The Turlock Irrigation District Board of Directors kicked off the 2012 budget process on Tuesday with an overview of what the budget might look like, as the district attempts to keep costs flat and mulls an electric rate increase.
The preliminary budget sees the district reduce seven unfilled positions year-over-year, dropping from 479 positions to 472.
The employee allocation also drastically shifts from a year ago, with the General Manager’s office and Financial Services absorbing the 50 employees in Consumer Services. That department was shuttered in March as part of an internal reorganization.
The proposed budget sees operations and maintenance costs remain flat from 2011, save for additional costs of pension, legal fees related to ongoing labor negotiations, and a nearly $2 million increase in Electrical Engineering/Operations costs.
That surge is related to a smaller capital projects budget, TID staff explained, which previously absorbed part of some employees’ salaries as they worked on major projects like the Hughson-Grayson transmission line. With a smaller capital budget projected following those projects’ completion, some labor costs returned to the operations and maintenance budget.
Without those major projects, Director Charles Fernandes asked if the employees should still be kept on.
“If the capitol projects are done, do we need those people?” Fernandes asked.
But the employees are still necessary, according to TID General Manager Casey Hashimoto
“We are squeezing down,” Hashimoto said. “Each year we've been shrinking down allocations. But we've got to maintain what we've built.”
This year, Hashimoto continued, some maintenance was deferred to begin work on the Hughson-Grayson electrical transmission line, and a new Grayson Substation. That deferred maintenance must be completed in the coming year to keep the district on track, he said.
Possible rate increases were not discussed in depth Tuesday, but are expected to be on the table during the budget process.
In August, the district held a series of public meetings to discuss a potential rate increase of between 4 and 7 percent annually for the next two years – between $4 and $15 per month for most consumers. The exact structure of the rate increase was not identified during those meetings, but was deemed necessary to make up anticipated shortfalls in electric revenues due to costs related to constructing the Tuolumne Wind Project in Oregon, and the new Almond Power Plant expansion near Crows Landing.
The District Board of Directors will begin to review the budget proposal in depth at 9 a.m. on Oct. 18. The board will continue to discuss specific departments each Tuesday at 9 a.m. through Dec. 12 – save for an off week of Nov. 15 – at which point directors are expected to accept a final budget and any associated rate changes.
“It's a process all the way up until the final budget,” Hashimoto said.
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