BRADENTON, Fla. — Four Jefferson County, Ala., lawmakers are legally opposing the sewer rate increase proposed by the court-appointed receiver managing the county's sewer system and its defaulted debt.
Reps. John Rogers, Mary Moore, Rod Scott, and Oliver Robinson filed a complaint Thursday to intervene in the receiver's case to prevent a rate increase for various reasons, including the fact that two separate lawsuits are pending that could result in a reduction of the amount of sewer debt, according to court documents.
The lawmakers, who are sewer system ratepayers, said any increase in the sewer rate would exceed their ability to pay, be unreasonable and confiscatory, violate state law and Alabama's constitution, and be higher than comparable rates in other Alabama counties.
They also said a rate increase would "result in grievous injury resulting from implementations of liens against their property, impairment of their credit ratings and sale of their homes and commercial properties … if such increased rates are not paid," the complaint said.
A circuit court judge appointed John Young receiver last September to take over the sewer system with the authority to raise rates, and that ruling has not been challenged until now.
Young proposed a 25% rate increase in a June 14 report to the judge as well as the implementation of a low-income assistance program. He also said the sewer system has $3.14 billion of debt in default.
Because a rate increase has been proposed, now is "definitely the right time" to challenge Young's authority, said Birmingham attorney Jim McFerrin, a county resident and sewer ratepayer who said he is representing the four lawmakers for free because the county is in a crisis.
The lawmakers filed to intervene in the receivership case "to do whatever they could to be part of the solution to get the sewer problem resolved," he said. "From a legal standpoint, it's important for the creditors and the county to get together to resolve this."
The complaint says the ability to raise sewer rates rests solely with the County Commission, and Alabama's constitution specifically grants that power.
The covenants for the defaulted sewer warrants state that rates are subject to constitutional limitations, McFerrin said. "For anybody who bought warrants, any investor who invested in them, it was right there in plain language."
Alabama Attorney General Luther Strange on June 17 also filed to intervene in the receivership case on behalf of ratepayers. As of Friday, no hearing dates had been set.
Meanwhile, Jefferson County's financial problems — the current budget crisis due to the loss of a major revenue source and the defaulted sewer warrants — are a top priority of Gov. Robert Bentley, according to his press secretary, Jennifer Ardis.
Bentley has ordered that a meeting be held soon with Jefferson County commissioners and the local legislative delegation, but a date had not been set as of Friday, she said.
The governor's legal adviser, Cooper Shattuck, and state finance director David Perry are studying the "pros and cons" of the options available to Jefferson County, including filing for bankruptcy, Ardis said.
"The governor has said that bankruptcy has to be an option on table in order to get people to discuss the problems," she said. "He is not advocating for bankruptcy, but if that is what the county commission says needs to be done, he is supportive of the commission's decisions."
Ardis said the governor would call a special session of the Legislature for Jefferson County, but only if local lawmakers have agreed on measures they would support. She also said that Bentley has been asked to call a special session to discuss other state matters.