Jefferson County Commissioners Told Sewer Ratepayer Lawsuit is Effectively Over

Jefferson County CFO John Henry (Source: Solomon Crenshaw Jr.)

The U.S. Supreme Court on Monday declined to hear the appeal of Jefferson County sewer ratepayers from the 11th Circuit Court, effectively ending the county’s bankruptcy proceedings, Jefferson County Commissioners were told today.

“It’s been a long time coming,” Commission President Jimmie Stephens said following the commission committee meeting.

County attorney Theo Lawson said the ratepayers who sued have 25 days from Monday to take further action. That is unlikely, he said.

“I believe when the 25-day period runs after the decision of the Supreme Court, that will effectively end the Jefferson County bankruptcy appeal process,” Stephens said. “It will give us the ability to administer those unsecured creditors. That’s great news.”

Lawson said objectors have time to ask for reconsideration of the case. But he said, “It’s got to be some extremely extenuating circumstances and they can’t be something that you’ve already included in your filing. It’s a done deal.”

Commissioner Lashunda Scales immediately renewed her call for a town hall meeting for county citizens to get a thorough explanation of the sewer situation.

Scales and Commissioner Sheila Tyson have repeatedly noted that many ratepayers will struggle to pay rising sewer rates, especially as water rates are said to be rising as well. Tyson asked if sewer rates could be lowered at some point, to which Stephens said the county needs to stay the course established as it entered bankruptcy.


Rising Credit Ratings

Chief Financial Officer John Henry told commissioners that Standard & Poor’s Financial Services released a report regarding Jefferson County and its refunding warrants. The report showed that the county is moving in the right direction financially, he said.

Henry said Standard and Poor’s affirmed the county’s credit rating at AA with a stable outlook. He added later that the county’s sewer debt was recently upgraded to BBB+ plus from BBB by S&P.

“Everything that we’ve done in the past and everything that we are doing based on what the market is saying and based on what the rating agencies are looking at, we are heading in a really good direction, we’re heading in a strong direction,” Henry said. “I think we need to keep on that path.”

Stephens cautioned against making changes to the bankruptcy plan, including lowering sewer rates.

“The past decade, we’ve worked very, very diligently to make sure that we’re in a sound financial position and to make sure that our debt service is utilized to go to the benefit of the citizens and not the creditors,” the commission president said. “The higher the interest rate, the more the creditors receive and the less money we’re able to apply to the citizens of Jefferson County.”

Scales noted that it was the actions of a prior Jefferson County Commission that brought about the need to file bankruptcy and yielded the rising sewer rates. She said the current commission should be “very intentional” in creating the next budget to make sure “we don’t forget those who helped to put us in a good financial standing.

“I hope this commission will be a blessing back to its constituents who are hit the hardest,” she said. “We need to put something in place – not a United Way but a neutral entity that can assist those who qualify, whether you’re a senior citizen or someone who’s working and can’t afford to pay.”

Stephens questioned the mechanism by which citizens could be given relief on their sewer bills. He added that taking money from the general fund could adversely impact other county services, such as road maintenance.

“You’re taking public dollars to the benefit of a private individual,” he said. “There would have to be a conduit to be able to do that. But, of course, the commission will be receptive to do whatever’s needed and necessary for the people.”

Stephens acknowledged that an entity like the Jefferson County Committee for Economic Opportunity could fill the bill.

“It would be up to them to administer that,” he said. “That would be one vehicle to use.”