A bill that will mean relief to Jackson’s water customers also could mean improved credit for the cash-strapped capital city.
City officials are hailing the passage of SB 2856, a bill that gives them more freedom to adjust customers’ water bills.
The measure, which was slated to be signed by Gov. Tate Reeves, also will give the city a new tool to ensure bad water debt does not impact the city’s water bond rating.
“We need to improve the city’s bond rating, and we have uncollected debt on the books that is a hinderance,” said District 26 Sen. John Horhn, the bill’s author.
The news comes at just the right time. This year, the city’s water/sewer bond debt will again be rated by Moody’s Investor Services. In 2018, the entity downgraded the city’s bond rating.
Bond ratings are important because they affect the amount the city can borrow for infrastructure improvement projects, as well as the interest rate it receives. Lower interest rates on bonds could save city taxpayers millions of dollars over time.
The city’s rating has suffered in recent years for numerous reasons, including the fact that the city has millions of dollars in uncollectible debt. The uncollectible debt comes from unpaid water and sewer use fees. In some cases, the debtors are deceased, have moved, or have filed bankruptcy. Because of this it appears Jackson’s collections are far worse.
Under the state constitution, cities cannot zero out the debt, and must retain it on the books.
Horhn said the city will now be able to put the uncollectible amount into a separate category on its balance sheets. By doing that, creditors will no longer hold that amount against the city.
Other provisions in SB 2856 give the city more freedom to help existing customers who are unable to pay.
In recent years, many Jackson customers have seen their bills increase, in part, due to complications from the Siemens contract.
The firm was brought on in 2012 to completely overhaul the billing system. Work including installing new meters and creating and implementing new billing software in the water/sewer business administration office.
Work wrapped up in 2015. Since then, customers have reported huge spikes in their monthly water statements.
In some cases, the increases have been a result of faulty meters. In other cases, customers don’t receive a bill for months, and when they finally do, amounts owed can be thousands of dollars.
“The bills our customers have been receiving have made it impractical for them to pay,” Mayor Chokwe Antar Lumumba said.
Provisions allow the city correct bills based on several criteria.
Among them, disputed amounts must be caused by city equipment or process failures or by damage related to extreme weather events, natural disasters, emergencies, or mandatory evacuations.
The legislation also allows the city to declare amounts to be uncollectible in cases where customers are “so disproportionately impoverished or needy” that they cannot pay.
In those instances, the city can set up payment plans to recoup at least a portion of the debt.
Lumumba said the city was still hammering out plans on how to implement the legislation at press time.
The measure passed the House and the Senate unanimously.