JXN Water to announce new rate structure for water bills - WAPT Jackson

JXN Water announces new rates for water bills

JXN Water announces new rates for water bills

Updated: 1:44 PM CST Nov 17, 2023

Finally got to the point where we're ready to start talking numbers that everybody wants to hear about. So uh take this opportunity, we're um we're, this is the first rate increase. It's been proposed obviously, since the stipulated order was put into effect uh by Judge Wingate November 29th. So we've been working on financial management plans. We've been working on *** lot of uh understanding what our budget needs to be in the future and uh where we are today and, and the revenue we need to generate to create *** well run fully funded utility. And so that's really the goal here is to make sure we're self supporting in the long term. I think you've all heard my comments over the last several months. About roughly 56% of people we bill are paying their bills and that number keeps going up each month since we've really started focusing on that and we will start shutting people off for not paying their bills to get that number up to where it needs to be the good utilities across the United States collect anywhere from 95 to 99% of the amount they bill. And we'd like to be in that category within *** few years. We recognize we can't just turn that right off, but we're moving in that direction. So the interim stipulated order, the judge wingate enter that appointed me as the interim third party manager has *** process in it to for me to submit to propose rate increases and rate restructuring. And that process essentially is I propose something to the mayor. He has to put it on the council agenda the next regular scheduled meeting. And so uh the plan is again to submit this to the mayor uh late today or on Monday and it will show up on the December 5th council agenda if that's correct. Uh That's the the meeting we're targeting to get this on the council's agenda. And from there, um council takes action and there's couple of things that happen according to the order, they can pass the proposal as submitted if they pass on the proposal and and don't approve it. Uh The order allows the interim third party manager to go ahead and implement the proposal anyway. So uh we are planning to move this forward in in the format that is at, it would be great to have some discussion about that with the council and with the citizens. We think this is *** great opportunity to uh to really change the dialogue around water and sewer in the city of Jackson. So the rate structure and many of you. I think, remember last year, early in the year, I talked about some unusual proposals for rates. We were struggling to get meters in the ground. I was talking about using uh property value or property size, some attribute of property to, to base our rates on uh shortly after that during the last legislative session, uh that house bill 698 was proposed and passed and signed into law which uh eliminates the ability to do that legally. So, uh we've pivoted away from the idea of doing something unusual. We're sticking in strict compliance to the HP 698 requirements. And in that, uh it, it requires *** volumetric rate as well as it allows for *** fee. And the fee covers, uh reading from the actual bill, calculation of the user's bill shall be limited to the actual amount of volumetric usage plus those fees, reasonable and necessary for the cost of capital expenses, system operation and maintenance and debt service. And many of you have also heard me talk about those are the costs. When you look at water, the variable cost, the cost of water, you actually drink very small part of it. And so we've structured this rate system to have *** fee and we're calling it an availability fee that covers those capital expenses, system operation and maintenance and debt service. In our case, debt service is still *** huge portion. There's outstanding debt of about $260 million and monthly debt service payments are almost 2 million *** month. And so all that fits into the fixed part of this, the fee that we will charge. It's gonna be *** meter sized base fee. So if your meter is *** 58 inch meter, you get *** $40 availability fee and then you're gonna pay $6 for every 100 cubic feet of water you use and uh sorry about the 100 cubic feet. That's uh 748 gallons. But uh each, each uh 100 cubic feet, 748 gallons. Now, our meters are in 100 cubic feet. So we don't talk gallons which everyone else talks gallons, the water utility business and it's not unique to Jackson. It's in 100 cubic feet, but give you proportion for regular families. It's about 6 to 7 CCF or an average family in Jackson, which had 2.5 people in *** household. And so they have *** 58 inch meter and they use about six hun six CCF 100 cubic feet, which is the equivalent of about uh 5000 gallons of water *** month. And that bill uh would be calculated with $6 for every uh 100 cubic feet they use. And that's water and sewer combined. So if you think about the rate today, it's 385 for water and 535. Whereas that backwards, that's close to those, those two. Those are the numbers 535 for *** sewer that combines as uh $9.20 under 20 cents, 12 cents. And then compare that to the $6 per CCF that we're pay going forward. But again, the monthly fee in today's bill is $11.55. And we're gonna, it would be $40 for *** 58 inch meter. And then larger meters get *** portion of the amount of water that can flow through those. We have higher availability fees. *** couple of things we're doing this very uh very unique. We recognize that there's 25% of Jackson's population that's um pretty economically disadvantaged. And uh most of those are receiving snap benefits. So we've created *** customer class which is called snap and they will categorically get *** lower availability fee if they're snack, receiving snack benefits. And so that allows us to, there's, they'll pay the exact same amount for the water. They're using the volumetric charge at $6 per 100 cubic feet. But their availability fee for *** 5 8 m for *** snap customer classification customer is gonna be $10 *** month. So their bill, water and sewer combined plus availability fee will be somewhere just under $50 *** month, which by our calculations seems affordable for even the folks that are receiving staff benefits based on their income levels. Uh Everyone else's average bill will be somewhere in the with *** +58 in meter will be somewhere around $76 *** month. So again, when you compare that to what most people are paying today, it's not very far off if you use more water. Actually, uh you act, you may be very close and we'll show you some examples of how those bills play out um municipally. So the snap piece is also based in, in some language in Mississippi law. So *** lot of people think you can't separate people within *** customer classification and you can't. So the the law actually says *** municipality may say set different rates for different classifications of users. *** municipality shall not discriminate in setting rates among members of the same classification. So we've created *** snap classification. It's *** different classification and it's legally based on the fact that we've already recognized them in the state of Mississippi who administers the snap program for nutrition. And so they have already been classified differently than the rest of the population. And that is the basis for this. So we're really excited that we're gonna make an affordable rate. And the reason that's very important for us and we talk *** lot about needing to cut people off for not paying their bill is that they have to, we have to collect and if the bill is not affordable, we get back in the same spiral we were in before where people just can't pay their bill. We shut them off, they work around it. It, it, it creates *** real stress on the community and it's not again you to Jackson. So, having *** bill that's affordable, makes it easier for us to actually shut people off to collect it because we know they can afford to pay it. There will be times when people have financial issues and they can't pay their bill. And so we've created ***, *** fund with Munich Foundation for rate assistance. And essentially, that's uh *** phone call to Jackson Waters number right over there, 601 515 100 saying I, I've, I've experienced some financial distress and they'll get *** series of questions and if they're eligible, um we will use some of that. Uh again, it's foundation money. It's sitting in the community foundation. We're always looking for donations and we'll have awesome opportunities for customers to contribute to that fund uh over the next many years as we try to build up that, to support our, our citizens in, in times when they're struggling to pay the bill, we're all in this together and, and that's really the message. You know, there will be some people that are going to see their bills go up, but people see their bills go down at the end of the day, we need to pay for water. It's valuable, we need to pay for sewage collection and we're trying to get sewage back into the pipes and we've already made some significant progress there, but it's not right to have sewage running in the streets. *** lot of people wondering about, you know, all the federal dollars we've got and why do we need to, to do this? None of the federal dollars are eligible to use for the sewer system at all. And all of the federal dollars are really tied to specific infrastructure projects and we will burn through that quickly making the repairs we need to make to the water system and we need to be sustainable on the long term. And so this great model that we're putting in place will allow us to be sustainable for the long term. I think that's and then you, you got *** press release that has *** lot of details, but I'm gonna walk you through *** couple of examples uh on these slides and I'm gonna take some questions from you. So what we have in this one, this is *** 58 inch regular customer meter uh using about 8.5 cubic feet of water. That's, this is currently and these, this is the rates that instruction in place today. 385 for the water, 536 for sewer and *** service fee of 155. So the bill would add up today. 89 89 83 Preta and we add 7% tax uh for state and 1% city tax bill. This is pre tax and this is without sanitation charges. We're comparing water and sewer to water and sewer plantation is not under the third party. Manager. City sets that rate. We're still billing and collecting for them at this point. But we will ultimately switch that to *** separate bill. You'll see that in that t institution. So under the proposed rates that same 8.5 100 cubic feet, that's $6 per cubic *** 51 for water and sewer together. And then because it's *** 58 inch meter, the availability fee is 40 so $91. So less than $2 difference in that particular example. Yeah, if you went down to the six CCF, the difference is *** little closer to $10. So it's all very dependent on water usage. People that are concerned this is an inclining block water rate. So there's four rates for water you use up to 30 CC FA L. That's *** lot of water. And I don't think any of our residential single fam home families use anywhere near 30 CCFL. It's all $6. You use more than 30 CCF. It goes up to $12 use more than 100 goes to 14. And then if you use more than 350 it goes to to 16. So it's an inclining block rate to encourage conservation even within businesses, we're trying to get them to reduce their water dependency that allows us not to have to invest more in water supply or increase plant sizes, things like that, that are long term investments that you made. So that's an easy example. Again, trying to use real numbers uh which we did uh We, we pulled some example meters and found that this particular person and it's obviously fictitious. Regular Joe Smith, we go to the next one. This is *** five inch an inch reader in *** snap household. So that's again, they're in the snap customer classification because they're receiving snap benefits. Uh Currently, they're paying 6681 *** month under the new uh great structure will be 46 times trying to make it affordable for folks that are already recognized as in need of government assistance for *** nutrition program. Water is every bit as important. In fact, you can go roughly three days without water, you can go about 30 days without food, another five inches meter. This is uh but *** small business, it's *** hair salon and then you went and looked at what air saws to use. This, this one was used for about 15 CCF per month and you see their, their bill will also drop based on the particular combination of water usa usage and the 58 inch meter wheel. Those. So we have from currently somewhere in the 180 range to then about 100 and 30. So small business is gonna get some advantage. This is *** uh pizza shop. We use *** lot more water. About 100 and 8600 put current bill is somewhere in the 1700 range. Remember it's an inclining block water rate. So they're paying much more for the water as they get used more during the month. And so they're seeing *** pretty significant increase up to 2500 per month. And then finally, we got the full service restaurant and this particular one is *** little less than the pizza, for example that we use. And their charges would go from 1348. And this is *** two inch meter availability charge is much higher because you put *** lot more water through *** 200 m and their their uh charges go to 1900 so significant but not overly uh crazy. And then five it's *** multifamily development concept use *** lot of water. Again, the rate changes at both plus above 30 there's *** different rate for the water use between 30 100 and then from 100 to 350 is *** different rate and then over 350. So this is the maximum rate of the water as an inch and *** half meters. The availability charge is based again on the meter size and they go from somewhere around 8500 to 13 thou almost 14,000. That's it for these things. So with that, let's have to get back to the regular Joe Smith, roughly 50,000 of our customers fall into this Skype. They're, we are largely residential, 58 inch meters predominant. And so most folks in our customer base will see something like this, *** very relatively small change in, in the water uh bill. And if they use less water, they can actually get that bill down to, closer to where they work. Uh Ted this snap classification. Um Are you working off *** model of this used elsewhere in the country? There's been *** lot of study of uh trying to get snap benefits eligible utility bills eligible for snap benefits. So you think about the snap program, you can actually buy bottled water with your snack. And the cost of bottles of water is hundreds of times more expensive than drinking tap water. And so the idea that you could pay your utility bill with snap is is catching on in discussions. I had that discussion actually with *** center corporation staffer uh for the subcomittee. Um There's *** professor out of University of Wisconsin, Manny Teodoro has been studying this uh at length. I really think it's *** better way to deal with water bills across the country. This might be uh the the piece that gets people's attention. Mississippi is leading the way here in Jackson with that. And then potentially we don't even have to have *** separate SAMP classification in the future because if the snap program changed to allow them to pay their bill we, we could eliminate that.

JXN Water announces new rates for water bills

Updated: 1:44 PM CST Nov 17, 2023

Water bills are going up for Jackson residents and businesses for the first time since JXN Water took over. Interim third-party manager Ted Henifin said the goal for setting the rate structure is to make JXN Water a well-run, fully-funded utility. "That's the goal here, that we're self-sustaining in the long term," Henifin said during a Friday briefing. How did we get here? "We understand the timing is terrible" Citywide boil-water alert issued on Christmas DayThe governor and president declare an emergency in response to Jackson's water crisisA third-party administrator was named to take control of Jackson's water crisis JXN Water bills include capital expenses, operation and maintenance and debt services. Henifin said deb services is almost $2 million a month. The bills will now be a meter size-based fee.An average family in Jackson will pay about $76 a month under the plan. Henifin said because about 25% of Jackson's population is "pretty economically disadvantaged" and are enrolled in the Supplemental Nutrition Assistance Program, JXN Water is establishing a SNAP category. "Those residents will get a lower fee," Henifin said. "They'll pay the same amount for water they're using, but their availability fee is going to be $10 a month. Water and sewer combined, plus availability, will be about $50 a month."Henifin said the next step is to present the plan to Mayor Chokwe Antar Lumumba, who will then get it onto the Jackson City Council meeting agenda, which he said would be the Dec. 5 meeting. "From there, the council takes action," Henifin said. "They can pass the proposal as submitted. If they pass on the proposal and don't approve it, the order allows the interim third-party manager to go ahead and implement the proposal anyway."The new rates will go into effect Jan. 1, JXN Water officials said.Earlier this year, the water company said fewer than six out of 10 water customers are paying their bills. In a notice sent to customers, Henifin said it's time for everyone to get current on their bill or face losing water service. The shutoffs could begin in the beginning of 2024."We're really excited that we're going to take an affordable rate," Henifin said. "We have to collect and if the bill is not affordable, we get in the same cycle. Having a bill that's affordable makes it easier for us to shut it off and collect it."There is also a fund with a community foundation that will help customers with bill assistance. JXN Water officials said in October that there had been major improvement compared to last year when Jackson's 150,000 residents couldn't flush, drink or shower and had to boil water.

JACKSON, Miss. —

Water bills are going up for Jackson residents and businesses for the first time since JXN Water took over.

Interim third-party manager Ted Henifin said the goal for setting the rate structure is to make JXN Water a well-run, fully-funded utility.

"That's the goal here, that we're self-sustaining in the long term," Henifin said during a Friday briefing.

JXN Water bills include capital expenses, operation and maintenance and debt services. Henifin said deb services is almost $2 million a month. The bills will now be a meter size-based fee.

An average family in Jackson will pay about $76 a month under the plan. Henifin said because about 25% of Jackson's population is "pretty economically disadvantaged" and are enrolled in the Supplemental Nutrition Assistance Program, JXN Water is establishing a SNAP category.

"Those residents will get a lower fee," Henifin said. "They'll pay the same amount for water they're using, but their availability fee is going to be $10 a month. Water and sewer combined, plus availability, will be about $50 a month."

Henifin said the next step is to present the plan to Mayor Chokwe Antar Lumumba, who will then get it onto the Jackson City Council meeting agenda, which he said would be the Dec. 5 meeting.

"From there, the council takes action," Henifin said. "They can pass the proposal as submitted. If they pass on the proposal and don't approve it, the order allows the interim third-party manager to go ahead and implement the proposal anyway."

The new rates will go into effect Jan. 1, JXN Water officials said.

Earlier this year, the water company said fewer than six out of 10 water customers are paying their bills. In a notice sent to customers, Henifin said it's time for everyone to get current on their bill or face losing water service. The shutoffs could begin in the beginning of 2024.

"We're really excited that we're going to take an affordable rate," Henifin said. "We have to collect and if the bill is not affordable, we get in the same cycle. Having a bill that's affordable makes it easier for us to shut it off and collect it."

There is also a fund with a community foundation that will help customers with bill assistance.

JXN Water officials said in October that there had been major improvement compared to last year when Jackson's 150,000 residents couldn't flush, drink or shower and had to boil water.