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Thread: Jefferson County (Birminham) in Alabama faces bankruptcy

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    Jefferson County (Birminham) in Alabama faces bankruptcy

    Leaders of the largest county in the US state of Alabama have voted to file for a $4.1bn (2.6bn) bankruptcy, the costliest US municipal failure ever.

    Jefferson County has been struggling to avoid bankruptcy since 2008, but recent talks on a deal to restructure its crippling debt broke down. The county sunk into debt after a costly upgrade of its sewer system.

    Announcing the vote result, Commissioner Jimmie Stephens said filing for bankruptcy would not radically change the situation in the county. "Jefferson County has, in effect, been in bankruptcy for three years," he told the Associated Press.

    In September, a deal with the county's creditors, including JPMorgan Chase, saw lenders agree to forgive about $1bn in debt, with the county refinancing another $2bn, and a series of sewer rate increases. However, the negotiations ended some $140m short as terms of the deal shifted, increasing the repayment amount from $2.05bn to $2.19bn.

    Jefferson's mounting debt issues were brought on by a combination of increasing interest rates on bonds, turbulency in the derivatives market and corruption among local government officials.

    At least 21 people, including four former county commissioners, have been convicted or pleaded guilty to corruption-related charges in connection with the sewer's construction and bond financing, according to Bloomberg News.
    http://www.bbc.co.uk/news/world-us-canada-15668788

    In 2008, the GOP's Tea Party branch took control in Jefferson County, Alabama, and ushered in a host of Tea-Party type changes - including the loss of about 40% of tax revenue. Is this a fluke or will it happen elsewhere (like in VA which just saw a similar take-over in its state congress)?

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy




    fail.


    the Tea Party led Republicans to take over Alabama in 2010.


    Because of stuff like this.

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    In the Alabama state government, the take-over was 2010. In Jefferson County (Birmingham) they took over the mayor's office and county commission in 2008. Check it for yourself.

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    The Honorable Mayor William A. Bell, Sr. was sworn in on Tuesday January 26, 2010 as the 33rd Mayor of the City of Birmingham. Up through 2009 we had Larry Langford, who was a Democrat, and - among other things - guilty of both supreme idiocy and, it turns out, bribery, massive fraud, conspiracy, and money laundering, for which he was sentenced to 15 years in prison.

    I am from this area. we had a long line of idiot wasteful projects that put us here. a dome for cripes sakes...


    from good ole Wiki:

    ...Langford and two associates were investigated by the Securities and Exchange Commission for actions which occurred during his tenure as County Commission president involving allegedly illegal transactions which steered County bond business to particular companies in exchange for bribes.[20][21]

    On April 30, 2008, the Securities and Exchange Commission sued Langford in federal court.[22] The lawsuit alleged Langford accepted more than $156,000 in cash and benefits from Montgomery banker Bill Blount in exchange for county bond business.[22]

    On the morning of December 1, 2008, Larry Langford was arrested by the FBI on a 101 count indictment[23] alleging conspiracy, bribery, fraud, money laundering, and filing false tax returns[24] in connection with a long-running bribery scheme.[25] He was led into the courtoom in leg-irons.[26] Also indicted were lobbyist and former state Democratic Party executive director Al LaPierre, and Montgomery investment banker and bond underwriter, and former state Democratic Party chairman, William B. Blount of Parrish & Co.

    While Langford was head of the Jefferson County commission, he engaged in a variable rate auction, and bond swaps, to raise money to help improve the county's sewer system.[27] During that time, Langford is alleged to have received $235,000 in bribes from Blount, some routed through Al LaPierre, to help influence the bond deals. According to the indictment, William Blount helped Langford receive a $50,000 loan, which was used to purchase jewelry, including a Rolex watch, and designer clothes.[28] Blount's firm earned $7.1 million in fees from the bond deals while LaPierre was paid $219,500 by Blount for his help the scheme.[29] Jefferson County banks made approximately $120 million by encouraging the county to refinance nearly all of its bonds using swaps. The result of the bonds has resulted in a $3.2 billion sewer debt which now threatens to bankrupt the county. The government is currently seeking $7.6 million in forfeiture from the three men....
    but sure. blame the tea party. that'll make you feel better.
    Last edited by cpwill; 11-10-11 at 09:21 AM.

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    I'm stunned.

    Just how does a county head towards bankruptcy anyway? I didn't know it was possible to force a bankruptcy on the whole populous that pays the taxes - hope it doesn't ruin their credit, too.
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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    it wont' effect individuals, though it may effect their property valuations. Which is too bad, because Jefferson has some really nice areas. one day, i'll move back home


    but governments can and do do go bankrupt, and as states fill their budget gaps by pushing burdens downward, we're going to see more do so. this will be an interesting precedent case.

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    It has a whole lot to do with the city's central planning. As you know, large cities need to be centrally planned, however, they failed to pay or their waste water (septic/sewer) system. That was after a push some 5 - 10 years ago to update their system. The major reason they failed to pay for the system is that it came at 3 times the estimated cost. The goal of the project was to avoid EPA fines for unsanitary city conditions. There was so much wrong with this whole project. You can blame local, state and federal politians (EPA).

    At the end of the day, those people who live in the county are going to lose value in their homes and get higher tax rates. A lose lose for everyone.
    Last edited by Blue_State; 11-10-11 at 09:41 AM.

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    Quote Originally Posted by Frolicking Dinosaurs View Post
    In the Alabama state government, the take-over was 2010. In Jefferson County (Birmingham) they took over the mayor's office and county commission in 2008. Check it for yourself.
    Not being familiar with Jefferson Counties financial state for the last 10 years, why should I believe that all of its problems are a result of these "Tea-Party type changes" as you say instead of believing Commissioner Stephens ?

    Announcing the vote result, Commissioner Jimmie Stephens said filing for bankruptcy would not radically change the situation in the county.

    "Jefferson County has, in effect, been in bankruptcy for three years," he told the Associated Press.
    This statement, to me, only shows that the Tea-Party type changes have not had enough of an effect to turn around this counties economy enough to force the vote on bankruptcy. You have not made any case for why the previous councils got the 2008 electorate into this situation nor have you said anything about which party controlled it before 2008... A lot of missing information here that could lead to specious or false conclusions !!
    The question is more important than the answer!

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    Quote Originally Posted by Disputatious71 View Post
    This statement, to me, only shows that the Tea-Party type changes have not had enough of an effect to turn around this counties economy enough to force the vote on bankruptcy. You have not made any case for why the previous councils got the 2008 electorate into this situation nor have you said anything about which party controlled it before 2008... A lot of missing information here that could lead to specious or false conclusions !!
    I am not sure how logical that is. They are doing something about the massive problem. They are getting the debt collectors off their back while they work out a repayment plan. Changes don't happen overnight. They had to do something, and their plan includes holding off debt collectors while they gather finances and raise taxes. They are taking...what is that phrase...fiscal responsibility. I really don't care who is in office...they are taking action to clean up the mess.

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    Re: Jefferson County (Birminham) in Alabama faces bankruptcy

    Quote Originally Posted by Frolicking Dinosaurs View Post
    BBC News - Jefferson County in Alabama faces bankruptcy

    In 2008, the GOP's Tea Party branch took control in Jefferson County, Alabama, and ushered in a host of Tea-Party type changes - including the loss of about 40% of tax revenue. Is this a fluke or will it happen elsewhere (like in VA which just saw a similar take-over in its state congress)?
    Did he say the Tea Party was around in 2008? Can someone lend him a history book.
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