I suspect the historically low water rates were just underfunding repairs both at the treatment plants and collection (sewers) and distribution( water mains). If you look at how much water main has been replaced per year over the last 50 years it’s been abysmal. And now we are paying for it.

Infrastructure costs money to maintain. It’s not sexy. And since politicians control these things they don’t want to look unpopular spending money to take care of stuff.