Mr.

Martin comes up and brief us.

I want to have uh just a quick update on our ordering of uh equipment um for especially for blight control afternoon, Lorenzo Anderson Public Works Director.

Um I'll just go over the list.

Um ski sphere is on the quick bid in April.

Uh we have a couple of we're going through the reverse auction uh on some of these uh equipment.

So when I say uh quick bid, that's what we're doing the reverse auction.

Uh ski is fear.

Uh like I said, April, uh all the attachments will be ordered uh once we receive that or know the vendor, so it makes sure that it attaches to uh what we select.

Um we have the four 2500 RAM pickup trucks.

Uh they're ordered, and we're waiting for the due date.

We they did say uh they're expecting it to be longer than expected around June the first.

Um we have the dump trucks, I mean dump trailers receive you utility trailers receive.

We have a zero turns received, and um the meaning excavator is on the reverse uh auction.

Um, I think May 1st, meaning excavator uh more quick purchasing, which is a reverse auction, and the roll off truck is on the quick bid, and ATVs are ordered.

Okay, and how many skips there is what's that?

Um that update again.

Uh our ability to uh clean up blight is is critical to moving the city forward as well.

So we're going to start now with the uh discussion overview of the Metro Jackson Water Authority Act.

And I say that, and I'd like to start off by saying, you know, this is not just about water, this is about who pays and who decides things.

And we have to be clear.

And so it's important that we look at uh the city of Jackson governance in this matter.

So with that said, I'd like to uh have Mr.

Drew Martin.

Yes, sir.

Drew Martin City Attorney.

So I've tried to break this down into several categories.

Y'all feel free to stop and interrupt me at any time to tell me to focus on one area or another if I don't cover it the way you want.

That said, I probably have a section for each thing you're gonna ask about.

I hope I do at least.

Um, and so I'll I will likely get to all of it.

Let me give a real brief overview first.

So just as Councilman Hartley said, the act is known as the Metro Jackson Water Authority Act, and it creates what's known as a public benefit corporation that states its purpose is to manage the water and the and wastewater systems that serve uh Jackson and the current received Jackson services.

Um the authority does not come into existence until an appointment of a majority of the board.

The board is nine members, so that means you need five members to be appointed before the entity exists, and as was mentioned last night, uh the statute gives a May 1st date for appointing the members.

Well, it really says May 1st, but I think it has to mean May 1st or after because they're not all going to be appointed by May 1st.

I I don't believe, but but we'll see.

It says May 1st.

Uh a couple of high points.

Uh any rate increase and any expenditure exceeding five million dollars will require at least a two-thirds majority vote to pass.

That's down from what was originally suggested, but it's still greater than a majority.

Say again rate increases and expenditures exceeding five million dollars.

Okay.

Right.

Requires a two-third.

And uh, I would encourage the uh turn on your mic, please.

I would encourage the council members to ask questions as as we get them within the framework of sure of your program.

That'll be fine.

Uh to answer your question, I mean five million.

Right.

Um competitive and open procurement is required for what the statute defines as major procurements, and the statute defines major procurements as anything over a million dollars.

So it doesn't require interestingly that state current current state procurement law be followed, but it does require a competitive and open procurement process.

The act also allows for emergency purchasing by rule, just as the city does in certain situations.

It also says that the entity can use state procurement services like the Department of Finance Administration.

Yes.

I hate to interrupt, but can you back up?

Yeah.

Let's go back over the uh governance structure itself.

The nine member board.

Sorry.

The nine member board.

Yes, sure.

Let me skip to that first.

So the total board will be nine voting members.

It's actually a ten member board because there's one nine voting member as well.

And it goes like this.

You'll have three at-large members appointed by the mayor of the city of Jackson and confirmed by this city council.

You'll have two at-large members that are appointed by the governor.

You'll have one at-large member appointed by the lieutenant governor.

You have another at-large member.

Uh this one's a little bit tricky, but it's appointed by the governor in consultation with the mayor of the city of Jackson.

Of course, the statute doesn't define what that consultation would be.

But not city, that's right, because that member, any of the governor's appointments, I didn't write this down, but if I recall, the governor's appointment has to be that governor's appointment has to be confirmed by the Senate, I believe.

Something in the legislature.

I'll pull the mayor's nodding.

Uh okay, so basically the city of Jackson will have influence on three members.

We'll have we'll have three full appointments that we decide completely on our own.

We'll have a fourth member.

There is another member, let's put it that way, that although appointed by the governor must be consultant, must consult with the mayor, but but correct.

I mean, really, it's three city members.

Okay, and so we have no majority control.

That's correct.

Three out of nine is what the city has.

Okay.

And some say, depending on how much you want to create credit that language for a fourth, but even that would not be a majority under any definition.

So it's consultant not approved.

That's correct.

Uh there's also an at-large member appointed by the mayor of the city of Byron, confirmed by the Byron Board of Alderman.

There's also a at-large member appointed by the mayor of the city of Ridgeland, confirmed by the Ridgeland Board of Alderman.

That's your nine members.

That's your nine voting members.

And then the tenth member, the ex officio as they call it non-voting member, is the mayor of the city who may also designate a representative to attend meetings on his behalf.

And that's the city of Jackson.

That's right.

Now it's voice, but no say, no vote for that vote.

For that member.

And these members, is there anything in there that says they have to have a degree in engineering or they have to well, not have to.

It's not mandatory, but what the what the statute says is members must be Mississippi residents.

Not Jackson residents.

Not Jack's fire.

Members members must be Mississippi residents with significant demonstrated experience in at least one of the following.

Business management, fiscal affairs, public finance, public health, engineering, or public utilities.

For what is worth the Richmond, thanks to Mr.

Drape over here, the reporter.

As their appointee to the board.

So there's one already named.

Okay.

He's also on the library commission.

Is he is he in the one cent sales standard?

Yes.

Okay.

So he's he's a resident of Jackson.

Uh but he's city engineer in Richland.

Is that read something that happened?

I don't know.

I've been I'm being honest, I haven't seen any news today if it's I thought I uh somewhere came across a cliff that says that the city had rejected that that appointment.

I'm maybe maybe incorrect, but yeah, I heard it was appointed.

He was appointed by Richmond.

Okay.

And so is the fisher.

What's in the plan ledger, so it must be true.

Charlie, do you want to come in?

And so uh my question is they're getting the same level of representation that the well, the city of Jackson is getting three for these other entities, which represent the other eleven percent of the ratepayers are getting a full voting member.

That's correct.

Ridgeland and Byron will each have a full voting member despite having no ownership of the assets, no debt obligations to the system, and no other uh ownership or obligation that I'm aware of.

They're simply customers to the city's services.

And including in some cases, lower water bills.

Well, Ridgeland in particular uh receives sewer services only, so theirs is definitely lower.

And and Byron being outside of the PSC's range, uh also receives a lower rate.

That's that's right.

They have up to now.

There are some issues, there are some provisions in the statute about that.

Um I'll get to those in a minute.

Uh other things about the board that that I picked out at least, uh, as we said earlier, all it the statute says to answer your question, Council Parkinson, uh all initial public members must be appointed by May 1st, 2026.

Of course, there's no penalty if it's May 2nd, 3rd, or 4th.

So who knows what'll happen there?

But that's what the statute says.

Um excuse me.

Yes, does the statute say why this is, and I'll ask the other question later about uh the transition or about the uh federal judge opinion on the transition itself.

But does it say why the state uh is going to try to expedite this thing and get it done before the uh uh before Jackson Water has even completed a lot of his stabilization?

No, there's nothing stated in the statute really about that.

In terms of the transfer deadlines, it does say uh upon the transition being ordered by the court uh or upon such earlier time as the court decides.

Um but what does happen, and this plays right into the section we're in any way, once a majority of the board members have been appointed, their first job is to select a president, uh not a president of the board, but a president of the entity of the authority.

Uh there to consult with the court with Judge Wingate in appointing that president, and that president once named will serve as the deputy to the ITPM to the third party manager up to and until the transition occurs.

It's my understanding that the the um reason for the short fuse on on uh getting the board on on board is uh because they want to make sure the incoming CEO or president, whatever it is, has plenty of time working with Mr.

Hennef and before there's a transition.

So he can have some institutional knowledge, not just be from the job, you know, and as if it leaves town.

That's not stated in the statute, but that's consistent with those provisions and it's consistent with having him serve as de he he or she serve as deputy as well for that very reason, essentially to shadow Mr.

Hennefan and learn the system.

I would also suspect, and this this is speculation, but uh the legislature can pass whatever group they want to pass, but ultimately Judge Wingate is the is the person who can set this group.

And I would imagine that if they hurry up and actually materialize the board, actually get a board establishment, even so far as goes and makes a hiring decision.

I would imagine that sort of puts Judge Wingate back to the coroner because he's not back in the court, believe me.

I don't think he is either.

Uh honestly.

I I I we don't know yet.

There hasn't been a court appearance in front of Judge Wingate since this was passed, much less since Governor has signed it.

I suspect that will change in fairly short order.

Uh so we don't know what his take on this is.

We want to find out.

Um I suspect he'll want to have a voice in how this occurs.

But but I think there's a couple of sticking points in the statute that we'll get to in more detail in a minute.

But but one of them is uh if Judge Wingate doesn't order the transition to this entity, it doesn't matter that the entity exists.

Um there's another target there too, which is, and we will I don't want to jump to this yet, but I do want to make the point since we're on the subject.

The next thing this board has to do after naming a president is to engage in lease negotiations with the city.

So uh that lease is required.

There is it well, let me rephrase that.

That lease is required in order for this authority to do anything.

If the city does not enter into a lease with the authority, the authority can't come onto our property and use our stuff.

And without the city's water and sewer treatment plants and pipes and the infrastructure, the authority can do nothing.

And and to be clear, again, I I guess I'm jumping ahead, even though I said I wouldn't.

Um there's nothing in the statute that requires the two parties to reach an agreement.

Okay.

While we're fixing the technical issue, I'll mention a couple other minor things about the board.

Uh each board member serves at the will and pleasure of the appointing authority.

So Ridgland's member serves so long as Ridgeland wants him to serve.

And there's a term too.

There's three and four year staggered terms, it'll ultimately be four years, but even within that term, if Ridgeland uh uh tires of their appointment and wants to change it, Ridgeland can change its appointment.

The same is true for the governor's appointments, the same is true for the city's appointments.

It's the will and pleasure of that governing authority.

So if the city wanted to make a change to its appointments, the city could do so.

Yeah, how would that work with the okay?

Uh before you go to that question, I just want to uh let members know we have a quorum, and so we officially gavel the meeting public works committee into the session.

Thank you, Mr.

Persium.

So if if that's ever happened, um, would the mayor need to initiate?

Can the council initiate?

But under state law, under any of these appointments, uh, the mayor is a the mayor's job is to appoint the city council's job is to confirm or not to confirm.

The same way we do other appointments.

Correct.

Exactly the same.

Okay.

Um let's see, what did I leave off here?

Uh, the uh you're limited to two terms of service on the board.

Um members cannot be, we said what they need to be.

Members cannot be elected officials, they cannot be current or former federal, state, or local elected officials, and no current, and obviously there aren't any current employees of the authority right now, but as time goes by, if the authority comes to exist, no current or former employee of the authority may serve as a board member either.

Statute gives the we talked about appointing the president.

Statute gives them 30 days after the majority of board appointments have been made to appoint the president.

Uh, as I said, they have to consult with the court, and the president will act as deputy to the ITPM.

The president's job is to supervise the system, hire and manage staff, all of whom will serve at the will and pleasure of the president, set budgets, maintain records access, et cetera.

Um that more or less covers the board issue.

Thank you.

Yeah, I think we need to get other questions about the board.

Well, I'll just no, Mr.

February.

Thank you.

I'll just know it's a very important thing that you a few things that you said.

This board comes into an existence when a majority of the members are appointed.

And their first order is to select a president within 30 days.

Given that we only have three members here, there is a chance that the two that the governor selects, the one that the lieutenant governor selects, uh Byron and Ridgeland can be appointed, and they could hire in other words, we need to move quick to get our appointments in because it's possible that a president can be named before we even get our our folks.

If five if five members were appointed and the city had not appointed anyone that five members could select a president, um, correct without any voice from the city.

And that would not be good.

I would not recommend that.

Okay.

I got a question on this one here for all.

Okay, just to make sure I get this clear.

When they are appointed boards, you did say they can start three or four years at the will of the entity.

Well, it's three, it's three, they stagger them to start, they end up all being four-year terms.

But two terms and limited to two.

That's right.

That's right.

So a couple of the terms start as three-year terms in order to create that statute.

Okay, thank you.

Well, Peter Tagerson, CA, one more important point.

No member of the board can be an elected official or a former elected official.

That means I can't go to but we need you need to bear that in mind as you're thinking about who you're going to confirm and as you go forward.

It cannot be a current or former elected official.

Okay.

I got a question on uh I assume the board members do not get paid anything.

They do not get paid.

There are allowances for per diemes and some other things.

There's no salary.

Okay, so the the so they get started here and they hire a president in 30 days later.

What do they have funds for to do anything with?

I mean, do they don't so how do they pay the president?

I assume the president gets paid.

Well, he'll he he is entitled to earn a salary as set by the board.

Uh the only allocation of funds available for the entity that I see in the statute is that the statute says that the state will pay for the entity to have things like lawyers and financial consultants to help them negotiate a lease and so forth.

Um I don't see anything that sets aside money for that salary in advance.

Okay.

Okay.

Uh by the way, it is possible that I've missed a couple of things, and I'm making note of those questions, I can make sure I have a double check.

And we have the handout that was provided as well.

Correct.

I want to echo uh city attorney Martin.

There is really no salary provision in there for the president.

I suspect that uh nobody's going to take the job for free, and that once a president is named, the entity will try and go to the court and figure out some way to have Jackson Waters start paying that individual would be, but again, this is speculation.

This is the city attorney and I and the mayor all talking about this, trying to put our heads together as how some of this might unfold.

The mayor has repeatedly said, and I think it bears worth repeating again.

There are a number of unknowns in this bill.

There are some unknown unknowns we haven't identified, but there are a number of known unknowns, for example, how you're going to pay somebody when you don't have funds.

So regardless of what happens, and the public needs to understand this, there's not a new entity that's going to be set up, take over next month or two months from now.

Uh at best, you are talking about a year plus transition, and that's assuming that there isn't litigation, there are challenges to part of the bill, there are challenges to some of the authority that's attempting to be exercised, et cetera, et cetera.

So while there's a sense of urgency for appointments to be made, because there could be a president named and certainly a quorum of this agency could begin officially meeting once a majority are named.

There's a long ways between naming those people and actually having any entity take over.

I'll add that it's going to be a real challenge.

Sorry.

That's going to be a real challenge to do a search to find the right person, which is really an important job, the president of this, because it's going to take the run of the order system when the Hennefin leaves, when you don't have any idea of how much salary there's going to be.

That makes it really difficult to go find the right universe of people in, you know, without knowing what whether what you're going to go pay them.

Anyway.

And and I was going to say I think the bigger challenge is going to be uh I'm assuming there's a qualified water sewer authority operator who wants to be president in the scope of the 350 million people to live in the United States.

I assume there's one or more qualified people who are interested.

Right.

If I was one of those people, I'd want to know what the system revenue is.

And realistically, what numbers am I working with?

Because if I'm going to accept the job, I would like to have some idea what my collections are, what my connections are, et cetera, et cetera.

And so not only a salary and issue as I see it for a qualified president of this entity, but other data that the president would need to decide whether the job is worth taking on or not, is not currently at hand.

I appreciate that.

There is a lot of issues.

And I'd like to focus on, you know, I think we need to do our due diligence, as councilman Parkinson said, and look to a brief study on membership.

But also, I think in the long run, we need to look at how this thing is supposed to work, how the federal uh judge is going to interact, uh, the the legal restraints uh from the federal dictates.

We need to understand that moving forward.

Because then I believe firmly we need to fix the system.

Uh this thing came out as somewhat of a surprise to me because I'm thinking we're still over there talking to Judge Wingate about a lot of issues.

We even did a resolution on a lot of issues, and we're waiting for satisfaction on that.

And now you're saying with all these broken issues, we're gonna put it in somebody else's hands.

So I want us to focus on not only yes, the membership of a potential board, but also we have work to do and for us assessing and and fixing what we are we know that are problems.

And if I could add to that, well, one thing we all need to be thinking about is so the statute is pretty ill-defined on how the board will operate, how the entity will operate.

A lot of that I think is I think is intentional and gonna be left to the board to decide through its bylaws.

I say all that to say we need to be thinking about what are the things if this were to go forward, does the city need to see happen for this to work at all?

Because that lease negotiation is an opportunity for us to force those things in there.

And so much so that I think we have the leverage to be able to say if they're not in there, we're not leasing your stuff.

I agree.

Uh I agree.

One other thing in your analysis, what is being said concerning the federal mandate for our transition.

So whatever you come up with.

At the end of the day, it's up to Judge Wingate to decide that.

I mean, the state can't dictate to a federal court what a federal court's going to do.

And so the statute essentially says when Judge Wingate decides it's appropriate to transition it, that's when it'll transition.

But it doesn't really even attempt to tell him how to do it.

It just creates a vehicle to be there for him to transition to it.

It seems to say that it would require it, but I don't care what a state law says, it can't tell a federal court what to do.

Okay.

And I'm I'm just curious.

What is the federal court mandated to do?

Is the system supposed to be completely fixed?

Well, yes and no.

I mean, substantially fixed, right?

So what the statute says is whatever federal obligations and state obligations are left, whatever permitting requirements, whatever compliance requirements that the entity will uh accept of.

They go with they go with the system.

Um that's a good thing in some ways, because if it were to happen, it would relieve the city from potentially being on the hook for some of those things, I think.

Uh it's not crystal clear.

Uh, but the answer to your question is the federal court order implicates and specifically says the following benchmarks will be hit, uh, the following uh corrections, the sewer system will be accomplished.

Uh the water system is more or less already in a state where it could probably be transitioned.

The sewer system is probably the billing is uh one of our concerns.

Right.

I and I mean only in terms of infrastructure.

When you get to billing, there is no requirement either from the federal court or from the state statute that all of that be fixed in advance.

I know that's a subject that's come up here and it has to be fixed.

Um that's going to be a point of contention.

It's going to be a point of debate.

Uh the if Judge Wingate were to say, look, I I don't I've given up on Jackson Water fixing that part, maybe the next entity can do it.

He could decide that if he wanted to.

Um, I don't know which is better.

I mean, I I don't, but I know that that that part of the system uh without that part being fixed, all of this is going to fail, no matter who has it fixed.

Um I will say what what is allowed and what the statute does is it specifically requires a customer billing dispute uh process to be created.

There is not one currently that would be statutorily required.

It does not require an in-person customer center.

That's an issue that we need to remember about uh as we get into lease negotiations.

I don't see any reason why we couldn't accomplish that, but it's not required by the statute.

The statute specifically allows for disconnection of services for non-payment.

It also adds up to a $100 civil fine or penalty that can be assessed for violation of rules, which seems to be a potential penalty for non-paying customers.

Uh, it allows for all system debt prior to November 22nd or whichever date it is, maybe off a day 2022 to be written off as bad debt.

It also allows any bill that has been uncollected for a period of three years to be written off as bad debt.

Okay, does it address any of the other operational issues like road repairs and utility cuts?

No, all of that would have to go with the system and would have to become a responsibility authority.

I don't see any other way it could work, but legally and statutorily, it's not it's not it's not stated.

And these are a lot of questions.

You're right, other than the very general all obligations of the system would transfer uh to the authority.

Um some other I'll I'll skip my notes for a minute and come back to it because I know you want to hit some of the higher stuff.

Um the system debt, it says the city's water and sewer debt would transfer with the system, the system itself, or I should say the authority would be authorized to refinance that and would be authorized to issue new debt.

Uh what we understand, but what is not required or mandated is that the authority would refinance the current sewer and water debt.

What that essentially does is zero out the city's obligations on those debt uh and take it over for the authority, with one exception.

Uh the our sanitation fees would still be subject uh to liens to secure some part of that debt.

But that would be the only part of the city's assets or obligations or funds that could be attached that way.

In other words, uh they could come after sanitation fees if they weren't making enough money to cover everything, they couldn't come after anything else.

So that would effectively give them some degree of control over our sanitation.

Some, some the flips of the the one of the silver lining there, if you want to call it that, is we would the city would take back over its own sanitation collection.

This statute would allow us to contract with this with the county to do that if we thought it would be helpful.

It also would allow for sanitation fees to be collected as part of the property tax assessments as a separate line item.

Uh that isn't important, and it's something that we should consider whether it goes along with this authority or not in the future, because the rate of people paying their property taxes is pretty darn high.

The rate of people paying their water bills, which has their sanitation fees on it is not, as we know.

So getting our sanitation fees under our control of collection and getting that collection rate up to 90, 95 plus percent is a significant additional revenue to the city that we don't currently have.

We would no longer have a third party, Jackson Water trying to collect those fees, not collecting them, holding them, fighting over them, et cetera.

That's not a big silver lining because we ought to have that anyway, right?

Uh, but it is it does exist.

Can I make a point?

Yes.

One of the things that I think was counterproductive in the the prior administration, and and they ended up with an adversarial, I consider it adversarial relationship with Judge Wingate.

And I don't think that's really a healthy environment for us to try to work through this.

I think we need to see him as the professional um colleague that he is and and and treat him in a very professional manner, any comments about him.

Uh he's uh you know done a lot, and we need to uh be respectful of the position he's in and in everything that we do and talk about.

Well, uh let me let me just second that.

Having been a part of conversations on both sides of that, the the difference is night and day.

I think we have more or less accomplished that goal, and I think it needs to continue to be a goal that we that we keep uh uh understood.

Two other quick things, and I agree.

Yes, and and that is you know, I believe he lives in the city of Jackson.

He's a resident, he knows people that are on this water system.

So I agree we need to make sure that um you know we make our voices known to him, our concerns known to him, and rely on the fact that as an integral part of the community, he will serve the people well in making these decisions going forward.

I think that's correct.

Um a couple of things that the that the authority would have that that, for example, Jackson Water does not have.

Uh they would be subject to the open meetings act, just like the city is.

Uh, they would be subject to the public records act, just like the city is.

That matters because a lot of the reason we're left wondering if the rates are correct now is because there is financial information that Jackson Water has that we simply still don't know and have.

It's impossible for us to know with certainty what is being spent on what right now.

This would require that.

There's also some other transparency requirements in the act that would require that the financial statements be quarterly and public.

Uh, all of the information one good thing in here is the city will finally know exactly where the money is going, how it was procured, and who it's going to in a way that we simply haven't known for the last almost four years now.

Okay.

Oh, the rates are not going to be subject to the public service commission.

It's a separate entity by itself.

There's no PSC regulation over this authority.

So there's no review?

Not by the PSC.

The state would be the regulator.

But now that's uh the I mean, right now the P the P would when we were running the water system, the PSC didn't have any safe so except for the people outside one mile.

No, that's it.

Well, that so is that one mile outside the city still apply?

That won't be a factor anymore with this authority, as best I can tell.

Right.

Okay.

Yeah.

Um the way rates would work generally.

Uh every other year, a by a uh expert rate study would have to be performed.

Um, if two rate studies go by that both show with a system at a deficit, then a rate increase is mandated to cover the shortfalls.

There's no affordability study required.

I can't remember if that phrase is used.

I don't believe so, though.

I think it only refers to it as a rate study.

I'll I'll check that to confirm.

So the rate study is done every other year.

And if Biennial is the term that's used in the statute, which that is taken to mean every other year.

That's the way I take it to mean.

Um if two of those come back negative, then the rate if two consecutive studies show the necessity of a rate increase, then an increase must be made.

So that's over a four-year period.

I think that's how that's how I read that.

Okay.

I'm sorry.

They will only be approving rate.

Well, they can they can change the rates at any time with that two-thirds vote.

Right.

But they'll have that rate study every two years that in theory is meant, I think, as a as a standard just to look at things and see are we where we ought to be?

Uh if two consecutive rate studies show that the rates are insufficient to cover the cost of the system, then the rates have to be increased.

So is there any independent agency or state group that will be examining the escalation of these rates?

I mean, Jackson Water came in and there was an automatic 40 dollar increase.

Then there was another rate increase.

Then there was a second rate increase.

Is there anyone paying that would be able to pay attention to that escalation in rates?

Short answer is I don't see who would be doing that.

Uh the longer answer is at least we'll have the information available that we could in theory do that ourselves.

But what's the what does that mean, right?

So we look at it and say, no, we don't like that.

And we don't have the votes to bring it down.

Correct.

That's that's that's the point.

Um that's right.

What what what the statute says is that the end the the authority is uh authorized to set and enforce just and reasonable rates and charges, sufficient to cover operations and maintenance, debt service reserves, and covenant compliance, which essentially means bond covenants, is what that's talking about, with equal charges for similarly situated customers.

That's that's the way it's written.

So the citizen of Jackson has no way to alter that path.

We would have uh, and I I don't say this implying that it's anything more than it is.

We would have three votes, um, and we would have uh our our the power of our persuasion.

That's it.

Let me add we got the power of a lease negotiation.

Right.

Before we get there, we have that.

That's right.

So before you state uh understand it's public form, and if there's any strategy or legal uh deliberation we need, you know, we need to do that in private.

But please that's why I was being hesitant.

But uh I do want to say when I think on one level everybody thinks of lease as I'm getting something and I'm paying X dollars for it.

That's what a lease is.

So the system is getting our infrastructure and it's supposed to pay us something for that.

But lease terms can include non-monetary items.

And one of the proposed terms that you as a council may want to consider is there going to be an affordability study, not just a rate study.

Is there going to be some other uh mechanism that you could insert in that lease that would give the city council a comfort level that we wouldn't have a random $40 tap fee enacted in the future and things like that?

So no, there's nothing in the bill, but remember every time the bill is silent, you the eight of you as governing authorities will have some negotiating power.

Okay.

And if my here's my one of the reasons I asked that.

We don't want to raise rates so high that we lose our most vulnerable citizens.

Absolutely.

Our elderly folks, we got a system now where they can't afford water in their own city or on their own street that they've been there for generations.

We do not want to be in that predicament.

Keep raising it, escalating them, and I understand your your language, Mr.

Martin, about well, it's going to go for bonding, it's going to go for operation, and it's going to go for this.

We have to have something like that to ensure we're not going to be getting rid of people in the city of Jackson only for folks with the ability to pay higher rates to move back in.

We have to maintain our history, our heritage.

We have to maintain protect our citizens, especially our uh underserved and most vulnerable communities.

Mr.

Taylor said I and Mr.

Martin, I I love the points you're making about the the lease.

And I'll just say a couple of things.

Um we're already getting I I'm sure y'all are.

We're already getting messages either encouraging me to not sign the lease or encouraging me to sign the lease.

The lease doesn't exist.

There is no terms of the lease.

There is no there is nothing for me to either sign or not sign.

Um so I think it's important to stress that we are extremely preliminary in all of this.

Uh my other question is I I think you're exactly right.

Negotiating a fair lease, I think is is a really important leverage point that we have.

Um, and I want to make sure there's nothing in there that says that the lease has to be a hundred-year lease or a there is one term about there is one uh provision about the term of the lease.

Uh and what it says is the lease term must continue at least until all authority bonds are paid in full, or provision for payment is made under the applicable bond resolution.

It's never clear to me what never gonna be, by the way.

It's you said until the bonds paid off until the bond is paid off, or that's never gonna help or until or until provision for payment is made.

It's that second phrase that is a little unclear.

But I agree.

I think the system, I think we should expect the system always to carry some debt.

I think most systems probably do.

Yeah.

I think that's a trick statement.

Yeah.

And I just want to make sure that okay, we could enter into a lease that might seem very favorable, but if if if there's if as soon as we do that, then terms change or whatever.

We don't have the ability to go back every year to make sure whatever.

It it's it's once the lease is done, it's let me say this.

I I wouldn't speak that in absolutes just yet.

The the fact that the term has the fact that the the lease doesn't end until a certain time does not necessarily foreclose us, including provisions that would allow us to revisit certain issues within that lease.

Excuse me, Mr.

Bret.

Um so yes, the lease wouldn't terminate until that, which might be never.

Uh but A, you said something about, and you may not have been it this way, terms might change.

Well, they're not just gonna change, they would only change if we agree to them changing.

And B that there are ways to negotiate and draft a lease that would allow for some things to be revisited, and we just have to talk about what those are.

So I got a question.

It's still a dangerous um on the on the leak on the lease.

Um because obviously if we say we'll lease you this, you know, water, all the water pipes and the and the water system for you know a hundred thousand dollars a year or a million dollars a year, that's an extra expense, which makes them even dip more difficult to um you know make sure that's they're gonna raise rates than to cover what we have it makes it more difficult to keep rates low.

So uh, you know, we've we had the waters back when we were running the water system.

Uh there wasn't really we owned it, so there wasn't a lease, and we and but you know, we didn't obviously didn't take as good a care of it as we should have.

So I I wonder what should be the I don't where's the starting point for trying to figure out what the lease should be if it's a dollar amount?

Well, my suggestion is that we not have that discussion just yet.

Um uh and and not necessarily in public uh first.

Um but you don't have to, I will say this you shouldn't think that it has to just be an absolute number.

There's there's other ways to get to something uh maybe.

Okay.

Okay.

Um follow up.

Is there any provision for returning the system back to the city of Jackson?

Same as when that lease term ends, uh, when the bonds when the debt's paid off.

So when the debt's paid off.

But does it mean that there we couldn't, but there's no legal requirement that it be turned back over before that.

But there is a legal requirement that it be returned to the city of Jackson after the debt is paid off.

I'll review the language to make sure it's mandatory before I go too far.

But essentially the way the statute reads, yes, is that the system should be returned to the city upon the um uh what's the right term?

Paid paying off all of the debt.

I mean it's okay.

And but again, keep in mind that that's not as simple a statement as it sounds like because there's a reasonable change.

I mean, every business, every successful and big business, and this is a big business, carries some debt.

Uh it's usually good business to carry some debt, not too much, but some.

And this board might decide that as well.

So we possibly we can never get our system back.

If if the board kept carrying debt, then that provision that trigger would never occur.

Let me ask you something.

Are there how many of the municipalities in the state is under this type control?

Under this statute, none.

None.

So we're the only one.

Only one I see.

Okay.

I got a question on the existing contract.

There's been talk about uh let me let me answer one more thing.

I'm sorry, I hate interrupt it.

It in the same way that the state acted like they were passing a general airport law, but it was really just to come after our board, they passed what they called a general water bill to come after our system and our board.

That that's the answer.

Oh, uh, I think I I got that part.

Yeah.

They're in the take in mode.

And this is a legislative taking of our stuff.

No, it isn't because we don't have it right now.

Federal government's got it.

Yeah, but you know, the federal government was supposed to be here for a time for uh for a period of time to get the system in order.

And my thoughts was that they were going to return it to the city of Jackson.

So now you're saying, or the governor's coming out and saying, well, we don't believe that the city of Jackson will have that leadership to properly uh manage its own system, where every other municipalities in the state has the ability to manage their own system.

Well, it was broken when they took it over.

The the uh one more question on the existing contracts with all the vendors that um are running the system uh right now, both the sewer system as well as the plants out there.

Uh can those be um tossed out and and can you do re can that will the new board be able to rebid those contracts if they want to?

It's it's not stated in the statute, and it's not a hundred percent clear.

It's my opinion that no contract that Jackson Water has uh can be forced on a subsequent entity, that it would be terminable at their decision.

That doesn't mean it would terminate automatically, but it would mean in my opinion, the board would be wise uh to review every contract and terminate the ones that need to be terminated and uh equitably procure the ones that that they can do a better job with.

Yeah, because they or to train up their own people and employees, uh, which will also be significantly cheaper.

So they the Jackson Water was not subject to state procurement laws, but I assume this authority would be subject to not subject to state procurement laws per se.

Uh the statute for some reason says that they are they must procure anything over a million dollars, they must use some form of equitable procurement process, uh competitive procurement process, I should say.

For smaller ones, there's some other language I'll find out.

I've got it in my notes somewhere.

Um it's encouraged, but for smaller ones, it's a little bit more ambiguous.

But anything you get over a million, they've got to use some form of competitive procurement process.

They don't necessarily have to follow the state procurement statutes.

Really?

Okay.

Okay, so no oversight there is what I'm hearing as well.

And I want to comment, uh, Councilman Foote.

Yeah.

You said the system was broken, and I agree.

It was broken.

Perhaps management, perhaps, but isn't there something to be said about the state neglecting the system, not providing the aquit funds, and it being an old system, there's a reason it's broken, and it's not all the reason is mismanagement.

Now we have new management, and the governor has implied that our management will never be good enough to service this.

And and I I disagree with that.

I disagree with the notion we have an engineer, we have everything else.

I thought the federal government was gonna come in and fix something and turn it back over to us with safeguards that we can move it forward.

And instead of doing that, you have a system that's no longer working for everyone, including our most vulnerable population, and they're saying, well, the uh, you know, the Jackson Water is uh ready to abandon, they're ready to get out of town now, and now it's the state, and the state is gonna do a better job.

I say that we need to be considered the same way other municipalities around the state.

And I say fundamentally, this law is flawed, and no one bothered to come to the people who actually pay into that system and ask them a thing.

Not not man enough to come to them, look in our eyes and say, hey, look, we are concerned about your water system.

Let's sit down and make a plan together.

No, this was a take.

It wasn't a negotiation, it was a take.

Just because you have the votes to do something doesn't mean that you need to do it.

So going forward, I don't believe maybe wrong, Councilman Foote.

What's that?

I said I may be wrong.

Okay, but to me, if you're going to be if uh if the state is so interested, they should come and talk to the people and find out the exact direction to go.

But when there's a takeover and then an implication that we're not smart enough, we're not good enough to run this system, then that's wrong.

And can I add on to that?

Because it's new people on the council, and some of the people that he may be talking about was on the council when all this happened.

So he has to give the new people chance enough to show that we are capable, because I know I am, because he don't know me.

And another thing.

I know a little bit of what's going on is supposed to be run.

It's supposed to be run.

We have a qualified engineer who's been doing uh uh sewage treatment plan operations in several different municipalities formats, county wide, statewide, and now and without considering any of that, and that's what really irritates me.

Federal government I see a failure with our billing system and our folks are exposed, and we have no recourse to tell them other than nothing we can do, and then going forward, we're going to be at the same location where we can tell them nothing we can do, but their assistant.

I'm sorry, continue.

I think at this point it'd be easier to take questions from what areas that you want to hear more about.

Uh I've got plenty more notes, although I think we've covered the major parts.

Um what would be most helpful to the council?

I think going forward, I would like to see uh uh that interaction with Judge Wingate to find out okay.

What are his thoughts on a transfer?

Is this in fact uh premature?

What are his thoughts on the status of the system being well and functioning, including billing, before we automatically turn it over to another entity?

I know you have um another committee meeting right after this.

Uh there I have some thoughts uh that are I would say litigation strategy type of thoughts that I would like to convey in executive session about that exact issue if we've got a few minutes to do it.

All right, sir.

I appreciate that.

One other thing is uh as chair of the public works committee.

I have addressed the letter to Mr.

Harry Alexander, executive director of the public Mississippi Public Utility staff requesting that they put perform an independent analysis, uh representing the interests of utility customers, uh, some of the areas, the billing system integrity, customer service performance, operational readiness matrix that's the leaks, main breaks, infrastructure restoration, financial and ratepayers risk exposure, as well as transition readiness assessment.

Why would we go forward without this information being known?

I've also crafted a letter to Commissioner Dekeeper stamps requesting for some of the same as type of assistance or information, and this is these documents are whatever is available within their jurisdiction to do.

But one thing we're um I want to engage them on is general ratepayers impact, public accountability and put potential effects on customers, service quality concerns, billing accuracy, customer service performance, and infrastructure repair issues, also from the to the commissioner, transition considerations, the broader implications of the governance structure contemplated by the act.

And I would um I make a copy to anyone that's that need be, and uh I would ask that these public servants in their uh official capacity provide us with more information so that we might be in a better place to make these critical decisions questions, administration.

Anything good Parkinson?

Can we go on the executive session?

If you have time, let's do that.

Okay, a motion has been made that we go into executive session, second, all in favor.

All right, folks, it's been uh voted that we go into executive session.

Uh this is concerning legal ramifications, specific litigation involves city water federal court at the city city water, yeah.

Okay, all right.