MINUTES
Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, April 26, 2023, 11:00 a.m.
Meeting videos are available on CPA’s YouTube Channel.
www.youtube.com/@CPApublicmeetings
Committee Members participated in this meeting from the following locations:
Camarillo City Hall
Mayor’s Office
601 Carmen Drive
Camarillo, CA 93010
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Claremont City Hall
Citrus Room
207 Harvard Avenue
Claremont, CA 91711
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Rolling Hills Estates City Hall
Conference Room
4045 Palos Verdes Drive North
Rolling Hills Estates, CA 90274
Thousand Oaks City Hall
City Manager’s Office, Council Office #1
2100 Thousand Oaks Blvd.
Thousand Oaks, CA 91362
CALL TO ORDER & ROLL CALL
Committee Chair Santangelo called the meeting to order at 11:00 a.m. and Gabriela Monzon, Board Clerk, conducted roll call.
Roll Call
Camarillo Susan Santangelo Committee Chair Remote
Carson Reata Kulcsar Committee Member Remote
Claremont Corey Calaycay Committee Member Remote
Rolling Hills Estates Steve Zuckerman Committee Member Remote Santa Monica Pam O’Connor Committee Member Absent
Thousand Oaks David Newman Committee Member Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
A written public comment was received.
CONSENT AGENDA
1. Approve Minutes from the March 22, 2023, Finance Committee Meeting
2. Approve Selection of Baker Tilly (a) to continue as the Independent Financial Auditor for CPA’s FY 2022/23 Financial Statements Audit and (b) to perform CPA’s FY 2022/23 Single Audit of California Arrearage Payment Program (CAPP) Funds Clean Power Alliance Finance Committee Page 2 of 3
April 26, 2023 Minutes
3. Receive and File March 2023 Risk Management Team Report
4. Receive and File March 2023 CPA Investment Report
5. Receive and File February 2023 Financial Dashboard
Motion: Committee Member Calaycay, Calaycay
Second: Committee Member Zuckerman, Rolling Hills Estates Vote: The consent agenda was approved by a roll call vote.
Regarding Item 1, Committee Member Zuckerman asked about the status of CPA’s line of credit.
David McNeil, Chief Financial Officer, explained that staff is in negotiations to increase CPA’s credit line with JP Morgan. Committee Member Kulcsar asked about best practices for audit firms, Mr. McNeil confirmed that state guidelines recommend rotating the auditing partner every six-years.
REGULAR AGENDA
6. Report from the Chief Financial Officer
David McNeil, Chief Financial Officer, reported that CPA recorded a loss in February but remains $3 million ahead of budget. The interim rates will result in a higher revenue for the balance of fiscal 22/23, and staff expects to record an increase in CPA’s net position for the fiscal year. Staff is currently updating CPA’s financial modeling and will present results at the May meeting. CPA is heading into the summer months in sound financial health.
Responding to Committee Member Zuckerman’s inquiry about the second prepay transaction, Mr. McNeil explained that due to market volatility, staff may not move forward with it until late May or June.
7. Review Fiscal Year 2023/24 Budget Priorities and Draft Operating Expenses David McNeil presented the FY 2023/24 budget priorities and draft operating expenses budget. Mr. McNeil reviewed the timeline of the budget process, explained CPA’s framework for financial management and cost control, identified the FY 23/24 operational priorities, and provided operating expense and staffing context. The total operating expense increase of 23% reflects operational priorities including investments in staffing and customer programs.
In response to Committee Member Zuckerman’s question about renewable energy and storage project development delays, Mr. McNeil indicated that project online dates are incorporated into CPA’s financial projections. Responding to Committee Member Kulcsar’s questions concerning billing data management services, Ted Bardacke, CEO, indicated that the contract with Calpine for billing services will end in 2025. CPA will subsequently issue a Request for Proposals; the exact functions to be insourced versus remain with an outside manager is still to be determined. Responding to Committee Member Zuckerman’s question about account receivables trends, Mr. McNeil noted that CPA’s commercial accounts receivable have stabilized; residential customer past due accounts continue to be elevated. Committee Member Kulcsar thanked staff and commented on the transparency and clarity of the detailed customer programs budgeting.
In response to Committee Member Newman’s question about the source of customer program funding, Mr. McNeil explained that the budget reflects CPA’s contribution, with state funding for the CALeVIP program flowing directly to the customers and not through CPA.
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April 26, 2023 Minutes
Mr. McNeil provided the staffing budgets for FY 2022/23 and FY 2023/24. Staff projects the operating expenses for staffing to increase by 43%, from 1.2% of the total revenue in FY 2022/23 to a still industry-leading 1.3% of revenue in the upcoming year; 24% of the draft staffing budget increase is for new positions. Mr. McNeil provided metrics and comparisons to other Community Choice Aggregations (CCA). Mr. Bardacke added that there are some organizational policy questions surrounding the retention incentive, and they will be discussed with the Executive Committee. Committee Member Kulcsar suggested more context about customer accounts be added to the comparison chart.
COMMITTEE MEMBER COMMENTS
None.
ADJOURN
Committee Chair Santangelo adjourned the meeting at 11:55 p.m.