BRADENTON, Fla. - Jefferson County, Ala., commissioners yesterday approved forbearance agreements for swaps covering most of the county's $3.2 billion of sewer debt.
The agreements with counterparties delay payments until Dec. 8.
Newly sworn in commissioner William Bell, a Democrat, joined fellow Democrat Shelia Smoot and board president Bettye Fine Collins, a Republican, in seeking the extension.
The extension was opposed by commissioners Jim Carns and Bobby Humphryes, both Republicans who favor the county filing for bankruptcy to solve the financial crisis created by the sewer debt.
The County Commission has approved a series of forbearances on the swaps and sewer debt payments since early this year. The board has been negotiating with creditors since mid-February trying to restructure the debt, most of which is in variable- and auction-rate mode.
Alabama Gov. Bob Riley is now facilitating talks with the county's creditors, but he has not spoken about the status of negotiations for several weeks.
The next milestone with regard to the sewer system likely will be a hearing Monday in Birmingham federal court on whether a receiver will be appointed to take over the utility.
The two main insurers of the sewer debt, Financial Guaranty Insurance Co. and Syncora Guarantee Inc., want the system placed in receivership. They claim, among other things, that the county failed to increase rates to pay debt service as required by bond covenants.
As of the last evaluation of the swaps, the county owned more than $400 million to counterparties.