Shelby County officials, state legislators weigh in on JeffCo bankruptcy
Published 5:40 pm Thursday, November 10, 2011
By BRAD GASKINS / Staff Writer
COLUMBIANA – Shelby County officials and state legislators reacted Thursday to Jefferson County’s Chapter 9 bankruptcy filing.
State Sen. Cam Ward, R-Alabaster, called it “a real tragedy” and a “stain on all our reputations.”
State Sen. Slade Blackwell, R-Birmingham, urged the Jefferson County Commission to reconsider its Nov. 9 bankruptcy decision.
Shelby County officials, meanwhile, said the largest municipal bankruptcy in the U.S. would send economic ripples throughout the state. Still, they said, the county should remain mostly unscathed.
County officials do not expect the bankruptcy to affect the county’s Triple-A credit rating.
Shelby County’s next large financial project – refinancing existing water system debt – isn’t scheduled until 2015. When the county eventually seeks refinancing, it will rely on its “historically sound fundamental financial condition to overcome any questions” lingering from the bankruptcy, Shelby County Manager Alex Dudchock said.
Some of the county’s cities could have a tougher time in the bond market.
“Some that may have been able to issue debt in the past may not be able to in the near future,” Dudchock said, “or may have higher rates and issuance costs than what they may have gotten in the past.”
The county does not expect capital markets to close completely, Dudchock added. The short-term impact on Shelby County’s recovery in employment and business recruitment and retentions is unknown.
County Attorney Butch Ellis said Shelby County’s credit and reliability would overcome any adverse reaction that might come from the bankruptcy.
“While there may be a general dampening of willingness to loan money, it wouldn’t be very specific to Shelby County,” Ellis said.
Ellis said Jefferson County is now paying for “past sins” and “probably had no other alternative” than to file for bankruptcy.
“I’m sure the (Jefferson County Commission) is doing what they think is best for Jefferson County,” he added.
Ellis also briefly recalled Shelby County’s brush with bankruptcy in the early-1990s.
Sen. Ward, who represents portions of Shelby, Jefferson and two other counties, said Jefferson County’s bankruptcy is “a black eye on the whole state.”
“There was obviously a lot of public corruption which led to this situation,” Ward said, “but the current group of commissioners have really done everything they can to avoid filing for bankruptcy. They gave it their best efforts.”
The current Jefferson County Commissioners are a “very honest and capable group” that are “working hard to clean it up,” Ward said, adding that the current commissioners “got dealt a bad hand of cards.”
Corley Ellis, chairman of the Shelby County Commission, said he doesn’t “foresee any negative impact on Shelby County from this.”
“My concerns are for the citizens of Jefferson County and our friends and neighbors there,” Corley Ellis said. “Hopefully this will be a point where we can move forward as a region and start fixing the problem.”
More than 50 percent of Shelby County residents work outside of the county. And as one of seven counties of the Greater Birmingham area, Corley Ellis said Shelby County has a vested interest in seeing its neighbors succeed.
“We do feel like we’re in this boat with them, and we’re rooting for Jefferson County in hopes that they’ll pull through this, more for their sake than ours,” Corley Ellis said. “For the region, we need and hope and want Jefferson County to do well.”