Jackson could be gearing up to take legal action against Siemens, a firm it brought on years ago to completely overhaul its water and sewer system.
“For too long, residents and businesses have been burdened by a billing problem ... which was intended to provide more timely and accurate bills to customers and (additional) revenue for the city,” said Mayor Chokwe Antar Lumumba at a press conference today.
Lumumba said he had assembled a legal team to investigate “public malfeasance” related to the city’s water billing issues, but stopped short of saying what action, if any would be taken against Siemens.
Jackson had previously begun an investigation into some discrepancies in the billing department. No update on that investigation was given.
He said the city was also gearing up for a public relations campaign to be launched against the city as a result of the investigation.
“My administration stands ready to pursue necessary actions as a result of this investigation. Why will expect customers to continue paying bills during this time, we stand committed to protecting the rights of residents and businesses.”
Jackson brought on Siemens in 2012. The contract was for $91 million and sold to residents as a “revenue-neutral” agreement, meaning the city would be able to pay for it over time with the savings generated through more accurate billing.
Instead, the mayor said the work has had the opposite effect. It’s caused may customers to receive inexplicably high bills while more customers receive no bills at all for months at a time.
Meanwhile, Jackson is currently paying $7 million a year to retire the Siemens bond debt, which represents the largest single investment the city has made in infrastructure.
“The financial resources of water and sewer have been nearly depleted by lower billed and collected revenues,” he said.
Last year city officials said the water system was in danger of going bankrupt. In all, more than $14 million in one-percent funds were used to help prop up the system, including $6.9 million which reimbursed the water/sewer enterprise funds for emergency water repairs dating back to 2016.
Earlier this month Public Works Director Robert Miller told the Sun billing was generating enough revenues to remain solvent, but not enough to rebuild its cash reserves.
Because of the lack of revenue, Jackson has had to halt work on many of its federally mandated consent decree projects.
The mayor didn’t say who was part of the legal team that had been brought on and would not answer questions after giving a statement.
Below is a copy of the mayor's statement in full:
“For too long, City of Jackson residents and businesses have been burdened by water and sewer billing problems since the system was first implemented.
This system- which was intended to provide more timely and accurate bills to customers and additional revenue to the City- instead, caused many customers to frequently receive inexplicably high bills while even more customers received no bill at all for months at a time.
Consequently, the financial resources of the water and sewer system have been nearly depleted by lower billed and collected revenues.
This contract represents the largest investment in the City’s history- nearly $90 million which requires the City to make annual debt payments of $7 million through 2041.
The consequences of the failures of this project represent an undue burden to the residents and businesses of Jackson.
After careful consideration, my administration believes we must investigate the possibility that willful actions and neglect have caused harm to the residents and businesses of Jackson.
After much deliberation, I have engaged a legal team which has been involved in some of the most high-profile investigations of public malfeasance in recent years.
As we vigorously pursue this investigation, we anticipate that there will be a massive public relations campaign to cast extremely negative assertions against the City.
My administration stands ready to pursue necessary actions as a result of this investigation.
While we expect our water/sewer customers to continue paying their bills during this time, we stand committed to protecting the rights and interests of our residents and businesses.”
