Item 7
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 7
______________________________________________________________________________ TO: Board of Directors
FROM: Edward Burnham, Finance and Operations Director
Mitch Sears, Executive Officer
SUBJECT: Financial Update – November 30, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending November 30, 2022
DATE: January 19, 2023
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of November 1, 2022 to November 30, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending November 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 November 30, 2022.
Financial Statements for the period November 1, 2022 – November 30, 2022 In the Statement of Net Position, VCEA, as of November 30, 2022, has a total of $2,970,725 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 $2,704,794 restricted assets for the Power Purchases Reserve account.
Item 7
The term loan with River City Bank includes a current portion of $755,672. The line of credit with the County of Yolo has an outstanding balance of $2,000,000. On November 30, 2022, VCE’s net position is $14,151,088.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $5,836,607 of revenue (net of allowance for doubtful accounts), of which $5,894,360 was billed in November, and $4,232,606 represent estimated unbilled revenue. The cost of electricity for the November revenue amount totaled $4,370,125. For November, VCEA’s gross margin was approximately 25% and net income totaled $1,098,721. The year-to-date change in net position was $5,515,561.
In the Statement of Cash Flows, VCEA cash flows from operations were $4,520,296 due to November cash receipts of revenues being more than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending November 30, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($3,985,898) 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 – ($7,774,272) and -13% – Unfavorable variance due to warmer weather than forecast during the winter months, heat storms in June and November, and gas prices driving short-term power market increases.
• Marketing Collateral – 66,271 and -30% – favorable variance related to the delay of engagement activities related normalization post COVID-19.
• Contingency – ($220,000) and (100%) – favorable variance to budget is due to not having a need yet to utilize the contingency funds set aside in the budget.
Attachments:
1) Financial Statements (Unaudited) November 1, 2022 to November 30, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending November 30, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF NOVEMBER 1 TO NOVEMBER 30, 2022
PREPARED ON JANUARY 11, 2023
2 November 30, 2022
ASSETS
Current assets:
Cash and cash equivalents $ 2,970,725
Accounts receivable, net of allowance 11,421,932
Accrued revenue 4,232,606
Prepaid expenses 32,082
Other current assets and deposits 2,139,195
Total current assets 20,796,540
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 2,704,794
Total restricted assets 3,804,794
TOTAL ASSETS $ 24,601,334
LIABILITIES
Current liabilities:
Accounts payable $ 570,264
Accrued payroll 90,920
Interest payable 4,193
Due to member agencies (28)
Accrued cost of electricity 2,880,824
Other accrued liabilities 1,025,621
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 44,058
Limited Term Loan 755,672
Loan - County of Yolo 2,000,000
Total current liabilities 9,351,524
Total noncurrent liabilities -
TOTAL LIABILITIES $ 9,351,524
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 3,804,794
Unrestricted 11,220,515
TOTAL NET POSITION $ 15,249,809
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
NOVEMBER 30, 2022
3 FOR THE PERIOD
ENDING
NOVEMBER 30, 2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 5,836,607 $ 79,617,401
Other revenue 691 1,158,974
TOTAL OPERATING REVENUES 5,837,298 80,776,375
OPERATING EXPENSES
Cost of electricity 4,370,125 69,820,972
Contract services 239,417 2,486,387
Staff compensation 109,723 1,162,221
General, administration, and other 25,335 1,790,400
TOTAL OPERATING EXPENSES 4,744,600 75,259,980
TOTAL OPERATING INCOME (LOSS) 1,092,697 5,516,395
NONOPERATING REVENUES (EXPENSES)
Interest income 8,431 35,250
Interest and related expenses (2,407) (36,084)
TOTAL NONOPERATING REVENUES
(EXPENSES) 6,024 (834)
CHANGE IN NET POSITION 1,098,721 5,515,561
Net position at beginning of period 14,151,088 9,734,249 Net position at end of period $ 15,249,809 $ 15,249,810 (UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF NOVEMBER 1, 2022 TO NOVEMBER 30, 2022 (WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
4 FOR THE
PERIOD ENDING
NOVEMBER 30,
2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 8,717,199 $ 64,247,297 Payments received from other revenue sources 691 1,158,283 Payments to purchase electricity (4,839,880) (67,348,242) Payments for contract services, general, and adminstration 733,167 (3,493,881) Payments for staff compensation (90,881) (1,044,329)
Net cash provided (used) by operating activities 4,520,296 (6,480,872)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (1,043,210) 2,645,856
Interest and related expenses (2,456) (32,221)
Net cash provided (used) by non-capital financing activities (1,045,666) 2,613,635
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 8,431 26,819
Net cash provided (used) by investing activities 8,431 26,819 NET CHANGE IN CASH AND CASH EQUIVALENTS 3,483,061 (3,981,337) Cash and cash equivalents at beginning of period 3,292,458 5,882,555 Cash and cash equivalents at end of period $ 6,775,519 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 2,970,725 2,970,725
Restricted assets 3,804,794 3,804,794
Cash and cash equivalents at end of period $ 6,775,519 $ 6,775,519 (WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF NOVEMBER 1 TO NOVEMBER 30, 2022
5 FOR THE
PERIOD ENDING
NOVEMBER 30,
2022 YEAR TO DATE
Operating Income (Loss) $ 1,092,697 $ 4,423,697
(Increase) decrease in net accounts receivable 3,339,315.94 (4,114,087.47) (Increase) decrease in accrued revenue (400,270) (2,464,412.74) (Increase) decrease in prepaid expenses 9,317 853,148.00 Increase (decrease) in accounts payable 31,399 125,522.43 Increase (decrease) in accrued payroll 18,842 27,011.00 Increase (decrease) in due to member agencies (868) (117,973.00) Increase (decrease) in accrued cost of electricity (469,755) (2,451,345.00) Increase (decrease) in other accrued liabilities 958,071 739,870.78 Increase (decrease) in user taxes and energy surcharges (58,454) (74,704.90) Net cash provided (used) by operating activities $ 4,520,296 $ 2,322,202 FOR THE PERIOD OF NOVEMBER 1 TO NOVEMBER 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 11/30/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 79,617,402 $ 83,603,300 $ (3,985,898) -5% Other Revenues - Programs $ 1,158,974 $ - $ 1,158,974 100% Interest Revenues $ 35,575 $ 16,500 $ 19,075 116%
Purchased Power $ 69,820,972 $ 62,046,700 $ (7,774,272) -13% Purchased Power Base $ 69,820,972 $ 60,974,800 $ (8,846,172) -15% Purchased Power Contingency 2% $ - $ 1,071,900 $ 1,071,900 100% Labor & Benefits $ 1,162,221 $ 1,192,900 $ 30,679 3%
Salaries & Wages/Benefits $ 966,538 $ 998,800 $ 32,262 3% Contract Labor (SMUD Staff Aug) $ - $ 37,900 $ 37,900 100% Human Resources & Payroll $ 195,683 $ 156,200 $ (39,483) -25% Office Supplies & Other Expenses $ 200,638 $ 185,000 $ (15,638) -8% Technology Costs $ 56,468 $ 36,500 $ (19,968) -55%
Office Supplies $ 9,682 $ 2,200 $ (7,482) -340%
Travel $ 2,183 $ 5,500 $ 3,317 60%
CalCCA Dues $ 104,415 $ 116,600 $ 12,185 10%
CC Power $ 26,891 $ 22,000 $ (4,891) -22%
Memberships $ 1,000 $ 2,200 $ 1,200 55%
Contractual Services $ 2,289,243 $ 2,420,200 $ 130,957 5% Other Contract Services $ - $ 23,100 $ 23,100 100%
Don Dame $ 9,097 $ 9,300 $ 203 2%
SMUD - Credit Support $ 495,806 $ 524,700 $ 28,894 6%
SMUD - Wholesale Energy Services $ 551,982 $ 543,300 $ (8,682) -2% SMUD - Call Center $ 737,853 $ 731,700 $ (6,153) -1%
SMUD - Operating Services $ 69,647 $ 55,500 $ (14,147) -25% Commercial Legal Support $ 7,848 $ - $ (7,848) 100%
Legal General Counsel $ 99,730 $ 141,900 $ 42,170 30%
Regulatory Counsel $ 178,279 $ 182,600 $ 4,321 2%
Joint CCA Regulatory counsel $ 30,581 $ 29,700 $ (881) -3% Legislative - (Lobbyist) $ 55,000 $ 55,500 $ 500 1%
Accounting Services $ 8,053 $ 24,200 $ 16,147 67%
Financial Consultant $ - $ 23,100 $ 23,100 100%
Audit Fees $ 45,368 $ 75,600 $ 30,232 40%
Marketing $ 153,929 $ 225,500 $ 71,571 32%
Marketing Collateral $ 153,729 $ 220,000 $ 66,271 30%
Community Engagement Activities & Sponsorships $ 5,500 200 $ 5,300 $ 96% Programs $ 1,215,492 $ 159,500 $ (1,055,992) -662%
Program Costs $ 124,727 $ 159,500 $ 34,773 22%
Programs - AgFIT $ 1,090,765 $ - $ (1,090,765) 100%
Rents & Leases $ 17,600 $ 19,800 $ 2,200 11%
Hunt Boyer Mansion $ 17,600 $ 19,800 $ 2,200 11%
Other A&G $ 400,034 $ 336,900 $ (63,134) -19%
Development - New Members $ - $ 23,100 $ 23,100 100%
Strategic Plan Implementation $ 5,684 $ 44,600 $ 38,916 87% PG&E Data Fees $ 238,509 $ 253,000 $ 14,491 6%
Insurance $ 12,249 $ 7,700 $ (4,549) -59%
Banking Fees $ 143,592 $ 8,500 $ (135,092) -1589%
Miscellaneous Operating Expenses $ 176 $ 600 $ 424 71%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 75,260,306 $ 66,607,100 $ (8,653,206) $ -13% Interest on RCB loan $ 33,588 $ 31,300 $ 2,288 7%
Interest Expense - Bridge Loan $ 2,496 $ 70,800 $ (68,304) -96% NET INCOME 5,515,561 $ 16,910,600 $ (11,395,039) $ -67%