In a recent development, the interim third-party manager of JXN Water, Ted Henifin, has proposed a significant increase in water rates for residents of Jackson, Mississippi. This 24 percent hike is intended to address the dwindling federal funds and ongoing financial struggles faced by the city's water system. The announcement comes as part of Henifin's February 28, 2025, Financial Management Plan, which highlights the urgent need for additional revenue. Despite this increase, the system is expected to continue facing financial difficulties without further assistance. The plan also addresses other challenges, including depleted contingency funds and non-payment issues from approximately 14,000 customers. While some city officials oppose the rate hike, others emphasize the necessity of improving collection rates and addressing income disparities through targeted measures.

The proposal to raise water rates by 24 percent stems from the pressing need to stabilize the financial health of JXN Water. Ted Henifin, who assumed his role in late 2022, outlined the dire financial situation during a presentation of his Financial Management Plan on February 28, 2025. According to Henifin, the depletion of federal funds, coupled with operational deficits, necessitates an increase in metered usage rates. For the average residential customer, this would translate to an additional $9 per month on their water bills. However, even with this adjustment, the financial projections suggest that the system will still face acute challenges in the near term. The utility has been relying heavily on borrowed funds, particularly from local ARPA match funds, which must be replenished to leverage state grants fully.

HENIFIN'S PLAN ALSO ADDRESSES THE BROADER FINANCIAL CONTEXT OF JXN WATER. The city has utilized millions of dollars from the American Rescue Plan Act (ARPA) to support its water and sewer systems. However, these funds have been partially used to cover immediate operational costs, leaving limited resources for long-term improvements. Additionally, JXN Water was unable to modify provisions of the 2023 Consolidated Appropriations Act to use federal funds for paying off existing water and sewer debts. Furthermore, the city had exhausted three critical contingency funds before Henifin took over, exacerbating the financial strain. Addressing the issue of non-paying customers, Henifin emphasized the importance of ensuring all users have active accounts and improving overall collection rates to sustain the water system.

THE PROPOSAL HAS MET WITH MIXED REACTIONS FROM CITY OFFICIALS. Mayor Chokwe Antar Lumumba has expressed concerns about the current rate structure, describing it as a "regressive tax" that disproportionately affects lower-income residents. To mitigate this impact, Henifin proposed creating a customer classification based on SNAP data, reducing the availability fee for eligible households. However, implementation has been hindered by the refusal of federal agencies to provide the necessary data. In the meantime, Henifin has initiated efforts to enroll SNAP recipients in a reduced-rate program, though uptake has been limited. Despite these challenges, Henifin remains committed to ramping up collection efforts and seeking additional grant funding to stabilize the system.

Moving forward, the financial sustainability of JXN Water hinges on multiple factors, including improved collection rates and securing additional revenue streams. The proposed rate increase aims to bridge the immediate funding gap, but more comprehensive solutions are needed to address the underlying financial challenges. Henifin's strategy involves intensifying collection efforts, pursuing new grants, and exploring debt repayment options. Ultimately, the success of these initiatives will determine the long-term viability of the water system in Jackson, ensuring reliable service for all residents while striving to balance financial stability with affordability.