2016-11-14T10:18:21-06:00 2015-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2015-01-01 740880083 SAN BERNARD ELECTRIC COOPERATIVE INC SANB 9798653171 PO BOX 1208 BELLVILLE TX 77418 BILLY MARRICLE PRESIDENT/GM 9798653171 2016-11-08 1 Matt R Willis P00419741 8067473806 2016-11-07 X 2015 2017-02-10 21:41:12Z BILLY MARRICLE PO BOX 1208 BELLVILLE TX 77418 70833707 0 X WWW.SBEC.ORG X 1939 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 129 0 -82 -82 0 0 75368997 70350051 71142 77524 -16790 57170 75423349 70484745 40844 46684 5307886 4381798 6020806 6422228 0 0 0 64053813 59634035 75423349 70484745 0 0 187905693 186667070 111348413 108388284 76557280 78278786 THE COOPERATIVE'S RESPONSIBILITY AND AIM IS TO PROVIDE EXCELLENT AND INNOVATIVE CUSTOMER SERVICE AS REFLECTED IN TOP QUALITY ELECTRIC SERVICE RELIABILITY, AFFORDABLE RATES, EMPLOYEE TEAMWORK AND THE HIGHEST DEGREE OF INTEGRITY IN ALL COOPERATIVE ENDEAVORS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 26,331 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 52 0 129 1 1 1 0 0 0 0 73957039 2459433 0 X 9 9 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 0 0 1 1 0 X KEN WIED BUSINESS GROUP MANAGER 9798653171 309 WEST MAIN STREET BELLVILLE TX 77418 X GUS H MILLER JR BOARD PRESIDENT 10.00 X X 26438 0 0 BRUCE R PILCIK 1ST VICE PRESIDENT 10.00 X X 25521 0 0 KARL N MICKLITZ 2ND VICE PRESIDENT 8.50 X X 27916 0 0 SAMMY CONDRA 3RD VICE PRESIDENT 12.00 X X 28521 0 0 CHARLES MATULA SECRETARY/TREASURER 10.00 X X 27846 0 0 ELROY KIECKE ASSISTANT SEC/TREASURER 6.00 X X 26463 0 0 JOHN ALLEN DIRECTOR 12.00 X 30521 0 0 FRANK POKLUDA DIRECTOR 11.00 X 12610 0 0 COLT HAACK DIRECTOR 10.00 X 30721 0 0 BILLY MARRICLE PRESIDENT/GM 46.00 X 189519 0 121817 KEN WIED BUSINESS GROUP MANAGER 45.00 X 127536 0 64099 JAMES PHILLIPS 1ST CL LINE TECH 55.00 X 107376 0 42493 ROBERT HROMADKA LINE CREW LEADER 51.00 X 115326 0 55314 LARRY WEDEKING AREA LINE SUPERVISOR 48.00 X 110239 0 51419 CLAYTON STANFORD ENGINEERING MANAGER 43.00 X 118965 0 85022 DON ROBERTS ELECTRIC SYS. MANAGER 41.00 X 143741 0 131571 1149259 0 551735 9 0 1 0 BURNS & MCDONNELL PO BOX 411883 KANSAS CITY MO 64141 ENGINEERING CONSULTING/SUBSTATION CONSTR 1623983 ABC PROFESSIONAL TREE SERVICES 201 FLINT RIDGE RD WEBSTER TX 77598 ROW CLEARING 1297485 MCCOY TREE SURGERY PO BOX 720342 NORMAN OK 73072 ROW CLEARING 995395 THE DAVEY TREE SURGERY COMPANY PO BOX 5015 LIVERMORE CA 94551 ROW CLEARING 607000 LINE TECH INC 402 TECHNOLOGY DRIVE BASTROP TX 78602 LINE CONSTRUCTION 450337 12 X ELECTRICITY SALES 221000 67669476 67669476 LEASE INC. FROM LCRA 221000 2063193 2063193 PATRONAGE DIVIDENDS 221000 444672 444672 SERVICE FEES 221000 172710 172710 70350051 61402 61402 75477 59355 16122 16122 16122 287604 289607 -2003 -1921 -82 JOINT POLE RENTAL INCOME 221000 50173 50173 DISPATCHING REVENUE 519100 9000 9000 59173 70484745 70348130 -82 136697 X 46684 4381798 739528 3622618 822633 940146 297303 3661484 6740895 PURCHASED POWER 41168406 DISTRIBUTION EXPENSE 5199625 CUSTOMER SERVICE 1325621 ADMIN. AND GENERAL 1103303 434701 70484745 X 1259699 716808 2932927 2181726 3433380 3672577 13814610 11194830 220987311 58422536 158615609 162564775 4752557 4628852 3096911 1707502 187905693 186667070 5968156 5362085 286657 340799 101501393 97604511 3592207 5080889 111348413 108388284 X 68905 66310 0 0 76488375 78212476 76557280 78278786 187905693 186667070 X 0 1721506 X X 0 1 X 0 0 0 1 X 2016714 2016714 5887882 2882200 3005682 208770858 55540336 153230522 4311857 4311857 162564775 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 1342400 CONSUMER DEPOSITS 805119 DEFERRED CREDITS 2500273 POWER COST OVER COLLECTED 433097 5080889 X 70488124 3379 3379 70484745 0 70484745 66106326 0 66106326 4378419 4378419 70484745 Part IV, Line 2b: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. 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. THE COOPERATIVE HAS PUT INTO PLACE AN "OPERATION ROUNDUP" PLAN. MEMBERS WHO WISH TO PARTICIPATE IN THE PLAN VOLUNTARILY ROUND THEIR ELECTRIC BILLS UP TO THE NEAREST WHOLE DOLLAR. THE DIFFERENCE IS USED TO FUND THE PLAN. THE "OPERATION ROUNDUP" FUNDS ARE MAINTAINED IN A SEPARATE ACCOUNT AND USED TO SUPPORT EDUCATION PROJECTS, YOUTH PROJECTS, COMMUNITY PROJECTS AND EMERGENCY ASSISTANCE WITHIN THE COMMUNITIES AND AREAS SERVED BY THE COOPERATIVE. Part X, Line 2: THE COOPERATIVE HAS ADOPTED 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 DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. Part XI, Line 2d - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSE 3,379. Part XII, Line 4b - Other Adjustments: PATRONAGE CAPITAL ASSIGNABLE 4,381,798. EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSE -3,379. 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. Part XII, Line 4B FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID OR ALLOCATED TO THE MEMBERS IS REPORTED AS AN INCREASE IN EQUITY AND NOT AS AN EXPENSE. THEREFORE, NET INCOME PER THE AUDITED FINANCIAL STATEMENTS IS REPORTED GROSS OF THE AMOUNT OF PATRONAGE DIVIDENDS THAT ARE EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. HOWEVER, BECAUSE THE ALLOCATION OF PATRONAGE DIVIDENDS IS ONE ASPECT OF HOW THE COOPERATIVE FULFILLS ITS TAX EXEMPT PURPOSE OF OPERATING ON A COOPERATIVE BASIS, THE AMOUNT OF PATRONAGE DIVIDENDS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS REPORTED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". PATRONAGE DIVIDENDS ARE ALLOCATED ON A PATRONAGE BASIS AND DONE SO PURSUANT TO A PRE-EXISTING OBLIGATION AS PROVIDED FOR IN THE "NON-PROFIT OPERATION" ARTICLE OF THE COOPERATIVE'S BYLAWS. 1 WALLER COUNTY FAIR ASSOCIATION PO BOX 911 HEMPSTEAD TX 77445 741481196 501 (C) (3) 6885 OPERATIONS 1 SCHEDULE I, PART II ALL GRANTS, SPONSORSHIPS AND DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X X X X X 0 0 0 BILLY MARRICLE PRESIDENT/GM 178184 0 4194 0 7141 0 109458 0 12359 0 311336 0 0 0 KEN WIED BUSINESS GROUP MANAGER 119320 0 2786 0 5430 0 54536 0 9563 0 191635 0 0 0 ROBERT HROMADKA LINE CREW LEADER 111804 0 1930 0 1592 0 33055 0 22259 0 170640 0 0 0 LARRY WEDEKING AREA LINE SUPERVISOR 107234 0 1979 0 1026 0 41038 0 10381 0 161658 0 0 0 CLAYTON STANFORD ENGINEERING MANAGER 113435 0 2917 0 2613 0 62297 0 22725 0 203987 0 0 0 DON ROBERTS ELECTRIC SYS. MANAGER 133035 0 3250 0 7456 0 109837 0 21734 0 275312 0 0 0 SCHEDULE J Part II, Column C INCLUDED IN THIS AMOUNT IS THE INCREASE IN ACTUARIAL VALUE OF BENEFITS PAYABLE UNDER A DEFINED BENEFIT RETIREMENT PLAN. THE CONTRIBUTION RATE FOR PARTICIPANTS IN THE NRECA R&S DEFINED BENEFIT PENSION PLAN ARE THE SAME FOR ALL INDIVIDUALS IN THIS MULTI-EMPLOYER PLAN. THE CHANGE IN ACTUARIAL VALUE FOR EACH PARTICIPANT, HOWEVER, VARIES WITH AGE. IN OTHER WORDS, THE OLDER A PLAN PARTICIPANT IS, THE GREATER THE INCREASE IN THAT INDIVIDUAL'S CHANGE IN ACTUARIAL VALUE, ALL OTHER THINGS BEING EQUAL. BECAUSE THIS RELATES TO A MULTI-EMPLOYER PLAN, CASH CONTRIBUTION TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. BILLY MARRICLE ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 98,673 EMPLOYER CONTRIBUTION TO 401(K)PLAN 10,785 TOTAL REPORTED IN COLUMN C $ 109,458 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (98,673) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,062 EXPENSE TO THE COOPERATIVE $ 52,847 KEN WIED ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 47,379 EMPLOYER CONTRIBUTION TO 401(K)PLAN 7,157 TOTAL REPORTED IN COLUMN C $ 54,536 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (47,379) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,309 EXPENSE TO THE COOPERATIVE $ 36,466 ROBERT HROMADKA ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 28,092 EMPLOYER CONTRIBUTION TO 401(K)PLAN 4,963 TOTAL REPORTED IN COLUMN C $ 33,055 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (28,092) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,591 EXPENSE TO THE COOPERATIVE $ 26,554 LARRY WEDEKING ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,298 EMPLOYER CONTRIBUTION TO 401(K)PLAN 4,740 TOTAL REPORTED IN COLUMN C $ 41,038 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,298) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,077 EXPENSE TO THE COOPERATIVE $ 25,817 CLAYTON STANFORD ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 55,088 EMPLOYER CONTRIBUTION TO 401(K)PLAN 7,209 TOTAL REPORTED IN COLUMN C $ 62,297 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (55,088) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 26,212 EXPENSE TO THE COOPERATIVE $ 33,421 DON ROBERTS ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 101,524 EMPLOYER CONTRIBUTION TO 401(K)PLAN 8,313 TOTAL REPORTED IN COLUMN C $ 109,837 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (101,524) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,376 EXPENSE TO THE COOPERATIVE $ 41,689 Form 990, Part VI, Section A, Line 1 THE COOPERATIVE HAS 9 BOARD MEMBERS; ALL 9 ARE ALLOWED TO VOTE, HOWEVER THE BOARD PRESIDENT VOTES ONLY IN THE CASE OF A TIE. Form 990, Part VI, Section A, line 4 SECTION 1.04 OF THE COOPERATIVE'S BYLAWS WERE AMENDED TO UPDATE THE JOINT MEMBERSHIP REQUIREMENTS FROM "A HUSBAND AND WIFE, BY SPECIFICALLY SO REQUESTING IN WRITING," TO "TWO PEOPLE WITH A MARRIAGE RECOGNIZED AS LEGAL AND BINDING BY THE STATE OF TEXAS." THE SAME SECTION WAS FURTHER AMENDED TO REPLACE THE PRONOUNS "A HUSBAND AND WIFE" TO "THESE TWO PEOPLE." SECTION 8.04 OF THE COOPERATIVE'S BYLAWS WERE AMENDED TO EXCLUDE THE FOLLOWING: "IF, PRIOR TO RETIREMENT OF CAPITAL AS PROVIDED BY THESE BY-LAWS, A PERSON CEASES TO BE A MEMBER OR PATRON OF THE COOPERATIVE AND SUCH PERSON'S EXISTENCE AND WHEREABOUTS ARE UNKNOWN TO THE COOPERATIVE FOR A PERIOD OF FIVE (5) YEARS, CAPITAL CREDITS TO SUCH PERSON'S ACCOUNT SHALL BE DEEMED A CONTRIBUTION TO CAPITAL AND SUCH PERSONS SHALL HAVE NO FURTHER CLAIM TO SUCH CAPITAL. IF A CHECK REPRESENTING ANY RETIREMENT OR REFUND OF ANY SUCH CAPITAL CREDITS, DEPOSITS AND OTHER SUCH AMOUNTS SHALL BE MAILED TO ANY SUCH PERSON AT THE PERSON'S LAST KNOWN ADDRESS SHOWN IN THE RECORDS OF THE COOPERATIVE AND SHALL BE RETURNED UNCLAIMED TO THE COOPERATIVE, OR ANY SUCH CHECK SHALL REMAIN UNCASHED AND NO CLAIM THEREFORE SHALL BE MADE BY SUCH PERSON FOR A PERIOD OF FIVE (5) YEARS AFTER THE ISSUANCE THEREOF, IT IS AGREED THAT SUCH PERSONS SHALL THEREAFTER HAVE NO RIGHT, TITLE AND INTEREST TO ANY SUCH CAPITAL CREDITS, DEPOSITS OR OTHER AMOUNTS CREDITED TO SUCH PERSON ON THE BOOKS OF THE COOPERATIVE AND ALL RIGHT, TITLE AND INTEREST THEREON AND THERETO SHALL BE DEEMED TO BE ASSIGNED TO AND SHALL BECOME THE PROPERTY OF THE COOPERATIVE." 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 PER 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 FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION FOR DISCUSSING ITEMS OF A SENSITIVE AND CONFIDENTIAL NATURE. WHEN THIS OCCURS MANAGEMENT AND OTHERS IN ATTENDANCE ARE REMOVED FROM THE MEETING ROOM. ITEMS DISCUSSED IN EXECUTIVE SESSION ARE NOT DOCUMENTED. HOWEVER, ACTIONS TAKEN BY THE BOARD AFTER EXECUTIVE SESSIONS ARE ADJOURNED ARE FULLY DOCUMENTED IN THE WRITTEN MINUTES. Form 990, Part VI, Section B, line 11 MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION, REVIEW AND APPROVAL PRIOR TO FILING. Form 990, Part VI, Section B, line 12c THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. THE CONFLICT OF INTEREST POLICY IS REVIEWED ON AN ANNUAL BASIS. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS AND A COMPENSATION COMMITTEE COMPARE THE FORM 990S OF OTHER COOPERATIVES, EMPLOY AN INDEPENDENT COMPENSATION CONSULTANT AND USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE PRESIDENT/GM. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD OF DIRECTORS AND THE PRESIDENT/GM EMPLOY AN INDEPENDENT COMPENSATION CONSULTANT, THE FORM 990 OF OTHER COOPERATIVES AND USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. FINALLY, THE COOPERATIVE'S FINANCIAL STATEMENTS, GOVERNING DOCUMENTS, AND BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE. Form 990, Part VI, Section B, Line 14 THE COOPERATIVE DOES NOT HAVE A WRITTEN DOCUMENT RETENTION AND DESTRUCTION POLICY IN PLACE, BUT FOLLOWS THE RUS RECOMMENDATIONS REGARDING DOCUMENT RETENTION AND DESTRUCTION. 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. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A MULTI-EMPLOYER DEFINED BENEFIT PLAN. CONTRIBUTIONS TO THIS PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF SUCH PLAN. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED TO THE DEFINED CONTRIBUTION PLAN AND THE INSURANCE PAID ON BEHALF OF AND 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 PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO 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 AS PRESCRIBED FOR RUS ELECTRIC BORROWERS. THE UNIFORM SYSTEM OF ACCOUNTS 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 THEIR ACCOUNTING SYSTEM, BUT OTHER EXPENSES THAT ARE DESCRIBED IN LINES 1 - 23 ARE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE UNIFORM SYSTEM OF ACCOUNTS. 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 $4,362,146 LESS DIRECTORS FEES REPORTED ON 1099-MISC (236,557) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (185,916) PLUS SALARIES & WAGES ALLOCATED TO NONOP MARGINS 7,908 PLUS SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 2,492,524 PLUS SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 1,313,285 TOTAL WAGES ACCRUED AND/OR PAID $7,753,390 Form 990, Part IX, Line 24e OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TAXES - PROPERTY & OTHER $ 304,264 TRANSMISSION EXPENSE 130,437 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $ 434,701 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 2015 CALENDAR YEAR. BECAUSE PATRONAGE DIVIDENDS IS 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 ARE AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. Form 990, Part IX, Line 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OFFICE SUPPLIES AND EXPENSE $ 221,333 OUTSIDE SERVICES EMPLOYED 58,986 REGULATORY COMMISSION EXPENSE 113,572 DUES PAID ASSOCIATED ORGANIZATIONS 87,266 DIRECTOR EXPENSE 84,308 MAINTENANCE OF GENERAL PLANT 398,308 MISCELLANEOUS GENERAL EXPENSE 139,530 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 1,103,303 Form 990, Part X, LINES 17 AND 25 THE COOPERATIVE PREVIOUSLY INCLUDED ACCRUED EXPENSES (COMPRISED OF "ACCRUED EMPLOYEE COMPENSATED ABSENCES", " ACCRUED INTEREST AND "OTHER CURRENT ACCRUED LIABILITES") AS COMPONENTS OF OTHER LIABILITIES ON LINE 25 OF PART X. HOWEVER, FOR THE 2015 CALENDAR YEAR, THE COOPERATIVE BEGAN REPORTING THESE AMOUNTS ON LINE 17 IN ACCORDANCE WITH FORM 990 INSTRUCTIONS. TO INCREASE CONSISTENCY, ACCRUED EXPENSES IN THE AMOUNT OF $1,149,895 FOR THE 2014 CALENDAR YEAR HAVE BEEN RECLASSED FROM LINE 25 TO LINE 17. Form 990, Part XI, line 9: NET CHANGE IN MEMBERSHIPS -2,595. OTHER COMPREHENSIVE INCOME-PROVISION FOR POST-RETIREMENT BENEFIT OBLIGATION -267,184. PATRONAGE CAPITAL ASSIGNABLE 4,381,798. RETIREMENT OF PATRONAGE CAPITAL -2,390,513.