Turlock Irrigation District will not add to 4% hike

10/29/2013 5:47 PM

10/29/2013 5:48 PM

Electricity customers will not face higher bills in 2014 on top of a previously approved 4percent hike, the Turlock Irrigation District board heard Tuesday while reviewing next year’s proposed budget.

The board in late 2011 agreed to raise rates under a three-step plan, with 4percent increases at the beginning of 2012, 2013 and 2014. Officials say the extra money helps the district comply with a state mandate for more renewable energy.

Other than that, “We’re proposing no base rate increases for 2014,” General Manager Casey Hashimoto told the board while proposing a $398.9million budget, a half-percent bump up from the previous year.

Attributing the increases to the state environmental mandate allows TID to escape legal stumbling experienced by its Tuolumne River partner, the Modesto Irrigation District. MID has not considered raising power rates since its attorney last year privately advised that a hike without the vote of the people could violate state law linking rates to actual costs of providing services.

Both districts charge power customers more in order to keep farmers’ irrigation rates artificially low.

MID could revisit the issue after Nov. 5, when three new board members join the five-person panel. Two TID incumbents face re-election challenges.

The MID board approved a 2014 budget last week, while TID leaders are not expected to vote on theirs until Dec. 10.

TID expects to receive $372million next year in power and water sales, up from $358million in 2013. But costs are rising even faster, forcing the district to pull $13million next year from a rate stabilization fund to keep from raising electricity bills. That’s substantially more than a $7.4million transfer approved with the 2013 budget, which followed an $11.4million transfer the year before.

The district’s debt payments will climb next year to $32.6million, up from $30million this year. TID carried $1.1billion in debt as of Jan. 1 and expects to put out an extra $877.4million in interest payments through 2041, for a total of nearly $2billion.

If the budget is approved, the number of approved TID positions would drop by two, to 454, including 22 that are vacant.

The district signed a labor contract with a union representing more than half of all employees earlier this year but continues to negotiate with another representing 40 line workers and their supervisors. Hashimoto said, “I hope to conclude labor negotiations in 2014, but that’s a variable,” and suggested building a 3percent pay increase, or an extra $1.1million, into the proposed budget.

Pension costs are expected to soar an extra $1.3million next year, he added.

Seeking a new federal license for Don Pedro Reservoir, which TID shares with MID, is expected to cost TID $2.5million next year. The districts expect to spend more than $25million in the multi-year effort.

TID expects to lose an additional $100,000 next year in bad debt, or inability to collect from customers who use services but can’t pay. Joe Malaski, assistant general manager over finances, put the blame on “the ongoing economic downturn.”

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