Biden signs legislation allocating $600M for Jackson water
WASHINGTON, D.C. (WLBT) - A bill allocating more than $600 million in federal funds to address Jackson’s crumbling infrastructure cleared its final hurdle on Thursday, being signed by President Joe Biden.
Thursday afternoon, the president signed H.R. 2617, a $1.7 trillion omnibus spending bill that includes $600 million for Jackson water.
“I think it’s going to make getting Jackson back on the right path that much easier, having some resources to do it,” said Ted Henifin, Jackson’s water manager.
Henifin, who was appointed interim third-party manager over Jackson water as part of a federal court order approved in November, was unsure when the funds would come in.
“I assume pretty quickly. The inner workings of the federal government on a holiday weekend... I hope it will be in a reasonable amount of time.”
The news is a welcome relief for Jackson residents, business owners, and city leaders alike, after a tumultuous couple of years in which the city has dealt with water crisis after water crisis, including the most recent one that hit on Christmas Eve.
“I am so very thankful for the attention and support from the federal government to our city. So very thankful, so hopeful, and so ready,” said Jeff Good, co-owner of three Jackson restaurants.
Good’s businesses have been hit particularly hard by Jackson’s water woes, with one of his establishments, Broad Street Baking Company & Cafe, closed all week due to a lack of water.
He alluded to the legislation in a social media post earlier this week, saying that federal help couldn’t come quickly enough.
Ward One Councilman Ashby Foote was also pleased to hear the bill had been signed. “How about that?” he said.
The city faces hundreds of millions, if not a billion dollars, in water needs. A U.S. Army Corps of Engineers evaluation put together in response to the August/September crisis showed the city needed as much as $140 million to address immediate needs at both its water treatment plants.
There’s plenty of work to be done in repairing water lines in the city, and I welcome that,” Foote said. “It’s work that needs to be done and I look forward to improving our system in the years ahead.”
The funding includes $150 million to provide technical assistance, training, and grants in connection with the August 2022 federal emergency and $450 million for capital improvements associated with the same.
In August, the governor declared a state of emergency taking over Jackson’s water system after equipment failures at the O.B. Curtis Water Treatment Plant left tens of thousands of people without water. A federal emergency declaration followed.
In November, U.S. District Court Judge Henry Wingate signed an interim stipulated order allowing the federal government to take over Jackson’s water system, and appointed Henifin as the third-party administrator overseeing it.
Henifin says the $450 million will come to the state and likely be placed in its State Revolving Fund loan specifically for use on Jackson water.
He said the funds could be used for a variety of water projects that would be eligible for funding under SRF rules and could be used to forgive existing SRF debt. Jackson has three outstanding SRF water loans, with a combined value of about $51.7 million. The city applied for and received the loans in 2016, 2019 and 2021.
“It could go to forgiving, wiping out some debt for SRF projects, but there may be better things to do with it,” he said. “So... I’m not going to guess what the ultimate mix of projects or debt forgiveness or whatever is going to come out of that.”
Henifin said Jackson would have to apply to receive the funding, much like it would have to do when it traditionally applies for an SRF loan. Mississippi’s drinking water SRF program is administered by the Mississippi State Department of Health.
“But again, it’s not competitive, because it’s Jackson’s money,” he said. “It’s just a mechanism to get it that’s restricted for SRF eligible expenses, largely capital projects.”
The allocation likely will have major implications on how the city funds mandates in the federal court order.
The order, which was approved on November 30, requires the ITPM to create a financial management plan showing how the city plans to pay for water system improvements, in particular, the order’s priority project list.
The plan is due to the Environmental Protection Agency and U.S. Department of Justice December 29 for review. The final plan must be in place and implemented 60 days from the signing of the stipulated order, which will be in late January.
“We’re going to incorporate some big changes with the omnibus bill and the dollars coming in to really figure out where that is best to apply that, in what years, and what works,” he said. “So, there’s going to be a lot of changes to what we originally were thinking of in terms of the financial plan.”
The passage of the omnibus bill will not impact other aspects of the order, including mandates to establish and fund an Operations and Maintenance account and a Capital Improvements Account for the water system.
Henifin says both of those accounts have been set up with Trustmark Bank, and the city must make the first deposits into both of those within seven days.
The city will be required to transfer $15.9 million into the O&M account in the current fiscal year, excluding any operations/maintenance expenditures Jackson already has incurred. Funds in that account will cover day-to-day operations and maintenance of the city’s water system, as well as emergency needs.
Jackson must deposit $22.9 million into the Capital Improvements Account. That amount can include city funds, federal or state loans and grants, and any other assistance Jackson receives for its water system.
Priority projects include hiring a vendor to operate and maintain the system, and developing and implementing a plan to winterize the city’s treatment plants. completing a corrosion control treatment plant for the Curtis and J.H. Jewell plants, and implementing an alternative water source plan to supply residents in the event of another crisis.
On top of that, Henifin says he wants to replace some 100 miles of small-diameter water pipelines over the next five years, including 10 miles in the current fiscal year.
Jackson’s fiscal years run from October 1 of the current year to September 30 of the following year.
Meanwhile, Henifin is working to set up an office and hire staff local to administer the order. He has worked with the Mississippi Secretary of State to establish JXN Water, to do so.
“I need a business to actually do business in Mississippi,” he said. “I need to hire people, pay invoices, hire contractors... open bank accounts. That requires a Federal Tax Identification Number. You’ve got to be incorporated. So, I’ve incorporated at this point as an S corporation.”
Incorporation papers were filed with Secretary Michael Watson’s office on December 7.
“My accountant says that might not be the best solution. We might change that,” he said. “But, anyway, it’s a corporation, it’s been incorporated in Mississippi.”
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