The fragility of Jackson’s water system, plagued by decades of outmigration, deferred maintenance and declining federal support, was on full national display in February after a historic freeze left at least 40,000 without running water for weeks.
City officials are asking for state and federal support to help raise the $1 billion they say is needed to fix the system, which failed to produce safe drinking water for more than a month after the storm.
Mississippi Today spoke with several national policy experts about how other American cities have navigated large-scale water funding shortages and how Jackson could move forward. The experts offered several solutions, chronicled in the article below, but ultimately agreed that the absence of a more involved federal government leaves few answers for Jackson.
“A lot of these systems that are on the brink of falling apart, they’re just one extreme event away from a crisis,” said Dr. Newsha Ajami, director of the Urban Water Policy program at Stanford University. “That’s what happened in Jackson. It’s a cumulative effect of not investing in our infrastructure for so many years. Aging infrastructure, all of these extreme events that we’re experiencing, it’s all coming together.”
Some signs of short-term relief have trickled in during the past couple weeks. Jackson is set to receive $47 million from the American Rescue Plan, the name of the new $1.9 trillion stimulus bill President Joe Biden signed last week. Mississippi Sen. Cindy Hyde-Smith introduced a bill in Congress that would steer infrastructure funds towards the city.
But those measures still leave Jackson a long way from the necessary funding to repair and revamp its water system.
Federal water infrastructure support has plummeted since the 1970s, when the U.S. sent funds to cities to help comply with the newly-passed Clean Water and Safe Drinking Water Acts. In 1977, federal support accounted for 31% of governments’ total water utility spending, according to the Congressional Budget Office. By 2017, that share had dropped to 4%.
Now, such spending largely comes in the form of loans rather than grants, mainly through the Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act that supports specific projects, as well as an annual allotment called the Drinking Water State Revolving Fund, which last year totaled $2.7 billion for the whole country.
“If Jackson alone has a $1 billion need, and the total EPA State Revolving Fund is $2.7 billion, that starts to give you an order of magnitude of how big the problem is versus how much money is actually available,” said Dr. Martin Doyle, Director for Water Policy at the Nicholas Institute for Environmental Policy Solutions at Duke University.
As for many cities with rupturing infrastructure, the decline in federal support has coincided with Jackson’s sharp decline in population, which has shrunk by 20% since 1980.
Ajami, Doyle, and others discussed with Mississippi Today the ways other cities have tried to boost water infrastructure funding, such as consolidation and privatization, as well as different approaches to water billing.
Consolidation of regional water systems
For many cities, capital improvements such as upgrades to treatment plants and large-scale pipe replacements are simply unaffordable for their tax bases. Those cities instead focus what money is available towards regular operations and maintenance. But as bigger projects get pushed back, their costs only grow.
“The cost of recovering from the crisis is much higher than the cost of prevention,” Ajami said.
One successful cost-saving solution is consolidating utilities with neighboring towns and cities, similar to the way school districts merge to save money.
In 2014, after the city of Detroit filed for bankruptcy, a court ordered the creation of a regional authority that assumed the city’s water and sewer services. The Great Lake Water Authority took on $4 billion in debt from the city, and Detroit officials said the change allowed it to make infrastructure upgrades it couldn’t otherwise afford. Similarly, Raleigh, N.C., saw a decrease in maintenance and operation costs after combining utilities with nearby municipalities in the early 2000s.
“That starts to increase the scale of the operation, which means that you’re able to gain some efficiencies,” Doyle said.
In the U.S., there are more than 50,000 water utilities that operate independently, meaning they each have their own management and set of personnel, from engineers to customer service. When places combine utilities, they’re often able to serve the same populations at a lower fixed cost.
Despite the cost-saving potential, some city officials are unsure if Jackson and its neighbors could come to such an agreement, especially considering political and racial differences.
“I think it would be a difficult political thing to put a regional water system together, just because there’s a lack of trust issue,” said Jackson city councilman Ashby Foote. “A lot of the surrounding communities, I don’t think they would let Jackson run it, and I don’t think the city would vote to relinquish control of the systems.”
Foote and Jackson councilman De’Keither Stamps cited disagreements such as control over Jackson’s airport and the recent decision by West Rankin County officials to break off and build its own wastewater facility.
“Now (West Rankin) has to spend all this money to build a new sewer plant because of relationships and politics,” Stamps said. “How does that benefit the end user?”
Privatization of Jackson’s water system
While not as popular, privatization is a similar solution to consolidation, explained Doyle, who explored water-funding solutions for shrinking cities in an article for the American Water Works Association journal. Private water utilities, which serve 15% of Americans, can combine functions just as a regional utility would and can also provide more resources and expertise. Research also shows they are less likely to violate the EPA’s health-related drinking water statutes than public utilities.
The main concern around private utilities is cost. If a company took over Jackson’s water system, it would have to justify any rate increases with the state’s Public Service Commission; however, Doyle’s paper cites that “it is not uncommon for water rates to increase by greater than 10% when public systems are privatized, and in some cases, rates have reportedly almost doubled.”
Doyle said while it’s unclear how much more a private utility would cost Jackson, it should be considered a “tool in the toolkit.” Ajami and others were more skeptical.
“I don’t think privatization is going to solve the water problem for Jackson,” Ajami argued. “It’s probably going to make water more unaffordable. Their system will be upgraded, I’m just not sure that will lead to more affordable water rates for Jackson.”
Former Mayor Harvey Johnson Jr. said he turned down the idea while in office.
“That idea was thrown out, I rejected it,” said Johnson, who was mayor from 1997 to 2005 and again from 2009 and 2013. He asserted that private companies don’t have the same accountability as elected officials, and that cities can get locked into long-term contracts without a way out. “The driving force there is the bottom line, it’s not service.”
Jackson City Council President Aaron Banks said that whether it’s consolidation or privatization, Jackson leadership needs to be open-minded.
“I think we have to explore all those options,” Banks said.
Balancing affordability and water revenue
Despite the city’s long list of needed system improvements, officials know that raising water rates could make the service unaffordable in a place where 1-in-4 residents live below the poverty line.
Even if Jackson leaders had the political will to raise customers’ rates, paying for a $1 billion municipal bond would add $55 to $60 a month in charges to every household, or about a full day’s work on minimum wage, according to associate professor Manuel Teodoro of the University of Wisconsin-Madison’s Nelson Institute for Environmental Studies.
In 2017, Philadelphia took an innovative approach to address affordability: its Tiered Assistance Program, the first of its kind in the country, allows low-income residents to make payments based on earnings rather than water usage, and it also provides a path for debt forgiveness. Like in Jackson, many Philadelphia residents had built up water debt and weren’t contributing to the city’s water revenue. Since TAP began, the city simultaneously reduced water bill debt and increased the number of customers paying for the service.
Henrietta Locklear, vice president at financial consultant firm Raftelis, worked on Philadelphia’s assistance program and told Mississippi Today that such a system could work in Jackson should the city decide to increase water rates.
“The role is really more to say, ‘We have to have rate increases, and we know it’s going to affect some of our customers detrimentally, and we’re offering assistance to help customers in need,’” Locklear said.
Adjusting the water billing formula
Another way to stabilize revenue could be to adjust the city’s billing formula. Ajami, the Stanford policy expert, explained that while Jackson’s first priority is addressing emergency repairs to its system, the city should also aim to maximize its future water funding.
Jackson, like many cities, charges residents based on both water usage and tiered pricing, which adds a fee after a certain threshold. Customers are charged $3.21 per hundred cubic feet, and then a $7 flat fee is added after 300 cubic feet, or a little over 2,000 gallons, according to a city spokesperson.
Cities rely heavily on volumetric, or use-based, pricing because the more water a utility treats and delivers, the more strain it puts on the system. Yet volumetric pricing can leave a utility with varying revenue returns, Ajami said.
“If you use a gallon or 10 gallons, I still need to operate the treatment plant, I still need to maintain the pipes, I still need to operate the pumps,” Ajami said. “If people use less (water), they’re paying less, and then I have less money to do all those things.”
She said that Jackson would benefit from some combination of its current system and a “decoupled” rate — a common format for energy bills — which includes a fixed rate that pays for the utility’s routine operating costs.
Doyle added that the varying, volumetric nature of water bills stands out from other government revenue streams.
“A lot of the services we get are not use-based,” he said. Many roads, for instance, are mostly paid for by property taxes, not by how much a person drives. “Same thing for jails, same thing for city governments, same thing for school systems.”
In light of affordability issues, Doyle and Ajami both wondered why the U.S. has no federal safety net for water bills.
“You can get money from the federal government to assist you in being able to pay for household food and energy,” Doyle said. “You can’t get that for water, and that’s kind of weird.”
Ajami agreed, pointing to the federal Low Income Home Energy Assistance Program that helps pay for energy bills, and the Federal Communications Commission’s Lifeline program that helps with phone bills.
“In a way you’re all subsidizing access to communication, which is important,” she said, “but if we have something like that, why can’t we have something similar for water?”
A “barometer” of segregation
Jackson leaders in the past few weeks have asked state and federal officials to provide the city with money to begin repairing its water and sewer system.
Mayor Chokwe Antar Lumumba met with newly-appointed EPA Administrator Michael Regan to discuss funding avenues, and U.S. Rep. Bennie Thompson pledged to support any request for federal help.
Lt. Gov. Delbert Hosemann told Mississippi Today that state legislators “want to help.” Yet Hosemann, as well as Gov. Tate Reeves and Sen. Hyde-Smith, have criticized the city’s management of its past funding without mentioning other systemic causes that led to the crisis.
Mississippi Today reported on Wednesday that legislative leaders killed the city’s main ask to improve its water system: allow the Jackson City Council’s proposal to increase the city’s sales tax by 1 cent to be placed on to a citywide ballot.
Activists and academics who spoke with Mississippi Today described the way racism has fueled the inability of the 82% Black-city to address infrastructure needs, from white flight to a lack of state support.
Yet even with more state-led enthusiasm, Mississippi alone can’t afford Jackson’s funding needs, said former Jackson city councilman Melvin Priester Jr.
“While we always talk about, ‘We want more help from the state,’ the state doesn’t really have a big pool of money available to flow down to municipalities for this,” Priester said.
Priester and Johnson, Jackson’s former mayor, emphasized that the federal government’s deflated water funding has only inflated the city’s need. For instance, Jackson is struggling to fight its way out of an EPA consent decree for violations under the Clean Water Act, and last year received a $500,000 fine for violations under the Safe Drinking Water Act.
“There’s no resources coming from the federal government to help local governments to meet those standards,” Johnson said. “If you talk to a city councillor in Memphis, in New Orleans, in Birmingham, in Newark, they’ll tell you the same thing: the federal government has deserted local governments when it comes to infrastructure improvement, and we’re witnessing that now.”
Ajami agrees that political willingness is part of the issue, adding that the disconnect between Americans and how they receive water may be why there’s a lack of political pressure.
“Because it’s easy to access water for a majority of Americans, people don’t think about the complexity of the system that brings water to us,” she said. “You drive on the road, so if there are potholes, you experience them. You don’t see water pipes. It’s a hidden infrastructure that we don’t value as much, while it’s the most essential resource we depend on in our daily life.”
Ajami also underscored the impacts of funding shortages on a city’s poorer and disadvantaged citizens: they can’t afford to rely on bottled water or a filtration system, and they’re left with an aging infrastructure that their local government can’t afford to fix.
Cities have fallen into a cycle where the inability to afford repairs compounds the effects of the broken system, which is largely what created the desperation Jackson felt this past month. That’s why, Doyle explained, water utilities have become a good indicator of disparities across the country.
“Paying for water in a rich city is, on a per population basis, very cheap,” he said. “Paying for water in a poorer city on a per population basis is really expensive. So we’re getting this segregation not just between households and not just between neighborhoods, we’re getting this segregation between cities. That’s why I think one of the best barometers of how that big sorting in America is actually taking place is in the water utilities.”
Mississippi Today reporter Anna Wolfe contributed to this story.
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