Board of Directors Meeting Thursday, December 5, 2019 2:00 p.m. Slide 1
I. Welcome & Roll Call Board of Directors 2 CLEAN POWER ALLIANCE
II. General Public Comment Board of Directors 3 CLEAN POWER ALLIANCE
III. CLOSED SESSION Board of Directors 4 CLEAN POWER ALLIANCE
Closed Session Item 1 CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: a. 801 S. Grand Avenue, Los Angeles, CA b. 444 S. Flower Street, Los Angeles, CA c. 800 W. Sixth Street, Los Angeles, CA Agency negotiator: Theodore Bardacke for all properties Negotiating parties, respectively: a. CIM Group b. Coretrust Capital Partners, LLC c. Walter Kahn (Pacific Financial Equities, LLC) Under negotiation: Price and Terms for all properties. Slide 5
Closed Session Item 2 PUBLIC EMPLOYMENT (Government Code Section 54957) General Counsel Performance Evaluation Process Slide 6
IV. Consent Agenda Board of Directors 7 CLEAN POWER ALLIANCE
Item 1 Appoint Christian Cruz as the temporary Board Secretary for each Board meeting where a permanent Board Secretary is not available Agenda Slide 8 Page 5
Item 2 Approve Minutes from October 3, 2019 Board of Directors Meeting Agenda Slide 9 Page 6
Item 3 Adopt Resolution No. 19-12-018 amending CPA Bylaws regarding non-elected Alternate Directors attending closed session Agenda Slide 10 Page 16
Item 4 Authorize the Executive Director to execute an Amended Task Order No. 1 with Ascend Analytics to expand the scope of service to include the 2019 Reliability RFO and to increase the not-to-exceed amount by $50,000 for a total Task Order value of $195,000 Agenda Slide 11 Page 31
Item 5 Authorize the Executive Director to execute a Third Amended MRW Task Order No. 1 with MRW and Associates (MRW) for Rate Setting and Cost of Service Analysis to adjust the scope of work, extend the term to February 28, 2021, and increase the not-to-exceed amount by $55,000 from $369,090 to $424,090 Agenda Slide 12 Page 42
Item 6 Authorize the Executive Director to execute an Amended and Restated Consulting Agreement as attached, or in a substantially similar form, with Maher Accountancy (Maher) to modify the scope of work, extend the term to September 30, 2020, and reduce the monthly fee to $15,000/month for Jan–Jun 2020 and up to $10,000/month as mutually agreed by the parties for Jul–Sep 2020 Agenda Slide 13 Page 53
Item 7 Approve Policy No. 12 for Non-Energy Public Contracting Agenda Slide Page 68 14
Item 8 Receive and file Community Advisory Committee summary from October and November 2019 meetings Agenda Slide Page 79 15
Item 9 Receive and file Board of Directors and Standing Committee meeting schedule for 2020 Agenda Slide Page 82 16
V. Regular Agenda Board of Directors 17 CLEAN POWER ALLIANCE
Item 10 Approve General Counsel Employment Contract Agenda Slide 18 Page 84
Item 11 Presentation on Fiscal Year 2018-2019 Financial Statements Agenda Slide 19 Page 94
Agenda Slide 20 Page 96
Agenda Slide 21 Page 97
STATEMENTS OF NET POSITION JUNE 30, 2019 AND 2018 2019 2018 ASSETS 1 Cash and cash equivalents $7,258,580 $2,546,067 Investment in LA County Investment Pool 2,701,780 2 3 Accounts receivable, net of allowance 50,674,048 660,508 4 Accrued revenue 68,779,327 907,546 5 Market settlements receivable 5,573,657 - 6 Other receivables 357,454 80,892 7 Prepaid expenses 2,024,550 25,000 8 Deposits - 1,850,000 9 Restricted cash 7,952,000 750,000 Total current assets 142,619,616 9,521,793 10 11 Capital assets, net of depreciation 35,948 - 12 Deposits 128,000 107,250 Total noncurrent assets 163,948 107,250 13 Total assets 142,783,564 9,629,043 14 Agenda Slide 22 Page 108
Statements of Net Position June 30, 2019 and 2018 (Continued) 2019 2018 15 LIABILITIES Current liabilities 16 17Accounts payable 2,641,021 940,351 18Accrued cost of electricity 89,051,637 1,512,698 19Other accrued liabilities 2,495,683 - User taxes and energy surcharges due to 2,970,637 17,226 other governments 20 21 Total current liabilities 97,158,978 2,470,275 Noncurrent liabilities 22 23 Loans payable to County of Los Angeles 9,835,608 9,835,608 24 Note payable to bank 19,050,000 - 25 Supplier security deposits 750,000 - Total noncurrent liabilities 29,635,608 9,835,608 26 Total liabilities 126,794,586 12,305,883 27 NET POSITION 28 29Investment in capital assets 35,948 - 30Restricted for collateral 7,952,000 - 31Unrestricted (deficit) 8,001,030 -$2,676,840 Total net position $15,988,978 -$2,676,840 32 Agenda Slide 23 Page 108
Statements of Revenues, Expenses and Changes in Net Position Years Ended June 30, 2019 and 2018 2019 2018 1 OPERATING REVENUES 2 Electricity sales, net $253,913,018 $3,343,365 3 Other revenue 6,000 39,340 Total operating revenues 253,919,018 3,382,705 4 5 OPERATING EXPENSES 6 Cost of electricity 223,125,906 3,298,724 7 Contract services 9,123,988 2,418,688 8 Staff compensation 2,133,751 222,051 9 General and administration 745,213 127,208 Total operating expenses 235,128,858 6,066,671 10 11 Operating income (loss) 18,790,160 (2,683,966) 12 NONOPERATING REVENUES (EXPENSES) 13 Interest income 121,962 7,126 14 Interest and related expenses -246,304 - Total nonoperating revenues (expenses) -124,342 7,126 15 16 CHANGE IN NET POSITION 18,665,818 (2,676,840) 17 Net position at beginning of year -2,676,840 - 18 Net position at end of year $15,988,978 (2,676,840) Agenda Slide 24 Page 109
Item 12 Presentation on Current CPA Financial Performance Agenda Slide 25 Page 125
FY 2019-20 Financial Performance – Highlights CPA contributed $9.95 million to the net position over the first • four months of FY 2019-20 The results were 29% below budget for the period. Results • were impacted by cooler weather, lower demand, low spot market prices and a net long energy position CPA is in compliance with credit covenants and is on track to • make a significant contribution to the net position for during FY 2019-2020 CPA is making progress towards its board approved reserve • targets. Continued attention to reserve accumulation is essential for CPA to meet its mission and financial objectives Slide 26
Summary of July to October 2019 Budget to Actual Results July to October 2019 in $000,000** Jul-Oct Actual* Jul-Oct Budget Variance ($) Variance (%) Revenue (net) 334 331 3 1% Direct Expenses 317 309 9 3% Gross Profit 17 22 (5) -24% Gross Profit % 5% 7% Operating Expenses 7 8 (2) -20% Change in Net Position 10 14 (4) -29% % of Revenue 3% 4% * October 2019 results are preliminary ** figures may not sum due to rounding Slide 27
Summary of Expected FY 2019-20 Annual Results FY 2019-20 in $000,000 Budget Forecast* Variance ($) Variance (%) Revenue (net) 743 801 58 8% Direct Expenses 688 749 61 9% Gross Profit 56 52 (4) -6% Gross Profit % 8% 7% -1% -13% Operating Expenses 26 24 (2) -6% Change in Net Position 30 28 (2) -8% % of Revenue 4% 3% 0% * Forecast results include actual results for July to September 2019, preliminary October 2019 actual results and forecast results for November 2019 to June 2020. The forecast is based on current CPA retail rates, current forward market prices and the latest load forecast. Forecast and actual results may differ. Slide 28
CPA Credit Covenants Update – River City Bank FY 2019-20 Actual Projected in $000,000 Sep-19 Dec-19 Mar-20 Jun-20 Quarterly Cumulative EBIDA* 9.4 12.8 11.8 31.1 RCB Minimum EBIDA Covenant (Quarterly) 6.4 1.4 1.7 24.3 In compliance? PASS PASS PASS PASS Unrestricted Tangible Net Assets (UTNA) 39.5 RCB Minimum UTNA (Annual)** 33.5 In compliance? PASS * EBIDA: Earnings before interest, depreciation and amortization ** Unrestricted Tangible Net Assets: Total assets less restricted and intangible assets less total liabilities Slide 29
CPA Reserve Policy Targets and Expected Performance CPA Reserve Summary in $000,000 10/30/2019 6/30/2020 A Reserve target minimum (% of G) 30% 30% B Reserve target maximum (% of G) 50% 50% C=AxG Reserve target minimum ($) 232 239 D=BxG Reserve target maximum ($) 387 398 E Reserves ($)* 26 48 F=E/G Reserve % 3% 6% Estimated annual operating expenses and G cost of energy for the upcoming year 773 796 * June 30, 2020 reserves are estimated Slide 30
Item 13 Update on Local Programs/Customer Outreach and Discuss Member Agency and Regional Delivery Mechanisms for Local Programs Agenda Slide 31 Page 128
Update on Local Programs and Customer Outreach Discuss Local Program Delivery Mechanisms December 5, 2019 Agenda Slide 32 Page 129
Summary Local Programs Strategic Plan 1 • – Program Types, Delivery Mechanisms Near-Term Program Initiatives 2 • – DER Pilot, Community Solar, Low-Income 100% Green Discount, Back-Up Power for Essential Facilities 3 Customer Outreach/Acquisition/Retention Efforts • – Solar Marketplace, Community Based Organization Grants, Key Accounts 4 Program Delivery Mechanisms • – Mass Market, Direct Procurement & Install, Local/Regional Innovation Fund Agenda Slide 33 Page 130
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