2012-09-24T08:29:01-05:00 2011-12-31 450250958 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2011-01-01 450217439 McKenzie Electric Cooperative Inc MCKE 7014449288 PO Box 649 Watford City ND 588540649 John Skurupey 7014449288 2012-09-04 1 LISA CHAFFEE CPA P00193453 7012398500 2012-09-04 2011 2016-02-24 21:20:13Z John Skurupey PO Box 649 Watford City ND 588540649 39610098 0 X http://www.mckenzieelectric.com X 1945 ND The tax-exempt purpose of the Organization is to deliver electricity to members. 9 9 45 0 -85 -85 0 0 29790849 39230936 497543 361481 547 15404 30288939 39607821 0 12452 0 7627169 3070998 3374697 0 0 0 21063991 28217160 24134989 39231478 6153950 376343 69040553 94508010 13090266 31082208 55950287 63425802 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 2011 the Cooperative served 2,847 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 45 1 0 0 0 0 0 38032184 341758 0 X 9 9 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 5.70 X X 16021 0 0 Donald Link 6.00 X X 15933 0 0 Rondee Hanna 4.70 X X 15108 0 0 Travis Thompson 6.80 X 14683 0 0 Glenn Aamodt 4.30 X 15058 0 0 Glen Houghton 4.40 X 14933 0 0 Dennis Johnson 4.10 X 15196 0 0 Clayton Monsen 4.80 X 4257 0 0 Tim Wasem 5.20 X 16267 0 0 John Skurupey 48.20 X 132162 0 27089 Tim Melby 41.70 X 77244 0 16554 336862 0 43643 1 0 1 0 4 T Construction Inc PO Box 250 Emmet ID 83617 Line Construction 3325699 Highmark PO Box 491 Blackhawk SD 57718 Line Construction 2941029 Badlands Electric Inc PO Box 473 Baker MT 59313 Line Construction 1909745 HDR Inc PO Box 3480 Omaha NE 68103 Engineering Services 1669762 Timberline Construction PO Box 1156 Rapid City SD 57709 Line Construction 1616538 15 Electric Revenues 221000 37995060 37995060 Capital Credits 221000 1235961 1235961 NDSBIC K-1 230000 -85 -85 39230936 361045 361045 16287 16287 1188 2256 -1068 -1068 -1068 457 21 0 -21 457 436 436 185 0 185 185 39607821 39231206 -85 376700 X 12452 7627169 412446 2218491 607653 136107 533607 585490 3406705 Cost of Power 22703831 Distribution 2832718 Admin & General 1026049 Customer Accts & Servic 394419 -3265659 39231478 1976372 1766960 3975164 185360 5243458 6294194 4441580 1221130 1887006 115586 83396 121781929 54746556 45256212 67035373 11252441 12813951 190 190 69040553 94508010 2672715 6210550 1045 1660911 16328286 8756640 8542327 13090266 31082208 X 0 0 18719560 25796165 37230727 37629637 55950287 63425802 69040553 94508010 X 376343 7099172 X 0 1 1 X 1 1 0 1 714348 714348 1539735 1079578 460157 94129339 53666978 40462361 25398507 25398507 67035373 Patronage Capital Credits - Power Suppliers 11364431 C Investment in ND Small Business Dev Ptshp 3763 C CFC Investment 68009 C Patronage Capital Credits - Other Assoc. Companies 377748 C Special Funds - Reserved Cash 1000000 C 12813951 Deferred Credits 5425802 Post-Retirement Benefit Obligations 27103 Power Cost Reserve 3089422 8542327 39607821 39231478 376343 7099172 7099172 7475515 39594642 -13005 -13005 39607647 174 174 39607821 31591304 0 31591304 7640174 7640174 39231478 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, 2011 the account held $1,045. Description of Uncertain Tax Positions Under FIN 48: Part X: The Cooperative is exempt from income taxes under Section 501(c)(12) of the Internal Revenue Code. The Cooperative has adopted the provisions of FASB Accounting Standards Codification Topic ASC 740-10. Implementation resulted in no cumulative effect adjustment to retained earnings as of the date of adoption. The Cooperative had no unrecognized tax benefits as of December 31, 2011 and 2010. 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 and State tax examinations by tax authorities for years before 2008. The Cooperative undergoes an annual analysis of its 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 8 - Other Adjustments: Retired Capital -550,564. North Dakota Small Bus. Investment Co K-1 Income -174. Donated Capital Credits 1. Patronage Capital Credits Allocated During Current Year 7,627,169. Retired Capital Credits Gain 22,740. Total to Schedule D, Part XI, Line 8: 7,099,172. Part XII, Line 2d - Other Adjustments: Expenses Included in Revenue on Financial Statements -13,005. Part XII, Line 4b - Other Adjustments: North Dakota Small Bus. Investment Co K-1 Income 174. Part XIII, Line 4b - Other Adjustments: Patronage Capital Credits Allocated During Current Year 7,627,169. Expenses Included in Revenue on Financial Statements 13,005. 1 Benefit Fund of the McKenzie County Healthcare Systems 709 4th Ave NE Watford City ND 58854 363431210 501(c)(3) 10000 Wellness Center Project 1 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. In 2011, the Benefit Fund of the McKenzie County Healthcare Systems approached them for support for their building project of a community wellness center. X 1 1 X X X 0 0 0 John Skurupey 131383 0 0 0 779 0 25557 0 1532 0 159251 0 0 0 Part I, Line 1a The spouse of Tim Wasem was provided airfare to attend a company function. This is a benefit of the Board of Directors. 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 $22,897. 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 $48,589. 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 August 2012 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 $22,897 and for Tim Melby is $11,859. 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 $48,589 and $18,107, 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 $(3,374,697). 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 5: Retired Capital -550,564. North Dakota Small Bus. Investment Co K-1 Income -174. Donated Capital Credits 1. Patronage Capital Credits Allocated During Current Year 7,627,169. Retired Capital Credits Gain 22,740. Total to Form 990, Part XI, Line 5: 7,099,172. 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 1 0 0 0 0 0 0 0 McKenzie Electric Operation Roundup K General Ledger