Jefferson County, Alabama, is trying to avoid setting the new standard for municipal bankruptcy. Their best and final offer is in with their creditors, and if no deal is reached then County officials are prepared to approve a $4.1 billion filing for Chapter 9 bankruptcy protection. Teetering on the brink of bankruptcy has been a slowly developing crisis that too few in the state or county were willing to address. But now that they’re looking at the problem, everyone seems to be feverishly working towards a solution.

So far, Governor Bob Bentley has offered a deal that involves lending the county the protection of the state’s good credit. J.P. Morgan, the largest holder of county debt, has already agreed to write off more than billion dollars of the county’s sewer debt, but in exchange they wanted five consecutive years of sewer rate increases of 8%. The county balked at that proposal, instead offering three years of 8% increases, followed by 3% increases thereafter.

From the Business Insider:

Officials in Jefferson County expect to hear back from creditors on what they say is their final offer to settle the county’s $3.14 billion sewer debt.

County officials have asked creditors, led by JPMorgan, to write off $1.17 billion of the debt and provide $19 million of a $20 million relief fund for taxpayers who can’t pay their sewer bills. The counter-proposal also caps a sewer rate increase to no more than 8% a year for 3 years, and 3% for every year following, the Birmingham News reports.

Read the full article here.