2013-09-19T08:40:24-05:00 2012-12-31 450250958 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2012-01-01 450217439 McKenzie Electric Cooperative Inc MCKE 7014449288 PO Box 649 Watford City ND 588540649 John Skurupey 7014449288 2013-09-09 1 LISA CHAFFEE CPA P00193453 7012398500 2013-09-09 2012 2016-02-24 21:20:13Z John Skurupey PO Box 649 Watford City ND 588540649 67143463 0 X http://www.mckenzieelectric.com X 1945 ND The tax-exempt purpose of the Organization is to deliver electricity to members. 9 1 54 0 0 0 0 0 39230936 66792733 361481 306847 15404 -972 39607821 67098608 12452 15000 7627169 12579512 3374697 3546534 0 0 0 28217160 50687103 39231478 66828149 376343 270459 94508010 122184906 31082208 46323280 63425802 75861626 To make available and to serve all consumers within its boundaries with electric energy.To ensure an adequate source of central station power and work to make that energy as reliable as possible at the lowest possible cost. 0 0 The Cooperative delivers electric energy to members. In 2012 the Cooperative served 3,210 members. 0 0 0 0 0 0 0 1 0 1 0 1 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 1 1 0 0 1 20 0 1 54 1 0 0 0 0 0 101737888 149265 0 X 9 1 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 0 1 1 0 X Tim Melby 7014449288 PO Box 649 Watford City ND 588540649 X Ray Tescher 6.80 0.10 X X 16673 0 0 Donald Link 8.00 0.10 X X 17111 0 0 Rondee Hanna 6.10 0.10 X X 16774 0 0 Travis Thompson 11.90 0.10 X 16274 0 0 Glenn Aamodt 2.70 0.10 X 15224 0 0 Glen Houghton 4.90 0.10 X 15361 0 0 Dennis Johnson 5.20 0.10 X 15899 0 0 Clayton Monsen 4.90 0.10 X 4085 0 0 Tim Wasem 4.10 0.10 X 15297 0 0 John Skurupey 51.00 0.10 X 146088 0 37362 Tim Melby 43.40 0.10 X 84719 0 20005 363505 0 57367 1 0 1 0 4 T Construction Inc PO Box 25 Emmet ID 83617 Line Construction 5328182 Badlands Electric Inc PO Box 473 Baker MT 59313 Line Construction 2225883 Probst Electric Inc 875 South 600 West Heber City UT 84032 Line Construction 2165710 HDR Inc PO Box 3480 Omaha NE 68103 Engineering Services 1913704 Highmark PO Box 491 Blackhawk SD 57718 Line Construction 1851217 16 Electric Revenues 221000 64613133 64613133 Capital Credits 221000 2180080 2180080 NDSBI K-1 Income 900099 -480 -480 66792733 269427 269427 338 338 43545 44855 -1310 -1310 6000 -7310 37420 0 37420 37420 37420 67098608 66798733 0 299875 X 15000 12579512 446071 2426730 525094 148639 722339 3951317 Cost of Power 43148388 Distribution 3716379 Admin & General 1263201 Taxes 888490 -3003011 66828149 1766960 8620840 185360 126512 6294194 9084516 4441580 3810384 1887006 3490959 83396 84370 138472458 56250400 67035373 82222058 12813951 14745077 190 190 94508010 122184906 6210550 10428558 1045 1069 16328286 22553374 8542327 13340279 31082208 46323280 X 0 0 25796165 37935273 37629637 37926353 63425802 75861626 94508010 122184906 X 270459 12165365 X 0 1 X 1 0 0 1 X 739853 739853 1887232 1142895 744337 109275017 55107505 54167512 26570356 26570356 82222058 Patronage Capital Credits - Power Suppliers 13123853 C Investment in ND Small Business Dev Ptshp 4457 C CFC Investment 70663 C Patronage Capital Credits - Other Assoc. Companies 546104 C Special Funds - Reserved Cash 1000000 C 14745077 Deferred Credits 10654802 Post-Retirement Benefit Obligations 22507 Power Cost Reserve 2662970 13340279 X 67087783 -8437 -8437 67096220 2388 2388 67098608 54240200 0 54240200 12587949 12587949 66828149 Part IV, Line 2b: The members of the Cooperative can elect to round up their monthly electric bill to the next dollar. These funds collected from the membership are held in a Cooperative account until they are released to the McKenzie Electric Operation Roundup, Inc. These funds are transferred directly to the Operation Round Up on a monthly basis. Funds that exist at the end of year are a result of a timing difference in the receipt of the funds and the release of them to the Operation Round Up. For the year ended December 31, 2012 the account held $1,069. Description of Uncertain Tax Positions Under FIN 48: Part X, Line 2: The Cooperative is exempt from income taxes. The Cooperative complies with the provisions of Accounting and Standards Codification (ASC) 740-10. As of December 31, 2012, the unrecognized tax benefit accrual was zero. The Cooperative will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if such penalties and interest are incurred. Under normal circumstances, the Cooperative is no longer subject to Federal tax examinations by tax authorities for years before 2009 and state examinations for years before 2009. The Cooperative undergoes an annual analysis of various tax positions, assessing the likelihood of those positions being upheld upon examination with relevant tax authorities, as defined by ASC 740-10. Part XI, Line 2d - Other Adjustments: Expenses Included in Revenue on Financial Statements -8,437. Part XI, Line 4b - Other Adjustments: NDSBI Income per K-1 2,388. Part XII, Line 4b - Other Adjustments: Patronage Capital Credits Allocated During Current Year 12,579,512. Expenses Included in Revenue on Financial Statements 8,437. 1 Dunn County Fair Association PO BOX 461 Killdeer ND 58601 421653982 501(c)(3) 5000 Support for High Plains Cultural Center ND Community Foundation 200 8th St NE Watford City ND 58854 450336015 501(c)(3) 10000 Support for Connie Wold Wellness Center 2 0 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: The Board of Directors reviews community projects that are in need of financial assistance. They vote on the projects that are chosen each year and ensure they are for charitable purposes. X 1 1 X X X 0 0 0 John Skurupey 144937 0 0 0 1151 0 35799 0 1563 0 183450 0 0 0 Part I, Line 1a Board of Directors can be reimbursed airfare if they opt to take their spouse on business trips. This is covered by written policy. Supplemental Information Part III Included in column "C", Retirement and Other Deferred Compensation, is the estimated annual increase in the actuarial value of the defined benefit plan. The estimated increase for John Skurupey is $32,482. This amount is an estimate in the increase of the value of the plan and is not a current year expense of the Cooperative. The current year expense for this defined benefit plan was $52,385. Form 990, Part VI, Section A, line 6 Each Member has one vote. Form 990, Part VI, Section A, line 7a Members elect the Board of Directors. Form 990, Part VI, Section A, line 7b Changes to the By-Laws are subject to the approval of the Members. Form 990, Part VI, Section A, line 8b There are no committees with the authority to act on behalf of the full governing body. Form 990, Part VI, Section B, line 11 The Form 990 was presented at the July 2013 board meeting. The CEO and Business Manager reviewed the Form 990 prior to it being presented to the Board. Form 990, Part VI, Section B, line 12c Prior to becoming a Board Member, an individual must disclose any potential conflicts. A nominating committee determines if any of the disclosures by a prospective candidate represent a conflict. Board Members are required to disclose any conflicts that arise during their tenure. Annually there is a discussion when the Board is asked to complete the relationship letters which are completed for the Form 990. The CEO is subject to the same Conflict of Interest Policy as he is a Corporate Officer. Form 990, Part VI, Section B, line 15 The process for determining the compensation for the CEO and Business Manager includes the review of state wide salary data through NDAREC and consulting, as needed, by the NRECA consulting service. Compensation for all management positions and union contracts are approved by the Board. The process for the CEO takes place annually in the month of May. The process for the Business Manager takes place annually in the month of August. Form 990, Part VI, Section C, line 19 The financial statements are presented at the annual meeting held by McKenzie Electric Cooperative, and they are also in the Dakota Living Magazine. Copies of the governing documents, conflict of interest policy, and financial statements are available upon request. Compensation Of Officers Form 990, Part VII, Section A, Column (F) Included in column "F", Estimated Amount of Other Compensation, is the estimated annual increase in the actuarial value of the defined benefit plan. The estimated increase for John Skurupey is $32,482 and for Tim Melby is $14,894. These amounts are estimates in the increase of the value of the plan and are not current year expenses of the Cooperative. The current year expense for this defined benefit plan was $52,385 and $20,192, respectively for these individuals. Form 990, Part VII John Skurupey devotes less than three hours per year to the related organization and Tim Melby devotes less than one hour per year to the related organization. The board members collectively devote less than one hour per year to the related organization. Allocated Costs Form 990, Part IX, Allocated Costs, Line 24e The labor, pension and payroll taxes reported on lines 5-10 are already included in distribution expense, administrative & general expense and customer expense. Therefore, these amounts are being subtracted out as an other deduction on line 24e in the amount of $(3,546,534). Benefits Paid to Members Form 990, Part IX, Line 4 The Cooperative has interpreted the instructions to Part IX, Line 4, to mean patronage capital allocated for the year, rather than patronage capital retired. This is consistent with the Bylaws of the Cooperative. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 9: Retired Capital -440,404. Patronage Capital Credits Allocated During Current Year 12,579,512. Retired Capital Credits Gain 28,645. NDSBI Income per K-1 -2,388. McKenzie Electric Operation Roundup Inc PO Box 649 Watford City ND 588540649 311681245 Charitable Purposes ND 501(c)(3) 7 McKenzie Electric Cooperative Inc 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 McKenzie Electric Operation Roundup L General Ledger