HomeMy WebLinkAbout2019-11-19; Clean Energy Alliance JPA; ; Authorize Establishment of Interim Bank Account and Issuance of Request for Proposal for Credit and Banking ServicesDATE:
TO:
FROM:
ITEM3:
November 19, 2019
CLEAN ENERGY ALLIANCE
STAFF REPORT
Clean Energy Alliance Board of Directors
Dan King, City of Solana Beach, Assistant City Manager
Authorize Establishment of Interim Bank Account and Issuance of Request for
Proposal for Credit and Banking Services
RECOMMENDATION:
Authorize the establishment of an interim bank account at Union Bank and the issuance of a
Request for Proposal for Credit and Banking Services.
BACKGROUND AND DISCUSSION:
At its November 5, 2019 meeting, the Clean Energy Alliance (CEA) Board appointed an Interim
Board Treasurer/Chief Financial Officer (Marie Berkuti, Finance Director City of Solana Beach)
pursuant to Section 5.4 of the CEA Joint Powers Agreement (JPA). At the same meeting, the
Board approved the request of advances from Member Agencies in the amount of $150,000 per
agency to fund CEA's start up activities in fiscal year 2019-20.
Section 7.2.1 of the JPA requires that funds of CEA be deposited and held in a separate account
and not commingled with funds of any Member Agency or any other person or entity. For
operational efficiency, it is recommended that the Board authorize establishment of an interim
bank account with Union Bank to meet its cash needs while a permanent financial institution is
identified through a Request for Proposal (RFP) process.
Community Choice Aggregation (CCA) programs, such as that being implemented by CEA,
require specialized banking services, which could require a secured operating account (also
known as a lockbox) as typically required by energy suppliers, electronic deposits from SDG&E
customer payments, as well as typical general banking services.
In addition to a need to identify a financial institution to fulfill its banking needs, it is anticipated
that CEA will require credit support for financing initial start-up (beyond the costs funded by the
initial Member Agency advances), energy procurement and cash flow needs. The initial budget
estimates a need of nearly $4.0M in fiscal year 2020-21. The credit support may come from a
combination of lines of credit, direct loans, or assistance from consultants/contractors in the
form of deferred fees and/or term loans.
Issuance of the RFP will inform CEA of options available to assist financing its initial start-up and
cash needs, costs of the various options, and identify a short list of interested and potential
banking institutions.
The anticipated timeline for the credit and banking services RFP is shown below:
January 15, 2020
February 28, 2020
March 27, 2020
Mid-April 2020
End April 2020
May 2020
Release Request for Proposal
Bank Proposals Due
Review of Proposals Complete; Short-list Identified
Interviews of Short-Listed Banks
Final Bank Negotiations & Selection
Bank Selection & Credit Package Finalized
The anticipated timeline provides sufficient time to refine and finalize the fiscal year 2020-21
budget and financing needs, and finalize negotiations to have a funding mechanism in place by
July 2020.
The RFP process follows similar processes other CCAs have successfully completed in identifying
banking partners and addressing financing start-up and cash flow needs.
11/19/2019
Clean Energy Alliance
Item 3: Authorize Interim Bank Account and Issuance of
Credit and Banking Services RFP
Dan King
November 19. 2019
Item 3: Authorize Bank Account and RFP
RECOMMENDED ACTION:
Authorize the establishment of an interim bank account at Union Bank and
the issuance of a Request for Proposal for Credit and Banking Services.
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Item 3: Authorize Bank Account and RFP
BACKGROUND AND DISCUSSION:
• November 5, 2019 meeting, the Clean Energy Alliance ("CEA") Board
appointed an Interim Board Treasurer/Chief Financial Officer (Marie
Berkuti, Finance Director City of Solana Beach) pursuant to Section 5.4
of the CEA Joint Powers Agreement ("JPA").
• Board approved the request of advances from Member Agencies in
the amount of $150,000 per agency to fund the CEA start up activities
in fiscal year 2019/20.
• The City Council's of each City subse quently approved the $150,000 request s
Item 3: Authorize Bank Account and RFP
BACKGROUND AND DISCUSSION:
• Section 7.2.1 of the JPA requires that funds of CEA be deposited and
held in a separate account and not commingled with funds of any
Member Agency or any other person or entity.
• For operational efficiency, it is recommended that the Board authorize
establishment of an interim bank account with Union Bank to meet its
cash needs while a permanent financial institution is identified
through a Request for Proposal ("RFP") process.
11/19/2019
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Item 3: Authorize Bank Account and RFP
BACKGROUND AND DISCUSSION:
• In addition to a need to identify a financial institution to fulfill its banking
needs, it is anticipated that CEA will require credit support for financing
initial start-up (beyond the costs funded by the initial Member Agency
advances), energy procurement and cash flow needs.
• The initial budget estimates $4.0M in fiscal year 2020/21.
• The credit support may come from a combination of lines of credit, direct loans,
assistance from consultants/contractors in the form of deferred fees and/or term
loans.
• Issuance of the RFP will inform CEA of options available to assist financing
its initial start-up and cash needs, costs of the various options, and identify
a short list of interested and potential banking institutions.
Item 3: Authorize Bank Account and RFP
SCHEDULE:
If approved, the anticipated timeline for the credit and banking services RFP
is shown below:
• January 15, 2020
• February 28, 2020
• March 27, 2020
• Mid-April 2020
• End April 2020
• May 2020
Release Request for Proposal
Bank Proposals Due
Review of Proposals Complete; Short-list Identified
Interviews of Short-Listed Banks
Final Bank Negotiations & Selection
Bank Selection & Credit Package Finalized
11/19/2019
3
Item 3: Authorize Bank Account and RFP
RECOMMENDED ACTION:
Authorize the establishment of an interim bank account at Union Bank and
the issuance of a Request for Proposal for Credit and Banking Services.
11/19/2019
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