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Jackson Water System Has Problems Privatization Won’t Solve

Mississippi Gov. Tate Reeves says privatizing the water system is “on the table.” But the city's mayor and others argue that would likely create more problems rather than fix Jackson's broken infrastructure.

Members of Progressive Morningstar Baptist Church move cases of water after a Sunday morning service in Jackson, Miss., on Sept. 4, 2022, following the shutdown of the city's water system, which needs capital investments on the order of $1 billion or more.
(Seth Herald/AFP via Getty Images/TNS)
The most recent boil water notice for Jackson, Miss., was lifted late last week. But the heavier lifting is just getting started.

In late August, a series of storms caused the Pearl River to swell, inundating the O.B. Curtis Water Plant, where most of Jackson’s drinking water is treated. The aging, understaffed plant was unable to handle the influx of water, and it reduced the amount of clean water being distributed. That led to lower pressure in the system, and ultimately a loss of usable water all around the city. The flooding hadn’t even been as bad as officials feared in the days before the storms. But it laid bare a slow-growing disaster in Mississippi’s capital city.

Jackson was already under a boil water advisory when the flooding started. It was the second time in two years that a storm had left the city’s residents without drinkable water for weeks at a time. The city — 160,000 residents, 82.5 percent Black, a quarter living below the poverty line — had been losing its tax base for years, and struggling to pay for critical maintenance and infrastructure upgrades. There was occasionally open conflict between Jackson Mayor Chokwe Antar Lumumba, a Black Democrat, and Mississippi Gov. Tate Reeves, a white Republican. In the days after the most recent crisis began, state leaders seemed to suggest that managing the long-term management of Jackson’s water system shouldn’t be left to local leaders.

Among the options leaders have discussed is selling or leasing the water system to a private company — a trend in utility management that has ebbed and flowed over the years. “Privatization is on the table,” Reeves said at a press conference on Sept. 5. But is that a likely outcome? And how would it affect residents?

Recovery Plan Is A “Moving Target” 

Both local and state leaders have acknowledged that Jackson’s water system needs capital investments on the order of $1 billion or more. But sorting out the full extent of what needs to be fixed is “a bit of a moving target,” Lumumba told Governing in an interview last week. The mayor has pushed back on suggestions that the city doesn’t have a plan for the system by releasing several plans to the media, including a capital-improvement plan that he says cost hundreds of thousands of dollars to commission.

Currently, Lumumba says, the city is getting help from a variety of parties — including the Environmental Protection Agency, the Mississippi Emergency Management Agency, the U.S. Army Corps of Engineers and professional mutual aid networks — to compile a list of necessary fixes. Lumumba says he recently requested a dashboard of measures needed to shore up the system, from “stopgap” fixes to long-range capital improvements.

Jackson currently owns its water system, and Lumumba notes that residents have voted to increase their own taxes to pay for infrastructure upgrades in the past. The city tried to do so again after the last major crisis in 2021, but was stymied by state legislators. Its request for $46 million in state funds to make improvements was also denied last year.

“Our residents aren’t afraid of shared sacrifice,” Lumumba says. “They just want solutions that make sense for them.”

Shrinking Investments, Disparate Impacts 

The federal government used to pay a much bigger share of the cost of maintaining water infrastructure. But it’s been shrinking for almost half a century, says Mami Hara, CEO of the U.S. Water Alliance, a Washington, D.C.-based nonprofit group. Addressing the backlog of critical repairs to national water infrastructure will require “growing and continued investment” from the federal government, Hara said in an email. The U.S. Water Alliance and the American Society of Civil Engineers have estimated an average annual gap of $81 billion between what’s spent on water infrastructure and what’s needed. The Infrastructure Investment and Jobs Act signed by President Joe Biden last year provides some of the biggest investments in water infrastructure in generations, but still far short of the estimated need — some $55 billion over five years, according to Hara.

Water-infrastructure needs are a national problem. But they’re especially acute in poor cities like Jackson, and tend to have worse impacts — in terms of water quality, reliability and affordability — in Black communities and other communities of color.

“These disparities often stem from uneven investments in water infrastructure,” Hara says. “Drinking water systems serving low-resource communities tend to have less revenue and less access to capital to finance projects. Infrastructure deteriorates without investment in maintenance, which reduces water quality and threatens public health.”

What Would A Private Company Do?

Private companies tend to charge residents more for water. In a recent study of 500 water systems, researchers at Cornell University and the University of Pittsburgh found that privatization specifically was associated with higher bills and less affordability for local ratepayers. That’s partly because private companies extract a profit on top of the cost of operating the system, researchers say. One of the risks to privatization is that a company seeking profit wouldn’t devote the maximum of resources to the water system, says Marcela González Rivas, an associate professor in the Graduate School of Public and International Affairs at the University of Pittsburgh, who co-authored the study.

“All systems require a lot of investment, and because of that, on top of everything, when you put in people making a profit out of it, it’s not consistent with affordable rates,” González Rivas says.

Lumumba says that Jackson does need outside help, and that he’s been trying to negotiate an operations and maintenance agreement with a private company (which he wouldn’t name), but that the negotiations were undercut by the state talking with the same company. The city is “well within its capacity to make those [third-party] agreements and maintain ownership” of the water system, Lumumba says. But the state may be looking to take control of the system, transfer it to a private company or regionalize the water authority to spread out costs and revenues with surrounding municipalities. (Asked whether the governor was actively considering a move to privatize the system, a spokesperson said, “All options are on the table and we are considering their strengths and weaknesses.”)

“Privatization is the worst possible solution,” Lumumba says. “With the level of capital improvement that Jackson’s water facility needs, [a private company] would have to get a really, really hefty pound of flesh from our residents in order to make the profit that they’re looking to make on the system. For a city where affordability is already a significant challenge, it would essentially move our citizens from one state of misery to the next.”

It may be a moot point. According to Christopher Franklin, CEO of Essential Utilities, one of the largest water companies in the U.S., it’s “not possible” for a private company to operate a system like Jackson’s that has so much deferred maintenance. Franklin, whose company is just coming off a failed deal to acquire a large water utility near Philadelphia, acknowledges that private water companies tend to have higher rates. But he says that what anti-privatization advocates call profiteering is actually just the basic economics of running a solvent utility. The economics aren’t there in Jackson.

“There’s a limit to what private companies can do,” Franklin says. “The volume of capital needed, the size of the rate increases needed [to cover it] and then the ability to pay in Jackson, Miss., make it very difficult to — forget profit — just to talk about breaking even.”

Maintaining Public Control

Jackson won’t be able to pay the cost of upgrading its water system on its own. And it “is wholly unequitable for small communities and historically underserved communities of all sizes to bear the burden of meeting gaps and accrued system costs,” says Hara, of the U.S. Water Alliance. But even if all of the capital investments were covered by the federal government and the work was completed quickly, Jackson may still struggle to pay the operating costs of a modern water system without charging more than its residents can afford to pay.

“For cities that are poor or cities that are shrinking, you need a subsidy,” says Mildred Warner, a professor of urban planning at Cornell University, who co-authored the study on privatization and affordability. “You just do.”

In Jackson, regular people have been helping each other bear the burden of life without clean running water. Groups like Cooperation Jackson have been receiving support from around the country and helping to distribute bottled water to communities in need. For Kali Akuno, a co-founder of the group, the influx of support has been both encouraging and discouraging.

“To me it really demonstrates that there are limits to solidarity in this particular form,” Akuno says. “Despite everything that’s come in, that’s still coming in, it actually doesn’t and can’t meet everybody’s needs. It’s just not set up to do that.”

While the most recent boil water notice has been lifted, Akuno says residents expect water crises to be “a periodic aspect of our life in the city.” That doesn’t mean they should be expected to cede control of their water system, though. He doesn’t expect a private company will actually take over the water authority, but he says the state is using the threat as a political tool.

“The bottom line is private companies are in it to make money, and there’s no money to be made in Jackson,” Akuno says. “The city is going to face some major challenges, and I fear that if we don’t get a grip on this soon, and get some resources, that Jackson’s going to continue to shrink at a very accelerated rate.”
Jared Brey is a senior staff writer for Governing. He can be found on Twitter at @jaredbrey.
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