2022-11-11T13:08:32-06:00 2021-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2021-01-01 740708876 JACKSON ELECTRIC COOPERATIVE INC JACK 3617714400 PO BOX 1189 EDNA TX 779571189 JAMES COLEMAN GENERAL MANAGER 3617714400 2022-11-10 1 JAMES COLEMAN 999009999 WILLIAM M MILLER P00439459 8067473806 2022-11-10 X 3 AAL1 IAL1 2021 2022-09-23 18:48:47Z JAMES COLEMAN PO BOX 1189 EDNA TX 779571189 69287786 0 X WWW.JECEC.COM X 1939 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 11 11 108 0 5869849 0 0 0 58127959 61450699 121115 267640 4265065 7458416 62514139 69176755 9070 13593 0 0 6792982 7691017 0 0 0 53169064 59045867 59971116 66750477 2543023 2426278 153123644 161516050 88783977 94115850 64339667 67400200 PROVIDE DEPENDABLE ELECTRIC AND SUBSIDIARY SERVICES AT COMPETITIVE PRICES, TO MAINTAIN LINES OF COMMUNICATION BETWEEN THE BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES, MEMBERS AND COMMUNITY LEADERS TO ACTIVELY PARTICIPATE IN COMMUNITY AFFAIRS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 16,910 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 1 0 0 0 1 79 0 108 1 1 1 0 0 0 0 62076623 6302128 0 0 0 X 11 11 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 0 X JAMES COLEMAN GENERAL MANAGER 3617714400 8925 STATE HIGHWAY 111 SOUTH GANADO TX 77962 X JAMES HOFFMEISTER DIRECTOR 4.00 X 9750 0 0 BRUCE ELLIOTT DIRECTOR 1.50 X 9750 0 0 LH CORNELIUS JR PRESIDENT 2.00 X X 9750 0 0 LAVAL SIMONS DIRECTOR 1.50 X 9750 0 0 TOM HUDGINS DIRECTOR 2.00 X 9750 0 0 PATRICK STUART DIRECTOR 2.00 X 9000 0 0 DOUG TISE DIRECTOR 5.00 X 9000 0 0 MICHAEL JACOBS SECRETARY/TREASURER 3.00 X X 9000 0 0 ANTHONY SMITH DIRECTOR 1.50 X 9000 0 0 WILLIAM HANSEN VICE PRESIDENT 2.30 X X 7500 0 0 JAMES ROACH DIRECTOR (OCT-DEC) 4.00 X 2250 0 0 JAMES E COLEMAN GENERAL MANAGER 50.00 X 255165 0 111873 MARTIN FLORES FOREMAN 57.00 X 137892 0 31906 RICHARD BOURLAND OPERATIONS MANAGER 50.00 X 124968 0 64891 AUSTIN BOURLAND WAREHOUSE MANAGER 51.00 X 111575 0 38525 TYLER STASTNY FOREMAN 49.00 X 121284 0 26061 DAMIEN COLEMAN ENGINEER 50.00 X 116326 0 21391 961710 0 294647 18 0 1 0 POWERLINE CONSTRUCTION INC PO BOX 889 EDNA TX 77957 LINE CONSTRUCTION 1856793 QUANTA TELECOM SVC LLC 7908 N SAM HOUSTON PARKWAY W SUITE HOUSTON TX 77064 FIBER CONSTRUCTION 997531 ASPLUNDH TREE EXPERT CO PO BOX 725124 PHILIDELPHIA PA 19090 TREE TRIMMING 713795 MERIDIAN COOPERATIVE INC 100 ASHFORD CTR N SUITE 500 ATLANTA GA 30338 BILL PRINTING AND COMPUTER SUPPORT 384997 MCGINNIS LOCHRIDGE 609 MAIN ST SUITE 2800 HOUSTON TX 77002 LEGAL 288930 8 X SALES OF ELECTRICITY 221000 59742808 59742808 PATRONAGE DIVIDENDS 221000 1458448 1458448 SERVICE FEES 221000 149035 149035 OTHER PROGRAM REVENUE 221000 100408 100408 61450699 225421 225421 38719 -3500 42219 42219 42219 155776 114531 41245 41245 SALES OF PROPANE 221000 3958858 3958858 INTERNET SERVICE PROVIDER 517000 1910991 1910991 PPP LOAN FORGIVENESS 221000 1520700 1520700 26622 26622 7417171 69176755 61534163 5869849 1772743 X 13593 461538 5335573 714055 809579 370272 2996772 3282923 PURCHASED POWER 42715347 DISTRIBUTION EXPENSE 3294272 PROPANE OPERATIONS 2703561 UBIT EXPENSE/BENEFIT -46673 4099665 66750477 1722676 1480696 4240729 5084235 205367 145483 3816474 4767855 243775 413535 137677507 26237144 106892319 111440363 4615180 5443542 31024749 32302646 362375 437695 153123644 161516050 5670797 6792105 2742184 2742184 120463 113584 77445794 82920741 1520700 1284039 1547236 88783977 94115850 X 209145 215500 0 0 64130522 67184700 64339667 67400200 153123644 161516050 X 2426278 627897 6358 X X 0 1 X 0 0 0 1 X 71957 1652360 1724317 15439899 15439899 105745545 26237144 79508401 14767746 14767746 111440363 PATRONAGE CAPITAL-TEC 373328 C PATRONAGE CAPITAL-CFC 1223686 C PATRONAGE CAPITAL-STEC 29654035 C PATRONAGE CAPITAL-SEDC 128780 C PATRONAGE CAPITAL-NRTC 3671 C CAPITAL TERM CERTIFICATES 890637 C OTHER INVESTMENTS 28509 C 32302646 CONSUMER DEPOSITS 1295695 STATE SALES TAX 197493 GROSS RECEIPTS ASSESSMENT 54048 1547236 X 68031719 627897 627897 67403822 1772933 1772933 69176755 64977544 0 64977544 1772933 1772933 66750477 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. PART X, LINE 2: THE COOPERATIVE UTILIZES 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 THEIR TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS), OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 4B - OTHER ADJUSTMENTS: RECLASSIFIED EXPENSES 1,772,933. PART XII, LINE 4B - OTHER ADJUSTMENTS: RECLASSIFIED EXPENSES 1,772,933. 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. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. X 0 0 X 0 0 0 JAMES E COLEMAN GENERAL MANAGER 218185 0 1883 0 35097 0 85085 0 26788 0 367038 0 0 0 RICHARD BOURLAND OPERATIONS MANAGER 105541 0 1146 0 18281 0 52364 0 12527 0 189859 0 0 0 MARTIN FLORES FOREMAN 126329 0 846 0 10717 0 22245 0 9661 0 169798 0 0 0 AUSTIN BOURLAND WAREHOUSE MANAGER 99896 0 827 0 10852 0 12737 0 25788 0 150100 0 0 0 PART I, LINE 1A HEALTH OR SOCIAL CLUB DUES OR INITIATION FEES - THE COOPERATIVE HAS A WELLNESS PROGRAM IN WHICH THE COOPERATIVE WILL DEDUCT $10 PER MONTH PER ELIGIBLE EMPLOYEE AND INCUR THE ENTIRE BILLING COSTS FOR EMPLOYEE SELECTED WELLNESS VENDORS. 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. JAMES COLEMAN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 82,498 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,587 TOTAL REPORTED IN COLUMN C $ 85,085 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (82,498) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 45,155 EXPENSE TO THE COOPERATIVE $ 47,742 RICHARD BOURLAND: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 51,106 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,258 TOTAL REPORTED IN COLUMN C $ 52,364 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (51,106) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 19,293 EXPENSE TO THE COOPERATIVE $ 20,551 MARTIN FLORES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 20,882 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,363 TOTAL REPORTED IN COLUMN C $ 22,245 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,882) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 16,990 EXPENSE TO THE COOPERATIVE $ 18,353 AUSTIN BOURLAND: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 11,524 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,213 TOTAL REPORTED IN COLUMN C $ 12,737 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (11,524) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,029 EXPENSE TO THE COOPERATIVE $ 18,242 DAMIEN COLEMAN FAMILY RELATIONSHIP - OFFICER (J. COLEMAN) 116326 EMPLOYMENT 0 BRYTON HERDES FAMILY RELATIONSHIP - OFFICER (J. COLEMAN) 73307 EMPLOYMENT 0 FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR THE COOPERATIVE'S BYLAWS WERE AMENDED. THE FOLLOWING IS A SUMMARY OF THE CHANGES MADE: ARTICLE II - COOPERATIVE MEMBERSHIP SECTION 2.1 - REQUIREMENTS FOR MEMBERSHIP: DELETED THE NEED FOR BOARD TO VOTE ON MEMBERSHIP. ARTICLE III - MEMBER MEETINGS AND MEMBER VOTING SECTION 3.3 - AGENDA, ATTENDANCE, AND ACTION AT MEMBER MEETINGS: IN FINAL SENTENCE OF FINAL PARAGRAPH ADDED WORDING, "SUBJECT TO THE PROVISIONS OF SECTION 3.7 BELOW." SECTION 3.7 - MEMBER VOTING BY MAIL BALLOT: ADDED PARAGRAPH ALLOWING MAIL OR ELECTRONIC BALLOTS TO TAKE PLACE OF MEMBER MEETING AS LONG AS THE NUMBER OF ELECTRONIC AND MAIL IN BALLOTS EQUALS OR EXCEEDS THE REQUIRED MEMBER QUORUM. SECOND NEW PARAGRAPH STATED THAT A MEMBER WHO SUCCESSFULLY COMPLETED A MAIL IN BALLOT, MAY ATTEND A MEMBER MEETING IN PERSON, BUT CAN NOT CAST A SECOND VOTE IN PERSON. SECTION 3.8 - QUORUM: DELETED LINE, "AT THE MEETING OF THOSE MEMBERS," IN ORDER TO ALLOW FOR MAIL IN AND ELECTRONIC BALLOTS. DELETED, "AT A MEETING THOSE PRESENT IN PERSON MAY ADJOURN THE MEETING," TO, "THE MEETING MAY BE ADJOURNED." ARTICLE IV - BOARD OF DIRECTORS SECTION 4.5 - DIRECTOR ELECTIONS: DELETED LINE, "AT EACH MEMBER MEETING AT WHICH, AND ADDED, "FOR EACH," TO ALLOW FOR NON PRESENT MEMBERS TO VOTE BY BALLOT OR ELECTRONICALLY. ALSO ADDED THAT MAIL BALLOTS ARE SUBJECT TO THE PROVISIONS OF SECTION 3.7. ARTICLE IX - MISCELLANEOUS SECTION 9.2 - BYLAW AMENDMENT: ADDED THAT BYLAWS CAN BE ADOPTED, AMENDED, OR REPEALED BY VOTE OF A MAJORITY OF MEMBERS VOTING AT A MEMBER MEETING OR BY MAIL BALLOT, SUBJECT TO THE PROVISIONS OF SECTION 3.7." 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 PRIOR TO FILING, MANAGEMENT REVIEWED THE FORM 990 AND ALSO PROVIDED AN ELECTRONIC COPY OF THE FORM 990 TO THE BOARD FOR ITS OWN REVIEW. SUBSEQUENT TO FILING, MANAGEMENT WILL DISCUSS THE FORM 990 IN DETAIL WITH THE BOARD AT A REGULAR MONTHLY MEETING. FORM 990, PART VI, SECTION B, LINE 12C ON A MONTHLY BASIS, THE BOARD OF DIRECTORS AND OFFICERS REVIEW ALL TRANSACTIONS THAT MIGHT VIOLATE THE CONFLICT OF INTEREST POLICY. ADDITIONALLY, THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY AND ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. IF A CONFLICT OF INTEREST ARISES THE INVOLVED DIRECTOR WILL NOT VOTE ON THE ISSUE. FORM 990, PART VI, SECTION B, LINE 15A THE BOARD OF DIRECTORS UTILIZE INTERNAL RESOURCES AND PERFORM AN ANNUAL REVIEW WHEN DETERMINING THE GENERAL MANAGER'S COMPENSATION. OTHER THAN THE GENERAL MANAGER, THE COOPERATIVE DID NOT HAVE ANY EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, LINE 15B HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION C, LINE 19 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. 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 THE EMPLOYEE OFFICER AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE EMPLOYEE OFFICER 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 VII, SECTION A: THE BOARD OF DIRECTORS CONSIDER THE GENERAL MANAGER TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE GENERAL MANAGER IS LISTED AS AN EMPLOYEE OFFICER. 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 VIII, LINE 11A: THE CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (CARES ACT) ESTABLISHED THE PAYCHECK PROTECTION PROGRAM (PPP) TO PROVIDE LOANS TO SMALL BUSINESSES AS A DIRECT INCENTIVE TO KEEP THEIR WORKERS ON THE PAYROLL. THE LOANS ARE FORGIVEN IF ALL EMPLOYEE RETENTION CRITERIA ARE MET AND THE FUNDS ARE USED FOR ELIGIBLE EXPENSES. DURING 2020, THE COOPERATIVE APPLIED FOR AND RECEIVED A LOAN OF $1,520,700. AFTER FULFILLING THE REQUIREMENTS OF THE PROGRAM, THE COOPERATIVE APPLIED FOR AND WAS GRANTED LOAN FORGIVENESS. BECAUSE THE NATURE OF THE PROGRAM IS COMPRISED OF A BONA FIDE LOAN FOLLOWED BY LOAN FORGIVENESS, THE AMOUNT FORGIVEN WAS RECORDED AS INCOME. ALTHOUGH THE INSTRUCTIONS TO FORM 990 STATE THAT THE AMOUNT OF PPP LOANS THAT ARE FORGIVEN MAY BE REPORTED ON LINE 1E AS CONTRIBUTIONS FROM A GOVERNMENTAL UNIT, THE COOPERATIVE HAS CHOSEN TO REPORT THE PPP LOAN FORGIVENESS AS OTHER INCOME ON LINE 11C. 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 NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION (CFC). 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 TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 5,797,111 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (94,500) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (111,873) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,412,729 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 409,443 TOTAL WAGES ACCRUED AND/OR PAID $ 7,412,910 FORM 990, PART IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: ADMINISTRATIVE AND GENERAL EXPENSES $ 1,906,294 CUSTOMER ACCOUNTS 416,730 INTERNET SERVICE PROVIDER EXPENSE 1,723,937 INVESTMENT EXPENSES 30,839 TAXES 26,864 OTHER DEDUCTIONS (4,999) TOTAL OTHER EXPENSE PER 990, LINE 24E $ 4,099,665 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 2021 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 IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 652,644 OFFICE SUPPLIES 628,765 INJURIES AND DAMAGES 96,608 REGULATORY COMMISSION 98,568 MISCELLANEOUS GENERAL 1,245,102 MAINTENANCE OF GENERAL PLANT 194,203 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,915,990 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (13,593) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (94,500) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (663,543) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (238,060) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,906,294 FORM 990, PART IX, LINE 1: 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. EACH GRANT, SPONSORSHIP, AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. FORM 990, PART XI, LINE 9: NET CHANGE IN MEMBERSHIPS 6,355. DONATED CAPITAL 3. FORM 990, PART XII, LINE 2C: THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. JEC BROADBAND LLC PO BOX 1189 EDNA TX 779571189 BROADBAND SERVICE PROVIDER TO MEMBERS OF THE COOPERATIVE TX 1910991 9935628 JACKSON ELECTRIC COOPERATIVE INC JEC PROPANE LLC PO BOX 1189 EDNA TN 779571189 PROPANE SALES AND DELIVERY TX 3958049 1685589 JACKSON ELECTRIC COOPERATIVE INC