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Jefferson County

Jefferson County . Financial Analysis. Jefferson County, Alabama. Population: 660 thousand. Home-rule. Jefferson County, Alabama. Population: 660 thousand. Home-rule. Income (2010 Census). Better than the state of Alabama average. Jefferson County, Alabama. Population: 660 thousand.

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Jefferson County

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  1. Jefferson County Financial Analysis

  2. Jefferson County, Alabama Population: 660 thousand Home-rule

  3. Jefferson County, Alabama Population: 660 thousand Home-rule Income (2010 Census) Better than the state of Alabama average

  4. Jefferson County, Alabama Population: 660 thousand Home-rule In November 2011, filed for the most Expensive municipal bankruptcy

  5. Jefferson County, Alabama Population: 660 thousand Home-rule In November 2011, filed for the most Expensive municipal bankruptcy 4.1 billion. 3.1 billion relating to sewer work

  6. Overview • County historically enjoyed low financing costs • Financially stable county • High revenue stream due to taxes • Financial troubles due to sewer project (1990s) • Corruption • Non-performing investments • Complex financial instruments

  7. Revenue Sources (2010)

  8. Revenue Sources (2010) Sales Tax more than 10%

  9. Expenditures (2010)

  10. Expenditures (2010) DEBT SERVICE IS HIGH BURDEN High government cost 67% of expenditures for government costs and debt service

  11. Current Ratio (Liquidity Ratio)

  12. Current Ratio (Liquidity Ratio) CRISIS

  13. Debt to Total Asset Ratio (Leverage Ratio)

  14. Debt to Equity (Leverage Ratio) FINANCIAL CRISIS

  15. Times-Interest Earned (Coverage Ratio)

  16. Return on Net Assets POOR PERFORMANCE OF INVESTMENTS

  17. Financial Troubles • Expensive sewer overhaul related project started in the 1990s • In 2003 take advantage of low financing costs and refinance sewer bonds from fixed rate to lower but floating rate • Entered complex financial derivatives market to hedge against interest rate increase • Bought complex financial instruments as their own investment

  18. Financial Crisis • Investors lost confidence in county’s ability to repay debt • Bond interest rates soared • County couldn’t refinance their debt DEBT SERVICE BURDEN

  19. Financial Crisis • Investors lost confidence in county’s ability to repay debt • Bond interest rates soared • County couldn’t refinance their debt • Investments did not perform • Fees actually cost the county even more money

  20. Financial Crisis • Investors lost confidence in county’s ability to repay debt • Bond interest rates soared • County couldn’t refinance their debt • Investments did not perform • Fees actually cost the county even more money • County filed for bankruptcy • 4.1 billion dollars total • 3.1 billion related to sewer overhaul

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