City proposes loan to correct water billing issues

By ANTHONY WARREN,

A final fix to Jackson’s water billing struggles could be on the horizon, as part of the 2020 fiscal year budget.

City officials began budget talks last week. As part of next year’s spending plans, the Lumumba administration is proposing taking out a $6 million short-term loan to address problems with its long-embattled water billing system.

If approved by the council, the loan would help pay for “lifting and shifting” the current billing software off of Jackson’s aging servers and place it on a cloud-based system. Funds also would be used to implement fixes that would make it easier to read, provide training to ensure employees, and ensure the meters and transmitters in the field are working right.

The loan would likely be repaid with general fund dollars. Next year’s budget is expected to be around $365 million, about the same as the current year.

Mayor Chokwe Antar Lumumba said once the repairs are made, collections and revenues in the department will go up.

For customers, the repairs should mean fewer “stranded” bills. Bills become stranded when customers no longer receive them.

More than 1,000 statements become stranded each month as a result of complications from the billing system.

Complications have arisen, in part, due to problems with the Siemens Industry overhaul. Jackson brought on the firm in 2012 to completely overhaul its water billing system. Work included installing some 65,000 new water meters citywide, creating and implementing new billing software and installing transmitters in the field to carry meter data directly to the billing office.

The contract was for $90 million and was touted by then-Mayor Harvey Johnson Jr. as being “revenue neutral,” meaning the work would be paid for over time with increased revenues from improved collections.

The new billing system went live in 2015, and the city has been dealing with complications ever since. In early 2018, officials announced that more than 20,000 customers were not receiving bills because of problems with the system, and as a result, the water/sewer enterprise fund was about to go bankrupt.

For the 2019 fiscal year, Jackson is expected to collect between 60 and 70 percent of its billed amounts. And as of last week, 25 percent of the city’s customers were receiving bills and not paying, while between five and seven percent of customers were not receiving statements at all.

Jackson has approximately 52,000 water customers.

If loan is not issued, the mayor said Jackson will continue doing what it’s doing – making temporary repairs to the system and un-stranding bills as water/sewer revenues allow.

“The city is able to take advantage of emergency loan funds so we can pay for the fix and stop putting tape and bubble gum on this thing,” Lumumba said. “We can go for the comprehensive fix, so we can have a much more reliable system.”

The city has been struggling to work out its billing problems for more than a year. Since last April, the city has spent more than $3.7 million to correct “stranded” accounts, assess system needs, maintain equipment in the field and begin lifting its new billing software off of its current servers.

In June, the city awarded Mythics, Inc. a $947,000 to begin moving the city’s “customer care and billing software” off of existing servers for placement in the cloud. 

Chief Administrative Officer Robert Blaine said the “lift and shift” to improve the stability of the system. “Now, there are challenges with the stability of the system, all due to the fact we have servers on our premises that are at end of life,” he said.

Blaine said the lift and shift should be completed by October 1. The contract will be paid once the work is completed, he said.

News comes more than two months after the city field suit against Siemens Industry and its subcontractors, with the administration alleging the international company perpetrated “a massive fraud” against the city, severely damaging its finances, destroying its creditworthiness and ruining its reputation among residents.

Because of problems in the billing department, the city’s bond ratings were downgraded in 2018. And in July, the administration had to meet with insurers of the Siemens bonds, who were worried that the debt couldn’t be repaid.

The suit was filed in Hinds County Circuit Court. Jackson is seeking $225 million in damages.

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