BY SOLOMON CRENSHAW JR. | For The Birmingham Times
Jimmie Stephens remembers he wasn’t proud of Jefferson County when he took office as a county commissioner in 2010.
“I was embarrassed and ashamed of what Jefferson County had become and what its reputation was, in the state and in the nation,” recalled Stephens, now the president of the commission.
Jefferson County had become by most accounts one of the worst financially managed governments in the nation laying off more than 1,000 of its employees and filing the then-largest municipal bankruptcy in November 2011.
But Stephens, his fellow commissioners, county manager and department heads no longer feel that sense of shame and embarrassment, they say.
Last month, Jefferson County got positive reviews from investors and financial publications that would have been unimaginable more than 10 years ago. The county completed refinancing $2.24 billion in sewer debt that had been in place since its exit from bankruptcy in 2013. This saves $1.17 billion throughout the life of the debt, reduces debt service payments, creates a customer assistance fund and stabilizes rate increases.
The $2.24 billion in bonds drew a whopping $26 billion in orders, prompting positive headlines that the county hasn’t seen in decades.
Bloomberg News reported that buyers stampeded into the deal enticed by Jefferson County’s “turnaround story.” The Birmingham Business Journal recently headlined a story: “Refinancing Sewer Debt Big Win for Rate Payers in Jeffco.”
Commissioner Lashunda Scales said the current commission has been very deliberate in doing the work that is required to regain the public’s trust.
“Decisions such as responsible fiscal spending, setting policies to enhance citizens’ quality of life, along with hiring capable staff and consultants are the necessary steps that have been taken for the betterment of the county,” Scales said.
Commissioner Sheila Tyson said the difference between previous commissions and the current one is “a collaboration where all of us have the same interests … ratepayers whether they are Democrat or Republican.
“Our reputation is on the line. You don’t want your children to go back in history to see that you did absolutely nothing about a problem that wasn’t created by us but if we can find a solution to it, we want to be the solution.”
Stephens said fiscal and investment policies were put in place “that afforded us checks and balances and a guideline to where we would never be [bankrupt] again.
“We established a disaster relief fund, a budget maintenance fund. We put money back for rainy days,” he said. “They’ve never done that.”
Those “rainy day” funds now have a total of $60.2 million which continues to grow.
“Government has always grown to its revenue, to its income,” Stephens said. “What we did is, we restored that fiscal responsibility to put money back in case of [natural disasters], in case we had a downturn in the economy … we could dip into our reserve fund to get us through the tough times.”
The refinancing of its sewer warrants not only reduced the county’s payments on the overall sewer debt but it also stabilized rate increases for residents which at one time had been spiraling out of control.
While many challenges still face the county “we’re in a far better place than we were before,” said Commissioner Joe Knight, chair of the finance committee.
Knight can remember when he was told the county would never rebound from its financial woes and bankruptcy.
The county would lay off 1,000 of its employees and file the then-largest municipal bankruptcy in November 2011 with $4.23 billion in debt, $3.2 billion of that sewer debt.
“It kept me up late many nights thinking about it,” he said. “What were our choices? Try to work out some deal with the current creditors? Go ahead and make the plunge? We tried to negotiate a deal. It was turned down and we really had nowhere else to go.
“There were so many people saying, ‘You will kill the county for the next 10 years,’” Knight recalled, “‘and we will maybe never be able to dig out.’”
The county would begin “digging out” on Dec. 3, 2013, when it exited bankruptcy.
RETURN TO FINANCIAL STABILITY
Last week the Government Finance Officers Association (GFOA) awarded Jefferson County the Certificate of Achievement for Excellence in Financial Reporting, the highest form of recognition in that area.
“Since taking the CFO position achieving this recognition has been a goal of our team,” said Angela Dixon, Jefferson County chief financial officer. “This achievement is the result of a collaborative effort of the finance team, commissioners, county manager’s office, and all county departments to compile the required information. This is the first time the county has ever received this distinguished award.”
That recognition comes as the once financially strapped county has notched a number of successes that include attracting global brands like the J.M. Smuckers Company which is building a $1.1 billion plant that will employ more than 800 people and produce the popular snack, Uncrustables’ and Amazon which built in 2020 an 855,000-thousand square foot distribution center in Bessemer that employes approximately 1,500. Since then, Amazon has opened additional facilities — notably on the site of the old Century Plaza Mall where Jefferson County invested around $3 million in road and infrastructure improvements.
“Jefferson County’s return to financial stability relied heavily on two core principles,” Dixon said, “strong regional economic growth, and focused and determined leadership from across our community, especially the Jefferson County Commissioners that made that growth possible.”
‘CORRUPT … AND BANKRUPT’
If anyone knows about the turnaround it would be Tony Petelos, the county’s first county manager, who was hired 10 months after a totally new commission took office in 2010.
“We inherited a dysfunctional, corrupt, bankrupt county,” Petelos said, “and I’m proud to say that’s not the case anymore.”
Petelos, a former Hoover mayor and state representative, who came to the county with a reputation for honesty and integrity but also experience with troubled agencies such as the Alabama Department of Human Resources (DHR) which was under a federal consent decree in 1997 when Petelos assumed leadership. He developed a plan that ultimately led to the end of federal oversight.
“I had the experience of working in adverse situations when I went to DHR,” said Petelos. “It was under a federal court mandate . . .I worked with a lot of people over the years, and I knew the county needed people who would be honest and sincere knowing that we had to build public trust back into the county … we had to do everything on the up and up and we had to do things the right way. The public had lost faith in Jefferson County. We had a job to do.”
That meant getting rid of some who weren’t prepared to fall in line and keeping those who were.
Petelos, who retired in 2021, remembers telling a federal judge, “I have good news and I have bad news. The judge asked for the bad news first. ‘I lost 12 department heads and deputies since I’ve been here,’ Petelos replied. He said, ‘Well what’s the good news? I said. ‘lost 12 department heads and deputies since I’ve been here,’” Petelos responded.
“We had to change the mindset of a silo government . . . being honest, being fair to everybody and treating everybody with respect. I tried very hard to do that.”
Petelos said it was lonely at first with his deputy Walter Jackson; chief of staff Justin Smith; versatile assistant Aleishia Coleman and later Helen Hayes, the public information officer.
But there was also a commission that was ready to solve the problem, he said.
“They were committed to get things turned around. We worked hard, our office, implementing everything they wanted, everything they needed done, we worked hard to put it in place. It was a lot of hard work, but a lot of dedication and a lot of teamwork … It was a team effort from our employees to county commissioners to the new county manager’s office.”
Petelos said he was intentional about building an executive team and searched near and far for the best talent and recruited department heads from Wyoming, Oregon, Texas, Washington D.C. Georgia and closer to home Auburn.
One of those hires was Cal Markert, out of Baldwin County, who came as a roads director, deputy county manager and now he’s county manager. Petelos retired in 2021 and was succeeded by Markert.
The county is learning the JeffCo Way, which focuses on continuous improvement, Markert said.
“The commission is focused more on policy that’s driving the long-term vision of the county. They approve all the financials on the basis of the county as a whole. They’re not approving or fighting over what’s best for their district, but they’re looking at what’s best for the long-term county as a whole.”
Markert said the county manager system helps alleviate a lot of “single-minded decision making” by commissioners whose focus was previously divided.
“The county manager, of course, supervises the day-to-day operations of the county and the employees and staff,” he said. “We now have a strategic plan, a 5-year strategic plan. The commission wanted to look and say these are our goals long term. We did the plan together and as we move forward, it allows us more continuity to where, year after year, we’re focused on meeting the goal. It allows those goals to be met.”
BY THE BOOK
Another change has been less visible: the work done behind the scenes by the six-member County Attorney’s office headed by T.A. “Theo” Lawson II, who first came to the county in 2004.
Lawson said he’s seen the county pay closer attention to matters before that may have been overlooked. “Some were being ignored,” he said, “… maintenance of the sewer system. Fair selective processes of employees in a manner that was non-biased … as a result of those things [now] being taken care of the county has seen a positive result.”
Lawson, named county attorney in 2016, said his office spends hours researching information because “we have seen what happened with the county and as that relates to not paying attention to [issues],” he said. “We pride ourselves in researching [information] all the way from the front to the back and we give the most informed opinions that we think can be received … sometimes our attitude is not ‘can you, but should you?’ knowing that we are giving the best opinion.”
Few matters come before commissioners without a thorough review by his entire office, Lawson said. “We vet things among each other,” he said. “By the time something has come from me or something that has our name or our seal of approval on it, we’ve vetted and doubled vetted.”
TOP OF THE WORLD
Steve Ammons stepped down from the commission last year to take the job as CEO of the Birmingham Business Alliance. He remembers having had no reservations about joining the commission in 2018 despite its checkered past that included bankruptcy and federal consent decrees — one for employee discrimination and an environmental consent decree.
Ammons said he had done his homework, knew the processes that were being done, how things had changed, and that the county was on the right track.
“I think we were making the right decisions for the county to continue to grow, and become more efficient,” he said.
The BBA CEO pointed to the county’s developmental services department as an example of efficiency. That department had established online submissions of applications for construction permits and those submissions could be returned with comments.
“You didn’t have to have people coming into the building and they got to be more efficient with their business because they didn’t have to come in,” he said. “Things got handled much, much more efficiently. That’s just one example.”
Others include improvements to citizen engagement like updated website and communication tools for citizens; implementation of My Jeffco App, citizen request tool for services and information; social media pages; podcasts; digital newsletter; E-Services and E-Permitting.
Mike Bolin, elected in 2023 to fill Ammons’ unexpired term as the District 5 commissioner, is quick to admit he can take no credit in county improvements that yielded the recent successful trip to bond market, “but I am very proud to stand behind the other four commissioners of the Jefferson County Commission today as I think the refunding shows the ability of this commission to take care of its citizenry today.”
At its lowest point, back when he was losing sleep and natural disasters were sweeping through the county, Knight acknowledged that Jefferson County felt as though the weight of the world was on its back. Now, with the successful refinancing of the sewer debt, it seems the county is on top of the world.
“That’s a pretty good way to put it,” Knight said. “However, we’re not on top of the world. We’re in a far better place than we were before.
“The bottom line is we still have a very large sewer debt … but we’ve got it to where we can pay it [and that hadn’t been the case in the past] and we’re in good shape,” he said. “We’re in very good shape because we’ve done all the other things too. That was kind of like the last piece of the puzzle, to get that refinanced.”
