Mississippi Administrative Code › Title 33 - Public Health - Local Governments And Rural Water Systems Improvements Board › Part 16 - Drinking Water Systems Improvements Revolving Loan Fund Program Regulations › APPENDICES › Appendix 33-16-A - CITY OF JACKSON WORKPLAN FOR THE SUPPLEMENTAL APPROPRIATION

Current through June 25, 2024
The information following this paragraph is the
							 City of Jackson's proposed work plan developed by the court appointed Interim
							 Third-Party Manager as submitted to the program. Elements of this work plan
							 (including debt relief) will be moved to the IUP's Priority List once the EPA
							 and the State have determined that the project/activity is eligible for
							 assistance through this appropriation/ DW SRF program.
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City of Jackson Water System (JXN Water) SRF Priority
				  List for FY 2024
Utility
Description
Zip Code
Service Area Population
Loan Amount 2024
Total Project Cost
Jackson Water
Debt Retirement
39215
155000
$220M
$220M
Jackson Water
Find and Fix Water Leaks
39215
155000
$12M
$24M
Jackson Water
Distribution System Optimization
39215
155000
$34.5M
$54.5M
Jackson Water
Intake Structure Repair OBC
39215
155000
$5.5M
$5.5M
Jackson Water
Chemical Feed Repair OBC
39215
155000
$24M
$24M
Jackson Water
Treatment Process Renewals
39215
155000
$40M
$90M
Jackson Water
Small Diameter Pipe Replacement
39215
155000
$20M
$30M
Jackson Water
EPA Admin/Technical Assist
39215
155000
$1.6M
$2.0M
Totals
$357.6M
$450M
Note: "Loan Amount 2024" is sum of 2023 + 2024
				  columns from table above.
INTRODUCTION
The City of Jackson received a direct appropriation through
				  the Consolidated Appropriations Act, 2023 to be administered under the Section
				  1452 of the Safe Drinking Water Act as follows:
For an additional amount for "State and Tribal
				  Assistance Grants'', $450,000,000, to remain available until expended, for
				  capitalization grants under section 1452 of the Safe Drinking Water Act
				  (42 U.S.C.
				  300j-12): Provided, That notwithstanding
				  section 1452(a)(1)(D) of the Safe Drinking Water Act, funds appropriated under
				  this paragraph in this Act shall be provided to States or Territories in EPA
				  Region 4 in amounts determined by the Administrator in areas where there the
				  President declared an emergency in August of fiscal year 2022 pursuant to the
				  Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
				  5121 et seq.): Provided further, That
				  notwithstanding the requirements of section 1452(d) of the Safe Drinking Water
				  Act, for the funds appropriated under this paragraph in this Act, each State
				  shall use 100 percent of the amount of its capitalization grants to provide
				  additional subsidization to eligible recipients in the form of forgiveness of
				  principal, grants, negative interest loans, other loan forgiveness, and through
				  buying, refinancing, or restructuring debt or any combination thereof: Provided
				  further, That the funds provided under this paragraph in this Act shall not be
				  subject to the matching or cost share requirements of section 1452(e) of the
				  Safe Drinking Water Act: Provided further, That the Administrator of the
				  Environmental Protection Agency may retain up to $1,000,000 of the funds
				  appropriated under this paragraph in this Act for management and
				  oversight.
PROJECT SELECTION PROCESS
On November 29, 2022, Henry T. Wingate, United States Federal
				  District Judge in the United States District Court for the Southern District of
				  Mississippi (Northern Division) signed an Interim Stipulated Order in Case No.
				  3-22-cv-00686-HTW-LGI, the United States of America v the City of Jackson,
				  Mississippi. This order appointed an Interim Third-Party Manager (ITPM) to
				  control the drinking water system in Jackson, serving the residents of Jackson,
				  the town of Byram, and a portion of Hinds County. The Order also included a
				  list of priority projects that were to be completed by the ITPM as
				  expeditiously as possible to ensure safe and reliable drinking water remains
				  available to all customers, at all times. These projects have been programmed
				  with other available funding in the Financial Management Plan developed by the
				  ITPM in January 2023 and those programmed for funding through the State Of
				  Mississippi, Drinking Water Systems Improvements, Revolving Loan Fund Program
				  (SRF) in 2024 are included in this appendix.
PROGRAM ACTIVITIES
Debt Retirement:
The water enterprise in Jackson
				  is currently heavily burdened with debt from private bond issuances dating back
				  to the early 1990's. These bonds were refinanced multiple times with no benefit
				  to the water system. Additional series were issued in from 2013 through 2015 to
				  finance the new billing and AMI metering project. The total outstanding private
				  bond debt is around $175M with approximately $20 million of debt service
				  annually through 2041. Additionally, the enterprise is carrying $115M in SRF
				  debt that adds another $4M annually to debt service requirements.
The Financial Management Plan calls for retirement of all
				  debt as soon as possible with a portion of the direct appropriation from the
				  Consolidated Appropriations Act, 2023. Retirement of all debt removes the $23M
				  of annual debt service and allows the utility to begin building reserves and
				  generating cash to be used to reinvest in a "pay-as-you-go" method. Long-term
				  financial strength and stability is the key to ensuring the Jackson Water
				  System remains reliable and safe for generations to come. The model shows the
				  Jackson Water System building reserves to 90 days, cash on hand, by 2029, while
				  generating over $20M annually for PAY-GO reinvestment.
Over the 20-year
				  planning period, the $290M investment in debt retirement will generate more
				  than $340M in capital to reinvest in the system and avoid more than $100M in
				  interest payments.
Because debt was issued for the water and sewer system, much
				  of the outstanding private debt has not been able to be clearly unraveled to
				  determine DWSRF eligibility. The 2013 Series of private bond debt, however,
				  appears to be eligible as it provided the funding for the Siemens metering and
				  billing system performance contract. The payoff is estimated at $75 million.
				  Additionally, the DWSRF outstanding debt is clearly eligible with an
				  outstanding balance of approximately $35 million. Thus, the FY 2024 IUP has
				  included $220 million for debt retirement.
The City of Jackson received other funding for water system
				  repairs through other programs, some of which must be obligated in short order.
				  As a result of those funds, more than $135M is programmed. This level of
				  capital investment will stretch the capacity of the local contracting community
				  and the ability to coordinate and manage such an aggressive program by the
				  ITPM.
Without putting the Jackson Water System on a sustainable
				  financial path through debt retirement, the one-time Federal funding through
				  the Consolidated Appropriations Act, 2023, is at serious risk of not meeting
				  expected service life and the system needing another one-time appropriation in
				  10 to 15 years. This investment (debt retirement) is akin to "teaching Jackson
				  to fish" as opposed to just providing fish for today's meal.
Find and Fix Water Leaks
The find and fix program in Jackson is a coordinated effort
				  between JXN Water, consultants, and multiple contractors to locate and repair
				  water leaks throughout the distribution system. The list of leaks are initiated
				  through sources such as known historical leaks, leaks called into JXN Water by
				  private citizens, and leaks observed by contractors and others visual scanning
				  the Jackson system. The list of leaks is prioritized and directed through
				  consultants and scheduled with an appropriate contractor based on availability,
				  capability, and the complexity of the work. Consultants will provide daily
				  oversight through construction inspection for documenting, tracking, and
				  conformity to construction standards. Separate paving contractors will also be
				  engaged to follow behind to restore roadways.
Distribution System Optimization
As solutions are identified in the analysis process, this
				  program will design and construct the specific projects required to balance and
				  maintain pressures. These solutions may be significant capital projects or
				  smaller tactical investments and operating changes. Until the analysis is
				  complete, no new investments can be added to the system. Repairs and
				  replacements will continue during this period.
Intake Structure Repairs (OB Curtis)
The intake structure at the Ross Barnett Reservoir has fallen
				  into a state of disrepair. The building that houses needed chemical feed
				  equipment and water quality monitoring sensors needs replacement to protect
				  those systems from the weather. Full water quality sensing at the intake allows
				  operators to see changing raw water conditions to prepare treatment processes
				  for changing water chemistry. Additionally, new flow-paced chemical feed
				  equipment can be directly informed by the raw water data collected at the
				  intake structure, ensuring reliable treatment, and minimizing chemical use. The
				  chemical feed at the intake structure is not functional currently. Feeding
				  chemical at the intake reduces build-up of marine growth in the intake pipes
				  and reduces loading on the screens in the plant.
Chemical Feed Repair (OB Curtis)
The chemical feed and disinfection systems and supporting
				  facilities at the O. B. Curtis WTP need to be replaced with safer and more
				  reliable systems. The current systems do not support reliable operation of the
				  WTP process for safe, reliable, and sustainable drinking water. Aluminum
				  chloralhydrate (coagulant), sodium permanganate (oxidizer), coagulant aid
				  polymer, and fluoride system will be replaced with similar processes. The
				  disinfection systems will be transitioned from gas to liquid feeds. The
				  existing chlorine gas system will be replaced with an on-site hypochlorite
				  generation system to feed hypochlorite and the existing ammonia gas system will
				  be replaced with a liquid ammonium sulfate system.
Treatment Process Renewals
As part of the third-party operation and maintenance of the
				  water treatment plants, a comprehensive process review was conducted to
				  ascertain process improvements required to maintain safety and reliability.
				  This assessment identified various projects that need to be implemented to
				  address condition, reliability, and capacity constraints. The projects include
				  residual handling system upgrades, granular media filter rehabilitation,
				  electrical system replacement, SCADA and cybersecurity upgrades, rapid mix,
				  flocculation and sedimentation rehabilitation and upgrades, raw water pipeline
				  rehabilitation, and clearwell rehabilitation.
Small Diameter Pipe Replacement
A significant factor in the challenges to maintain pressure
				  and water quality in the distribution system is the over 100 miles of piping in
				  the Jackson Water System that is less than 6 inches in diameter, with a
				  majority of that 2-inch diameter galvanized pipe. All small diameter piping
				  needs to be replaced with a minimum of 6-inch diameter pipe. This will improve
				  localized pressure issues, meet current fire protection standards, and will
				  improve aesthetic qualities of the water (taste, odor, color) in homes and
				  businesses served by these 2-inch pipes. This program will replace the 2-inch
				  through 4-inch diameter mains as well as service lines back to the edge of the
				  public rights-of-way. The work will be coordinated with funding for wastewater
				  system improvements to allow replacement of sewer lines in the same streets at
				  the same time - preventing streets from being opened twice.
SCHEDULE FOR COMPLETION
This program is scheduled to begin immediately and continue
				  through 2029 with additional funding phases in future fiscal year programs. The
				  2024 plan presented here will obligate $357.6M by September 30, 2024. The
				  entire $450M appropriation will be obligated by 2029.
EVALUATION PROCESS
These investments will be evaluated through the reduction in
				  the need to issue large precautionary boil water notices (more than 500
				  customers impacted) as well as improved permit compliance at the water
				  treatment facilities.
Financially, the evaluation will be the days cash on hand and
				  the amount of PAY-GO generated each year.