Finance & Risk
Management
Committee
Meeting
September 19, 2024
Welcome
&
Call to
Order
Roll
Call
4 Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
not
on the
Agenda
Consent
Calendar
1. Approval of June 20, 2024,
Meeting Minutes
Public
Comment on
Consent
Calendar
Regular
Agenda
2. Review of Treasurer’s Report for Period Ending
June 30, 2024
3. Presentation and Update on Clean Energy
Prepayment Financing
4. Recommend Approval of Bond Issuer for
Energy Prepayment Transaction
10 Item No. 2
Treasurer’s Report for Period Ending June 30,
2024
Recommendation: Receive and File Treasurer’s
Report for Period Ending June 30, 2024
Presenter:
Dr. Eric Washington,
Chief Financial Officer
11 Results for the period underperformed overall
compared to the adopted budget:
• Net operating revenues 5.0 percentage
points under budget.
• Operating expenses came in 1.0
percentage points under budget
Financial results for the YTD FY24:
• $1.24M in net operating revenues
• $1.07M in total expenses (includes
energy costs of $1.04M or 83% of net
revenues)
• $179M change in YTD net position
Item No. 2: Treasurer’s Report
YTD FY24 Budget v. Actual
13 70.4
71.9 70.9
67.4 61.8
59.2 56.1
57.9 59.5
60.9 63.2
67.2 71.9 73.8 73.5
69.9 63.6
58.5 58.5 59.3 61.2
63.8 64.7
67.6 0
10 20
30 40
50 60
70 80
Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Actuals 10 Year Average
Actual Temperatures vs. Historical Averages
14 $178M
Reserve
Contribution
FY 2023-24 YTD
$M $200M
Item No. 2: Treasurer’s Report
$412M
Total Liquidity
FY 2023-24 YTD
$0M
Outstanding
Debt
FY 2023-24 YTD
57%
Percent Reserve
Goal Met
FY 2023-24
CONTRIBUTION RESERVES
GOAL DEBT
Reserve contribution
for the fiscal year
Outstanding loans
FY24 YTD
Total available liquidity
FY24 YTD
$525M 180-DCOH
Reserve Target FY24
$M $20M $40M $60M
LOC $0M
$M $200M $400M $600M
$299M
Cash
$113
LOC $525M
Cash
57%
Unmet
Reserves
43%
FY 2023-24
FY 2023-24
$178M Actual
$233M Budget
15 Item No. 2: Treasurer’s Report
103
Days
Cash on Hand
142
Days
Cash on Hand with
Total Liquidity
$180.0M
$237.1M
$318.7M
$382.7M
$432.2M $434.1M $462.8M
$482.6M $496.3M $501.5M $474.7M $449.0M$412.8M
35%
25%
40%
52%
67%
65%
71%
75%
78%
74%
69%
64%
57%
$0.0M
$100.0M
$200.0M
$300.0M
$400.0M
$500.0M
$600.0M
6/30/20237/31/20238/31/20239/30/2023
10/31/202311/30/202312/31/2023
1/31/20242/29/20243/31/20244/30/20245/31/20246/30/2024
Rolling 12 Month Reserves FY 2023-24
Unrestricted Cash Lines of Credit Reserve Goal Total Reserves FY24 RESERVE GOAL:
16 Item No. 2: Treasurer’s Report
Public
Comment for
Item No. 2
18 Item No. 3
Presentation and Update on Clean Energy
Prepayment Financing
Recommendation: Receive and File Presentation
and Update on Clean Energy Prepayment
Financing
Presenter:
Dr. Eric Washington,
Chief Financial Officer
Energy Prepayment Discussion
PFM Financial Advisors LLC 555 W. 5th Street
Suite 3500
Los Angeles, CA 90013
213.489.4075
September 19, 2024
20 Prepayment Transaction Overview
• Goal – Reduce cost of power purchases by 8% or more
• How – Leverage use of tax-exempt bonding capacity to secure long-term supply Background
• Codified in the U.S. tax law
• Used since the 1990s largely for natural gas transactions • Over 100 transactions totaling over $70 billion completed in the U.S. – mostly for gas • Eleven energy prepayment transactions totaling $9.8 billion completed last few years for six California Community Choice Aggregators:
• East Bay Community Energy • Pioneer Community Energy
• Silicon Valley Clean Energy • Clean Power Alliance
• Marin Clean Energy • Central Coast Community Energy
21 Prepayments That Have Been Completed by
CCAs in California
Date Amt. ($000) Issuer Description Beneficiary
09/2021 1,234,720 California Community Choice Fin Auth Elec (Green) SVCE, EBCE 11/2021 602,655 California Community Choice Fin Auth Elec (Green) MCE 06/2022 931,120 California Community Choice Fin Auth Elec (Green) EBCE 12/2022 459,640 California Community Choice Fin Auth Elec (Green) Pioneer 01/2023 841,550 California Community Choice Fin Auth Elec (Green) SVCE 02/2023 998,780 California Community Choice Fin Auth Elec (Green) CPA 06/2023 958,290 California Community Choice Fin Auth Elec (Green) CPA 08/2023 997,895 California Community Choice Fin Auth Elec (Green) EBCE 10/2023 647,750 California Community Choice Fin Auth Elec (Green) CCCE 12/2023 1,038,285 California Community Choice Fin Auth Elec (Green) MCE 01/2024 1,101,625 California Community Choice Fin Auth Elec (Green) SVCE Total $9,812,310
• All transactions to date have achieved a 9.5% savings or better. • Most recent transactions have been over 12%
22 Prepayments That Have Been Completed by
Municipal Utilities in California
Date Amt. ($000) Issuer Description Beneficiary
06/2006 230,845 Vernon Nat. Gas Fin Auth Nat Gas City of Vernon Elec 01/2007 209,350 Roseville Natural Gas Fin Auth Nat. Gas City of Roseville Elec 05/2007 757,055 Northern Ca Gas Auth No. 1 Nat. Gas SMUD 09/2007 887,360 Long Beach Bond Fin Auth Nat. Gas City of Long Beach 10/2007 504,445 So. Ca. Pub. Power Auth Nat. Gas Multiple MOUs 10/2007 251,695 Long Beach Bond Fin. Auth Nat. Gas City of Long Beach 08/2009 901,620 M-S-R Energy Authority Nat. Gas MID/Redding/SVP 10/2009 514,160 So. Ca Pub Power Auth (Windy Flats) Elec (Wind) LADWP, Mult. MOUs 04/2010 778,665 Cal. Statewide Comm Dev Auth Nat. Gas SMUD 2010/11 394,700 So. Ca Pub Power Auth (Milford 1 & 2) Elec (Wind) LADWP, Mult. MOUs 12/2018 539,615 Northern Ca Energy Auth Gas/Elec SMUD
Total $5,969,510
23 Entities Involved in a Prepayment
Transaction
• SD Community Power – Has existing Power Purchase Agreement(s) for clean energy • Prepay Counterparty – Typically a financial institution with a commodity presence or a financial institution partnered with a commodity market participant • Issuer – Bond issuing entity formed for sole purpose of selling the prepayment bonds, typically a Joint Powers Authority (“JPA”). All other CCAs have used California Community Choice Financing Authority (CCCFA)
• Existing Power Supply Counterparty – Agrees to limited assignment of the existing PPA • Bond Investors – Purchase the non-recourse tax-exempt prepayment bonds • Service Providers - Municipal financial advisor, bond, tax and disclosure counsel, to support the structuring and issuance of a prepayment transaction. 24 Prepayment Timeline
Nov 7, 2023: Request-for-Proposal (RFP) was issued for Municipal Financial Advisor (MFA) Dec 28, 2023: PFM Financial Advisors LLC (PFM) was selected as MFA Feb 15, 2024: Finance and Risk Management Committee (FRMC) Prepaid Financing Presentation Feb 22, 2024: Board Presentation Prepaid Financing Presentation Apr 19, 2024: RFP issued for underwriter and legal services (bond, tax, disclosure) Aug 22, 2024: Legal counsel agreement with Chapman & Cutler for disclosure services – Potential Board approved
Sep 19, 2024: FRMC – Presentation and potential recommendation for Board approval of Resolution for Bond Issuer
Sep 26, 2024: Board – Presentation and potential approval of Resolution for Bond Issuer Oct 17, 20224: FRMC – Presentation and potential recommendation for Board approval on Resolution to authorize documents
Oct 24, 2024: Board – Presentation and potential recommendation for Board approval on Resolution to authorize documents
Nov 21, 2024: Execute prepaid agreement
Dec 5, 2024: Closing
Public
Comment for
Item No. 3
26 Item No. 4
Recommend Approval of Bond Issuer for Energy
Prepayment Transaction
Recommendation: Recommend Board Adoption of Resolution approving the selection of California Community Choice Financing Authority (CCCFA), a joint powers authority, as the Bond Issuer for a potential SD Community Power energy prepayment financing transaction and authorizing SD Community Power to join the CCCFA as an Associate Member.
Presenter:
Dr. Eric Washington,
Chief Financial Officer
Public
Comment for
Item No. 4
Committee Member
Announcements
Adjournment
Next Regular
Finance & Risk
Management
Committee
Meeting
October 17, 2024