Item 6
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Edward Burnham, Finance and Operations Director
Mitch Sears, Executive Officer
SUBJECT: Financial Update – August 31, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending August 31, 2022
DATE: August 31, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of August 1, 2022 to August 31, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending August 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 August 31, 2022.
Financial Statements for the period August 1, 2022 – August 31, 2022 In the Statement of Net Position, VCEA, as of August 31, 2021, has a total of $4,107,992 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 $1,025,127 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of August Item 6
31, 2021, $62,955. VCE member obligations are incurred monthly due to staffing, accounting, and legal services.
The term loan with River City Bank includes a current portion of $884,987. The line of credit with the County of Yolo has an outstanding balance of $3,000,000. On August 31, 2022, VCE’s net position is $14,980,296.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $11,509,634 of revenue (net of allowance for doubtful accounts), of which $12,181,117 was billed in August, and $5,892,160 represent estimated unbilled revenue. The cost of electricity for the August revenue amount totaled $9,605,351. For August, VCEA’s gross margin was approximate 25% and net income totaled $1,298,621. The year-to-date change in net position was $5,292,424.
In the Statement of Cash Flows, VCEA cash flows from operations were ($186,459) due to August cash receipts of revenues being more than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending August 31, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($2,850,941) and -5% – Unfavorable variance due to The 2022 Budget incorporated revenues associated with extreme temperatures and drought conditions. These revenues have not fully materialized in the actuals for 2022.
• Purchased Power – ($3,819,961) and -8% – Unfavorable variance due to warmer weather than forecast during the winter months, heat storms in June and August, and gas prices driving short-term power market increases.
Attachments:
1) Financial Statements (Unaudited) August 1, 2022 to August 31, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending August 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF AUGUST 1 TO AUGUST 31, 2022
PREPARED ON OCTOBER 7, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 4,107,992
Accounts receivable, net of allowance 15,614,740
Accrued revenue 5,892,160
Prepaid expenses 21,881
Other current assets and deposits 2,139,195
Total current assets 27,775,968
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 1,025,127
Total restricted assets 2,125,127
TOTAL ASSETS $ 29,901,095
LIABILITIES
Current liabilities:
Accounts payable $ 492,677
Accrued payroll 57,353
Interest payable 4,458
Due to member agencies 62,955
Accrued cost of electricity 8,277,578
Other accrued liabilities 49,430
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 64,984
Limited Term Loan 884,987
Loan - County of Yolo 3,000,000
Total current liabilities 14,874,422
Total noncurrent liabilities -
TOTAL LIABILITIES $ 14,874,422
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 2,125,127
Unrestricted 12,677,046
TOTAL NET POSITION $ 15,026,673
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
August 31, 2022
3 FOR THE PERIOD
ENDING
AUGUST 31, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 11,509,634 $ 57,409,358
Other revenue 108,352 1,108,198
TOTAL OPERATING REVENUES 11,617,986 58,517,556
OPERATING EXPENSES
Cost of electricity 9,605,351 49,025,099
Contract services 226,303 1,721,766
Staff compensation 104,584 834,938
General, administration, and other 338,430 1,629,911
TOTAL OPERATING EXPENSES 10,274,668 53,211,714
TOTAL OPERATING INCOME (LOSS) 1,343,318 5,305,842
NONOPERATING REVENUES (EXPENSES)
Interest income 4,401 15,249
Interest and related expenses (2,721) (28,667)
TOTAL NONOPERATING REVENUES
(EXPENSES) 1,680 (13,418)
CHANGE IN NET POSITION 1,344,998 5,292,424
Net position at beginning of period 13,681,675 9,734,249 Net position at end of period $ 15,026,673 $ 15,026,673 (WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OFAUGUST 1, 2022 TO AUGUST 31, 2022
4 FOR THE
PERIOD ENDING
AUGUST 31, 2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 10,390,750 $ 44,925,017 Payments received from other revenue sources 108,352 1,108,198.00 Payments to purchase electricity (10,058,197) (45,995,495.00) Payments for contract services, general, and adminstration (524,920) (2,816,198.00) Payments for staff compensation (102,444) (841,494.00)
Net cash provided (used) by operating activities (186,459) (3,619,972)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (42,813) 2,731,961
Interest and related expenses (2,852) (26,995)
Net cash provided (used) by non-capital financing
activities (45,665) 2,704,966
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 4,401 15,249
Net cash provided (used) by investing activities 4,401 15,249 NET CHANGE IN CASH AND CASH EQUIVALENTS (227,723) (1,040,676) Cash and cash equivalents at beginning of period 6,460,842 6,460,842 Cash and cash equivalents at end of period $ 6,233,119 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 4,107,992 4,107,992
Restricted assets 2,125,127 2,125,127
Cash and cash equivalents at end of period $ 6,233,119 $ 6,233,119 (WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF AUGUST 1 TO AUGUST 31, 2022
5 FOR THE
PERIOD ENDING
AUGUST 31, 2022 YEAR TO DATE
Operating Income (Loss) $ 1,343,318 $ 5,305,842
(Increase) decrease in net accounts receivable (1,517,534.00) (8,306,895.41) (Increase) decrease in accrued revenue 483,578 (4,123,966.74) (Increase) decrease in prepaid expenses 10,918 863,349.00 (Increase) decrease in other assets and deposits - (140,919.00) Increase (decrease) in accounts payable 17,855 47,935.00 Increase (decrease) in accrued payroll 2,140 (6,556.00) Increase (decrease) in due to member agencies 929 (54,990.00) Increase (decrease) in accrued cost of electricity (452,846) 2,945,409.00 Increase (decrease) in other accrued liabilities 10,111 (236,320.00) Increase (decrease) in user taxes and energy surcharges (84,928) (53,778.90) Net cash provided (used) by operating activities $ (186,459) $ (3,760,891) FOR THE PERIOD OF AUGUST 1 TO AUGUST 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY
2022 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 08/31/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 57,409,359 $ 60,260,300 $ (2,850,941) -5% Other Revenues - Programs $ 1,108,198 $ - $ 1,108,198 100% Interest Revenues $ 15,574 $ 12,000 $ 3,574 30%
Purchased Power $ 49,025,099 $ 45,199,100 $ (3,819,961) -8% Purchased Power Base $ 49,019,061 $ 45,135,000 $ (3,884,061) -9% Purchased Power Contingency 2% $ - $ 64,100 $ 64,100 100% Labor & Benefits $ 835,934 $ 869,200 $ 33,266 4%
Salaries & Wages/Benefits $ 683,772 $ 726,400 $ 42,628 6% Contract Labor (SMUD Staff Aug) $ - $ 29,200 $ 29,200 100% Human Resources & Payroll $ 152,162 $ 113,600 $ (38,562) -34% Office Supplies & Other Expenses $ 153,390 $ 135,800 $ (17,590) -13% Technology Costs $ 42,838 $ 27,800 $ (15,038) -54%
Office Supplies $ 7,119 $ 1,600 $ (5,519) -345%
Travel $ 250 $ 4,000 $ 3,750 94%
CalCCA Dues $ 75,291 $ 84,800 $ 9,509 11%
CC Power $ 26,891 $ 16,000 $ (10,891) -68%
Memberships $ 1,000 $ 1,600 $ 600 38%
Contractual Services $ 1,605,020 $ 1,673,800 $ 68,780 4% Other Contract Services $ - $ 16,800 $ 16,800 100%
Don Dame $ 7,741 $ 6,600 $ (1,141) -17%
SMUD - Credit Support $ 354,335 $ 328,100 $ (26,235) -8% SMUD - Wholesale Energy Services $ 397,146 $ 393,000 $ (4,146) -1% SMUD - Call Center $ 531,486 $ 529,800 $ (1,686) 0%
SMUD - Operating Services $ 34,080 $ 40,200 $ 6,120 15% Commercial Legal Support $ 8,234 $ - $ (8,234) 100%
Legal General Counsel $ 70,479 $ 103,200 $ 32,721 32%
Regulatory Counsel $ 97,174 $ 132,800 $ 35,626 27%
Joint CCA Regulatory counsel $ 4,532 $ 21,600 $ 17,068 79% Legislative - (Lobbyist) $ 45,000 $ 40,200 $ (4,800) -12% Accounting Services $ 9,446 $ 17,600 $ 8,154 46%
Financial Consultant $ - $ 16,800 $ 16,800 100%
Audit Fees $ 45,368 $ 27,100 $ (18,268) -67%
Marketing $ 124,669 $ 164,000 $ 39,331 24%
Marketing Collateral $ 124,469 $ 160,000 $ 35,531 22%
Community Engagement Activities & Sponsorships $ 4,000 200 $ 3,800 $ 95% Programs $ 1,100,193 $ 116,000 $ (984,193) -848%
Program Costs $ 102,724 $ 116,000 $ 13,277 11%
Programs - AgFIT $ 997,469 $ - $ (997,469) 100%
Rents & Leases $ 17,690 $ 14,400 $ (3,290) -23%
Hunt Boyer Mansion $ 17,690 $ 14,400 $ (3,290) -23%
Other A&G $ 349,866 $ 240,000 $ (109,866) -46%
Development - New Members $ - $ 16,800 $ 16,800 100%
Strategic Plan Implementation $ 3,788 $ 25,400 $ 21,612 85% PG&E Data Fees $ 194,326 $ 184,000 $ (10,326) -6%
Insurance $ 9,880 $ 5,600 $ (4,280) -76%
Banking Fees $ 141,872 $ 8,200 $ (133,672) -1630%
Miscellaneous Operating Expenses $ 176 $ 600 $ 424 71%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 53,212,037 $ 48,432,900 $ (4,779,137) $ -10% Interest on RCB loan $ 26,171 $ 23,900 $ 2,271 10%
Interest Expense - Bridge Loan $ 2,496 $ 52,000 $ (49,504) -95% NET INCOME 5,292,427 $ 11,763,500 $ (6,471,073) $ -55%