AGENDA – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 1 Appro
AGENDA
Meeting of the Finance and Risk Management Committee
San Diego Community Power (SDCP)
September 14, 2023
3:00 p.m.
City of San Diego Metropolitan Operations Complex (MOC II) Auditorium 9192 Topaz Way, San Diego, CA 92123
The meeting will be held in person at the above date, time and location. Finance and Risk Management Committee (FRMC) Members and members of the public may attend in person. Under certain circumstances, FRMC Members may also attend and participate in the meeting virtually pursuant to the Brown Act (Gov. Code § 54953). As a convenience to the public, SDCP provides a call-in option and internet-based option for members of the public to virtually observe and provide public comments at its meetings. Additional details on in-person and virtual public participation are below. Please note that, in the event of a technical issue causing a disruption in the call-in option or internet-based option, the meeting will continue unless otherwise required by law, such as when an FRMC Member is attending the meeting virtually pursuant to certain provisions of the Brown Act.
Note: Any member of the public may provide comments to the Finance and Risk Management Committee 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. Anyone attending in person desiring to address the FRMC is asked to fill out a speaker’s slip and present it to the Clerk of the Board or the Secretary. To provide remote 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 Comment 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.
AGENDA – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 2 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 Welcome
Call to Order
Roll Call
Pledge of Allegiance
Items to be Added, Withdrawn, or Reordered on the Agenda Public Comments for Items Not on the Agenda
Opportunity for members of the public to address the Board on any items not on the agenda but within the jurisdiction of the Board. Members of the public may provide a comment in either manner described above.
MEETING AGENDA
1. Approval of June 8, 2023 Meeting Minutes
Recommendation: Approve the June 8, 2023 Meeting Minutes
2. Review of Treasurer’s Report for Period Ending 6/30/23 Recommendation: Receive and File Treasurer’s Report for Period Ending 6/30/23
3. Review of Treasurer’s Report for Period Ending 7/31/23 Recommendation: Receive and File Treasurer’s Report for Period Ending 7/31/23 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
Copies of the agenda and agenda packet are available at https://sdcommunitypower.org/resources/meeting-notes/. Late-arriving documents related to a Board meeting item which are distributed to a majority of the Members prior to or during the Board meeting are available for public review as required by law. Public records, including agenda-related documents, can be requested electronically at [email protected] or by mail to SDCP, PO BOX 12716, San Diego, CA 92112. The documents may also be posted at the above website.
Such public records are also available for inspection, by appointment, at San Diego Community Power, 2488 Historic Decatur Road, Suite 250, San Diego, CA 92106. Please contact [email protected] to arrange an appointment.
MINUTES – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 1 FINANCE AND RISK MANAGEMENT COMMITTEE
SAN DIEGO COMMUNITY POWER (SDCP)
City of San Diego Metropolitan Operations Complex (MOC II) Auditorium 9192 Topaz Way
San Diego, CA 92123
MINUTES
June 8, 2023
The Committee minutes are prepared and ordered to correspond to the Committee Agenda.
Agenda Items can be taken out of order during the meeting.
The Agenda Items were considered in the order presented.
WELCOME
CALL TO ORDER
Chair McCann (Chula Vista) called the Finance and Risk Management Committee meeting to order at 3:01 p.m.
ROLL CALL
PRESENT: Chair McCann (Chula Vista), Alternate Director Fisher (Imperial Beach), Director Parent (La Mesa)
ABSENT: None
Also Present: Chief Financial Officer (“CFO”)/Treasurer Washington, General Counsel Baron, City Clerk Wiegelman
PLEDGE OF ALLEGIANCE
Chair McCann (Chula Vista) led the Pledge of Allegiance.
ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED ON THE AGENDA There were no items to be added, withdrawn, or reordered.
MINUTES – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 2 PUBLIC COMMENTS FOR ITEMS NOT ON THE AGENDA
There were no public comments.
MEETING AGENDA
1. Approval of May 18, 2023 Meeting Minutes
ACTION: Motioned by Alternate Director Fisher (Imperial Beach) and seconded by Director Parent (La Mesa) to approve the minutes of the Finance and Risk Management Committee meeting held Thursday, May 18, 2023. The motion carried by the following vote:
Vote: 3-0
Yes: Chair McCann (Chula Vista), Alternate Director Fisher (Imperial Beach), Director Parent (La Mesa)
No: None
Abstained: None
Absent: None
2. Review of Treasurer’s Report for Period Ending 4/30/23 CFO/Treasurer Washington presented the Treasurer’s Report for period ending April 30, 2023.
Following Committee questions and comments, no action was taken.
3. Approval of the FY 2023-24 Operating Budget
CFO/Treasurer Washington provided a PowerPoint presentation on the FY 2023-24 Operating Budget, highlighting the budget development timeline, net revenues, total expenses, the FY 2024- 2028 Capital Investment Plan, and next steps.
Committee questions and comments ensued.
ACTION: Motioned by Chair McCann (Chula Vista) and seconded by Director Parent (La Mesa) to approve the FY 2023-24 Operating Budget and forward to the Board of Directors for consideration. The motion carried by the following vote:
Vote: 3-0
Yes: Chair McCann (Chula Vista), Alternate Director Fisher (Imperial Beach), Director Parent (La Mesa)
No: None
Abstained: None
Absent: None
MINUTES – FINANCE AND RISK MANAGEMENT COMMITTEE – SAN DIEGO COMMUNITY POWER 3 4. Approval of Remainder of Collections/Delinquency Policy for Residential Customers
Director of Data Analytics and Account Services Utouh provided a PowerPoint presentation on the Collections/Delinquency Policy, highlighting the objectives of the policy, the state of arrearages in the region, the residential arrearages in the region, the state of SDCP arrearages, and the programs assisting customers with arrearages.
ACTION: Motioned by Chair McCann (Chula Vista) and seconded by Director Parent (La Mesa) to approve the remainder of the Collections/Delinquency Policy for Residential Customers and forward to the Board of Directors for consideration. The motion carried by the following vote:
Vote: 3-0
Yes: Chair McCann (Chula Vista), Alternate Director Fisher (Imperial Beach), Director Parent (La Mesa)
No: None
Abstained: None
Absent: None
COMMITTEE MEMBER ANNOUNCEMENTS
There were no announcements.
ADJOURNMENT
Chair McCann (Chula Vista) adjourned the meeting at 3:40 p.m.
SAN DIEGO COMMUNITY POWER
Staff Report – Item 2
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Financial and Risk Management Committee From: Eric W. Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Treasurer’s Report – For Fiscal Year End Period ended 06/30/23 Date: September 14, 2023
--------------------------------------------------------------------------------------------------------------------
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 its unaudited year – end for the period ended June 30, 2023, along with budgetary comparisons. Preparation of the 6/30/23 audited financial statements are in progress and are expected to be available during the October/November timeframe.
ANALYSIS AND DISCUSSION
Actual financial results for the fiscal year end (FYE) period ended 06/30/23: $891.18 million in net operating revenues were reported compared to $929.79 million budgeted for the period. $747.74 million in total expenses were reported (including $720.33 million in energy costs) compared to $772.08 million budgeted for the period (including $738.80 million budgeted for energy costs). After expenses, SDCP’s change in net position of $143.44 million was reported for Fiscal Year 2023. The following is a summary of the actual results compared to the Fiscal Year 2023 Budget.
Table 1: Budget Comparison Versus Actual Results
• Net operating revenues finished $38.61 million (or 4.0 percentage points) under the budget primarily due to lower than expected customer demand attributed to cooler weather.
• Operating expenses finished $24.34 million (or 3.0 percentage points) lower than expected when compared to the FY 2023 budget. Although savings were experienced across all expense categories, savings in the cost of energy was the key driver as a results of credits received from California Independent Systems Operator (CAISO) and cooler than expected weather.
When compared to the proforma, the FYE 2023 financial results were lower than what was projected. SDCP’s change in net position was 3% under the projections primarily due to revenues coming in lower than expected due to lower demand caused by cooler weather which was somewhat offset by reduced expenses.
The following is a summary to actual results compared to the fiscal year-to-date proforma.
Table 2: Proforma Comparison Versus Actual Results
Figure 1: Proforma versus Actual Results
For the period ending 06/30/23, SDCP contributed $143,435,176 to reserves compared to the $157,713,220 included in the FY 2022-23 amended budget. Total SDCP reserves at the end of the period were $183,660,045 and total available liquidity (including lines of credit availability) was $297,930,045. SDCP has a total FY 2022-23 year-end reserve target of $190,058,650, which is equivalent to 90-days of total operating expenses as set in SDCP’s Reserve Policy
FISCAL IMPACT
N/A
ATTACHMENTS
Attachment A: 2023 Year-to-Date Period Ended 06/30/23 Financial Statements 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, 2023, 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 16, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents - unrestricted 65,683,880 $
Accounts receivable, net of allowance 110,513,731
Accrued revenue 78,792,784
Prepaid expenses 30,527,498
Other receivables 233,715
Deposits 14,771,350
Total current assets 300,522,958
Noncurrent assets
Capital assets, net of depreciation 159,083
Lease asset, net of amortization 873,251
Cash and cash equivalents - restricted 2,147,000
Deposits 2,885,000
Total noncurrent assets 6,064,334
Total assets 306,587,292
Current liabilities
Accrued cost of electricity 77,345,343
Accounts payable 510,812
Other accrued liabilities 3,794,647
State surcharges payable 500,589
Security deposits 630,000
Interest payable 612,522
Lease liability 366,323
Total current liabilities 83,760,236
Noncurrent liabilities
Bank note payable 35,730,000
Supplier security deposits 624,000
Lease liability 521,193
Total noncurrent liabilities 36,875,193
Total liabilities 120,635,429
Net investment in capital assets 144,818
Restricted for collateral 2,147,000
Unrestricted 183,660,045
Total net position 185,951,863 $
NET POSITION
SAN DIEGO COMMUNITY POWER
STATEMENT OF NET POSITION
As of June 30, 2023
ASSETS
LIABILITIES
See accountants' compilation report. 2
OPERATING REVENUES
Electricity sales, net 891,178,064 $
Total operating revenues 891,178,064
OPERATING EXPENSES
Cost of energy 720,327,704
Contract services 15,957,376
Staff compensation 6,726,270
Other operating expenses 2,866,222
Depreciation and amortization 253,553
Total operating expenses 746,131,125
Operating income (loss) 145,046,939
NON-OPERATING REVENUES (EXPENSES)
Investment income 433,366
Interest and financing expense (2,059,394)
Nonoperating revenues (expenses) (1,626,028)
CHANGE IN NET POSITION 143,420,911
Net position at beginning of period 42,530,952
Net position at end of period 185,951,863 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
Year Ended June 30, 2023
See accountants' compilation report. 3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 801,265,394 $
Receipts of security deposits 47,431,731
Other operating receipts 10,964,074
Payments to suppliers for electricity (753,820,919)
Payments for goods and services (16,551,190)
Payments to employees for services (6,302,492)
Payments for deposits and collateral (80,254,418)
Payments of state surcharges (1,899,237)
Net cash provided (used) by operating activities 832,943
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Proceeds from bank note payable 55,910,000
Principal payments - loans (5,514,511)
Principal payments - bank note payable (51,520,082)
Interest and related expense payments (1,560,734)
Net cash provided (used) by non-capital
financing activities (2,685,327)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments of lease liability (235,232)
Payments to acquire capital assets (91,588)
Net cash provided (used) by capital and related financing activities (326,820)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 433,366
Net change in cash and cash equivalents (1,745,838)
Cash and cash equivalents at beginning of period 69,576,718 Cash and cash equivalents at end of period 67,830,880 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) 65,683,880 $
Restricted cash 2,147,000
Cash and cash equivalents 67,830,880 $
SUPPLEMENTAL CASH FLOW INFORMATION:
Capital acquisitions included in accounts payable 71,550 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS
Year Ended June 30, 2023
See accountants' compilation report. 4
Operating income 145,046,939 $
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities
Depreciation and amortization expense 253,553
Provision for uncollectible accounts 18,187,308
(Increase) decrease in:
Accounts receivable (78,314,049)
Accrued revenue (31,853,169)
Other receivables (233,715)
Prepaid expenses (26,066,190)
Deposits (7,965,293)
Increase (decrease) in:
Accrued cost of electricity 20,113,838
Accounts payable (185,693)
Other accrued liabilities 3,051,411
State surcharges payable 168,003
Supplier security deposits (41,370,000)
Net cash provided (used) by operating activities 832,943 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS (continued)
Year Ended June 30, 2023
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, 2023, 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 16, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 2022/23 YTD
Amended
Budget
2022/23 YTD
Actual
2022/23 YTD
Amended
Budget
Variance
(Under) Over
2022/23
YTD
Actual/
Amended
Budget %
2022/23 Annual
Amended
Budget
2022/23
Amended
Budget
Remaining
REVENUES AND OTHER SOURCES Gross Ratepayer Revenues 939,183,767 909,365,372 $ (29,818,395) 97% 939,183,767 $ 29,818,395 $ Less Uncollectible Customer Accounts (9,391,838) (18,187,308) (8,795,470) 194% (9,391,838) 8,795,470 Total Revenues and Other Sources 929,791,929 891,178,064 (38,613,865) 929,791,929 38,613,865 OPERATING EXPENSES Cost of Energy 738,800,294 720,327,704 (18,472,590) 97% 738,800,294 18,472,590 Professional Services and Consultants 17,271,121 15,137,517 (2,133,604) 88% 17,271,121 2,133,604 Personnel Costs 7,362,226 6,726,270 (635,956) 91% 7,362,227 635,957 Marketing and Outreach 4,194,490 2,107,105 (2,087,385) 50% 4,194,489 2,087,384 General and Administrative 1,890,283 1,548,877 (341,406) 82% 1,890,283 341,406 Programs 1,275,000 300,000 (975,000) 24% 1,275,000 975,000 Total Operating Expenses 770,793,414 746,147,473 (24,645,941) 770,793,414 24,645,941 Operating Income (Loss) 158,998,515 145,030,591 (13,967,924) 158,998,515 13,967,924 NON-OPERATING REVENUES (EXPENSES) Investment income - 433,366 433,366 - (433,366) Debt Service and Bank Fees (1,285,295) (2,028,781) (743,486) 158% (1,285,295) 743,486 Total Non-Operating Revenues (Expenses) (1,285,295) (1,595,415) (310,120) (1,285,295) 310,120 NET INCREASE (DECREASE) $ 143,435,176 157,713,220 $ (14,278,044) $ 157,713,220 $ 14,278,044 $
SAN DIEGO COMMUNITY POWER
BUDGETARY COMPARISON SCHEDULE
Year Ended June 30, 2023
See accountants' compilation report.
SAN DIEGO COMMUNITY POWER
Staff Report – Item 3
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power 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 to Date 2024 Period ended 07/31/23
Date: September 14, 2023
--------------------------------------------------------------------------------------------------------------------
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 its year-to-date financial statements for the period ended July 31, 2023, along with budgetary comparisons.
SDCP additionally reports monthly metrics during its Board meetings as part of its Update on Back-Office Operations. As part of the Treasurer’s Report, certain key metrics related to risk are to be presented during Financial and Risk Management Committee (FRMC) meetings.
ANALYSIS AND DISCUSSION
Actual financial results for the period ended 07/31/23: $162.85 million in net operating revenues were reported compared to $162.7 million budgeted for the period. $98.88 million in total expenses were reported (including $96.2 million in energy costs) compared to $99.04 million budgeted for the period (including $92.36 million budgeted for energy costs). After expenses, SDCP’s change in net position of $63.97 million was reported for Fiscal Year 2024. The following is a summary of the actual results compared to the Fiscal Year 2024 Budget.
Table 1: Budget Comparison Versus Actual Results
• Net operating revenues finished $149,042 (or less than 1.0 percentage point) over the budget and largely in line with expectations.
• Operating expenses finished $158,115 (or less than 1.0 percentage point) under the budget primarily due to savings from all operating non-energy expenses negating slightly higher than expected energy costs which were due to large resource adequacy purchases to ensure compliance.
Financial results for the period underperformed the projections presented in the year-to-date proforma. SDCP’s change in net position was 7% under the projection primarily due to higher-than-expected cost of energy
The following is a summary to actual results compared to the fiscal year-to-date proforma.
Table 2: Proforma Comparison Versus Actual Results
Figure 1: Proforma versus Actual Results
For the period ending 07/31/23, SDCP contributed $63,966,557 to its reserves but was expected to gain $63,659,400 per the FY 2023-24 adopted budget. Total SDCP reserves at the end of the period were $247,761,561 and total available liquidity (including lines of credit) was $362,031,561. SDCP has a total FY 2023-24 year-end reserve target of $245,539,726 which is equivalent to 90-days of total operating expenses as set in SDCP’s Reserve Policy. SDCP is pursuing a strategic goal of $491,079,452 in reserves, which is equivalent to 180-days of total operating expenses.
Figure 2: Participation Rates
Phase 4 mass enrollment process in National City and Unincorporated County of San Diego for Non-Net Energy Metering (NEM) customers is officially completed as of May, 2023. The participation rate for this new phase is fluid and will change as we continue with our enrollment of Net Energy Metering (NEM) customers from April 2023 through March 2024. In the interim, we are reporting on the opt outs and eligible accounts associated with the phase based on those accounts that we have noticed for enrollment on a rolling basis as of the reporting month.
Staff are also presenting State of SDCP Arrearages directly related to financial risk for FRMC consideration and for regular review moving forward. Additional metrics can be added by request. Below arrearage data is SDCP’s Receivables aged 120+ Days as of 8/28/2023.
Figure 3: State of SDCP Arrearages
Figure 4: State of SDCP Arrearages Residential vs Commercial
FISCAL IMPACT
N/A
ATTACHMENTS
Attachment A: 2024 Year-to-Date Period Ended 07/31/23 Financial Statements 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 July 31, 2023, 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 31, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents - unrestricted 122,783,778 $
Cash and cash equivalents - restricted 500,000
Accounts receivable, net of allowance 135,245,975
Accrued revenue 108,469,439
Prepaid expenses 29,270,098
Other receivables 37,320
Deposits 14,296,704
Total current assets 410,603,314
Noncurrent assets
Capital assets, net of depreciation 156,142
Lease asset, net of amortization 842,064
Cash and cash equivalents - restricted 1,647,000
Deposits 2,330,000
Total noncurrent assets 4,975,206
Total assets 415,578,520
Current liabilities
Accrued cost of electricity 122,763,498
Accounts payable 546,684
Other accrued liabilities 3,942,225
State surcharges payable 184,450
Security deposits 525,000
Interest payable 427,447
Lease liability 367,697
Total current liabilities 128,757,000
Noncurrent liabilities
Bank note payable 35,730,000
Supplier security deposits 624,000
Lease liability 489,917
Total noncurrent liabilities 36,843,917
Total liabilities 165,600,917
Net investment in capital assets 69,042
Restricted for collateral 2,147,000
Unrestricted 247,761,561
Total net position 249,977,603 $
NET POSITION
SAN DIEGO COMMUNITY POWER
STATEMENT OF NET POSITION
As of July 31, 2023
ASSETS
LIABILITIES
See accountants' compilation report. 2
OPERATING REVENUES
Electricity sales, net 162,378,167 $
Grant revenue 473,250
Total operating revenues 162,851,417
OPERATING EXPENSES
Cost of energy 96,203,705
Contract services 1,525,992
Staff compensation 702,526
Other operating expenses 256,546
Depreciation and amortization 34,129
Total operating expenses 98,722,898
Operating income (loss) 64,128,519
NON-OPERATING REVENUES (EXPENSES)
Investment income 110,772
Interest and financing expense (274,019)
Nonoperating revenues (expenses) (163,247)
CHANGE IN NET POSITION 63,965,272
Net position at beginning of period 186,012,331
Net position at end of period 249,977,603 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
One Month Ended July 31, 2023
See accountants' compilation report. 3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 108,153,718 $
Receipts of security deposits 1,835,863
Other operating receipts 1,423,540
Payments to suppliers for electricity (51,025,748)
Payments for goods and services (1,513,354)
Payments to employees for services (750,776)
Payments for deposits and collateral (205,000)
Payments of state surcharges (500,589)
Net cash provided (used) by operating activities 57,417,654
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Interest and related expense payments (398,626)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments of lease liability (29,902)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 110,772
Net change in cash and cash equivalents 57,099,898
Cash and cash equivalents at beginning of period 67,830,880 Cash and cash equivalents at end of period 124,930,778 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) 122,783,778 $
Restricted cash - current 500,000 $
Restricted cash - noncurrent 1,647,000
Cash and cash equivalents 124,930,778 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS
One Month Ended July 31, 2023
See accountants' compilation report. 4
Operating income 64,128,519 $
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities
Depreciation and amortization expense 34,129
Provision for uncollectible accounts 6,765,757
(Increase) decrease in:
Accounts receivable (31,498,001)
Accrued revenue (29,676,655)
Other receivables 196,395
Prepaid expenses 1,257,400
Deposits 1,029,646
Increase (decrease) in:
Accrued cost of electricity 45,418,155
Accounts payable 35,870
Other accrued liabilities 147,578
State surcharges payable (316,139)
Supplier security deposits (105,000)
Net cash provided (used) by operating activities 57,417,654 $
SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS (continued)
One Month Ended July 31, 2023
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 July 31, 2023, 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 31, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 2023/24 YTD
Budget
2023/24 YTD
Actual
2023/24 YTD
Budget
Variance
(Under) Over
2023/24
YTD
Actual/
Budget %
2023/24 Annual
Budget
2023/24 Budget
Remaining
REVENUES AND OTHER SOURCES Gross Ratepayer Revenues 169,481,641 169,143,924 $ (337,717) 100% 1,346,325,552 $ 1,177,181,628 $ Less Uncollectible Customer Accounts (6,779,266) (6,765,757) 13,509 100% (53,853,022) (47,087,265) Grant revenue - 473,250 473,250 - (473,250)
Total Revenues and Other Sources 162,702,375 162,851,417 149,042 1,292,472,530 1,129,621,113 OPERATING EXPENSES Cost of Energy 92,359,121 96,203,705 3,844,584 104% 948,529,425 852,325,720 Professional Services and Consultants 2,918,560 1,491,770 (1,426,790) 51% 22,939,626 21,447,856 Personnel Costs 1,547,125 702,526 (844,599) 45% 13,178,031 12,475,505 Marketing and Outreach 377,629 168,772 (208,857) 45% 2,973,829 2,805,057 General and Administration 1,282,076 158,169 (1,123,907) 12% 7,861,973 7,703,804 Programs 35,333 - (35,333) 0% 278,250 278,250
Total Operating Expenses 98,519,844 98,724,942 205,098 995,761,134 897,036,192 Operating Income (Loss) 64,182,531 64,126,475 (56,056) 296,711,396 232,584,921 NON-OPERATING REVENUES (EXPENSES) Investment income - 110,772 110,772 - (110,772) Interest and related expenses (203,131) (270,690) (67,559) 133% (2,437,574) (2,166,884) Transfer to Capital Investment Program (320,000) - 320,000 0% (3,840,002) (3,840,002) Total Non-Operating Revenues (Expenses) (523,131) (159,918) 363,213 (6,277,576) (6,117,658) NET INCREASE (DECREASE) $ 63,966,557 63,659,400 $ 307,157 $ 290,433,820 $ 226,467,263 $
SAN DIEGO COMMUNITY POWER
BUDGETARY COMPARISON SCHEDULE
One Month Ended July 31, 2023
OPERATING FUND
See accountants' compilation report.