If WBHM’s recent shift away from classical music baroque your heart, then there’s not much we can do for you (except maybe suggest Pandora). In the meantime, Birmingham’s public radio station is taking a greater interest in local news, even bringing newspaper people on the air.

And, they let us sit on the good furniture.

Beginning this week, WBHM will feature Wednesday segments with Birmingham Weekly columnist Kyle Whitmire (I promise I won’t write about myself in the third person again) and Birmingham News columnist John Archibald (booo!!!).

Archibald gets the morning shift, with a segment called “Plugged.” It promises a more heady agenda, focusing on hoity-toity themes. This week’s segment, which you can hear here, focused on trust, whatever that is.

Meanwhile, I get the afternoon shift, talking about who’s backstabbing whom at City Hall and County Commission. The first segment focused on Jefferson County’s last minute attempts to avoid bankruptcy, the mayor’s wrecked plans for free bus fare and his pesky problem of being sued by the SEC.

Not that this is any sort of competition, but in our first week, I totally whipped Archibald at this radio game. However, he does have a better head shot than I do, which through the wonder’s of Photoshop, I’ve now made even better. My photo, which is at least five years old, dates from my first pathetic attempt to grow a full beard.

But neither of us topped the radio professional. Yesterday, WBHM’s Tanya Ott took Mayor Larry Langford to task for his recent unpleasantness with the SEC and on-going Justice Department investigation. According to Langford, the federal investigations into him are the evil machinations of his campaign opponent Patrick Cooper and, of course, the media. It’s all one great conspiracy.

I’m still waiting on my black helicopter.

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Commission President Bettye Fine Collins discusses Jefferson County’s options as clock runs out.

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Read the full story and more here.

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SEC sues Langford, Blount and LaPierre

As expected, the SEC has filed a lawsuit in federal court here against Mayor Larry Langford, Montgomery investment banker Bill Blount and lobbyist Al LaPierre. The SEC’s complaint is a civil lawsuit, so nobody is getting arrested or going to jail. That’s the Justice Department’s end of things and they’re still working at it.

In the meantime, the SEC wants Blount, LaPierre and Langford to repay money they received in various bond deals from Langford’s tenure at the Jefferson County Commission. According to the lawsuit, Blount paid off more than $150,000 of Langford’s personal debts, while Langford directed more than $6.7 million in fees to Blount’s investment firm, Blount Parrish.

Read the full story

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If the commission approves, Jefferson County will pledge surplus sales taxes to help meet debt service on its sewer bonds, Commission President Bettye Fine Collins said in a press conference Wednesday. Currently the county has only pledged net sewer revenues — money from ratepayers minus operating costs — to pay down the $3.24 billion in sewer debt. In recent years, the net sewer revenues have average about $130 million per year. After recent market events and Jefferson County’s technical defaults, annual debt service on the sewer bonds could rise to $250 million or more, Collins said.

In 2004, the county enacted a one-cent sales tax hike for school construction. Then-Commission President Larry Langford championed the tax increase. Today, the sales tax produces more revenue than needed to pay the school bonds, Collins said.

However, it will take an act of the Alabama Legislature to redirect the surplus revenue.

Read the full text of Collins statement here.

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Birmingham city councilor William Bell and about two dozen supporters gathered at noon Monday on the steps of the Jefferson County Courthouse to urge certification of the special election for the District One seat on the Jefferson County Commission. Calvin Woods, leader of the local chapter of the Southern Christian Leadership Conference, spoke in support of Bell, as did state Sen. Linda Coleman and state Rep. Mary Moore.

“At a time when Jefferson County is faced with the worst financial crisis in the history of this county government, Patricia Working, Rick Erdemir, and Floyd McGinnis are allowed to continue this charade,” Woods said.

Working, Erdemir, and McGinnis are three voters who filed a lawsuit with the Jefferson County Circuit Court asking that the election results not be certified.

The District 1 seat was vacated last year when Larry Langford stepped down upon being elected Mayor of Birmingham. Governor Bob Riley then appointed retired two-star General George Bowman to the seat. Bowman has stated that in the past that he plans to remain in ofice until someone else is sworn in.

Bell won the Feb. 5 election with 56 percent of the vote, failing to force a run-off with any of the six candidates in the race. Bowman came in second with 16 percent, and Fred Plump came in third with 10 percent of the vote.

Last year, Plump filed suit with the U.S. District Court, claiming that Gov. Riley had no authority to appoint a commissioner in Jefferson County. That case is still pending.

Plump has since joined Bell as a defendant in Working, Erdemir, and McGinnis’s suit. Plump’s attorney, Edward Stills, claims that Working and Erdemir do not live in District 1.

Woods, who referenced that claim at the rally Monday, also had something to say about the only plaintiff actually from District 1:

“Mr. Floyd McGinnis had a chance to know all the candidates who ran for the Jefferson County Commission seat for District One. He voted in the Feb. 5, 2008 election.”

In response to these comments, Albert L. Jordan, an attorney representing the three voters, told the Weekly, “I don’t think that will stop him from challenging the election.” According to Jordan, his clients’ lawsuit cites a 1977 statute that gives the county election commission authority to hold a special election during a ‘County-wide election’ to fill vacancies. Jordan argues that the day the county scheduled for the election does not fit the definition of a ‘County-wide election.’ “Feb. 5 was a presidential preference primary; no government officers were being elected, just delegates.”

Jefferson County Circuit Court Judge Scott Vowell will hear proposed orders from all of the participants in the suit on Wednesday and oral arguments, if needed, this Friday.

— Madison Underwood

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The financial crisis over Jefferson County’s sewer debt will not cause layoffs or otherwise effect employee benefits, Commission President Bettye Fine Collins said Thursday morning.

During the commission’s weekly work session, Collins read from a memo to county employees assuring them that their jobs and benefits are not at risk.

By the contracts with bond holders, the sewer system debt is payable only from the net revenues of the sewer system, Collins said. That means other county services will not be effected. What’s more, the debt service comes after other sewer operating expenses, such as payroll.

While that’s good news for county employees, the commission and its advisors are still struggling over how to keep the county out of bankruptcy. On Wednesday, the county announced that it would not post collateral or insurance to stop terminations of 13 interest rate swaps. Thursday, Collins seemed more upbeat, indicating that the county might be able to work with its creditors to avoid bankruptcy.
Read the full story

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Finance chief steered JeffCo disaster

WAR ON DUMB by Kyle Whitmire

Two weeks ago, Banks, Finley, White & Co. delivered the fiscal 2007 audit to the City of Birmingham. The city received a clean bill of health.

“We did enough tests and procedures that we feel that if fraud had occurred, we would have caught it,” Jeff White told the Administration Budget and Finance Committee.

Realize, though, that this audit was for the fiscal year ending June 31, 2007, the last full fiscal year of the Bernard Kincaid administration. Short of inspiring confidence, it is a good indicator of what Birmingham has yet to loose - its good name on the market and credit with the banks.
Next, you have to look to one hiring change made by the new mayor, Larry Langford.

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Jefferson County has until Friday to post $184 million in collateral or insurance to prevent the costly terminations of its interest rate swaps, but in two more material event notices Wednesday night, the county says it will meet neither requirement.

PDFs of Jefferson County’s latest event notices can be found here and here.

“The County has notified the counterparties to the Swap Agreements that it does not
presently intend to post collateral or provide insurance to the counterparties for its obligations under the Swap Agreements,” the county said in the notice.

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Thursday night Jefferson County released the second “material event notice” in as many weeks regarding its sewer debt crisis. The news isn’t good.

According to this release, recent downgrades by ratings agencies could soon cause the county’s interest rate swaps to terminate, an event that could cost the county hundreds of millions of dollars. The only way to avoid such terminations is for the county to produce $184 million in insurance or collateral by March 7. According to the notice, the county does not have the revenue or cash on hand to provide such collateral.

The county writes in the notice:

“As of the date of this notice, the County can offer no assurances that it can obtain the required insurance or post the necessary eligible collateral to avoid an Additional Termination Event under the Swap Agreements. If an Additional Termination Event occurs, the respective counterparties will have the right to terminate the respective swap transactions upon notice to the County, in which event the County would be obligated to pay the resulting termination payment in accordance with the provisions of the Swap Agreements. The aggregate amount of the termination payments that would be due is approximately $184 million as of February 27, 2008.”

What’s more, interest rates on variable rate warrants continue to rise and auction rate warrants continue to come due. As the auction rate warrants mature, and the county still cannot pay or find buyers for new bond debt to refinance the old.

“The County has experienced a total of eight failed auctions as of February 27, 2008 with respect to $869,450,000 aggregate principal amount of Auction Rate Warrants,” the county said in the event notice.
The county says that, while it continues to look for solutions to the problems, it can promise none.

More to come as we translate from the original Greek.

Or you can find the whole document here.

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