According to Patterson, the city sold its last bond related to the Leeds-General Cooperative District — which helped bring Bass Pro Shops and The Shops of Grand River to Exit 140 in Leeds, with the help of Moody and St. Clair County — on Wednesday, Nov. 9. Jefferson County announced it would file for Chapter 9 bankruptcy, the largest municipal bankruptcy in U.S. history, a day later.
“The bond we sold … was the last bond they sold before they bankrupted,” Patterson said. “When they (Jefferson County) bankrupted, Assured Guarantee, that gives bond insurance to municipalities, issued a statement that they’re not issuing any more bond insurance in Alabama.
“We’re lucky — we sold the last bond and got everything done on short notice. If that hadn’t happened, that would’ve been a major catastrophe.”
Commissioners in Jefferson County officially filed for bankruptcy after failing to reach a settlement agreement with the county’s creditors regarding over $4 billion in debt. St. Clair County borders Jefferson, and according to County Commission Chairman Stan Batemon, nearly 50 percent of the county’s citizens work there.
Batemon said Friday, however, that he does not believe St. Clair will suffer any long-term effects from the filing.
“There will probably be some short-term interest rate effects on all of us, but in the long run I don’t think it will affect us,” he said. “I think we will all be required to stand on our own financial record.
“What St. Clair County has to do will not be measured by what Jefferson County has done. I think I see it may be a short-term thing.”
Patterson said the same thing about Leeds. While most of its citizens live in Jefferson County, the city has its own police force, water board and school system.
“The biggest effect we’ll have, as far as affecting the city itself, will have to do with any future bond issues, or what kind of effect it’s going to have on a sewer system,” he said. “Those are unknown. It’s not going to impact the day-to-day finances of the city.”
As for economic development, county Economic Development Council director Don Smith said he believes St. Clair County will be no less attractive for prospective companies.
“St. Clair County has always been a well-run county,” Smith said. “I don’t foresee us being affected from the Jefferson County bankruptcy more than any other county in Alabama will.
“We have wonderful leadership here. The leaders are fiscally responsible, and are focused on making sure that our county’s economy continues to stay strong. The County Commission doesn’t put funds toward programs unless they create new jobs, create new taxes or retain existing jobs. Whenever that is your number one rule of thumb, it’s difficult for a county to get into trouble.”
Of course, that doesn’t mean the county can’t learn lessons from Jefferson, according to Batemon.
“I think one of those lessons would be that the more a government allows another government to dictate how they operate, the more likely they are to get in trouble,” he said. “I think Jefferson County has a history of allowing the Jefferson County state delegation to dictate how they govern.
“I think one lesson we’ve learned is, if you’re a form of government, then you need to run you business and stay out of other levels of government’s business.”
Contact Will Heath at email@example.com.