‘Who’s going to pay for it?’:
No easy answers to resolve water issues
BRADSHAW –Local officials in McDowell County called a meeting in the town of Bradshaw to talk about broadband internet in West Virginia’s poorest county. But the first question from a resident focused on something more basic.
“Eleven years ago someone knocked on my door and promised me I could get city water. I still don’t have any city water, and I’ve never heard from them since — not once,” Sandra Roberts said. “Will you be like that? When is the next time we’re going to see you all out this way?”
The speakers assured Roberts they would not do that, and that this time, a promise would be fulfilled.
In McDowell County, it’s nearly impossible to attend a community gathering — no matter the focus — without water being part of the conversation.
“We hear it all the time, everywhere,” said Cecil Patterson, a McDowell County commissioner. “It’s a big concern for folks around here, [and] for us, too.”
When it comes to water, Roberts remains skeptical of any commitments handed down to her and her neighbors. She hasn’t touched the water coming out of the faucets in her Lex home in years. Instead, she drives about 40 minutes to Iaeger each week to fill up water jugs for her family from a mountain spring.
“We’re tired of having to wait for things, of being that afterthought and talked about when it’s convenient, but left behind when it’s not,” Roberts said.
Made of copper, steel, plastic and terra cotta, hundreds of miles of pipes weave underneath West Virginia, forming more than 500 water and sewage systems that serve a majority of the state’s residents.
Not all, though.
Not Roberts, or thousands of others who live in small hollows and communities nestled in nooks throughout the state’s natural mountainous terrain.
“What we have already done — that’s the easy stuff,” said Wayne Morgan, director of the West Virginia Infrastructure and Jobs Development Council, a clearinghouse responsible for approving and overseeing infrastructure projects in the state. “All that’s left is the harder stuff — difficult extensions that cost more money, and all of that is on top of the money needed to take care of what is already there.”
According to the council, 62 percent of structures in the state are connected to a water system, and just 46 percent to a sewage system. Lex is one of those communities where many residents go without, and the council estimates that $17 billion — more than three times the state’s entire 2018 — would be needed to connect the hollow and the hundreds of others like it throughout the state to centralized utility services.
While a majority of that estimate is for extending lines for new connections — $2.3 billion for water and $10.7 billion for sewage — $4 billion is needed for rehabilitation work to ensure the current infrastructure still works.
As with the rest of the country, much of West Virginia’s water piping was laid in the early 20th century. Most has a lifespan of 75 to 100 years, a timeframe that has already expired in some places and is quickly approaching in others, said Amy Swann, director of the West Virginia Rural Water Association.
In many areas, this infrastructure was developed by coal companies operating company towns, and was handed off when coal production slowed and companies left. Residents were often ill equipped to operate the systems — the most qualified workers usually left with the companies — and early mismanagement and lack of necessary maintenance set many systems up for premature failure, with pipes giving way before their estimated timemark.
Mavis Brewster, director of the McDowell County Public Service District, said that’s the case for nearly every community sitting along U.S. 52, the rural county’s main route.
“Coal companies kept everything moving, some better than others, but when they left, the problems were mostly the same,” Brewster said. “Now we don’t know where a lot of these systems run exactly — original plans were lost — and we have less resources on hand to deal with more.”
The McDowell County PSD has made a practice of acquiring small systems in the region when they are unable to effectively serve their customers. Now operating 16 separate systems in the county, soon to be more, Brewster is an advocate for consolidating utility systems.
“Regional systems are the way to go. Sometimes, especially [in Southern West Virginia] geography can make them unfeasible, but when they are, it’s great,” Brewster said.
But some communities are too far apart to regionalize, and residents have other concerns.
After a project to improve water infrastructure in the towns of Northfork and Keystone, the McDowell PSD will take over service for the two towns. Brewster said this almost certainly will mean improvements for customers of those systems, both off which are considered historically noncompliant by the U.S. Environmental Protection Agency.
Northfork residents approved the referendum proposing the county PSD’s takeover in 2014, but Brewster said the support wasn’t always there — McDowell County PSD had offered its services to the town in the past, but couldn’t get residents’ approval.
Throughout the entire state, but especially in Southern West Virginia, people take immense pride in the things they can independently own and operate, Swann said. For many community leaders, handing over something like a water system to a larger, neighboring entity can feel like handing over a piece of their independence.
“Some of this resistance is cultural and some of it is practical, at least to them,” Swann said. “It’s kind of like a perfect storm of aging infrastructure, cultural values, ability — or inability — to pay. It’s all a big problem.”
A few miles down from Northfork is Keystone, where residents don’t have meters for their water. While the water quality is questionable — the town has been operating under a boil-water advisory since 2012 — residents pay about $25 a month no matter their how much they use. But if they don’t pay, there’s no valve that can be turned to shut off the water.
Essentially, it’s free, Brewster said, and when the PSD takes over, residents know that’s going to change.
“They know, that if they get a new water system, they’re going to get metered water,” Swann said. “That’s part of the deal. They’re not going to walk by and not get metered water — it’s not going to happen.”
Vondalere Scott, the town recorder and former mayor of Keystone, worries that that the county’s takeover of the water system will mean less revenue for the town, which is already buried in debt.
The reality, though, is income from water bills does not compare to expenses accrued by the system, Brewster said. Regionalization, while perhaps difficult in the short term (correcting inadequate systems can be more expensive than forming entirely new ones, according to Brewster), is a crucial strategy for long term viability.
“Everyone’s costs go down — instead of having 100 customers on a small system trying to cover millions of dollars [for projects], you have thousands. There is less reporting and testing since you can consolidate, you buy chemicals in bulk and you don’t need as many operators. The fewer systems you have, the better.”
West Virginia is one of two states to lose population over the past decade, and much of that loss was centered in Southern West Virginia, according to a study by Pew Charitable Trusts. Since 2007, more than 18,000 residents have left the state.
That makes it even more important for smaller systems to band together, regionalization advocates like Brewster argue.
Geographically, water and sewage connectivity has grown in the last 10 years, but out of the 44 public water systems operating in Southern West Virginia’s coalfield counties — Boone, Lincoln, Logan, Mingo, McDowell and Wyoming — just 13 reported serving more customers in 2017 than in 2007. For the 22 sewage systems in the same counties, just four saw an increase.
But more people connected through the same sets of pipes, intake systems, treatment plants and reserve tanks means more people at risk if something goes wrong.
In 2014, thousands of gallons of chemicals spilled into the Elk River just upriver from the main Charleston intake center for West Virginia-American Water, a private company that has offered water services in the state for more than 100 years.
The spill left 300,000 people in nine West Virginia counties connected to WVAW without potable water. A relatively small number of people in the same region, though, were connected to small, community water systems and didn’t have any problems..
In the 1990s, leaders at West Virginia-American Water saw the regionalization trend on the horizon. The company began using public-private partnerships to soak up smaller systems as they fell behind.
Because it’s so large, West Virginia-American is able to disperse costs for projects among more of their customers, so rate increases don’t hurt as much, said Dan Bickerton, the company’s director of business development.
“If you have less customers and more costs, your rates are going to continue to go higher and higher and higher, or your system is going to continue to deteriorate, and you don’t want those things to happen,” Bickerton said.
Jackie Roberts, director of the PSC’s Consumer Advocate Division, agrees that regionalization can help correct small, failing water systems. But she cites West Virginia-American’s practice of taking over systems in central West Virginia as a major reason for the company’s rate increases.
“The question is who is going to pay for it? If the customers in those local and desperate places can’t pay to begin with, who is going to?” Roberts said. “Acquisitions, if you do them, they’re going to cost money. They’re going to come with rate increases for existing customers.”
Other than revenue from customers — which solely cover operating expenses for the utilities — community systems often rely on local governments to pay for rehabilitation work and line extensions.
According to the United States Conference of Mayors, localities bear the brunt of responsibility for funding water projects — 98 percent of financing for water and sewage infrastructure throughout the nation is done by local governments. County commissions and town councils may not raise the money, but they apply for and get funds from grant programs, nonprofits and other agencies.
Grants are the most sought-after funding source for water projects, according to Marie Prezioso, director of the state Water Development Authority, the funding arm of the IJDC. There are fewer grants in recent years, though, a struggle that is also felt at the Rural Water Association as it tries to help small community water systems.
“There are some people who say we’ll just rebuild the systems and give them all grant money,” Swann said. “There just isn’t that much grant money.”
As grant funding has shrunk, water and sewage systems have started using more low-interest loans to fund their projects. Loans are funded through the Drinking Water Treatment State Revolving Fund and the Clean Water State Revolving Fund, two federal-state partnerships managed by the WDA.
The federal government designates money to these funds annually, but most of the spending power comes from interest and payments on loans granted to systems for projects in past years.
Low-interest loans can still bury small water systems in debt. Projects can take years to complete; that’s years before new customers can be added and provide a system with more revenue to pay off debt or pay for other maintenance, Brewster said.
The state hasn’t provided as much funding for such projects in recent years, according to Prezioso. The West Virginia Lottery, one of the largest sources of infrastructure funding, granted $46 million in 2014, but just $26 million in 2015. Those numbers are rising again, but the lean years had a real effect, she said.
In all, 144 proposed sewage and water projects were approved by the IJDC for construction in West Virginia, at a total of nearly $700 million. By Dec. 31, 2017, only $8.5 million — just over 1 percent of necessary funds — were secured for the projects.
If these projects were completed, they would connect 6,170 more customers — 3,063 water ratepayers and 3,107 wastewater ratepayers — to a centralized service. They could also improve service for upwards of 50,000 customers in the state.
While more secure and available funding could certainly improve how water and sewer utilities operate now, Swann is part of a minority that does not think throwing money at the issue can solve it. There will always be more need than available funds, she believes, and even if all pipes could be replaced today, utilities still need a way to maintain them, or else they’ll find themselves in the same position a few years down the road.
With limited and ever-shrinking external funding pools, systems are often left with little choice but to raise rates, a sometimes daunting process that can be made even more challenging by local political interests and policies at the West Virginia Public Service Commission, Swann said.
When a system wants to propose a rate hike, it must hire attorneys and accountants to audit its finances and prepare a report for the PSC. Brewster said McDowell County PSD pays an average of $10,000 each time it requests a rate increase.
“When you apply for [a rate increase], it’s not because you want to, it’s because you have to,” Brewster said. “It’s because you need more money to keep functioning, and having to pay all that to even get a ‘yes’ or ‘no’ takes a toll.”
While the PSC does have systems to help small systems afford these costs, it’s just more red tape in an already gruelling process, Brewster said.
Most times, the PSC will suggest a lower rate than proposed in an attempt to lessen the burden for customers. A study commissioned in 2014 by the West Virginia arm of the RWA and other water-focused organizations in the state analyzed how West Virginia regulates its utilities compared to other states. It found that the PSC rejects the fully requested amounts for rate increases “by a magnitude greater than” other, comparable states.
Swann wants to see the state reform the way it handles rates for water and sewage.
The PSC has final say on any rate increase for utilities, in an attempt to keep costs low while bringing in enough money to cover loan debt and keep systems up and running. The current system often means utilities can’t build up enough money to do those things, said Swann, who spent 25 years working as the director of the PSC’s public service district division before joining the RWA in 2013
The 50 State Study found that only seven other states in the nation regulate water or sewage utilities relatively as strongly as West Virginia does.
In the past, the RWA lobbied to update state code and deregulate parts of the PSC to make it easier for systems to build up capital and access other assistance they need.
For Jackie Roberts at the PSC, proposals to decrease oversight for systems can be concerning. While she understands the need for more revenue, she worries about the risks that could come to consumers if systems aren’t watched.
“We need to make sure what the utilities are doing is reasonable and necessary and in the ordinary course of business — that their expenses are appropriate,” Roberts said. “We look at every aspect of their operations and go from there.”
In 2015 a bill passed, allowing larger systems that operate as political subdivisions — those with more than 4,500 customers and $3 million in annual revenue — to not be regulated by the PSC for rate increases (within reason) or construction project proposals.
“We got that little chink away,” Swann said. “It’s worked exactly the way we said it’s going to.”
Last legislative session, a bill that proposed to do similar for smaller systems died in committee, much to the frustration of Swann, since this one would have assisted the community systems she feels need help the most.
Roberts expects to see other, related legislation floating around this upcoming session. She worries that, if passed, having less regulations through the PSC could mean more risk for consumers.
“Whenever you’re providing an essential service like water, you need to make sure it’s done correctly. We’re all familiar with intentional misdeeds — like in Flint — or even with chemical spills — like here in Kanawha Valley. This all needs to be done correctly, or there are serious risks,” Roberts said. “Someone might get along without heat or electricity for a few days, but water is essential. You’re not lasting long without it.”
While agencies and organizations may hold differing views on what should be priority for handling how water and sewer systems operate, most agree on two things: changes need to be made, and those changes will only be successful with strong, unwavering community support at the local level.
This can be difficult, as residents in many areas — like Sandra Roberts in Lex — have grown apathetic after feeling as though they’ve been written off for years.
“We’re tired of watching people make promises then put their money somewhere else when it really matters,” Roberts said. “Show us something, show us you’re serious about us. We can only take being knocked back so many times, and dammit, I think we’re just about there.”
The more residents that can rally for ownership or changes in a water system, the more influence they have — in 1980, that’s how McDowell County PSD was formed: women in the region, specifically in Caretta and Coalwood, would not step down from demanding access to clean, reliable water in their homes. So the PSD was formed by the county, and handed over to the woman who started the movement.
“These problems didn’t come over night and they aren’t going to be solved overnight,” Swann said. “I think if you have that dedicated group at the local level, that everyone should try to be supporting them in what they’re trying to do … Water is going to be around forever and these struggles are going to continue, to get worse, to grow, if we don’t.”
Caity Coyne is a Galloway Fellow, part of our central Appalachia reporting project, which is made possible by the Galloway Family Foundation.
This series is part of a collaborative effort by the Lexington Herald-Leader, Charleston Gazette-Mail and West Virginia Public Broadcasting that was coordinated by Report for America, a national service program that places talented journalists in local newsrooms, and funded with support from the Galloway Family Foundation.