Alabama’s Jefferson County filed a plan Sunday for getting out of the largest municipal bankruptcy in the United States.
The county, home to the city of Birmingham, filed for bankruptcy in 2011 when it couldn’t pay back the more than $3 billion it had borrowed to repair and expand its sewers. The county owes a total of $4.2 billion.
More from GlobalPost: Alabama's Jefferson County files for biggest municipal bankruptcy in US history
The plan would knock the $1.2 billion off its debt and raise sewer rates annually by 7.41 percent for four years and by 3.49 percent annually for an unspecified number of years after that, the Associated Press reported.
According to Bloomberg News:
Only a small percentage of the county’s $4.2 billion in debt will be paid in full, marking the first time US investors holding municipal debt have been forced as part of a bankruptcy case to take losses on the principal owed to them.
Creditors – which include banks, hedge funds and monoline insurance companies that insure the debt – and the US Bankruptcy Judge for the Northern District of Alabama will have to approve the plan, the AP reported.
Only one of Jefferson County’s five commissioners voted against the plan, the Birmingham News reported.
"I totally disagree with this," Jefferson County Commissioner George Bowman told the Birmingham News. "In essence, it's the poor, and those who are on the sewer, who are going to be the ones who will pay the debt and bail the county out of bankruptcy. The wrong people are paying the cost of the increase."