When the Water Stops: One Rural Community’s Crisis and the National Problem Behind It

Residents of Alderpoint recently received a letter in the mail that stopped many of them cold. The Alderpoint County Water District, the only source of water service for the rural community in southeast Humboldt County, warned customers that unless the district could pay a past-due PG&E power bill of $14,357.17, power to the water system could be shut off as soon as April 17, 2026. When power goes, the pumps stop. When the pumps stop, the water stops. And when water stops, county environmental health officials could begin red-tagging homes as uninhabitable — even for residents who have paid their water bills every single month.

As one longtime customer put it: “It’s a shame that the paying residents of this town are the ones that are expected to get the electric bill paid, so our homes are not red flagged and cause us all more grief and financial stress.”

“That’s a real fear, and that’s not a good fear to have,” said Humboldt County 2nd District Supervisor Michelle Bushnell, who has been working to stave off the crisis since the district enlisted her help.

Bushnell confirmed that if water service is lost, county environmental health would have no choice but to treat affected homes as uninhabitable — a consequence that falls equally on those current on their bills and those who are not. What stands between Alderpoint residents and that outcome right now is the extension PG&E granted after Bushnell’s intervention. “We have some time right now,” Bushnell said — time she and state officials are racing to use to secure grant funding, complete a rate study, and stabilize a district that has been unraveling for years.

What’s happening in Alderpoint is not unique. Across California, hundreds of public water systems are currently designated as failing by the state — more than 79% of them serving disadvantaged communities. The vast majority are small systems just like this one, lacking the resources to keep pace with rising costs and aging infrastructure. Nationwide, the picture is starker still: of the more than 45,000 community water systems serving populations of 10,000 or fewer, the EPA found that more than a third fell out of compliance with federal water standards in a recent 12-month period. The 20-year price tag to fix America’s water infrastructure has been estimated at $625 billion.

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How We Got Here

The letter, dated March 20, 2026, was blunt: the district had already narrowly avoided a shutoff on March 17 — sparing the community only after Bushnell called PG&E and the state intervened. Residents were told they had one month. District Secretary Cheryl March described the situation: the rates haven’t been changed in too long, the infrastructure is too broken, and the money simply isn’t there.

Records provided to Redheaded Blackbelt by the district show why. In 2025, the district collected about $55,300 from ratepayers and spent nearly $93,500 just to keep the water running — a gap of roughly $38,000 with no reserves left to cover it. The single biggest expense was power: PG&E billed the district $44,277 across its two pump accounts, nearly 80 cents of every dollar collected from customers before paying a single employee or fixing a single pipe.

The last time Alderpoint raised its water rates was 2014. Since then, PG&E’s rates have surged dramatically. According to March, the district is currently billed under PG&E’s B-19-S large commercial time-of-use rate schedule — one where fixed customer charges have increased 148% since 2020 alone, and summer peak demand charges have jumped 80% over the same period.

“If you have a district that hasn’t increased their rates in 10 years, just the cost of inflation and increasing costs for PG&E bills is going to outpace the revenue coming in,” said Colette Santsche, Executive Officer of LAFCo.

The district has billed its customers just over $51 a month — allotting 1,000 cubic feet of water per customer in the base rate — for 14 years; becoming stagnant as costs have inflated. Monthly expenses averaged nearly $7,800 in 2025 while revenue averaged $4,608. The district has burned through its reserves entirely.

“We don’t have enough revenue to cover our expenses,” March said.

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The COVID Blow

The financial strain didn’t happen overnight. During the COVID-19 pandemic, state-mandated moratoriums prevented water districts from shutting off service to customers who weren’t paying. For a small, cash-strapped district like Alderpoint, that period was particularly damaging.

“When COVID hit, and you couldn’t shut people off — I think that’s where the big downfall was,” March said. “People hid behind that.”

When the moratorium ended, the district was left holding significant unpaid balances it had no quick way to recover. Customers who had stopped paying during the pandemic were slow to catch up, and some didn’t at all. March confirmed the district currently has approximately $13,000 in accounts on active payment plans, and another roughly $10,000 owed by customers who have been shut off and have not paid. Some of those accounts belong to people who simply left — a pattern Bushnell and others tie directly to the collapse of the cannabis economy. As cultivation income dried up across Southern Humboldt, some residents who had fallen behind on bills during leaner times packed up and walked away from properties entirely, leaving the district holding unpaid balances with no one left to collect from.

The broader customer base tells its own story. Of the district’s 86 meters, only 68 are active. The rest serve properties that are abandoned, in probate, or where residents have been shut off for non-payment. The more accounts go dark, the less revenue comes in, and the less the district can afford to maintain the system the remaining customers depend on.

The COVID moratorium hit a community that was already economically fragile. Alderpoint and the surrounding Southern Humboldt area have faced years of population decline and economic contraction — accelerated in recent years by the collapse of the cannabis market, which had been a significant, if informal, source of income for many residents. Most of those who remain are retired or on fixed incomes, with few local employment opportunities. “There aren’t great paying jobs over there — none, actually,” Bushnell said. “Most folks are retired or on social security of some sort.” That economic reality shapes everything: who can afford to pay their water bill, who can’t, who shows up to board meetings, and who is willing to take on the unpaid work of serving on a rural water board. It also explains one of the district’s most stubborn obstacles — even as costs climbed and the financial picture darkened, rate increases have repeatedly stalled. Residents already stretched thin on fixed incomes have pushed back hard against paying more for water, even when the rates being charged were well below what comparable districts collect. The very poverty that makes a rate increase feel impossible is the same force that has made one inevitable.

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75% of the Water Is Going Somewhere — Nobody Knows Where

Compounding the financial crisis is a physical one. The district’s infrastructure is old, built on asbestos concrete pipes that deteriorate over time, and leaking badly. March said the district estimates it is losing approximately 75% of the water it pumps before it ever reaches a customer’s meter.

“When the guys fix one leak somewhere, something else breaks,” March said.

That figure has been reported internally for years, calculated by comparing what the pumping station records going into the system against what gets metered at customer taps. Detectable leaks get repaired as quickly as the district can manage, March said, but the bulk of the loss is believed to be coming from failures deeper in the aging pipe network — ones the district has no equipment or technology to locate. Without a professional leak detection survey, there is no precise map of where the losses are, no engineering assessment of what repairs would cost, and no data trail sufficient to unlock most infrastructure grant programs.

Santsche, in a written statement following the interview, confirmed the state’s assessment: the feasibility study now being developed will “evaluate potential water loss, including a leak detection survey, and development of a backup water supply.”

The consequences of the leaks ripple outward. Because the system hemorrhages water, the pumps run constantly to replace the water lost and constant pumping means a constant, escalating power bill. Meanwhile, the district draws its water directly from the nearby river, which creates a separate compliance risk: under drought forbearance rules, the district is legally prohibited from drawing from that source during drought conditions.

“If there’s a drought — which looks like could be this year — we’re not allowed to pump out of the river,” March said.

The district has no backup water supply. Santsche confirmed that consolidation with a neighboring system is not feasible. The nearest public water system is approximately 6.5 miles away, and the Garberville Sanitary District is 16 miles away. The feasibility study will instead evaluate development of a backup groundwater well.

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A System That Couldn’t Ask for Help Until It Was Failing

The district tried for years to get ahead of the problem. March said the board recognized the need for a rate study, a professional financial analysis required under California’s Proposition 218 before any rate increase can be enacted, but couldn’t get traction. In 2023, the district applied for state funding to conduct one and was denied because California, according to March, had run out of money for the program. A private rate study, she was quoted, would cost around $13,000 — money the district didn’t have.

“We kept getting told, ‘You guys have to be deemed failing before you’re going to get any public funding,'” March said. “Basically, things really start to happen when there’s an emergency. And this is an emergency.”

The barriers compounded. The district’s longtime auditor died, and during the COVID period, March said she was unable to find a replacement CPA willing to take on a new client. Years of unaudited books are now a barrier to many grant programs that require current financial documentation — the same programs that might have helped prevent the crisis now being used as a lifeline to survive it.

LAFCo’s Municipal Service Review of Southern Humboldt water and wastewater providers, adopted in November 2023, had already flagged Alderpoint’s trajectory. That review identified “limited financial resources, governance and administrative capacity constraints, infrastructure and water loss concerns, and the need for rate adjustments to better align with the rising costs of operating the system,” according to Santsche. It also encouraged the district to pursue external funding through technical assistance programs and infrastructure grants.

“Industry standards recommend updating rates approximately every five years to ensure revenues keep pace with inflation and the cost of operating the system,” Santsche wrote.

Alderpoint hadn’t done so in over a decade.

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Officials Are Working to Help — But Time Is Short

Bushnell said she called PG&E directly when contacted by the district, and was able to negotiate the one-month extension that is currently keeping the water on. She described PG&E as cooperative: “They said, ‘We’re not turning them off right now — we hear you.’ That was really great.”

PG&E, citing customer privacy requirements under CPUC regulation, declined to confirm or discuss the specifics of the Alderpoint situation with Redheaded Blackbelt. But PG&E spokesperson Jeff Smith offered a general statement that appeared to speak to the circumstances: “When a customer that provides a critical service to a community falls behind on their payments and is ultimately scheduled for shutoff for nonpayment, but such a shutoff would result in undue impact on a community potentially resulting in a safety situation, we would usually explore other options other than shutting the power off as to not cause any hardship to a community.”

In addition to helping secure an extended deadline for the PG&E payment, Bushnell is also looking at possible loan options for the district with a payback guaranteed from the district’s property tax funding, though options are limited.

On a parallel track, state officials are pursuing a multi-pronged intervention. Santsche outlined the current efforts:

Short-term emergency funding: State officials are exploring emergency funding through a program designed to help small disadvantaged water districts cover immediate operational costs — including past-due utility bills. The funding, if approved, could also cover ongoing day-to-day expenses while the district works toward financial stability. It is not a permanent fix; the assistance is typically limited to a window of roughly two to three years, intended to buy time rather than solve the underlying structural problems.

Rate study: A water rate study is now underway, funded through California’s SAFER program. Santsche said it could be completed within approximately 90 days — though the Proposition 218 process, which requires mailed notice to all property owners and a formal 45-day protest window, will extend the timeline before any new rates can take effect. If a majority of property owners formally protest, the increase cannot proceed.

“The community is going to need to support that through the Prop 218 process,” Santsche said. “Community understanding and support is an important part of the process.”

Feasibility study: A multi-year study, also funded through SAFER, will fund a formal leak detection survey, evaluate infrastructure needs, and explore development of a backup groundwater supply to address the forbearance compliance issue. It will also include a community outreach component.

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A District Running on Goodwill

Perhaps the most fragile element of the current situation is not financial — it is human. The district’s certified water operator currently volunteers his time and expertise as the district’s employee gains the necessary certification, an issue since the last certified operator left in 2023.

Without a certified operator, state regulators could shut the district down regardless of whether the power bill gets paid.

The board itself is barely functional. Of five seats, three are currently filled — the minimum needed for a quorum. Two of those members work out of town. Two seats remain vacant. A recent meeting was canceled for lack of quorum. Community attendance at board meetings, March noted, has typically been one or two people sporadically, as personal issues arise.

“It’s a struggle over there,” Bushnell said. “They are struggling for revenues to meet their expenditures — and folks don’t understand how the district got to where it’s at right now.”

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Not an Anomaly

Alderpoint’s situation — frozen rates, aging pipes, a shrinking customer base, a COVID-era debt hangover, and a power bill that has outrun revenue — is a template, not an outlier. California’s most recent drinking water needs assessment found failing public water systems serving more than 811,000 residents statewide, with nearly 80% of those systems located in disadvantaged communities. The state has mounted one of the most aggressive responses in the country through its SAFER program, which, if approved, would fund the rate study and feasibility study now being pursued for Alderpoint. But demand vastly outpaces supply — the state’s own 2024 assessment projected a five-year funding gap of $5.5 billion for communities with failing or at-risk infrastructure.

Nationally, between 1998 and 2024, household water and sewer bills increased at roughly twice the rate of general inflation — and the gap keeps widening. The EPA estimates nearly 14 million households already face unaffordable water bills; one analysis projected that number could climb to more than a third of all American households within five years if rates continue rising faster than incomes. Small rural systems bear the sharpest edge of that pressure: they lack the economies of scale that larger utilities use to spread costs, they serve the communities least able to absorb rate increases, and they are the least equipped to navigate the grant and loan programs that might save them.

“Without the economies of scale that larger systems benefit from, small systems struggle to fund necessary upgrades, meet regulatory standards, and provide reliable service,” the California Water Association noted in a recent analysis of the consolidation crisis facing small districts statewide.

For Alderpoint’s 68 active customers, that abstraction has a very concrete deadline: April 17.

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What Comes Next

An emergency board meeting is scheduled for Friday, March 27, at 6 p.m. at the Alderpoint Volunteer Fire Department, 17440 Alderpoint Rd. Supervisor Bushnell will be present. The district is asking all customers with past-due balances to pay what they owe, and those on payment plans to pay more than the minimum if they can.

Even if every overdue account were paid in full tomorrow, it would not solve the underlying problem. At current rates, with current power costs, the district runs a structural deficit every single month. The only path to solvency runs through two things simultaneously: a rate increase sufficient to cover actual operating costs, and a significant reduction in power consumption — which means finding and fixing the leaks that are forcing the pumps to run around the clock.

Without both, the district will be back in the same crisis within months of resolving this one.

March was direct: paying the power bill buys one month. Summer is coming, and with it PG&E’s seasonal surcharges. Without fixing the leaks, the pumps will keep running, the bills will keep climbing, and the cycle will repeat.

The answer, officials agree, is emergency funding to stabilize the district now, a rate increase to make it financially sustainable, and infrastructure investment to stop the physical losses driving the crisis. All of it requires time, money, and the kind of community engagement that has been largely absent from board meetings for years.

Santsche put it plainly in her written statement: “As a small, disadvantaged community, it is not uncommon for systems like Alderpoint to require both financial and capacity development support. Local engagement will be essential moving forward.”

The district currently has two vacant board seats open to any community members residing within the district boundaries.

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The Alderpoint County Water District can be reached at P.O. Box 117, Alderpoint, CA 95511, (707) 926-5162.

Update: Those wanting to view their water district’s ratings in the SAFER Dashboard can view data here: https://www.waterboards.ca.gov/drinking_water/certlic/drinkingwater/saferdashboard.html

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Disclosure: The author is a ratepayer of the Alderpoint County Water District. Her mother, a former board member of the district, passed away in 2023.