Alabama Residents Furious Over Possible Rate Increases: ‘If They Let This Stuff Happen They Are Going to Get the Biggest Riot the South Has Ever Seen’

http://news.yahoo.com/alabama-residents-furious-over-rate-increases-let-stuff-202403568.html

So how did this all start?

Sewage and water rates (on average) have increased faster than inflation because the federal government has demanded that cities replace their “worn-out” sewer facilities to meet federal clean-water standards.

When a federal judge forced Jefferson County to upgrade its outdated sewer system, officials decided to finance the project with bonds.

“Outside advisers suggested a series of complex deals with variable-rate interest . . . Loan payments rose quickly because of increasing interest rates as global credit markets struggled, and the county could no longer afford its payments,” Bloomberg reports. That’s why Jefferson County residents have seen a 329 percent increase in their rates over the past decade and a half–the county has been trying to finance these new facilities.

The sewage system was supposed to cost $300 million. However, since the project started in 1996, the costs have risen to $3.1 billion after various problems and a series of bond and derivatives deals fell through in 2008.

Not surprisingly, a large amount of corruption was involved.

JP Morgan Securities and two of its former directors have been fined for trying to bribe to Jefferson County employees and politicians in a bid to win business financing for the sewer project. Six former Jefferson County commissioners have been found guilty of accepting bribes, along with 15 other state officials.

As a result of the bad investments and government corruption, current county commissioners have been forced to file for Chapter 9 bankruptcy (which gives the county the right to stop paying some bills temporarily so that it can organize its finances), the largest municipal bankruptcy in U.S. history