Significant financial issues before the Board

The Board received reports at its June 30 meeting on several matters that could portend rate increases.  Past president Sol Chooljian suggested the Board follow past practice of doing a complete mid-year budget review.

The wet winter has meant that water sales revenue is about 67% ($476,000) under budget.  Sales for the second half of the year may be the same as, or higher than, in 2022, but that is unlikely to make up the revenue shortfall in the first half of this year.

Base salaries for operators may be going up 20-25% because there seem to be in Ventura County no unemployed operators with the necessary California certifications.  Crestview and other water companies/districts are all trying to hire away from each other, and that typically leads to higher salaries without actually filling all the job openings.  The Board was advised that we could soon get to the point that the base salary for a journeyman operator may be upwards of $120,000.  We encourage shareholders to give any suggestions and offers of assistance to President Frank Mezzatesta.

In the monthly operations report, the Board was advised it should plan to purchase and hold in inventory a larger stock of critical spare parts.  No dollar amount was mentioned.  In June, there was a power outage that shut down both wells, and Well #6 could not be restarted without replacing a 20-year-old component. If that part had not been on hand, it would have taken 5-6 weeks to acquire, and Crestview would have had to switch to imported water and suffer a big operating expense increase.

On the positive side, Crestview is in the process of paying off the balance of the $1.5 million, 10-year loan it took in 2019 to pay for Well #7.  The terms were favorable at the time, but we are paying substantial interest every month, and with this loan outstanding Crestview cannot take out the much larger loan it will need for a new well. It is expected that a new, longer-term loan at only 2% from a State fund will be available when Crestview is ready.

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One Reply to “Significant financial issues before the Board”

  1. Remember, the state revolving fund loan was not pursued because Robert said Crestview would have to agree to prevailing wages.

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