Blount, others included in water works bond proposal

A plan proposed by the Birmingham Water Works Board to refinance more than $70 million of bonds includes a Montgomery investment bank, Blount Parrish, recently sued by the Securities and Exchange Commission. Blount Parrish is also under investigation by the Department of Justice for its involvement in a disastrous series of bond deals that have left Jefferson County teetering on the brink of bankruptcy.



The proposed deal also includes a law firm, Haskell, Slaughter, Young & Rediker, which advised the county on those same troublesome transactions.



The water works board wants to refinance more than $70 million of bonds. While the water works pays the debt service on those bonds, the City of Birmingham technically owns the debt, which is carried on the city's books.



Water works Executive Director Mac Underwood told the Birmingham City Council that the deal would save money for ratepayers, but some councilors seemed skeptical.



Councilor Carole Smitherman asked specifically why Blount Parrish and Haskell, Slaughter, Young & Redicker had been included.



Blount Parrish has served as the water works' financial advisor since 2004, Underwood told the council.



Late last month, the SEC sued Blount Parrish and senior partner Bill Blount, along with Birmingham Mayor Larry Langford and lobbyist Al LaPierre. The lawsuit accused Blount of doing favors for Langford in exchange for bond business from the county. Read previous article here.

Previous to advising the county on its bond transaction, Blount and his firm helped structure the financing for VisionLand, a publicly financed theme park that declared Chapter 9 bankruptcy in 2002.



"We have talked to the ratings agencies to see if any of the recent articles that have come out would have a negative effect on this transaction, and according to S&P and Moody's, the recent things that came out would not have a negative effect on this transaction," Underwood told the councilors.



Underwood also vouched for Haskell, Slaughter, Young & Rediker, saying the firm had served the board on other bond deals.



The proposed bond deal also includes a minority underwriter, Grigsby & Associates. Last year, Birmingham Weekly reported on that firm's history after then-Mayor Bernard Kincaid questioned the council including it in a proposed bond deal.



Other parties to the proposed water works deal include:

• Raymond James & Associates, Senior Managing Underwriter;



• Capital South Bank, Underwriter;



• Protective Securities, Underwriter;



• Yvonne Green Davis, Issuers Counsel;



• Waldrep, Stewart & Kendrick, Bond Counsel;



• Balch & Bingham, Bond Counsel for Birmingham;



• Sheppard, Harris & Associates, Revenue Certification;



• U.S. Bank Corporate Trust Services, Bond Trustee;



• Raftelis Financial Consulting, Rate Consultant.

The Administration Budget and Finance Committee forwarded the proposal to the full council with no recommendation. It is now scheduled to go before the full council, Tuesday May 27.