Item 6
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Edward Burnham, Finance and Operations Director
Mitch Sears, Executive Director
SUBJECT: Financial Update – September 30, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending September 30, 2022
DATE: November 10, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of September 1, 2022 to September 30, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending September 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 September 30, 2022.
Financial Statements for the period September 1, 2022 – September 30, 2022 In the Statement of Net Position, VCEA, as of September 30, 2021, has a total of $3,756,413 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 $1,026,142 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of September 30, 2021, $1,924. 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 $842,042. The line of credit with the County of Yolo has an outstanding balance of $3,000,000. On September 30, 2022, VCE’s net position is $12,695,191.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $9,792,177 of revenue (net of allowance for doubtful accounts), of which $11,186,238 was billed in September, and $4,500,183 represent estimated unbilled revenue. The cost of electricity for the September revenue amount totaled $11,737,194. For September, VCEA’s gross margin was approximately (20%) and net income totaled ($2,331,482). The year-to-date change in net position was $2,960,942.
In the Statement of Cash Flows, VCEA cash flows from operations were ($310,014) due to September cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending September 30, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($3,484,964) 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 – ($8,509,855) and -16% – Unfavorable variance due to warmer weather than forecast during the winter months, heat storms in June and September, and gas prices driving short-term power market increases.
• Interest Expense - Bridge Loan – (57,804) and -96% - Favorable variance due to use of power purchase reserve account funds and favorable loan terms with the County of Yolo.
Attachments:
1) Financial Statements (Unaudited) September 1, 2022 to September 30, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending September 30, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF SEPTEMBER 1 TO SEPTEMBER 30, 2022
PREPARED ON NOVEMBER 5, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 3,756,413
Accounts receivable, net of allowance 16,679,553
Accrued revenue 4,500,183
Prepaid expenses 49,116
Other current assets and deposits 2,139,195
Total current assets 27,124,460
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 1,026,142
Total restricted assets 2,126,142
TOTAL ASSETS $ 29,250,602
LIABILITIES
Current liabilities:
Accounts payable $ 553,618
Accrued payroll 66,825
Interest payable 4,458
Due to member agencies 1,924
Accrued cost of electricity 9,961,211
Other accrued liabilities 58,659
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 86,674
Limited Term Loan 842,042
Loan - County of Yolo 3,000,000
Total current liabilities 16,555,411
Total noncurrent liabilities -
TOTAL LIABILITIES $ 16,555,411
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 2,126,142
Unrestricted 10,344,549
TOTAL NET POSITION $ 12,695,191
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
SEPTEMBER 30, 2022
3 FOR THE PERIOD
ENDING
SEPTEMBER 30, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 9,792,177 $ 67,201,535
Other revenue 25 1,108,223
TOTAL OPERATING REVENUES 9,792,202 68,309,758
OPERATING EXPENSES
Cost of electricity 11,737,194 60,762,293
Contract services 269,783 1,991,549
Staff compensation 100,061 934,999
General, administration, and other 19,041 1,648,952
TOTAL OPERATING EXPENSES 12,126,079 65,337,793
TOTAL OPERATING INCOME (LOSS) (2,333,877) 2,971,965
NONOPERATING REVENUES (EXPENSES)
Interest income 5,115 20,364
Interest and related expenses (2,720) (31,387)
TOTAL NONOPERATING REVENUES
(EXPENSES) 2,395 (11,023)
CHANGE IN NET POSITION (2,331,482) 2,960,942
Net position at beginning of period 15,026,673 9,734,249 Net position at end of period $ 12,695,191 $ 12,695,191 (UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF SEPTEMBER 1, 2022 TO SEPTEMBER 30, 2022 (WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
4 FOR THE
PERIOD ENDING
SEPTEMBER 30,
2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 10,141,031 $ 55,066,048 Payments received from other revenue sources 25 1,108,223.00 Payments to purchase electricity (10,053,561) (56,049,056.00) Payments for contract services, general, and adminstration (306,920) (3,123,118.00) Payments for staff compensation (90,589) (932,083.00)
Net cash provided (used) by operating activities (310,014) (3,929,986)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (42,945) 2,689,016
Interest and related expenses (2,720) (29,715)
Net cash provided (used) by non-capital financing activities (45,665) 2,659,301
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 5,115 20,364
Net cash provided (used) by investing activities 5,115 20,364 NET CHANGE IN CASH AND CASH EQUIVALENTS (350,564) (1,391,240) Cash and cash equivalents at beginning of period 6,233,119 6,460,842 Cash and cash equivalents at end of period $ 5,882,555 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 3,756,413 3,756,413
Restricted assets 2,126,142 2,126,142
Cash and cash equivalents at end of period $ 5,882,555 $ 5,882,555 (WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF SEPTEMBER 1 TO SEPTEMBER 30, 2022
5 FOR THE
PERIOD ENDING
SEPTEMBER 30,
2022 YEAR TO DATE
Operating Income (Loss) $ (2,333,877) $ 5,305,842
(Increase) decrease in net accounts receivable (1,064,813.00) (8,306,895.41) (Increase) decrease in accrued revenue 1,391,977 (4,123,966.74) (Increase) decrease in prepaid expenses (27,235) 863,349.00 (Increase) decrease in other assets and deposits - (140,919.00) Increase (decrease) in accounts payable 60,941 47,935.00 Increase (decrease) in accrued payroll 9,472 (6,556.00) Increase (decrease) in due to member agencies (61,031) (54,990.00) Increase (decrease) in accrued cost of electricity 1,683,633 2,945,409.00 Increase (decrease) in other accrued liabilities 9,229 (236,320.00) Increase (decrease) in user taxes and energy surcharges 21,690 (53,778.90) Net cash provided (used) by operating activities $ (310,014) $ (3,760,891) FOR THE PERIOD OF SEPTEMBER 1 TO SEPTEMBER 30, 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 09/30/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 67,201,536 $ 70,686,500 $ (3,484,964) -5% Other Revenues - Programs $ 1,108,223 $ - $ 1,108,223 100% Interest Revenues $ 20,689 $ 13,500 $ 7,189 53%
Purchased Power $ 60,762,293 $ 52,246,400 $ (8,509,855) -16% Purchased Power Base $ 60,756,255 $ 51,921,900 $ (8,834,355) -17% Purchased Power Contingency 2% $ - $ 324,500 $ 324,500 100% Labor & Benefits $ 935,995 $ 977,100 $ 41,105 4%
Salaries & Wages/Benefits $ 773,272 $ 817,200 $ 43,928 5% Contract Labor (SMUD Staff Aug) $ - $ 32,100 $ 32,100 100% Human Resources & Payroll $ 162,723 $ 127,800 $ (34,923) -27% Office Supplies & Other Expenses $ 170,041 $ 152,200 $ (17,841) -12% Technology Costs $ 47,056 $ 30,700 $ (16,356) -53%
Office Supplies $ 8,912 $ 1,800 $ (7,112) -395%
Travel $ 1,184 $ 4,500 $ 3,316 74%
CalCCA Dues $ 84,999 $ 95,400 $ 10,401 11%
CC Power $ 26,891 $ 18,000 $ (8,891) -49%
Memberships $ 1,000 $ 1,800 $ 800 44%
Contractual Services $ 1,865,474 $ 1,901,900 $ 36,426 2% Other Contract Services $ - $ 18,900 $ 18,900 100%
Don Dame $ 8,098 $ 7,500 $ (598) -8%
SMUD - Credit Support $ 412,309 $ 389,200 $ (23,109) -6% SMUD - Wholesale Energy Services $ 448,758 $ 443,100 $ (5,658) -1% SMUD - Call Center $ 600,546 $ 597,000 $ (3,546) -1%
SMUD - Operating Services $ 40,223 $ 45,300 $ 5,077 11% Commercial Legal Support $ 7,758 $ - $ (7,758) 100%
Legal General Counsel $ 71,914 $ 116,100 $ 44,186 38%
Regulatory Counsel $ 156,445 $ 149,400 $ (7,045) -5%
Joint CCA Regulatory counsel $ 21,004 $ 24,300 $ 3,296 14% Legislative - (Lobbyist) $ 45,000 $ 45,300 $ 300 1%
Accounting Services $ 8,052 $ 19,800 $ 11,748 59%
Financial Consultant $ - $ 18,900 $ 18,900 100%
Audit Fees $ 45,368 $ 27,100 $ (18,268) -67%
Marketing $ 132,194 $ 184,500 $ 52,306 28%
Marketing Collateral $ 131,994 $ 180,000 $ 48,006 27%
Community Engagement Activities & Sponsorships $ 4,500 200 $ 4,300 $ 96% Programs $ 1,102,631 $ 130,500 $ (972,131) -745%
Program Costs $ 105,014 $ 130,500 $ 25,487 20%
Programs - AgFIT $ 997,618 $ - $ (997,618) 100%
Rents & Leases $ 17,600 $ 16,200 $ (1,400) -9%
Hunt Boyer Mansion $ 17,600 $ 16,200 $ (1,400) -9%
Other A&G $ 351,834 $ 272,300 $ (79,534) -29%
Development - New Members $ - $ 18,900 $ 18,900 100%
Strategic Plan Implementation $ 4,685 $ 31,800 $ 27,115 85% PG&E Data Fees $ 194,238 $ 207,000 $ 12,762 6%
Insurance $ 11,039 $ 6,300 $ (4,739) -75%
Banking Fees $ 141,872 $ 8,300 $ (133,572) -1609%
Miscellaneous Operating Expenses $ 176 $ 600 $ 424 71%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 65,338,091 $ 55,901,700 $ (9,436,391) $ -17% Interest on RCB loan $ 28,891 $ 26,400 $ 2,491 9%
Interest Expense - Bridge Loan $ 2,496 $ 60,300 $ (57,804) -96% NET INCOME 2,960,970 $ 14,711,600 $ (11,750,630) $ -80%