Henifin blocked from treatment plant as firm protests termination
JACKSON, Miss. (WLBT) — A ploy to protest JXN Water’s plans to hire a new firm to run the city’s wastewater treatment plants Thursday landed its operators in federal court.
U.S. District Judge Henry Wingate called a status conference for Thursday afternoon, hours after he was informed that Veolia North America had blocked Interim Third-Party Manager Ted Henifin from accessing the Savanna Street Wastewater Treatment Plant.
Henifin and Jacobs Solutions staffers were supposed to meet there to discuss the transition with Veolia.
However, Veolia Vice-President of Operations Matt Johnson met Henifin at the gate, told him he was not ready to meet, and that he could not access the property.
“This was an opportunity to pause what JXN Water was trying to accomplish and work with them about the concerns and issues we’re seeing,” he told the judge. “Whether right or wrong, I apologize for creating chaos that didn’t need to exist, but I thought it was the only way to bring it to your attention.”
During more than an hour and a half of proceedings, Wingate asked Johnson about his concerns, but admonished him and others, saying that Henifin, as the third-party manager, has a nearly unfettered right to access the city’s water and sewer properties.
At the heart of the matter is Henifin’s decision to end the city’s nearly decade-long contract with Veolia and replace the firm with Jacobs Solutions.
Veolia took over management of Jackson’s Savanna Street, Trahon, and Presidential Hills treatment plants in early 2016.
According to the contract, the firm would be paid $11 million a year for 10 years to manage the city’s plants and pumping stations, and to help ensure Jackson complied with its sewer consent decree.
The firm currently charges JXN Water about $14.8 million a year, about $830,000 more than the proposed contract with Jacobs.
| Wastewater treatment costs | |
|---|---|
| Veolia North America | $14,857,858 annually |
| Jacobs Solutions | $14,027,210 (proposed) |
For his part, Johnson told Wingate ending the contract early would cost ratepayers between $1.2 million and $1.4 million in demobilization costs.
“We question why go through with this and pay a premium with so little time left in the contract,” he said. “I don’t see the business sense behind that.”
Johnson also touted the firm’s efforts in the last year and a half to improve conditions at the Savanna plant, including investing in training for the plant’s 35 employees.
“We’ve been investing heavily in employees for years,” he said. “To lose them early would be disappointing and frankly hurtful.”
He told the judge that, despite what happened on Thursday, Veolia would still like to compete for the city’s business and would like JXN Water to issue a request for proposals to get the most competitive price.
Henifin countered Johnson’s claims, saying the city would face similar demobilization costs even if the contract goes to term.
“We’d be responsible for the same costs we have for early termination,” he said. “I don’t find that convincing.”
Demobilization costs include, among other things, employee severance.
Henifin said there will be no need for severance because those employees will immediately be hired by Jacobs.
Lynette Baker, senior director of operations and maintenance with Jacobs, told Wingate that Jacobs wants to hire all of the current workers at the Savanna plant and plans to begin processing them next week.
“In the industry, we call it badge-flipping. The transition can be difficult, but we try to make it easy for the staff, so they’ll get a paycheck and benefits from the start,” Baker said. “Our goal is to have all 35 starting on October 1 with a Jacobs logo on their shirts.”
Henifin also refuted Johnson’s claims that Veolia was doing a good job, saying the firm had neglected the city for years, leading to hundreds of prohibited bypasses at the Savanna plant.
Those bypasses occur when wastewater is diverted around the plant’s treatment processes and released into the Pearl River untreated or partially treated.
For years, much of the Pearl in the metro area has been under a contact advisory as a result. It’s unclear when that advisory will be lifted.
“That was the driving force, but we didn’t want to fire them for cause, because that would be damaging to them,” he said.
Henifin was appointed third-party manager over the city’s water system in 2022. He took over Jackson’s sewer system the following year.
As manager, Henifin can enter into and end contracts on behalf of the city. However, he is required to consult with city leaders before entering into a long-term agreement.
The Jacobs contract would be for nine years, for around $14,027,210, about $830,000 less than what Veolia currently charges.
Baker says Jacobs is able to cut costs, in part, because it already has a presence in Jackson and would be able to provide human resources, support services, and safety training at no additional costs.
“We went through and made the decision based on our relationship with JXN Water and where we thought we’d be contractually, and we happened to come in under budget of Veolia,” she said.
Interim City Attorney Drew Martin said he would like to see JXN Water issue a request for proposals to see if a firm could offer a lower price than that.
Cities typically issue RFPs for services, such as trash-hauling, plant management, and the like.
As an officer of the court, Henifin is not required to follow the state or city’s bidding laws but is encouraged to do so under the order appointing him manager over the sewer system.
Interim Chief Administrative Officer Pieter Teeuwissen also attended the hearing. He told Wingate that Mayor John Horhn was willing to abide by any decision the judge makes.
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