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Bankrupt Alabama county's computers fail
June 8, 2012 / 6:47 PM / 5 years ago

Bankrupt Alabama county's computers fail

BIRMINGHAM, Ala., June 8 (Reuters) - Alabama’s bankrupt and cash-strapped Jefferson County has been hit by a computer failure that is delaying payments of bills and deposits, the county manager said on Friday.

Vendor payments by the county, which filed the biggest U.S. municipal bankruptcy on Nov. 9, will be a couple of days late, according to County Manager Tony Petelos. Other payments, such as payroll and those due creditors, were unaffected by the computer mishap.

Saddled with massive sewer-system debt and the loss last year of a local jobs tax, the county has since the filing cut hundreds of staff, reduced services sharply and stopped payments on general obligation debt.

A nine-year-old computer server that was the last of 16 county machines capable of handling the financial software used for payment processing had failed on Sunday night and was revived only early Friday morning.

“Countywide, we have put off capital purchases, and it doesn’t take long to catch up with us,” said Petelos, adding that a boiler in a county facility had also stopped working this week.

Petelos said computer purchases and other technology spending had been cut, postponed or reduced because of revenue shortfalls but that he hopes to purchase new servers in next year’s budget.

Jefferson County, which is home to Birmingham, Alabama’s largest city, filed its $4.23 billion bankruptcy after a tentative workout, mainly with Wall Street creditors, unwound and scuttled concessions that may have been worth $1 billion to the county. (Additional reporting and writing by Michael Connor in Miami; Editing by Phil Berlowitz)

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