After nearly 14 long and sometimes embarrassing years as the national torchbearer for municipal bankruptcy, Orange County may soon lose that distinction thanks to a financial disaster elsewhere that could dwarf its debacle.
Jefferson County, Ala., was weighing its options this week in the wake of a looming bond crisis that recently forced it to skip a $53-million sewer bond payment -- sending the county's credit rating tumbling to the lowest junk status. Among the recovery plans being discussed: a $4.6-billion bankruptcy filing similar to one undertaken by Orange County in 1994 but nearly triple its size.
Jefferson County officials could not be reached for comment.
According to the Birmingham News, however, as county commissioners pledged to fight efforts by state lawmakers to wrest control of the sewer system from the county, a city mayor called on Birmingham-area business leaders to organize a trip to Wall Street to offer assurances that cities in the county are solvent.
"We cannot continue to allow our County Commission and its financial advisors to drag the rest of us down into the abyss of financial destruction," the newspaper quoted Fultondale Mayor Jim Lowery as writing in a memo to all those concerned.
Closely monitoring the situation is Orange County Supervisor John Moorlach, who first gained fame by correctly predicting the largest municipal bankruptcy in the nation's history while campaigning for county treasurer in 1994.
He lost, but later replaced his opponent, who presided over the $1.6-billion financial debacle. Eventually Moorlach was elected to the county Board of Supervisors, over which he now presides as chairman.
Recognized today as a leading expert on municipal bankruptcies, Moorlach said Thursday that he had received numerous calls in the last two months from media outlets nationwide with questions on the subject. The most recent, he said, came from a TV station in Birmingham, which flew out a crew.
"I told them that Chapter 9 is very expensive," he recalled. "I think they've gone through the rapids, and there will be a calm lake at the end, not a waterfall. They need to let cooler heads prevail; just wait a little bit, then figure out how to pay for all these added costs."
Ah, but there may be another reason he would prefer Jefferson County to pick another option. If bankruptcy is declared, Moorlach said, "I would be pretty upset. We'd be like a small footnote here; I'd be very disappointed to lose the top spot."
If the unthinkable happens, though, Moorlach said he was prepared to be gracious: "I will send them a proclamation."