Jefferson County, Alabama
Jefferson County was spending more than its total revenue, so it sold bonds to finance its operating deficits.  Normally, governments sell bonds to borrow money to build infrastructure. But Jefferson County borrowed money to put off tax increases or service reductions. Jefferson County worked with Wall Street banks (such as J.P. Morgan) to sell the bonds and to make interest rate swaps on its debt. These financial deals happened in 2002 and 2003 while the economy was healthy. People who purchase bonds want to know the source of the money to pay back the bonds. So, Jefferson County used its sewer system fees to back its bonds. The county sold $3.14 billion in sewer bonds. It also paid the banks millions of dollars of fees for their help in selling the bonds and setting up the county's debt.