The letter with our January water bills states that the groundwater allocation lawsuit, going on since 2018, ís “directly responsible for 20% of the necessary rate increase.” To the contrary, 100% of the increase pays for additional water purchases made necessary by the board’s negligent stewardship of Well #4, and the budget for legal fees has not been increased at all.
Comparing the 21/22 budget to the 20/21 budget, Water Sales Revenue went up $597,993. Water Purchase Expense went up $605,833, which is 1.3% more than the additional revenue. Meanwhile, the Professional Fees budget stayed exactly the same at $222,500.
It may be that the groundwater adjudication trial starting January 19 will result in a big surge in legal fees, but since they are not in the budget it is false to say that they caused any part of the rate increase. Those unbudgeted legal fees may be the cause of the next rate increase later this year.
In another whopper, the letter states, “Your company had originally planned to have the replacement well operational in September 2019.” Crestview is implying this was a reason not to take, years ago, the steps recommended by the general manager to keep Well #4 from failing. Whatever may have been the board’s original intention, that could not have been its intention when it filed its Conditional Use Permit application May 15, 2019 because the general manager had said repeatedly that it takes at least two years to bring a new well into production.
When the Well #7 application was denied by the Planning Commission June 25, 2020, a rational Crestview board would have understood Well #7 was unlikely ever to go into production. Even if Crestview had beaten the odds and won its appeal to the County Board of Supervisors on September 14, 2021, it would have been at least September 2023 before Well #7 could have been in production. (Well #4 failed in August 2021.) Given the actual time line, failure to take proper care of Well #4 was pure negligence. More about that here and here.
New to this newsletter? Click on the Home tab and read earlier posts. If this newsletter is useful to you, please forward it to other Crestview shareholders so they can sign up to receive future posts directly. Shareholders may comment below.