The Birmingham City Council Tuesday urged Jefferson County to file for bankruptcy immediately, and asked Gov. Robert Bentley not to call a special session of the Legislature to assist the county with its debt and budget problems.
The council passed a resolution that said proceeding with Chapter 9 could help the county seek relief, including the “invalidation of the sewer warrants procured by JPMorgan’s bribery, and the recovery by the ratepayers of the Jefferson County sewer system of the financial costs and losses caused by JPMorgan’s bribery and other wrongful conduct.”
In addition, the council said it would petition the U.S. Justice Department to initiate criminal proceedings against JPMorgan and seek reimbursement of the bank’s expenses paid by ratepayers. The bank is the county’s largest creditor.
Last week, the City Council voted to spend up to $10,000 to hire retired federal judge U.W. Clemon and his Birmingham-based firm, White, Arnold and Dowd PC, to explore legal options to prevent what the council called “unjust” sewer rate increases tied to a settlement of the county’s troubled sewer debt. Many sewer system ratepayers live in Birmingham, the county seat.
The council’s resolution states that the same banks involved in a proposed debt-restructuring plan also engaged in criminal activity that hurt Jefferson County, Clemon told the Birmingham News. He said there may be other actions the council can take to prevent sewer rate increases, though he was not specific.
“I am to investigate all means by which the City Council can assist its constituency in avoiding sewer rate increases,” Clemon told the paper.
