JACKSON—JXN Water says it is necessary to increase the capital city’s water utility rate next year, despite objections from Jackson officials who say the agency has not done enough to explore other sources of revenue that might avert a rate increase.
Jackson City Attorney Drew Martin said in a document filed in the U.S. District Court for the Southern District of Mississippi on Dec. 22 that city officials had determined that the water utility rate should not increase after the City of Jackson’s review of the agency’s financial records. “To summarize, the governing authorities of the City do not support the rate increase that JXN Water has proposed,” the document filed on Dec. 22 states.
“The rate is unfair because of its size, because rate payers have already been subject to one official rate increase and another unofficial one in the form of a new $40.00 availability charge, and because it overly burdens the 60% of rate payers who are already paying their share,” the court filing states.
JXN Water’s Interim Third-Party Manager Ted Henifin stood before the Jackson City Council in April, proposing a 12% water rate increase—what would have been the second increase in about a year. It would amount to the average customer paying an extra $9 to $11 on each bill, Aisha Carson, JXN Water’s lead communications officer, told the Mississippi Free Press.
Henifin has maintained that an additional rate increase is necessary to cover continued costs of operating both the water and sewer systems. “The reason I’m here today in front of you is the longstanding history of underfunding water and sewage here in the City of Jackson,” he told the city council on April 8, 2025. “We’re coming to request enough money to keep sewage off the streets and keep water available for everyone all the time.”
The city council rejected the proposal and, since then, some council members have voiced a desire for the U.S. District Court for the Southern District of Mississippi Judge Henry T. Wingate and the federal government to return control of the water and sewer systems back to the City of Jackson.
Carson told the Mississippi Free Press in October that she saw the move as a political stunt. “Councilman [Kenneth] Stokes has specifically called us to turn people back on, and they haven’t paid their bill, yet,” Carson said. “So you asked us to enforce collections, but you’re asking us to turn constituents back on outside of the process. So are we supposed to do collections the way we’re supposed to do it?”
Dueling Proposals
The City’s argument against the rate increase is that the water utility agency overspends rather than prioritizing collecting unpaid bills and making sure that every property receiving water is connected to an active JXN Water account.
In the Dec. 22 court filing, City Attorney Drew Martin outlined several recommendations for the water utility company to increase its revenue: improve its billing and collections systems, lobby the Mississippi Legislature to help fund operations and debt service for the water and sewer systems and refinance the City’s debt. The City said about 6,000 locations receive water without an account and that JXN Water has undercounted the number of accounts not paying bills.
Additionally, the City recommended a rate increase for the more than 4,000 customers who live one mile or more outside city limits, arguing that these customers have not been subjected to the same increases as everyone else. The City estimates an additional $30 million in annual revenue if these issues are addressed.
The City also suggested an affordability study to “analyze the system to determine the reasonable costs needed to operate Jackson’s water and sewer system,” the court filing states.
The City acknowledged that “the engineering and infrastructure work performed by JXN Water and Mr. Henifin have been a success.” However, the court document states, City officials believe JXN Water’s financial structure has been “been backwards since Day 1, and it should have been created differently.”
In addition to the suggested changes that would provide estimated annual revenues of approximately $30 million, the City of Jackson identified an additional $74,434,949.13 in revenue from water and sewer accounts that have “been billed but not collected” in the past two years. The City requested JXN Water begin formal collection of this outstanding amount.
The City is asking JXN Water to deposit around $1.5 million by Jan. 15, 2026, to be paid toward the water and sewer system’s debt service on March 1. The court filing said the payments are secured through the City’s sales tax and warned that if JXN Water does not make the deposit by January, the Mississippi Department of Revenue will intercept the city’s sales tax revenues to pay directly to the bond trustee. The City notes that this debt service is supposed to be paid through water collections but that it has had to make at least two of these payments out of its own revenues.
Following the City of Jackson’s Dec. 22 court filing, Carson of JXN Water responded that the City’s continued opposition of the rate increase is “yet another case of letting politics get in the way of good financial management.”
“The rate increase will allow JXN Water to pay enough of our bills to keep our contractors working,” Carson said in a Dec. 22 statement. “It is not punitive, political, or optional. It is required to meet court orders, comply with federal and state law, and maintain access to the borrowing necessary to prevent raw sewage from entering Jackson’s streets and streams. Without it, the system cannot function responsibly.”
“Restoring and stabilizing the water and sewer systems was never going to be easy or inexpensive. Mr. Henifin, an expert federal utility trustee, has led the charge by assembling and investing in a highly regarded team with the technical and operational expertise necessary to stabilize, rebuild, and responsibly operate the water and sewer systems,” she continued.
Regarding the water and sewer debt obligations, Carson said the City “cannot simultaneously oppose the rate increase while expecting JXN Water to meet existing debt obligations and maintain essential services. Those positions are incompatible.”
Operating Within Means
Jackson City Attorney Drew Martin said in the City’s court filing that like the City, JXN Water must operate within its means. “Mr. Henifin has on several occasions represented to the Court and the public that he does not have enough money to perform all of the work he wants to perform. Neither does the City. The City is legally required to balance its budget. It cannot expect its citizens to pay more when it overspends,” the filing said.
In a response to JXN Water’s statement, Mayor John Horhn’s director of communications, Nic Lott, said in an email that “The City of Jackson is looking for every way possible to increase revenue in the water/sewer system without raising rates.”
Lott said the City is offering to help JXN Water to obtain its suggested revenue sources and that JXN Water has not disputed the City’s recommended revenues or its recommendations. “Instead, it has attacked the City for not supporting a 25% rate increase to the 60% or so of current customers who are paying their bills.”
Carson said Henifin “has determined that this rate increase, and the borrowing it will support, is essential. It is the most affordable and effective way to comply with Judge Wingate’s order, applicable federal and state requirements, and—most importantly—his obligation to the residents and businesses of Jackson.”
She confirmed that the agency plans to “continue to pursue the rate increase” but did not specify a timeline for when that could happen.
Kevin Edwards contributed to this report.