As Californians Rack Up $1 Billion in Water Debt, Advocates Fear Relief Could Come Too Late

Californians have accumulated $1 billion in unpaid water bills since the beginning of the COVID-19 pandemic, and about 1.6 million California households are behind on their water bills, according to a new survey from the State Water Resources Control Board.

A statewide water shutoff moratorium has kept water running since April even for those unable  to pay their utility bills. The mounting debt is taking a toll on households and water systems alike, as COVID-19 case counts continue to rise in many parts of California.

“The way it makes me feel as we go through the data is: Don't panic, but be very worried,” Darrin Polhemus, the director of the board’s division of drinking water, said at a public meeting this week.

The survey found that 12% of all households in California have accrued some amount of water debt. Most owe less than $200, but over 155,000 households — or nearly half a million people — owe more than $1,000 in unpaid bills. Low-income people are far more likely to have debt at all, and to have higher quantities of debt.

“In places where people were already struggling economically, those are the areas in the state with the highest amount of debt,” said Max Gomberg, who works at the Board.

People of color shoulder a disproportionate amount of rent debt, too. More people have debt in zip codes with higher rates of Black and Latinx households. Those same households are more likely to hold more than $600 in debt.

“The very same communities that have already been hit hardest by this pandemic will also face the worst of this water shutoff crisis,” said Jonathan Nelson, policy director of the Community Water Center. “This is really a basic matter of environmental justice and racial justice.”

Until this week, California had no idea how bad its water debt crisis was, while other states have been keeping track of water debt for months already. Nationwide, estimates suggest that water utilities could face a financial impact of $13.9 billion by the end of 2020. Some 42% of Californians are currently struggling to keep up with basic household expenses, according to the Census Bureau’s bi-weekly Household Pulse Survey.

The board decided to study California’s water debt crisis last fall at the urging of advocates and community members who were concerned about how the state would respond to the crisis without a clear understanding of the extent of the problem. In November, the board began a survey of over 500 water systems across the state of California.

“This [has] really just further unearthed the stress cracks here amongst our water systems that we were already very concerned about prior to the pandemic,” said board chair Joaquin Esquivel. “It’s of grave concern for the long term health of our state systems.”

Most water systems in the state report little to no financial strain. But from the outset, the board wanted to understand what mounting debt means for the smallest, most vulnerable water systems in the state that often serve low-income, disadvantaged communities. Last fall, some of those systems reported revenue drops as high as 50%, jeopardizing their financial health.

The board found almost a fifth of the state’s most vulnerable water systems had less than 60 days of cash reserves on hand at the time of the survey — now nearly two months ago. Twelve vulnerable systems said they would not be able to keep the lights on in three months without financial assistance. The board estimates within six months, 134 water systems would run out of money absent any relief.

“We have time, but we don't have a lot of time,” said Jennifer Clary, California director of the advocacy group Clean Water Action. The survey requested data as of October, so some systems in particularly dire financial straits could approach the brink in a matter of weeks.

Nelson and other advocates warn that such vulnerable systems already struggle to provide safe and affordable drinking water to their customers. Additional financial strain could push them to the brink and delay steps to improve water access, quality and affordability.

“These are stunning numbers,” said Michael Claiborne, senior attorney at the Leadership Counsel for Justice and Accountability. “They reflect an urgent need to provide relief to households that are struggling with water and utility debt, and to ensure that small water systems in the state can continue to operate.”

Congress included $638 million for water debt relief nationwide in the December stimulus bill. California can expect to receive between $60 and $70 million of that, which is nowhere near enough to provide relief to households and water systems alike.

In January, California State Senator Bill Dodd (D-Napa) introduced two bills at the state legislature to address the crisis. One would provide financial relief to households in debt, and the other to protect them from future water shutoffs.

“We need a lot more,” Nelson said. “Water is not a one time need. We're going to need ongoing funding for water affordability in this country.”