Redwood Coast Energy Authority
633 3rd Street, Eureka, CA 95501
Phone: (707) 269-1700 Toll-Free (800) 931-RCEA Fax: (707) 269-1777 E-mail: [email protected] Web: www.redwoodenergy.org
BOARD FINANCE SUBCOMMITTEE MEETING AGENDA
NOTE: This is an in-person meeting with no online or phone participation.
Redwood Coast Energy Authority Office May 14, 2024
633 Third Street, Eureka, CA 95501 Tuesday, 2 - 3 p.m.
In compliance with the Americans with Disabilities Act, any member of the public needing special accommodation to participate in this meeting should call (707) 269-1700 or email [email protected] as soon as possible. Advance notice enables RCEA staff to make their best effort to reasonably accommodate access to this meeting while maintaining public safety.
Pursuant to Government Code section 54957.5, all writings or documents relating to any item on this agenda which have been provided to a majority of the Board Finance Subcommittee, including those received less than 72 hours prior to the RCEA Board meeting, will be made available to the public at www.RedwoodEnergy.org.
1. ROLL CALL. Committee Members: Scott Bauer, Skip Jorgensen, Sarah Schaefer, Frank Wilson. Staff: Director of Business Planning & Finance Lori Biondini; Interim Executive Director Eileen Verbeck.
2. ORAL AND WRITTEN COMMUNICATIONS. This item is provided for the public to address the Finance Subcommittee on matters not on the agenda. At the conclusion of all public statements, the Finance Subcommittee may respond. Any request that requires Finance Subcommittee action will be set by the Subcommittee to a future agenda or referred to staff.
3. APPROVAL OF MINUTES
A. Approve minutes of May 15, 2023, Board Finance Subcommittee meeting.
4. NEW BUSINESS
A. Subcommittee Chair Selection
Appoint an RCEA Finance Subcommittee Chair to serve a one-year term ending on the first regular Board of Directors meeting of 2025.
5. OLD BUSINESS
A. Fiscal Year 2024-25 Draft Budget
Provide guidance and input to staff on draft fiscal year 2024 - 2025 budget. 1 RCEA May 14, 2024, Board Finance Subcommittee Meeting Agenda
6. COMMITTEE AND STAFF COMMUNICATIONS. All communications shall be limited to RCEA business and shall not request or lead to action by the Subcommittee at this meeting.
7. FUTURE AGENDA ITEMS. Any request that requires Subcommittee action will be set by the Subcommittee for a future agenda or referred to staff.
8. FUTURE MEETING DATES.
A. May 23, 2024, RCEA Board of Directors meeting – Draft Budget Review and discussion.
B. May or June 2024, Board Finance Subcommittee meeting – Draft Budget Revision (if needed, date to be determined)
9. ADJOURNMENT.
2 Redwood Coast Energy Authority
633 3rd Street, Eureka, CA 95501
Phone: (707) 269-1700 Toll-Free (800) 931-RCEA Fax: (707) 269-1777 E-mail: [email protected] Web: www.redwoodenergy.org
BOARD FINANCE SUBCOMMITTEE
DRAFT MEETING MINUTES
Wednesday, May 15, 2023
4 p.m.
Notice of this meeting was posted on May 12, 2023. Deputy Executive Director Eileen Verbeck called a regular meeting of the RCEA Board Finance Subcommittee to order on the above date at 4:02 p.m. COMMITTEE MEMBERS PRESENT: Scott Bauer, Sarah Schaefer, Frank Wilson. ABSENT: Skip Jorgensen. STAFF PRESENT: Director of Business Planning & Finance Lori Biondini; Executive Director Matthew Marshall; Human Resources & Workforce Development Manager Kristy Siino; Deputy Executive Director Eileen Verbeck; Clerk of the Board Lori Taketa.
ORAL COMMUNICATIONS
Deputy Executive Director Verbeck confirmed that no member of the public was in attendance and no written comment was received, then closed the public comment period.
APPROVAL OF MINUTES
No member of the public commented on the draft minutes.
M/S: Schaefer, Wilson: Approve Minutes of May 16, 2022, Board Finance Subcommittee Meeting.
The motion passed with a unanimous voice vote. Ayes: Bauer, Schaefer, Wilson. Noes:
None. Absent: Jorgensen. Abstentions: None.
NEW BUSINESS – Subcommittee Chair Selection
No public comment was received on this agenda item.
M/S: Wilson, Bauer: Appoint Sarah Schaefer to serve as RCEA Finance Subcommittee Chair for a one-year term ending on the first regular Board of Directors meeting of 2024.
The motion passed with a unanimous voice vote. Ayes: Bauer, Schaefer, Wilson. Noes:
None. Absent: Jorgensen. Abstentions: None.
OLD BUSINESS – A. RCEA Fiscal Year 2022-2023 Q1 - Q3 Budget Report (Information only)
Business Development and Finance Director Biondini reported that the mid-year budget adjustment brought the actual revenues and expenses closer to projected amounts.
Expenses such as upcoming environmental attribute payments, the required power content label mailing, and the cost of leasing new office space will likely cause net income to fall slightly short of the projected amount at year’s end. No further budget adjustments were 3 RCEA May 15, 2023, DRAFT Board Finance Subcommittee Meeting Minutes
recommended. The group discussed the public’s confusion about solar customer billing changes and RCEA charges on their electricity bill. There was no public comment on this item.
OLD BUSINESS - B. Draft Salary and Benefit Update
Deputy Executive Director Verbeck described proposed salary and benefit adjustment proposals based on staff input, and their budget impacts. The group discussed the impacts of remote work on RCEA’s staff recruitment and retention, and benefits of adjusting salaries before they lag behind COLA increases.
The Directors recommended increasing staff salaries by14%, adding a 401(a) employer retirement contribution plan, contributing $4K to all staff’s 457(b) retirement plans and matching employee plan contributions up to 7%, adding flat rate longevity incentives and adding Juneteenth as a paid holiday. There was no public comment on this item.
OLD BUSINESS - C. Draft Fiscal Year 2023-2024 Budget
Executive Director Marshall, Deputy Executive Director Verbeck and Business Planning and Finance Director Biondini presented the draft 2023-2024 fiscal year budget. Rural Regional Energy Network funds were included as revenue. Most of the funds will pass through RCEA as the statewide energy efficiency program’s administrator. The draft budget expenses include make-up procurement to cover the Sandrini Solar project delays to April 2024, statewide RuralREN outreach efforts, new RCEA office building property acquisition and additional staff positions, some of which are needed for RuralREN work. The draft budget assumes RCEA maintains the 0.5% retail rate discount from PG&E rates and adds $9.8 million toward the agency’s reserve goal of $35 million. The group reviewed the agency’s path to reaching its five-year reserve goal of between $10 and 35 million dollars, including the pandemic period dip which nearly depleted reserves and the slow recovery to just above the minimum goal amount. Since 2017, RCEA saved Humboldt County ratepayers $6.2 million on their electricity bills. There were no public comments on this agenda item.
OLD BUSINESS - D. Update on RCEA’s Banking Account at First Republic Bank (Information only)
Business Planning and Finance Director Biondini reported that JP Morgan Chase acquired First Republic Bank. There were no public comments on this agenda item.
FUTURE MEETING DATES
Deputy Executive Director Verbeck confirmed the following meeting dates:
• Introduce draft budget at Board meeting - May 25, 2023, at 3:30 p.m. • Finance Subcommittee reviews Board-recommended budget changes - June 13, 2023, at 5 p.m. (If needed.)
• Final budget review/approval at Board meeting - June 22, 2023, at 3:30 p.m.
Chair Schaefer adjourned the meeting at 5:07 p.m.
Lori Taketa
Clerk of the Board
4 STAFF REPORT
Agenda Item # 4
AGENDA DATE: May 14, 2024
TO: Board Finance Subcommittee
PREPARED BY: Lori Taketa, Clerk of the Board
SUBJECT: Subcommittee Chair Selection
BACKGROUND
The RCEA Board of Directors created the standing Finance Subcommittee on January 28, 2019, “to meet as needed to work with staff and advise the Board of Directors on matters relating to audit, finance and budget.” Subcommittee members serve one-year terms ending on the first regular Board meeting of each year. Discussion prior to the subcommittee’s creation focused on the directors’ expressed desire to increase organizational transparency and Board member understanding of the agency’s finances.
Directors Scott Bauer, Skip Jorgensen, Frank Wilson, and Chair Sarah Schaefer volunteered to serve on this standing subcommittee at the Board’s January 24, 2024, meeting.
Staff recommends the subcommittee members appoint a chair to call meetings as needed.
STAFF RECOMMENDATION
Appoint an RCEA Finance Subcommittee Chair to serve a one-year term ending on the first regular Board of Directors meeting of 2025.
ATTACHMENT
None.
5
STAFF REPORT
Agenda Item # 5
AGENDA DATE: May 14, 2024
TO: Board of Directors Finance Subcommittee
PREPARED BY: Lori Biondini, Business Development & Finance Director Eileen Verbeck, Interim Executive Director
SUBJECT: Fiscal Year 2024-25 Preliminary Draft Budget
SUMMARY
Staff will provide a presentation on the preliminary draft budget at the meeting.
STAFF RECOMMENDATION
Provide guidance and input to staff on draft fiscal year 2024-2025 budget.
6 Fiscal Year 2024-25 Preliminary
Draft Budget Overview
Background
• As of January 2024, RCEA has provided $7.6M in cumulative rate payer savings. Proposed budget reflects 0.5% retail rate discount from PG&E rates.
• Calculated energy revenue and expense based on financial model from May 7, 2024.
• Based on expected decreases in PG&E rates and increased costs due to implementing Slice of Day Resource Adequacy purchasing, RCEA is expecting a negative net revenue for the next couple fiscal years. • Current cash on hand is about $23M.
Highlights: Energy Sales & Supply
Assumptions:
• Model A includes meeting the current renewable energy targets through short-term procurement pathways.
• Model B includes reducing voluntary procurement of renewable and carbon free energy to only meet state goals instead of RCEA Board adopted goals.
• Both Models include energy from the Sandrini Solar project coming on-line in October 2024.
Highlights: Personnel
• Includes freezing Finance Coordinator, Admin Specialist, Rural REN Manager and Rural REN Specialist vacancies.
• Accounts for 3-month vacancy in ED position.
• Includes maintaining the Analyst position in DSM. This position will seek out external program funding.
• Maintains all existing staff.
• Accounts for estimated increases of insurance and benefit costs.
Community of
Humboldt County
RCEA Board
Independent Auditors
Executive
Director*
Manager
Community
Strategies
Coordinator
Community
Strategies
Associate
Customer
Service
Director
Infrastructure
Planning & Operations
Manager
Infrastructure
Programs
Manager
Infrastructure
Programs
Specialist
Infrastructure
Director
Business Planning
& Finance
Manager
Finance
Coordinator
Admin
Manager
Contracts and
Grants
Specialist
Finance
Director
Power Resources
Manager
Power
Resources
Manager
Account
Services
Specialist
Power
Resources
Specialist
Power
Resources
Specialist
Power
Resources
Contractor
Wholesale Power
Procurement
&
Scheduling
Director
Demand-Side
Management
Manager
Direct Install, Energy
Efficiency, &
Conservation
Technician
Energy
Efficiency
Technician
Energy
Efficiency
Coordinator
Intake
Manager
Demand
Side
Projects
Manager
Demand Side
Projects
Technician
Energy
Efficiency
Specialist
Programs
Manager
Rural REN
Analyst
Rural REN
Specialist
Rural REN
Manager
Regulatory and
Legislative
Policy
General Counsel
Deputy
Executive
Director
Community
Advisory
Committee
Manager
Human Resources
& Workforce
Development
Specialist
Administration Technician
Information
Technology
Specialist
Executive
Support
Clerk of the
Board
Preliminary Bottom-line
*Current budget net revenue does not reflect actuals.
**Includes selling some renewable energy already procured.
Current Budget A
FY24-25
Preliminary Draft
B
FY24-25 Draft with
Reduction in
Environmental
Goals
Revenue $86.5M $70.3M $70.3M
Expenses $76.4M $76.1M $66.9M
Net Revenue $10.1M* -$5.8M $3.4M**
Projected Net Revenue
FY 25 FY 26 FY 27 Total
Model A –
Board Adopted
renewable &
carbon-free
targets
-$5.8M -$7M -$7.7M -$20.5M
Model B –
State
Renewables
Portfolio
Standard (RPS)
target
$3.4M* -$166K* -$2.8M -$434K
*Includes selling some renewable energy already procured.
Revenue
Current Budget A
FY24-25
Preliminary Draft
B
FY24-25 Draft with
Reduction in
Environmental
Goals
Electricity
Sales
$85.3M $68.5M $68.5M
Grants and
Contracts
$1M $1.78M $1.78M
Program
Related
Service Fees
(EV charging
use, FIT
application
fees)
$121,900 $60,000 $60,000
Expenses
Current
Budget
A
FY24-25
Preliminary Draft
B
FY24-25 Draft with
Reduction in
Environmental
Goals
Wholesale Power Supply $65.4M $65M $55.9M
Personnel $5.1M $5.2M $5.2M
Facilities and Operations $1.5M $934,766 $934,766
Communication and
Outreach
$160,485 $114,900 $114,900
Professional and Program
Services
$3.3M $3.9M $3.9M
Program Expenses $290,014 $302,714 $302,714
Incentives and Rebates $402,575 $150,000 $150,000
Non-Operating Costs $129,500 $129,000 $129,000
Changes/Highlights: Other
Reduced overall Department requests by $2.3M including:
• Funds were removed for Building Design ($1.2M based on quotes).
• Program budget for incentives/rebates was reduced by
$330,000.
Incentive and Rebate Budget Department Request
Residential Incentive and
Rebates by Program
Average Per
Customer
Rebate
Number of
Customers
Served
Total
Request
Equipment rebates* 300 267 $80,000
Heat Pump Rebates** 1000 80 $80,000
Residential Kits 75 533 $40,000
NBT Battery Storage Incentive (low
income) 3500 10 $35,000
NBT Battery Storage Incentive 2500 40 $100,000
Misc Programs (tool lending/
induction stove) 250 20 $5,000
Electric Vehicle 2250 27 $60,000
Electric Bike 615 98 $60,000
Total 1074 $460,000
*This fiscal year to date we have issued 145 equipment rebates for a total of $28,340
**This fiscal year to date we have issued 106 heat pump rebates for a total of $112,000
Incentive and Rebate Budget Cuts
Proposed Reduction
Residential Incentive and
Rebates by Program
Average Per
Customer
Rebate
Number of
Customers
Served Total Request
Equipment rebates 300 67 $20,000
Heat Pump Rebates 1000 30 $30,000
Residential Kits 75 100 $7,500
NBT Battery Storage Incentive
(low income) 3500 5 $17,500
NBT Battery Storage Incentive 2500 10 $25,000
Misc Programs (tool lending/
induction stove) 250 0 $0
Electric Vehicle 2250 13 $30,000
Electric Bike 615 33 $20,000
Total 304 $150,000
Progress on Building Cash on Hand/ Reserves
Rural REN Implications FY 2024-2025
• We are still awaiting a decision from CPUC on our Rural REN. • All Rural REN funds haven been taken out.
• If awarded, a portion of the revenue will offset current personnel and programmatic costs being funded by CCE-DSM General budget. • If not awarded staff will either:
• Reapply for Rural REN with a smaller geographic region or • Apply for CPUC energy efficiency funds through the Elect to Administer or Apply to Administer programs.
Summary of Grant Funding Pursuits
• DOE Renew America Schools – Potential $300,000 in the next year to fund staff time to develop a strategic plan. Phase 2 and 3 would be $8M to $15M for fund energy improvement projects at local schools. • DOE TERAS Grant – Microgrid development with Tribal Partners. A total of $6M to RCEA to fund staff and consultants over 5 years. • PG&E Resilience Hubs - $100,000 toward design of resilience hub (Food for People).
• Funding to offset overages for CEC EV network project.
Board Direction to Staff
• Should staff present the reduction in renewable portfolio and carbon free voluntary procurement to the Board.
• Should staff further reduce program offerings (including a reduction in full-time and part-time staff).
• Should staff present rate options to the Board including alleviating the discount and/or cost of service rates.
Board Direction to Staff
• Draft budget presented to Board May 23
• Determine date of next Finance Subcommittee prior to June 27 Board meeting for additional review/input
• Final proposed budget presented to Board June 27