Williamsburg residents may see their water bills rise as the city grapples with costly utility upgrades and a tight budget.
City staff expects to collect $51.4 million through the end of June. That’s $260,000 under what was budgeted. Meanwhile, the city’s expenses came in $300,000 less than expected.
While still a surplus, the gap has shrunk from last year when Williamsburg collected more than $1 million more than expected.
“This is the most difficult budget I’ve had to do since I came to Williamsburg,” said City Manager Andrew Trivette at Williamsburg’s budget retreat on Friday.
Trivette said costs for materials and contractors have gone up. Williamsburg is collecting less income from sales, lodging and meals taxes and business licensing fees. Increases in property appraisals continued to rise but at a slower pace than in previous years.
“The days of having an overflow and plenty are probably behind us as all of these normal revenue streams that we rely on slow down, particularly tourism,” he said. “I think that’s the one that’s hurting us the most.”
The current draft of the 2026 budget includes new expenses that range from new library and jail funds to additional school costs and employee salary raises. Trivette did not include funding for new positions or a proposed live performance venue and removed $30 million in capital improvement projects.
The city’s tightened finances also led Trivette last week to place a hold on hiring unless department heads can demonstrate they will not widen the gap in revenue and expenses.
Also not yet included in the budget is additional money for Williamsburg-James City County Schools. The school board is still finalizing its budget request but current estimates include an additional $13 million ask from the city and James City County.
Trivette said it’s complicated by the search for a new WJCC superintendent and the ongoing negotiations between the city and county for the division’s new joint operating agreement.
“There’s a lot of uncertainty in the whole conversation,” he said.
Williamsburg’s current budget draft does not increase the city’s property tax rate, which is the lowest of Virginia’s 38 cities at 62 cents per $100 of assessed value.
But residents may see their water rates increase in 2026. Williamsburg expects upgrades to its aging utility infrastructure will cost more than $27 million. That pays for improvements to its water treatment plant, distribution pipes and replacing multiple pump stations.
“We’ve got a number of pump stations that are 50 years old, and they have reached a point where it’s more cost-effective to now replace those than to repair them,” Trivette said. “In fact, in many cases, we couldn’t even get the parts to do the repairs if we had to.”
The need was made clear when Public Works Director Jack Reed noticed leaks near one of Williamsburg’s pump stations shortly after being hired in 2023. When attempting to shut off an intake pipe from the city’s reservoir to fix the leak, the valve “didn’t operate, or when it did operate, it broke.”
“What had to happen is, in fairly short order, we ran bypasses around the break and continued to serve water to the city while we made the repair,” Trivette said.
One option to pay for the upgrades would bump water rates by 7% annually through 2035, about 40% increase through 2030. But that would decrease the amount of cash-on-hand in Williamsburg’s utility fund each year, dipping into the negatives by 2031.
Another option would vary increases by year, averaging out at 12% annually through 2035. That’s about 90% more through 2030. It would leave more cash-on-hand for the city.
The city estimates a 30% increase would raise monthly bills by up to $7 per month for the average customer. Williamsburg residents have paid $5.30 per 1000 gallons of water since 2017.
The draft of the 2026 budget also did not include funding to renew a contract with Newport News Waterworks for up to 2 million gallons of water per day as a backup supply. The 50-year contract was signed in 2009 and had to be renewed at the 25-year mark in 2024. Williamsburg City Council delayed renewal for a year while staff evaluated its options. The cost to renew would now surpass $18 million.
Reed said in January the city is “unlikely” to move forward with that deal. Trivette said he believes Williamsburg will have an agreement with Newport News Waterworks, though it “may not be exactly” as envisioned in the current deal.
Trivette noted that additional funding opportunities will open up in 2026. That’s when a moratorium on increases to the city’s meals and lodgings taxes stemming from the 1% Historical Triangle Regional Sales Tax or “Tommy Tax” expires.
“All those things would be less burden on our residents, more burden on our visitors and that might be prudent,” Trivette said.
Mayor Doug Pons was concerned about deferring capital improvement projects but remained optimistic despite the tight budget.
“We’re going to have another budget that meets the requirements that the city residents and businesses are looking to have and I think we’re going to be fine.”