JACKSON, Miss.—Jackson residents still don’t know whether or not their water rates will rise after the City of Jackson and JXN Water met for more legal arguments in federal court on Jan. 7.
The hearing came one day after the Jackson City Council held a closed session and passed a resolution asking the U.S. District Judge for the Southern District of Mississippi Henry T. Wingate to consider several points before deciding on the rate increase and other matters related to the agency’s operations.
“In addition to the rate increase, there are a number of other issues that the council wants to make sure are being considered,” Jackson City Attorney Drew Martin told the judge on Jan. 8. “The council wants to make sure that the court is aware they’re hearing from their people throughout the city (about these issues).”
The argument between the City and JXN Water over rate increases has intensified in recent months. The City has argued that the proposed 12% rate increase is unnecessary and that JXN Water should prioritize collecting unpaid bills and verifying accounts.
JXN Water has argued a rate increase is the best way to get the agency back on track financially.
Much of the Jan. 8 court hearing centered on testimony from accountant Michael Thomas, who the City of Jackson employed for an analysis of the water utility company’s financial records.
At a previous court hearing, Martin told Wingate that the City of Jackson would need to review the agency’s financial records before deciding whether or not to support JXN Water’s decision to pursue a rate increase.
JXN Water’s federally-appointed manager, Ted Henifin, has maintained since last April that the 12% rate increase is urgently needed to cover daily maintenance, operational costs and the long-term sustainability of both the water and sewer systems.
The rate increase would allow the agency to continue to function at a capacity that would “keep sewage off the streets and keep water available for everyone all the time,” the water operator told council members on April 8, 2025.
They told him instead to increase collection rates.
‘I Haven’t Done A Rate Study’
Ted Henifin initially denied Michael Thomas access to the agency’s financial records, fearing the information might leak to the public. He relented under an agreement that Thomas only share the findings with the mayor and council members.
JXN Water allowed Thomas access to its quickbooks data and weekly billing and collections reports dating back to October 2023, the accountant testified in court on Wednesday. In addition, Thomas told the judge, he conferred with the agency’s outside accounting firm when he had questions about the data.
He compiled his findings in a report to city officials in December and Martin subsequently submitted a statement on behalf of the City to the court about the findings.
Those findings, discussed in court on Wednesday, included an argument that because of JXN Water’s gap in collections, the agency has missed out on collecting over $74 million in revenue from delinquent water accounts.
“A significant number of the customers billed are not paying. The opportunity is to grow the percentage of payers,” Thomas told the court.
However, when the judge questioned Thomas over whether or not the report findings supported the need for a rate increase, Thomas hesitated to offer a definitive conclusion.
“Does your study support a rate increase or does it not?” the judge asked the accountant.
“That’s a hard question for me to answer,” Thomas replied. “I haven’t done a rate study. In this particular case, all I’ve done is a collections review.”
Instead, Thomas told the judge, the point of his analysis was to find any opportunities for “revenue (to) go up in the short term that might rival the rate increase.”
Those opportunities include JXN Water opening an in-person, customer service center and the agency taking a more aggressive approach to identity and address delinquent accounts for both residential and commercial water customers, he said.
Thomas then told the court that his examination found the agency is now increasing its revenue.
‘Be Very Aggressive About Billing and Collections’
In his own line of questioning of the City of Jackson’s financial consultant, Paul Calamita, an attorney for JXN Water, asserted that it is not feasible for the agency to turn off water access to all delinquent customers.
“We would never want to turn off 1,000 customers when we could only turn on maybe 10-20 a day right?” Calamita asked Michael Thomas.
Even if the agency collected on 100% of the delinquent bills, the revenue still would not cover the full costs of the agency’s monthly expenses, Calamita said.
Ted Henifin has said the same.
“We’re short. Even if every single person paid, we’d get 112 million, which would leave us three million short on (operations and maintenance), not including the City stuff,” Calamita told the judge.
“We have to have a rate increase,” the attorney continued.
In response, Jackson City Attorney Drew Martin questioned the utility agency’s financial management saying that “to some extent, it appears that JXN Water has spent itself into the need for this rate increase.”
He pushed back on Calamita’s insinuation that JXN Water inherited faulty billing and collections practices from the City of Jackson’s previous management of the systems.
“We want to find solutions. We have suggestions,” Martin told the judge. “What we keep hearing back is, ‘The City screwed this up.’”
Following the court hearing, the Mississippi Free Press asked Jackson Mayor John Horhn about the accountant’s hesitancy to either support or oppose the necessity for a rate increase.
“We did not hire a consultant to determine whether a rate increase was needed or not,” Horhn said. “We needed to look at the fiscal health of JXN Water because we weren’t getting any information. And what he ultimately arrived at is that we’ve got 75 million dollars out there that’s our money and we need to figure out how we can go collect that.”
He reiterated the City’s position that a rate increase is not necessary to meet the revenue needs.
“Once we are able to be very aggressive about those billing and collections, then we can look at where we are,” the mayor said. “But if the numbers were collected that are out there—75 million dollars—that would solve JXN Water’s problems without a rate increase.”
The Mississippi Free Press asked JXN Water for comment on Thomas’ report that the water utility company missed out on collecting over $74 million in bills between October 2023 and December 2025.
Aisha Carson, JXN Water’s lead communications specialist, responded on Friday.
“The city has framed its opposition to the proposed rate increase as an effort to protect ratepayers, while also asserting that JXN Water should immediately collect roughly $74 million in outstanding balances accumulated since 2023,” she said in a statement. “It’s important to understand that those two positions are not separate—they involve the same customers.”
The agency’s financial plan accounts for improving collections gradually over time, Carson said on Jan. 9.
“What the city is proposing instead is an aggressive focus on back collections in the near term,” she continued. “Recovering $74 million would necessarily mean extracting that amount from ratepayers—the same households they say they are trying to shield from financial pressure. Pursuing that level of collection rapidly would have significant economic impacts on residents and the broader local economy.”