Questions and answers arising from the City’s acquisition of RCH.
- Will RCH Water Supply Corporation customer rates change?
When the City acquires RCH, it will be able to set rates without going through the Public Utility Commission (PUC) for approval. The McLendon-Chisholm City Council sets the rates just like they do with services provided by vendors like Waste Management Services, Trash Services, etc. Once the Transfer Agreement is executed there is a list of events which will occur, including, but not limited to: an inspection of RCH’s financial documents for the purpose of conducting a study to ensure the City is covering the expenses and has a reserve. Customers inside the City Limits do not have the right to appeal rates to the PUC, because they have the power of the vote in City elections. [Texas Water Code Sec. 13.043]
- What can customers in the ETJ do about rate changes?
For those customers that live outside the City Limits and are unable to vote in City elections, they have the right to appeal the rates to the PUC. An appeal requires 10% of the customers outside the City Limits to join. [Texas Water Code Sec. 13.043]
- Will there be a future rate study?
Yes, it may take place for the 2024-2025 City Budget Season. There are current rates already set by RCH that will be used at this time. Please note that rates for outside City customers would need justification to be treated differently than those inside the City Limits, such as the additional infrastructure, resources and personnel time required to provide service to the ETJ customers. The City would have to give notice to the City customers outside the City Limits of the rate change within 60 days after the effective date of the rate change. [Texas Water Code Sec. 13.043]
- Can the City offer billing administration?
Yes. The City has an agreement with Inframark and will start new account administration once the City provides customer data.
- Will the City produce an audit?
Yes. 180 days after the end of the fiscal year an independent audit has to be presented and accepted to the City Council.
- Did the City request items in the RCH WSC Transfer Agreement?
When the City Council passed this agreement on September 27, 2022 there is a “Section V. Review Period and Right to Inspect” stating within fourteen (14) days of the Effective Date, RCH shall make “documents” available for reasonable inspection and copying by McLendon-Chisholm. “Documents” includes such items as operation logs and engineering to financial related documents. This is a standard list of items to be requested, and the City understands due to lack of improvements it may be difficult to deliver. However, good faith efforts should be attempted.
- Did the City include clauses in the RCH WSC Transfer Agreement that McLendon-Chisholm can terminate the Agreement?
The City Management, City Council and local citizens have exhibited good faith in all their efforts to show support. This includes things like allowing a secure water payment lock box to be placed at the City Hall. The City Council retained a water specialist, Emily Rogers of Bickerstaff, Heath Delgado Acosta, LLP. The City Council appointed several citizens to serve on a City Water Committee. A plethora of actions taken by local government showing its support for this transfer exhibit the City’s firm belief this Agreement will serve our public.
- How long will it take for an approval of the Agreement by the Public Utility Commission?
In some cases, it has taken approximately nine (9) months. Most of the application and documents have already been processed from City Administration and our Legal Team. McLendon-Chisholm has drafted an interim agreement and the City Council unanimously passed that agenda item on May 24, 2023. The RCH WSC Board Directors should have received certified letters by Postal Service containing this Interim Agreement. No board director or RCH WSC registered agent has requested these documents from City Administration.
- Can RCH WSC Board of Directors approve for the president to sign the Interim Agreement and the Transfer Agreement while both parties await for the PUC to respond to the filing?
Yes. It’s the City’s earnest hope the RCH WSC Board President, David Naylor, will have followed through in producing a June 7, 2023, 4:00 PM RCH Board meeting agenda which includes discussion and action of the referenced agreements. Once the RCH WSC Board approves both agreements then designated representatives City Administrator Konrad Hildebrandt and Mayor Pro Tem Adrienne Balkum will provide an immediate remedy by initiating the process to negotiate an Interim Management Agreement (also delivered to RCH) on behalf of RCH to handle the day-to-day operations, business affairs, repair, maintenance, water meter reading, billing, etc.
- Does the City of McLendon-Chisholm have the monies to manage water system improvements?
Yes. During the interim of the first stage of the transfer process we have cost-related information for immediate needs that will be necessary for operations and billing administration. Additional stages for improvements will be addressed in future budgets and will be planned for as it involves several entities including NTMWD.
If there are additional questions or concerns please email City Administrator Konrad Hildebrandt so that it may be addressed in a timely manner.