Sunday, May 11,
News staff writer
When it come ups to managing its debt and recognition situation,
Jefferson County have pretty much just been winging it.
The state's most thickly settled county, teetering toward
bankruptcy after amassing $3.2 billion of sewerage debt, lacks
a modern and comprehensive policy covering the sale of
bonds, the hiring of investment bankers and tons of other facets
of municipal finance.
A comprehensive debt direction policy is a common thread
among the country's best-run cities, counties and
states. The best of the policies take most of the judgment
calls from the influence of politicians, specifying
fail-safe procedures on merchandising investings that tin prove
risky, like the floating-rate enslaveds that have got pushed
Jefferson County to the edge.
"It's one of the most of import subjects in
government finance right now," said Jeff Esser,
executive manager of the Government Finance Officers
Association, the professional development organisation for
those employed in the field. "You could compose 300 pages
on effectual debt direction and still not abrasion the
Thomas Jefferson County Committee President Bettye Fine Collins
said the county's fiscal advisors have got researched
the substance and told her the county enacted a rudimentary
debt direction program old age ago, but that it is inadequate in
"We haven't established a thorough policy, to my
knowledge," Wilkie Collins said. "We are working on a lot
of things right now, and that should be one of them."
In 1999, Thomas Jefferson County made a thrust at a policy,
adopting a modest, 12-page written document that sets up a committee
to supervise fiscal hedgerows called interest-rate swaps. Those fiscal contracts were supposed to protect the
county from swinging involvement rates. They didn't work,
and now Thomas Jefferson County is not only paying higher interest
rates, it owes $300 million to trade holders who came out
ahead at the county's expense.
It all stems from the sewer. The county sold $3.2 billion
of chemical bonds to do sewerage fixes and expansions. Rising
short-term involvement rates have got added more than than $3 million a
week to the county's interest payments, leaving some
bondholders unpaid as commissioners scramble to avoid
The county also have about $1.4 billion in other debt,
mostly for a countywide school-construction program.
A stopping point expression at the chemical bond gross sales shows Jefferson
County's debt direction all too often flew in the face
of what the municipal finance community footing "best
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