On Friday, July 17, 2009, the special masters appointed by Federal Judge David Proctor in the sewer bond litigation filed their final report.  On page 4 of the report, the special masters state, “Although related to the [sewer] Warrants, these Swap Agreements are general obligations of the County, and, unlike the Warrants, are not secured by the System Revenues.”  General obligations would, by their nature, be an obligation to be paid from the County’s general fund. 

On Monday, July 20, 2009, the special masters filed a clarification of that report, stating, “The Special Masters file this Clarification to the Final Report to eliminate any confusion which may have been caused by the Special Masters’ use of the phrase “general obligations” in their background section discussing the problems facing the County.  Although the Special Masters Final Report referred to the Swap Agreements as general obligations of the County, they are not, in the sense that phrase is used in connection with governmental financing.  The Special Masters file this clarification to eliminate the sentence using this phrase from the Final Report.”

What is missing from this “clarification” is the security for these swap agreements.  If not secured by the sewer system revenues, then what are these $5.4 billion in swap agreements secured by?  Are these obligations to be paid from the County’s general fund?  This question is critical and should not be left unanswered.  The ratepayers and taxpayers of Jefferson County are entitled to know the source for paying these swap agreements.  As debates about rate increases, tax increases and a new occupational tax face the community, this question needs to be answered so the citizens of the County can be informed as to where they tax and rate payments are going.