Well, a little bit of Lumumba grift drew the attention of a federal judge yesterday. WLBT reported:
More than five years after the city made the announcement, questions have again been brought up as to how Jackson spent the proceeds from its settlement with Siemens Industry U.S.A. “The $60 million went somewhere else,” Interim Third-Party Manager Ted Henifin said. “It didn’t go to the water and sewer system.” On Monday, Henifin appeared at the federal courthouse in downtown Jackson to hear from residents about his proposed water rate increase.... Henifin told Wingate that 33 percent of those funds - a little more than $29.4 million - went to the law firm representing the city, leaving approximately $60 million for the city to spend. Wingate said he asked Henifin to investigate how the city used the funds, saying he wanted to know whether they went to water or sewer. “A portion of it - a small portion - went to pay outstanding bills for water and sewer, but none of it went to existing debt,” Henifin said. “We’re not sure where the rest of it is.” In 2022, WLBT reported that $14 million had gone to prop up water and sewer, while $36.7 million had been set aside to bring city into compliance with its water and sewer bonds....
Henifin told the judge that Jackson had $148 million in outstanding water and sewer obligations, which JXN Water took on after the third-party manager took over the water system. The lion’s share of that amount comes from the $90 million in bonds the city issued back in 2013 to pay for the Siemens contract. According to city bond documents, Jackson will be straddled with the Siemens debt through December 2040, when the final $7.2 million payment will be made. Once the bond is retired, the city will have paid $113 million in interest in addition to the $89.9 million in principal. Henifin touts that payment as one of the reasons he needs to increase rates. In all, JXN Water will have to pay about $17 million this year on the city’s bond debt, in addition to $115 million in operations and maintenance costs. Henifin reiterated that even if 100 percent of customers were paying at existing rates, it would not be enough to cover all of those expenses. Rest of article.
Hizzoner said the city was getting a great deal by hiring his attorney friends in Birmingham on contingency. Add Barry Howard and Winston Thompson to the mix for local representation and the backscratching is on.
The Burgermeister justified the payouts at several press conference, claiming it was a risky lawsuit. Just curious. Did the Mayor get any legal advice from local firms that handle environmental law such as Watkins & Eager or Lord Snow? Did they advise how much it would cost or what the chances of recovery would be? Inquiring minds want to know.
37 comments:
Have all of those thieves, aka: Politicians, turn their pockets out to check first.
Is my memory failing me but didn't the City Council vote to use those funds to cover annual budget deficits?
Quit acting stupid, you know the vast majority of it was stolen by people in power of the dying city of Jackson.
How many times can this be replayed until they send these city “leaders” to jail?
Some of the details in these two links:
https://www.wlbt.com/2022/05/16/auditors-jacksons-siemens-settlement-gone-city-spent-money-based-revenues-it-knew-wouldnt-come/
https://kingfish1935.blogspot.com/2022/05/food-fight-mayor-fires-back-at-wlbt.html
WLBT reporting on the report Jackson's Council got on Jackson's Comprehensive Annual Financial Report 2020:
"Among findings, he said Jackson experienced less than a $15 million gain from the Siemens settlement proceeds, with those funds being used to keep the water/sewer enterprise fund and sanitation accounts afloat.
Hodges also told council members the city in recent years had spent millions of dollars more in water and sewer funds than it brought in, with officials basing the spending on amounts billed, rather than amounts collected.
“You’ve got revenue reported during the year that is not going to be collected,” Hodges said. “That needs to be allowed for during the year, so you’re not looking at inflated numbers, and then at the end of the year, $7 million disappeared because it’s not going to be collected.”
Despite what his Honor says, this was not a risky or complicated lawsuit. To the contrary, it was an easy, clear cut case of liability on the part of Siemens. They sold the City a new meter system, and it clearly didn't work . Case closed. And it was filed in Hinds Cunty Circuit Court, the City vs an out of state corporation, a sure win for the City. Suit was filed in June and settled the following March or April and without a single deposition being taken. That's faster than most fender bender car wreck cases....because Siemens knew it was going to lose.
There were plenty of local law firms who could have handled this easily and who would have handled it for less than 33%.
Chokwe on the Siemens settlement and where it went.
He was worried about an outside receiver.
A couple years ago, my administration took on the Herculean task of addressing past wrongs that have led to a dysfunctional, unreliable and inconsistent water meter and billing problem.
It is the result of the City’s disasterous contract with Siemens Industry, Inc. to update and modernize our system. Instead of passing on savings to the City of Jackson, it instead led to long term problems we face today.
With the help of an outside legal team specifically tailored to these kind of municipal contracts, the City of Jackson sued Siemens, eventually settling for the entire amount of the City’s largest ever contract. If we did not take that risk, we would not even be having a discussion about the about $60 million dollars that we recouped.
Since we took receipt of the funds over two years ago, my administration moved to use that money in the most fiscally conservative way possible and shore up existing debt from the original contract, from emergency transfers for water sewer repairs from the general fund, and ensuring we had a reserve to stabilize our credit rating.
Not doing so would have been catastrophic. It could have led to a receivership where an outside entity takes over the system, or possibly even bankruptcy. Just about all of Siemens settlement cash went to paying the city’s debt and it was all related to water/sewer issues. There is no mystery. We have discussed all of this at length in public forums. I talked about it as recently as Monday.
I should also note that it isn’t just since 2018 that we’ve operated under a deficit. We have had a deficit on the water/sewer side of the ledger well before that, the result of an inability to read faulty water meters. This too has been well-reported on in the past.
The larger, more important question should be what are we doing to right the ship? We recognized a while ago that it is unsustainable to run a water department when you aren’t receiving water revenue. We are currently installing new water meters for all water customers across the city. This follows our push for a water forgiveness plan for residents.
Jackson has many problems. It has limited financial resources. So, the Siemens money, which we recouped after taking the risk of suing the international corporation, can be accounted for down to the last penny. We are very thankful for it because without it, we would be in a much, much worse position then we are today.
https://kingfish1935.blogspot.com/2022/05/food-fight-mayor-fires-back-at-wlbt.html
But Chokwe knew he was going to win with the legal team he chose!
Time to create a water/sewer authority. Ted is obviously over his head, and has plenty of time to get the billing system corrected. The Mayor has squandered resources during his tenure. It has been widely reported how the Siemens funds have been spent. Ted is just creating an excuse.
My hat's off to Judge Wingate for requiring this question to be answered. He was/is definitely the right judge for the water/sewer receivership.
Mayor Lumumba appears to confabulate the difference between the City's current payables and long term bonded debt.
It's the difference that doesn't matter when all a so called leader does is pull his statements from where the sun doesn't shine.
@10:56 agreed. Antar's incompetence has nothing to do with Ted's. They had a boatload of cash which they also blew. He's had plenty of time to get the collections up and they still haven't done the mass shut offs like they've been threatening.
Time to jack up the rates to whatever it takes to make the system solvent.
Jxn water didn't blow the money they got. The judge explained about it. It can only be used on certain projects. Not day to day expenses.
I'm all for the cut offs but doing so doesn't increase collections. Jackson, as a whole, is bankrupt. Yes, cut off the non-payers but don't think for a moment that doing so will suddenly result in a new flush of revenue. Ted Henifin is not the problem.
He says the money can be accounted for down to the last penny. Okay, so why do the audits show it as missing?
"Time to create a water/sewer authority."
Agreed. Have no idea what the damn State Legislature is doing regarding this. There were bills filed to do so but the legislature appears too cowardly to make sure August 2022 never happens again. Now, Horhn will be Mayor of Jackson and he will use his influence to convince legislators to punt on this deal because they all know him and think he will be competent enough to manage the water/sewer system. Let's say it is true that Horhn is competent enough to handle it. What happens after Horhn when another Yarber of Lyin Lumumba is elected?
I agree. I wonder if he could order a forensic audit to locate all of the funds that should have gone to water/sewer.
Rates should not be raised until JXN Water gets the billing/collecting system 100% working. Last I saw, JXN Water was bringing in 60% of what it should be. Has that changed? I believe the annual collections are supposed to be $84 million and JXN Water is bringing in $50 million. $34 million would go a long way in repairing/upgrading water sewer systems.
Put a lien on Lumumba's estate.
Wrong. $150 million couldbe used for 'day to day' expenses, the remainder could nor. But when one lands a cushy job, with cushy employees, and lots of cash in the bank, those 'day to day' expenses sometimes don't get controlled.
While Ted has done a good job managing something Chockwe couldn't, Ted has not done so with a fiscally conservative approach. Doesnt take a hidden camera operative yo see where Ted's day to day money goes as he lives his weekdays in Jackson.
As said earlier, time for Wingate, with cooperation from tge legislature, to establish a water/sewer utility district and manage this system
It ain't rocket science, it's basic shit flows downhill, something utility systems manage all over the country.
Cutting off the non-payers would have a small impact on the cost of operating the system to produce the drinkable water and treat the sewage, but does not provide the needed funding to reverse the accrued neglect and mismanagement of these systems.
The fixed costs, repair expenses, capital investments would not be reduced significantly if all the residential not payers were cut off.
An additional significant expense not affected by cutting off the non-payers is the existing bond principal and interest (including those sold to finance the Siemens fiasco.)
If they could collect all the unpaid balances and collect 100% going forward it would still have a negligible effect in the short term as a source of capital for repairing the outdated treatment plants and deteriorated distribution and collection systems.
It would still be the correct thing to do, and should be done.
... Ted has not done so with a fiscally conservative approach ...
Proof?
I'm glad this is finally under scrutiny. Every has smelled a rat on this the whole time. Hell, Dorky Dorsey or Kansas could have handled this one, but they may have some decency about them and refused the kickbacks to Lumumba. Word on the street is it is all in offshore bank accounts. This is from a pretty damn reliable source too. To the tune of millions of dollars.
Lightfoot, Franklin law firm in Bham pocketed the big fee, along with the procurer Winston thompson
Time's running out for Chokwe to spin the late audits.
There might be some fine shiggity buried in the details.
Whenever you are talking about Lumumba and write: “he says…..” Everything else is a lie. EVERYTHING
Shad can’t get involved because it is a municipality, correct? He can uncover a state employee stealing $2,000 worth of gasoline with a state card but can’t investigate the $60 million that is unaccounted for and the excessive $29 million in legal fees.
sung to the tune of "where have all the flowers gone"
What Sister R's 'non-profit' doing?
...into some stripper's g-string.
Can get Involved with other Municipalities not being current on Audits but Not Jackson?
Which law firm was used?
You think the mayor and the da didn’t get cut in? You know they did.
Judge should make the city shut where money went ! Mayor will never let Heflin look at anything concerning that money !!!
Sounds like some jxn water workers must be here. There’s no way you can say collecting all the non payers and past dues wouldn’t help the situation! He’s just too chicken shit to do the cutoffs. You would get a rush of money plus reconnect fees and most importantly ppl that would start paying monthly to prevent a cut off. Or you can just keep letting a large portion get away with this shit and charge the actual payers way more. Great idea comrade.
Ten million missing here, Ten million missing there...pretty soon we are going to be talking about real missing money that we are forced to account for.
Judge said in court to atty representing the apartment complex owners---no more workarounds, no more deals, no more foregiveness of debts.
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