After nearly three months of reviewing reports from each department, Turlock Irrigation Board of Directors passed the final budget on Tuesday with no rate increases or major changes.
"There have been minimal changes to this budget," said Assistant General Manager of Financial Services and Chief Financial Officer Joe Malaski. "I suspect the only substantive changes have been in a couple of capital programs."
These two changes are a reduction of $700K for Don Pedro Operating Account to eliminate a provision in its capital program and a reduction of $2.8 million from SB7x7's initial proposed capital budget to more accurately reflect what the area is expected to expend in 2016, according to Malaski.
Aside from those revisions, Malaski said that the budget is the essentially the same as was originally proposed. He added that the budget does not include any electric rate increases, and the power supply adjustment is expected to remain at -0.5 cents for the entire year of 2016.
The 2016 budget includes an estimated $372 million in total operating revenues, which is approximately $14 million less than the 2015 adopted budget of $386 million. General Manager Casey Hashimoto said that a significant amount of the decrease can be attributed to gas and oil revenue, which decreased $8 million from the 2015 adopted budget.
Hashimoto said that revenue challenges include an unpredictable wholesale market and relatively flat growth going into 2016. Power supply challenges include forward market price volatility, hydrological conditions and river requirements, uncertain output of Tuolumne Wind Project Authority, and an evolving environmental frontier.
"We have a new mandate now due to SB 350, we go from 33 percent in year 2020 to 50 percent in year 2030, so staff and I will have to figure out a strategy going forward to meet that new challenge," said Hashimoto in November.
Operations and Maintenance impacts include service reliability, power plant overhauls and contractual wage increases, as well as addressing heightened security needs with one additional Full Time Equivalent position in Electrical Engineering and Operations.
"Basically, it's a control system security analyst," said Hashimoto in November. "There's a corresponding increase in the need to be able to secure our system and it's mainly the energy management system that runs our electric grid. We have a small trailer at the Broadway yard that housed our computer and there are currently four people that service that.
"We need another analyst because as more and more of our computer systems proliferate and interact with our business computer system, we need to make sure that we can secure that," continued Hashimoto.
Overall, the Operations and Maintenance budget for the General Manager's Administration will increase by 2.2 percent in 2016. Major expenditures for the proposed Capital budget indicate $2.1 million allocated for the Don Pedro Relicensing and $1.2 million for the La Grange Licensing.
Large expenditures in the Financial Services Administration capital budget include $4.4 million on the Customer Information System, which handles all billing and collection for TID accounts, $625K on network infrastructure and $225K to replace an estimated 90 desktops and 77 tablets and laptops.
Operations and Maintenance costs are projected at $13.7 million, which is an increase of 3.2 percent from 2015, due in part to contractual wage increases and steps, as well as an increase in credit card fees.
"This increase in the budget is to cover the District paying for residential credit card fees," said Malaski in November. "That's based on basically what we're seeing now. We have about 13,000 a month-people who actually use our credit card processor."
As more people potentially become accustomed to this type of payment method, Malaski said that he hopes more customers will opt for paperless transactions, which will eliminate the need to mail out bills.
The 2016 capital budget for Water Resources Administration is roughly $12 million with large expenditures attributed to the SBX7-7 Measurement compliance of nearly $1 million, Palm Street Operations Complex at $5.6 million, Irrigation capital at $2.4 million and vehicles and equipment at $1.2 million. The Operations and Maintenance budget totals $18.7 million, up slightly from 2015.
"There is an increase in the budget itself, but this is an increase in the budget, not necessarily an increase in the amount of money TID has," said Assistant General Manager of Water Resources Tou Her in November. "There are some components that are in here that are transfers from some other administrations.
"It's a shifting of the budget," explained Her.
The capital budget for Power Supply Administration in 2016 is $14.6 million with large expenditure items being the Don Pedro Life Extension Project at $6.9 million, gas field costs a $2.2 million and Units 1 and 2 Hot Gas Path Inspections at the Walnut Energy Center at $1.5 million per unit. The Operations and Maintenance budget totals $51 million, up slightly by 1.6 percent when compared to 2015.
The 2016 capital budget for Electrical Engineering Administration is $14 million with large expenditures attributed to the upgrade of transmission and distribution lines at $3 million, routine expansion of transformers at $2 million, routing expansion services at $1.7 million and the Washington 115/12kV substation at $1.3 million. The Operations and Maintenance budget totals $19.9 million, up slightly from 2015.