider in valuing the system, including depreciation. The document details the corruption that has surrounded system upgrades and bond issues since the early 2000s.
The proposed resolution states that the county will not revisit sewer rates for two years to evaluate the new rate structure. At that time, the commission will consider rates “that will generate revenues sufficient to satisfy operating expenses, capital expenditures, and debt service on an amount that correlates to the value of the used and useful system assets,” the resolution said.
Jefferson County filed the nation’s largest municipal bankruptcy last November citing the overleveraged sewer system debt and loss of other revenues for its general fund.