Staying AfloatBy ANTHONY WARREN,
Allocation to keep water fund solvent until summer
Jackson’s water and sewer cash fund should stay afloat at least until the summer.
Meanwhile, city officials were still in talks last week with Siemens in hopes that it can correct problems with its billing system.
As of April 17, the city’s water and sewer enterprise fund had a cash balance of $12,543,847, according to Director of Administration Charles Hatcher.
Nearly $7 million of that was given to the city in March to reimburse it for making emergency repairs to the system.
The remaining is from water and sewer usage fees, which are billed to customers monthly.
“Whether or not the water/sewer enterprise stays solvent … depends on getting customers billed and collected,” Hatcher said. “The cash infusion (from the commission) most likely gets us through the summer.”
Of the $12.5 million, $1.6 million will cover main breaks associated with the January water crisis. Another $400,000 will repair utility cuts related to those main repairs.
The remaining funds will cover day-to-day operations, any upcoming emergency needs and scheduled bond debt payments.
Jackson currently has about $221.5 million in water and sewer bond debt.
That amount includes around $49.3 million the city issued in 2011, $82.2 million issued in 2012 and $89.9 million the city took out in 2013.
The amount does not include the $30 million in bonds the city council recently authorized to cover repairs at the Savanna Street Wastewater Treatment Plant.
The $89.9 million issued by the city in 2013 was used to pay for a $91 million “energy performance contract” with Siemens.
The city brought on the firm in 2012 to do a complete overhaul of the city’s aging water system.
Improvements included replacing some 65,000 residential water meters, 5,000 commercial meters, replacing broken sewer mains and upgrading the city’s water billing system.
To date, Jackson has made two payments on that bond, $1.6 million in December 2016 and $1.7 million in December 2017, Hatcher said. The next payment of approximately $2.85 million is due on June 1, he said.
To stay solvent, the city needs to generate between $5.5 million and $6 million a month in collections.
However, since October, the department has only collected on average around $3.96 million a month.
In March, collections were up, with the city bringing in just under $4.6 million, Hatcher said.
Revenues are down because of problems in the water/sewer billing department.
Last month, city officials told the council 15,000 customers were still not receiving regular statements.
Water collections have fluctuated greatly since Siemens work got under way.
In 2014, the year work began on meter replacement, the city collected $69.4 million in water/sewer revenues. The following year, collections fell to $59 million, but rose to $63 million the year after that. In fiscal year 2017, water collections rose to $71 million.
Hatcher told the Sun previously that didn’t know why they rose in fiscal 2017. “My guess is (it was) an attempt to right the ship that wasn’t sustained,” he said. “But that is just a guess, I wasn’t here.”
No agreement had been reached with Siemens at press time.