Critical Call to Action – December 10th City Council Meeting

Dear RCH Members,

As we approach the December 10th City Council meeting, I want to share a detailed overview of the so-called “plan” submitted by Councilman Tucker. This plan presents two proposals, both of which fundamentally undermine RCH’s autonomy and long-term stability. I urge you to review this information carefully and take action to protect RCH’s future.

The Proposed Plan

Plan A claims to retain RCH as the main water provider for MC/ETJ residents but renders RCH subservient to Blackland as its sole wholesale water supplier. Under this arrangement, RCH would, in theory, abandon its current project and connect to Blackland, which in turn would rely on NTMWD for water at a cost of $35 million, ostensibly covered by developers. This would supposedly minimize rate increases for Blackland and RCH customers. There are many problems with this proposal. 

The outlined benefits include a supposed elimination of the need for RCH to shoulder the $35-40 million debt of its current project and commitments to provide adequate water supply by Fall 2026. However, this proposal assumes an additional cost for RCH’s connection to Blackland of approximately $5.3 million and suggests an additional cost to RCH customers of around $8 per month. Second, one of the strongest messages that RCH has received from its members is that it needed to move to a reliable source of water that is not reliant on the City of Rockwall and not capped by contract.  The RCH Board has acted to do that, securing a contract with NTMWD and is already underway with building the connection. This proposal would once again place RCH and its members in a supply position that would be subject to volume limits and prices set by the Board of Directors of Blackland.  That would be a step backward from the current situation with Rockwall as RCH’s source of supply. 

While these numbers may seem attractive at first glance, they are speculative and fail to account for the real economics and risks involved. The plan does not provide guarantees for how developer-funded investments would be executed or sustained. Most importantly, no explanation is provided about the full nature of the agreement between the developer, Blackland, the City, and the County, all of which would impact the actual cost to customers.  Instead, the proposal is phrased as though the developer is simply donating 35MM to Blackland. It also glosses over potential disruptions and compromises the independence RCH has worked so hard to establish. The underlying assumption that Blackland is willing and can meet the needs of MC/ETJ residents and its own customers simultaneously by 2026 is optimistic at best and reckless at worst. This plan also assumes that Blackland would be willing and able to provide RCH with more water than we currently receive from Rockwall, an assumption that is far from guaranteed. Blackland is likely to impose additional restrictions on RCH’s water usage that would not exist with a direct connection. Furthermore, NTMWD’s standard policies prohibit the resale of water without explicit approval from their board. Securing such approval would be a lengthy and uncertain process. Considering the significant time and resources NTMWD has already invested in approving RCH’s existing plans and the investments RCH itself has made, it is highly probable that NTMWD would seek reimbursement of those costs if RCH were to abandon its current project. These complications only underscore the impracticality and risk of this proposal.

Plan B proposes a full acquisition of RCH by MC, with a suggested purchase price of $0–12 million. The city would assume all RCH debts, loans, and litigation, halting all current projects during negotiations. It proposes retaining current RCH staff under city management and forming a Management Advisory Board to oversee water operations. Funding for future water projects would come from municipal bonds, state water development funds, or similar sources. This is at least the third permutation of the City’s unrealistic desire to simply announce its takeover of RCH. 

This plan raises more questions than answers. Given its current struggles with infrastructure management and poor financial condition, how does the city intend to finance this acquisition? As one example, the City terminated the legal means of access for RCH to deliver water to Sonoma Verde when the City had no means to deliver that replacement water.  What safeguards would be in place for RCH staff and customers during and after this transition? The proposal also does not discuss the long-term impacts on rates, service quality, and decision-making authority for RCH members. The city’s track record on sewer management, including significant rate increases, raises serious concerns about its ability to effectively manage water services in a way that benefits RCH members. The City simply wants control, and that’s not a valid basis. 

Why These Plans Are Problematic

Both proposals directly threaten RCH’s autonomy, financial health, and operational stability. Plan A undermines the significant progress we’ve made by forcing us to abandon our current project and depend on an external wholesaler. The costs of abandoning these projects at the current time are not estimable. Further customers would be asked to pay a surcharge for these costs.  Plan B opens the door to a complete takeover, relinquishing our hard-earned independence to a city that has yet to demonstrate its ability to manage such responsibilities effectively. That path has not worked in the past and will not work now.

Additionally, these plans are riddled with speculative numbers and vague assurances. There is no engineering analysis, feasibility study, or evidence-based financial plan to support the claims. The lack of direct dialogue between the city and RCH further highlights the council members’ disregard for our input and expertise.

Call to Action

This situation demands your attention and action. I strongly encourage you to attend the December 10th City Council meeting and voice your concerns. RCH’s investments, autonomy, and ability to provide reliable services are at stake. Let the council know that these speculative and poorly conceived plans are unacceptable and that RCH members will not stand by while our future is at risk.

The meeting will take place tomorrow, December 10, 2024, at 6:30 PM at McLendon Chisholm City Hall. Please make every effort to attend and speak out in defense of RCH. Your involvement is critical to ensuring that RCH continues to serve our community with integrity and independence.

Thank you for your continued support.

Sincerely,

David Naylor
RCH Board President