MINUTES
Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, October 25, 2023, 11:00 a.m.
Meeting videos are available on CPA's YouTube Channel.
http://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
Clean Power Alliance
Executive Conference Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Claremont City Hall
Citrus Room
207 Harvard Avenue
Claremont, CA 91711
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
Rolling Hills Estates City Hall
Conference Room
4045 Palos Verdes Drive North
Rolling Hills Estates, CA 90274
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 Present
Thousand Oaks David Newman Committee Member Absent
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
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October 25, 2023 Minutes
CONSENT AGENDA
1. Approve Minutes from the September 27, 2023, Finance Committee Meeting
2. Receive and File September 2023 Risk Management Team Report
3. Receive and File September 2023 CPA Investment Report
4. Receive and File August 2023 Financial Dashboard
Motion: Committee Member Calaycay, Claremont
Second: Committee Member Zuckerman, Rolling Hills Estates Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
5. Report from the Chief Financial Officer
David McNeil, Chief Financial Officer, reported a gain of $20 million recorded during the first two months of FY 2023/24, which is below budget and primarily due to cooler than normal temperatures and lower revenues. Staff anticipates a favorable financial year. CPA has not drawn on the line of credit.
6. Receive Report from the Independent Auditor and Review FY 2022/2023 - Financial Statements and FY 2022/2023 Budget to Actual Report Bethany Ryers, Independent Auditor from Baker Tilly, presented the FY 2022/2023 audit report, noting no material issues with CPA’s reporting or internal controls.
There were no audit adjustments, findings, or concerns, and Baker Tilly agrees with CPA’s accounting policies and disclosures. Ms. Ryers reviewed future accounting standards that may affect CPA and thanked staff for their hard work and responsiveness.
Committee Member Zuckerman asked several questions about audit submissions, the Required Supplemental Information (RSI), and how prepay bonds are included in the audit. Ted Bardacke, CEO, clarified that the Board receives the audit, and it is posted on CPA’s website and becomes part of the credit profile, without further submission to an external agency. The RSI contains a narrative explanation and analysis of CPA’s financial performance, financial condition, and prospects. Ms.
Ryers noted that prepay bonds are not a financial liability for CPA and are referenced in the notes to the financial statements. Committee Member Kulcsar asked several questions on the auditing estimation, delinquent accounts, and audit consistency. Ms. Ryers explained that the financial audit estimation involves an assessment of the reasonableness of CPA’s financial statements and includes unbilled revenues and allowance of doubtful accounts. Ms. Ryers added that CPA’s audits have consistently adhered to governmental accounting standards.
Committee Members Zuckerman and Kulcsar inquired about the effectiveness of CPA’s internal controls. Ms. Ryers explained that the audit does not offer an opinion on internal controls, as its scope does not encompass identifying deficiencies. Consulting firms can perform more comprehensive internal control reviews if concerns arise.
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October 25, 2023 Minutes
Mr. McNeil provided a summary of CPA’s FY 2022/23 financial results, noting a “clean” audit opinion and an increase in net position and liquidity by $80.3 million and $162.8 million respectively, despite adverse events. Mr. McNeil reviewed the current and noncurrent assets and liabilities, the fiscal stabilization fund, and total net position. Mr. McNeil compared the FY 2022/23 base budget with the actual budget.
In response to Committee Member Zuckerman’s question, Mr. McNeil stated that no further California Arrearage Payment Program (CAPP) funds were expected.
Committee Member Zuckerman commented on CPA’s significant interest income; staff will explore investment options in Certificates of Deposits (CDs) to further enhance interest income. Committee Member Kulcsar asked questions about potential double counting and variable line of credit fees. Mr. McNeil clarified that CPA’s accounts receivable and accrued revenue would not be double counted.
CPA incurs a fixed non-utilization fee of 0.45% on the unused portion of its line of credit, with borrowed funds carrying a variable rate rate plus a fee.
COMMITTEE MEMBER COMMENTS
Committee Member Zuckerman and Chair Santangelo thanked staff and the auditing team for their clear audit report.
ADJOURN
Committee Chair Santangelo adjourned the meeting at 12:01 p.m.