Item 6
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Interim General Manager
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – January 1, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending January 31, 2022
DATE: March 10, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of January 1, 2022 to January 31, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending January 31, 2022.
BACKGROUND & DISCUSSION:
The attached financial statements are prepared in a form to satisfy the debt covenants with River City Bank pursuant to the Line of Credit and are required to be prepared monthly.
The Financial Statements include the following reports:
• Statement of Net Position
• Statement of Revenues, Expenditures and Changes in Net Position • Statement of Cash Flows
In addition, Staff is reporting the Actual vs. Budget variances year to date ending January 31, 2022.
Financial Statements for the period January 1, 2022 – January 31, 2022 In the Statement of Net Position, VCEA, as of January 31, 2021, has a total of $2,526,535 in its checking, money market and lockbox accounts, $1,100,000 restricted assets for the Debt Service Reserve account, $1,998,276 restricted assets related to supplier deposits, and $2,462,118 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of January 31, 2021, $138,909. VCE member obligations are incurred monthly due to staffing, accounting, and legal services.
Item 6
The term loan with River City Bank includes a current portion of $1,153,026. On January 31, 2022, VCE’s net position is $8,413,614.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $3,602,643 of revenue (net of allowance for doubtful accounts), of which $3,417,595 was billed in January and $1,698,209 represent estimated unbilled revenue. The cost of the electricity for the January revenue totaled $4,538,541. For January, VCEA’s gross margin was approximate -26% and net loss totaled ($1,335,483). The year-to-date change in net position was ($1,335,483).
In the Statement of Cash Flows, VCEA cash flows from operations were ($1,462,514) due to January cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending January 31, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue - $247,043 and 7% – favorable variance is due to load being more favorable than planned and the weather has been warmer than forecast.
• Purchased Power – ($942,359) and -17% – favorable variance is due to load being more favorable than planned and the weather has been warmer than forecast.
Attachments:
1) Financial Statements (Unaudited) January 1, 2022 to January 31, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending January 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF JANUARY 1 TO JANUARY 31, 2022
PREPARED ON MARCH 2, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 2,526,535
Accounts receivable, net of allowance 6,854,199
Accrued revenue 1,698,209
Prepaid expenses 579,311
Other current assets and deposits 1,998,276
Total current assets 13,656,530
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 2,462,118
Total restricted assets 3,562,118
Noncurrent assets:
Other noncurrent assets and deposits
Total noncurrent assets -
TOTAL ASSETS $ 17,218,648
LIABILITIES
Current liabilities:
Accounts payable $ 501,149
Accrued payroll 56,235
Interest payable 2,684
Due to member agencies 138,909
Accrued cost of electricity 4,858,263
Other accrued liabilities (19,338)
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 134,106
Limited Term Loan 1,153,026
Total current liabilities 8,805,034
Noncurrent liabilities
Term Loan- RCB
Total noncurrent liabilities -
TOTAL LIABILITIES $ 8,805,034
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 3,562,118
Unrestricted 4,626,996
TOTAL NET POSITION $ 8,413,614
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
JANUARY 31, 2022
3 FOR THE PERIOD
ENDING
JANUARY 31, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 3,602,643 $ 3,602,643
TOTAL OPERATING REVENUES 3,602,643 3,602,643
OPERATING EXPENSES
Cost of electricity 4,538,541 4,538,541
Contract services 227,979 227,979
Staff compensation 95,680 95,680
General, administration, and other 73,836 73,836
TOTAL OPERATING EXPENSES 4,936,036 4,936,036
TOTAL OPERATING INCOME (LOSS) (1,333,393) (1,333,393)
NONOPERATING REVENUES (EXPENSES)
Other Revenue
Interest income 1,678 1,678
Interest and related expenses (3,768) (3,768)
TOTAL NONOPERATING REVENUES
(EXPENSES) (2,090) (2,090)
CHANGE IN NET POSITION (1,335,483) (1,335,483)
Net position at beginning of period 9,749,097 9,749,097 Net position at end of period $ 8,413,614 $ 8,413,614
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF JANUARY 1, 2022 TO JANUARY 31, 2022
4 FOR THE
PERIOD ENDING
JANUARY 31, 2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 3,963,587 $ 3,963,587 Receipts for security deposits with energy suppliers - - Payments to purchase electricity (5,012,447) (5,012,447) Payments for contract services, general, and adminstration (308,108) (308,108) Payments for staff compensation (103,354) (103,354)
Other cash payments - -
Net cash provided (used) by operating activities (1,460,322) (1,460,322)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt - -
Interest and related expenses (3,870) (3,870)
Net cash provided (used) by non-capital financing
activities (3,870) (3,870)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 1,678 1,678
Net cash provided (used) by investing activities 1,678 1,678 NET CHANGE IN CASH AND CASH EQUIVALENTS (1,462,514) (1,462,514) Cash and cash equivalents at beginning of period 7,551,167 7,551,167 Cash and cash equivalents at end of period $ 6,088,653 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 2,526,535 2,526,535
Restricted assets 3,562,118 3,562,118
Cash and cash equivalents at end of period $ 6,088,653 $ 6,088,653
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF JANUARY 1 TO JANUARY 31, 2022
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
JANUARY 31, 2022 YEAR TO DATE
Operating Income (Loss) $ (1,333,393) $ (1,333,393)
(Increase) decrease in net accounts receivable 275,616.59 275,616.59 (Increase) decrease in accrued revenue 69,984 69,984
(Increase) decrease in prepaid expenses 305,919 305,919 (Increase) decrease in inventory - renewable energy credits - - (Increase) decrease in other assets and deposits - -
Increase (decrease) in accounts payable (28,088) (28,088) Increase (decrease) in accrued payroll (7,674) (7,674)
Increase (decrease) in due to member agencies 20,964 20,964 Increase (decrease) in accrued cost of electricity (473,906) (473,906) Increase (decrease) in other accrued liabilities (305,088) (305,088) Increase (decrease )security deposits with energy suppliers - - Increase (decrease) in user taxes and energy surcharges 15,343 15,343 Net cash provided (used) by operating activities $ (1,460,322) $ (1,460,322)
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
FOR THE PERIOD OF JANUARY 1 TO JANUARY 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
VALLEY CLEAN ENERGY
2022 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 01/31/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 3,602,643 $ 3,355,600 $ 247,043 7%
Interest Revenues $ 1,678 $ 1,500 $ 178 12%
Purchased Power $ 4,538,541 $ 5,480,900 $ (942,359) -17% Purchased Power Base $ 4,538,541 $ 4,838,600 $ (300,059) -6% Purchased Power Contingency 2% $ - $ 642,300 $ (642,300) -100% Labor & Benefits $ 95,679 $ 109,900 $ (14,221) -13%
Salaries & Wages/Benefits $ 77,674 $ 90,800 $ (13,126) -14% Contract Labor (SMUD Staff Aug) $ - $ 4,900 $ (4,900) -100% Human Resources & Payroll $ 18,005 $ 14,200 $ 3,805 27% Office Supplies & Other Expenses $ 40,597 $ 16,400 $ 24,197 148% Technology Costs $ 4,568 $ 2,900 $ 1,668 58%
Office Supplies $ 24 $ 200 $ (176) -88%
Travel $ - $ 500 $ (500) -100%
CalCCA Dues $ 9,115 $ 10,600 $ (1,485) -14%
CC Power $ 26,891 $ 2,000 $ 24,891 1245%
Memberships $ - $ 200 $ (200) -100%
Contractual Services $ 210,924 $ 209,600 $ 1,324 1%
Other Contract Services $ - $ 2,100 $ (2,100) -100%
Don Dame $ 380 $ 800 $ (420) -53%
SMUD - Credit Support $ 50,937 $ 43,500 $ 7,437 17%
SMUD - Wholesale Energy Services $ 48,987 $ 48,800 $ 187 0% SMUD - Call Center $ 65,656 $ 65,800 $ (144) 0%
SMUD - Operating Services $ 1,108 $ 5,000 $ (3,892) -78% Commercial Legal Support $ - $ - $ - 100%
Legal General Counsel $ 13,983 $ 12,900 $ 1,083 8%
Regulatory Counsel $ 21,596 $ 16,600 $ 4,996 30%
Joint CCA Regulatory counsel $ 192 $ 2,700 $ (2,508) -93% Legislative - (Lobbyist) $ 5,000 $ 5,000 $ - 0%
Accounting Services $ 1,084 $ 2,200 $ (1,116) -51%
Financial Consultant $ - $ 2,100 $ (2,100) -100%
Audit Fees $ 2,000 $ 2,100 $ (100) -5%
Marketing $ 17,053 $ 20,500 $ (3,447) -17%
Marketing Collateral $ 17,053 $ 20,000 $ (2,947) -15%
Community Engagement Activities & Sponsorships $ - $ 500 $ (500) -100% Programs $ 1,058 $ 14,500 $ (13,442) -93%
Program Costs $ 1,058 $ 14,500 $ (13,442) -93%
Rents & Leases $ 3,200 $ 1,800 $ 1,400 78%
Hunt Boyer Mansion $ 3,200 $ 1,800 $ 1,400 78%
Other A&G $ 28,932 $ 28,000 $ 932 3%
Development - New Members $ - $ 2,100 $ (2,100) -100%
Strategic Plan Implementation $ 5,892 $ 2,100 $ 3,792 181% PG&E Data Fees $ 21,730 $ 23,000 $ (1,270) -6%
Insurance $ 1,310 $ 700 $ 610 87%
Banking Fees $ - $ 100 $ (100) -100%
Miscellaneous Operating Expenses $ 51 $ 600 $ 600 100%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES $ 4,936,036 $ 5,902,200 $ (925,015) -16% Interest on RCB loan $ 3,768 $ 3,400 $ 368 11%
Interest Expense - Bridge Loan $ - $ - $ - 100%
NET INCOME $ (1,335,483) $ (2,548,500) $ 1,171,868 -46%