EPA Consent decree: Bankruptcy near for Jefferson County

Jefferson County Alabama that is.

A financial crisis has Alabama's Jefferson County on the verge of a $4.2 billion bankruptcy action. The county is home to Birmingham, the state's largest city.

MSD has long been a problem for many in our community with such a large debt and our involvement in a similar consent decree with the EPA. MSD's own Bud Shardein has often cited Birmingham as one example of who we are following in this regard.

While the current MSD debt is listed at approximately $2.8 billion it is set to dramatically rise due to the consent decree we in Louisville are forced into accepting.

Bud Shardein has stated it will cost us an additional $800 million (and that number will rise daily)to comply with the consent decree we agreed to with the EPA. With the principal and interest involved that brings our total MSD debt to approximately $4.5 billion.

Note the similarities. Louisville is the largest City in Kentucky and we have the same approximate debt as Birmingham.

Birmingham should not be a model we follow.

In Birmingham Alabama for example the sewer rates have more than quadrupled in recent years because of this agreement and the bonds that were issued to pay for it.

High Finance Backfires on Alabama County - New York Times

As a matter of fact according to Bloomberg the rates have increased a staggering 329% since 1997.

Bloomberg.com: Worldwide

The county's proposal to creditors is to cap payments from sewer customers at $115 million a year and supplement that with about $27 million in extra revenue from the county's 2005 sales tax increase dedicated to repaying school bonds.

One has to wonder how new schools will be funded now.

We have problems of our own here in Louisville. MSD last year used a 32% rate hike for new revenue and yet we still have major sewer problems. Just recently after a storm there was approximately 11 million gallons of raw sewage that spewed from the sewers through manholes and into our neighborhoods.

This is not a one time incident.

We deserve full accountability and transparency by MSD and we deserve to have oversight by the Public Service Commission (PSC) just as LG&E does.

Our future very well may depend on it.