Jefferson County Bankruptcy Bites Again: Sewer Bills Will Rise 3.5% in 2023
Jefferson County residents will see a 3.49% increase in their sewer bills next year and can expect a similar increase every year until the county is debt free.
County Commissioner Sheila Tyson said her customers have already called her with concerns about higher than normal sewer bills this year, in addition to multiple complaints she has received about similar issues with water bills.
Tyson voters aren’t the only ones worried about their water bills. Birmingham Water Works (BWWB) customers across the metropolitan area have been reporting missing bills, multiple bills and overstated bills for almost a year.
It is now apparent that sewerage and BWWB customers may be able to attribute their higher than normal bills to the same readings.
According to Jefferson County Environmental Services Director David Denard, Jefferson County’s sewage system bills are based on water volume readings that local water utilities collect for the system in exchange for a percentage of sewer rates.
These readings are the same ones used to calculate utility water bills and when customers in the area receive their bills, the sewer charges along with their water utility bill are displayed.
BWWB has previously said that due to the shortage of meter readers, some people received estimated bills from the fall of last year, which Denard says would also mean sewer customers received estimated bills.
Sewer rates have increased each year in Jefferson County pursuant to the county’s 2013 bankruptcy settlement following the largest and costliest municipal bankruptcy in US history in November 2011.
“The county cited $4.23 billion in debt, including $3.14 billion in sewer debt, and hundreds of millions of dollars owed on general obligation and school term debt, in the filing. balance sheet on November 9, 2011,” former Birmingham News reporter Barnett Wright wrote in 2013.
In the bankruptcy agreement signed by Jefferson County and U.S. Bankruptcy Clerk Scott Ford, rate increases of 7.89% were agreed to each year until October 2018, when the annual increase fell. at 3.49%.
The agreement continued that this rate increase would occur every fiscal year beginning in November until the county had no outstanding balances.
The agreement also contained an adjustment resolution that allowed the county commission to adjust these rates up or down during a fiscal year to prevent sewer rates from getting “too high or too low.”
Jefferson County’s bankruptcy filing made national headlines in mid-2013 as “the largest municipal bankruptcy in U.S. history,” according to a New York Times report.
In June of that year, the Jefferson County Commission voted to pass a resolution accepting an agreement that would begin the county’s deleveraging process.
“The agreements announced today – plan support agreements – are with investment bank JPMorgan Chase & Co.; bond insurers Assured Guaranty, FGIC and Syncora and the seven hedge funds. Together, these parties own approximately 2, $4 billion on the $3.078 billion sewer debt,” the News reported.
The agreed settlement was a Chapter 9 adjustment plan, which allows tax authorities to refinance debt through a series of loans to exit bankruptcy without having to sell assets.
“It’s very difficult to go into a Chapter 9 bankruptcy,” commissioner Joe Knight said in Wright’s story. “Coming out of Chapter 9 bankruptcy is probably even harder. But now we have a shot at coming out of that Chapter 9 with a consensual deal, with some plans in place. We may not have that opportunity again.
In a 2013 timeline detailing the county’s path to bankruptcy, AL.com staff reporters wrote that much of the debt came from borrowed money used to rebuild and repair sewers in Jefferson County. , but has continued to increase over the years.
“1997: County begins six years of massive borrowing for sewer repairs. He is also using some of that money for new sewers not required under the consent decree.
1999: The second short-lived business tax – In an attempt to grab hog money for themselves, Jefferson County lawmakers pass a bill that earmarks nearly $30 million from local tax funds the projects of the legislators. The department obtains from the court that it orders this new tax and continues to collect the first professional tax. In November, legislators repeal the old business tax law.
2000: Jefferson County challenges acts of legislature in court and wins. A judge rules that the repeal was not valid – thus reinstating the first business tax – because the repeal was passed under the practice that only local legislators vote on local bills.
2004-05: Jefferson County borrows $1.05 billion to build schools. This is funded by an additional one-cent sales tax,” the timeline reads.
That county tried to pay off the debt in subsequent years through rate increases, closing courthouses and nursing homes, but ended up filing for bankruptcy six years after borrowing to build schools.
According to Jefferson County Public Information Officer Helen Hays, the county does not have a timeline for debt repayment.
Tyson said while she can relate with her constituents to the stress of rising rates, there is little she or the other commissioners can do to alter the financial structure of the deal.
“If there was anything I could do, you know I would do it,” Tyson said. “I’m just stuck but planning to do whatever I can to help because I get the same bills as them.”