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DOJ Releases New Jackson Water Plan    01/28 09:51


   JACKSON, Miss. (AP) -- The interim manager appointed by the U.S. Department 
of Justice to reform the troubled water system in Mississippi's capital city 
released a new financial plan Friday to change the way Jackson bills for water 
and spend hundreds of millions of federal relief funds paying down the system's 

   The plan would relieve the water system of its debt and introduce a new 
billing model that would become effective in the budget year that begins on 
Oct. 1. The proposed reforms would allow Jackson to pay for the costs of 
improving and operating a water system that is in such disrepair it could fail 
again at any moment, according to Ted Henifin, the interim water manager.

   "I've got to tell you, I could walk out of here right now and lose the 
system. It's that tenuous," Henifin said at a Friday news conference. "We've 
done a lot to improve this system, but it might fail tomorrow."

   Henifin said that Jackson Mayor Chokwe Antar Lumumba called him in a panic 
earlier Friday because he had lost water in his home. The mayor was worried the 
system had failed again. Repeated breakdowns have caused many in the city of 
about 150,000 to go days and weeks at a time without safe running water.

   The plan would change the way Jackson issues fees for water use. Water fees 
would be capped at $150 per month for homes with a value of $160,000 or more. 
Bills for commercial and other properties would be capped at $600 a month. This 
is part of Henifin's proposed solution to a loss of revenue Jackson has 
experienced as its tax base eroded over the past few decades.

   Increasing maintenance costs in a city where 25% of residents are in poverty 
could lead to increases in water rates, further accelerating migration out of 
Jackson to the suburbs. This represents a "slow death spiral" that many cities 
in the United States have faced over the past four decades, according to 
Henifin's proposal.

   The new rate structure would reduce the system's dependence on city water 
meters, which have been mired in problems, Henifin said. In the past, some 
residents have been billed too little or too much, and some have not received 
bills for long periods of time.

   But legislation passed by Mississippi state senators Thursday would ban 
Henifin's proposed solution. The bill, which is being pushed by Republican 
legislators from outside Jackson, would require that utilities charge residents 
based on the amount of water they use. Metering systems are used to calculate 
how much water people use.

   On Friday, Henifin said the city's past challenges with water meters would 
make it difficult to rebuild confidence in a metering system.

   The metering bill isn't the only legislation advancing in the state 
legislature that would impact Jackson's water system. Another bill proposes an 
eventual transfer of water, wastewater and storm water services provided by 
Jackson, a Democratic-led city, to a new regional entity's "ownership, 
management and control."

   Henifin told The Associated Press that he believes the bill could be 
motivated by a desire by state officials to access the large pot of federal 
dollars earmarked for Jackson's water.

   Henifin's plan would also reserve around $290 million from a loan fund 
included in an $800 million trove of federal dollars to pay off the water 
system's existing debt. The move would improve the water utility's credit 
rating so it could borrow more money in the future for further improvements, 
Henifin said.

   Paying off debt using federal dollars would ensure that one-time funding is 
used for one-time expenses. "That's business 101," Henifin said.

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