2022-11-11T14:54:52-06:00 2021-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2021-01-01 480499309 THE VICTORY ELECTRIC COOPERATIVE ASSOCIATION INC VICT 6202272139 PO BOX 1335 DODGE CITY KS 678011335 SHANE LAWS CEO 6202272139 2022-11-09 1 SHANE LAWS 999009999 WILLIAM M MILLER P00439459 8067473806 2022-11-09 X 3 AAL1 IAL1 2021 2022-09-23 18:48:47Z SHANE LAWS PO BOX 1335 DODGE CITY KS 678011335 85827025 0 X WWW.VICTORYELECTRIC.NET X 1945 KS TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 11 11 76 0 0 0 0 0 69368119 83739453 344707 148947 51757 1914568 69764583 85802968 58988 49084 5324119 8449530 6471479 6732022 0 0 0 57968046 68569072 69822632 83799708 -58049 2003260 169453454 181839680 108212032 111712793 61241422 70126887 TO PROVIDE A SAFE, RELIABLE SERVICE AT A COMPETITIVE RATE, PROVIDE ECONOMIC DEVELOPMENT OPPORTUNITIES AND SERVICES FOR OUR CONSUMERS, AND TO ENSURE THE FINANCIAL STABILITY OF THE COOPERATIVE THROUGH THE USE OF PRUDENT BUSINESS PRACTICES AND THE LATEST TECHNOLOGY. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 20,037 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 0 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 0 0 0 1 38 0 76 1 0 0 0 0 0 77965948 789953 0 0 0 X 11 11 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 0 1 1 0 X ANGELA UNRUH CFO 6202272139 3230 N 14TH AVE DODGE CITY KS 67801 X KENNY WEHKAMP TRUSTEE 12.00 X 24999 0 0 JOHN LEIS TRUSTEE 6.50 X 33020 0 0 JIM IMEL TRUSTEE 7.00 X 28484 0 0 PATRICK MORSE PRESIDENT 4.30 X X 29499 0 0 KENNETH SCHULTE TRUSTEE 2.00 X 6795 0 0 JAMES DARYL TIEBEN VICE PRESIDENT 8.70 X X 27099 0 0 CEDRIC DREWES SECRETARY/TREASURER 7.00 X X 34820 0 0 RANDY QUINT TRUSTEE 13.00 X 27099 0 0 GARY GILLESPIE TRUSTEE 5.00 X 24399 0 0 TERRI LARSON TRUSTEE 4.50 X 25899 0 0 JAMES L OCHS TRUSTEE 7.00 X 34820 0 0 SHANE LAWS CEO 55.00 X 358815 0 145139 ANGELA K UNRUH CFO 45.00 X 182422 0 90741 DENZIL MCGILL VP OF IT 45.00 X 155352 0 92917 RYAN MILLER VP OF OPERATIONS 48.00 X 148250 0 145403 ROB HENRY VP OF ENGINEERING 50.00 X 134771 0 83886 MARLON HERNANDEZ-GONZALEZ JOURNEYMAN 55.00 X 138567 0 51133 AMY GRASSER VP OF CORPORATE SERVICES 45.00 X 132138 0 70067 1547248 0 679286 19 0 1 0 NISC PO BOX 1147 MANDAN ND 58554 BILLING & SOFTWARE SERVICES 372687 FRANK'S PLUMBING INC 23903 12 RD MONTEZUMA KS 67867 DRILLING SERVICES 287490 KANSAS ELECTRIC COOPERATIVES PO BOX 4267 TOPEKA KS 66604 ASSESSMENTS, SUBSCRIPTION DUES, SAFETY M 238511 MARKS NELSON 1310 E 104 STREET STE 300 KANSAS CITY MO 64131 ACCOUNTING AND TAX SERVICES 111610 4 X SALES OF ELECTRICITY 221000 68087295 68087295 SERVICE FEES 221000 9312381 9312381 PATRONAGE DIVIDENDS 221000 6114699 6114699 TRANSMISSION/WHEELING 221000 225078 225078 83739453 111467 111467 1147 0 1147 1147 1147 39196 1716 37480 37480 37480 18083 22341 -4258 -4258 PPP LOAN FORGIVENESS 221000 1858571 1858571 POLE ATTACHMENT INCOME 221000 59108 59108 1917679 85802968 83773822 0 2029146 X 49084 8449530 1074050 3448801 1002650 944726 261795 3800043 5012657 PURCHASED POWER 54251450 DISTRIBUTION EXPENSE 3135917 ADMIN & GENERAL EXPENSE 1196240 TRANSMISSION EXPENSE 639740 533025 83799708 2074930 1444213 6893241 6376236 5886091 8001941 28479 13466 2494479 2924686 2858079 2192388 179950085 61569420 117523499 118380665 31684046 36641247 10610 5864838 169453454 181839680 4831506 5400457 100309106 103175096 3071420 3137240 108212032 111712793 X 0 0 0 0 61241422 70126887 61241422 70126887 169453454 181839680 X 2003260 6882205 X X 0 1 X 1 0 790555 790555 8160185 2064300 6095885 157906839 53910943 103995896 13092506 5594177 7498329 118380665 CFC MEMBER CAPITAL SECURITIES 100000 C CFC CAPITAL TERM CERTIFICATES 305839 C PATRONAGE CAPITAL - COBANK 298148 C PATRONAGE CAPITAL - NRUCFC 281096 C PATRONAGE CAPITAL - NISC 155485 C PATRONAGE CAPITAL - KEPCO 5446418 C PATRONAGE CAPITAL - SEPCO 28437446 C PATRONAGE CAPITAL - OTHER 484972 C CONTRIBUTED CAPITAL - SEPCO 1131843 C 36641247 CONSUMER DEPOSITS 1244581 ACCRUED OPERATING TAXES & FEES 1708568 DEFERRED CREDITS 184091 3137240 X 85802968 0 85802968 0 85802968 75350178 0 75350178 8449530 8449530 83799708 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 ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE, OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 8,449,530. 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. PART XII, LINE 4B: FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS ALLOCATED OR TO BE 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. 0 CRISIS CENTER OF DODGE CITY PO BOX 1173 DODGE CITY KS 67801 480975166 501(C)(3) 10000 0 SHARING SUCCESS GRANT DODGE CITY AREA CHAMBER OF COMMERCE PO BOX 939 DODGE CITY KS 67801 480198165 501(C)(6) 5599 0 ANNUAL MEMBERSHIP, STATE OF THE CITY ADDRESS, ANNUAL GOLF TOURNAMENT, DODGE CITY DAYS SALUTE THE TROOPS MAIN STREET DODGE CITY PO BOX 818 DODGE CITY KS 67801 480990726 501(C)(6) 5400 0 ANNUAL MEMBERSHIP, DOWNTOWN TRICK-OR-TREAT 1 2 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 X X 0 0 0 SHANE LAWS CEO 348098 0 0 0 10717 0 117616 0 27523 0 503954 0 0 0 RYAN MILLER VP OF OPERATIONS 141182 0 5000 0 2068 0 116154 0 29249 0 293653 0 0 0 ANGELA K UNRUH CFO 176474 0 5000 0 948 0 61718 0 29023 0 273163 0 0 0 DENZIL MCGILL VP OF IT 149124 0 5000 0 1228 0 65394 0 27523 0 248269 0 0 0 ROB HENRY VP OF ENGINEERING 127963 0 5000 0 1808 0 56363 0 27523 0 218657 0 0 0 AMY GRASSER VP OF CORPORATE SERVICES 126684 0 5000 0 454 0 41844 0 28223 0 202205 0 0 0 MARLON HERNANDEZ-GONZALEZ JOURNEYMAN 137121 0 0 0 1446 0 23287 0 27846 0 189700 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 CONTRIBUTION TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. SHANE LAWS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 97,316 EMPLOYER CONTRIBUTION TO 401(K) PLAN 20,300 TOTAL REPORTED IN COLUMN C $ 117,616 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (97,316) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 102,942 EXPENSE TO THE COOPERATIVE $ 123,242 RYAN MILLER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 106,376 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,778 TOTAL REPORTED IN COLUMN C $ 116,154 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (106,376) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 49,244 EXPENSE TO THE COOPERATIVE $ 59,022 ANGELA UNRUH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 49,166 EMPLOYER CONTRIBUTION TO 401(K) PLAN 12,552 TOTAL REPORTED IN COLUMN C $ 61,718 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (49,166) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 63,178 EXPENSE TO THE COOPERATIVE $ 75,730 DENZIL MCGILL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 57,870 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,524 TOTAL REPORTED IN COLUMN C $ 65,394 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (57,870) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 54,010 EXPENSE TO THE COOPERATIVE $ 61,534 ROB HENRY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,410 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,953 TOTAL REPORTED IN COLUMN C $ 56,363 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,410) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 45,411 EXPENSE TO THE COOPERATIVE $ 53,364 AMY GRASSER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 33,005 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,839 TOTAL REPORTED IN COLUMN C $ 41,844 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (33,005) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,488 EXPENSE TO THE COOPERATIVE $ 53,327 MARLON HERNANDEZ-GONZALEZ: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 17,236 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,051 TOTAL REPORTED IN COLUMN C $ 23,287 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (17,236) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,774 EXPENSE TO THE COOPERATIVE $ 28,825 FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAS 11 BOARD MEMBERS; ALL 11 ARE ALLOWED TO VOTE, HOWEVER, THE BOARD PRESIDENT VOTES ONLY IN THE CASE OF A TIE SHOULD ALL MEMBERS OF THE BOARD NOT BE PRESENT AT ANY GIVEN MEETING. FORM 990, PART VI, SECTION A, LINE 2 A BUSINESS RELATIONSHIP EXISTS BETWEEN KENNY WEHKAMP (TRUSTEE), JIM IMEL (TRUSTEE) AND SHANE LAWS (CEO). ALL SERVE ON THE BOARD OF SUNFLOWER ELECTRIC POWER CORPORATION AT THE REQUEST OF AND FOR THE BENEFIT 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 TRUSTEES. 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 5. AMENDMENT TO THE BYLAWS 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. FORM 990, PART VI, SECTION B, LINE 12C THE BOARD OF TRUSTEES AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF TRUSTEES AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF TRUSTEES 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 TRUSTEES USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE BOARD AND THE CEO USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICERS AND KEY EMPLOYEES, IF ANY. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE PROVIDES A COPY OF THE BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. THE ANNUAL REPORT AND BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE. 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 LIMIATION 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 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 2: PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO RESULT FROM THE PAYMENT OF INTEREST TO 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 RURAL UTILITIES SERVICE (RUS) UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR RUS ELECTRIC BORROWERS. 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, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 2,686,980 TRAINING 13,562 OFFICE SUPPLIES 292,883 OUTSIDE SERVICES 153,659 INSURANCE 90,702 EMPLOYEE BENEFITS 29,704 TRUSTEES 329,262 MISCELLANEOUS GENERAL 374,277 MAINTENANCE OF GENERAL PLANT 185,401 REGULATORY COMMISSION 6,154 MEMBER MEETING 68,342 ADVERTISING 18,397 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 4,249,323 LESS: RECLASS OF TRUSTEE FEES TO PART IX, LINE 5 (296,933) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,708,917) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,047,233) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,196,240 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 $ 4,522,851 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-NEC (296,933) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (235,880) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 2,343,869 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 291,093 TOTAL WAGES ACCRUED AND/OR PAID $ 6,625,000 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. 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 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CUSTOMER ACCOUNTS $ 342,846 CUSTOMER SERVICE AND INFORMATION 169,147 SALES EXPENSE 20,604 OTHER DEDUCTIONS 428 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 533,025 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 8,449,530. PATRONAGE CAPITAL RETIRED - TOTAL -1,839,679. PATRONAGE CAPITAL RETIRED - DISCOUNT 271,724. DONATED CAPITAL 630. FORM 990, PART XII, LINE 2C: THE BOARD OF TRUSTEES HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR.