Monday, January 30, 2023

Water Bills Going Up, Equity Billing Coming

 Water bills are going to be based upon property values and oh, they are also going to go up.  So said Jackson Water Manager Ted Henifin at a press conference Friday.

The EPA filed an enforcement action against the city of Jackson for its failure to properly maintain its water system over the last several years in U.S. District Court in November.  The agency submitted a proposed consent decree.  U.S. District Judge Henry Wingate appointed Mr. Henifin as Jackson's Water Manager as the Court took over the water system.

The Court required Mr. Henifin to submit a financial management plan for the water system by January 28, 2023.  PFM of Philadelphia provided utility financial advice while national engineering firm Stantec assisted Mr. Henifin in determining a rate structure.  Mr. Henefin discussed the plan at a press conference Friday. Highlights of the press conference are: 

* Mr. Henifin said "The (water) system is really strained financially."  Jackson is not in compliance with most bond covenants.  The billion dollars in federal assistance will "do wonders" to get the system working but it will not keep the system working.  The Water Tsar said the challenge is to create a revenue stream that will fully fund water operations. 

He said good utilities have cash reserves but unfortunately, Jackson's utilities have none after the Siemens debacle destroyed the billing system.  An A-rated utility has at least 90 days of cash on hand.  The goal of restoring the cash reserves drove the model he created.   Mr. Henifin said bond covenants require a 1.2% reserve. (p.3)

* Jackson can't borrow much money today.  Mr. Henifin said Jackson's bond rating is in the B,BB,-B range, "barely above junk bonds."  The study says the "current credit ratings" are Ba2 Moody's and BB- by S&P.  (p.4) The plan states (p.4):

These low credit ratings and the continued failure to meet the existing General Bond Resolution requirements mean that as of the Plan date, the System is unable to access the municipal bond market to support its capital program.

Mr. Henefin set a goal of making Jackson an A-rated utility with a minimum of 90 days cash on hand by FY 2029.   

* Debt service for Jackson's water/sewer operations is $23 million per year. (P.9 has list of bond issues)

* It only cost $50 million to run the water/sewer system.  Unfortunately, debt service and metering almost equal the cost of operations.  

The study states (p. 13)  the meters will cost $5.1 million per year.  Jackson is leasing the meters but is not responsible for their maintenance.  The plan claims the meter installation project is "behind schedule." Mr. Henefin said the meters will cost $10 million per year once fully installed.  The total costs includes billing employees salaries.  He claims using "equity billing" will remove such costs.  He said breaking the contract will be rather costly for the city. 


* Mr. Henifin said goal is to get out of the debt burden and "move on."  Federal funds will be used to pay off water/sewer debt of $290 million.  The removal of the debt frees up cash to invest in operations and restore the system to profitability.  The plan states paying off all debt will free up $23 million FY 2024.  Such an amount is a little more than the losses currently suffered by Jackson's water/sewer system.

* "I don't know how anyone in this city trusts a bill, if they got a bill," exclaimed the Water Manager. He said Jackson had "challenges" in issuing bills.  Mr. Henifin said it will take a year or two to get the meter system corrected but much longer to build up confidence in the billing system. 

* Mr. Henefin used the billing debacle to shift to the subject of equity billing.  The U.S. Water Alliance focused on property values, not consumption.  He said the assessed values of Jackson homes were well below their market value.  He said he would use a multiplier times the property value to determine a rate to charge monthly bills.  

The water manager's team looked at four models and determined the equity model ("Property attribute" as he called it.) was the only one that paid off existing debt without requiring the use of meters (after 2030).  The models are provide on pps. 8-9 in the plan posted below. 

The median single family residential bill would be $50 per month for water/sewer services. Bills will be capped at $150 per month.  The value of the home would be $160,000 before the cap is reached.  The new fees will not include trash.  He said a home with a property value of $100,000 will have a water/sewer bill of $100 per month. (p.13)

The bills for commercial properties will be capped at $600 per month.  Mr. Henifin acknowledged the bill will be low for some businesses.    


* There are two bills in the Legislature that will ban such "equity billing."  The Grand Poobah of Jackson's water system said he would not address those bills.  However, sources told JJ Mr. Henifin is looking at the possibility of going to court to stop such bills from taking effect. 

* Mr. Henifin recommended extending judicial oversight of Jackon's water system for "some period of time." He clarified the statement to an extension of five years or until the federal funds are spent. 

* The Water Manager plans to enter into a contract with Jacobs Engineering for five years.  

The plan states (p.5) Jackson will borrow up to $100 million in the "2030 timeframe to construct a new plant or completely rehabilitate the existing facilities."  

Mr. Henifin recommended (p.16) adding sewer and stormwater systems to the court order. He said he hopes to have the new rate structure in place by October 1, 2023. 


Anonymous said...

I expect to see more for sale signs with increasingly lower prices.

Anonymous said...

He still hasn't addressed the 42% of tax free properties. They do not receive a property tax bill. IE: How much will the Capitol, First Baptist, Museums, Zoo pay for water/sewer?

Anonymous said...

I can tell you this when we sold our house in NE Jackson in 2020. We got 150,000 for it. It's a 1800 sq ft house. It was on Kings Place paralleling S Pear Orchard Rd.

Anonymous said...

Hitch up your britches NE Jackson homeowners--this is just the start

Anonymous said...

I f jackson drug dealers paid $200 cash/month,Jackson would have an A+ bond rating in six months.

Anonymous said...

Henifin loses if he goes to court thinking he can bully the state.

Anonymous said...

Go right ahead, Ted. Charge me $150 a month for water. I guarantee you my neighbors and I will have the best looking, best watered lawns on the planet.

Anonymous said...

The Fidel Castro of water plant Generals--

Anonymous said...

“There are two bills in the Legislature that will ban such “equity billing.” The Grand Poobah of Jackson's water system said he would not address those bills. However, sources told JJ Mr. Henifin is looking at the possibility of going to court to stop such bills from taking effect.”, communism imposed by the judicial process. Ain't that a bitch.

The mayor and his posse love them some court action.

Anonymous said...

My current water bill in Madison (Bear Creek Water) is $11.13.

Still loving that Marxist carpetbagger in charge of your water?

Anonymous said...

Nothing wrong with paying off the debt ($290M) except they have to do a $290M bond to pay off the debt? Well at least the attorneys and bond counsel will reap the benefits!

Everything wrong with equity billing! $10M metering cost just goes away? Billing will be free?

He wants sewer and storm water in the federal order? Trying to stop the utility district bill in the Legislature I would say.

Anonymous said...

@ 1157 is correct. Flat rates will encourage waste. There will be no "conservation" at all.

Anonymous said...

And federal lawsuits coming. I'd suggest not cashing those water checks just yet.

Anonymous said...

Given Ted's federal-sourced authority, does federal preemption overrule any actions by the State of Mississippi?

Anonymous said...

Correct me if I'm wrong, but isn't there a judge over Henifin that said he had to go by state laws? Someone needs to rein in this fool.

Anonymous said...

Serious question here. Need one of the local media members to ask this question. What are they doing about all the balances from estimated billing? I fought with city on a couple of occasions after taking photos of my meter, and comparing to estimated bill. They corrected the subject bill downward for that month, but when I asked about all the other bills that were over-estimated, they said "i should've taken photos of the meter at that time and came to billing dept then". I've since quit paying because I'm not dealing with that crap anymore. Believe me, i'm not the only one. There are thousands of people who don't pay because no one feels there is recourse of shut-offs. They don't have enough people to answer 911 or respond to shootings around here. Do we really think they have enough people to shut off everyones water. C'mon on. They've been trying for years to accurately bill correctly. What makes anyone think they're actually going to shut off water. And, if they did, just think about all the media that will fly in and say how mean it is to shut off water. This is where socialist thoughts have gotten us. They're counting on the few civilized residents to pay for everyone. What a joke this city is

Anonymous said...

I'm bullish on the financial success of automated car washes in Jackson. GoShine folks come on down.

Anonymous said...

If this kind of idiocy prevails and persists , I’ll run my water day and night until my last child graduates from JA in 5 years. May not make it that long, but he starts driving in 2.5, so that’s the hard line. Then, I’ll take my loss on our house and run like hell. .

Anonymous said...

Flat rates will absolutely encourage waste. My bill for my NE jackson home is currently around $185 per month (we have a pool). I usually conserve how much we fill the pool to keep the bill under $200. With a cap we will have no incentive to do that

Fix the Pipes and Fill the Potholes said...

Based on my experience I believe the NEW water meters are working. After installation in November we received a bill with an estimate which was high. I have been watching water usage on the meter and the daily average consumption has been appropriate for house size, occupants, etc. Our December bill reflected my rough calculations and most importantly matched the meter data. I don't think the meters are the real problem or the reason he wants to ditch them. Maybe the issue is manpower and the need to take unqualified COJ employees out of the equation? Maybe the Biden-EPA is pushing a welfare water model? I understand that this is not everyone's experience. I just think that the technology works but isn't getting him to the model's goal-line revenue wise.

Anonymous said...

@11:51 that's exactly what I've been trying to tell people. A house like that would probably be $280,000 in Flowood, etc. It's ridiculous. And with this water billing fiasco, who is going to want to move to this city?

Anonymous said...

Jxn get's what Jxn deserves. All you Jxn residents who will whine and complain when this goes into effect, you should have seen this coming 30 years ago, you had plenty of time and opportunity to get out. I moved here in 95 and even then was smarter enough not to invest money in the city limits.

Anonymous said...

Flys in the face of reality. Kafkaesque

Anonymous said...

Where can I get some of that $400,000 to not fix the problem?

Anonymous said...

"Jxn get's what Jxn deserves. All you Jxn residents who will whine and complain when this goes into effect, you should have seen this coming 30 years ago, you had plenty of time and opportunity to get out. I moved here in 95 and even then was smarter enough not to invest money in the city limits."

Who's gonna tell him that the stench of Jackson crime is already headed to his "safe" suburban neighborhood?

Anonymous said...

The other question/issue that I see coming is what about the customers outside the city limits. Water/sewer rates are typically 50% higher outside the city limits, does this mean that those customers will pay the same $ 150 cap or will they cap at $ 225?

Anonymous said...

by 2029....that is beyond laughable- The Empire State building was built in 11 months!! "Come on man" !!

Anonymous said...

Henifin's commentary on the operational economics is a condemnation of Lumumba's stewardship.

Anonymous said...

Federal and state regulations governing water/sewer grant/loan projects, which the city has, prohibit this billing scheme. I suspect future funding, such as that the city has just received, has similar prohibitions. The regs essentially require billing on a usage basis.

Anonymous said...

@12:09 - I'm confused, how is your overall bill so low. I too have Bear Creek water for my lake house. My meter reading was 1617 last month and this month 1617 which means I didn't use ANY water - 0 gals used. My bill - yes for water was $10.50; however, for sewer add an additional $52.00. My bill was $62.50.

Anonymous said...

Biggest boob in Jackson since, I guess, Bob McIlvaine.

Anonymous said...

HMFIC has spoken

Anonymous said...

@7:00 pm: 12:09 used 63 cents worth more water than you did and didn't have a sewer bill.

Wow said...


Who knew the 10 year consequence of the disastrous Seimen's investment would be this.

The crazy thing to me is that it costs 10MM a year to maintain a billing system. And that 2029 is the earliest predicted return to any financial viability.

Anonymous said...

@7:00 I’m the Bear Creek general manager, so I will weigh in. His bill was water only. Your bill was water and sewer. And if you have a $52.00 sewer bill on such small usage, I assume you live at Lake Cavalier. At Lake Cavalier, Bear Creek is the water provider and Lake Lorman is the sewer provider. We bill the sewer for Lake Lorman and remit them the money. That is the rate THEY set. If you were a Bear Creek sewer customer your sewer would have been around $17.00

Anonymous said...

So the previous scam was the Jackson poor "straight piping" around their meters. I predict the new scam will be the cheapest house on every street pays a water bill, and the other customers all terminate their accounts. Of course, a few extra trenches might appear from the backyard of that house to all the other houses on the street. Invest in PEX and Sharkbite fittings now while you can still get in low!

BTW, if I agree to pay 1.2% of my homes' value annually for water and sewer, is there a breakdown of how much of that water will be drinkable from the tap vs. boil it myself or pick it up from a fire station parking lot?

Bleed them dry Choke. Once you get all the tax payers to leave Jackson then you can finally achieve the "cold fusion" dream of living 100% off the Federal dollar while putting nothing into the system.

Anonymous said...

@12:09pm Democrats (and all Leftists) love them some court action when they can't achieve anything through the appropriate political process. There's always a wild-card idiot judge that'll give them some more time, or an out-right favorable ruling.

Example? Jess Dickinson

Anonymous said...

In particular, Mississippi Department of Environmental Quality Executive Director Chris Wells is asking why EPA’s Office of External Civil Rights Compliance is seeking documentation dating back to January 1, 1970, nearly a year before EPA was established. So this is just BS on part of EPA requesting. Having personally done public file reviews for MDEQ in the late 1990’s and early 2000 this is probably not even records kept worth looking at back then. Needless to say grasping in Overreach is not unusual for the Federal Government when using the Race Card. I don’t know why or how the EPA has given in to such tactics & stooped this low. By Pass MS legislature and give the $ to Mayor Chokwe & COJ without any oversight from EPA like the Mayor demands. Have the Mayor sign an agreement for staying off ALL NATIONAL MEDIA and not ask for any more help when he fails yet again. Crime, trash & water issues were not created by the State of MS. Do not blame us anymore. Quit having temper tantrums & grow up & do your job!

Anonymous said...

The $150 "cap" does not include sewage OR garbage pickup. The actual bill will be closer to $350 per month. Write it down.

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