2024-11-15T23:11:41-06:00 2023-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2023-01-01 750712525 RITA BLANCA ELECTRIC COOPERATIVE INC RITA 8062494506 PO BOX 1947 DALHART TX 790225947 GRACE SUBEALDEA CEO/GENERAL MANAGER 8062494506 2024-11-15 1 0 WILLIAM M MILLER P00439459 8067473806 2024-11-15 X 2023 2024-10-15 13:58:12Z GRACE SUBEALDEA PO BOX 1947 DALHART TX 790225947 79696880 0 X WWW.RITABLANCAELECTRIC.COM X 1945 TX TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 42 0 0 0 0 0 90140936 79033062 384142 595608 4113 9181 90529191 79637851 23490 24730 10512635 19620098 3331823 3703872 0 0 0 76671152 56291720 90539100 79640420 -9909 -2569 130821379 150809043 26546096 29651686 104275283 121157357 NONE 0 0 SALE OF ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 8,644 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 56 0 42 1 0 0 0 0 0 76715053 10478883 0 0 0 X 9 9 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X TAMMY RINNE INSIDE OPERATIONS MANAGER 8062494506 12198 US HWY 87 DALHART TX 790225947 X CARL D FINCH CHAIRMAN 5.00 X X 28615 0 0 BRAD GREEN DIRECTOR 1.80 X 28465 0 0 BRADLEY MCBRYDE VICE CHAIRMAN 4.00 X X 28540 0 0 DAVID HIGGINS DIRECTOR (JAN-MARCH) 2.30 X 7760 0 0 DARREN STALLWITZ DIRECTOR 3.00 X 19250 0 0 SHAD MCDANIEL DIRECTOR 3.30 X 20507 0 0 BRENT SPURLOCK SECRETARY/TREASURER 3.00 X X 28615 0 0 CHRIS SHELDON DIRECTOR 2.00 X 20946 0 0 WADE LENZ DIRECTOR 10.00 X 28615 0 0 DAWSON HIGGINS DIRECTOR (MARCH-DEC) 5.00 X 16241 0 0 BRENT WHEELER CEO/GENERAL MANAGER (JAN-DEC) 45.00 X 272152 0 103616 TRACY HOWELL OUTSIDE OPERATIONS MANAGER 45.00 X 189645 0 57336 GRACE SUBEALDEA CEO/GENERAL MANAGER 45.00 X 192168 0 76551 REYNOLD MARTINEZ SUPERVISOR 40.00 X 128327 0 65204 LARRY ARAGON LINEMAN 40.00 X 142488 0 64407 JOHN POPE SUPERVISOR 40.00 X 128150 0 49179 TAMMY RINNE INSIDE OPERATIONS MANAGER 40.00 X 112947 0 61831 SHAUN SCOFIELD LINEMAN 40.00 X 126859 0 58579 1520290 0 536703 13 0 1 0 COOKE ELECTRICAL CONTRACTING INC 1000 N FOREST ST AMARILLO TX 79106 ELECTRICAL CONTRACTOR 1316486 MCNABB ENTERPRISES LLC PO BOX 309 HARTLEY TX 79044 CONSTRUCTION CONTRACTOR 1012009 VIZ ENGINEERING LLC 7717 MILWAUKEE AVE STE 500 103 LUBBOCK TX 79424 ENGINEERING CONTRACTOR 191272 STONEWALL FABRICATION & CONSTRUCTION 718 8TH STREET WOLFFORTH TX 79382 CONSTRUCTION CONTRACTOR 151092 4 X SALES OF ELECTRICITY 221000 69094612 69094612 PATRONAGE DIVIDENDS 221000 9833388 9833388 SERVICE FEES 221000 105062 105062 79033062 602503 602503 24493 31388 -6895 -6895 -6895 33147 27641 5506 5506 POLE ATTACHMENT INCOME 221000 3675 3675 3675 79637851 79031673 0 606178 X 24730 19620098 1119022 1588147 239927 591435 165341 537612 3153713 PURCHASED POWER 51031471 ADMIN & GENERAL EXPENSE 896634 DISTRIBUTION EXPENSE 507683 CONSUMER EXPENSE 143963 20644 79640420 3179984 5098528 3439971 8845621 5804823 5597171 1542402 1587319 336296 284923 114435308 30057500 80333290 84377808 5660 5660 33976049 42905715 2202904 2106298 130821379 150809043 6412798 6341053 10135 10627 12973975 11707573 7149188 11592433 26546096 29651686 X 8665 8780 0 0 104266618 121148577 104275283 121157357 130821379 150809043 X -2569 16884643 X X 0 0 0 0 1 X 638401 638401 4529163 1139007 3390156 106028359 28918493 77109866 3239385 3239385 84377808 CAPITAL TERM CERTIFICATES 380029 C INVESTMENTS IN ASSOCIATED ORGANIZATIONS - PATRONAGE CAPITAL 42524641 C INVESTMENTS IN ASSOCIATED ORGANIZATIONS - OTHER 1045 C 42905715 ACCUMULATED PROVISION FOR PENSIONS & BENEFITS 143248 CONSUMER DEPOSITS 137740 ACCRUED OPERATING TAXES 145052 DEFERRED CREDITS - GSEC REFUNDS 6950508 DEFERRED CREDITS - UNCLAIMED CAPITAL CREDITS 1040122 DEFERRED CREDITS - OTHER 3175763 11592433 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 REPORTED TO 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. PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ENERGY EFFICIENCY ASSISTANCE FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE REPORTED TO THE STATE OF TEXAS AND CAN ONLY BE USED TO ASSIST MEMBERS OF AN ELECTRIC COOPERATIVE IN REDUCING THEIR ENERGY CONSUMPTION AND ELECTRICITY BILLS. ANY AMOUNTS SO DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART VII: THE AMOUNT OF INVESTMENTS - OTHER SECURITIES ON FORM 990, PAGE 11, PART X, LINE 12 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART VII 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% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. 0 THE OPPORTUNITY PLAN INC PO BOX 1035 CANYON TX 79015 756020405 501(C)(3) 10000 0 FUND SCHOLARSHIPS 1 PART II: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X 0 0 0 BRENT WHEELER CEO/GENERAL MANAGER (JAN-DEC) 221269 0 30455 0 20428 0 67215 0 36401 0 375768 0 0 0 GRACE SUBEALDEA CEO/GENERAL MANAGER 159319 0 24243 0 8606 0 44869 0 31682 0 268719 0 0 0 TRACY HOWELL OUTSIDE OPERATIONS MANAGER 163307 0 20187 0 6151 0 52809 0 4527 0 246981 0 0 0 LARRY ARAGON LINEMAN 123391 0 15561 0 3536 0 30185 0 34222 0 206895 0 0 0 REYNOLD MARTINEZ SUPERVISOR 117893 0 9492 0 942 0 31502 0 33702 0 193531 0 0 0 SHAUN SCOFIELD LINEMAN 111181 0 14405 0 1273 0 25366 0 33213 0 185438 0 0 0 JOHN POPE SUPERVISOR 110240 0 14425 0 3485 0 32707 0 16472 0 177329 0 0 0 TAMMY RINNE INSIDE OPERATIONS MANAGER 102255 0 9405 0 1287 0 25901 0 35930 0 174778 0 0 0 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, YEARS OF SERVICE AND THE CURRENT INTEREST RATE ENVIRONMENT. 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 CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. BRENT WHEELER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 45,215 EMPLOYER CONTRIBUTION TO 401(K) PLAN 22,000 TOTAL REPORTED IN COLUMN C $ 67,215 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (45,215) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,326 EXPENSE TO THE COOPERATIVE $ 51,326 GRACIELA SUBEALDEA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 28,937 EMPLOYER CONTRIBUTION TO 401(K) PLAN 15,932 TOTAL REPORTED IN COLUMN C $ 44,869 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (28,937) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,160 EXPENSE TO THE COOPERATIVE $ 36,092 TRACY HOWELL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,794 EMPLOYER CONTRIBUTION TO 401(K) PLAN 16,015 TOTAL REPORTED IN COLUMN C $ 52,809 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,794) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,195 EXPENSE TO THE COOPERATIVE $ 37,210 LARRY ARAGON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 19,753 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,432 TOTAL REPORTED IN COLUMN C $ 30,185 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (19,753) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,586 EXPENSE TO THE COOPERATIVE $ 24,018 REYNOLD MARTINEZ: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 20,966 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,536 TOTAL REPORTED IN COLUMN C $ 31,502 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,966) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,725 EXPENSE TO THE COOPERATIVE $ 24,261 SHAUN SCOFIELD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 15,202 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,164 TOTAL REPORTED IN COLUMN C $ 25,366 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (15,202) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,309 EXPENSE TO THE COOPERATIVE $ 23,473 JOHN POPE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 21,683 EMPLOYER CONTRIBUTION TO 401(K) PLAN 11,024 TOTAL REPORTED IN COLUMN C $ 32,707 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (21,683) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 14,695 EXPENSE TO THE COOPERATIVE $ 25,719 TAMMY RINNE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 15,115 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,786 TOTAL REPORTED IN COLUMN C $ 25,901 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (15,115) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,863 EXPENSE TO THE COOPERATIVE $ 24,649 KAREN HOWELL FAMILY RELATIONSHIP - EMPLOYEE OFFICER (T. HOWELL) 98813 EMPLOYMENT 0 FORM 990, PART I: IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET LOSS OF $2,570 WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THEREFORE, IT HAS REVENUE IN DECEMBER OF EACH YEAR THAT IT HAS EARNED BUT WILL NOT BILL UNTIL THE FIRST BILLING CYCLE OF THE FOLLOWING YEAR. THE COOPERATIVE ESTIMATES THIS REVENUE AND RECORDS IT AS ACCRUED UNBILLED REVENUE IN ORDER TO MATCH THE REVENUE WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES THE REVENUE TO MEMBERS IN THE YEAR IT IS BILLED RATHER THAN WHEN ACCRUED. THIS TIMING DIFFERENCE IS FAIR AND EQUITABLE BECAUSE IT MATCHES THE PATRONAGE DIVIDEND ALLOCATED WITH THE BILLING RECORDS USED TO ALLOCATE THE MARGINS. DUE TO THE TIMING OF WHEN THE COOPERATIVE ALLOCATES ACCRUED UNBILLED REVENUE, PAGE 1, PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/23 $ - 0 - LESS: UNBILLED REVENUE 12/31/22 (2,569) (A) - DECREASE EQUALS NET LOSS ON PAGE 1 $ (2,569) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 19,620,098 TOTAL 2023 NET MARGIN PER FINANCIAL STATEMENTS (A + B) $ 19,617,529 FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAS 9 BOARD MEMBERS; ALL 9 ARE ALLOWED TO VOTE, HOWEVER, THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. 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. 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 12C ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE THE BOARD OF DIRECTORS TO DISCLOSE ALL POTENTIAL CONFLICTS OF INTERESTS. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS UTILIZE INTERNAL RESOURCES AND A PERFORMANCE REVIEW WHEN DETERMINING AND SETTING THE COMPENSATION OF THE GENERAL MANAGER. THE GENERAL MANAGER UTILIZIES INTERNAL RESOURCES AND PERFORMANCE REVIEWS WHEN DETERMINING AND SETTING THE COMPENSATION OF EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE, IF ANY. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, FINANCIAL STATEMENTS AND CONFLICT OF INTEREST POLICY TO ANY MEMBER WHO MAKES A WRITTEN REQUEST OF ANY SUCH DOCUMENT. FORM 990, PARTS VI & VII THE COOPERATIVE ANNUALLY PROVIDES EACH DIRECTOR WHO SERVED ON THE BOARD DURING THE YEAR A QUESTIONNAIRE AND TIME LOG. THE COMPLETED QUESTIONNAIRES AND TIME LOGS ARE USED TO COMPLETE THE APPLICABLE QUESTIONS ON THE FORM 990 PERTAINING TO BUSINESS RELATIONSHIPS AMONG DIRECTORS, OFFICERS, AND KEY EMPLOYEES, AS WELL AS TO DETERMINE IF THERE ARE ANY TRANSACTIONS WHICH MUST BE REPORTED IN DETAIL ON SCHEDULE L - "TRANSACTIONS WITH INTERESTED PERSONS". DAWSON HIGGINS RETIRED DURING THE YEAR AND THE COOPERATIVE WAS UNABLE TO OBTAIN A COMPLETED QUESTIONNAIRE AND/OR TIME LOG, THE COOPERATIVE RELIED UPON THE COMPLETED INFORMATION FOR THE PRIOR YEAR. THERE WERE NO KNOWN CHANGES FROM 2022 TO 2023. 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 HIGLY 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 ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. FORM 990, PART VIII, LINE 2B: 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 UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES MODIFIED FOR ELECTRIC BORROWERS OF THE RURAL UTILITIES SERVICES (RUS). 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 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 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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 2,707,169 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (227,554) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (237,503) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 820,816 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 623,383 TOTAL WAGES ACCRUED AND/OR PAID $ 3,686,311 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 703,845 OFFICE SUPPLIES 96,147 OUTSIDE SERVICES 69,489 SAFETY, INJURY & DAMAGE PREVENTION 136,902 EMPLOYEE BENEFITS 84,263 DIRECTOR FEES 347,640 ANNUAL MEETING 50,065 INSTITUTIONAL & GOODWILL ADVERTISING 46,280 DUES TO ASSOCIATED ORGANIZATIONS 163,289 MAINTENANCE OF GENERAL PLANT 146,097 MISCELLANEOUS GENERAL EXPENSE (263) PUBLIC UTILITY COMMISSION 116,584 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 1,960,338 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (24,730) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (227,554) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (523,339) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (288,081) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 896,634 FORM 990, PART IX, LINE 4: PURSUANT TO FORM 990 INSTRUCTIONS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO 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 MARGINS PRODUCED BY 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 TAX 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 PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2023 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 19,620,098. PATRONAGE CAPITAL RETIRED - TOTAL -2,718,912. PATRONAGE CAPITAL RETIRED - DISCOUNT 7,253. NET CHANGE IN MEMBERSHIPS 115. OTHER COMPREHENSIVE INCOME PROVISION FOR PENSION & BENEFITS -23,911. FORM 990, PART XII, LINE 2C: AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FINANCIAL STATEMENT AUDIT YEAR-END OF JUNE 30TH. THE TAX RETURN HAS BEEN AND CONTINUES TO BE PREPARED BASED ON A CALENDAR TAX YEAR-END OF DECEMBER 31ST. THE BOARD OF DIRECTORS HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR.