2 Finance and Risk
Management Committee
Regular Meeting
October 16, 2025
3 Welcome and Call to Order
4 Roll Call
55 6
Land Acknowledgement
7 Items to be Withdrawn or
Reordered on the Agenda
8 Public Comment on non-Agenda Items
9 Consent
Calendar
1. Approve September 18, 2025, Meeting
Minutes
2. Approve 2026 Finance and Risk
Management (FRMC) Committee Meeting
Schedule
3. Recommend Board Approval of Non-Material Revisions to FY 2025-2026 Operating Budget, the FY 2025-2026
Capital Budget, and the FY 2026-2030
Capital Investment Plan
10 Public Comment on Consent Calendar
11 Regular
Agenda
4. Fiscal Year End 2024-25 Financial Audit
Progress Report Presentation
5. Treasurer’s Report for Period Ending July
31, 2025
6. Recommend Board Adoption of
Resolution No. 2025__, Approving a Third
Revision to the Financial Reserves Policy
12 Item No. 4
Fiscal Year End 2024-
25 Financial Audit
Progress Report
Presentation
Recommendation:
Receive and File Fiscal Year End 2024-25
Financial Audit Progress Report Presentation.
Presenter:
Dr. Eric Washington, Chief Financial Officer/Treasurer
Kellin Gilbert and Alauna Rico, Sorren
13 sorren.com
San Diego Community Power
Finance & Risk Management Committee
Meeting
October 16, 2025
14 Introduction
Kellin Gilbert, CPA
Audit Partner
17 years in public accounting and performing audits of government entities Currently working with several CCA’s throughout California Alauna Rico
Audit Senior Associate
4 years in public accounting and performing audits of governments (CCA’s) 15 Transition to Sorren CPAs P.C.
As of May 2025, legacy Pisenti & Brinker combined practices with several other like-sized firms and rebranded as one unified firm “Sorren.” By combining resources with the strategic merger, we can make even greater investments in technology as well as our greatest assets, our people and clients.
Sorren is a new national top 50 firm and currently has over twenty office locations and almost a thousand employees.
The Santa Rosa office will continue to be the lead office for San Diego Community Power. No changes to the current engagement team, costs or timing of the services we provide to SDCP.
16 Results of Current Year Audit
The 2025 audit is near completion. We plan on reporting the following:
• Unmodified opinion – Based on our audit, the financial statements are materially accurate.
• No significant deficiencies or material weakness in internal control noted. 17 Audit of the year ended June 30, 2025
Financial Statements
Relative Roles & Responsibilities
• Management is responsible for preparing the Financial Statements and establishing a system of internal control.
• Auditor is responsible for auditing the Financial Statements • Considering risks of material misstatement in the Financial Statements • Considering internal controls relevant to the Financial Statements • Performing tests of year-end balances based on risk assessment • Evaluating adequacy of disclosures
18 Risk Assessment for the year ended June
30, 2025
Our audit is a risk-based audit. Risk assessment procedures include:
• Gain an understanding of the entity’s operating characteristics, practices, and procedures.
• Compare to our knowledge of similar entities, industry, and professional guidance.
• Review procedures and controls surrounding significant transaction cycles and business processes.
19 Risk Assessment for the year ended June
30, 2025
Significant areas of focus for the audit:
• Revenue recognition
• Accounts receivable and accrued revenue
• Test a sample of customer billings
• Relate total cash received during the year to revenue • Review revenue recognition through year-end and method for determining (accrued revenue)
• Cash & Investments
• Confirmations sent to financial institutions
• Accrued Cost of Electricity
• Review subsequent bills from electricity providers and cash payments • Financial Statement Note Disclosures – Complete and without bias 20 Required Board Communications
• There were no new material accounting policies adopted by San Diego Community Power throughout the period audited.
• No alternative treatments of accounting principles for material items in the financial statements have been discussed with management.
• We are not expecting to propose any adjustments to the financial statements. • We have not identified any significant or unusual transactions or applications of accounting principles where a lack of authoritative guidance exists. • There have been no disagreements with management concerning the scope of our audit, the application of accounting principles, or the basis for management’s judgments on any significant matters.
• We have not encountered any difficulties in dealing with management during the performance of our audit.
21 Kellin Gilbert
Partner
[email protected]
(707) 577-1511
sorren.com
22 Public Comment on
Item No. 4
23 Item No. 4
Committee Members
Comments or
Questions
Fiscal Year End 2024-25
Financial Audit Progress
Report Presentation
Recommendation:
Receive and File Fiscal Year End
2024-25 Financial Audit Progress
Report Presentation.
24 Item No. 5
Treasurer’s Report for
Period Ending July 31,
2025
Presenter:
Dr. Eric Washington, Chief Financial Officer/Treasurer
Recommendation: Receive and file
Community Power’s revisions to the existing
Net Energy Metering Tariff/Program (NEM)
and to the existing Net Billing Tariff (NBT) and
Community Power’s establishment of the new
Net Billing Tariff Virtual (NBT-V) and a Net
Billing Tariff Aggregation (NBT-A) for all new
customers who elect this and who have
installed onsite generation on or after
February 15, 2024 that qualifies for the tariff
and for existing customers transitioning out of
the Virtual Net Energy Metering Tariff (VNEM)
or the Net Energy Metering Aggregation Tariff
(NEMA) following the conclusion and/or
termination of their 20-year VNEM or NEMA
legacy period.
Recommendation:
Receive and File Treasurer’s Report for Period
Ending July 31, 2025.
25 Results for the period overperformed overall
compared to the amended budget:
• Net operating revenues 4.7 percent under
budget.
• Operating expenses came in
(8.0) percentage points under budget.
Financial results for the YTD FY26:
• $144.6M in net operating revenues
• $122.8M in total expenses (includes
energy costs of $97.1M or 67% of net
revenues)
• $21.8M change in YTD net position
YTD FY26 Budget v. Actual
Item 5: Treasurer’s Report
YTD FY26 as of
7/31/25 (1 month) FY26 YTD Budget Budget Variance ($) Budget (%) Net Operating Revenues $ 144,622,279 $ 151,679,000 $ (7,056,721) 95.3% Total Expenses $ 122,764,286 $ 133,010,000 $ (10,245,714) 92% Change in Net Position $ 21,857,994 $ 18,669,000 $ 3,188,994 Budget Comparison
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY26 Results v. Budget
YTD FY26 as of 7/31/25 (1 month) FY26 YTD Budget
26 Item 5: Treasurer’s Report
$M $50M $100M $150M $200M
$M $200M $400M $600M
$22M
Reserve
Contribution
FY 2025-26 YTD
$617M
Total Liquidity
FY 2025-26 YTD
$0M
Outstanding
Debt
FY 2025-26 YTD
78%
Percent Reserve
Goal Met
FY 2025-26
CONTRIBUTION RESERVES
GOAL DEBT
Reserve contribution
for the fiscal year
Outstanding Debt
FY26 YTD
Total available
liquidity FY26 YTD
$499M 180-DCOH
Reserve Target FY26
$499M
$22M Actual
FYTD $19M Budget
FYTD
$389.6M
Cash + investments
$227.5M
LOC
$M $20M $40M $60M
Cash
78%
Unmet
Reserves
22%
27 Item 5: Treasurer’s Report
141
Days
Cash on Hand
223
Days
Cash on Hand with
Total Liquidity
28 Item 5: Treasurer’s Report
29 Public Comment on
Item No. 5
30 Item No. 5
Committee Members
Comments or
Questions
Treasurer’s Report for
Period Ending July 31,
2025
Recommendation:
Receive and File Treasurer’s Report for
Period Ending July 31, 2025.
31 Item No. 6
Recommend Board Adoption
of Resolution No. 2025__,
Approving a Third Revision to
the Financial Reserves Policy
Recommendation:
Recommend Board Adoption of
Resolution No. 2025__, approving a third
revision to the Financial Reserves Policy.
Presenters:
Jeb Spengler, Sr. Strategic Finance Manager
32 Item 6: Revision to Financial Reserves Policy
San Diego Community Power will maintain Financial Reserves as described in this policy to:
• Meet Community Power’s strategic objectives
• Secure, maintain, and/or improve a standalone investment grade credit rating • Secure favorable terms with vendors, including power producers • Satisfy working capital requirements
• Adhere to contractual bank covenants
• Provide funds to cover unanticipated expenditures
• Support rate stability
33 Reserve Policy Timeline
Community Power
Board adopts initial
Reserve Policy
2020-04
June 2021 February 2022
Community Power
Board approves First
Revision to Reserve
Policy authorizing
delegated conditions
for the use of
Reserves
June 2024
Community Power
Board approves
Second Revision to
Reserve Policy with
comprehensive
updates to goals, use
of excess reserves
and clarifying
definitions
October 2025
Recommended Board
approval of Third
Revision to Reserve
Policy to update Days
Cash on Hand
definition to include
Investments
Comprehensive
Risk and
Reserves policy
review and update
to the Board
Q1 2026
3434
Reserve Policy Update
The contribution to Reserves is determined
through SDCP’s annual budget process as
defined in the agency’s Budget Policy and/or
Community Power’s rate setting process as
defined in the agency’s Rate Development
Policy.
Contribution:
Discretionary
Current Goal:
180-Days Cash on
Hand
Current Policy
Proposed Policy
Definitions
Reserves: Net Position
Days cash on hand:
(unrestricted cash and cash equivalents, and
investments unencumbered by legal agreements
and not earmarked for specific purposes) x 365 /
(operating expenses for the current fiscal year)
Definitions
Reserves: Net Position
Days cash on hand:
(unrestricted cash and cash
equivalents) x 365 /
(operating expenses for the
current fiscal year)
35 Public Comment on
Item No. 6
36 Item No. 6
Committee Members
Comments or
Questions
Recommend Board Adoption of
Resolution No 2025__, approving a
third revision to the Financial
Reserves Policy
Recommendation:
Recommend Board Adoption of Resolution
No. 2025__, approving a third revision to
the Financial Reserves Policy.
37 Committee Member Announcements
38 Adjournment
39 Next Regular Finance and
Risk Management
Committee Meeting
November 13, 2025
[email protected]