December 5, 2020

Mississippi city settles water lawsuit for $90M

Mississippi’s capital city is set to receive nearly $90 million after both sides agreed to settle Jackson’s lawsuit against a private company over a water meter and billing system that has been fraught with problems.

Jackson Mayor Chokwe Antar Lumumba announced Wednesday that Siemens Industry Inc. agreed to pay the city the full amount of the original contract.

“Gone are the days when you can rip off the city of Jackson for your personal benefit, leaving devastated communities in your wake. This is a new day,” Lumumba said, according to the Clarion Ledger.

Siemens AG is a German company with U.S. corporate offices in Delaware. Jackson officials hired the company in 2012 under then-Mayor Harvey Johnson.

The $90 million contract was the largest in the city’s history. It called for installation of new water meters, a new billing system and infrastructure work.

But some customers were billed too little or too much or did not receive any bills for long periods of time. Some water meters failed.

The city sued Siemens in June, originally seeking $225 million. In November, the city doubled its demand to $450 million.

“This case involves a massive fraud orchestrated by Siemens under the guise of an energy performance contract promising $120 million in guaranteed savings for the city,” said the lawsuit filed in Hinds County Circuit Court.

Siemens issued a statement after the lawsuit was filed, saying its work on the Jackson water project “has been validated by an independent, third-party review” done by a separate firm hired by the city.

“Siemens has gone above and beyond its contractual obligations to help address the city’s well-known challenges, which are complex,” the company’s statement said in June.

Lumumba said Wednesday that officials will hold community meetings to discuss how the city will use the settlement money.

Most likely, it will put most of the money in the enterprise fund of the Public Works Department which disperses funds for infrastructure projects, including road repair and water-related projects.