- What are the sections of the Texas Code to assert that RCH members will not get the proceeds of a sale to Aqua Texas?
RCH Water Supply Corporation is a nonprofit water supply corporation operating under Chapter 13, 49, 67 of the Texas Water Code, and Chapter 22 of the Texas Business Organization Code. Any transfer of the system must comply with the requirements in those laws.
Any transfer of assets or customers to another entity by RCH MUST be APPROVED by the Public Utility Commission before the transfer can happen (Tex. Water Code 13.301).
If RCH proposes to transfer all of its assets to an entity, two thirds of the members of RCH MUST VOTE to approve any resolution adopted by the board recommending the transfer of the system (Tex. Bus. Org. Code 22.164, 22.252).
Any money paid to RCH as a result of sale of the system must stay in RCH. State law PROHIBITS the payment of dividends to members of non profit entities (Tex. Bus. Org. Code 22.053).
Any property held by RCH at the time it winds up its business must be distributed only for tax exempt and public purposes to the state or a political subdivision of the state. The district court in Rockwall County is required to distribute the property in a manner that will best accomplish the general purpose for which RCH was organized (Tex. Bus. Org. Code 22.304).
- Where does water for McLendon-Chisholm residents come from currently?
Residents in the City of McLendon-Chisholm get their water from retail water providers that hold a certificate of convenience and necessity (CCN), including RCH Water Supply Corporation (WSC), Blackland Water Supply Corporation and High Point Special Utility District (SUD). Map of Water Service Boundaries
One of those retail service providers, RCH is having difficulty providing continuous and adequate retail water services to its customers. RCH purchases wholesale water from the City of Rockwall. The City of Rockwall is a member of the North Texas Municipal Water District (NTMWD). For years, the City of Rockwall has encouraged its wholesale customers to find alternative wholesale water supplies because the City of Rockwall needs its NTMWD wholesale supply to serve City of Rockwall customers. Blackland, another wholesale customer of the City of Rockwall, has made arrangements through a NTMWD customer contract to transition its wholesale supply from the City of Rockwall to NTMWD. High Point receives its wholesale supply from the City of Forney and City of Terrell. RCH does not have an adequate wholesale supply of water.
- What is RCH?
Originally the letters stood for Rockwall, Chisholm and Heath. RCH is a non-profit water supply corporation created pursuant to the authority granted in the Texas Water Code Chapter 67. RCH was incorporated in 1961. RCH was granted a CCN to provide retail potable water to customers within its CCN service area. This nonprofit model has historically been used to serve rural water customers in Texas. As cities grow, however, communities need updated service models to best service utility customers.
- Why are there water shortages and restrictions in the RCH CCN service area?
RCH only purchased 2.1 million gallons of water each day (1,359 maximum equivalent of residential connections). The water needs of RCH customers exceed this amount. RCH cannot currently provide the amount of water families in our community need. While droughts do happen and conservation is always wise, frequently entering emergency water restrictions is not a long-term solution. Instead, we should move forward with a plan that allows for access to a more reliable wholesale water supply.
- Why are RCH customers subject to Stage 5 Emergency Water Restrictions when neighbors within the Blackland and High Point CCN service areas are not?
Notwithstanding water shortages last year and in prior years, RCH has failed to increase its wholesale water capacity beyond the 2.1 million gallons of water it contracted from the City of Rockwall. RCH first entered into a Wholesale Water Purchase Agreement with the City of Rockwall October 5, 2009. Section 3 of that agreement states: The City of Rockwall reserves the right to deny extending the contract if the City determines that RCH is not actively taking steps to obtain an alternate water source.
That 2009 original agreement was extended December 17, 2014, for a five year term ending December 31, 2019. The 2014 first amendment state that RCH may extend the wholesale agreement for a five year term beginning December 31, 2019, by providing Rockwall notice of RCH’s intent to extend. The City of Rockwall has been telling its wholesale customers, including RCH, to obtain wholesale water sources.
- What is the (short-term) solution to our water issues?
The best solution for a secure water future for our community is for McLendon-Chisholm to enter a customer contract with NTMWD that secures a long-term wholesale water supply for retail customers. See March 15, 2023 and August 8, 2023, letters from McLendon-Chisholm to NTMWD requesting to become a direct customer of NTMWD.
Unlike WSCs, SUDs and investor-owned utilities (IOUs), cities are able to provide retail water and sewer within their corporate limits and extraterritorial jurisdiction (ETJ) without a CCN.
- What about an immediate solution like an interconnect with another area provider?
An interconnect will require support of both the provider and their wholesaler. CCN holders are limited to providing retail service within their service area. In order for a CCN holder to provide wholesale service to another provider will require written permission (in the form of a contract amendment) from that retailer’s wholesale service provider. Once the wholesaler consents to an interconnect, the two retail providers will need to agree on both the connection point and the compensation (typically this is done by contract).
- What is the benefit of the City managing our water supply, as opposed to a third party vendor?
City ownership of the retail water system ensures that water customers are getting water for the lowest possible cost and the system is operated with the greatest degree of transparency. City services can take advantage of tax-exempt financing for infrastructure improvements and would allow for bundling of water, sewage and trash hauling bills for customers.
- Who are the members of RCH eligible to vote if there is an election?
Article VIII of the RCH Certificate of Formation (Articles of Incorporation) provides: “The Corporation’s members shall be a record owner of a fee simple title to property in an area served by the Corporation or a person or entity who is granted membership in the Corporation and who either currently receives or will be eligible to receive water service from the Corporation. All customers of the Corporation unless exempt of prohibited by law.” The RCH bylaws state: Any person, including any legal entity owning or having a real property right to property served or which may be served by the Corporation upon payment of the Membership fee and upon compliance the Corporation’s conditions for water service as provided for in its published charges rates and conditions for service. See RCH Articles of Incorporation and bylaws at this link.
- How to call, email and/or visit the RCH Board of Directors?
Email the board at: naylor@rchwatersupply.com, or fill out the “Contact Us” form on the RCH website. In addition, a list of board members can be found at Board Members.
NEW MONTHLY BOARD MEETING DATES. You can also show up at their regularly scheduled first Tuesday of the month meetings, usually, held at 4pm at Chisholm Baptist Church, 1388 S State Hwy 205, Rockwall, TX 75032.
11) Who are the City experts that are working with the City on water-related matters?
Water Attorney: Emily Rogers, Managing Partner of Bickerstaff See resume here.
Engineer: Michael DeMotte, PE, CFME and Matt Atkins, Team Leader, Associate Principal of Teague, Nall & Perkins Engineers TNP
Water and Wastewater Management: Cameron Robinson, Account Manager, Inframark
