(Updates with statement from Alabama Governor Robert Bentley beginning in third paragraph.)
Nov. 9 (Bloomberg) -- Alabama Governor Robert Bentley pledged to help Jefferson County find a legislative solution to its $3.14 billion debt load as local officials were set to resume deliberations on either a settlement with creditors or a record municipal bankruptcy filing.
County commissioners will convene at 1 p.m. local time, Commissioner Joe Knight said yesterday after they recessed a closed meeting on the plans.
Bentley released a statement last night in support of a settlement deal, saying he had met yesterday with the president pro tem of the state Senate, Del Marsh, and the speaker of the House of Representatives, Mike Hubbard, to discuss the county’s sewer debt and other fiscal problems.
“All three of us are 100 percent committed to solving this issue in the Legislature,” Bentley said. “My administration and the legislative leadership stand ready to work with the rest of the state Legislature in a special session. This is a problem that can and must be solved for the good of both Jefferson County and the entire state.”
A provisional agreement with creditors led by JPMorgan Chase & Co. and approved by commissioners in September included $1.1 billion in concessions on the debt and called for sewer- rate increases of as much as 8.2 percent for the first three years.
JPMorgan, which arranged most of the bonds, would take the biggest loss. The county and creditors are $140 million apart, Commission President David Carrington said in a press briefing Nov. 7.
The commission reviewed a final version of that agreement yesterday, and will decide between accepting it, continuing to negotiate or file for Chapter 9 bankruptcy protection, Knight said.
The county’s 25-member legislative delegation has been unable to unite behind measures needed to implement the tentative settlement, including ways to generate revenue for Jefferson’s strained general fund.
Any member of a local delegation has been able to block a law that applies to his or her jurisdiction under a tradition of “local courtesy.” Should the full Legislature act on the financial crisis without local approval, internecine political warfare would result, Jefferson County lawmakers have said.
--Editors: Jerry Hart, Mark Schoifet, Stephen Merelman
To contact the reporter on this story: Margaret Newkirk in Birmingham at firstname.lastname@example.org
To contact the editor responsible for this story: Mark Tannenbaum at email@example.com