City planning on cutting off non-paying water customers

Starting September 17, business and residents who don’t pay their water bills could face having their service cut off.

Recently, Public Works Director Robert Miller discussed strategies for boosting collections in the water/sewer billing department.

Among them, he said the city should resume water shut-offs for customers who do not pay.

The turn-offs would not affect customers who are already on payment plans, as long as their payments remain current.

The decision would be a reversal of policy for Mayor Chokwe Antar Lumumba’s administration, which had opted not to do water shut offs until problems in the billing system were straightened out.

For months, the city has been working with Siemens USA to address its water billing crisis. And even though progress has been made, Miller told the city council recently that payments were not coming in quick enough.

“The water and sewer enterprise fund is not collecting adequate revenues to cover operating expenses, debt service and cash reserve requirements,” he said.

Collections are down, in large part, due to complications with the city’s new billing system, installed by Siemens and part of a major water system overhaul.

In 2012, the city contracted with the international firm to replace Jackson’s aging system with a new, automated one. The following year, Jackson issued $89.9 million in bonds to cover renovation costs.

Covenants of the bonds require Jackson to maintain a certain amount in the water/sewer enterprise fund to ensure debt service payments are made.

 

As part of the overhaul, Siemens agreed to install some 60,000 new water meters, replacing dilapidated water and sewer mains, and building and installing a new billing system for the water/sewer business office.

The contract was sold as revenue neutral and was expected to pay for itself over time with increased collections.

However, the work failed to live up to the hype. In the spring, more than a year after Siemens wrapped up work, more than 20,000 customers were not receiving bills.

 

In April, the city brought Siemens back on to help correct the problems.

Since then, the city has corrected more than 17,000 accounts.

City officials had hoped payments would be coming in full force, helping to shore up the water enterprise fund.

Rather, they’ve been coming in as a trickle. Total billed amounts account for $14.3 million. The total amount collected last week was around $1.8 million.

Miller took the blame for the slow rate of return, citing the city’s too-lenient payment policies.

“The second mistake I made was in allowing the extended repayment plans. We did not have good data to support the decision, so we considered the (fairest) thing. If you didn’t get a bill for eight months, you would get eight months to pay it back,” he said.

“Even when they have gotten bills, it hasn’t turned into substantial cash immediately,” he said. “Even on correct bills we would not do turnoffs for nonpayment until the (stranded) bills got caught up.”

At press time, about 5,700 accounts remain stranded. Miller told the Sun they are likely the result of non-functioning, damaged or vandalized equipment in the field.

Those accounts will be corrected as equipment in the field is repaired, replaced and brought back in sync with the billing system. 

 

 

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