It's finally happened: Jefferson County, Alabama faces Doomsday. Its finances have finally imploded, as the county will probably enter into bankruptcy:
"BIRMINGHAM, Alabama (Reuters) - Alabama's debt-ridden Jefferson County laid off about two-thirds of its 3,600 employees on Monday because of plummeting revenues, a move that will sharply curtail services in areas ranging from roads to courthouses.
The cuts are just the latest blow to Jefferson, whose population of 660,000 includes Birmingham, the state's largest city and its economic powerhouse. They come after the county racked up around $4 billion in debt by using exotic financial instruments to fund a revamp of its sewer system.
The work-force cuts will hit the roads and transportation, revenue and security departments, and reductions will also affect the courthouse and information technology department as well as laborers paid on an hourly basis, according to a senior county official...." Article
This angers me a little, as the media in Jackson has been negligent in its duty to report local city business of this nature to the public. Unless one reads this blog, watched a couple of minor stories on WLBT that didn't get into the details, or read the Northside Sun, one would have no idea Jackson is considering refinancing some of its bonds with these same "exotic financial instruments." Several reporters have told me it's over their heads, people don't care, or it's just too much to cover. The Clarion-Ledger is not interested in this story and the one publication that should cover it, the Mississippi Business Journal, is too busy writing puff pieces to make their advertisers happy, as it should be called the Business Edition of VIP Magazine or something similar. But hey, they support Jackson as they moved downtown, so in the eyes of Downtown Jackson Partners, which should be concerned about this matter, they are ok people.
Well, the article above is WHY they should cover this story. The time to report it is not after the budget has blown up and the people have no one left in city government but before it happens. No one in the media has grilled Rick Hill and asked him some tough questions. He has yet to explain what happens if the interest rates move the wrong way. He was once asked if what happened to Jefferson County could happen to Jackson. He said it couldn't but his answer makes one wonder if he even understood what took place in Alabama. Mr. Hill has not been forthcoming with details and still has not explained why the fees are much higher than the fees paid for the original underwriting of the bonds. All he has said is it can't happen here and to trust him. Sorry Mr. Hill, I've seen too many of these weapons of financial destruction cripple too many budgets around the country to accept that from a bureaucrat whose answers make me wonder if he even understands how these things work.
Don't take my word for as gospel on this subject. I have collected all my posts on this subject and placed them in a sidebar on the lower right-hand side of this blog page. If anyone in the media wants to cover this and doesn't understand the subject matter, contact me. I'll be more than happy to explain it to you, as on this subject I care more about the reporter just getting the story out there than giving me credit. I have posted all available public documents on these refinances (they were obtained through public records requests). Additional public records requests have been submitted for information on the revised proposal. Unless you want what is taking place in Jefferson County to happen here as well, it's time to quit whining how this is over your heads and start learning how this stuff works.
Tuesday, August 4, 2009
Jefferson County faces Doomsday
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11 comments:
... and the one publication that should cover it, the Mississippi Business Journal, is too busy writing puff pieces to make their advertisers happy as it should be called the Business Edition of VIP Magazine or something similar.
Great line. The MBJ has become a next to useless periodical. They should change their artwork to a cheerleading theme.
Notice how they were pimping Perkins Rowe in their Baton Rouge story as being part of the downtown success? Guess they didn't notice Perkins Rowe is waaaay out from Downtown (Its on Perkins and Bluebonnet) and they somehow missed how the project is going under and how many liens are being places on it as the owners are suspected of engaging in fraud.
Well it seems to me that all we have to do is take the Wizard's advice, close our eyes, click our heels together, repeat his mantra and go deep on some new taxpayer funded debt to build a new arena downtown. THAT will solve everything.
Actually we do need an arena. The Coliseum is a complete joke and embarrassment to the area.
Absolutely. Build the arena. It is our magic bullet. It will all be green grass and high tides!
They may call out the National Guard in Jefferson County.
BIRMINGHAM, Ala. – The sheriff in Alabama's most populous county may call for the National Guard to help maintain order, a spokesman said Tuesday, after a judge cleared the way for cuts in the sheriff's budget and hopes dimmed for a quick end to a budget crisis.
...
Hale may have to cut as many as 188 deputies and almost 300 civilian workers out of more than 700 employees total because of Boohaker's ruling, Christian said. That would leave just enough workers to staff the county's two jails, which hold about 1,000 prisoners on average.
NOW think about that same scenario playing out in Jackson
Never said it was a magic bullet. I just we need a new one. When it should be built and how it should be funded is another issue.
I have to agree with KF on this one.
So do I. We need to avoid rate swaps like we need to avoid the plague.
Wall Street pushes Jefferson County closer to the brink.
NEW YORK (Dow Jones)--The Bank of New York Mellon Corp. (BK) Monday filed suit against Alabama's financially-strapped Jefferson County, seeking to expedite payments for holders of the county's $3.2 billion in outstanding debt.
The bank, which is the trustee for the owners of Jefferson County's auction-rate and variable-rate debt issued by the sewer system, argues the county failed to pay $331.7 million in principal payments on warrants due for redemption since June 2008.
Birmingham has lost 14% of its population since 1990. The Governor and Legislature of Alabama are working on a rescue plan. Their solution. HIGHER TAXES.
Say NO Mayor Harvey Johnson.
The plan in Alabama is to impose a 0.5% percent occupational tax on everyone WHO WORKS in Jefferson County -- which includes Birmingham. Everyone will pay, there will be no exceptions.
If the same thing was to happen in Jackson due to the extreme recklessness of the bond schemes being proposed by Rick Hill it wouldn't matter where you lived in the metro area, if you worked anywhere inside of the Jackson city limits you will pay this tax.
Jackson residents would be royally screwed as we already pay the highest ad val taxes in all the metro area.
Mayor Harvey Johnson. You can not put Jackson in this spot. You must refuse to advance the irresponsible esoteric bond schemes to refinance Jackson's debt.
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