Officials in Jefferson County expect to hear back from creditors on what they say is their final offer to settle the county’s $3.14 billion sewer debt.County officials have asked creditors, led by JPMorgan, to write off $1.17 billion of the debt and provide $19 million of a $20 million relief fund for taxpayers who can’t pay their sewer bills. The counter-proposal also caps a sewer rate increase to no more than 8% a year for 3 years, and 3% for every year following, the Birmingham News reports.
The plan comes in response to a proposal from the creditors, submitted last month, which agreed to erase $1 billion of the debt, and asked for an 8% increase for five years. Several county commissioners said they could not agree to the rate increases.
Commissioners say they expect to get a response from creditors by tomorrow, and are prepared to authorise a $4.1 billion Chapter 9 municipal bankruptcy — the largest in U.S. history — if no deal is reached.
“I have no inclination to drag this out any longer,” Commissioner Jimmie Stephens told the Birmingham News. “Nothing is going to change in the next week. … Now that the commission has given its final and best offer, it’s time for the creditors to decide whether to take it or not.”
Alabama state officials are furiously trying to work out a final deal in New York this week. After ignoring the county’s bankruptcy struggles for years, Gov. Robert Bentley has agreed to back a deal with the state’s good credit, and has said he will consider calling a special legislative session to try to help solve Jefferson County’s structural budget problems.
Jefferson County leaders will meet Friday morning to decide whether to accept a deal or file for Chapter 9 municipal bankruptcy.