Cost of Services

Cost of Service: An Overview

While Waterworks is a department of the City of Newport News, it is important to know that we receive no money from the City’s General Fund or from the City at all, to operate. Waterworks is totally dependent on revenue from customers in terms of fees and charges for water service, delivery and connection.

Over the past several years, water demand has dropped. This means our revenue stream has also decreased. We were able to adjust by making cuts to our expense budget including the elimination of 30 positions since 2009 and we have eliminated or postponed some capital projects. We did not, however, reduce our system maintenance costs because the integrity of our system and its infrastructure is vitally important to all of us.

While making these necessary adjustments, we learned that we had undervalued the service we provide. Maintaining the entire water system and each individual connection to the system has a cost, and in some cases, we were not charging enough to cover the cost. All customers need to pay what it costs us to serve them. The majority of the costs to run Waterworks are fixed costs. No matter how much or how little water our customers demand, we still have the same amount of meters to read, repair and maintenance work to be completed, inspections to be performed, bills to be sent and received, telephone calls to answer and laboratory tests to analyze.

What we need from you, our customers, is to help us keep this utility in good standing with the appropriate financial means to accomplish what we need to do to provide for public health (safe and reliable tap water), public safety (working fire hydrants and proper water pressure), and quality of life. No fee increases are ever easy, but we feel certain that you want and deserve no less than a well-run water provider. And even with the increases, we will still be delivering safe drinking water to the average customer for about a $1 per day.

Please keep in mind that while water demand has dropped, we continue to support conservation measures and initiatives. Our Rain Barrel Workshops with the Newport News Master Gardeners have been very popular. We cannot, however, escape the reality that while customers are purchasing less water, we still need adequate revenues to operate effectively and efficiently.

Questions and Answers 

Is there any incentive to conserve water anymore?
YES, absolutely! Despite the increased Service Fee, the average residential bill is still over 60% dependent on water usage so you can still reduce your bill by using less, and remember that water conservation also remains an effective and beneficial environmental choice. 

What “services” are provided in the Service Fee?
The Service Fee is designed to recover some of the costs incurred for providing water service. In order for clean, safe water to flow from your tap, we must provide source water monitoring and testing; dam and pump station maintenance; meter reading; bill generation; online services like direct debit, phone and online payments; technology improvements and maintenance; pipe/valve/meter repairs; hydrant maintenance; safety programs and training for employees; water quality testing and analysis; 24-hour emergency dispatch service; system design and engineering; GIS and mapping; and much more. 

Can’t you draw from your “reserves”? Isn’t that what reserves are for?
No. First and foremost, reserves are for emergencies, and in water utility terms, emergencies can be extremely expensive. Unexpected, serious failures can cost millions (even tens of millions) of dollars to repair. In addition, Waterworks has an AAA (triple A) bond rating which allows us to borrow money, when necessary, at the lowest rate. To maintain that bond rating it is very important that we keep a certain amount of money in reserves.The bottom-line is this: if we have an unforeseen failure, we need money in reserves and the ability to borrow at a low rate. 

Will you continue to bill residential customers bi-monthly?
For now, yes. And we understand that makes water rate and/or fee increases seem greater than they are. If you read the water portion of your bill and divide it in half, it would represent a monthly bill. For most residential customers, your average daily water costs are about a $1 per day. 

Who can I contact if I have any questions?
Please call Waterworks customer service at 757-926-1000. Major decisions about Waterworks and your drinking water are made by Newport News City Council. They meet on the second and fourth Tuesdays of the month at 7:00 PM in Newport News City Hall and you are welcome to attend and participate.