Item 6
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Executive Director
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – April 30, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending April 30, 2022
DATE: June 9, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of April 1, 2022 to April 30, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending April 30, 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 April 30, 2022.
Financial Statements for the period April 1, 2022 – April 30, 2022 In the Statement of Net Position, VCEA, as of April 30, 2021, has a total of $5,296,074 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 April 30, 2021, $62,246 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 $1,054,195. The line of credit with the County of Yolo has an outstanding balance of $3,000,000. On April 30, 2022, VCE’s net position is $8,388,870.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $6,729,101 of revenue (net of allowance for doubtful accounts), of which $ 5,340,067 was billed in April, and $2,813,755 represent estimated unbilled revenue. The cost of the electricity for the April revenue totaled $3,894,811. For April, VCEA’s gross margin was approximate 42% and net income totaled $2,445,024. The year-to-date change in net position was ($1,551,433).
In the Statement of Cash Flows, VCEA cash flows from operations were ($94,005) due to April cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending April 30, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue - $803,417 and 5% – favorable variance due to the weather has been warmer than forecast during the winter months and rate and PCIA impacts.
• Purchased Power – ($1,221,308) 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. • Banking Fees – ($58,812) and -754% – unfavorable related to the upfront banking fees for the executed 2 year agreement line of credit with River City Bank.
Attachments:
1) Financial Statements (Unaudited) April 1, 2022 to April 30, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending April 30, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF APRIL 1 TO APRIL 30, 2022
PREPARED ON JUNE 1, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 5,296,074
Accounts receivable, net of allowance 8,002,312
Accrued revenue 2,813,755
Prepaid expenses 29,717
Other current assets and deposits 1,998,276
Total current assets 18,140,134
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 1,041
Total restricted assets 1,101,041
TOTAL ASSETS $ 19,241,175
LIABILITIES
Current liabilities:
Accounts payable $ 425,663
Accrued payroll 63,828
Interest payable 2,356
Due to member agencies 62,646
Accrued cost of electricity 4,131,535
Other accrued liabilities 6,346
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 125,736
Limited Term Loan 1,054,195
Loan - County of Yolo 3,000,000
Total current liabilities 10,852,305
Total noncurrent liabilities -
TOTAL LIABILITIES $ 10,852,305
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 1,101,041
Unrestricted 7,063,329
TOTAL NET POSITION $ 8,388,870
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
APRIL 30, 2022
3 FOR THE PERIOD
ENDING
APRIL 30, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 6,729,101 $ 16,643,416
TOTAL OPERATING REVENUES 6,729,101 16,643,416
OPERATING EXPENSES
Cost of electricity 3,900,849 16,735,230
Contract services 188,318 783,169
Staff compensation 121,423 415,206
General, administration, and other 71,318 252,383
TOTAL OPERATING EXPENSES 4,281,908 18,185,988
TOTAL OPERATING INCOME (LOSS) 2,447,193 (1,542,572)
NONOPERATING REVENUES (EXPENSES)
Other Revenue
Interest income 1,047 4,250
Interest and related expenses (3,216) (13,111)
TOTAL NONOPERATING REVENUES
(EXPENSES) (2,169) (8,861)
CHANGE IN NET POSITION 2,445,024 (1,551,433)
Net position at beginning of period 5,943,846 9,749,097 Net position at end of period $ 8,388,870 $ 8,197,664
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF APRIL 1, 2022 TO APRIL 30, 2022
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
4 FOR THE
PERIOD ENDING
APRIL 30, 2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 3,546,169 $ 14,910,660 Payments to purchase electricity (3,274,410) (17,851,669) Payments for contract services, general, and adminstration (247,656) (689,634) Payments for staff compensation (124,146) (291,141)
Net cash provided (used) by operating activities (100,043) (3,921,784)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (32,944) 2,901,169
Interest and related expenses (3,342) (13,541)
Net cash provided (used) by non-capital financing
activities (36,286) 2,887,628
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 1,047 4,250
Net cash provided (used) by investing activities 1,047 4,250 NET CHANGE IN CASH AND CASH EQUIVALENTS (135,282) (1,154,052) Cash and cash equivalents at beginning of period 6,532,397 6,532,397 Cash and cash equivalents at end of period $ 6,397,115 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 5,296,074 5,296,074
Restricted assets 1,101,041 1,101,041
Cash and cash equivalents at end of period $ 6,397,115 $ 6,397,115
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF APRIL 1 TO APRIL 30, 2022
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
APRIL 30, 2022 YEAR TO DATE
Operating Income (Loss) $ 2,447,193 $ (1,613,890)
(Increase) decrease in net accounts receivable (1,723,072.00) (694,467.41) (Increase) decrease in accrued revenue (1,475,666) (1,045,561.74) (Increase) decrease in prepaid expenses (18,799) 855,513.00 Increase (decrease) in accounts payable 18,966 (19,079.00) Increase (decrease) in accrued payroll (2,723) (81.00)
Increase (decrease) in due to member agencies 1,385 (55,299.00) Increase (decrease) in accrued cost of electricity 626,439 (1,200,634.00) Increase (decrease) in other accrued liabilities 10,428 (279,404.00) Increase (decrease) in user taxes and energy surcharges 15,806 6,973.10 Net cash provided (used) by operating activities $ (100,043) $ (4,045,930)
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
FOR THE PERIOD OF APRIL 1 TO APRIL 30, 2022
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
VALLEY CLEAN ENERGY
2022 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 04/30/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 16,643,417 $ 15,840,000 $ 803,417 5% Interest Revenues $ 4,575 $ 6,000 $ (1,425) -24%
Purchased Power $ 16,735,230 $ 17,950,500 $ (1,221,308) -7% Purchased Power Base $ 16,729,192 $ 16,248,000 $ 481,192 3% Purchased Power Contingency 2% $ - $ 1,702,500 $ (1,702,500) -100% Labor & Benefits $ 416,202 $ 437,600 $ (21,398) -5%
Salaries & Wages/Benefits $ 343,001 $ 363,200 $ (20,199) -6% Contract Labor (SMUD Staff Aug) $ - $ 17,600 $ (17,600) -100% Human Resources & Payroll $ 73,201 $ 56,800 $ 16,401 29% Office Supplies & Other Expenses $ 82,862 $ 65,600 $ 17,262 26% Technology Costs $ 13,917 $ 11,600 $ 2,317 20%
Office Supplies $ 4,595 $ 800 $ 3,795 474%
Travel $ - $ 2,000 $ (2,000) -100%
CalCCA Dues $ 36,460 $ 42,400 $ (5,940) -14%
CC Power $ 26,891 $ 8,000 $ 18,891 236%
Memberships $ 1,000 $ 800 $ 200 25%
Contractual Services $ 739,732 $ 834,600 $ (94,868) -11% Other Contract Services $ - $ 8,400 $ (8,400) -100%
Don Dame $ 2,076 $ 3,200 $ (1,124) -35%
SMUD - Credit Support $ 144,382 $ 169,900 $ (25,518) -15% SMUD - Wholesale Energy Services $ 195,948 $ 195,200 $ 748 0% SMUD - Call Center $ 262,312 $ 263,500 $ (1,188) 0%
SMUD - Operating Services $ 5,181 $ 20,000 $ (14,819) -74% Commercial Legal Support $ - $ - $ - 100%
Legal General Counsel $ 38,464 $ 51,600 $ (13,136) -25% Regulatory Counsel $ 25,880 $ 66,400 $ (40,520) -61%
Joint CCA Regulatory counsel $ 192 $ 10,800 $ (10,608) -98% Legislative - (Lobbyist) $ 20,000 $ 20,000 $ - 0%
Accounting Services $ 4,336 $ 8,800 $ (4,464) -51%
Financial Consultant $ - $ 8,400 $ (8,400) -100%
Audit Fees $ 40,960 $ 8,400 $ 32,560 388%
Marketing $ 49,834 $ 82,000 $ (32,166) -39%
Marketing Collateral $ 49,834 $ 80,000 $ (30,166) -38%
Community Engagement Activities & Sponsorships $ 2,000 - $ (2,000) $ -100% Programs $ 65,390 $ 58,000 $ 7,390 13%
Program Costs $ 65,390 $ 58,000 $ 7,390 13%
Rents & Leases $ 9,600 $ 7,200 $ 2,400 33%
Hunt Boyer Mansion $ 9,600 $ 7,200 $ 2,400 33%
Other A&G $ 158,727 $ 119,400 $ 39,327 33%
Development - New Members $ - $ 8,400 $ (8,400) -100%
Strategic Plan Implementation $ (90) $ 8,400 $ (8,490) -101% PG&E Data Fees $ 87,165 $ 92,000 $ (4,835) -5%
Insurance $ 5,040 $ 2,800 $ 2,240 80%
Banking Fees $ 66,612 $ 7,800 $ 58,812 754%
Miscellaneous Operating Expenses $ 51 $ 600 $ 600 100%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 18,257,629 $ 19,575,500 $ (1,282,760) $ -7% Interest on RCB loan $ 13,111 $ 12,600 $ 511 4%
Interest Expense - Bridge Loan $ - $ 10,400 $ (10,400) -100% NET INCOME (1,622,748) $ (3,752,500) $ 2,094,641 $ -56%