City of Jackson Finds No Water System Cost Savings – Interim Third-Party Manager to Pursue Essential Rate Increase

December 22, 2025 – Jackson, MS – After decades of underinvestment in Jackson’s water and sewer systems led to their complete collapse in 2022, the City, State, and Federal governments agreed that a trustee was needed to restore service and put the systems on a viable financial and operational footing.  Ted Henifin, a nationally respected utility leader, came out of retirement to do just that.

Decades of the City underfunding the utility led to a self-imposed loss of City governance.  Even a 2013 federal sewer consent decree was not enough to convince the City to change its ways.  The City ignored the Decree requirements, leading to literally thousands of days of violations.  The City still is not in compliance with most of the requirements of that Decree.  When Judge Wingate took over the case and asked the DOJ attorney whether the City had made progress during the 13 years the sewer consent decree was in place, he conceded that no progress was made.

Given the City’s ongoing refusal to take the necessary steps to ensure customers had accounts, bills were paid, and rates were sufficient to fund the utility, the parties agreed that the Trustee would have the authority to raise rates unilaterally. That power was an important inducement to Mr. Henifin (and any trustee who may follow him).  If the City could veto financial decisions going forward, any Trustee (and the water/sewer systems) is destined to fail.

In yet another case of letting politics get in the way of good financial management, the City remains opposed to the pending rate increase and therefore demanded an extended period for its financial consultant—who has no clear utility experience—to review the minute details of JXN Water’s finances in search of cost savings. However, based on billing system access logs, we do not believe the consultant spent time actually reviewing the water and sewer financial details. The City’s review of JXN Water’s finances was a red herring – as JXN Water has long argued, including to Judge Wingate. Despite Judge Wingate’s instruction to exclude questions related to sanitation fees owed by JXN Water to the City, the consultant appears to have prioritized the City’s interests by focusing on that issue while largely disregarding the water and sewer financial details.

After hours on December 19, the City issued a report which opposes the rate increase and essentially urges JXN Water to (1) pay the City’s water system debt obligations first, (2) live within inadequate means to provide water/sewer service to the residents of Jackson, and (3) hope the legislature will send money or some other financial miracle will happen.

The City’s position reflects a continued reliance on non-recurring funding sources and insufficient budgeting over the long-term stability of the water system, rather than compliance with Judge Wingate’s orders and applicable federal and state legal requirements – all of which require this rate increase.  The rate increase will allow JXN Water to pay enough of our bills to keep our contractors working.  It is not punitive, political, or optional. It is required to meet court orders, comply with federal and state law, and maintain access to the borrowing necessary to prevent raw sewage from entering Jackson’s streets and streams. Without it, the system cannot function responsibly.

Furthermore, The City cannot simultaneously oppose the rate increase while expecting JXN Water to meet existing debt obligations and maintain essential services. Those positions are incompatible. Responsible stewardship requires aligning financial commitments with the revenue needed to support them. The Trustee’s legal and ethical obligations are to protect the interests of water and sewer system users.

We have come a long way together. Restoring and stabilizing the water and sewer systems was never going to be easy or inexpensive. Mr. Henifin, an expert federal utility trustee, has led the charge by assembling and investing in a highly regarded team with the technical and operational expertise necessary to stabilize, rebuild, and responsibly operate the water and sewer systems. He has determined that this rate increase, and the borrowing it will support, is essential. It is the most affordable and effective way to comply with Judge Wingate’s order, applicable federal and state requirements, and—most importantly—his obligation to the residents and businesses of Jackson. This work is about rebuilding the system to provide safe, reliable water to a community that for far too long bore the consequences of inadequate financial stewardship and deferred investment.  It is time to move forward.