AGENDA – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 1 AGENDA
Meeting of the Finance and Risk Management Committee
San Diego Community Power (SDCP)
May 12, 2022
3:00 p.m.
The meeting will proceed as a teleconference meeting in compliance with waivers to certain provisions of the Brown Act provided for under Government Code section 54953(e)(1)(A), in relation to the COVID-19 State of Emergency and recommended social distancing measures. There will be no location for in-person attendance. In compliance with the Brown Act, SDCP is providing alternatives to in-person attendance for viewing and participating in the meeting. Further details are below.
Note: Any member of the public may provide comments to the Finance and Risk Management Committee (FRMC) on any agenda item. When providing comments to the FRMC, it is requested that you provide your name and city of residence for the record. Commenters are requested to address their comments to the FRMC as a whole through the Chair. Comments may be provided in one of the following manners:
1. Providing Oral Comments During Meeting. To provide comments during the meeting, join the Zoom meeting by computer, mobile phone, or dial-in number. On Zoom video conference by computer or mobile phone, use the “Raise Hand” feature. This will notify the moderator that you wish to speak during a specific item on the agenda or during non-agenda Public Comment.
Members of the public will not be shown on video but will be able to speak when called upon. If joining the meeting using the Zoom dial-in number, you can raise your hand by pressing *9.
Comments will be limited to three (3) minutes.
2. Written Comments. Written public comments must be submitted prior to the start of the meeting by using this (web form). Please indicate a specific agenda item when submitting your comment.
All written comments received prior to the meeting will be provided to the FRMC members in writing. In the discretion of the Chair, the first ten (10) submitted comments shall be stated into the record of the meeting. Comments read at the meeting will be limited to the first 400 words.
Comments received after the start of the meeting will be collected, sent to the FRMC members in writing, and be part of the public record.
If you have anything that you wish to be distributed to the FRMC, please provide it via [email protected], who will distribute the information to the Members.
The public may participate using the following remote options:
Teleconference Meeting Webinar
https://zoom.us/j/93476863568
AGENDA – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 2 Telephone (Audio Only)
(669) 900-6833 or (253) 215-8782 | Webinar ID: 934 7686 3568 Welcome
Roll Call
Public Comment for Items Not on the Agenda
Items to be Added, Withdrawn, or Reordered on the Agenda
MEETING AGENDA
1. Report on Treasurer’s Report for Period Ending 3/31/22 Recommendation: Receive and File Treasurer’s Report for Period Ending 3/31/22 Committee Member Announcements
Committee Members may briefly provide information to other members and the public. There is to be no discussion or action taken on comments made by Directors unless authorized by law.
Adjournment
Availability of Committee Documents
Copies of the agenda and agenda packet are available at https://sdcommunitypower.org/resources/meeting-notes/. Late-arriving documents related to a FRMC meeting item which are distributed to a majority of the Members prior to or during the FRMC meeting are available for public review as required by law. Previously, public records were available for inspection at San Diego Community Power, Moniker Commons located at 2869 Historic Decatur Road San Diego, CA 92106. However, due to the Governor’s Executive Orders N-25-20 and N-29-20 and the need for social distancing, in-person inspection is now suspended. Public records, including agenda-related documents, can instead be requested electronically at [email protected] or by mail to SDCP at, 815 E Street, Suite 12716, San Diego, CA 92112. The documents may also be posted at the above website.
SAN DIEGO COMMUNITY POWER
Staff Report – Item 1
-------------------------------------------------------------------------------------------------------------------- To: Financial and Risk Management Committee
From: Eric W. Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Treasurer’s Report –Presentation of Financial Results for Fiscal Year 2022 Period ended 3/31/22
Date: May 12, 2022
--------------------------------------------------------------------------------------------------------------------
RECOMMENDATION
Receive and File Report
BACKGROUND
San Diego Community Power (SDCP) maintains its accounting records on a full accrual basis in accordance with Generally Accepted Accounting Principles (GAAP) as applicable to governmental enterprise funds.
SDCP has prepared year-to-date financial statements for the period ended March 31, 2022, along with budgetary comparisons.
ANALYSIS AND DISCUSSION
Financial results for the period ended 3/31/22: $251.38 million in net operating revenues were reported compared to $253.50 million budgeted for the period. $245.79 million in total expenses were reported (including $239.80 million in energy cost) compared to $249.86 million budgeted for the period (including $242.31 million budgeted for energy costs). After expenses, SDCP’s change in net position of $5.59 million was reported for Fiscal Year 2022. The following is a summary of the actual results compared to the Fiscal Year 2022 Budget.
• Net operating revenues finished -$2.12 million (or -0.8 percentage points) under the amended budget primarily as a result of a timing differential related to billing.
Budget Comparison
YTD FY22 as of
3/31/22 (9 mos)
FY22 YTD
Budget
Budget
Variance ($) Budget (%)
Net Operating Revenues $ 251,375,501 $ 253,498,793 $ (2,123,292) 99 Total Expenses $ 245,788,242 $ 249,855,356 $ (4,067,114) 98 Change in Net Position $ 5,587,259 $ 3,643,437 $ 1,943,822 • Operating expenses finished -$4.07 million (or -1.6 percentage points) under the amended budget
Financial results for the period were over the projections presented in the year-to-date proforma. SDCP’s change in net position was 27.92% over the projection primarily due to lower-than projected energy costs. This was partially offset by lower-than expected net operating revenue.
The following is a summary to actual results compared to the fiscal year-to-date proforma.
FISCAL IMPACT
N/A
ATTACHMENTS
Attachment A: 2022 Year-to-Date Period Ended 3/31/22 Financial Statements Proforma Comparison
YTD FY22 as of
3/31/22 (9 mos)
FY22 YTD
ProForma
ProForma
Variance ($) Proforma (%)
Net Operating Revenues $ 251,375,501 $ 253,054,678 $ (1,679,177) -0.66% Total Expenses $ 245,788,242 $ 248,686,920 $ (2,898,678) -1.17% Change in Net Position $ 5,587,259 $ 4,367,758 $ 1,219,501 27.92% $-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY22 Results v. Proforma
YTD FY22 as of 3/31/22 (9 mos) FY22 YTD ProForma
1 ACCOUNTANTS’ COMPILATION REPORT
Management
San Diego Community Power
Management is responsible for the accompanying financial statements of San Diego Community Power (a California Joint Powers Authority) which comprise the statement of net position as of March 31, 2022, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
April 28, 2022
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents 6,512,357 $
Accounts receivable, net 20,229,932
Accrued revenue 14,278,465
Prepaid expenses 818,878
Deposits 6,012,057
Total current assets 47,851,689
Noncurrent assets
Restricted cash 10,000,000
Deposits 3,450,000
Total noncurrent assets 13,450,000
Total assets 61,301,689
Current liabilities
Accrued cost of energy 39,351,938
Accounts payable 815,108
Other accrued liabilities 413,942
Security deposits 754,000
Interest payable 70,256
Total current liabilities 41,405,244
Noncurrent liabilities
Other noncurrent liabilities 517,741
Bank note payable 22,840,082
Loans payable 5,000,000
Total noncurrent liabilities 28,357,823
Total liabilities 69,763,067
Unrestricted (8,461,378)
Total net position (deficit) (8,461,378) $
NET POSITION
SAN DIEGO COMMUNITY POWER
STATEMENT OF NET POSITION
As of March 31, 2022
ASSETS
LIABILITIES
See accountants' compilation report. 2
OPERATING REVENUES
Electricity sales, net 251,375,501 $
OPERATING EXPENSES
Cost of energy 239,801,680
Contract services 1,788,762
Staff compensation 2,351,528
General and administration 1,400,744
Total operating expenses 245,342,714
Operating income 6,032,787
NONOPERATING EXPENSES
Interest and financing expense 445,528
Nonoperating expenses 445,528
CHANGE IN NET POSITION 5,587,259
Net position at beginning of period (14,048,637)
Net position at end of period (8,461,378) $
SAN DIEGO COMMUNITY POWER
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
Nine Months Ended March 31, 2022
See accountants' compilation report. 3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 231,001,249 $
Receipts of supplier security deposits 184,000
Other operating receipts 5,596,638
Payments to suppliers for electricity (218,041,178)
Payments for goods and services (3,086,717)
Payments to employees for services (2,289,392)
Payments for deposits and collateral (6,573,708)
Payments for state surcharges (560,365)
Net cash provided (used) by operating activities 6,230,527
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Interest and related expense payments (438,736)
Net cash provided (used) by non-capital
financing activities (438,736)
Net change in cash and cash equivalents 5,791,791
Cash and cash equivalents at beginning of period 10,720,566 Cash and cash equivalents at end of period 16,512,357 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) 6,512,357
Restricted cash 10,000,000
Cash and cash equivalents 16,512,357 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS
Nine Months Ended March 31, 2022
See accountants' compilation report. 4
Operating income 6,032,787 $
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities
Provision for uncollectible accounts 2,539,146
(Increase) decrease in:
Accounts receivable (21,652,957)
Accrued revenue (2,058,156)
Other receivables 4,043,272
Prepaid expenses (818,878)
Deposits (5,562,057)
Increase (decrease) in:
Accrued cost of electricity 23,207,217
Accounts payable 452,826
Other accrued liabilities 75,977
Due to State of California 237,350
Supplier security deposits (266,000)
Net cash provided (used) by operating activities 6,230,527 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS (continued)
Nine Months Ended March 31, 2022
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
See accountants' compilation report. 5
1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
San Diego Community Power
Management is responsible for the accompanying special purpose statement of San Diego Community Power (SDCP), a California Joint Powers Authority, which comprise the budgetary comparison schedule for the period ended March 31, 2022, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.
The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of SDCP.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
SDCP’s annual audited financial statements will include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows.
Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to SDCP because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
April 28, 2022
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 2021/22
YTDAmended
Budget
2021/22 YTD
Actual
2021/22 YTD
Amended
Budget
Variance
(Under) Over
2021/22
YTD
Actual/
Amended
Budget %
2021/22 Annual
Amended
Budget
2021/22
Amended
Budget
Remaining
REVENUES AND OTHER SOURCES Gross Ratepayer Revenues 255,351,504 253,914,647 $ (1,436,857) 99% 380,816,532 $ 126,901,885 $ Less Uncollectible Customer Accounts (1,852,711) (2,539,146) (686,435) 137% (2,763,026) (223,880) Total Revenues and Other Sources 253,498,793 251,375,501 (2,123,292) 378,053,506 126,678,005 OPERATING EXPENSES Cost of Energy 242,309,646 239,801,680 (2,507,966) 99% 329,517,592 89,715,912 Personnel Costs 2,711,092 2,351,528 (359,564) 87% 4,023,175 1,671,647 Professional Services and Consultants 2,416,754 1,450,872 (965,882) 60% 5,126,016 3,675,144 Marketing and Outreach 1,144,311 1,061,205 (83,106) 93% 1,748,699 687,494 General and Administrative 539,605 677,429 137,824 126% 783,581 106,152 Total Operating Expenses 249,121,408 245,342,714 (3,778,694) 341,199,063 95,856,349 Operating Income (Loss) 4,377,385 6,032,787 1,655,402 36,854,443 30,821,656 NON-OPERATING REVENUES (EXPENSES) Debt Service and Bank Fees (733,948) (445,528) 288,420 61% (978,000) (532,472) Total Non-Operating Revenues (Expenses) (733,948) (445,528) 288,420 (978,000) (532,472) CHANGE IN NET POSITION $ 5,587,259 3,643,437 $ 1,943,822 $ 35,876,443 $ 30,289,184 $
SAN DIEGO COMMUNITY POWER
BUDGETARY COMPARISON SCHEDULE
Nine Months Ended March 31, 2022