2021-10-04T08:37:33-05:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 740498072 BANDERA ELECTRIC COOPERATIVE INC BAND 8662263372 PO BOX 667 BANDERA TX 78003 BECKY BRADBURN CFO 8662263372 2021-10-04 1 BECKY BRADBURN 999009999 WILLIAM M MILLER P00439459 8067473806 2021-10-04 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z WILLIAM HETHERINGTON PO BOX 667 BANDERA TX 78003 81334656 0 X WWW.BANDERAELECTRIC.COM X 1938 TX TO PROVIDE ELECTRIC, BROADBAND INTERNET AND OTHER RELATED GOODS AND SERVICES TO OUR MEMBERS. 8 8 135 0 103773 0 0 0 79849414 80683065 -268571 94007 989104 406622 80569947 81183694 227650 65136 12321102 11917331 8891345 8826584 0 0 0 58916281 60578785 80356378 81387836 213569 -204142 245266579 270892866 159892839 177900626 85373740 92992240 LIGHTING THE GRID TO EMPOWER OUR MEMBERS.THE GOAL OF THIS MISSION IS TO ENHANCE THE QUALITY OF LIFE BY PROVIDING HIGHLY RELIABLE ELECTRIC AND OTHER RELATED SERVICES, THAT ARE VALUED BY OUR MEMBERS, AT THE LOWEST POSSIBLE COST. 0 0 ELECTRIC DIVISION:PROVIDING ELECTRIC ENERGY TO OUR MEMBERS AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 38,084 ACTIVE SERVICES AT YEAR END. FIBER DIVISION:PROVIDING FIBER OPTIC BROADBAND INTERNET SERVICES TO MEMBERS ON A PATRONAGE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 7,644 BROADBAND SUBSCRIBERS AT YEAR END. THE FIRST CONNECTIONS BEGAN RECEIVING SERVICE IN 2017. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 0 1 1 0 0 1 68 0 135 1 1 1 0 0 0 0 80489926 5850611 0 0 0 X 8 8 0 1 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X BECKY BRADBURN CFO 8662263372 PO BOX 667 BANDERA TX 78003 X MICHAEL EDWARDS CHAIRMAN 4.90 X X 31400 0 0 JERRY PIERCE DIRECTOR 5.80 X 30000 0 0 KURT SOLIS SECRETARY/TREASURER 5.10 X X 33000 0 0 RICHARD EARNEST DIRECTOR 5.60 X 31500 0 0 JEREMY DILLER VICE CHAIRMAN 4.80 X X 29500 0 0 JERRY WORD SR JAN-SEP DIRECTOR 3.30 X 22900 0 0 FRANCES LAUE DIRECTOR 6.60 X 36000 0 0 CHRIS BLAKEMORE DIRECTOR 5.00 X 24000 0 0 JEFFREY SLOCUM DIRECTOR 3.90 X 31000 0 0 WILLIAM HETHERINGTON CEO 60.00 X 352685 0 132917 JOHN PADALINO GENERAL COUNSEL/CHIEF ADMIN OFFICER 50.00 X 231778 0 74560 BECKY BRADBURN JULY-DEC CFO 50.00 X 113410 0 44955 LYNN MIDGETTE JAN-JUNE COO 50.00 X 115001 0 0 SHANE SCHMIDT MANAGER OF BEC FIBER 55.00 X 159000 0 54665 JOHN RUSH MANAGER OF OPERATIONS 50.00 X 132405 0 70240 ALLEN MARSHALL OUTSIDE PLANT OPERATIONS SUPERVISOR 47.00 X 123980 0 50894 BILLY SIMPSON NETWORK OPERATIONS SUPERVISOR 52.00 X 123930 0 47038 PERRY HOLT SENIOR DATABASE ADMINISTRATOR 47.00 X 118277 0 49060 THILO JANSSEN MANAGER OF ENGINEERING 48.00 X 118559 0 46854 1858325 0 571183 16 0 1 0 BURNS & MCDONNELL PO BOX 411883 KANSAS CITY MO 64141 TRANSMISSION LINE CONTRACTOR 6130247 ELECTRICOM LLC PO BOX 319 PAOLI IN 47454 FIBER CONTRACTOR 4653717 K&S ELECTRIC CO INC 1901 N GRIMES HOBBS NM 88240 FIBER CONTRACTOR 2795994 JAMES POWER LINE CONSTRUCTION 43 SHOOTING CLUB ROAD BOERNE TX 78006 OVERHEAD LINE CONTRACTOR 2428146 DAS FIBER LLC PO BOX 2391 BOERNE TX 78006 FIBER CONTRACTOR 2061672 18 X SALES OF ELECTRICITY 221000 68357911 68357911 SALES OF FIBER INTERNET 221000 5880342 5797804 82538 TRANSMISSION LEASE 221000 4360107 4360107 PATRONAGE DIVIDENDS 221000 870437 870437 SERVICE FEES 221000 612491 612491 601777 580542 21235 80683065 91709 91709 6000 3702 2298 2298 2298 257398 147260 110138 110138 POLE ATTACHMENT INCOME 221000 296484 296484 296484 81183694 80689430 103773 390491 X 65136 11917331 1548271 5322894 701499 849760 404160 5216330 8298582 PURCHASED POWER 36086353 ADMIN & GENERAL EXPENSE 4973105 DISTRIBUTION EXPENSE 3932025 CONSUMER EXPENSE 793087 1279303 81387836 1666101 768725 2524136 2747821 290812 291519 1993549 2707337 855295 803073 334490665 80004884 229624130 254485781 5168443 5781201 3144113 3307409 245266579 270892866 9518480 6540274 4768 109853 64193 146231680 167027504 4032826 4263887 159892839 177900626 X 641290 663475 0 0 84732450 92328765 85373740 92992240 245266579 270892866 X -204142 7822642 X X 0 1 X 1 0 0 1 X 2697841 2697841 9079212 3441356 5637856 307553557 76563528 230990029 15160055 15160055 254485781 ACCUMULATED PROVISION FOR POST RETIRMENT BENEFITS 2107853 CUSTOMER ADVANCES FOR CONSTRUCTION 1025252 CUSTOMER DEPOSITS 708772 DEFERRED CREDITS - UNCLAIMED PATRONAGE CAPITAL 382256 OTHER ACCRUED LIABILITIES 39754 4263887 X 81183694 0 81183694 0 81183694 69470505 0 69470505 11917331 11917331 81387836 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. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. ALSO 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 APPROVED BY 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 X, LINE 2: THE COOPERATIVE HAS ADOPTED 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 POSITIONS 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 11,917,331. PART VIII: THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 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 VIII 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. 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 PAID OR 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. X 0 0 X X 0 0 0 WILLIAM HETHERINGTON CEO 293157 0 55120 0 4408 0 106850 0 26067 0 485602 0 0 0 JOHN PADALINO GENERAL COUNSEL/CHIEF ADMIN OFFICER 222424 0 0 0 9354 0 44387 0 30173 0 306338 0 0 0 SHANE SCHMIDT MANAGER OF BEC FIBER 158396 0 0 0 604 0 24602 0 30063 0 213665 0 0 0 JOHN RUSH MANAGER OF OPERATIONS 129796 0 0 0 2609 0 36630 0 33610 0 202645 0 0 0 ALLEN MARSHALL OUTSIDE PLANT OPERATIONS SUPERVISOR 123396 0 0 0 584 0 21057 0 29837 0 174874 0 0 0 BILLY SIMPSON NETWORK OPERATIONS SUPERVISOR 123396 0 0 0 534 0 17201 0 29837 0 170968 0 0 0 PERRY HOLT SENIOR DATABASE ADMINISTRATOR 112196 0 5250 0 831 0 17935 0 31125 0 167337 0 0 0 THILO JANSSEN MANAGER OF ENGINEERING 117807 0 0 0 752 0 21720 0 25134 0 165413 0 0 0 BECKY BRADBURN JULY-DEC CFO 97531 0 0 0 15879 0 26568 0 18387 0 158365 0 0 0 PART I, LINE 1A HOUSING ALLOWANCE - ONE INDIVIDUAL REPORTED ON FORM 990 PART VII, JOHN PADALINO, RECEIVED THIS BENEFIT DURING THE YEAR. ADDITIONALLY, THE VALUE OF THE BENEFIT WAS INCLUDED IN THE RESPECTIVE REPORTABLE COMPENSATION. THE CEO PROVIDED AN OFFER LETTER OF EMPLOYMENT AND APPROVED THE HOUSING ALLOWANCE AS A PART OF THE COMPENSATION PACKAGE. 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. WILLIAM HETHERINGTON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 89,750 EMPLOYER CONTRIBUTION TO 401(K) PLAN 17,100 TOTAL REPORTED IN COLUMN C $ 106,850 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (89,750) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,718 EXPENSE TO THE COOPERATIVE $ 59,818 JOHN PADALINO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 30,659 EMPLOYER CONTRIBUTION TO 401(K) PLAN 13,728 TOTAL REPORTED IN COLUMN C $ 44,387 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (30,659) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 34,100 EXPENSE TO THE COOPERATIVE $ 47,828 SHANE SCHMIDT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 16,764 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,838 TOTAL REPORTED IN COLUMN C $ 24,602 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (16,764) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,312 EXPENSE TO THE COOPERATIVE $ 29,150 JOHN RUSH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 28,230 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,400 TOTAL REPORTED IN COLUMN C $ 36,630 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (28,230) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,150 EXPENSE TO THE COOPERATIVE $ 28,550 ALLEN MARSHALL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 13,257 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,800 TOTAL REPORTED IN COLUMN C $ 21,057 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (13,257) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 16,275 EXPENSE TO THE COOPERATIVE $ 24,075 BILLY SIMPSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 13,301 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,900 TOTAL REPORTED IN COLUMN C $ 17,201 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (13,301) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 16,275 EXPENSE TO THE COOPERATIVE $ 20,175 PERRY HOLT: TOTAL REPORTED IN COLUMN C $ 17,935 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (17,935) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 18,182 EXPENSE TO THE COOPERATIVE $ 18,182 THILO JANSSEN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 14,220 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,500 TOTAL REPORTED IN COLUMN C $ 21,720 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (14,220) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 14,024 EXPENSE TO THE COOPERATIVE $ 21,524 BECKY BRADBURN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 20,443 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,125 TOTAL REPORTED IN COLUMN C $ 26,568 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,443) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 10,308 EXPENSE TO THE COOPERATIVE $ 16,433 ANDREW EDWARDS FAMILY RELATIONSHIP - OFFICER (M. EDWARDS) 90926 EMPLOYMENT 0 FORM 990, PART I, LINE 19: THE LOSS OF $204,142 REPRESENTS THE SOLAR DIVISION LOSS. SUCH LOSS IS BEING ROLLED FORWARD ON A STAND ALONE BASIS TO OFFSET ANY FUTURE NET MARGINS OF THE SOLAR DIVISION. FORM 990, PART VI, SECTION A, LINE 3 THE COOPERATIVE HIRED T. LYNN MIDGETTE, P.C., TO BE ITS CFO/COO. TOTAL COMPENSATION PAID TO T. LYNN MIDGETTE FOR THE TAX YEAR 2020 WAS $115,001. FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, THE BOARD APPROVED AMENDMENTS TO THE COOPERATIVE'S BYLAWS. THE FOLLOWING IS A SUMMARY OF CHANGES: ARTICLE II, MEETINGS OF MEMBERS, SECTION 1. ANNUAL MEETING AND SECTION 2. SPECIAL MEETINGS HAVE BEEN AMENDED TO ALLOW MEETINGS TO BE HELD BY MEANS OF REMOTE COMMUNCATION AS MAY BE DESIGNATED BY THE BOARD OF DIRECTORS. ARTICLE III, DIRECTORS, SECTION 7. VACANCIES, SUB-SECTION C WAS AMENDED TO STATE THAT IF MORE THAN 3 QUALIFIED INDIVIDUALS SUBMIT AN APPICATION PACKAGE FOR A BOARD VACANCY, THE CEO/GM WILL SEEK AT LEAST 3 MEMBERS FROM THE DISTRICT, OR FORMER DIRECTORS OF THE DISTRICT, TO SERVE ON A DIRECTOR CANDIDATE VALIDATION COMMITTEE. THE COMMITTEE WILL NARROW DOWN THE LIST OF CANDIDATES TO AT LEAST 3 QUALIFIED INDIVIDUALS FROM WHICH THE BOARD OF DIRECTORS WILL SELECT THE INTERIM DIRECTOR. A COMPLETE COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE AT: HTTPS://WWW.BANDERAELECTRIC.COM/EN-US/GOVERNANCE 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 ANNUALLY, THE COOPERATIVE REQUIRES ALL DIRECTORS, OFFICERS, AND MANAGEMENT TO CERTIFY, VIA A SIGNED CERTIFICATE OF COMPLIANCE, THAT THEY HAVE COMPLIED WITH THE CODE OF ETHICS AND ARE NOT AWARE OF ANY UNREPORTED VIOLATIONS OF THE POLICY THAT MAY HAVE OCCURRED. THESE ACTIONS ARE IN COMPLIANCE WITH THE COOPERATIVE'S CODE OF ETHICS POLICY, C05-4, PART II, #7. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS UTILIZE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS/ GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE CEO UTILIZES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. 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 OF ANY SUCH DOCUMENT. THE BYLAWS AND ARTICLES OF INCORPORATION CAN ALSO 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 LIMITATION OF SUCH PLAN. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS, KEY EMPLOYEES, 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. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. FORM 990, PART VIII, LINE 2: PATRONAGE DIVIDENDS 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: ALTHOUGH THE COOPERATIVE IS NO LONGER AN RUS BORROWER, ITS ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) 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, 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 $ 6,871,165 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (269,300) LESS: EMPLOYEE OFFICER AND KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (307,097) PLUS: SALARIES AND BENEFITS ALLOCATED TO PURCHASED POWER 182,506 PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 9,338 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 2,751,684 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 546,410 TOTAL WAGES ACCRUED AND/OR PAID $ 9,784,706 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, AND OTHER $ 4,434,846 OFFICE SUPPLIES 718,906 OUTSIDE SERVICES 648,305 INSURANCE 320,034 EMPLOYEE BENEFITS (283,031) DIRECTORS 360,344 ADVERTISING 126,857 DUES TO ASSOCIATED ORGANIZATIONS 180,990 ANNUAL MEETING 75,489 MISCELLANEOUS GERNERAL 1,101,430 REGULATORY COMMISSION 114,787 MAINTENANCE OF GENERAL PLANT 1,313,669 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 9,112,626 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (269,300) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (2,848,085) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,022,136) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 4,973,105 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: COST OF SALES - SOLAR 451,341 TRANSMISSION 335,771 FIBER 338,452 OTHER DEDUCTIONS 153,739 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 1,279,303 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, BROADBAND INTERNET AND OTHER RELATED GOODS AND SERVICES 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 CALENDAR 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 THE PATRONS RESULTING FROM THEIR PURCHASE OF GOODS AND SERVICES FROM THE COOPERATIVE FOR THE 2020 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 11,917,331. PATRONAGE CAPITAL RETIRED - TOTAL -3,457,310. PATRONAGE CAPITAL RETIRED - DISCOUNT 577,609. PATRONAGE CAPITAL RETIRED - RETAINED -1,027. NET CHANGE IN MEMBERSHIPS 22,185. OCI- PENSIONS AND BENEFITS -1,236,146. FORM 990, PART XII, LINE 2C: 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. BANDERA ELECTRIC CHARITABLE FOUNDATION 3172 STATE HIGHWAY 16 N BANDERA TX 78003 473758376 OPERATION ROUND-UP TX 501(C)(3) LINE 10 BANDERA ELECTRIC COOPERATIVE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 BANDERA ELECTRIC CHARITABLE FOUNDATION N N/A - LESS THAN $50,000 BANDERA ELECTRIC CHARITABLE FOUNDATION O N/A - LESS THAN $50,000