BRADENTON, Fla. - A federal judge has scheduled a full hearing for March 24 on a motion by bond insurers and a bank trustee to appoint a receiver to oversee Jefferson County, Ala.,'s debt-ridden sewer system.
U.S. District Judge David Proctor held a status hearing in the case Wednesday in Birmingham, the county seat, and asked county commissioners why they had not taken action to solve the system's financial problems, according to the Birmingham News.
The sewer system is plagued by $3.2 billion of debt, most of which is in troubled variable- and auction-rate mode.
Proctor reportedly also said that he designated special masters in the case to recommend avenues for avoiding the appointment of a receiver.
"My greatest disappointment at this point is I'm not so certain the commission, in particular, understands that," Proctor was quoted as saying. "I'm not so sure the commission understands that this is a great opportunity."
The county is reviewing recommendations made by the special masters and will issue a report in a week, the newspaper said.
In an order filed by the court yesterday, Proctor told parties to revise a 62-page document they filed jointly in November, which detailed issues that they agreed on and those that were in dispute. The issues in dispute covered 44 pages.
Proctor ordered documents in preparation for the March 24 hearing to be submitted by March 18.
Syncora Guarantee Inc., Financial Guaranty Insurance Co., and trustee for bondholders Bank of New York Mellon are seeking a receiver for the sewer system because they claim the county has failed to increase revenues to support debt service payments.