Municipal Bankruptcy in Prichard, Alabama

Pension fund drove Prichard to bankruptcy

 

…the municipality faces an overwhelming and on- going crisis in its pension fund. Also, sales tax revenue is down about 8 percent and the recession has hit Prichard's government hard.

 

…Prichard can't pay its pensioners. The city also has cut important public services such as the municipal jail and library operations. Occasionally, trash builds up in the streets because the city's reduced workforce falls behind in collecting it.

 

The bankruptcy is a sad development for the people whose retirement checks have been cut off, the citizens who are seeing services reduced…Nevertheless, the filing was necessary.

 

The city's biggest problem is the pension fund. Attorneys representing Prichard say the fund takes in $35,000 in each month in contributions, but must pay $160,000 to current retirees…The city has put extra money in, but can't afford to do that any longer.

 

…In bankruptcy, pensioners likely will receive no checks or reduced checks…

 

Editorial Board

Press-Register, October 29, 2009