Transcript
This is Eileen Wray-McCann for Circle of Blue, and this is “What’s Up With Water,” your need-to-know news of the world’s water, made possible by support from people like you.
In Albania, a campaign to stop hydropower development on the Vjosa River has received international attention. EuroNews reports that celebrities like Leonardo DiCaprio and the outdoor brand Patagonia have joined local and regional conservation groups to advocate for what some call Europe’s last wild river. The Vjosa River runs for 170 miles, and from its headwaters in Greece to its end at the Ionian Sea, it is free of any dams. The conservation groups want to turn the land along the river into a national park. Political leaders in Albania have supported the park idea, but activists fear empty promises, even after the Environment Ministry rejected a proposed dam on the river last September.
In South Asia last week, India and Pakistan met for the first time in over two years in an effort to resolve issues under the Indus Waters Treaty. The treaty divides the basin’s waters between the countries. According to the Indian Express, delegates discussed Pakistan’s objections to Indian hydropower projects on the Chenab River. The last meeting over the Indus basin was held in 2018. Since then, a series of military attacks between India and Pakistan put negotiations into gridlock.
This week, Circle of Blue reports on a critical juncture for Michigan’s rural water systems, which now must reckon with decades of underinvestment in infrastructure.
Craig Cugini, the city manager of Ishpeming, is a calculator by trade. To keep the water system functioning, he computes customer rates and charges, balances a mixture of federal loans and state grants, and keeps tabs on the aging pipes.
Right now the numbers don’t add up.
Cugini told Circle of Blue “I have probably over $10 million worth of sewer projects alone to do in this town, and I don’t have anywhere near $10 million worth of money to do sewer work.”
The sewer pipes are only part of the equation. When laying out a sewer infrastructure work plan, Cugini also needs to account for the cost of road repairs in the historic city. As he put it, “If you tear up all those roads then you have all new roadway and my roadway funds are very limited.”
Though the math that Cugini applies to his work is fairly straightforward, the challenges add up a serious threat for Ishpeming and other small rural Michigan cities. Town managers are trying to balance the immediate need for new pipes and treatment works with the financial constraints of a population that is shrinking, and residents who are poorer, and older than elsewhere in Michigan.
Ishpeming is in Michigan’s Upper peninsula, and it grew around the mining of iron ore in the late 18 hundreds. It now has 6,400 residents, nearly half as many as at its peak 120 years ago. These days, Ishpeming’s smaller, older population is caught between the past and a hard place. The city has to pay for the neglected investments of the previous century while also sorting out what’s ahead for this one.
What Cugini needs to do in Ishpeming is…almost everything. The sewer system requires a complete overhaul in the next ten years, prompting Cugini’s search for $10 million.
There’s also the matter of drinking water. The state of Michigan is determined to rid water supply systems of lead, a public health menace. In 2018, former Gov. Rick Snyder set a goal to remove lead from pipes and plumbing components in the next two decades. But Cugini says that to meet that standard in Ishpeming means replacing 80 to 90 percent of his system. And that kind of infrastructure investment for a community goes on to affect household finances of its residents. He said “With the amount of money it’s going to cost, I don’t know how we’re going to achieve it. We’re trying to fight the dynamic of doing what we need to do but making living in the community affordable.”
Building, maintaining, and operating a water and sewer system is generally the most expensive item on a small town’s budget. Those costs are passed on to the residents, whose water and sewer rates tend to be higher than their urban counterparts, whose systems have the advantages of scale. The problem is when previous generations set their water rates, they failed to account for something crucial: that one day their assets would become liabilities.
Rising rates and large fixed costs are problems. Things get worse when there are fewer customers to pay the bills and those customers don’t have the ability to pay as much. Ishpeming is not the only small city struggling with this uncompromising calculus.
One lifeline for communities like Ishpeming is the Water and Waste Disposal Program, run by the rural development unit at the U.S. Department of Agriculture. The program provides billions of dollars each year for small towns to replace pipes, install new treatment works, and improve their resistance to flooding from heavy rains.
Tim Neumann, the executive director of the Michigan Rural Water Association, said these loans are essential for bolstering rural economies. He told Circle of Blue “Without that infrastructure in place you’re not going to keep any type of industry or business in those areas.”
The Water and Waste Disposal Program was created with that understanding in mind. The authors of the bill that established the grant and loan program during the Nixon administration were explicit about the need to sustain an economic base.
The bill was the Rural Development Act of 1972, and the chair of the Committee on Agriculture and Forestry, Sen. Herman Talmadge, introduced it in a speech to his colleagues in the Senate. He said if rural areas were to grow and prosper and, as he put it, “move forward with the rest of America,” they needed more than just credit and investment. They needed the right sorts of investment — with the federal government there to help. He added that the new industry must have,
It’s been nearly five decades since that speech, and the importance of the USDA’s Rural Development unit continues to grow. Even though Republican politics are leery of federal spending, Republican-leaning areas directly benefit from help that maintains essential services. In fiscal year 2020, Congress allocated $443 million for the rural water and waste disposal grant program and $1.4 billion for the loan program.
Michigan towns have certainly seen the benefits. Between January 2008 and November 2020, they received nearly $964 million in USDA water and sewer loans, and $307 million in grants. The savings come from the grants but also from favorable terms on the loans. Interest rates can be as low as just over one percent for the poorest communities. And long repayment periods for the loans – up to 40 years – can also shrink the size of annual bills.
USDA loans or grants are not automatic. The funds are available to communities of 10,000 people or fewer. To be eligible, water systems must meet financial requirements. But, said Cugini, the potential savings are worth the paperwork.
Besides low-interest loans, there are other ways to save money on infrastructure. Take the $10 million sewer replacement that’s on the horizon for Ishpeming. There might be a way to repair the system using new technologies. Cugini said that one option might involve putting something inside the pipes, rather than taking them out. Flexible liners can be inserted into a sewer pipe and then cured until they harden. That would avoid having to destroy and rebuild streets, and would spare the roads budget.
But it depends – liners are an option only if the pipes are not already too brittle or warped. So managers have to know the condition of their local water and sewer assets. The Michigan Infrastructure Council sponsors a tool for communities to assess their systems and chart a course for future investment.
But even if towns understand the condition of their systems, not all will be able to finance the upgrades on their own. USDA Rural Development is a lifeline, but it isn’t long enough for everyone to grab hold.
That’s a motivating concern for Martin Doyle, a Duke University professor who studies U.S. water systems. His research is a mix of financial metrics and demographic trends. It sheds light on the relationship between communities and local infrastructure: the need to have it and the ability to pay for it.
Doyle’s inquiry raised unsettling concerns about the trajectory of rural living and the role of government assistance. For all the talk of climate migration havens, the near-term is not promising for many rural areas across the U.S. These places are losing residents, like many in Michigan. According to a recent analysis by the Michigan Department of Technology, Management, and Budget, over a third of the state’s counties are expected to lose population in this decade. Most of those counties are in the Upper Peninsula, the Thumb, and northeast Michigan.
When population declines and economic stagnation sets in, a town struggling to update its water system often must reach outside for help. As Doyle explained in a recent lecture sponsored by the National Academies of Sciences, Engineering, and Medicine, when an entire region starts to decline, the challenge rises to the state and federal level. He then asked: “Do we want to subsidize and prop up entire regions? Are we willing to have that as a policy of the United States, to continue propping up some of these cities and geographic regions? Or are we willing to say that, as a policy, we are willing to see some of these communities and regions decay? And that is one of the most troubling aspects of this entire research agenda.” In a separate conversation, Doyle called the affordability of rural water service a “monstrous elephant in the room.”
That elephant, like Doyle’s questions, may be hard to budge.
President Joe Biden entered office with a pledge to restore America’s infrastructure. The $1.9 trillion pandemic relief package that Congress approved in early March includes $350 billion in aid to state and local governments. Part of that money can be used for water and sewer systems. There’s also a stand-alone infrastructure bill among the next items on the president’s agenda, which could add billions more for water and sewer.
And assistance could be on the way not just to systems, but to their customers as well, like other federal programs for food and energy. Capitol Hill lawmakers started to move in that direction during the last two coronavirus relief packages. They included over $1 billion to help low-income households pay their water bills.
And instead of merely propping up failing systems, Congress could require more struggling water and sewer systems to merge with better-run neighboring systems. States like Kentucky, California, and North Carolina are working to ensure that state funding goes to water systems that have adequate technical skills and financial foundations.
More federal money would be a boon to places like Ishpeming, which finds itself indebted to the past and accountable to the future. As Cugini described it, “Right now what you’re finding is people are paying water bills to cover the last hundred years and to project how to get ourselves to the next hundred years. You feel like everyone’s rates are super high, but it’s where we’re at. Our forefathers didn’t do anything to help us with setting rates to give us pots of money to do work. And so we’re now playing catch up.”
And that’s “What’s Up with Water,” from Circle of Blue, where water speaks. Much more coverage and analysis informing a better water future awaits you at circleofblue.org. This is Eileen Wray-McCann – thanks for being here.
Eileen Wray-McCann is a writer, director and narrator who co-founded Circle of Blue. During her 13 years at Interlochen Public Radio, a National Public Radio affiliate in Northern Michigan, Eileen produced and hosted regional and national programming. She’s won Telly Awards for her scriptwriting and documentary work, and her work with Circle of Blue follows many years of independent multimedia journalistic projects and a life-long love of the Great Lakes. She holds a BA and MA radio and television from the University of Detroit. Eileen is currently moonlighting as an audio archivist and enjoys traveling through time via sound.
