Mincing no words, the city of Jackson accuses JXN Water of spending its way into a rate increase in a report submitted to U.S. District Henry Wingate Friday. The city compiled the report after Judge Wingate gave the city permission to dig through JXN Water's books. The city opposes the rate increase, arguing it will overburden the "60% of customers paying bills."
Michael Thomas, CPA of Systems Consultants Associates issued the report after reviewing JXN Water finances. Bill Cooley is the founder of the company.
Highlights and recommendations of the report:
* Jackson asks Judge Wingate to order JXN Water to deposit a $1.5 million bond payment with the Court. The payment is due in March but the report states the state will start intercepting its sales tax revenue is the deposit is not made.
* The city aims squarely at Ted Henifin and fires away. "The financial structure of JXN Water has been backwards since Day One and it should have been created differently.
*Jackson said JXN Water should prioritize bond payments over operations and maintenance. Doing so will require JXN Water to tighten its belt, thus forcing it to renegotiate contracts and open more contracts to competitive bidding. There is just one problem with this recommendation. The bond covenants require JXN Water to pay operations and maintenance expenses before debt payments.
Mr. Henefin fired back, " The system has been underfunded for years - with the City supplementing with General Fund revenues. There is no way to operate within available revenues and provide safe water to all customers, all the time as well as keeping sewer in the pipes and not running down the streets."
*About competitive bidding. Mr. Henifin said "Pure supposition that we would save any money and get same level of service. We saved $800K per year moving to Jacobs from the competitively bid Veolia contract and are already receiving better service."
* There must be a continued focus on revenue collection based on timely and accurate billing as well as accountability of payment of the billed amounts. The Receiver replied: "His own table clearly shows we are doing this with success."
* The Court should order JXN Water to work with the city to identify all places receiving water without an account. The report does not state how utility should work with the city.
Receiver Ted Henifin said there are 6,000 non-account holders receiving water. Mr. Thomas estimates that at a monthly bill of $85, collecting from those receiving water without an account will generate $509,280 in monthly revenue and $6 million in annual revenue.
* The report claims 17,832 customers received bills in September and 20,047 received bills in October but didn't pay. Collecting from these customers would generate $1 million per month and $12 million per year.
* JXN Water should seek a rate increase for customers who live more than a mile outside the city limits who have been paying lower rates nor do they pay the $40 monthly availability fee. The report argues they should pay the same rate and the availability fee as the rest of the customers do.
* The Court should order JXN Water to work with the city to collect bills that have not been paid. The report again does not say how JXN Water should work with the city, just that it should do so.
* Water/sewer delinquencies from October 2023 to December 2025 are $74.4 million. The city claims if only $10 million of that amount is collected per year, it will improve the system's revenue to $122 million.
* The city wants to supplement revenue with assistance from the State. The report states the city is going to get the legislature to appropriate funds for the water system. Since the legislature does not meet until January, the assistance can be classified as "hoped-for" revenue.
* The Court should order an affordability study by an expert. The expert should compare JXN Water's rates to other cities in the Southeast. However, it appears one such study already exists. Mr. Henefin said "This was done and is included on page 7 of attachment 4 in the City's filing."
As one can easily see, JXN Water's rates are in the middle of 15 Southeastern cities reviewed.
* Time for some trash talk. The city accuses JXN Water of holding $5.5 million of sanitation fees in 2024 and $8.5 million in 2025. The report claims an additional $13.7 million has not been collected. It is curious the city delved into the issue of sanitation fees as Judge Wingate said the city should not study this area.
* The city takes strong issue with the contract with Jacobs Engineering. The company manages the two water plants at $3 million per month.
* The report claims collection rates reached 67% in March but fell afterwards and never returned to that level. However,
Mr. Henifin took strong issue with the report. He said Mr. Thomas did not log into JXN Water's Quickbooks system (expenses) until the evening of December 18, the night before the report was due.
* The Receiver told the Court at an earlier hearing he did not focus on the billing system when he first assumed office because he spent most of his attention on keeping the system running and making much - needed repairs. The city used that little statement against Mr. Henifin, arguing he admitted neglecting the system.
* The city said it is in discussions with lenders to refinance its water and sewer debt.
Note: The actual report is on p.31 posted below.
62 comments:
I didn't download & read the whole report, but from the on-set it sure looks like the COJ expects the State to help pay their water bills...
COJ still doesn't understand the concept of "Receivership." Feds aren't asking for the City's suggestions how to run the system or billing. One more confirmation that there is no way water and sewer management can be handed back to the City.
The city is not suppose to be involved
with this water
To have people pay more outside city
Jxn Water has to PSC approval. They
want agree.
The rate increase is within the EPA
accordability rate. Jxn Water has done
two rate studies. One this year.
Mr. Henifin told Wlbt that their accountant never logged into Bills. com
where payments and invoices are stored. He only looked at finances the
night before he briefed city council.
Talk about kicking the anthill: Just look at the distribution list. Lots of free-water peeps but, curiously, no members of the MS delegation or their staff - talk about biting the federal hand that feeds...
The 1% sales tax they want approved
will require election and citizens voting
I think 60%.
In the near future the city of Jackson will have to be taken over by the state or feds. Jackson is in serious decline
I think the federal govt. needs to speak
up. They have agreement with city that
Jxn Water can raise rates. City is not
Suppose to be involved at all.
The City wants JXN water to fail. They want to prove their case that the City should regain control over water, and thus the handing out of lucrative contracts. The City is against rate increases, against turning off non-paing accounts, against professional, knowledgeable, and experienced contractors doing work on the system; i.e. against everything JXN Water needs to succeed.
Of course if the COJ were again running the water department they would have no problem raising rates. Right?
Shout out to both Chokwe Lumumbas.
WIthout them the City could never be in a position to make such a filing.
It doesn't look like the City filing mentioned the Environmental Protection Agency, the Safe Drinking Water Act, other than in documents referenced.
The City filing apparently also didn't mention any of the consent orders entered into with both the State Of Mississippi and the EPA concerning the history of repeated violations of regulations. These violations incluuded not treatoing and distributing safe water, and massive discharges of untreated sewage.
It would seem liket Job 1 ought to be provide safe and legally compliant water and sewage services. The City has proven they were unable to.
Is the zoo current on their water bill?
I heard they had at least one large leak for a long time. Was there even a meter on that water?
79% are paying their bills.
The city didn't tell the truth about what
% per month Jxn Water collects.
4:13 the city didn't see Jxn Water's
payments or invoices so how do they
know?
In case you ask what experience Michael Thomas CPA has with water systems and the City of Jackson's issues, here is something from 2016:
"Also looming this budget season is the city's water sewer deficit, or the "biggest leaky hole in the city’s finances," as Councilman Ashby Foote put it. Systems Consultants President Michael Thomas called the Jackson Public Works Department "probably the biggest threat to the financial operations of the city." https://www.clarionledger.com/story/news/local/2016/08/16/jackson-budget-negotiations-cuts-tax-increases/88764434/
The city are the ones that neglected
the system.
You ain't got to be Mensa level to know the problem is not the 60% paying their water bills...The problem is the 40% freeloadin' and suckin' the tit of entitlement.
Every time someone from the City starts complainming about non billed water being delivered to customers I remember this JJ post:
https://kingfish1935.blogspot.com/2023/02/who-ordered-code-e.html
" Some Jackson dirt, er, make that dirty water, came out in federal court today as U.S. District Judge Henry Wingate outed a long-time practice of giving free water service to friends and family of the favored few. "
The City sure seems to think the Legislature is going to help out? Wonder why that is so and wonder in what form would the Legislature help? I find it hard to believe a taxpayer from Shaw, MS is gonna be happy about helping with Jackson's water. And what does refinancing the debt actually save? I can't imagine the bond rate and/or terms are that much more favorable now.
Out of the administrative side of Horhn's mouth comes the call to "collect more" then out of the other, the political side, after Henifin has unleashed a massive new salve of cutoffs, Horhn effectively demands that the collections stop, or at least slowdown.
This document to Wingate clearly demonstrates that Horhn is not a serious leader.
Jackson loves conflict. What other cities and towns do so orderly is impossible in Jackson without lawsuits, court fights, debate, etc. it really is amazing.
4:53 79% are paying.
You can't believe what the city said.
I see one of the most intelligent statements was to “raise the water bills.” I hate to tell the Einstein who came up with this idea. If the citizens of Jackson are not paying, you can charge anything you want. The “rich” people that I know who live in Madison, pay their bills and all is well.
Shout out to Sister R!
They want? Want what?
I guess Wingate is obligated to interfere, and entertain the COJ idioti...?
Fug’um, let them rot!
I completely afree
I can't see the city getting the debt redone cause you have to pledge water
and sewer revenue.
Ted is finally showing his stripes!!! Competitive bidding is “pure supposition that it would safe money”!!! Unbelievable statement coming from a career public works employee!!!
And don’t believe his $800K savings with Jacobs handling the sewer plants instead of Veolia.
Why don’t we let everyone “negotiate” a contract and just do away with bidding!!! Yeah that would work!!!
The only way the legislature will help fund COJ Water/Sewer is via the establishment of a Regional Water/ Sewer Cooperative run by a regional board.
Why are the bond payments JXN Water's responsibility?
The city netted $60 million from the Siemens settlement, and then spent it on things other than the water/sewer system.
That debt should belong to the city, not JXN Water, unless and until the city proves how it spent the money. If 15% was spent on the water/sewer system, the let JXN Water pay 15% of the bond payments.
What happened to Judge Wingate's audit of the Siemens money? Did that go anywhere?
What’s up with the repeat haiku commenter?
Agreed. Yankee slap coming. The City Council must be illiterate, and not have a clue as to how government works.
The "city" can bloviate all it wants. They are not in the driver's seat, but delusionally think they are....kind of like an adolescent.
Maybe the new mayor can hire someone that majored in genders equity interpretive dance from JSU to run the water department.
Yeah, why is he carrying their water?
It is very obvious that no one at COJ has any business experience and the water system is a political pawn to them. They want so bad to be charge but still won’t admit they have no clue what they are doing. :facepalm
Mayor Horhn: “I’m their leader. Which way did they go?”
The city wants Jxn Water to live within their means. Read the story in Clarion
Ledger where city is millions over their
budget on streets. They'll blame on the
last admin.
One can woner how much Mr. Thomas billed for his agreed upon procedures. Logging in the night before the report is due to compile the report is negligence at best..... Seems like a nice FOIA request to make from the city...
Looks like dookie water is back on the menus.
COJ prays daily for JXNWater to crash and burn so to return to the old tribal ways where the Village Big Man dispenses water and largesse.
The city of Jackson doesn't agree with the third-party receiver concerning a water/sewer rate increase? Well, I'm shocked 😲 shocked I say. This is my shocked face.
Question on the COJ making documents available. I cannot find the 2026 Budget, the 2023 Audit, or this "study" anywhere on the COJ website. I understand the website got revised, but shouldn't these all be available? Kingfish - do you know where these are located online?
Another Question for legal types - should/could the federal court just order Entergy to turn over their electrical customer records in the COJ so JXN Water could quickly determine who is the responsible party that needs to pay a water bill as you should have the correct phone number? They just authorize them to set up a one-time call bank over the next 30-days to drive down the number of unpaid bills, with hard cutoffs thereafter.
You don’t have to look far to see that there is a racial component here.
I hope you are correct about the Legislature setting up a regional authority. They haven’t done so yet so I’m not buying it.
Who will the City replace Jacobs with and who will get the minority business percentage of the contract? That’s the questions to be asking. We all know that’s why the City wants control of the water system again.
The latest completed audit (aka ACFR or Annual Comporehensive Financial Report) is the 2022.
I believe Horne got elected into more than he thought. He has to dig the city out of a huge hole left by his predecessors. He will do some good but overall the city will keep going the wrong direction. It would take strong leadership and tough love to bring the city back to what it could be.
FY 2024-2025 (fiscal year ended September 30, 2025) Budget was adopted on September 10 2025 by council in a special meeting. I think they are still working on the FY 2025-2026 Budget.
Link to Council minutes of September 10, 2025, bottom of page 2 for resolution to adopt budget, scroll down for adopted FY 2024-2025 budget: https://share.google/XjaKHShczfhmlrYBy
11:19 The city can't replace Jacobs they have at least 9 years left on their
contract for both water and sewer.
10:19 They already got those records.
Correction- that is the FY 2025-26 budget at the link.
I wonder how many of the hateful, racist commenters actually live in the City of Jackson, are serviced by JXN Water, have actual experience dealing with both, and know what they are talking about. My guess is 'nearly zero'.
Your guess is incorrect.
Racism has nothing to do with incompetence of dumping millions of gallons of raw sewage in our rivers. The city of jackson has ruined the pearl river that affects us all. Not everything is about race, at your home if the guy next door had his sewage strait piped to your back yard you wouldn't care what color he was. You have choices in life. You can call everyone rasist and accept living in a shit hole, or you can admit its a shithole and fix it.
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