About a week after the Environmental Protection Agency determined that two Mississippi state agencies didn’t discriminate against Jackson in providing water funds, the EPA Office of Inspector General released a new report examining issues in state and local governance ahead of the capital city’s 2022 drinking water crisis.

The EPA OIG launched an audit in November 2022, a couple months after the water crisis that led to a federal takeover of the system. The report, which came out on Tuesday, found that the Mississippi State Department of Health failed to provide flexible loan options to disadvantaged communities like Jackson. After interviewing city employees, the audit also listed several issues with Jackson water plant staff and internal communications.

For one, a former manager at the O.B. Curtis treatment plant didn’t “effectively conduct routine maintenance, delayed routine maintenance, and did not retain new hires, hampering the day-to-day operations of the entire treatment plant,” the audit said, adding more work to an already understaffed team of water operators.

Interviews also showed that operators, whose salaries were below market rates, often worked seven days a week and more than 12 hours a day, and yet the plant still did not always have a certified operator on site, as required by state law.

On top of staffing problems was ineffective communication within the city, the audit said, prolonging issues such as hiring staff for the treatment plant. The report also found that water operators didn’t feel comfortable reporting issues “outside of their chain of command at the water treatment plant,” leading to a “reactive approach” by city leadership to address the plant’s issues.

A Health Department spokesperson told Mississippi Today the agency is reviewing the report. The city of Jackson did not reply to a request for comment by publish time.

Health Department lacked flexibility in loans to Jackson

In last week’s report by the EPA’s Office of External Civil Rights Compliance, the agency found no evidence of discrimination in how the Health Department and the Mississippi Department of Environmental Quality awarded loans to Jackson under the federal revolving loan program. In Mississippi, loans under that program for drinking water funding go through Health Department.

Tuesday’s report, though, found that the state agency didn’t make loan repayments — both as far as interest rates as well as the loan term lengths — as flexible as it could have for economically disadvantaged places like Jackson.

“(The Safe Drinking Water Act) provided different funding options for states to help disadvantaged communities better afford (funds from state revolving loans), including increased loan subsidies, extended loan terms, and reduced interest rates,” the audit says. “However, the MSDH did not make these flexible loan and subsidy options available to disadvantaged communities, including Jackson, until after June 2021.”

Between 2016 and 2021, the Health Department awarded three loans to the city totaling about $52 million. The audit notes Jackson leadership’s past statements that the limited loan options discouraged the city from applying for more funds through the program, and that the city unsuccessfully tried to procure money elsewhere, such as through the state Legislature.

“Had the MSDH provided flexible loan options for disadvantaged communities in a timelier manner, Jackson may have decided earlier to request and use them to lower its financing costs to improve its water system,” the report reads. “Additionally, these funding options could help other disadvantaged communities in Mississippi better afford investing in their drinking water infrastructure.”

To improve the state’s loaning practices, the EPA says it will train the Health Department in offering assistance to disadvantage communities by June 30.

Update 5/14/24: This story has been updated to clarify that the EPA Office of Inspector General is independent of the agency and provides oversight of EPA.

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