This deal stinks

The county – seat of Alabama’s largest city, Birmingham – is openly struggling with what some of its commissioners have taken to calling “the sewer crisis”. The roots of this date back to 1996, when the county decided it would be a good idea to take over sanitary sewers from 21 cities and repair them in order to cut down on raw sewage discharges into local streams.

The estimated cost was about $1.2 billion. Fast forward 12 years and this has ballooned to $3.2 billion.

Worse still, a series of interest rate swap transactions brokered by former JPMorgan Chase managing director Charles LeCroy in 2002 left the county mired in a financial mess. LeCroy was sent to prison for three months in 2005 in connection with a municipal corruption case in Philadelphia.

At more than $7,000 of debt per capita, Jefferson County now has the highest per-capita sewer costs in the US. No one associated with that fateful 1996 decision has emerged smelling sweetly.