Statement on New Rate Increase

Dear Members,

RCH is committed to ensuring the reliability and sustainability of our water services while also accommodating the growth in our system. In order to ensure that RCH fulfills these obligations, we have recently hired NewGen Strategies to conduct a comprehensive review of our financial and operational performance as part of this commitment. NewGen is a highly respected advisor to water utilities on rates. Below are the key updates and decisions affecting our community:

Revenue and Financial Sufficiency
Our current rates are insufficient to meet the financial demands of our growing utility and services operations. Starting in 2025, projected revenues under the existing rate structure will fall short of what is required to meet operational expenses, debt service, and reserve needs. NewGen has advised the Board that in order to meet these obligations, adjustments to our rates are necessary to ensure continued reliable service, deliver new water supply, and confirm sufficient reserves for future infrastructure needs.

Legal Fee Surcharge
In 2024, RCH incurred $368,229 in legal expenses due to unnecessary actions by the City of McLendon-Chisholm, led by Councilmen Day and Tucker and former Councilwoman Balkum. A 24-month surcharge of $5.14 per connection per month will be added to customer bills starting this year to recover these costs.

This surcharge will likely increase or become prolonged if Councilmen Day and Tucker continue their obstructionist tactics, which could result in additional legal expenses and further financial burdens on RCH and its members.

Investments in Infrastructure
Over the next five years, RCH will invest $46.5 million in critical infrastructure improvements to ensure the reliability of our water system. These include:

• A new pump station and water transmission line to the North Texas Municipal Water District (NTMWD) is set to begin in July 2026.
• Relocation of the Highway 205 waterline required by TxDot.
• General system improvements.

These projects are essential to meeting future water demands and improving service reliability for our members. The NTMWD connection is an important accomplishment for RCH and the community.  This water supply will allow RCH to move away from the City of Rockwall contract, which limits the total supply to RCH. Once this interconnect is operational, RCH will have more than adequate water for existing customers and new growth.

Rate Adjustments and Customer Impact
At this time, we are approving a 9.46% rate increase for 2025, effective February 1st.(Including 3.25% surcharge for legal expenses)  For an average household using 18,000 gallons per month, the monthly bill will increase from $160 to $175.14. The base rate for a standard 5/8" meter will increase from $25 to $35.

We are also retaining NewGen Strategies to review the new rates again in 2025. This will provide us with a year’s worth of usage data from the newly installed digital meters, ensuring better accuracy in future rate decisions. A decision on 2026 rates will occur later this year after this comprehensive review.

Regional Rate Analysis:
A comparative analysis of regional utilities confirms that RCH’s rates remain highly competitive despite the planned adjustments. Currently:

• RCH's current monthly bill for 18,000 gallons ($160) is lower than that of neighboring utilities. 
• After the rate adjustment and surcharge, RCH's projected monthly bill of $175.14 will still rank below utilities like Terrell, Poetry WSC, and Nevada SUD and remain competitive with providers like Blackland Water Supply ($159.74) and High Point SUD ($166.00).

This analysis demonstrates that RCH members continue to receive exceptional value while we meet essential financial and operational requirements.

We recognize that these changes may create challenges for some members, but they are essential for securing our water system's long-term sustainability and reliability. We aim to maintain competitive rates while meeting financial and operational demands, ensuring that RCH remains a trusted and effective water supplier for our growing community.

Thank you for your continued support and partnership as we strengthen our water system and prepare for future needs. Should you have any questions or require further information, please do not hesitate to contact our office.

Sincerely,

David Naylor

RCH Board President