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Barriers to water infrastructure investment: Findings from a survey of U.S. local elected officials [1]

['Katy Hansen', 'Environmental Policy Innovation Center', 'Epic', 'Washington', 'Dc', 'United States Of America', 'Megan Mullin', 'Nicholas School Of The Environment', 'Duke University', 'Durham']

Date: 2022-08 

Abstract Investment in U.S. drinking water infrastructure is not keeping pace with need, contributing to water service failures that threaten public health, economic development, and community water security. Many explanations for lagging investment focus on the motivations of local elected officials, but those explanations are not rooted in research on elected officials’ own expressed views. We surveyed a representative nationwide sample of approximately 500 city and county officeholders about their perceptions of need for investment and barriers to meeting that need. Analysis of closed-ended and open-ended question responses reveals that the main barriers to investment are financial: incumbents weigh the cost of capital projects against the debt burden and affordability challenge created by those investments. Their concern about public opposition to rate increases is an important constraint on decisions to invest in water infrastructure. Our results also demonstrate disparities across communities in the perceived fiscal burden of water infrastructure. The great majority of elected officials expressed little concern about the condition of infrastructure in their own communities, but concern about infrastructure condition was positively correlated with concern about making investments, pointing to the financial stress for decision makers who bear the expense of deteriorating water systems.

Citation: Hansen K, Mullin M (2022) Barriers to water infrastructure investment: Findings from a survey of U.S. local elected officials. PLOS Water 1(8): e0000039. https://doi.org/10.1371/journal.pwat.0000039 Editor: Johanna Koehler, Vrije Universiteit Amsterdam, NETHERLANDS Received: April 15, 2022; Accepted: July 25, 2022; Published: August 16, 2022 Copyright: © 2022 Hansen, Mullin. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Data Availability: Data and replication material will be made available upon publication at https://dataverse.harvard.edu/dataverse/meganmullin. Funding: Research costs were supported by the Duke University Provost through the Innovations in Infrastructure Collaboratory grant (https://sites.duke.edu/interdisciplinary/funding-opportunities/collaboratories/) to MM. MM was funded in part by a grant from the Carnegie Corporation of New York (https://www.carnegie.org/awards/honoree/megan-mullin/). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Competing interests: The authors have declared that no competing interests exist.

Introduction A central challenge for water governance in the United States is deterioration of the built infrastructure that is necessary to provide drinking water services. Repairs and replacement have not kept pace with need as water infrastructure across the country reaches the end of its expected lifespan [1]. External stressors—including population shifts, threats to water quality, and drought, storms, and other climate change impacts—amplify the pressures on a physical infrastructure that is increasingly falling into disrepair [2–4]. The consequences of underinvestment are becoming more visible. Water main breaks, boil water orders, and other service disruptions are on the rise, threatening public health, economic development, and local resilience [5,6]. Explanations for underinvestment in water infrastructure often focus on the motivations of local elected officials. The provision of U.S. drinking water services is overwhelmingly a local responsibility. Whereas all levels of government invest in highways, rail, and aviation, almost 95 percent of water infrastructure investments are funded at the local level [7]. Local elected officials, who must approve capital spending plans and bond issues, might worry about losing electoral support if they increase water fees to pay for capital projects. Scholars and practitioners often cite politicians’ fear of electoral punishment as a leading contributor to infrastructure underinvestment [8–11], but this explanation is not rooted in research on elected officials’ own expressed views. There is a gap in knowledge about the perceptions of elected officials on the need for investment and the barriers to meeting that need. We surveyed a representative sample of more than 500 U.S. city and county officeholders to assess the nature of their concerns about investing in drinking water infrastructure and identify characteristics of officeholders and communities they represent that are associated with more pronounced investment concern. Responses to closed-ended and open-ended questions revealed that the main barriers to investment are financial: elected officials weigh the cost of needed improvements against the debt burden and affordability challenge created by those investments. Politicians seek to avoid budgetary shocks that sharply increase water bills and could incite electoral punishment. Concern about investment does not seem to reflect satisfaction with the status quo. Instead, elected officials who perceive the highest barriers to investment also are most concerned about the condition of drinking water infrastructure in their own communities, and they are more likely to represent communities with low household income. Political partisanship also is associated with local elected officials’ attitudes about investment, with Republican officeholders expressing less concern about infrastructure condition and more concern about the impacts of investment. Our results add to burgeoning evidence on the disparities across communities in financial capacity to support the provision of safe, reliable, and affordable drinking water [12–14]. We show that the challenge of providing robust water services while maintaining affordable rates is not just financial and managerial; it is also political. For elected officials, potential public opposition to water rate increases lends an urgency to broader concerns about the financial impacts of infrastructure investment.

The local context for water infrastructure investment A large majority of residents in the United States rely on drinking water service from a local government—a municipality, county, or special district [15]. Local governments collect revenue from residential, commercial, and industrial ratepayers to fund capital projects as well as ongoing water system operations and maintenance. Unlike other local government functions that draw from a general fund, drinking water is funded by revenues generated from fees for service. Water rates typically include fixed and volumetric charges that vary widely for different types of customers [16]. Most local governments take on debt to finance capital projects: about 65 percent of water infrastructure investments are financed with loans [17]. Grants from state and federal funding programs cover less than 3 percent of investments in drinking water systems [18]. Although government spending on water garners widespread public support [19,20], investment has not kept pace with necessary water system repairs. The federal government estimates a capital improvement need of $472 billion by 2035 to ensure reliable water service and regulatory compliance [21]. Current levels of spending will cover only one-third of the estimated need, contributing to a large and growing investment gap [22]. The consequences are becoming more visible. Corroding service pipes have exposed millions of Americans to lead in their drinking water. Water main breaks, which disrupt service and allow potential contamination, are occurring more frequently [5]. Drought and severe storms sometimes knock out water service for days or weeks, especially where the infrastructure has already deteriorated. In extreme cases, this failure to maintain water infrastructure has manifested in sustained household water insecurity. In Jackson, Mississippi’s state capital and its largest city, decades of underinvestment have resulted in regular water outages and contamination from lead and other pollutants due to corroding pipes and low water pressure [23]. Widespread contamination and lengthy service shutoffs have persisted for years in Martin County, Kentucky, where as much as 65 percent of treated water leaks from pipes rather than reaching the tap [24,25]. In both cases, local officials have received criticism for deferring maintenance and repair. According to a Kentucky state regulator, “For too long, county officials and Martin District board members have deliberately allowed the utility’s assets to deteriorate in order to keep rates artificially low” [26]. Local officials have now steeply increased rates to fund infrastructure repairs. Because poverty rates in both Jackson and Martin County are high, financing these repairs jeopardizes water affordability. Why have localities failed to invest at levels needed to maintain basic water service? Answering this question requires a focus on local elected officials. Planners and water system managers can evaluate needs and prioritize projects, but it is local elected officials who make decisions about capital planning, debt issuance, and water rates. We focus on the perceptions and concerns of local elected officials to build understanding about the barriers to investing in water infrastructure.

Concerns about infrastructure condition and investment We aimed to characterize elected officials’ concerns about infrastructure condition and investment and to analyze how these concerns vary across elected officials’ political affiliations and community contexts. Our survey questions were informed by academic and practitioner literature on the financial, political, and logistical challenges associated with capital projects. Characterizing concerns We expected financial considerations to be elected officials’ main concern about investment. The capital-intensive, debt-financed, fee-based nature of water service requires decision makers to balance the benefits of infrastructure investment against increases in debt or water rates. Excessive debt can lower a local government’s credit rating, reducing access to credit and increasing the costs of future borrowing. Debt constrains spending in other areas and can cause financial distress. At the extreme, debt-ridden cities are at risk of default and heightened state supervision [27]. Whether financed by debt or by revenue, investment often requires an increase to water rates, which reduces affordability for low-income households and struggling businesses [28,29]. Unpaid bills often lead water utilities to charge late fees for arrearages or to shut off service, creating immediate hardship and health risks for those who lose access to water. Disconnecting and reconnecting service also add to the operating costs for water systems [30]. Elected officials may also have political concerns about rate increases, based on the belief that voters will respond to higher costs by punishing incumbents at the ballot box [8]. Investment in infrastructure is a form of preventive spending: it requires paying for repairs and replacements in the short term to avoid larger expenditures in the future. The benefits of investment may never become visible to voters. Electoral incentives are an important constraint on preventive spending [31]. Politicians seek to garner support by satisfying voters’ short-term preferences for lower taxes and fees, even if the politician personally believes that investment would offer long-term benefits for the community [32]. Financial and political impacts are not the only reasons to oppose or delay investment. Elected officials may doubt whether investment is truly needed. Capital projects entail risk, whether from uncertainty about the benefits or implementation challenges [33]. Water infrastructure projects require coordinated and complementary efforts between elected decision makers and local government administrators. Trust is crucial for politicians and administrators with overlapping responsibilities to coordinate. In its absence, elected leaders might seek to exercise more control over evaluating projects and setting spending priorities [34–36]. Finally, politicians may have concerns about the logistical impacts of infrastructure investment. Construction can disrupt traffic and business activity. Elected officials seeking to attract economic development and new residents might also worry about reputational harm from acknowledging that a community’s infrastructure has deteriorated [37]. As representatives for their communities in broader regional and economic development settings, elected officials may be sensitive to the complaints and reputational damage caused by short-term disruptions. Predicting concerns The possible concerns about water infrastructure investments that have been outlined in the literature are likely to be more pronounced for some local officials than for others. The urgency of financial considerations may be conditional on a community’s size and wealth, and financial, political, and logistical constraints on investment all may vary in resonance based on a politician’s partisan predispositions. In addition to identifying the overall nature of investment concerns across communities, we also sought to uncover where, and for whom, concern about investment is highest. Elected officials’ attitudes toward infrastructure may depend on local context. Localities vary widely in their investment needs, based on the size and condition of current infrastructure, quality and quantity of water supply, impacts from contaminants and changing climate, and infrastructure demands associated with land use, local economy, and population growth or decline. Ability to fund and finance investment also varies. Due to institutional fragmentation, there are thousands of drinking water systems, most serving small or very small populations with limited revenue bases [3]. The size of the community served affects the costs of providing water. In communities that have experienced population loss, fewer residents are left to pay for oversized systems that were built to serve larger populations [38]. Economic segregation between jurisdictions produces wide disparities in the wealth of revenue bases [39], which affects the financial capacity to hire staff with sufficient technical and managerial expertise [40,41]. Because of the importance of these locality conditions in shaping the challenges and costs of water service, we expected them to contribute to politicians’ attitudes about investment. In particular, we expected concern about both the quality of existing infrastructure and the impacts of investment to be highest in jurisdictions with small populations and low household income. We also were interested in testing how infrastructure attitudes vary with an officeholder’s political partisanship. Recent literature demonstrates that partisanship drives the behavior and decisions of elected officials even at the local government level [42–44]. As Americans’ political attitudes have become more nationalized [45], local elected officials have stronger incentive to hew to national party positions. How this incentive translates to local policy is not always clear [46]. Republican elected officials following partisan positions are likely to favor less public spending and less debt accumulation. Democratic elected officials are likely to favor higher spending on public services, but that preference may compete with concern about water affordability for low-income residents. We expected Democratic politicians to have more concern about infrastructure condition. We did not have a directional prediction for the relationship between partisanship and concern about investment, because we expected that concerns about public spending and affordability may compete against each other.

Data and methods To measure the perceptions of local elected officials about infrastructure condition and investment, we conducted an online survey through the nonprofit organization CivicPulse. CivicPulse maintains comprehensive, updated lists of publicly available contact information for government officials in municipalities, townships, and counties with populations of 1,000 or more. They randomly selected a set of elected officials—mayors, county executives, and council or commission members—to participate in this survey from April 2 to May 14, 2020. The survey was in the field during the early weeks of COVID-19’s spread in the United States, before the start of public conversations about water affordability and service shutoffs. The study was deemed exempt by the Institutional Review Board at Duke University (protocol 2020–0439), and consent was granted by voluntary survey completion. A total of 818 elected officials viewed the module on water infrastructure (from 14,440 solicitations), and 525 answered the set of questions about investment concerns that are the primary focus of this paper. The survey respondents came from 49 states. To protect respondents’ confidentiality, CivicPulse did not provide data about specific jurisdictions, but it did provide aggregated information on sample representativeness. As shown in the upper section of Table 1, the sample modestly overrepresents more populous or urban municipalities, while closely representing the population of counties nationwide. Overall, the sample is more representative than those used in most local government research, which typically samples from jurisdictions using a much higher minimum population threshold. The demographic characteristics of respondents, shown in the lower section of Table 1, are generally consistent with what is known about who runs for office [47]. PPT PowerPoint slide

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TIFF original image Download: Table 1. Survey of U.S. local elected officials, sample characteristics. https://doi.org/10.1371/journal.pwat.0000039.t001 The survey consisted of questions on perceptions and attitudes about water infrastructure. We report on concerns expressed by respondents about making infrastructure investments. Although some local government officials do not directly oversee a water system, drinking water service is largely a local function: local governments own 84 percent of water systems that serve more than 3,300 people [48]. Many respondents who indicated in open-ended survey responses that their jurisdictions do not provide water service nonetheless answered questions about their investment concerns. We also used questions from CivicPulse’s standard survey content on the demographic and political characteristics of respondents and information about their jurisdictions. CivicPulse provides access to data on locality characteristics for population, urbanicity, education, and household income only in terciles in order to protect respondents’ confidentiality. We used these terciles in our analyses. The survey opened with a question on respondents’ level of concern about the condition of drinking water infrastructure in their own communities. We then presented an experimental vignette about a water infrastructure investment that has been reported in a separate paper [49]. Next, we asked two questions to measure concerns about investment. We first used an open-ended question to elicit the concerns at the top of respondents’ minds. Following the open-ended question, we asked respondents to rate on a Likert matrix their level of concern about each of six impacts that academic and practitioner literatures have identified as potential impediments to local investment in infrastructure. Lastly, we included a question on respondents’ perceptions about electoral considerations in raising water rates. Fig 1 shows the question wording for relevant items. PPT PowerPoint slide

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TIFF original image Download: Fig 1. Survey question wording. https://doi.org/10.1371/journal.pwat.0000039.g001 Our analysis proceeds as follows. First, we report descriptive responses to the closed-ended questions about infrastructure condition and investment concerns. We then further characterize the nature of elected officials’ investment concerns using results from an exploratory factor analysis and responses to the open-ended question about barriers to investment. Next, we report results from regression analyses estimating how infrastructure concern, overall investment concern, and electoral perceptions are related to respondents’ personal and locality characteristics. All figures and data analyses use probability weights provided by CivicPulse to increase sample representativeness.

Conclusion Significant public investment is needed to provide safe drinking water as the climate, population, and land uses shift and existing infrastructure deteriorates. Yet despite broad public support, local investment in water infrastructure has not kept pace with need. We focus on the stated concerns of local elected officials in an effort to explain underinvestment. Based on results from a nationally representative sample survey of city and county officeholders, we find that concern about the impacts of infrastructure investment are more widespread among local elected officials than concern about the condition of existing infrastructure. Concern about investment is most commonly rooted in financial considerations. Elected officials balance the benefits of investment against concerns about debt and water affordability, which can mobilize public resistance to rate increases needed to fund infrastructure maintenance and repair. Even though water is funded separately from other local services, it still competes with other priorities when politicians consider how new investments will affect household budgets. Especially in low-income communities, concern about affordability can be a barrier to needed investment. Political considerations can serve as a barrier as well, as politicians who are Republican and those who perceive an electoral cost to water rate decisions both express more concern about investment. Our results lend support for the enduring conjectures by scholars and practitioners that electoral considerations are an important constraint on decisions to invest in water infrastructure. The financial implications of infrastructure investments are unquestionably an important consideration for everyone engaged in water planning, but elected officials view these implications through the lens of short-term impacts on constituents. With crowded issue agendas and short election cycles, politicians focus on the immediate issues that are most salient to the people they represent. That orientation leads to overemphasis on the costs of investment. Active engagement between politicians and professional planners can help loosen this constraint. Open-ended responses indicated that uncertainty about need prevents some local elected officials from making investments. Planners and water managers can use their training in prioritization, budgeting, and collaboration to build trust with elected officials to secure and communicate the long-term benefits of investment. With sound asset management and capital improvement plans, they can work with officeholders to develop funding strategies that balance investment with manageable debt and water rates. We note two limitations of our study. First is an issue of timing. Because elected officials were responding to the survey during the early weeks of COVID-19’s spread in the United States, when many Americans were experiencing wage loss and employment insecurity, reported concerns about financial impacts and water affordability may be higher than during times of more stable economic conditions. Second, the confidential nature of the survey prohibits us from connecting respondents’ perceptions about water system conditions to detailed information about their communities and the water stress they face. Still, these survey results can provide a foundation for future studies on local investment in infrastructure. Future studies could focus on discrepancies between the level of concern about infrastructure and need to invest. These studies will require a stronger data foundation on the condition of water infrastructure across communities than is currently available [12,14]. Building this data foundation is essential for understanding the political and managerial response to external stressors on a water system. Do local elected officials’ priorities shift as disruptions to the safe, reliable provision of drinking water become more visible and salient? Comparative case studies that detail when, why, and how elected officials fund capital projects while mitigating the financial consequences for households and localities would advance understanding about political pathways for infrastructure investment. Future studies could also explain the relationship between water infrastructure and growth. Open-ended responses underscore how economic decline and aspirations to boost development spur infrastructure investments, yet these aspirations can sometimes result in financially harmful overexpansion of water system [52]. Ultimately, local governments’ ability to support water system operations hinges on local financial conditions. In most communities, ratepayers can provide the revenue or fund the debt service that allow drinking water systems to repair aging infrastructure and meet emerging challenges. But some water systems sit on the brink, and decision makers are torn between concern about infrastructure condition and concern that making necessary investments will threaten fiscal health or the disconnection of households from water service. Local officials recognize that precarious balance and try to find ways to stretch scarce revenues further while responding to the demands of their constituents. Satisfying constituent concerns while making crucial investments is essential for maintaining water systems that secure public health and economic development.

Acknowledgments We thank Kyle Endres, Jonathan Chu, Nathan Lee, and Kristin Olofsson for helpful feedback at various stages of this research. Research was supported by a Duke University Provost’s Collaboratory grant and the Carnegie Corporation of New York.

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