Following preliminary budget workshops earlier this year, the Turlock Irrigation District Board of Directors moved forward in their 2016 budget process on Nov. 3 with presentations from the General Manager and Financial Services Administration regarding the 2016 Proposed Business Plan.
"The goal is by Dec. 15 to have the board adopt the budget and the rates," said General Manager Casey Hashimoto.
The 2016 proposed budget includes an estimated $372 million in total operating revenues, which is approximately $14 million less than the 2015 adopted budget of $386 million. 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.
Down approximately $27 million from last year's adopted budget, power supply wholesale is $253 million in the 2016 proposed budget. The proposed Operations & Maintenance expense will be a 3.7 percent increase from 2015 at an estimated $70 million for 2016.
The revenue financed capital for 2016 is an estimated $12 million, which is approximately $2 million more than the 2015 amount. The debt financed capital is projected at $35 million, which is approximately $1 million more than 2015.
"The financed goes from $33.6 million to $35.2 million," said Hashimoto. "The biggest contributor to the increase in our capital spending is the CIS [Customer Information System], which is a multi-year project. The proposed budget for 2016 is $4.4 million."
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.
Operations and Maintenance impacts include service reliability and power plant overhauls. These impacts also include a 3 percent wage increases that will be allocated to the International Brotherhood of Electrical Workers. TID is currently in negations with the TID Employees Association as well.
Additionally, Hashimoto said that he is going to request an increase by one full-time equivalent in Electrical Engineering and Operations to enhance TID's needs to address heightened security needs.
"Basically, it's a control system security analyst," said Hashimoto. "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's 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, Hashimoto said that he is proposing an estimated $9 million for the General Manager Operations and Maintenance 2016 budget, which is a 2.2 percent increase from the 2015 budget.
The 2016 proposed General Manager Capital Budget includes a $50K general contingency, as well as Don Pedro Federal Energy Regulatory Commission Relicensing at an estimated $2 million and La Grange FERC Licensing at an estimated $1 million.
Hashimoto said that for the Don Pedro FERC Relicensing, TID still needs to complete a predation study and continue to enlist the help of HDR Inc., a global firm that he said is helping the District with the relicensing process. The La Grange FERC licensing process includes an upstream habitat and temperature study, and a fish count downstream of La Grange. The District is using HDR Inc. to help with that licensing process as well.
Chief Financial Officer and Assistant General Manager of Financial Services Joe Malaski said that the biggest change in the Financial Services Administration Report comes from an estimated $500K increase in the proposed 2016 administration budget.
"This increase in the budget is to cover the District paying for residential credit card fees," said Malaski. "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.
Malaski said overall the proposed Financial Services Administration Operations and Maintenance Budget is an estimated $14 million, which is a 3.2 percent increase from last year's adopted budget of $13 million.
The proposed 2016 Financial Services Administration Capital Budget includes $225K to replace an estimated 90 desktops and 77 tablets and laptops, according to Malaski. Additionally, CIS replacement is projected to have a budget of $4.4 million.
"That's probably one of the bigger projects internally," said Malaski. "We've been working on this project for about a year now. As team members started working through it, they identified 3,600 different projects, different processes that are impacted by CIS."
"That is something we will have to deal with going forward in making sure these systems can do what they need them to do. If they can't deliver, we're going to need to find alternative ways," continued Malaski.