BIRMINGHAM, Ala., Oct 10 (Reuters) - Voters in Birmingham, Alabama, where America’s biggest ever municipal bankruptcy is playing out, voted four-to-one to authorize the city government to sell $150 million of bonds to fix streets and tidy parks, officials said on Wednesday.
While centered in Jefferson County, which nearly a year ago filed a $4.23 billion bankruptcy, Birmingham’s city government has retained an AA rating with both Standard and Poor’s Ratings Service and Fitch Ratings, as well an Aa2 with Moody’s Investors Service, City Chief Financial Officer Tom Barnett said.
Birmingham, a regional business hub with universities and medical centers, boasts a major investment account of $83 million, a general fund balance of $92 million and a bond reserve of $30 million.
“As the rating agencies point out, we do have substantial reserves to meet unforeseen challenges,” Barnett said.
In six separate referenda, Birmingham voters on Tuesday okayed the bonds, which the city expects to issue in two parts. Barnett said $75 million in debt will be sold in early 2013, and the remaining $75 million within three to five years.
The city’s planned projects include a landfill expansion costing $6.3 million, parks and recreation improvements worth $20 million, and streets an sidewalks work estimated at $48.7 million.
“The major focus is to take care of public infrastructure that may have deteriorated and to revitalize neighborhoods that would then increase our tax base,” said Barnett.
Birmingham Mayor William Bell, in presenting the bond plan in New York last May, admitted that the Jefferson County bankrupcty was affecting the city, despite its good fiscal shape. The bankrupcty had added around 25 basis points to the yields that Birminghan would pay, Bell said.