In a time of record-breaking unemployment as a result of the COVID-19 pandemic, Californians owe an estimated $1 billion in unpaid water utility bills. With reduced revenue, hundreds of water utilities are at high risk of financial emergency.
The State Water Board estimates at least 1.6 million households have an average of roughly $500 in water debt — a crisis that could lead to a wave of families facing water shutoffs, liens on their homes or other collection methods. That’s according to the results of a statewide survey of residents and water systems released Tuesday morning.
“This is a crisis,” said State Water Board member Laurel Firestone. “The inability to pay for water bills, the kind of debt we’re seeing in households, has real impacts.”
Data show Black and Latino households are disproportionately affected. All households that owe more than $1,000 are in the L.A. area, but families across the state have unpaid bills for water and wastewater services.
“People that were already hurting, low income and Black and Brown communities are those who have been impacted more overall, and by water debt,” said Max Gomberg, a manager with the State Water Board.
“This is a racial justice issue. Water is basic PPE,” said Jonathan Nelson with Community Water Center, a Visalia-based advocacy group. “If we do not act soon, 1.6 million households may soon experience a drinking water crisis in their homes.”
Water debt could lead to water shutoffs
While Gov. Gavin Newsom issued an executive order in April that stopped water shutoffs during the public health emergency, water advocates like Leadership Counsel for Justice and Accountability warn that lawmakers must act swiftly to prevent shutoffs once the emergency order is lifted.
Michael Claiborne, an attorney with Leadership Counsel, said the threat is simple: “the moratorium will be lifted, and shutoffs will resume. And a lot of these families that have high debt now are going to lose access to water.”
Families are forced to forgo food or medical services to pay the water bill, Firestone said. Residents could lose their homes. And they’re at risk of the threat to health and human dignity, if the water is shut off, and potentially losing custody of their children.
Running water is a basic tool for preventing the spread of COVID-19. It’s also considered a human right in the state of California. But in some places, it’s really expensive.
Residents in parts of the state, including parts of the San Joaquin Valley were already cost-burdened by disproportionately high water bills even before the pandemic – with more than 50% paying more than 2% of their household income just for water by some estimates.
High water bills show up even when the water is undrinkable due to contamination.
Residents in Cantua Creek, for example, pay more than $100 a month in the summertime for water that they can’t drink.
California currently offers no financial assistance to help residents cover their water bills. Assistance is available to help cover electric and gas bills.
Small water systems may delay projects for clean drinking water
Water systems also face dire consequences, data show, particularly those that serve a small base of customers.
With reduced revenue from customer payments, water systems without reserves may struggle to cover the costs to provide basic services and will likely resort to delaying infrastructure improvement projects for safe, clean drinking water.
An estimated 20% of water systems have less than 60 days of cash on hand, an indication they’re at high risk of financial collapse. Among the financial impacts to water systems is potentially downgraded credit ratings, which in turn could increase the cost of loans for large capital improvement projects.
The survey showed what some already knew: that small water systems were struggling financially even before the pandemic.
Many of those same systems fail to provide their customers with clean water, as they are overburdened with contaminated groundwater and aging infrastructure. Without reserves or cash on hand, water systems can’t replace a broken well, for example.
The pandemic exacerbates and underscores the problem.
Legislation introduced to assist those with water debt
State Sen. Bill Dodd, D-Napa, recently introduced two pieces of legislation to address these issue.
- SB 222 would establish a Water Affordability Assistance Fund and affordability assistance program to provide financial assistance for drinking and wastewater services to low-income ratepayers facing economic hardships.
- SB 223 would strengthen and extend existing programs that protect low-income households facing or losing water service due to non payment. The bill would expand a program created under SB 998 to include small water systems.
“The affordability crisis has become even more intense,” Dodd told The Fresno Bee. “I saw it firsthand when I was in the Assembly representing Lake County. It was just atrocious how much water bills were, and people are living on social security, the bare minimum.”
The bigger picture, he said, is that this occurs across the state, particularly in the Central Valley.
Funds for these bills could come from a combination of state, federal and possibly philanthropic sources, Dodd said. Congress in December passed an appropriations bill that included a $900-billion package for pandemic relief.
It included $683 million nationwide for utility bill assistance and California’s share will be about $62 million, according to Dobb’s staff. To access the federal aid, state legislators have to appropriate those funds.
Additional federal assistance could be on the way, as President-Elect Joe Biden has said he would push for another package to include funding for utility relief.
Dodd said he expects to see a bipartisan push to establish the Water Affordability Assistance Fund.