Economic Beast Feasts on the Weak
Many years ago while working as a reporter I wrote an article about a dangerous construction zone on a local highway.
Many years ago while working as a reporter I wrote an article about a dangerous construction zone on a local highway. A series of accidents had occurred along that stretch of road, including a double fatality. The state department of transportation spokesman said alcohol and/or speed was involved in all the accidents and the narrow, twisted lanes through the work zone were not the problem.
I disagreed. There were a lot of construction zones around the region and only one had been the scene of multiple serious accidents. There weren't more drunks or speeders traveling that particular section of road, the layout was dangerous and trapped the unwary or inebriated.
I though at the time is was very much like a dangerous beast that only kills the weak and lets the strong survive.
Our economic situation over the past few years is very much the same. Most water utilities around the country are struggling with the double whammy of aging infrastructure and a down economy. The vast majority will survive, but the weakest will fall.
Torn apart by a decade-long cancer that consumed it from within, Jefferson County, AL, fell victim to the Economic Beast in November. The county filed the largest municipal bankruptcy in U.S. history in an effort to retake control of its struggling sewer system and wipe away as much of its $4.15 billion debt as possible.
The size of Jefferson County's bankruptcy overshadows the previous record holder, Orange County, CA, which filed bankruptcy in 1994 over debts totaling $1.7 billion.
In the 1990s, a federal court forced Jefferson County, home to Alabama's largest city, Birmingham, to begin upgrading its outdated and overwhelmed sewer system to meet federal clean water standards. Faced with a huge and growing debt, the county became involved in a series of complex deals with variable interest rates that were later shown to be laced with bribes and influence-peddling. A string of elected officials, public employees and business people have been convicted of wrong-doing in the case.
Is it fair to blame the Economic Beast for the county's demise? Perhaps not. Certainly the county was felled by the cancer from within – the greedy, corrupt few who betrayed their fellow citizens and oath of office. But the county well might have survived if not for the economic downturn.
Of course, the county isn't dead: Chapter 9 gives it breathing room to plan how to deal with its debt. In such cases, the court functions are generally limited to approving the petition, confirming a plan of debt adjustment and ensuring implementation of the plan.
Whatever the outcome, Jefferson County's customers will be burdened with the resulting exorbitant sewer bills for decades to come. My heart goes out to them.
By the way, the Birmingham Water Works is a completely separate entity and is not connected to Jefferson County and their financial issues in any way. The BWW Board issued a statement saying the agency is in the strongest financial position it has seen in years.
James Laughlin, Editor