It's the sewer line of corruption and it runs right through Wall Street.
"Alabama’s largest county OKs deal to skirt bankruptcy on $3.1b debt; But the plan still needs backing of state lawmakers" by Jay Reeves, Associated Press / September 17, 2011
BIRMINGHAM, Ala. - Leaders of Alabama’s largest county yesterday chose to settle with Wall Street over $3.1 billion in debt from a sewer system overhaul rather than go through with what would have been the largest municipal bankruptcy in US history.
Jefferson County Commissioners agreed in principle to the deal, but the state legislature must take action in a special session to complete the pact, and commissioners said bankruptcy was still possible if that legislation is not passed.
Commissioner Jimmie Stephens, who oversees county finances, said there was no certainty legislators would approve the mix of local tax increases and budget changes required to make the deal final. “It’s a problem,’’ he said.
Jefferson County has been trying to avoid filing bankruptcy linked to the sewer system debt since 2008. Its problems stem from a mix of outdated sewer pipes, the economy, court rulings, and public corruption.
The primary effect of a settlement for county residents would be higher monthly bills for sewer service. Jefferson County has about 658,000 residents and is home to both Alabama’s largest city, Birmingham, and its medical and financial centers.
The proposed settlement with investors led by JPMorgan Chase & Co. includes the lenders agreeing to forgive about $1 billion in debt, the county refinancing about $2 billion, and a series of annual sewer rate increases.
They will get that billion back -- and more!
Related: Wall Street Craps on Alabama County
And your local leaders passed the buck to the state legislature.
The Alabama Constitution gives state lawmakers a high level of control over county finances, so the legislature must take several steps to seal the debt deal. They must approve formation of a public corporation to take over the sewer system from the county, agree to fund the settlement if the county falls short, pass legislation allowing the county to reallocate money already earmarked for other uses, and somehow replace lost revenues.
All so thieving banks can get paid.
It was not immediately clear whether the agreement has legislative support. But Governor Robert Bentley welcomed it and said he would work with lawmakers and the county so that the necessary laws can be passed.
Banks control Bentley.
“It may have been easier for the Commission to file for bankruptcy, but this settlement will result in a much better deal for the ratepayers and citizens of Jefferson County and for the state, with more than a billion dollars in debt reduction for the county,’’ Bentley said in a statement.
A bankruptcy filing in this case would have overshadowed the record one filed by Orange County, Calif., in 1994 over debts totaling $1.7 billion.
JPMorgan welcomed the agreement....
Shouldn't that tell you something right there?
The proposed settlement could serve as a blueprint for other states and counties that run into trouble over borrowing, said Matt Fabian, managing director at Municipal Market Advisors.
“The prominent takeaway is seeing the concessions that Jefferson County was able to wrest from its creditors, which is usually a very difficult thing to do from muni bond investors,’’ Fabian said.
Related:
Municipal Bond Milking
Barney Frank Benefited From State Debts
So the parasitic politicians that serve the banks are also profiting from your indebtedness, fellow citizen?
All of a sudden the paper and the politics all make sense, huh?
A federal court forced Jefferson County to begin a huge upgrade of its outdated sewer system to meet US clean-water standards in the 1990s, and officials used bonds to finance the improvements.
I have never understood how promising future tax money plus interest to "investors" was good for the taxpayer.
Outside advisers suggested a series of complex deals with variable-rate interest that were later shown to be laced with bribes.
Those would be the WALL STREET GUYS! Paper kind of vague about it, huh?
Loan payments rose quickly because of increasing interest rates as global credit markets struggled, and the county could no longer afford its payments. Meanwhile, a string of elected officials, public employees, and business people were convicted of rigging the transactions that helped put the county in so much trouble.
Those convicted in the graft investigation include then-Birmingham Mayor Larry Langford, a former president of the Jefferson County Commission; and former commissioner Chris McNair, whose daughter was one of the four black girls killed in an infamous Ku Klux Klan church bombing in Birmingham in 1963. Both Langford and McNair are serving federal prison terms.
The sewer debt isn’t Jefferson County’s only problem, though. It already has laid off about 550 of its 2,300 workers and reduced government services because courts struck down an occupational tax and business license that provided more than $74 million annually for its operating budget. The county has closed satellite offices and reduced hours, and long benches now line a hall in the main courthouse where residents often have to wait hours for the simplest transactions.
But hey, JP Morgan is getting paid and happy so meditate on that while you wait for the state that loves you to serve you and is all about protecting you.
Remember, American, that's what separates us from all the bad guys out there.
--more--"
Also see: Mass. Gets Credit Boost From Standard & Poors
I guess the Globe can't make the connection.
