2019-11-12T08:22:45-06:00 2018-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2018-01-01 743023938 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC GUAD 8308571200 PO BOX 118 GONZALES TX 78629 DARREN SCHAUER CEO 8308571200 2019-11-11 1 WILLIAM M MILLER P00439459 8067473806 2019-11-07 X 65.182.80.152 2019-11-11 10:42:31 CS P 2EBFA2265763A01132BE48D36E167D9476E1DDEB 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2018 2020-03-31 21:24:44Z DARREN SCHAUER PO BOX 118 GONZALES TX 78629 242066932 0 X WWW.GVEC.ORG X 1938 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 11 10 395 0 4877240 0 0 0 216344936 236517580 352137 809510 9641953 4517818 226339026 241844908 18137 23445 20556304 16333088 21448257 22039736 0 0 0 185303438 204026080 227326136 242422349 -987110 -577441 564336102 588088968 271211092 283827524 293125010 304261444 X BUILDING ON OUR HERITAGE & HAVING CONFIDENCE IN THE FUTURE, GUADALUPE VALLEY ELECTRIC COOPERATIVE IS A TEAM OF PROFESSIONALS COMMITTED TO EXCEEDING OUR MEMBERS' EXPECTATIONS BY IDENTIFYING & INVESTING IN PRODUCTS & SERVICES THAT FULFILL THE NEEDS OF THOSE WE SERVE. 1 0 ELECTRIC DIVISION:SALE OF ELECTRIC POWER TO MEMBERS - 84,127 ACTIVE SERVICES WERE PROVIDED POWER AT YEAR END AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. INTERNET/BROADBAND SERVICE DIVISION:PROVIDING FIBER INTERNET SERVICES TO ITS MEMBERS THROUGH A COMBINATION OF WIRELESS AND FIBER-TO-THE-HOME TECHNOLOGIES. SERVICES OF THIS DIVISION WILL BE PROVIDED TO MEMBERS ON A PATRONAGE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL TO THE EXTENT OF MARGINS FOR SUCH DIVISION. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 1 0 0 0 0 0 0 1 1 1 0 1 120 0 395 1 1 1 0 0 0 0 230259804 10487538 0 0 0 X 11 10 1 0 1 0 1 1 1 1 0 0 0 1 0 1 0 1 1 0 X GARY KORN 8308571200 825 E SARAH DEWITT DR GONZALES TX 78629 X LEWIS BORGFELD CHAIRMAN 9.50 3.00 X X 36967 2025 0 MELVIN STREY VICE PRESIDENT 5.00 3.00 X X 26317 2325 0 DON WILLIAMS SECRETARY/TREASURER 4.90 3.00 X X 26770 2325 0 HAROLD DEKUNDER DIRECTOR 6.00 2.00 X 9854 600 0 JOSEPH CASTILLEJA DIRECTOR 5.70 2.00 X 32197 1200 0 SHAWN MARTINEZ DIRECTOR 5.30 2.00 X 31447 1200 0 HENRY SCHMIDT DIRECTOR 6.60 3.00 X 28276 2325 0 DAVID WARZECHA DIRECTOR 6.10 2.00 X 28267 1200 0 ROBERT WERNER DIRECTOR 6.10 2.00 X 30376 1200 0 MARK ROBERTS DIRECTOR 5.80 2.00 X 29647 900 0 MORRIS HARVEY DIRECTOR 6.80 2.00 X 30376 1200 0 GARY BIRDWELL DIRECTOR 2.08 2.00 X 15580 600 0 DARREN SCHAUER CEO 60.00 1.00 X 594357 0 52088 SEAN ALVAREZ COO 50.00 1.00 X 336102 0 49203 STEVE BYONE CFO 55.00 1.00 X 338217 0 51962 MIKE ABSHER SENIOR EXECUTIVE MANAGER 50.00 X 214464 0 43579 ROBERT CHRISTMAS SR EXEC MGR - COMPLIANCE 55.00 X 208783 0 41678 CEASON BARNICK SR EXEC MGR - CUSTOMER RELATIONS 50.00 X 197889 0 43377 GARY KORN CONTROLLER 50.00 X 158738 0 37972 JEFFREY STRAHL EXEC MGR OF INFORMATION TECHNOLOGY 55.00 X 152012 0 37649 ZACHARY TAYLOR EXEC MGR OF ENGINEERING 45.00 X 147507 0 37194 ASHLEY COBURN EXEC MGR OF EMPOLYEE DEV & HR 45.00 X 141691 0 35886 TAD VERNOR ENGINEERING ASSOC OF COMM TECHNOLOGY 60.00 X 131932 0 35592 2947766 17100 466180 30 0 1 0 TLT CONSTRUCTION CO INC PO BOX 1086 SHERMAN TX 75091 LINE CONSTRUCTION 2668597 LAMAR TECHNICAL SERVICES INC 2000 WINDY TERRACE BLDG A CEDAR PARK TX 78613 LINE DESIGN 1520981 SENDERO POWERLINE INC PO BOX 2209 VICTORIA TX 77905 LINE CONSTRUCTION 1507965 VOLT POWER 2910 HWY 31 NW HARTSELLE AL 35640 MAKE READY/CONSTRUCTION 1494798 LAMBDA CONSTRUCTION LTD 211 JESSES CIRCLE NEW BRAUNFELS TX 78132 SUBSTATION SITE WORK 1088528 44 X SALES OF ELECTRICITY 221000 212231779 212231779 TRANSMISSION ACCESS 221000 13495952 13495952 SALES FROM INTERNET OPERATIONS 221000 5066477 3457364 1609113 TRANSMISSION LEASE 221000 2656820 2656820 SERVICE FEES & OTHER CHARGES 221000 2228011 2228011 838541 838541 236517580 686537 686537 21300 0 21300 21300 21300 344997 222024 122973 122973 122973 INTERCOMPANY MANAGEMENT INCOME 561000 3157170 3157170 POLE ATTACHMENT INCOME 221000 392350 392350 MAINTENANCE REVENUE 561000 110957 110957 836041 836041 4496518 241844908 235744508 4877240 1223160 X 23445 16333088 2497773 13606017 1260533 3537647 1137766 9049905 25129354 PURCHASED POWER 152110717 ADMIN & GENERAL EXPENSE 8555922 INTERNET EXPENSE 4400047 DISTRIBUTION EXPENSE 3847621 932514 242422349 3948684 26264198 27798780 6821702 12922386 13422507 2705000 4789600 7858968 82788 14103953 9438609 750241917 244659983 463351148 505581934 21770709 12691183 9876474 8996447 564336102 588088968 51900138 25064971 23865 40150 180837983 223474501 38449106 35247902 271211092 283827524 X 2041365 2060928 0 0 291083645 302200516 293125010 304261444 564336102 588088968 X -577441 11713875 X X 0 1 X 0 1 1 0 1 X 17720457 17720457 67979061 30416261 37562800 613629009 214243722 399385287 50913390 50913390 505581934 DEFERRED CREDITS - ADVANCES FOR CONSTRUCTION 3041217 DEFERRED CREDITS - OTHER 470817 CONSUMER DEPOSITS 3542130 ACCRUED OPERATING TAXES 2383605 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 24984775 ACCUMULATED DEFERRED FIT/UBIT 785729 OTHER LIABILITIES 39629 35247902 X PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR SCHOLARSHIPS TO ENABLE STUDENTS FROM RURAL AREAS TO ATTEND COLLEGE, TECHNICAL SCHOOL OR OTHER POST SECONDARY EDUCATION INSTITUTION. ANY AMOUNTS SO DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE AND ITS AFFILIATES FOLLOW THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE COOPERATIVE IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE AND AFFILIATES DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT THEIR TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART VIII: THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 DOES NOT EQUAL OR EXCEED 5 PERCENT OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART VIII HAS BEEN LEFT BLANK. PART IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5 PERCENT OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. 0 GUADALUPE COUNTY CHILDREN'S ADVOCACY 265 WETZ SEGUIN TX 78155 412071236 501(C)(3) 10678 BOOK INVENTORY AND LABOR ASSIST NEW BUILDING PROJECT X X X X X 0 1 0 DARREN SCHAUER CEO 444336 0 134529 0 15492 0 27500 0 24588 0 646445 0 0 0 SEAN ALVAREZ COO 268951 0 53772 0 13379 0 27500 0 21703 0 385305 0 0 0 STEVE BYONE CFO 270463 0 51734 0 16020 0 29852 0 22110 0 390179 0 0 0 MIKE ABSHER SENIOR EXECUTIVE MANAGER 192880 0 3075 0 18509 0 20958 0 22621 0 258043 0 0 0 ROBERT CHRISTMAS SR EXEC MGR - COMPLIANCE 178041 0 12911 0 17831 0 20280 0 21398 0 250461 0 0 0 CEASON BARNICK SR EXEC MGR - CUSTOMER RELATIONS 171567 0 12875 0 13447 0 19355 0 24022 0 241266 0 0 0 GARY KORN CONTROLLER 152206 0 4344 0 2188 0 16459 0 21513 0 196710 0 0 0 JEFFREY STRAHL EXEC MGR OF INFORMATION TECHNOLOGY 147842 0 2611 0 1559 0 15780 0 21869 0 189661 0 0 0 ZACHARY TAYLOR EXEC MGR OF ENGINEERING 138764 0 7500 0 1243 0 15336 0 21858 0 184701 0 0 0 ASHLEY COBURN EXEC MGR OF EMPOLYEE DEV & HR 138296 0 2703 0 692 0 14714 0 21172 0 177577 0 0 0 TAD VERNOR ENGINEERING ASSOC OF COMM TECHNOLOGY 128149 0 2615 0 1168 0 13778 0 21814 0 167524 0 0 0 LEWIS BORGFELD FAMILY RELATIONSHIP 36967 LEWIS BORGFELD RECEIVED COMPENSATION AS A BOARD MEMBER OF THE COOPERATIVE. HE AND SEAN ALVEREZ, OFFICER OF THE COOPERATIVE, ARE FAMILY MEMBERS PER THE 990 DEFINITION OF FAMILY MEMBERS. 0 SEAN ALVEREZ FAMILY RELATIONSHIP 385305 SEAN ALVEREZ RECEIVED COMPENSATION AS AN OFFICER OF THE COOPERATIVE. HE AND LEWIS BORGFELD, BOARD CHAIRMAN, ARE FAMILY MEMBERS PER THE 990 DEFINITION OF FAMILY MEMBERS. 0 FORM 990, PART I, LINE 19: REVENUE LESS EXPENSES AS REPORTED ON PAGE 1, PART I, LINE 19 DIFFERS FROM THE TOTAL NET MARGINS REPORTED ON THE COOPERATIVE'S AUDITED FINANCIAL STATEMENTS DUE TO BOOK TO TAX ADJUSTMENTS REQUIRED TO CONFORM TO THE FORM 990 INSTRUCTIONS. THE EQUITY METHOD INCOME IS RECORDED ON THE COOPERATIVE'S BOOKS AND INCLUDED IN TOTAL NET MARGINS. U.S. GAAP REQUIRES THE COOPERATIVE TO RECORD ON ITS BOOKS THE EQUITY METHOD INCOME FROM ITS WHOLLY OWNED SUBSIDIARY. EQUITY METHOD INCOME IS NOT INCOME FOR IRS FORM 990 PURPOSES AND AS SUCH HAS BEEN REPORTED AS AN OTHER CHANGE IN NET ASSETS. FORM 990, PART III, LINE 2 DURING THE YEAR, THE COOPERATIVE DISSOLVED ITS FIBER INTERNET SUBSIDIARY, GVEC.NET, AND TRANSFERRED ALL OPERATIONS AS A NEW DIVISION OF THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 1 THE COOPERATIVE HAS 11 BOARD MEMBERS; ALL 11 ARE ALLOWED TO VOTE; HOWEVER, THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. PER IRS FORM 990 INSTRUCTIONS, THE BOARD CHAIRMAN IS NOT AN INDEPENDENT DIRECTOR DUE TO A FAMILY RELATIONSHIP WITH AN EMPLOYEE OF THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 2 A FAMILY RELATIONSHIP EXISTS BETWEEN LEWIS BORGFELD, CHAIRMAN OF THE BOARD, AND SEAN ALVAREZ, OFFICER. FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, THE COOPERATIVE'S BYLAWS WERE AMENDED AS FOLLOWS: ARTICLE I - MEMBERS SECTION 1B WAS AMENDED TO CLARIFY THAT MEMBERSHIP IN THE COOPERATIVE (INCLUDING THE QUALIFICATIONS TO BECOME A MEMBER AND OBLIGATIONS OF BEING A MEMBER) REQUIRES THE PURCHASE OF ELECTRIC ENERGY AND/OR SERVICES (COLLECTIVELY REFERRED TO AS "ELECTRIC SERVICE"). ELECTRIC SERVICE IS ALSO DEFINED AS CONSUMING OR AGREEING TO CONSUME, RECEIVE, PURCHASE OR OTHERWISE USE ELECTRIC ENERGY AND/OR SERVICES FOR THE PURCHASE, DISTRIBUTION, DELIVERY OR METERING OF ELECTRIC ENERGY. THIS REPLACES THE REQUIREMENT TO PURCHASE EITHER ELECTRIC SERVICE OR ANOTHER COOPERATIVE SERVICE. ARTICLE VIII - NONPROFIT OPERATION SECTION 2C WAS ADDED TO DEFINE THE TERM "COOPERATIVE SERVICE" AS THE (1) PROVISION OF ELECTRIC SERVICE AND (2) THE PROVISION OF OTHER UTILITY TYPE GOODS AND SERVICES TO THE EXTENT THE PROVISION OF SUCH GOODS AND SERVICES WOULD QUALIFY AN ORGANIZATION FOR EXEMPTION FROM FEDERAL INCOME TAXATION AND FOR WHICH THE BOARD OF DIRECTORS CREATES A PRE-EXISTING LEGAL OBLIGATION (THROUGH APPLICABLE RESOLUTIONS, POLICY OR OTHER CONTRACTUAL AUTHORITY) TO PROVIDE SUCH OTHER UTILITY TYPE GOODS AND SERVICES ON A PATRONAGE BASIS. SECTION 2D WAS AMENDED TO CLARIFY THREE ITEMS. FIRST, THE PRE-EXISTING LEGAL OBLIGATION TO ALLOCATE PATRONAGE CAPITAL ON A FAIR AND EQUITABLE BASIS WAS CLARIFIED FOR PERTAINING TO THE PATRONAGE EARNINGS FOR EACH COOPERATIVE SERVICE. SECONDLY, A NEW PARAGRAPH WAS ADDED TO CLARIFY THE AUTHORITY THE BOARD OF DIRECTORS HAS IN RECOVERING AN OPERATING LOSS FROM THE PATRONS. SPECIFICALLY, IF THE COSTS AND EXPENSES EXCEED THE AMOUNTS RECEIVED AND RECEIVABLE FROM AND DIRECTLY RELATED TO PROVIDING SUCH COOPERATIVE SERVICE, THE BOARD OF DIRECTORS SHALL HAVE THE AUTHORITY UNDER ACCEPTED ACCOUNTING PRACTICES, LOAN COVENANTS, AND FEDERAL COOPERATIVE TAX LAW TO PRESCRIBE THE ACCOUNTING PROCEDURES UNDER WHICH SUCH OPERATING LOSS MAY BE ADDRESSED. THIRDLY, NON-OPERATING MARGINS WAS CLARIFIED TO BE NON-PATRONAGE EARNINGS, WHICH IS DEFINED AS REVENUE, INCOME, AND GAINS IN EXCESS OF EXPENSES AND LOSSES FROM A GOOD OR SERVICE PROVIDED ON A NON-PATRONAGE BASIS AND INCLUDES EARNINGS OR LOSSES FROM A SUBSIDIARY CORPORATION. SUCH AMOUNTS MAY BE USED TO OFFSET LOSSES, RETAINED BY THE COOPERATIVE OR EQUITABLY ALLOCATED TO THE PATRONS. A LINK TO A COMPLETE COPY OF THE COOPERATIVE'S BYLAWS CAN BE FOUND ON ITS WEBSITE AT GVEC.ORG/ABOUT-US/A-COMMON-PURPOSE. FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS BY DISTRICT. FORM 990, PART VI, SECTION A, LINE 7B THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE: 1. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 3. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 4. AMENDMENT TO THE ARTICLES OF INCORPORATION FORM 990, PART VI, SECTION A, LINE 8B THE COOPERATIVE HAS NO COMMITTEES WITH AUTHORITY TO ACT ON BEHALF OF THE GOVERNING BODY. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, THE QUESTION HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION B, LINE 11B MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. THE DISCUSSION AND REVIEW WAS PERFORMED AT THE BOARD MEETING IMMEDIATELY BEFORE FILING THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12 THE COOPERATIVE DOES NOT HAVE A FORMAL CONFLICT OF INTEREST POLICY, HOWEVER, LIMITATIONS ON THE BOARD OF DIRECTORS ARE DEFINED IN THE COOPERATIVE'S BYLAWS. THE ORGANIZATION REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH SUCH POLICIES. A QUESTIONNAIRE WAS ANSWERED BY ALL BOARD MEMBERS. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVE'S IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS/CEOS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE CEO USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE'S BYLAWS, ANNUAL REPORT AND FINANCIAL STATEMENTS ARE AVAILABLE ON ITS WEBSITE AT WWW.GVEC.ORG. FORM 990, PART VII, COLUMN F: IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, THE COOPERATIVE HAS ESTABLISHED A DEFINED CONTRIBUTION PLAN UNDER SECTION 401(K) OF THE INTERNAL REVENUE CODE. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE MADE PURSUANT TO THE PLAN DOCUMENT. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS, KEY AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. FORM 990, PART VIII, LINE 2: PATRONAGE DIVIDENDS RESULT FROM THE PAYMENT OF INTEREST FROM COOPERATIVE BANKS AND THE PURCHASE OF SUPPLIES AND SERVICES FROM OTHER COOPERATIVE ORGANIZATIONS. THE EXPENSES ASSOCIATED WITH PURCHASES FROM AND PAYMENTS TO SUCH COOPERATIVE ORGANIZATIONS ARE A DIRECT COMPONENT OF COST OF THE ELECTRIC SERVICE PROVIDED BY THE COOPERATIVE TO ITS MEMBERS. FORM 990, PART IX: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE SEPARATELY REPORTS SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH ITS ACCOUNTING SYSTEM, BUT OTHER EXPENSES THAT ARE DESCRIBED IN LINES 1 - 23 ARE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE USOA. FORM 990, PART IX, LINES 5-7: SALARIES AND WAGES ARE ALLOCATED TO ASSET, LIABILITY, AND EXPENSE ACCOUNTS BASED ON THE ACCOUNTING SYSTEM DESCRIBED ABOVE. THE FOLLOWING SCHEDULE RECONCILES AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $16,103,790 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (326,074) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (153,253) LESS: KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (128,634) PLUS: SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 5,904,308 PLUS: SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 895,048 TOTAL WAGES ACCRUED AND/OR PAID $22,295,185 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 2,123,846 OFFICE SUPPLIES 1,037,086 OUTSIDE SERVICES EMPLOYED 908,378 INJURIES & DAMAGES 1,215,257 PENSIONS & BENEFITS 3,470,700 REGULATORY COMMISSION 608,664 ADVERTISING 1,008,799 MISCELLANEOUS GENERAL 474,321 DISTRICT & ANNUAL MEETINGS 202,258 DUES TO ASSOCIATED ORGANIZATIONS 188,017 DIRECTORS 333,208 UTILITIES 911,600 MAINTENANCE OF GENERAL PLANT 1,556,426 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $14,038,560 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (326,074) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (3,679,951) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,476,613) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 8,555,922 FORM 990, PART IX, LINE 4: PURSUANT TO THE FORM 990 INSTRUCTIONS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS "PATRONS") SHOULD BE REPORTED ON PART IX, LINE 4. THE PHRASE "PATRONAGE DIVIDENDS PAID" REFERS TO THE PROCESS, SUBSEQUENT TO YEAR-END, BY WHICH THE COOPERATIVE ALLOCATES PATRONAGE CAPITAL TO AND, THEREFORE, OPERATES AT COST WITH ITS PATRONS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS PATRONS AND TO DO SO ON A COOPERATIVE BASIS. TAX LAW DEFINES "OPERATING ON A COOPERATIVE BASIS" AS SUBORDINATION OF CAPITAL, DEMOCRATIC CONTROL, AND OPERATION AT COST. THE COOPERATIVE OPERATES AT COST THROUGH THE ALLOCATION OF TRUE PATRONAGE DIVIDENDS (ALSO REFERRED TO AS ALLOCATIONS OF PATRONAGE CAPITAL) TO ITS PATRONS. PATRONAGE DIVIDENDS ARE CONSIDERED PAID IF THE ALLOCATION IS MADE (1) PURSUANT TO A PRE-EXISTING OBLIGATION, (2) FROM THE MARGINS PRODUCED FROM THE TRANSACTIONS DONE WITH OR FOR PATRONS, AND (3) IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). ADDITIONALLY, THE ALLOCATION OF PATRONAGE DIVIDENDS SHOULD BE MADE WITHIN A REASONABLE TIME PERIOD AFTER THE CLOSE OF THE COOPERATIVE'S YEAR-END OF DECEMBER 31. EACH ONE OF THESE REQUIREMENTS FOR A TRUE PATRONAGE DIVIDEND IS PROVIDED FOR IN THE NON-PROFIT OPERATION ARTICLE OF THE COOPERATIVE'S BYLAWS. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2018 CALENDAR YEAR. BECAUSE PATRONAGE DIVIDENDS ARE THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS PATRONS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED SUCH AMOUNTS AS AN EXPENSE FOR FORM 990 REPORTING. PATRONAGE DIVIDENDS ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 16,333,088. PATRONAGE CAPITAL RETIRED - TOTAL -4,448,766. PATRONAGE CAPITAL RETIRED - DISCOUNT 941,349. OCI - PENSION & BENEFITS 456,645. EQUITY METHOD INCOME FROM SUBSIDIARIES 577,441. EQUITY METHOD INCOME - NON CONTROLLING INTEREST -2,165,445. NET CHANGE IN MEMBERSHIPS 19,563. GVECNET LLC PO BOX 525 GONZALES TX 78629 INTERNET SERVICE PROVIDER TX 0 0 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC GVEC CHARITABLE FOUNDATION 825 E SARAH DEWITT DR GONZALES TX 78629 453420216 TO PROVIDE FUNDING FOR LOCAL NON-PROFITS AND NEEDY INDIVIDUALS TX 501(C)(3) 7 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC 1 GVEC HOME SERVICES INC PO BOX B GONZALES TX 78629 742766073 HVAC, SOLAR & ELECTRICIAN SALES AND SERVICES TX GUADALUPE VALLEY ELECTRIC COOPERATIVE INC C 2178796 4359741 1.00000 1 GVECNET INC PO BOX 525 GONZALES TX 78629 742876734 INTERNET SERVICE PROVIDER (THRU 6/30/18) TX GUADALUPE VALLEY ELECTRIC COOPERATIVE INC C 13231547 1.00000 1 GUADALUPE VALLEY DEVELOPMENT CORPORATION PO BOX 1546 GONZALES TX 78629 742490616 INVESTMENT COMPANY TX GUADALUPE VALLEY ELECTRIC COOPERATIVE INC C 3955 4059284 1.00000 1 1 0 0 1 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 GVEC CHARITABLE FOUNDATION N N/A - LESS THAN $50,000 GVEC CHARITABLE FOUNDATION O N/A - LESS THAN $50,000 GVEC HOME SERVICES INC O 2445206 LABOR DISTRIBUTION GVEC HOME SERVICES INC Q 2532494 INVOICES & OTHER RECORDS GVECNET O 1488712 LABOR DISTRIBUTION GVECNET P 322232 CUSTOMER BILLING GVECNET Q 1947762 INVOICES & OTHER RECORDS GUADALUPE VALLEY DEVELOPMENT CORPORATION A 76907 INVOICES & OTHER RECORDS GUADALUPE VALLEY DEVELOPMENT CORPORATION D 285000 INVOICES & OTHER RECORDS GUADALUPE VALLEY DEVELOPMENT CORPORATION N N/A - LESS THAN $50,000 GUADALUPE VALLEY DEVELOPMENT CORPORATION Q N/A - LESS THAN $50,000