Commission president still mum on JeffCo debt crisis
In an act of financial triage, the Jefferson County Commission Tuesday approved a resolution to give the Finance Committee special powers to negotiate new agreements with investment banks. Existing contracts with those banks entitle them to as much as $500 million immediately from the county. According to the county, those banks are willing to waive their rights in order to avoid virtual foreclosure on the county.
Were those banks to demand payment, the county does not have the cash on hand to make those payments. Bankruptcy would be all but certain.
In recent weeks, Commission President Bettye Fine Collins has implored commissioners and county officials to remain mum about the county’s financial straights. Tuesday, Commissioners Shelia Smoot and George Bowman balked at that request, saying they had both been excluded from the county’s financial dealings.
“I’m not asking for your permission to be at the table,” Smoot said. “I was elected to be at the table.”
Commissioner Collins sat quietly, staring blankly toward the back of the commission chambers while Smoot railed about being left out of county financial decisions.
“There is no plan,” Collins said. “There are a lot of capable people out there, apart from the commission, who are trying to effect a solution to this.”
Collins read into the record a statement prepared by the law firm Balch and Bingham. According to that memo, statements made by commissioners could be interpreted by investors as material statements of fact and thereby be subject to securities law.
“Until we are privy to the same information there is nothing in the law that can silence us,” Commissioner Smoot said.
The meeting followed news that Standards & Poor’s had downgraded Jefferson County sewer bonds from A to BBB, leaving the county hovering two gradations above junk bond status. The lower rating will make it more difficult for Jefferson County to restructure its debt.
While the investment banks have agreed to waive their rights to immediate payment, that only buys time for the county, Collins said after the meeting. According to Collins, the county is preparing a full disclosure before the end of the month.