If you remember this post from late 2008, Jefferson County was hit hard by a bunch of external forces that ruined them financially (auction rate security freeze, rate spike, recession, downgrades, interest rate swap default etc). To this day they are trying to stay out of bankruptcy with $3.9 Billion of sewer debt they are unable to service. Bond insurers are also threatening to sue the County for failing to disclose pertinent financial information on the 2003 sewer "refunding" deals (Bond Buyer). S&P is threatening to downgrade their sewer revenue bonds to default if they fail to pay principal or interest (WSJ). It seems like they are already insolvent..
Bank of New York Mellon Files for Jefferson County Sewer Receiver (BondBuyer)
Jefferson County Defaults on $46M of Accelerated Principal (BondBuyer)
Special Masters: No Jefferson County Resolution (BondBuyer)
Price $75.53, Yield 16.15% (Finra Data)
2/2013, 5% Sewer Revenue Capital Improvement Warrants w/ FGIC
Price $53.53, Yield %24.57 (Finra Data)
2/2015, 5% Sewer Revenue Capital Improvement Warrants w/ FGIC
Price $49.55 (Finra Data)
As a result of the occupational tax blow in January (which provided 25-30% of general fund revenues according to sources below) the County is cutting costs drastically and might have to raise sewer fees. They let go of 3,600 employees on Monday and now the public safety line could get whacked by $4.1 Million, which means the National Guard could be called in (Sheriff said). Their most recent audit is 9/30/2007 but check out the Dept. of Finance website which shows material event notices. I'm sure their debt service fund is itching for a few general fund transfers right now. This could relieve some pressure though - Compromise on an Alabama Tax (NYT).
Local CBS news video:
More articles:
Trustee Sues Jefferson County, Ala On Behalf Of Bondholders (WSJ)
Sheriff Asks for National Guards Help (CBS42)
Alabama county lays off 1 in 4 workers after bond fiasco (CSMonitor)
Lawmakers reach deal on Ala. county crisis (AP)
Inept and corrupt (TimesOnline)
Guard troops may be needed in troubled Ala. county (AP)
Alabama's Cash-Strapped Jefferson County To Furlough Workers (WSJ)
National Guard Needed To Protect Alabama County From Fatal Interest Rate Swaps (BusinessInsider)
Alabama's Jefferson County makes massive job cuts (Reuters)
"Bankrupt" Jefferson County.. Summons National Guard To Maintain Order (ZeroHedge)
JOEY KENNEDY: In Jefferson County, we get the government we deserve (AL.com)
Alabama county scrambles to save itself from collapse (HeraldTribune)
Alabama Area Reeling in Face of Fiscal Crisis (NYT)
Rallying Jefferson County employees chant 'Where is the money" (AL.com)
Deputies say Jefferson County employee arrested, bomb threats (AL.com)
Other Posts on Municipalities:
California Issues IOUs, California GO Bond Bets (7/1/09)
Oakland Denies Bankruptcy Rumors, General Fund Drying Up (6/9/09)
Time To Buy S&P National Municipal Bond ETF? (MUB) (10/20/2008)
Current Health of U.S Municipalities (Videos / Links) (10/19/08)
Jefferson County, AL - Possibility of Biggest Municipal Bankruptcy In History (10/18/08)
Distressed Detroit (July 12, 2008)
