JefCo Receiver's Reaction to Bankruptcy Decision

Sewer Receiver: Jefferson County Commission Decision "Devastating"

Jefferson County sewer receiver John Young, Jr. said today that Jefferson County Commissioner's decision to file the largest municipal bankruptcy in U.S. history is a "catastrophic mistake and devastating" for customers of the wastewater system.

"This decision by the Jefferson County Commission has devastating consequences for wastewater customers, citizens of Jefferson County and the State as a whole," said Young. "All of those involved except the Commissioners wanted the settlement and were working to make a settlement a reality. This decision will cost wastewater customers billions of dollars."

Young said the decision "flies in the face of common sense. The State of Alabama desperately wanted a settlement, the creditors wanted a settlement, the business community wanted a settlement and the Commissioners just turned their backs and walked away. This utterly irresponsible act makes the dark cloud hanging over Jefferson County even darker."

Young said the settlement agreement in place before the Commissioners contained many benefits to customers that now go away. Those include more than $1 billion in concessions from the creditors on the $3.14 million sewer debt, about $1 billion in interest savings that come with the moral obligation of the State of Alabama and a low income assistance program that would have benefitted many customers. Most importantly, said Young, the settlement would have meant a 6.5% rate increase for residential and non-residential customers that will now have to be "significantly higher" due to the Commission's decision to file bankruptcy.

"Residential and non-residential customers represent more than 95% of our revenue, and after four years without any rate increase, these customers were looking at an increase that was less than outlined in the original term sheet," said Young. "Now, as a direct result of the Commission's action, we are required to move forward with increases that will be significantly higher than what was in the settlement rejected by the Commissioners. The Commissioners all said today they wanted to do what is best for residents of Jefferson County, and they did just the opposite."

For more information about the wastewater issue, visit JeffCoWastewaterFacts.com.