State crisis looms as water bills stack up
$1 billion owed as households miss payments
Unpaid water bills are piling up across California as the pandemic continues to rage, leaving water agencies out hundreds of millions of dollars and nearly 1 in 8 families with rising debt — and worse, a possible water shutoff.
In the Bay Area alone, tens of thousands of households have missed a water payment recently. San Francisco reported more than three times as many delinquent water customers at the end of last year compared with March, shortly after the coronavirus pandemic began. That’s pushed the city’s total outstanding balance up six times what it was, to more than $7 million.
The financial hardship is even worse in parts of the Central Valley and Southern California. A statewide moratorium on service shutoffs, put in place indefinitely by Gov. Gavin Newsom in April, protects many residents from losing water for not making payments. But some water agencies are reporting that revenue shortfalls are threatening their bottom line and could soon disrupt operations.
“Providing water costs money,” said Cindy Tuck, deputy executive director for government relations at the Association of California Water Agencies. “Repayment is important. The water community recognizes that the executive order (barring water shutoffs for unpaid bills) was important,
but it is a significant financial impact . ... The money has to be repaid or somehow covered by the federal or state government.”
The growing water issues are highlighted in a survey of water agencies released Tuesday by the California State Water Resources Control Board and in individual utility records requested by The Chronicle.
Community leaders and water managers have begun calling for state and federal aid: both loans to customers and rescue packages for water suppliers. The COVID19 stimulus bill signed by President Donald Trump in December provides $638 million to help lowincome households nationwide pay for water service, but experts say it’s not enough to fill the financial hole. California will receive only a fraction of the money — and only a fraction of what it needs.
Unpaid water bills across the state are estimated to be $1 billion, representing the delinquency of more than 1.6 million households, or nearly 12% of the total.
“No one doesn’t want to pay their water bill,” said Jonathan Nelson, policy director for the Community Water Center, which advocates for water access, particularly for lowincome families. “But look at the jobless rate during the pandemic; look at the unemployment rate that just in the last couple of weeks spiked. People are hurting.”
Like with other financial duress, disadvantaged communities and people of color are bearing the brunt. The
average waterbill debt of Black households, for example, was $485 in areas where minorities are the majority as of October, when the state survey was completed, compared with the $380 debt for white households.
The areas with the most overdue water bills, by ZIP code, are several parts of Los Angeles County, the city of Colton in San Bernardino County, Orcutt in Santa Barbara County and Rancho Cordova in Sacramento County. In and around the Bay Area, the community of Port Costa and Lake County’s Clearlake have some of the highest concentrations of missed payments.
“People who were already hurting preCOVID, communities that were lowerincome, Black and brown communities, those are the most heavily impacted,” said Max Gomberg, a senior environmental scientist for the state water board who has been analyzing the finances of water agencies and their customers.
As a result of the revenue losses, nearly 20% of state water agencies, or as many as 600, are estimated to have less than 60 days of operating cash on
hand. The lack of funds has suppliers reducing staff, putting longterm projects on hold and looking at raising rates. Some won’t be able to continue longterm water delivery without government intervention.
The Kern County city of Delano in the San Joaquin Valley, with a population of 54,000, has been tapping into its general fund budget to make up for losses at its water department. That’s meant taking away potential funding for police, parks and public works. Still, given the high number of residents unable to afford their water bills, the city has started waiving late fees, nearly $400,000 worth to date.
“Because of the pandemic we’ve had to make a lot of budget cuts, in the millions, but this (nopenalty policy) is for a good cause,” Delano Mayor Bryan Osorio said.
While most water agencies report increasing delinquency, the majority of suppliers expect to be able to absorb the financial hit, including the Bay Area’s biggest providers.
The $7.8 million of outstanding customer debt in November at the San Francisco Public Utilities Commission, which provides water to city residents, represents less than 2% of agency revenues. The utility has been able to tap its rainyday fund not only to withstand lapses in payments but launch a customer assistance program, providing rate cuts of up to 15% for those struggling to pay their water bills.
“Right now, our primary focus is on helping our customers through this very difficult time,” said Will Reisman, spokesperson for the San Francisco PUC. “While the unrealized revenue due to missed payments is not a trivial amount, we can weather the losses for the moment. This is not a sustainable answer to the affordability issues facing our customers, which is why we are collaborating with utilities across the country to advocate for a longterm funding solution from the federal government.”
The East Bay Municipal Utility District, which serves 1.4 million customers in Alameda and Contra Costa counties, reported about $6.1 million of unpaid bills in October, between two and three times what it normally carries. Still, the missing payments constitute less than 2% of the total amount billed.
The Marin Municipal Water District reported about $3.4 million of unpaid bills at the end of the year, about 3% of the agency’s budget. The Alameda County Water District reported $956,000 of unpaid bills at the end of October, about 1% of the budget.