U.S. District Judge Henry Wingate smiles on Aug. 19, 2022, in Jackson, Miss. Wingate ruled Thursday, June 1, 2023, that the Mississippi chief justice cannot be a defendant in a lawsuit that challenges a state law dealing with appointed judges. (AP Photo/Rogelio V. Solis, File)
- U.S. District Judge Henry Wingate said the Court was at a “crossroads where judicial oversight must meet the stark, unyielding math of municipal survival.”
A federal judge ruled Monday that JXN Water can raise its rates 12% after a year-long battle with the City of Jackson, saying the Court was at a “crossroads where judicial oversight must meet the stark, unyielding math of municipal survival.”
The average water customer will see an estimated bill increase of $9 per month.
U.S. District Judge Henry Wingate was critical of Jackson’s handling of the issue while setting clear guidelines for JXN Water moving forward.
“While the Court grants this 12% increase as a survival measure, it does so with the strict expectation that JXN Water must aggressively pursue needed structural reforms to prevent further financial strain on the rate-paying public,” Wingate wrote, acknowledging the crisis came about because of Jackson’s past mismanagement.
The judge set six strategies to bolster long-term revenue and alleviate the need for future increases. The first is that the utility must expedite the identification and billing of currently unmetered or unbilled properties. Second, JXN Water is to create an in-person service site where customers can go to set up accounts, bring up billing issues, and file a complaint.
“Transparency and accessibility are non-negotiable mandates of this Court,” Wingate wrote.
Third, JXN Water is to develop a sample bill to educate the public. The sample must include a line-by-line explanation of the bill and explain the 12% increase in plain language.
JXN water must also conduct an efficiency audit of tiered billing.
“The goal is to ascertain whether it is financially feasible and practical to move toward a more equitable consumption-based model that protects the most vulnerable, low-volume users,” the ruling reads.
Fifth, JXN Water is to use enhanced debt collection. In the ruling, Wingate wrote of the unfairness of customers not paying their water bills. Wingate said that JXN Water must continue “to develop and refine a vigorous, fair collections strategy for the estimated $74 million in outstanding arrears, prioritizing large commercial delinquencies to recover lost capital.”
Finally, in executing these financial maneuvers, Wingate wrote, “JXN Water must not lose sight of its priority projects as outlined by the United States Government and this Court.” He continued by saying that financial solvency must be coupled with continuing the actual physical repair and modernization of the infrastructure as mandated by the existing consent decrees.
The judge was critical of Jackson’s leaders, who requested that the city conducted its own audit of JXN Water.
“Court allowed the City a significant indulgence: the opportunity to conduct an independent financial review. The resulting hearing, however, was a study in administrative irrelevance; rather than addressing the ‘Sword of Damocles’ hanging over the water system’s solvency, the City’s financial expert, Michael Thomas, presented an analysis that was fundamentally untethered from the crisis at hand,” Wingate wrote.
Wingate continued, “Remarkably, the record suggests the City did not even direct its own expert to perform the specific, rigorous analysis of water revenue requirements that this Court requested. Mr. Thomas, instead, expended the vast majority of his review time to sanitation fees, an issue this Court had explicitly and repeatedly announced was immaterial to the immediate necessity of a water rate increase.”
Judge Wingate chided Jackson leaders for not collaborating with JXN Water to address the utility’s $1.2 million monthly deficit, saying the City “failed to offer a single viable, immediate alternative to bridge the $20.4 million shortfall.”
Wingate concluded his ruling by writing, “While the City of Jackson must keep the water flowing today, the public is entitled to a full accounting of how every dollar, federal and local, has been spent. Accountability is not being waived; it is being deferred only long enough to ensure the system does not collapse under the weight of its own debt.”
Messages to JXN Water were not immediately returned Monday morning.
The City of Jackson issued a statement from Mayor John Horhn hours after the ruling was handed down.
“Jackson families are already carrying a heavy load, and that is why I opposed this 12 percent rate increase,” Mayor Horhn said. “At the same time, we cannot and will not allow our city to default on its water debt. My responsibility is to protect residents from unnecessary hardship while keeping our system solvent and honest about what we owe.”
Horhn went on to add, “Our position is simple. Jackson residents deserve a water system that is funded fairly, not on the backs of the people who can least afford it. We will meet our legal obligations, but we will also keep pushing for solutions that use existing tools like better collections, honest billing, and already-approved federal funds before asking every household to pay more each month.”
Wingate’s full ruling is shown below.
