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)
September 1, 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 public attendance. In compliance with the Brown Act, SDCP is providing alternatives to in-person public attendance for viewing and participating in the meeting. Further details are below.
Note: Any member of the public may provide comments to the Board of Directors on any agenda item.
When providing comments to the Board, it is requested that you provide your name and city of residence for the record. Commenters are requested to address their comments to the Board 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. Please be aware that the Chair has the authority to reduce equally each speaker's time to accommodate a large number of speakers.
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 Board 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 Board 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 Telephone (Audio Only) (669) 900-6833 or (253) 215-8782 | Webinar ID: 934 7686 3568 AGENDA – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 2 Welcome
Roll Call
Public Comment for Items Not on the Agenda
Items to be Added, Withdrawn, or Reordered on the Agenda
MEETING AGENDA
1. Treasurer’s Report for Fiscal Year-End Period Ending 6/30/22 Recommendation: Receive and File Treasurer’s Report for Fiscal Year-end Period Ending 6/30/22
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, 2488 Historic Decatur Road, Suite 250, 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 & Operations Officer/Treasurer Via: Karin Burns, Chief Executive Officer
Subject: Treasurer’s Report – For Fiscal Year End Period ended 6/30/22 Date: September 1, 2022
--------------------------------------------------------------------------------------------------------------------
RECOMMENDATION
Receive and file treasurer’s report to the fiscal year end period ending 6/30/22
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 its unaudited year- end financial statements for the period ended June 30, 2022, along with budgetary comparisons.
ANALYSIS AND DISCUSSION
Unaudited financial results for the year-end period ended 6/30/22: $383.80 million in net operating revenues were reported compared to $378.05 million budgeted for the period. $327.24 million in total expenses were reported (including $317.25 million in energy costs) compared to $342.18 million budgeted for the period (including $329.52 million budgeted for energy costs). After expenses, SDCP’s change in net position of $56.58 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 $5.76 million (or 1.5 percentage points) over the amended budget primarily due opt outs performing better than projected. • Operating expenses finished -$14.94 million (or -4.4 percentage points) under the amended budget primarily due savings from hedging activities.
Budget Comparison
YTD FY22 as of
6/30/22 (12 mos)
FY22 YTD
Budget
Budget
Variance ($) Budget (%)
Net Operating Revenues $ 383,814,801 $ 378,053,506 $ 5,761,295 102 Total Expenses $ 327,235,212 $ 342,177,063 $ (14,941,851) 96 Change in Net Position $ 56,579,589 $ 35,876,443 $ 20,703,146 Unaudited financial results for the period performed better than the projections presented in the year-to-date proforma. SDCP’s change in net position performed 36.1% better than the projection primarily and similarly due to better opt-out performance and to lower-than projected energy costs as a result of hedging activities.
The following is a summary to actual results compared to the fiscal year-to-date proforma.
FISCAL IMPACT
N/A
ATTACHMENTS
Attachment A: 2022 Fiscal Year-end Period Ended 6/30/22 Unaudited Financial Statements
Proforma Comparison
YTD FY22 as of
6/30/22 (12 mos)
FY22 YTD
ProForma
ProForma
Variance ($) Proforma (%)
Net Operating Revenues $ 383,814,801 $ 374,777,530 $ 9,037,271 2.41% Total Expenses $ 327,235,212 $ 333,195,322 $ (5,960,110) -1.79% Change in Net Position $ 56,579,589 $ 41,582,208 $ 14,997,381 36.07% $-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY22 Results v. Proforma
YTD FY22 as of 6/30/22 (12 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 June 30, 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. San Diego Community Power’s annual audited financial statements 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 the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
August 8, 2022
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents 57,076,718 $
Accounts receivable, net 50,386,990
Accrued revenue 46,939,615
Prepaid expenses 4,461,308
Deposits 6,241,057
Total current assets 165,105,688
Noncurrent assets
Restricted cash 12,500,000
Deposits 3,450,000
Total noncurrent assets 15,950,000
Total assets 181,055,688
Current liabilities
Accrued cost of energy 57,231,504
Accounts payable 624,955
Other accrued liabilities 740,006
State surcharges payable 332,586
Security deposits 42,624,000
Interest payable 113,862
Loans payable 5,000,000
Total current liabilities 106,666,913
Noncurrent liabilities
Other noncurrent liabilities 517,741
Bank note payable 31,340,082
Total noncurrent liabilities 31,857,823
Total liabilities 138,524,736
Unrestricted 42,530,952
Total net position 42,530,952 $
NET POSITION
SAN DIEGO COMMUNITY POWER
STATEMENT OF NET POSITION
As of June 30, 2022
ASSETS
LIABILITIES
See accountants' compilation report. 2
OPERATING REVENUES
Electricity sales, net 383,800,198 $
Liquidated damages 2,437,500
Total operating revenues 386,237,698
OPERATING EXPENSES
Cost of energy 319,686,027
Contract services 3,520,098
Staff compensation 3,662,441
General and administration 2,098,031
Total operating expenses 328,966,597
Operating income 57,271,101
NON-OPERATING REVENUES (EXPENSES)
Investment income 14,603
Interest and financing expense (706,115)
Nonoperating revenues (expenses) (691,512)
CHANGE IN NET POSITION 56,579,589
Net position at beginning of period (14,048,637)
Net position at end of period 42,530,952 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
Twelve Months Ended June 30, 2022
See accountants' compilation report. 3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 300,940,324 $
Receipts from liquidated damages 2,437,500
Receipts of supplier security deposits 42,204,000
Other operating receipts 6,801,249
Payments to suppliers for electricity (284,842,750)
Payments for goods and services (5,114,220)
Payments to employees for services (3,407,133)
Payments for deposits and collateral (7,212,708)
Payments for state surcharges (808,996)
Net cash provided (used) by operating activities 50,997,266
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Proceeds from loans 8,500,000
Interest and related expense payments (655,717)
Net cash provided (used) by non-capital
financing activities 7,844,283
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 14,603
Net change in cash and cash equivalents 58,856,152
Cash and cash equivalents at beginning of period 10,720,566 Cash and cash equivalents at end of period 69,576,718 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) 57,076,718
Restricted cash 12,500,000
Cash and cash equivalents 69,576,718 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS
Twelve Months Ended June 30, 2022
See accountants' compilation report. 4
Operating income 57,271,101 $
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities
Provision for uncollectible accounts 3,876,770
(Increase) decrease in:
Accounts receivable (53,147,639)
Accrued revenue (34,719,306)
Other receivables 4,043,272
Prepaid expenses (4,461,308)
Deposits (5,791,057)
Increase (decrease) in:
Accrued cost of electricity 41,086,784
Accounts payable 262,672
Other accrued liabilities 650,672
State surcharges payable 321,305
Supplier security deposits 41,604,000
Net cash provided (used) by operating activities 50,997,266 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS (continued)
Twelve Months Ended June 30, 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 budgetary comparison schedule of San Diego Community Power (SDCP), a California Joint Powers Authority, for the period ended June 30, 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
August 8, 2022
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 2021/22 YTD
Amended
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
Variance
(Under) Over
REVENUES AND OTHER SOURCES Gross Ratepayer Revenues 380,816,532 387,676,968 $ 6,860,436 102% 380,816,532 $ 6,860,436 $ Less Uncollectible Customer Accounts (2,763,026) (3,876,770) (1,113,744) 140% (2,763,026) (1,113,744) Total Revenues and Other Sources 378,053,506 383,800,198 5,746,692 378,053,506 5,746,692 OPERATING EXPENSES Cost of Energy 329,517,592 317,248,527 (12,269,065) 96% 329,517,592 (12,269,065) Personnel Costs 4,023,175 3,662,441 (360,734) 91% 4,023,175 (360,734) Professional Services and Consultants 5,126,016 2,959,622 (2,166,394) 58% 5,126,016 (2,166,394) Marketing and Outreach 1,748,699 1,698,601 (50,098) 97% 1,748,699 (50,098) General and Administrative 783,581 828,756 45,175 106% 783,581 45,175 Total Operating Expenses 341,199,063 326,397,947 (14,801,116) 341,199,063 (14,801,116) Operating Income (Loss) 36,854,443 57,402,251 20,547,808 36,854,443 20,547,808 NON-OPERATING REVENUES (EXPENSES) Investment income - 14,603 14,603 - 14,603 Debt Service and Bank Fees (978,000) (837,265) 140,735 86% (978,000) 140,735 Total Non-Operating Revenues (Expenses) (978,000) (822,662) 155,338 (978,000) 155,338 CHANGE IN NET POSITION $ 56,579,589 35,876,443 $ 20,703,146 $ 35,876,443 $ 20,703,146 $
SAN DIEGO COMMUNITY POWER
BUDGETARY COMPARISON SCHEDULE
Twelve Months Ended June 30, 2022