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 – October 31, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending October 31, 2022
DATE: December 8, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of October 1, 2022 to October 31, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending October 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 October 31, 2022.
Financial Statements for the period October 1, 2022 – October 31, 2022 In the Statement of Net Position, VCEA, as of October 31, 2021, has a total of $619,754 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 $1,572,704 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of October Item 6
31, 2021, $1,924. 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 $798,882. The line of credit with the County of Yolo has an outstanding balance of $3,000,000. On October 31, 2022, VCE’s net position is $14,151,088.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $6,579,529 of revenue (net of allowance for doubtful accounts), of which $7,345,373 was billed in October, and $3,832,335 represent estimated unbilled revenue. The cost of electricity for the October revenue amount totaled $4,688,554. For October, VCEA’s gross margin was approximately 29% and net income totaled $1,455,897. The year-to-date change in net position was $4,416,839.
In the Statement of Cash Flows, VCEA cash flows from operations were ($2,550,886) due to October cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending October 31, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($4,029,705) 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 – ($7,952,209) and -14% – Unfavorable variance due to warmer weather than forecast during the winter months, heat storms in June and October, and gas prices driving short-term power market increases.
• Marketing Collateral – 56 953 and -28% – favorable variance related to the delay of engagement activities related normalization post COVID-19.
Attachments:
1) Financial Statements (Unaudited) October 1, 2022 to October 31, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending October 31, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF OCTOBER 1 TO OCTOBER 31, 2022
PREPARED ON NOVEMBER 30, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 619,754
Accounts receivable, net of allowance 14,761,248
Accrued revenue 3,832,336
Prepaid expenses 41,399
Other current assets and deposits 2,139,195
Total current assets 21,393,932
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 1,572,704
Total restricted assets 2,672,704
TOTAL ASSETS $ 24,066,636
LIABILITIES
Current liabilities:
Accounts payable $ 538,865
Accrued payroll 72,078
Interest payable 4,242
Due to member agencies 840
Accrued cost of electricity 3,350,579
Other accrued liabilities 67,550
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 102,512
Limited Term Loan 798,882
Loan - County of Yolo 3,000,000
Total current liabilities 9,915,548
Total noncurrent liabilities -
TOTAL LIABILITIES $ 9,915,548
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 2,672,704
Unrestricted 11,253,884
TOTAL NET POSITION $ 14,151,088
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
OCTOBER 31, 2022
3 FOR THE PERIOD
ENDING
OCTOBER 31, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 6,579,259 $ 73,780,794
Other revenue $ 50,060 1,158,283
TOTAL OPERATING REVENUES $ 6,629,319 74,939,077
OPERATING EXPENSES
Cost of electricity $ 4,688,554 65,450,847
Contract services $ 255,421 2,246,970
Staff compensation $ 117,499 1,052,498
General, administration, and other $ 116,113 1,765,065
TOTAL OPERATING EXPENSES $ 5,177,587 70,515,380
TOTAL OPERATING INCOME (LOSS) $ 1,451,732 4,423,697
NONOPERATING REVENUES (EXPENSES)
Interest income $ 6,455 26,819
Interest and related expenses $ (2,290) (33,677)
TOTAL NONOPERATING REVENUES
(EXPENSES) $ 4,165 (6,858)
CHANGE IN NET POSITION $ 1,455,897 4,416,839
Net position at beginning of period $ 12,695,191 9,734,249 Net position at end of period $ 14,151,088 $ 14,151,088
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF OCTOBER 1, 2022 TO OCTOBER 31, 2022
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
4 FOR THE
PERIOD ENDING
OCTOBER 31, 2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 9,181,249 $ 64,247,297 Payments received from other revenue sources $ 50,060 1,158,283 Payments to purchase electricity $ (11,299,186) (67,348,242) Payments for contract services, general, and adminstration $ (370,763) (3,493,881) Payments for staff compensation $ (112,246) (1,044,329) Net cash provided (used) by operating activities $ (2,550,886) (6,480,872)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt $ (43,160) 2,645,856
Interest and related expenses $ (2,506) (32,221)
Net cash provided (used) by non-capital financing activities $ (45,666) 2,613,635
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income $ 6,455 26,819
Net cash provided (used) by investing activities $ 6,455 26,819 NET CHANGE IN CASH AND CASH EQUIVALENTS $ (2,590,097) (3,981,337) Cash and cash equivalents at beginning of period $ 5,882,555 5,882,555 Cash and cash equivalents at end of period $ 3,292,458 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents $ 619,754 619,754
Restricted assets $ 2,672,704 2,672,704
Cash and cash equivalents at end of period $ 3,292,458 $ 3,292,458 (WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF OCTOBER 1 TO OCTOBER 31, 2022
5 FOR THE
PERIOD ENDING
OCTOBER 31, 2022 YEAR TO DATE
Operating Income (Loss) $ 1,451,732 $ 4,423,697
(Increase) decrease in net accounts receivable 1,918,305.00 (7,453,403.41) (Increase) decrease in accrued revenue 667,847 (2,064,142.74) (Increase) decrease in prepaid expenses 7,717 843,831.00 (Increase) decrease in other assets and deposits - (140,919.00) Increase (decrease) in accounts payable (14,753) 94,123.00 Increase (decrease) in accrued payroll 5,253 8,169.00
Increase (decrease) in due to member agencies (1,084) (117,105.00) Increase (decrease) in accrued cost of electricity (6,610,632) (1,981,590.00) Increase (decrease) in other accrued liabilities 8,891 (218,200.00) Increase (decrease) in user taxes and energy surcharges 15,838 (16,250.90) Net cash provided (used) by operating activities $ (2,550,886) $ (6,621,791) FOR THE PERIOD OF OCTOBER 1 TO OCTOBER 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 10/31/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 73,780,795 $ 77,810,500 $ (4,029,705) -5% Other Revenues - Programs $ 1,158,283 $ - $ 1,158,283 100% Interest Revenues $ 27,144 $ 15,000 $ 12,144 81%
Purchased Power $ 65,450,847 $ 57,490,600 $ (7,954,209) -14% Purchased Power Base $ 65,444,809 $ 56,549,700 $ (8,895,109) -16% Purchased Power Contingency 2% $ - $ 940,900 $ 940,900 100% Labor & Benefits $ 1,053,494 $ 1,085,000 $ 31,506 3%
Salaries & Wages/Benefits $ 872,705 $ 908,000 $ 35,295 4% Contract Labor (SMUD Staff Aug) $ - $ 35,000 $ 35,000 100% Human Resources & Payroll $ 180,789 $ 142,000 $ (38,789) -27% Office Supplies & Other Expenses $ 188,980 $ 168,600 $ (20,380) -12% Technology Costs $ 54,518 $ 33,600 $ (20,918) -62%
Office Supplies $ 9,682 $ 2,000 $ (7,682) -384%
Travel $ 2,183 $ 5,000 $ 2,817 56%
CalCCA Dues $ 94,707 $ 106,000 $ 11,293 11%
CC Power $ 26,891 $ 20,000 $ (6,891) -34%
Memberships $ 1,000 $ 2,000 $ 1,000 50%
Contractual Services $ 2,074,843 $ 2,187,900 $ 113,057 5% Other Contract Services $ - $ 21,000 $ 21,000 100%
Don Dame $ 8,747 $ 8,400 $ (347) -4%
SMUD - Credit Support $ 454,058 $ 459,600 $ 5,542 1%
SMUD - Wholesale Energy Services $ 500,370 $ 493,200 $ (7,170) -1% SMUD - Call Center $ 669,199 $ 664,300 $ (4,899) -1%
SMUD - Operating Services $ 54,935 $ 50,400 $ (4,535) -9% Commercial Legal Support $ 7,848 $ - $ (7,848) 100%
Legal General Counsel $ 81,730 $ 129,000 $ 47,270 37%
Regulatory Counsel $ 167,016 $ 166,000 $ (1,016) -1%
Joint CCA Regulatory counsel $ 28,605 $ 27,000 $ (1,605) -6% Legislative - (Lobbyist) $ 50,000 $ 50,400 $ 400 1%
Accounting Services $ 6,968 $ 22,000 $ 15,032 68%
Financial Consultant $ - $ 21,000 $ 21,000 100%
Audit Fees $ 45,368 $ 75,600 $ 30,232 40%
Marketing $ 143,247 $ 205,000 $ 61,753 30%
Marketing Collateral $ 143,047 $ 200,000 $ 56,953 28%
Community Engagement Activities & Sponsorships $ 5,000 200 $ 4,800 $ 96% Programs $ 1,162,207 $ 145,000 $ (1,017,207) -702%
Program Costs $ 114,455 $ 145,000 $ 30,546 21%
Programs - AgFIT $ 1,047,753 $ - $ (1,047,753) 100%
Rents & Leases $ 14,400 $ 18,000 $ 3,600 20%
Hunt Boyer Mansion $ 14,400 $ 18,000 $ 3,600 20%
Other A&G $ 377,571 $ 304,600 $ (72,971) -24%
Development - New Members $ - $ 21,000 $ 21,000 100%
Strategic Plan Implementation $ 5,334 $ 38,200 $ 32,866 86% PG&E Data Fees $ 219,326 $ 230,000 $ 10,674 5%
Insurance $ 11,039 $ 7,000 $ (4,039) -58%
Banking Fees $ 141,872 $ 8,400 $ (133,472) -1589%
Miscellaneous Operating Expenses $ 176 $ 600 $ 424 71%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 70,465,767 $ 61,625,300 $ (8,840,467) $ -14% Interest on RCB loan $ 31,181 $ 28,900 $ 2,281 8%
Interest Expense - Bridge Loan $ 2,496 $ 66,600 $ (64,104) -96% NET INCOME 4,466,779 $ 16,104,700 $ (11,637,921) $ -72%