# JXN Water's Own Math Says Selling the System Saves $1.4M a Year. The Rate Hikes Are the Real Story. > A 30-page financial plan filed in federal court proposes Jackson sell its water and sewer assets to a new, city-independent authority. The document's own tables show what that buys: smaller rate increases, and a bond that only works if the city gives up control. *General News · By Jackson Wire Staff · September 10, 2026* The most consequential number in JXN Water's August financial plan is not the 10 percent rate increase it wants next spring. It is $120.8 million, the amount the plan says it would take to retire all outstanding debt on Jackson's water and sewer system if the city sold the assets outright. That figure appears in the 30-page Financial Management Plan filed Aug. 20 in the U.S. District Court for the Southern District of Mississippi, in the receivership cases the United States brought against the city (3:22-cv-00686 and 3:12-cv-790). The plan is signed by Interim Third-Party Manager Ted Henifin and prepared with PFM Financial Advisors and Stantec Consulting. It is the first time the receivership has put a price on the exit. The mechanics are laid out plainly. A newly governed JXN Water entity, or its successor, would buy the system's assets from the city and issue a tax-exempt bond to fund the purchase. The city would use the proceeds to pay off its debt. The plan states the tax benefit "hinges on the new authority not being connected to the city or under city control," because the Internal Revenue Code only allows tax-exempt treatment if the buyer is not related to the city for federal tax purposes. The plan quantifies the trade. Tax-exempt bonds carry interest rates roughly 25 to 30 percent below taxable bonds, according to the document. Assuming a sale closes in July 2028, funding the $120.8 million payoff on a tax-exempt basis rather than a taxable one would lower debt service by about $31.8 million over twenty years, or roughly $1.4 million a year. But the debt-service savings are the smaller half of the argument. The plan's comparison table shows what happens to customers. Under the updated base case, with no sale, JXN Water projects rate increases of 9 percent in 2028 and 8 percent in 2029, funds only about $20 million of capital through 2029, and defers roughly $66 million of projects. Under acquisition financing, the increases fall to 5 percent in each of those years, capital funding rises to $113 million, and nothing is deferred. That is the case Henifin is making: sell the system, and ratepayers absorb smaller increases while more pipe gets replaced. The plan identifies roughly $767 million in additional capital needs over the next 25 years, $404 million for water and $364 million for sewer. It also notes that $140 million of bonds remain outstanding under a 1993 general bond resolution, payable through December 2040. The plan is candid about why the system is here. Jackson's population has fallen to about 141,000 people spread over more than 100 square miles, leaving fewer customers to pay for a system whose costs are largely fixed. More than a quarter of residents, 27.9 percent, live at or below the federal poverty level. The document notes the city was "unwilling to raise rates" for years, which left the system underinvested and unable to absorb a shock like the 2022 failure. There is a historical echo in the plan that has drawn little attention. In 2013 the city signed a contract with Siemens to install advanced metering infrastructure and a new billing system. The contract failed. The city sued and recovered the $90 million it had spent, minus 30 percent in attorney's fees. According to the plan, "the balance was not used to pay off debt or fund capital improvements to the System." The money that was supposed to fix billing instead disappeared into the general fund, and the metering problems it was meant to solve are still cited as a cause of the current crisis. The collection numbers show the receivership has made real progress on that front. The plan reports that enforcement has lifted the collection rate from 60 percent in 2023 to about 82 percent year to date, with a target of 85 percent for the year. In the first six months of 2026, operating revenues exceeded operating expenses for the first time since 2020. But once debt service is included, the system still runs a near-term cash deficit, currently covered by federal grant funds the plan describes as "rapidly diminishing." The plan also confirms that every other option was tried and failed. "All avenues to reduce costs by restructuring debt service have proven to be unsuccessful," it states. That leaves rate increases, a sale, or continued reliance on grants that are running out. The political reception has been cool. Mississippi Today reported Sept. 9 that JXN Water confirmed in an email that it supports the sale, and that Mayor John Horhn's office did not respond to repeated requests for comment. Ward 1 Councilman Ashby Foote said the collection rate needs to improve further before customers are charged more. Ward 4 Councilman Brian Grizzell said the city should have raised rates earlier to avoid the current jumps. The plan does not set a date for a decision, and no sale can happen without the city's agreement and Judge Henry Wingate's approval. What the document does is put a number on the choice. The question now is whether Jackson's leaders will treat $1.4 million a year in debt-service savings, and a 4-point difference in rate increases, as enough to hand the system to an authority the city does not control. --- [The Jackson Wire](https://www.thejacksonwire.com/) · [Read on the web](https://www.thejacksonwire.com/article/jxn-water-plan-sale-acquisition-financing-120-million)