A week from today, Jefferson County will officially begin to exit the largest municipal bankruptcy is US history. In an article published last week, the Wall Street Journal questioned if the plan was too costly.
The county's plan calls for refinancing $1.9 billion of debt but some financial analysts contend the types of bonds the county will attempt to refinance will cost more to pay off in future. The estimated cost could be close to $6.9 billion to pay off with interest at the end of 40 years.
Jefferson County Commissioner Jimmie Stephens said it's fairer to refinance the debt over the length of time so the cost is shared and is not a burden to one group.
"So my children pay for what they use and what they are working on and we pay now what we are working on and we are using," Stephens said.
Jefferson County Commission President David Carrington compared it to a mortgage. By the time you pay off the mortgage over 30 years, the cost will be more than the original mortgage.
"I'm comfortable the debt structure we outlined is good for the ratepayer and the county will have sufficient revenues to payoff the debt in the future," Carrington said.
But not everyone agrees.
"That article reinforces what we have said all along it's too costly," Commissioner George Bowman said.
Bowman has voted against the plan to exit bankruptcy because of an almost 28 percent increase in sewer rates over the first four years of the plan.
"So while everyone is going around patting themselves on the back we got a plan to come out of bankruptcy is going to be borne by the poor," Bowman said.
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