The Turlock Irrigation Board of Trustees continued budget discussions on Tuesday, Oct. 29, with the final 2014 budget to be adopted by mid-December.
TID General Manager Casey Hashimoto presented an overview of the District and General Manager's Operations and Maintenance budget, followed by a detailed review of the Financial Services Administration Operations and Maintenance budget by Chief Financial Officer Joe Malaski.
According to TID's proposed 2014 financial forecast, a $13 million transfer from the rate stabilization fund would be drawn to cover the increase in costs associated with wage raises, pension costs, and medical expenses for employees.
Alongside the aforementioned increases, Hashimoto laid out the challenges facing the General Manager Operational and Maintenance budget in 2014 as being related to labor negotiations, property and general liability insurance, bad debts and audit fees.
"Pension will see a $1.3 million hit in 2014, and there are labor negotiations that we hope to conclude in 2014; but that's a variable," said Hashimoto.
According to Hashimoto, the District is facing a property and general liability insurance increase of $40,000 in 2014; a $200,000 medical increase; a $1.1 million increase to fund an anticipated three-percent raise in wage increases; another $100,000 for bad debts, and approximately $40,000 more in audit fees than originally anticipated.
Additionally, Hashimoto shared that two currently vacant staffing positions will be cut from the 2014 budget, with one position from the financial services administration and the other from water resources, bringing the total staffing level from 456 to 454.
The other area that will see a substantial increase in projected costs is the District's Structures and Improvements fund, as TID prepares to make a hefty $2.6 million purchase from the City of Turlock for the adjacent skate park/police station properties. At a modest $23,000 in 2013, the Structures and Improvements fund is expected to skyrocket to $2.7 million in 2014.
While the Structures and Improvements fund may see a significant increase, the District's total capital expenses are projected at $44.3 million, approximately $4 million less than 2013.
"We did reduce some of the proposed capital expenditures," said Hashimoto. "We took off the Walnut Power Plant overhaul. Once we purchase the property from the City of Turlock, we also had plans to convert some of those buildings to TID use, but we have deferred those plans."
Hashimoto said that with the changes to the capital expenses, the District will not risk going further into debt.