The financial woes at JXN Water continue to multiply. WLBT reported last week:
Interim Third-Party Manager Ted Henifin is sounding the alarm on JXN Water’s finances, weeks after his efforts to raise revenue through a rate increase were put on hold by a federal judge. In an exclusive interview with 3 On Your Side, Henifin says several major contractors have not been paid in months. Meanwhile, he isn’t bringing in enough revenue to cover the city’s bond debt payment due in December, meaning Jackson could be in danger of default. “I’ve got about $30 million [in invoices] I have not paid to Jacobs, Wicker Construction, Veolia... Sustainability Partners... and then Stantec Consulting... I’ve got them all still working on a handshake... I don’t think I can keep them working much longer,” he said. “This house of cards is going to tumble and crumble.”... In the spring, Henifin proposed a rate increase to help offset the exhaustion of federal funds. However, the proposal was voted down by the Jackson City Council and has been put on hold by U.S. District Judge Henry Wingate. Henifin says JXN Water likely will not be able to make a more than $5 million December bond payment as a result.... So why is JXN Water responsible for paying off Jackson’s debt? As part of the original stipulated order taking over the water system, Henifin was only expected to be over the water treatment plants, transmission lines, and other infrastructure. However, the City Council asked the Environmental Protection Agency and the Department of Justice to amend the order to allow the ITPM to take on the billing system as well. Henifin also agreed to take on the city’s bond debt. At the time, that debt included almost $150 million in outstanding principal and interest, including what was left of the city’s $89.9 million Siemens bond. Henifin had hoped to use a portion of a $600 million federal allocation to pay off that debt but the legislation authorizing the funding would not allow it. As a result, JXN Water must make millions of dollars in annual bond payments.... A copy of Jackson’s 2018-2019 bond catalog shows that those payments included $9.2 million in debt service in September, and $5 million in debt service on December 1. Henifin was able to make the September payment but had to delay paying contractors as a result. “I approached them back in the spring, and said, ‘You know, we need to make a bond payment on September 1, and the only way we’re going to be able to make it is if I can delay paying you until I get some capital later in the year,” he said.... Henifin said that had the rate increase gone into effect in June, he would have brought in an additional $4 million that could have gone to debt service and contractor payments. He also requested permission from Wingate to set up a water authority, which would have allowed him to issue new debt that he says could have gone to operational costs. Wingate, so far, has blocked the rate increase, saying back in July that he still had questions about how Jackson used nearly $60 million in Siemens settlement funds... Rest of article.
The bondholder, Assured Guaranty, recently met privately with Judge Wingate. The Court has also held private meetings with Mayor Horhn. JXN Water was excluded from the meetings.
26 comments:
just give it all back to the black supremacists since they want it so badly and let them figure it out for themselves and pay for it themselves. I am beyond fatigued.
Note to my broker: buy stock in bottled water and porta-potties.
Want to see an implosion of a major city? Eliminate their ability to issue bonds by defaulting on a bond payment.
Wingate has Water Czar Henifin painted into a corner. Default in 3, 2, 1...
You can’t help people that can’t do enough basic math to understand that a rate increase is mathematically required to make the system sustainable. The system will fail, they will blame the white man for not saving them, and they will keep sitting on their ash heap begging for welfare from someone else while demanding that they be “in charge” of whatever ruins are left.
Please don’t run off Ted. He’s the only reason we still have water
National Guard arriving with water trucks in 3, 2, 1...
9:32, bankruptcy sounds like the only solution. And in that case, the current bondholders get a haircut. After bankruptcy is filed and debts are restructured, it is actually easier to sell new bonds. I'm not sure why Heflin hasn't pursued that already.
I expect that all the people who want free water pay their phone bill every month on time.
KF why exclude Jxn Water
The house of cards falling will be on Wingate's head.
Dec. payment will be made. It will come
from the city general sale tax. It will go
to the dept of revenue to the bond trustee.
Mr. Henifin told the judge about this
months ago. He didn't listen. The mayor is against the raise. It was only
$9.00
He can't file for bankruptcy.
Give the debt back to the city.
We probably pay for that too.
This is on Judge Wingate.
This seems like it would be a good use of whatever Siemens money is left. Maybe that's where Judge Wingate has been going with this.
I don't know what people pay in Jackson. I live alone in the PRVWSD service area, and my monthly water bill is about $44, with garbage billed separately for $25 a month. So that's $70 a month for a single-person household, for utilities that don't have disastrous history and debt that Jackson has.
Seems like Horhn and the bleeding hearts on the City Council want to ru(i)n JxnWater themselves. Let them have it. They will destroy it and show themselves to be no better than the previous administration.
Use $600mm to pay off $150mm of debt. Get forgiveness later. Put the city on track to at least be able to meet its obligations.
Doesn't the city, itself, have an unpaid $6 million bill from JXN Water?
Please hold off long enough so I can sell my house in Jackson!
I am on Bear Creek Water. My water bill is $13.02/month.
He can't use the money to pay debt.
Mr Henifin tried to tell the judge.
He needed that rate increase.
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