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BIRMINGHAM, Ala. (WIAT) – Rates will be higher for Jefferson County Sewer customers starting November 1, 2013.
The county commission approved rate increases as part of a multi-billion dollar debt restructuring plan.
The bankruptcy exit plan would trim $3.2 billion in debt to $1.8 billion and supporters argue that without it, future sewer rate increases would be even higher. Still many customers are critical of the plan. Some say they’re being asked to pay for bad deals that they had no part in.
“This impact is hitting them right in their pockets and it will continue hitting them for forty years, their children, their grandchildren,” said Jefferson County Commissioner George Bowman.
“A fair deal is one where nobody likes it and everybody can live with it,” said David Carrington, Jefferson County Commission President.
If your monthly sewer bill is $38 now in five years it could be more than fifty. Starting this November residential customers will see a $5 base fee increase and business owners will see at least that on top of a 3.49 percent rate hike.
Across the board annual increases could start next year. The plan outlines four years of 7.89 percent increases followed by 3.49 percent rate increases for forty consecutive years.
“Most of the people on fixed incomes got to pay this money. It’s a disgrace and they don’t care they don’t have a heart for nobody,” said ratepayer Olivia Thompson.
“We elected these people to office to represent the people, not the bankers,” said Kerry English.
It passed by a 3-2 vote. Commissioners George Bowman and Sandra Little Brown voted no.
“The economy has gotten worse. People stand to even lose food stamps and the burden of just a $5 base fee plus seven-point increase in the rates is just going to be real hard for people to make it,” said Sandra Little Brown, Jefferson County Commission, District 2.
“Even though it’s unpopular the commission says that stepping up rates slowly over time is more fair than the alternative if a receiver were to make some large jumps in those rates immediately, but that could still happen.”
“I think what we need to realize is that the county borrowed some money, there was fraud associated with that money, that the creditors that the creditors, particularly JP Morgan has cut a $3.1 billion debt plus $750 million in fees to about $1.8 billion. And I’m convinced that $1.8 billion is a fair and reasonable settlement,” said Carrington.
“I don’t know if it’s the best deal obviously if we could get the debt down to a billion dollars that would be best. I think the benchmark is a fair deal.”
Carrington said depending on revenue and how much the sewer system generates, the rate increases could be lower in the years to come. Commissioners will still have the option of adjusting them downward.
“The creditors are not overjoyed with this plan. The trustee would love to put back in the sewer receiver and increase rates 25% three times over a year,” said Carrington.
“The non sewer users are paying 2 fold, 1 through their property taxes and 2 through their dump fees when the septic tank is pumped,” said Carrington.
The creditors are set to vote on the plan by October 8th.
To help lower bills Commissioner Carrington wants to start a foundation to pay for plumbing work on homes with older sewer connections.
Copyright 2013 WIAT-CBS42