Monday, Jefferson County chose a financial advisor and underwriter to refinance the nearly two billion dollar debt. The commissioners say they want to get it right, so multiple preventative measures are in place to further distance the county from its corrupt past.
The last refinancing of the sewer debt lead to the illegal bond swap deals involving cash and luxury items and ultimately bankruptcy. Four previous commissioners got in legal trouble for their roles in those deals.
Now, current Jefferson County commissioners want to keep the county's history of corruption in the past."No shoes in this deal. No watches, suits, shirts," said Commissioner Jimmie Stephens.
They are trying to send a strong message to the federal bankruptcy judge, Wall Street and citizens."We want everyone to understand this is a changed Jefferson County and we are going to do the right thing," said Stephens.
To exit bankruptcy, the now reduced 1.9 billion dollar sewer debt must be refinanced by December 20th. The interest rates will be fixed, and the previous underwriters were not considered for the job.
"This is going to be a fair deal. There's not going to be any payments or influence by an underwriter," said Commission President David Carrington.
For those reasons and its reputation, Citigroup was hired as the underwriter. The county also contracted Public Resources Advisory Group (PRAG) as an independent advisor to oversee the county's best interest.
But as part of the deal, a quiet period has been extended 21 days. That means any group interested in working with Citigroup cannot contact commissioners or their staff."I don't want any firm contacting my office for any reason," said Commissioner Sandra Little Brown who at the end of the quiet period hopes to see a list for Citigroup's team that includes local minority contractors."We're trying to make as many steps or protection possible so public can have confidence," said Carrington.
They hope a required public forum in early December will cement that confidence.
"This is not a backdoor deal. This is not a behind the scenes deal. This is up front. It is what you see deal," said Stephens.
The county will pay PRAG between 200 to 400 dollars an hour.
The rate for Citigroup could change depending on the bond rating secured. Right now, it's about seven dollars per every one thousand refinanced. That's less than the initial estimate of 19 million that was included in the bankruptcy plan.
The fees will be rolled into the new debt.
Jefferson County filed a bankruptcy exit plan June 30. A federal bankruptcy judge will either approve or reject that plan August 6.