The URL can be used to link to this page

Home My WebLink About2022-05-26; Clean Energy Alliance JPA; ; Review Proposed Clean Energy Alliance Fiscal Year 22/23 Budget and Schedule Adoption for June 30, 2022~ CLEAN ENERGY ALLIANCE DATE: TO: FROM: Staff Report May 26, 2022 Clean Energy Alliance Board of Directors Barbara Boswell, Chief Executive Officer ITEM9: Review Proposed Clean Energy Alliance Fiscal Year 22/23 Budget and Schedule Adoption for June 30, 2022 RECOMMENDATION Review proposed Clean Energy Alliance Fiscal Year 22/23 Budget and Schedule Adoption for June 30, 2022. BACKGROUND AND DISCUSSION The proposed fiscal year 22/23 budget (detail below) reflects service expansion into the cities of Escondido and San Marcos, addition of new positions, projected power supply costs based on current forward price curves and existing contracts, on-going regulatory compliance requirements and professional and legal services required to support operations. The following assumptions were used to develop the proposed budget: • Revenue based on current adopted rates; • Power supply costs based actual executed contracts and May forward price curves; • Consulting services based on approved contracts. Fiscal Year 21/22 Year End Estimates As part of developing the FY 22/23 proposed budget, staff has evaluated the current FY 21/22 budget to determine the projected ending net results. Revenues are expected to come in as projected while expenditures are expected to come in under budget as reflected in the chart below: Midyear Adjusted Year End Estimate Variance Budget Projected Revenue $63,282,755 $63,297,755 $15,000 Projected Expenditures $61,055,025 $59,792,791 ($1,262,234} Net Results $2,227,730 $3,504,964 $1,277,234 May 26, 2022 Proposed FY 22/23 Budget Page 2 of5 Expenditure savings are driven primarily by lower than projected power supply costs in the amount of $1,072,234, legal services savings of $88,500 and professional services savings of $91,200. The net savings results in changing ending fund balance from a projected negative $479,684 to positive $797,550. Proposed Fiscal Year 22/23 Budget The FY 22/23 proposed budget was based on the following priorities and goals: ► Financial Stability ► Meeting Regulatory Compliance ► Successful Expansion to Escondido and San Marcos Based on current assumptions, including accounting for the additional customers being served in Escondido and San Marcos, sufficient revenues are projected to cover costs with net positive results of operations in the amount of $2,408,390, as summarized below and detail reflected in the attachment. The chart below compares the FY 21/22 Year End Estimat es to FY 22/23 Proposed Budget: FY 21/22 Year End FY 22/23 Proposed Variance Estimate Budget Projected Revenue $63,297,755 $80,791,405 $17,493,650 Projected Expenditures $59,792,791 $78,383,015 $18,590,224 Net Results $3,504,964 $2,408,390 ($1,096,574) The increase in revenues is based on anticipated new revenue generated by the April 2023 service expansion to the cities of Esco ndido and San Marcos. The increase in expenditures is due to the increase in energy purchases related to the service expansion ($16.9MM) and f unding for positions ($750,000) proposed as part of the budget. The following table provides the line item detail of FY 21/22 Year End Estimates and FY 22/23 Proposed Budget. Clean Energy Alliance May 26, 2022 Proposed FY 22/23 Budget Page 3 of5 FY 21/22 Year End Estimates and FY 22/23 Proposed Budget REVENUE EnergySales Revenue Interest Income Funds provided by Financing REVENUE TOTAL EXPENDITURES Power Supply Data Management/Call Center Staffing/Consultants Legal Services Professional Services Audit Services Software & Licenses Memberships & Dues Printing Postage Advertising Insurance Bank Fees Debt Service TOTAL PROJECTED BUDGET Net Results of Operations Beginning Fund Balance Ending Fund Balance $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ FY 21/22 Midyear Adjusted Bu~et FY 21/22 Year End Estimate (5/2022 Pro Forma FY 22./23 Proposed Budget -Summary 57,282,755 $ $ 6,000,000 $ 63,282,755 $ 58,222,525 $ 840,000 $ 235,700 $ 375,000 $ 888,600 $ 41,000 $ 9,100 $ 121,000 $ 27,000 $ 21,100 $ 15,000 $ 32,000 $ 2,000 $ 225,000 $ 61,055,025 $ 2,227,730 $ (2,707,414) (479,684) $ 57,282,755 $ 15,000 $ 6,000,000 63,297,755 $ 57,150,291 $ 840,000 $ 200,000 $ 286,500 $ 797,400 $ 26,000 $ 11,600 $ 120,500 $ 25,000 $ 26,000 $ 1,500 $ 6,000 $ 2,000 $ 300,000 $ 59,792,791 $ 3,504,964 $ (2,707,414) 797,550 $ 80,786,405 5,000 80,791,405 74,134,855 1,151,180 985,280 390,000 963,600 15,000 15,100 121,000 55,000 50,000 15,000 35,000 2,000 450,000 78,383,015 2,408,390 797,550 3,205,940 The proposed budget increases reserves from projected $797,550 to $3,205,940 representing 4% of revenues. The recommended positions include: May 26, 2022 Proposed FY 22/23 Budget Page 4 of5 Positions recommended to transition from current interim appointee to permanent: • Chief Financial Officer/Treasurer -transition from interim appointee • Board Secretary -transition from interim appointee New recommended positions: • Account Services/Programs Manager • Procurement Manager • Regulatory Analyst A further description of the proposed positions and responsibilities follows: Chief Financial Officer/Treasurer To date, the Chief Financial Officer/Treasurer responsibilities have been provided through an agreement with Marie Marron Berkuti. Ms. Berkuti has informed CEA that she will no longer be available after August 31, 2022. This Board is required to appoint a Chief Financial Officer/Treasurer pursuant to Section 5.4 of the Joint Powers Agreement (JPA). Boa rd Secretary To date, the Board Secretary responsibilities have been provided by Sheila Cobian, through an agreement with the City of Carlsbad. Ms. Cobian has informed CEA that she is not able to continue providing these services. The Board is required to appoint a Secretary pursuant to Section 5.3 of the JPA. On an interim basis, the Interim Board Clerk is able and qualified to provide these services until a permanent Board Secretary is appointed. Account Services/Program Manager The Account Services/Program Manager position will be responsible for establishing and maintaining relationships with key accounts, managing the service expansion efforts, and coordinating marketing and outreach, researching, and pursuing funding opportunities and developing CEA programs. Procurement Manager The Procurement Manager position will be responsible for energy and non-energy procurements, establishing and monitoring CEA's Supplier Diversity program to ensure compliance with requirements and contracts administration. Regulatory Analyst The Regulatory Analyst position will be responsible for legislative and regulatory advocacy, monitoring legislation and developing positions related to proposed legislation and intergovernmental relations. The following reflects CEA's updated organization chart including the proposed positions. --- May 26, 2022 Proposed FY 22/23 Budget Page 5 of5 The proposed budget will be brought back to the Board for formal adoption at its June 30, 2022, regular meeting. FISCAL IMPACT Revenue from energy sales to customers provides sufficient funds for the proposed expenditures with excess going into reserves. ATTACHMENTS None Item g: Proposed FY 2022/23 Budget • Recommendation: 5/26/22 • Review Proposed FY 2022/23 Budget and Schedule Adoption for June 30, 2022 Meeting. CLEAN ENERGY _._:.ii:;;; ALLIANCE 8 Item g: Proposed FY 2022/23 Budget • FY 2021/22 Year End Estimates Projected Revenue Projected Expenditures Net Results Midyear Adjusted Budget $63,282,755 $61,055,025 $2,227,730 • Expenditure savings • Power Supply Costs -$1.oM • Legal Services -$88,500 • Professional Se rvices -$91,200 5/26/22 Year End Estimate Variance $63,297,755 $15,000 $59,792,791 ($1,262,234} $3,504,964 $1,277,234 CLEAN ENERGY ~ ALLIANCE 9 Item g: Proposed FY 2022/23 Budget • FY 22/23 Proposed Budget Assumptions • Revenues based on current adopted rates • Power supply costs based on actual executed contracts and May forward price curve • Consulting Services based on approved contracts • Priorities & Goals • Financial Stability • Regulatory Compliance • Successful Expansion in Escondido and San Marcos 5/26/22 CLEAN ENERGY -• .. ALLIANCE 10 Item g: Proposed FY 2022/23 Budget Projected Revenue Projected Ex enditures Net Results FY 21/22 Year End Estimate $63,297,755 $59,792,791 $3,504,964 FY 22/23 Proposed Bud et Variance $80,791,405 $17,493,650 $78,383,015 $18,590,224 $2,408,390 ($1,096,574) • Proposed FY22/23 Budget in Balance • Increase in revenue due to April 2023 Escondido & San Marcos Expansion • Increase in expenditure due to energy purchases to servitLEAN Escondido & San Marcos & proposed positions ~ :~v ALLIANCE 5/26/22 11 Item g: Proposed FY 2022/23 Budget • Proposed Positions -Transition from Interim to Permanent • Chief Financial Officer /Treasurer • Boa rd Secretary • Proposed New Positions • Accounts Services/Program Manager • Procurement Manager • Regulatory Analyst 5/26/22 CLEAN ENERGY ALLIANCE 12 Item g: Proposed FY 2022/23 Budget 5/26/22 General Counsel CEA Board of Directors CFO/Treasurer Board Secretary Board Clerk Account Services & Program Manager J Chief Executive Officer Procurement Manager Regulatory Analyst CLEAN ENERGY ~ .. ~ ALLIANCE 13 REVENUE Energy Sales Revenue Interest Income Funds provided by Financing REVENUE TOTAL EXPENDITURES 5/26/22 Power Supply Data Management/Call Center Staffing/Consultants Legal Services Professional Services Audit Services Software & Licenses Memberships & Dues Printing Postage Advertising Insurance Bank Fees Debt Service TOTAL PROJECTED BUDGET Net Results of Operations Beginning Fund Balance Ending Fund Balance $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ FY 21/22 Midyear Adjusted Budget 57,282,755 6,000,000 63,282,755 58,222,525 840,000 235,700 375,000 888,600 41,000 9,100 121,000 27,000 21,100 15,000 32,000 2,000 225,000 61,055,025 FY 21/22 Year End Estimate (5/2022 Pro Forma $ 57,282,755 $ 15,000 $ 6,000,000 $ 63,297,755 $ 57,150,291 $ 840,000 $ 200,000 $ 286,500 $ 797,400 $ 26,000 $ 11,600 $ 120,500 $ 25,000 $ 26,000 $ 1,500 $ 6,000 $ 2,000 $ 300,000 $ 59,792,791 FY 22/23 Proposed Budget -Summary $ 80,786,405 $ 5,000 $ 80,791,405 $ 74,134,855 $ 1,151,180 $ 985,280 $ 390,000 $ 963,600 $ 15,000 $ 15,100 $ 121,000 $ 55,000 $ 50,000 $ 15,000 $ 35,000 $ 2,000 $ 450,000 $ 78,383,015 $ 2,227,730 $ 3,504,964 $ (2,707,414) 2,408,390 797,550 (2,707,414) $ (479,684) $ 797,550 $ 3,205,940 • Proposed Budget results in 4% Reserve • Policy sets minimum reserve at 5% • Staff to continue refining budget to achieve 5% Reserve CLEAN ENERGY ~ ALLIANCE 14 Item g: Proposed FY 2022/23 Budget • Next Step • Staff to continue refining budget to achieve 5% reserve contribution • June 30, 2022 Regular Board Meeting -Budget Adoption 5/26/22 CLEAN ENERGY ~ ALLIANCE 15 -ALLIANCE Questions/Discussion 5/26/22