The Multi-million dollar question for Salisbury taxpayers - Is the City of Salisbury going to end-up a financial basketcase like what happened in Jefferson County, Alabama
Sewer construction and bond swap controversy
Two extremely controversial undertakings by the county account for the majority of this debt. First was a massive overhaul of the county-owned sewer system, and second was a series of risky bond-swap agreements. Both have been scrutinized by federal prosecutors, with several former county officials convicted of bribery and corruption.[citation needed]In 1995, Jefferson County entered into a consent decree with the Environmental Protection Agency regarding sewer overflows into the Cahaba River watershed. A total of $3.2 billion of new construction was subsequently contracted, both to comply with the consent decree and to expand the system to newly-developing areas and increase the number of ratepayers financing the construction. Several engineers, building contractors and commissioners have since been tried and convicted in Federal Court. On May 12, 2010, the U.S. Court of Appeals for the Eleventh Circuit affirmed the convictions in large part.[citation needed]
A series of controversial interest rate swaps, initiated in 2002 and 2003 by former Commission President Larry Langford (removed as the mayor of Birmingham after his conviction[4]), were intended to lower interest payments, but have, in fact, had the opposite effect, increasing the county's indebtedness to the point that officials have issued formal statements doubting the county's ability to meet its financial obligations. The bond swaps are at the center of an investigation by the United States Securities and Exchange Commission.[5]
In late February 2008 Standard & Poor's lowered their rating of Jefferson County bonds to "junk" status. The likelihood of the county filing for Chapter 9 bankruptcy protection has been debated in the press.[6] In early March 2008, Moody's followed suit and indicated that it would also review the county's ability to meet other bond obligations.[7]
On March 7, 2008, Jefferson County failed to post $184 million collateral as required under its sewer bond agreements, thereby moving into technical default.[8]
5 comments:
Joe - this article in Jefferson County sounds like a recording as to what has transpired in Salisbury.
Woe - Salisburians, you had better take heed.
Mark my words, the City Attorney will be called as a witness in the Salisbury case and corruption will be found. Why on earth Jimmy Boy keeps him as the City Attorney just does not add up.
I would like to understand more about how the corruption was discovered and prosecuted. It would be nice to know what agencies care about these matters and might help Salisburians to get to the bottom of what happened. WIll anyone be held accountable?
From what I read about the case by Googling it I found that the accrued attorney's fees were rolled over into and paid by a taxpayer funded muni-bond. Then the Feds moved-in and SEC and people started going to jail eventually.
Sounds like the way Salisbury is going.
What's a dilemna?
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