City’s plan would increase water, sewer rates 40 percent over the next year

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Published: Nov. 23, 2021 at 12:47 PM CST
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JACKSON, Miss. (WLBT) - If the Environmental Protection Agency agrees, Jackson’s water and sewer rates will go up an estimated 40 percent in less than a year.

The city is proposing raising rates twice in the next 10 or 11 months as part of its plans to renegotiate its sewer consent decree with EPA and the U.S. Department of Justice.

The increases would include the 20 percent hike that is expected to be taken up by the city council in December and a second rate increase that would likely be voted on before the start of the next fiscal year, which begins October 1, 2022.

The rate hikes are part of the city’s proposal to modify the terms of its decree. The proposal, which had to include a financial model on how to pay for decree work, was presented to the Environmental Protection Agency recently and is currently under review.

“What is currently in our plan is consistent rate increases - a rate increase now and a rate increase that would happen in a year, not even a full year, in the next fiscal year,” City Attorney Catoria Martin said. “The way they have it set up in their plan is each fiscal year you would have an increase. We’d start with 20, and I think it goes down to 17, and it goes down to 10 and it goes down to 5.”

Under the plan, the council would raise water and sewer rates by 20 percent this year. At the start of the next fiscal year, rates would go up another 17 percent.

It was unclear if the 10 percent and five percent increases would come in the next two fiscal years or would be spaced out over a longer period of time.

Combined, all four rate increases would raise water and sewer rates by 62 percent.

The council is expected to vote on the first increase at its December 7 meeting. An ordinance to raise rates was introduced Tuesday and is being held over until next month. If approved, the new rates would go into effect 30 days after their passage.

Also on December 7, the council is expected to take up a proposal to increase sanitation fees from around $20.84 to $35.

With the 20-percent hike, sewer fees would go from $4.47 per hundred cubic feet (CCF) to $5.36 per CCF. Water would go from $3.21 to $3.85 per CCF. The next 17 percent would boost water rates from $3.85 to $4.50 and sewer rates from $5.36 to $6.27.

CCF is 748 gallons of water and is the measurement used to determine water and sewer fees in Jackson.

Water and sewer rates were last increased in the city in 2013, under the late Mayor Chokwe Lumumba, the current mayor’s father.

Martin said the increases are lower than what the city’s consent decree consultant, Burns & McDonnell, recommended and warned EPA could require higher fees than the ones being offered.

“It is possible they’re going to tell us it’s going to be more than 20 percent, but we’re trying to get a start,” she said. “We hope they will be amicable... but we do not yet have confirmation.”

Martin said future rate increases could also be impacted by what Jackson receives in infrastructure funding from the state.

Mississippi is expected to receive more than $4.2 billion in funding as part of the $1 trillion infrastructure spending bill recently signed by President Joe Biden.

Of that amount, $429 million will be allocated to Mississippi over the next five years to help with water infrastructure needs, according to a fact sheet provided by the White House.

Although it’s not clear how much Jackson would receive from that allocation, help is definitely needed, with the cash-strapped city facing $960 million in consent decree mandates, and $2 billion in infrastructure needs overall.

Jackson entered into a consent decree with the EPA and U.S. Department of Justice in 2013, in part, due to a large number of sanitary sewer overflows (SSOs) that had occurred throughout the city.

SSOs occur when raw sewage comes out of the sewage system and gets into the environment. Causes of these overflows include blockages, line breaks, improper sewer design, and the like, the EPA’s website states.

Under terms, the city was initially required to make $400 million in upgrades to bring its sewer system into compliance with federal water quality laws. Since then, costs associated with the decree have grown to around $960 million.

While costs have gone up, Jackson’s financial situation worsened. In the last decade, the capital city’s population has dropped by nearly 20,000 people, going from 173,514 in the 2010 Census to 153,701 in the 2020 count.

Meanwhile, Jackson has struggled to collect on its water and sewer bills from its current residents, thanks to complications with the Siemens contract.

Jackson brought on Siemens USA in 2012 or 2013 to install a new billing system.

The roughly $90 million contract included replacing some 65,000 new water meters, installing new billing software in the city’s billing office, and putting in place a network of repeaters and transmitters to allow the meters to communicate directly with billing.

The meters and communications network never worked and a few years ago, the city’s water/sewer enterprise fund almost went bankrupt as a result. Jackson eventually sued Siemens and its subcontractors and settled the case for $89.5 million.

Funds recouped from the settlement, meanwhile, have already been used, in part, to bring Jackson’s water bonds into compliance with the bond covenants and to reimburse the general fund for transfers made to the water/sewer enterprise fund.

Jackson’s legal victory aside, problems with the billing system persist.

In May, the city reported some 8,000 customers were not receiving regular statements, while another 14,558 were not making regular payments.

Those 14,558 accounts constitute more than $39.7 million in outstanding but collectible water debt, according to a report submitted to the state’s Public Utilities Staff this summer.

To help boost collections, the city began shutting off customers for nonpayment beginning September 1. The Lumumba administration silently stopped shutting off water as part of the city’s response to the COVID-19 pandemic.

Weeks prior to beginning the shut-offs, in mid-July, the city implemented a new program to help low-income and disadvantaged customers to set up payment plans and get caught up on their bills.

It was not known how many people had signed up for that program or how many customers have had water suspended for nonpayment. We have reached out to interim Communications Director Ashley McLaughlin, who said we would have to file an open records request to obtain that information.

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