The Inconsistent Data of Jackson, Mississippi's Water Authority

In August, the water treatment plant for Jackson, Mississippi failed, sending untreated brown water through the pipes of the city, and the state declared an emergency. Homeowners regularly reported having no water pressure and seeing raw sewage flooding the streets. It was only since the end of October that the water was finally designated safe to drink.

Issues with the treatment plant had been known for decades. There were boil advisories in months prior, and in 2021 the plant shutdown in the middle of the pandemic due to a winter storm. In total, the city issued 200 boil notices over the course of a year.

In 2013, the city attempted to upgrade the billing system and consumption tracking software for the water authority that would hopefully help pay for future improvements.

The contract to do the work through the German manufacturer Siemens didn’t end well. Following complaints, the city would accuse the new system of being inherently flawed, showing excessively high water usage and sending customers massive utility bills. Eventually Siemens would return $90 million to the city as part of a settlement from the project.

But excessively high rates of water use and charges predate the Siemens contract. Large discrepancies in reported water use and revenues—such as including revenue they would never actually receive—indicate large oddities in the city’s accounting.

Sharp Drop in Water Treatment

In 2018, the utility would report a stark drop in how much water and sewer it was treating following the contract dispute. For sewer services, it was on the order of 36 million gallons less from 2017 to 2018. For drinking water, it was 17 million gallons less since 2011.

Ostensibly the stark drop in water consumption was a correction to what the Siemens-installed water billing system was reporting. But the high rates of water consumption go back years before the Siemens contract was signed.

According to annual reports, the city reported high water and sewer usage at 3 times the current rate going back to 2004.

Not only was the water and sewer usage uniquely high, but it didn’t seem to change despite a large population shift in the city over the past two decades.

Different population estimates show different levels at different points, but they all show a steady and large decline in the Jackson area.

Based on the Census’ Annual Estimates of the Population for Counties, the population for Hinds County, where Jackson is located, has been steadily declining for years. Between 2004 and 2008, the county would have 2,000 fewer people.

Yet during that time, the city was treating about the same amount—21 million gallons a year (standard deviation: 331 thousand gallons).

Between 2000 and 2020, the decennial Census—maybe the most accurate population estimate—shows the county lost over 23,000 residents, or 1,150 people a year on average. Based on maps from the Mississippi Public Service Commission, the Jackson water district largely overlaps with the borders of Hinds county. By itself, the city of Jackson shows a drop of 10,000.

Hemorrhaging Population After Rate Increase

The apparent exodus really picks up after 2013 when the county starts losing 3,000 people a year on average.

That outflux also happened to occur when the water authority finally raised water and sewer rates. In 2013, the current mayor’s father, Chokwe Lumumba, implemented a sudden increase in rates to help pay for the ailing sewer system and other struggling public works.

Sewer rates were expected to double and water rates were expected to go up by 35 to 40 percent to help raise $30 million. According to annual reports, the rate increase led to additional revenue of an additional $25 million a year in 2014—a 57 percent increase.

This is also around when the numbers for water and sewer usage dropped precipitously. Some of that could be related to the declining population of Jackson. But even if there was a mass exodus from the Jackson area around that time, it still doesn’t explain the water and sewer usage rates per person.

The amount of water and sewer usage went from 97 thousand gallons per person per year to 31 based on county population numbers. Sewer usage went from 183 thousand gallons per person per year to 31—the same as water usage.

In general, water and sewer use should be in line as most water consumed is removed via the sewer system. Before 2010 in Jackson, they differed by between 20 to 30 million gallons a year.

Seemingly High Costs for Service

Independent of the population changes, the rates that were being paid for water and sewer service were uniquely high both before and after.

Based on total customer revenue, the amount the authority brought in for both water and sewer services combined would go from 54 cents a gallon to almost $4 a gallon.

Compare this with a city like Washington, DC with an advanced water treatment facility. The average rates for water and sewer there are around $20 per thousand gallons—not per gallon.

At its cheapest, Jackson was earning $54 per thousand gallons in revenue, or over twice the rate of D.C.’s system.

Collection Rates

Yet, despite the high rates of revenue listed in annual reports for water and sewer services, anecdotal evidence indicates that the city’s bill collection rate was low.

A 2022 story from local news outlet WLBT quotes a local councilmember saying that poor collection rates were undermining the city's ability to upgrade their water system.

A representative for the city’s auditors, Tann, Brown & Russ, told WLBT that the city was regularly listing water and sewer revenue that they had not actually received. In 2020, “$7 million in projected revenues were eventually written off as uncollectible.”

Depending on which numbers are accurate, that could mean a 12 to 15 percent non-payment rate. But even that high of a non-collection rate doesn’t explain it all.

Total revenues minus an estimated $7 million uncollectible puts the charge rate at 45 cents in 2004 to $3.47 per gallon in 2018. Still very high compared with other cities.

All annual reports from 2013 to 2018 show a net revenue from sewer and water services even after interest payments even though the city has been running a deficit for years.

Related Financial Woes

While the issues with the aging water treatment plant have been known for decades, the city has struggled with getting the capital needed to make the improvements. The water and sewer fund regularly runs a deficit because of ongoing costs for prior debt.

There is an ongoing back and forth struggle between the city’s mayor and the state over who is ultimately responsible for not fixing the plant. The city placed the blame on the state for not previously providing the loans it asked for to fund repairs.

Mississippi governor Tate Reeves said that the situation only began to be fixed once the state stepped in and that the city doesn’t need to be burdened with more debt to make repairs.

While the Environmental Protection Agency (EPA) dedicated $74.9 million in funds for Mississippi’s water and sewer infrastructure, the mayor has insisted they need $2 billion to properly repair and replace the system.

Since the water plant shut down, numerous investigations have been launched by the EPA, NAACP, and Congress to see who or what might be at fault.

In 2018, the credit rating agency Moody’s downgraded the city’s status based on the water treatment plant's bonds, which required emergency funding from the city that year despite the recent increase in revenue from increased rates as well as a large settlement from the Siemens contract.

While the settlement from the Siemens contract earned the city $90 million according to WLBT, $30 million of that settlement went to paying lawyers. The rest went to help pay over $212 million outstanding debt on the water treatment facility and only $8 million was left as of June of this year.

Besides the debt, the city also struggles to find workers to help fix the issues at the plant.