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Williamsburg negotiates extended water supply deal with Newport News; no upfront payment required
Summary
City staff reported a renegotiated long-term water supply agreement with Newport News that provides up to 4 million gallons per day of capacity (1 million existing + 3 million on bulk purchase at industrial rate) without the previously anticipated $18 million upfront payment; council will consider the contract in June.
City staff told the Williamsburg City Council on May 5 that negotiations with Newport News Water Works produced a revised long-term water supply arrangement that officials say secures additional capacity without the $18 million upfront payment the city had previously faced.
Mister Reid (city staff presenting the agenda item) summarized the contract history, saying the original 2009 agreement provided for 1 million gallons per day and included an option that would have required a second payment that, together with earlier amounts, could have reached roughly $18 million. Staff recommended foregoing that upfront payment and, instead, extending and reworking the agreement.
Under the terms described to council, the proposed agreement (term 2025–2050 with options to extend) keeps the city's base 1 million gallons-per-day entitlement and adds up to 3 million gallons per day of treated water available for bulk purchase at an industrial rate (approximately $4.29 per 1,000 gallons). Staff emphasized there is no upfront purchase price in the negotiated proposal and that the arrangement would allow the city to avoid the earlier $12–18 million cash outlay.
When council members asked about downstream implications for development served by Newport News mains, staff said that some future customers located along the Newport News water line could be served directly by Newport News rather than Williamsburg, which would reduce potential local demand.
Council members praised staff negotiations and the regional relationships that aided the outcome. The council was told the revised contract should remove near-term capacity concerns; staff said the city will only pay for the extra treated water if and when the city uses it.
Staff and council noted the item will come back for formal approval at a June meeting after additional vetting. "We chose to forego the second payment," Reid said in the briefing, "and we've negotiated an additional 3,000,000 gallons a day of treated water available for bulk purchase…The major difference with this agreement versus the other is there's no upfront cost." Robert Wilson, speaking in open forum later, warned council to ensure water quality controls and raised that Newport News had reported PFOS contamination needing treatment; staff acknowledged treatment timelines and system integration work as implementation matters for the utility department to resolve.
Council indicated appreciation for the negotiated terms and the extra capacity they provide but did not take a binding vote; staff will return with final contract documents for the June meeting.
