Other cities sue SiemensBy ANTHONY WARREN,
The same firm Jackson paid $91 million to upgrade its water system has been sued by two other cities for similar work.
Last week, city officials were still in talks with Siemens USA in hopes that the firm will help sort out its water and sewer billing crisis.
Five years after Siemens was brought on to update the water system, an estimated 15,000 customers are still not receiving bills, and the water/sewer cash fund is in danger of drying up.
Earlier this year, the city council gave Mayor Chokwe Antar Lumumba’s administration permission to file suit against the international firm. However, at press time the mayor had not acted on the authorization.
In 2016, the city of Monticello, Ark., settled a lawsuit with Siemens over a similar water contract, and in 2012, the city of McComb settled a suit over similar claims.
According to the Southeast Arkansas Today, Monticello filed suit in federal court after it was unable to get out of a $10 million contract with the firm to replace water meters and aging water lines.
The city of nearly 10,000 settled the case for $4.6 million, months before it was expected to go to trial, the paper reported.
According to the August 2016 article, Monticello had concerns about the project after learning Siemens had installed the wrong meters and that the meters that had been installed had a high failure rate. Water billing problems also resulted.
The firm also billed the city for work before the project was completed.
The city of McComb brought on Siemens to replace some 6,000 meters and create a drive-by meter reading system.
There, the project was not completed on time, and once the meters were installed, the city had problems with the software trying to read them.
Jackson brought on the international firm in 2012. Under terms of its agreement, Siemens would replace some 65,000 water meters, replace broken sewer mains, and create and install new software in the water/sewer billing department.
Former Mayor Harvey Johnson touted the contract as “revenue neutral” and that it would pay for itself over time.
However, a report from a private consultant revealed that savings generated would come off the backs of ratepayers and in the reduction of staff.
According to a 2015 report from Raftelis Financial Consultants, Siemens guaranteed residential water collections to increase by $2.5 million a year, and stipulated that collections from commercial meters would increase by $1 million a year. Further, operating costs would be reduced by about $2.1 million a year, largely through the reduction of meter reading staff.
Fewer meter readers were needed because the devices could be read electronically, and could be shut off from water/sewer billing headquarters.
Fast forward six years, Siemens’ promises are unfulfilled.
Of Jackson’s 53,000 water and sewer customers, 15,000 are still not receiving regular bills. As of March 1, the water/sewer enterprise fund had just $3.2 million in cash on hand and in danger of going bankrupt.
Jackson needs to bring in between $5.5 million and $6 million monthly to remain solvent.
However, based on collections through March 1, the city was bringing in an average of $3.8 million a month.