The Turlock Irrigation District Board of Directors unanimously approved the district's 2014 budget Tuesday morning, with less reserve spending than officials originally forecast.
The budget foresees the district using only $4 million in reserves from its Rate Stabilization Fund. That's down from $13 million in reserve spending initially forecast, largely due an increase in revenue expected from electric operations.
And should all go well, TID Assistant General Manager of Financial Services Joe Malaski said that the district may avoid any reserve spending.
“It's my expectation, at least it's my hope, that we don't need to make those transfers at all,” Malaski said.
That deficit spending could be avoided if the district surpasses expected margins on electric sales, something which could happen easily given the conservative nature of the budget projections.
Or instead, TID could simply spend less than expected. Even though funding may be budgeted for certain initiatives, the district won't spend money simply because it is budgeted; expenditures are continuously reevaluated throughout the budget year.
“We target a budget every year,” Malaski said. “We don't spend every dollar in that budget.”
The district also forecasts much lower spending on capital projects than in recent years, with $44 million in total projects. That's down from $48 million spent last year, and annual capital project spending nearer to $190 million just a few years ago as TID constructed new generation facilities.
“It's significantly lower than any capital budget we've had in recent times,” Malaski said.
Overall, the budget calls for essentially flat spending and no base electric rate increases.
The proposed budget foresees $379 million in operating revenues and $334 million in expenses. A further $52 million in cash will be generated by operations, Rate Stabilization Fund transfers, and interest income. Debt service payments will tally $32.6 million, and revenue-financed capital projects will total $13.3 million. The district would deposit $6.1 million into reserves.
Despite a lack of base rate increases, customers will pay more for their electricity starting Jan. 1. The last of three previously-approved “environmental charge” increases will take effect that date, increasing customers' bills by a further 4 percent. In all, the environmental charge, linked directly to TID's costs to comply with state environmental legislation, will have raised customers' rates 12 percent over three years.
New TID Board President Ron Macedo, chairing his first meeting, commended staff for their hard work on the budget. But he said staff must remain vigilant throughout the year, carefully considering where money can be saved and what items should be placed on next year's budget.
“Budgets are never an easy thing, but it's a great guideline and I think TID does a fine job,” Macedo said.
On Tuesday, the TID Board of Directors is also scheduled to:
• Adopted a resolution containing updated salaries and benefits for managerial, supervisory, professional, and confidential employees. The resolution adopts a new step-based pay scale in lieu of traditional cost-of-living adjustments, extends the new employee probationary time from six months to one year, and offers tuition reimbursements.
• Authorized Wes Monier, Strategic Issues and Planning Department Manager, John Perry, Utility Analyst-Energy Resources, and Jason Carkeet, Utility Analyst-Water Resources, to act as authorized agents on behalf of the district for all matters pertaining to state disaster assistance.
TID has been incurred approximately $26,000 in costs related to the Rim Fire, and may be eligible for reimbursement of about 75 percent of those costs. An application for reimbursement has been submitted, but the final signature of these authorized agents is required to complete the application.
• Made minor adjustments to the District's investment policy.
• Limited the maximum electric panel size that a customer may install to 2,500 kilovolt-amperes, and eliminated the option for subsurface transformers to serve residential subdivisions.
• Appointed directors and district staff to serve on a large number of committees.
• Added three new job classifications: Consumer Programs Specialist, Human Resources Coordinator, and Line Division Manager. Two job classifications were be revised: Human Resources Analyst I-II, and Human Resources Technician.
• Heard regular weekly updates on power generation and irrigation water availability.
• Canceled the TID board meetings of Dec. 17, 24, and 31, and authorized the payment of warrants through that time.
• In closed session, discussed two cases of anticipated litigation.
• In closed session during a special, 8:30 a.m. meeting, discussed a case of existing litigation: Frank Sorrentino vs. Turlock Irrigation District, PG&E, et. al. No action was taken.