Finance & Risk
Management
Committee
Meeting
February 9, 2023
Welcome
&
Call to
Order
New FRMC Members:
Representatives from Chula Vista,
Imperial Beach and La Mesa
SDCP
Welcomes
You!
Roll
Call
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
Welcome
Roll Call
Public Comment for items
Not on the Agenda
Items to be Added,
Withdrawn or Reordered
on the Agenda
REGULAR AGENDA
1. Treasurer’s Report for Period
Ending 12/31/22
2. Approval of Fiscal Year (FY)
2022-23 Budget Amendment
Committee Member
Announcements
Adjournment
Regular
Meeting
Agenda
8 Item 1
Treasurer’s Report for Period Ending 12/31/22
Recommendation: Receive and File Treasurer’s
Report for Period Ending 12/31/22
Presenter:
Dr. Eric Washington,
Chief Financial Officer
9 Results for the period underperformed overall
compared to the adopted budget:
• Net operating revenues 7.0 percentage
points over budget.
• Operating expenses came in 12.0
percentage points over budget
Financial results for the YTD FY23:
• $446.5M in net operating revenues
• $434.67M in total expenses (includes
energy costs of $422.52M or 95% of net
revenues)
• $11.84M change in YTD net position
Item 1: Treasurer’s Report
YTD FY23 Budget v. Actual
10 Item 1: Treasurer’s Report
Year-to-date financial results compared to
projections:
• Net operating revenues were 7.18%
higher than proforma projections
• Total expenses were 11.33% over the
proforma projections
• Change in net position was $14.31M
under the projected
YTD FY23 Proforma v. Actual
11 Item 1: Treasurer’s Report
$27.5M $19.2M
$57.1M $49.3M
$31.4M $45.2M $46.7M
$30.0M
$35.0M
$35.0M
$18.7M $36.7M
$23.0M
$16.5M $26.5M
$26.5M
$62.5M
$54.2M
$75.7M $85.9M
$54.4M $61.6M $73.2M
$56.5M
$0.0M
$20.0M
$40.0M
$60.0M
$80.0M
$100.0M
$120.0M
$140.0M
$160.0M
$180.0M
12/31/2021 1/31/2022 7/31/2022 8/31/2022 9/30/2022 10/31/2022 11/30/2022 12/31/2022 Year-to-Date Reserves FY 2023
Unrestricted Cash Lines of Credit Reserve Goal Total Reserves RESERVE GOAL: $171.3M
12 $M $50M $100M
Reserves
18%
Lines
of
Credit
15% Unmet Reserves
67%
$56M
Total Liquidity
FY 2022-23 YTD
$24M
Outstanding
Debt
FY 2022-23 YTD
$M $20M $40M $60M
$12M
Reserve
Contribution
FY 2022-23 YTD
18%
Percent Reserve
Goal Met
FY 2022-23
Item 1: Treasurer’s Report CONTRIBUTION LIQUIDITY GOAL DEBT Reserve contribution
for the fiscal year
Outstanding loans
FY23 YTD
City Loans
Total available liquidity
FY23 YTD
$12M - Actual
$27M - Budget $24M - Budget
$107M - Goal
LOC
$M $20M $40M $60M $80M
Unrestricted
Cash LOC $56M
$171M Reserve
Target FY23
13 Item 1
Recommendation: Receive and File Treasurer’s
Report for Period Ending 12/31/22
14 Item 2
Approval of Fiscal Year (FY) 2022-23 Budget
Amendment
Recommendation: Recommend Board approval of
the FY 2022-23 Amended Budget to reflect total
operating revenues of $929,791,929 and operating
expenses of $769,021,035.
Presenter:
Dr. Eric Washington,
Chief Financial Officer
15 Proposed FY 2022-23 Amended Budget
Net Operating Revenue
FY 2023
$709.0 m
Total Expense
$695.9 m
Net Position
+$13.0 m
Net Operating Revenue
$929.8 m
FY 2023 Amended
Total Expense
$769.0 m
Net Position
+$160.8 m
16 Proposed FY 2022-23 Amended Budget
Net Operating Revenue
FY 2023
$709.0 m
Total Expense
$695.9 m
Net Position
+$13.0 m
Net Operating Revenue
$929.8 m
FY 2023 Amended
Total Expense
$769.0 m
Net Position
+$160.8 m
+$220.8 million
Approved rate change,
effective February 1, 2023
+$73.1 million
Higher energy costs,
small non-energy changes
+$147.8 million
Increase in net income
over adopted budget
17 Proposed FY 2022-23 Budget - Changes
Budget Changes by Category
Revenue
Cost of Energy
Board approved rate change, effective 2/1/22 which increased projected revenue.
Increased market power costs affecting all participants and in cost of market power supply.
Adopted
$729.0m
Adopted
$661.6m
Professional
Services
Personnel
Marketing and
Outreach
General and
Administrative
Amended
$929.8m
Amended
$738.8m
Use of professional services
was as budgeted.
Adopted
$16.9m
Amended
$16.4m
Longer than expected lead
times to hire new positions.
Adopted
$8.0m
Amended
$6.9m
Right-sizing printing costs. Adopted
$4.2m
Amended
$3.5m
Decrease mostly due to
recategorization to energy costs.
Adopted
$2.6m
Amended
$1.4m
Operating Income
+$147.8 m
Programs Slight decrease due to
recategorization to professional
services.
Adopted
$1.4m
Amended
$1.2m
Adopted Amended
18 Budget Amendment - Details
Item FY 23 Adopted
Budget, $M
FY 23 Amended
Budget, $M Difference
Gross Revenue 716.1 939.2 223.1
Less Uncollectible Accounts (7.2) (9.4) (2.2)
Net Revenue 709.0 929.8 220.8
Cost of Energy 661.6 738.8 77.2
Non-Energy Costs 33.0 29.3 (3.7)
Subtotal Operating Expense 694.6 768.1 72.9
Debt Service 1.3 1.0 0.3
Total Expense 695.9 769.0 72.9
Net Position 13.0 160.8
Cumulative Net Position 55.5 203.3
Days Cash on Hand 29.2 96.6
Budget Development Timeline
The adopted schedule for budget development is the
following.
Develop Operating
Revenue Estimate
Develop Operating
Expense Estimate
Develop financial
plan for credit rating
February March-April
Strategic planning
sessions with SDCP
Board
Staff develop
operating budgets
Baseline budget is
developed
May
FRMC Preview and
Recommend
SDCP Board Preview
and feedback
June
SDCP Board Approval July 1st Budget
Implemented
Mid-year budget
review (February)
Budget amendments
as necessary
20 Item 2
Recommendation: Recommend Board approval of
the FY 2022-23 Amended Budget to reflect total
operating revenues of $929,791,929 and operating
expenses of $769,021,035.
Adjournment
Next Regular
Finance & Risk
Management
Committee
Meeting
March 16, 2023