Item 6
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Executive Officer
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – March 31, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending March 31, 2022
DATE: May 12, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of March 1, 2022 to March 31, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending March 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 March 31, 2022.
Financial Statements for the period March 1, 2022 – March 31, 2022 In the Statement of Net Position, VCEA, as of March 31, 2021, has a total of $5,431,356 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 $1,041 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of March 31, 2021, $61,261 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 $1,087,139. On March 31, 2022, VCE’s net position is $5,943,846.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $3,560,481 of revenue (net of allowance for doubtful accounts), of which $3,702,319 was billed in March, and $1,338,089 represent estimated unbilled revenue. The cost of the electricity for the March revenue totaled $4,099,897. For March, VCEA’s gross margin was approximate -15% and net loss totaled ($ 964,688). The year-to-date change in net position was ($4,067,775).
In the Statement of Cash Flows, VCEA cash flows from operations were ($913,783) due to March cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending March 31, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue - $1,101,485 and 10% – unfavorable variance is due to load being lessfavorable than planned, and the weather has been warmer than forecast during the winter months. • Purchased Power – ($1,186,219) and -8% – favorable variance is due to load being more favorable than planned, weather has been warmer than forecast, and lower power market prices during winter months.
Attachments:
1) Financial Statements (Unaudited) March 1, 2022 to March 31, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending March 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF MARCH 1 TO MARCH 31, 2022
PREPARED ON MAY 5, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 5,431,356
Accounts receivable, net of allowance 6,279,240
Accrued revenue 1,338,089
Prepaid expenses 10,918
Other current assets and deposits 1,998,276
Total current assets 15,057,879
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 1,041
Total restricted assets 1,101,041
TOTAL ASSETS $ 16,158,920
LIABILITIES
Current liabilities:
Accounts payable $ 406,697
Accrued payroll 66,551
Interest payable 2,482
Due to member agencies 61,261
Accrued cost of electricity 3,505,096
Other accrued liabilities (4,082)
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 109,930
Limited Term Loan 1,087,139
Loan - County of Yolo 3,000,000
Total current liabilities 10,215,074
Total noncurrent liabilities -
TOTAL LIABILITIES $ 10,215,074
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 1,101,041
Unrestricted 4,618,305
TOTAL NET POSITION $ 5,943,846
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
MARCH 31, 2022
3 FOR THE PERIOD
ENDING
March 31, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 3,560,481 $ 9,914,315
TOTAL OPERATING REVENUES 3,560,481 9,914,315
OPERATING EXPENSES
Cost of electricity 4,099,897 12,834,381
Contract services 226,357 594,851
Staff compensation 102,302 293,783
General, administration, and other 94,169 252,383
TOTAL OPERATING EXPENSES 4,522,725 13,975,398
TOTAL OPERATING INCOME (LOSS) (962,244) (4,061,083)
NONOPERATING REVENUES (EXPENSES)
Other Revenue
Interest income 888 3,203
Interest and related expenses (3,332) (9,895)
TOTAL NONOPERATING REVENUES
(EXPENSES) (2,444) (6,692)
CHANGE IN NET POSITION (964,688) (4,067,775)
Net position at beginning of period 6,908,534 9,749,097 Net position at end of period $ 5,943,846 $ 5,681,322
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF MARCH 1, 2022 TO MARCH 31, 2022
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
4 FOR THE
PERIOD ENDING
MARCH 31, 2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 3,483,313 $ 11,364,491 Payments to purchase electricity (3,958,765) (14,577,259) Payments for contract services, general, and adminstration (338,125) (441,978) Payments for staff compensation (100,206) (291,141)
Net cash provided (used) by operating activities (913,783) (3,945,887)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt 2,967,057 2,934,113
Interest and related expenses (3,110) (10,199)
Net cash provided (used) by non-capital financing
activities 2,963,947 2,923,914
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 888 3,203
Net cash provided (used) by investing activities 888 3,203 NET CHANGE IN CASH AND CASH EQUIVALENTS 2,051,052 (1,018,770) Cash and cash equivalents at beginning of period 4,481,345 4,481,345 Cash and cash equivalents at end of period $ 6,532,397 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 5,431,356 5,431,356
Restricted assets 1,101,041 1,101,041
Cash and cash equivalents at end of period $ 6,532,397 $ 6,532,397
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF MARCH 1 TO MARCH 31, 2022
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
MARCH 31, 2022 YEAR TO DATE
Operating Income (Loss) $ (962,244) $ (4,061,083)
(Increase) decrease in net accounts receivable (453,156.00) 1,028,604.59 (Increase) decrease in accrued revenue 360,120 430,104.26 (Increase) decrease in prepaid expenses 10,325 874,312.00 Increase (decrease) in accounts payable (6,079) (38,045.00) Increase (decrease) in accrued payroll 2,096 2,642.00
Increase (decrease) in due to member agencies (98,611) (56,684.00) Increase (decrease) in accrued cost of electricity 141,132 (1,827,073.00) Increase (decrease) in other accrued liabilities 76,766 (289,832.00) Increase (decrease) in user taxes and energy surcharges 15,868 (8,832.90) Net cash provided (used) by operating activities $ (913,783) $ (3,945,887)
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
FOR THE PERIOD OF MARCH 1 TO MARCH 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
VALLEY CLEAN ENERGY
2022 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 03/31/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 9,914,315 $ 11,015,800 $ (1,101,485) -10% Interest Revenues $ 3,528 $ 4,500 $ (972) -22%
Purchased Power $ 12,834,381 $ 14,020,600 $ (1,186,219) -8% Purchased Power Base $ 12,834,381 $ 12,595,400 $ 238,981 2% Purchased Power Contingency 2% $ - $ 1,425,200 $ (1,425,200) -100% Labor & Benefits $ 294,780 $ 329,700 $ (34,920) -11%
Salaries & Wages/Benefits $ 242,835 $ 272,400 $ (29,565) -11% Contract Labor (SMUD Staff Aug) $ - $ 14,700 $ (14,700) -100% Human Resources & Payroll $ 51,945 $ 42,600 $ 9,345 22% Office Supplies & Other Expenses $ 69,186 $ 49,200 $ 19,986 41% Technology Costs $ 9,930 $ 8,700 $ 1,230 14%
Office Supplies $ 4,021 $ 600 $ 3,421 570%
Travel $ - $ 1,500 $ (1,500) -100%
CalCCA Dues $ 27,345 $ 31,800 $ (4,455) -14%
CC Power $ 26,891 $ 6,000 $ 20,891 348%
Memberships $ 1,000 $ 600 $ 400 67%
Contractual Services $ 554,237 $ 625,500 $ (71,263) -11% Other Contract Services $ - $ 6,300 $ (6,300) -100%
Don Dame $ 1,052 $ 2,400 $ (1,348) -56%
SMUD - Credit Support $ 117,711 $ 127,000 $ (9,289) -7% SMUD - Wholesale Energy Services $ 146,961 $ 146,400 $ 561 0% SMUD - Call Center $ 196,764 $ 197,600 $ (836) 0%
SMUD - Operating Services $ 5,634 $ 15,000 $ (9,366) -62% Commercial Legal Support $ - $ - $ - 100%
Legal General Counsel $ 28,490 $ 38,700 $ (10,210) -26% Regulatory Counsel $ 12,510 $ 49,800 $ (37,290) -75%
Joint CCA Regulatory counsel $ 13,562 $ 8,100 $ 5,462 67% Legislative - (Lobbyist) $ 15,000 $ 15,000 $ - 0%
Accounting Services $ 3,252 $ 6,600 $ (3,348) -51%
Financial Consultant $ - $ 6,300 $ (6,300) -100%
Audit Fees $ 13,300 $ 6,300 $ 7,000 111%
Marketing $ 47,012 $ 61,500 $ (14,488) -24%
Marketing Collateral $ 47,012 $ 60,000 $ (12,988) -22%
Community Engagement Activities & Sponsorships $ - $ 1,500 $ (1,500) -100% Programs $ 76,870 $ 43,500 $ 33,370 77%
Program Costs $ 76,870 $ 43,500 $ 33,370 77%
Rents & Leases $ 6,400 $ 5,400 $ 1,000 19%
Hunt Boyer Mansion $ 6,400 $ 5,400 $ 1,000 19%
Other A&G $ 92,805 $ 91,400 $ 1,405 2%
Development - New Members $ - $ 6,300 $ (6,300) -100%
Strategic Plan Implementation $ (90) $ 6,300 $ (6,390) -101% PG&E Data Fees $ 87,165 $ 69,000 $ 18,165 26%
Insurance $ 3,530 $ 2,100 $ 1,430 68%
Banking Fees $ 2,200 $ 7,700 $ (5,500) -71%
Miscellaneous Operating Expenses $ 51 $ 600 $ 600 100%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 13,975,723 $ 15,247,400 $ (1,230,528) $ -8% Interest on RCB loan $ 9,895 $ 9,600 $ 295 3%
Interest Expense - Bridge Loan $ - $ - $ - 100%
NET INCOME (4,067,775) $ (4,236,700) $ 127,776 $ -3%