James City County service authority proposes multi-year water, sewer rate increases; officials point to inflation and aging pipes

The James City Service Authority (JCSA) on Tuesday presented a proposed fiscal year 2026 budget that includes multi-year increases to both water and sewer charges, and outlined capital projects to repair aging pipes and improve system reliability.

JCSA General Manager Doug Powell told the community that JCSA is “the water and wastewater collection provider for James City County” and that the authority relies entirely on customer fees rather than property tax support. He described the system’s scope — a treatment plant that can produce up to 5,000,000 gallons per day, 426 miles of distribution lines, 2,963 fire hydrants, roughly 78 sewer pump stations and service to tens of thousands of customers — to explain why capital work can be costly.

Powell and staff said the authority’s proposed combined water and sewer budget is roughly $30.7 million for FY26, up from the previously planned $28.6 million, and noted that about half of the increase reflects a grant. The water fund’s FY26 capital improvement program (CIP) is about $5 million, with a five‑year water CIP near $23 million; the sewer CIP for FY26 is roughly $2.5 million, with a five‑year sewer CIP just under $21 million.

Why rates would rise

Powell said a rate study required every five years informed the proposals. The authority is proposing to increase the monthly fixed charge for water from $7.52 to $9.02 in FY26, with similar increases in the following two years and smaller increases in FY29–FY30. For volumetric water charges, the first tier would increase from $4.20 to $4.45 per 1,000 gallons, with larger percentage increases for higher tiers.

For sewer, Powell described an annual planned $1.50 per month increase in the fixed charge, from about $3.01 to $4.51 in FY26, with minor volumetric increases delayed until FY28–FY30. Powell estimated the combined effect for a typical customer consuming 5,000 gallons per month would be a bill rise from $50.65 to $55.11 in FY26 — a $4.46 increase.

Powell emphasized cost pressures from higher materials, chemical and construction prices since 2020 and said those costs “have not come back down.” He used recent projects to show scale: a completed College Creek main replacement cost $1,159,000 to replace 710 feet of 16‑inch pipe, and a planned 3,500‑foot replacement near the recreation center is estimated at $1,685,000. “These projects are more expensive than you might think sometimes,” he said.

Water supply planning and permits

On questions about long‑term water supply, Powell said JCSA’s current groundwater withdrawal permit expires in February 2027 and that discussions with the Virginia Department of Environmental Quality (DEQ) indicate the authority is likely to receive a 15‑year permit that would not include reductions until about year 14. Powell said the schedule gives time to see whether the regional SWIFt program — the Sustainable Water Initiative for Tomorrow run by the Hampton Roads Sanitation District (HRSD) — succeeds at recharging the aquifer by treating wastewater to drinking‑water quality and injecting it into the aquifer.

“DEQ is willing to allow us to wait and see how that goes,” Powell said, adding that building a new large treatment plant in lieu of SWIFT would be a multi‑hundred‑million‑dollar undertaking.

Reserves and funding

Powell described reserve accounts that generate interest income in the budget: an alternative water supply reserve, a replace‑and‑repair reserve for emergent repairs, designated reserves for capital projects, and undesignated reserves retained for bond‑rating and best‑practice purposes. He said interest income shown in the budget reflects earnings on those reserves.

What happens next

JCSA presented the rate recommendations as consistent with its rate study; no formal vote or board action on the rates was recorded during the presentation. Powell took questions after the presentation and said he would be available after the meeting for follow‑up.

Ending

JCSA officials framed the increases as part of routine five‑year rate planning and necessary to fund pipe replacements and pump‑station upkeep amid higher construction and materials prices. Powell noted that, even with the proposed increases, JCSA would remain among the lower combined rate jurisdictions in the region.