2021-11-15T13:37:55-06:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 860059728 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE INC SULP 5203842221 350 N HASKELL WILLCOX AZ 85643 CREDEN HUBER CEO 5203842221 2021-11-12 1 CREDEN HUBER 999009999 WILLIAM M MILLER P00439459 8067473806 2021-11-12 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z CREDEN HUBER 350 N HASKELL WILLCOX AZ 85643 112894866 0 X WWW.SSVEC.ORG X 1938 AZ TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 10 10 176 0 244458 122118 0 0 112331755 111461101 497958 239790 965474 1167862 113795187 112868753 216329 221559 13807457 12836324 14215441 14163520 0 0 0 84881390 85309882 113120617 112531285 674570 337468 316339797 319488701 172851649 165002687 143488148 154486014 SSVEC IS A COOPERATIVE DELIVERING SAFE AND RELIABLE ELECTRIC SERVICE, THROUGH PEOPLE WHO PROVIDE EXCEPTIONAL SUPPORT TO OUR MEMBER-OWNERS AND THE COMMUNITIES WE SERVE. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 52,984 ACTIVE SERVICES AT YEAR END. ELECTRIC DISTRIBUTION SERVICES (THE DELIVERY, BUT NOT THE SALE OF ELECTRICITY, TO A CUSTOMER OVER LINES OWNED, OPERATED AND MAINTAINED BY THE COOPERATIVE) WERE PROVIDED TO THE CLASS B MEMBERSHIP ON A COOPERATIVE BASIS. 0 0 0 0 0 0 0 0 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 0 0 0 0 0 0 0 1 1 0 0 1 151 0 176 1 1 1 0 0 0 0 109974193 2761329 0 1 0 X 10 10 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 AZ X X RON LEE CFO 5203842221 350 N HASKELL AVE WILLCOX AZ 85643 X JAMES JOHNSON DIRECTOR 6.70 1.00 X 21200 0 0 DONALD GENE MANRING VICE PRESIDENT 4.10 1.00 X X 17425 0 0 JOSEPH BEAM DIRECTOR 6.00 1.00 X 16900 0 0 KATHRYN THATCHER DIRECTOR 5.40 1.00 X 16625 0 0 RANDY REDMOND DIRECTOR 5.10 1.00 X 14800 0 0 THOMAS GOODMAN SECRETARY 3.40 1.00 X X 14150 0 0 DAN BARRERA PRESIDENT 5.20 1.00 X X 12700 0 0 CURTIS NOLAN TREASURER 3.60 1.00 X X 11900 0 0 PETE GILLESPIE DIRECTOR 2.60 1.00 X 11175 0 0 PAT ENGLISH DIRECTOR 2.60 1.00 X 10450 0 0 CREDEN HUBER CEO (SEE SCH O DISCLSOURE) 48.00 X 3888677 0 96947 JACK BLAIR MSO 48.00 X 236736 0 90275 JASON BOWLING CAO 50.00 X 196399 0 97102 NATHAN HODGES COO 45.00 X 203570 0 82889 DANIEL WILSON DOE 46.00 X 199619 0 86125 ORSON GARNSEY CITO 45.00 X 189552 0 74444 RON LEE CFO 48.00 X 183325 0 76669 RICHARD ELLIS JOURNEYMAN LINEMAN 53.00 X 152488 0 86041 MANUEL GONZALES TECH SVC/FLEET MANAGER 47.00 X 138534 0 75686 DAVID BANE KEY ACCOUNT MANAGER 43.00 X 140765 0 55294 JAMES FREEMAN CONTROLLER 46.00 X 137211 0 49798 LUIS MONTANO FOREMAN 50.00 X 139806 0 40836 5954007 0 912106 42 0 1 0 DESERT SPRINGS CONSTRUCTION & REMODELING 9828 E CANA ST HEREFORD AZ 85615 CONSTRUCTION CONTRACTOR 732461 ASPLUNDH TREE EXPERT LLC PO BOX 31001-2292 PASADENA CA 91110 ROW TREE TRIMMING 419846 BANKERS TITLE SERVICES 3687 N CAMPBELL AVE TUSCSON AZ 85719 REGISTRATION SERVICES 115883 3 X SALES OF ELECTRICITY 221000 105979714 105979714 PATRONAGE DIVIDENDS 221000 2493754 2493754 DISTRIBUTION SERVICES 221000 2296823 2296823 SERVICE FEES 221000 690810 690810 111461101 239790 239790 6404 0 6404 6404 6404 2886 26113 -23227 -23227 POLE ATTACHMENT INCOME 221000 917000 917000 INTERNET COMMISSIONS 517000 266573 266573 OUTSIDE SERVICES 811000 1112 1112 1184685 112868753 111461101 244458 1163194 X 221559 12836324 2456140 8076172 2111005 888924 631279 4990078 12975631 PURCHASED POWER 54473819 DISTRIBUTION EXPENSE 6276457 ADMIN & GENERAL EXPENSE 3283078 UNRELATED BUS. INC. TAX 23600 3287219 112531285 5032771 3391932 17440287 11482293 3800556 3641106 61214 48665 2061477 2632633 1430279 4231504 392604556 166375530 219618099 226229026 61484128 63215070 5410986 4616472 316339797 319488701 8664544 10398773 138879861 132308951 25307244 22294963 172851649 165002687 X 201270 203830 0 0 143286878 154282184 143488148 154486014 316339797 319488701 X 337468 10660398 X X 0 0 0 2413207 2413207 15478161 5891418 9586743 364643368 160484112 204159256 10069820 10069820 226229026 PATRONAGE CAPITAL - AEPCO 53500199 C PATRONAGE CAPITAL - CFC 2840947 C PATRONAGE CAPITAL - NISC 121373 C PATRONAGE CAPITAL - NRTC 25964 C PATRONAGE CAPITAL - FEDERATED 694721 C PATRONAGE CAPITAL - CRC 32185 C COBANK EQUITY INVESTMENT 2240223 C ASSOCIATED ORGANIZATIONS - GENERAL FUNDS 1010 C ASSOCIATED ORGANIZATIONS - GCSECA BLDG 160626 C CAPITAL TERM CERTIFICATES-CFC 2371287 C DEFERRED COMPENSATION FUNDS 1226535 F 63215070 CONSUMER DEPOSITS 2008997 ACCUMULATED PROVISION - PENSIONS & BENEFITS 2265455 ACCRUED OPERATING TAXES 2001011 DEFERRED CREDITS - ENERGY CONSERVATION & OTHER 11121476 DEFERRED CREDITS - FT. HUACHUCA REIMBURSEMENTS 4898024 22294963 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. 0 COCHISE EDUCATION FOUNDATION PO BOX DRAWER 493 BISBEE AZ 85603 263735497 501(C)(3) 5350 TEACHER OF THE YEAR DONATION BOYS AND GIRLS CLUB OF SIERRA VISTA INC 1746 PASEO SAN LUIS SIERRA VISTA AZ 85636 860801728 501(C)(3) 11140 ANNUAL DONATION; KARS FOR KIDS SIERRA VISTA AREA CHAMBER OF COMMERCE 21 E WILCOX DR SIERRA VISTA AZ 85635 742586694 501(C)(6) 8850 ANNUAL DONATION TUCSON CONQUISTADORES CLASSIC 6450 E BROADWAY BLVD TUCSON AZ 85710 202132844 501(C)(6) 7000 THE FIRST TEE OF TUCSON AND SOUTHERN ARIZONA'S YOUTH ALTHETIC PROGRAMS SSVEC FOUNDATION 311 E WILCOX DR SIERRA VISTA AZ 85635 860488826 501(C)(3) 14400 WASHINGTON YOUTH TOUR 2020 CASH AWARDS TO STUDENTS 3 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. ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X 1 1 X X 0 1 0 CREDEN HUBER CEO (SEE SCH O DISCLSOURE) 432690 0 5279 0 3450708 0 70807 0 26140 0 3985624 0 1322000 0 JACK BLAIR MSO 192634 0 5800 0 38302 0 75743 0 14532 0 327011 0 0 0 JASON BOWLING CAO 169411 0 18130 0 8858 0 71534 0 25568 0 293501 0 0 0 NATHAN HODGES COO 171347 0 9700 0 22523 0 68172 0 14717 0 286459 0 0 0 DANIEL WILSON DOE 174180 0 9650 0 15789 0 60657 0 25468 0 285744 0 0 0 ORSON GARNSEY CITO 178542 0 9500 0 1510 0 67135 0 7309 0 263996 0 0 0 RON LEE CFO 171712 0 9650 0 1963 0 56606 0 20063 0 259994 0 0 0 RICHARD ELLIS JOURNEYMAN LINEMAN 142573 0 2200 0 7715 0 65894 0 20147 0 238529 0 0 0 MANUEL GONZALES TECH SVC/FLEET MANAGER 117702 0 7904 0 12928 0 68969 0 6717 0 214220 0 0 0 DAVID BANE KEY ACCOUNT MANAGER 124836 0 3400 0 12529 0 47534 0 7760 0 196059 0 0 0 JAMES FREEMAN CONTROLLER 134256 0 1580 0 1375 0 33004 0 16794 0 187009 0 0 0 LUIS MONTANO FOREMAN 138560 0 900 0 346 0 20018 0 20818 0 180642 0 0 0 PART I, LINE 1A PURSUANT TO THE COOPERATIVE'S WELLNESS PROGRAM, EMPLOYEES ARE REIMBURSED FOR 50% OF THEIR OUT OF POCKET COSTS FOR PARTICIPATION IN QUALIFIED WELLNESS ACTIVITIES. THE TOTAL ANNUAL REIMBURSEMENT IS LIMITED TO $360 PER EMPLOYEE AND $360 FOR AN EMPLOYEE'S SPOUSE, PROVIDED THE SPOUSE IS COVERED UNDER THE COOPERATIVE'S HEALTH INSURANCE PROGRAM. EMPLOYEES ARE ELIGIBLE TO PARTICIPATE IN THE WELLNESS PROGRAM AFTER 60 DAYS OF EMPLOYEMENT. PART I, LINE 4B MR. CREDEN HUBER PARTICIPATES IN A SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATION (NQDC) PLAN. THE PURPOSE OF THE PLAN IS TO COMPENSATE THE PLAN PARTICIPANT FOR PENSION BENEFITS THAT ARE SUBJECT TO ANNUAL COMPENSATION LIMITS AND ALSO SUJECT TO CAPS ON THE LEVEL OF ACCRUED BENEFITS UNDER THE PLAN THAT MAY BE EARNED AS PROVIDED FOR BY SECTIONS 401(A)(17) AND 415(B) OF THE INTERNAL REVENUE CODE, RESPECTIVELY. BENEFITS ACCRUE FROM THE INITIAL DATE OF THE PLAN AND DO NOT VEST UNTIL NORMAL RETIREMENT AGE OF 62. AT AGE 62 ALL BENEFITS ACCRUED UNDER THE PLAN BECOME FULLY VESTED, PAYABLE AND REPORTABLE COMPENSATION TO THE PLAN PARTICIPANT. THIS OCCURRED DURING 2020. TOTAL VESTED BENEFITS PAID WERE $3,393,514. SUCH BENEFITS ARE W-2 COMPENSATION AND ARE, THEREFORE, INCLUDED IN SCHEDULE J, PART II, COLUMN (B)(III). OF THE $3,393,514 OF VESTED AND PAID BENEFITS DURING THE YEAR, APPROXIMATELY $1,322,000 WERE REPORTED IN PRIOR YEARS ON FORM 990, PART VII, COLUMN (F) AND SCHEDULE J, PART II, COLUMN (C) AS THE BENEFITS ACCRUED. THE DIFFERENCE IS PARTIALLY DUE TO CHANGES IN MORTALITY RATES AND INTEREST RATES. 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. 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. CREDEN HUBER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 62,257 ACTUARIAL INCREASE IN NQDC PLAN 0 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,550 TOTAL REPORTED IN COLUMN C $ 70,807 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT & NQDC PLANS (62,257) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT & NQDC PLANS 149,540 EXPENSE TO THE COOPERATIVE $ 158,090 JACK BLAIR: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 69,885 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,858 TOTAL REPORTED IN COLUMN C $ 75,743 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (69,885) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 66,042 EXPENSE TO THE COOPERATIVE $ 71,900 JASON BOWLING: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 66,215 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,319 TOTAL REPORTED IN COLUMN C $ 71,534 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (66,215) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 60,518 EXPENSE TO THE COOPERATIVE $ 65,837 NATHAN HODGES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 62,952 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,220 TOTAL REPORTED IN COLUMN C $ 68,172 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (62,952) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 59,380 EXPENSE TO THE COOPERATIVE $ 64,600 DANIEL WILSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 55,194 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,463 TOTAL REPORTED IN COLUMN C $ 60,657 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (55,194) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 62,145 EXPENSE TO THE COOPERATIVE $ 67,608 ORSON GARNSEY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 61,773 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,362 TOTAL REPORTED IN COLUMN C $ 67,135 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (61,773) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 61,005 EXPENSE TO THE COOPERATIVE $ 66,367 RON LEE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 51,220 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,386 TOTAL REPORTED IN COLUMN C $ 56,606 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (51,220) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 61,275 EXPENSE TO THE COOPERATIVE $ 66,661 RICHARD ELLIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 62,937 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,957 TOTAL REPORTED IN COLUMN C $ 65,894 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (62,937) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,536 EXPENSE TO THE COOPERATIVE $ 36,493 MANUEL GONZALES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 65,431 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,538 TOTAL REPORTED IN COLUMN C $ 68,969 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (65,431) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 40,149 EXPENSE TO THE COOPERATIVE $ 43,687 DAVID BANE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 43,771 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,763 TOTAL REPORTED IN COLUMN C $ 47,534 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (43,771) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,898 EXPENSE TO THE COOPERATIVE $ 46,661 JAMES FREEMAN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 30,112 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,892 TOTAL REPORTED IN COLUMN C $ 33,004 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (30,112) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,321 EXPENSE TO THE COOPERATIVE $ 26,213 LUIS MONTANO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 16,978 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,040 TOTAL REPORTED IN COLUMN C $ 20,018 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (16,978) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 34,281 EXPENSE TO THE COOPERATIVE $ 37,321 FORM 990, PART I, LINE 19: 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 INCOME OF $337,468, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE PLUS THE RETENTION OF NON-OPERATING MARGINS. 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/(LOSS) AS FOLLOWS: 1) NET INCREASE/(DECREASE) IN ACCRUED UNBILLED REVENUE PLUS 2) NON-OPERATING MARGINS. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/20 $ 2,326,352 LESS: UNBILLED REVENUE 12/31/19 (2,319,719) NET INCREASE IN UNBILLED REVENUE $ 6,633 ADD: NON-OPERATING MARGINS RETAINED 330,835 (A) - NET INCOME ON PAGE 1, PART I, LINE 1 $ 337,468 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $12,836,324 TOTAL 2020 NET MARGIN (A + B) $13,173,792 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 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 AND THE PAID PREPARER REVIEW DRAFTS OF FORM 990 PRIOR TO E-FILING. THE BOARD REVIEWS ANNUAL FILINGS AT MONTHLY MEETINGS. FORM 990, PART VI, SECTION B, LINE 12C THE DIRECTORS REVIEW THE CONFLICT OF INTEREST POLICY ANNUALLY, AND IMMEDIATELY ADDRESS ANY QUESTIONS OR CONCERNS IF THEY ARISE. THE BOARD OF DIRECTORS AND OFFICERS ARE ALSO REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT WHEN DETERMINING THE COMPENSATION OF THE CEO. THE BOARD AND THE CEO USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEE OFFICERS. FORM 990, PART VI, SECTION C, LINE 19 ANNUALY, THE COOPERATIVE MAILS ITS ANNUAL REPORT TO MEMBERS OF THE COOPERATIVE WHICH CONTAINS A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS. THE COOPERATIVE ALSO PROVIDES COPIES OF THEIR CURRENT AND PAST ANNUAL REPORTS AND GOVERNING DOCUMENTS ON THEIR WEBSITE. 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 OFFICERS 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 OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION 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 VII, SECTION A: W-2 WAGES RESULTING FROM SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATION PLAN: MR. CREDEN HUBER PARTICIPATES IN A SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATION (NQDC) PLAN. THE PURPOSE OF THE PLAN IS TO COMPENSATE THE PLAN PARTICIPANT FOR PENSION BENEFITS THAT ARE SUBJECT TO ANNUAL COMPENSATION LIMITS AND ALSO SUJECT TO CAPS ON THE LEVEL OF ACCRUED BENEFITS UNDER THE PLAN THAT MAY BE EARNED AS PROVIDED FOR BY SECTIONS 401(A)(17) AND 415(B) OF THE INTERNAL REVENUE CODE, RESPECTIVELY. BENEFITS ACCRUE FROM THE INITIAL DATE OF THE PLAN AND DO NOT VEST UNTIL NORMAL RETIREMENT AGE OF 62. AT AGE 62 ALL BENEFITS ACCRUED UNDER THE PLAN BECOME FULLY VESTED, PAYABLE AND REPORTABLE COMPENSATION TO THE PLAN PARTICIPANT. THIS OCCURRED DURING 2020. TOTAL VESTED BENEFITS PAID WERE $3,393,514 AND ARE REPORTED IN PART VII, COLUMN (F) AS A COMPONENT OF BOX 5, W-2 WAGES. ALTHOUGH THE VESTED BENEFITS ARE REPORTABLE COMPENSATION TO THE PLAN PARTICIPANT, ANNUAL EXPENSE OF THE PLAN IS EQUAL TO THE ANNUAL CONTRIBUTIONS AND NOT THE VESTED AMOUNT PAID. THE VESTED AMOUNT PAID IS DUE FROM THE PLAN AND IS AN ULTIMATE REDUCTION OF PLAN ASSETS RATHER THAN AN EXPENSE TO THE COOPERATIVE IN THE YEAR OF PAYMENT. TOTAL REPORTABLE COMPENSATION IN PART VII (COLUMNS D, E & F) FOR ALL OFFICERS, KEY EMPLOYEES, AND DIRECTORS IS $5,849,654. HOWEVER, SINCE THE $3,393,514 OF VESTED BENEFITS IS RECORDED AS A RECEIVABLE DUE FORM THE PLAN AND IS NOT A CURRENT EXPENSE TO THE COOPERATIVE,SUCH PAYMENT IS EXCLUDED FROM PART IX, LINE 5 "COMPENSATION OF CURRENT OFFICERS, DIRECTORS, TRUSTEES AND KEY EMPLOYEES". THE NET RESULT IS A PART IX, LINE 5 EXPENSE OF $2,456,140. 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 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. 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 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 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 ELECTRICITY 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 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 $10,532,312 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (147,325) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (604,451) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 12,681 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 3,928,711 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 1,613,886 PLUS: VESTED NONQUALIFIED DEFERRED COMPENSATION BENEFITS 3,393,514 TOTAL WAGES ACCRUED AND/OR PAID $18,729,329 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS & OTHER $ 6,124,016 OFFICE SUPPLIES 252,831 OUTSIDE SERVICES 682,599 INJURIES & DAMAGES 1,473 DIRECTORS 204,264 DUES TO ASSOCIATED ORGANIZATIONS 258,880 FORT HUACHUCA ADMINISTRATIVE & GENERAL 23,875 MISCELLANEOUS GENERAL 287,925 CAPITAL CREDITS 28,110 MAINTENANCE OF GENERAL PLANT 15,497 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 7,879,470 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (147,325) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (3,104,616) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,344,451) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 3,283,078 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TRANSMISSION $ 449,510 SALES 544,453 CONSUMER ACCOUNTS AND SERVICE 4,668,116 OTHER DEDUCTIONS 215,403 INTERNET 129,799 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 6,007,281 LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,898,093) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 ( 821,969) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 3,287,219 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 12,836,324. PATRONAGE CAPITAL RETIRED - TOTAL -3,159,006. PATRONAGE CAPITAL RETIRED - DISCOUNT 78,345. NET CHANGE IN MEMBERSHIPS 2,560. OTHER COMPREHENSIVE INCOME - PROVISION FOR PENSIONS AND BENEFITS 902,175. OTHER CHANGES IN EQUITIES FORM 990, PART XII, LINE 2: 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 31. THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE FOUNDATION 350 N HASKELL WILLCOX AZ 85643 860488826 FUND EDUCATIONAL YOUTH ACTIVIES AND QUALIFIED PROGRAMS AZ 501(C)(3) PF SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE INC 1 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE CHARITABLE TRUST 350 N HASKELL WILLCOX AZ 85643 860993649 ASSISTANCE TO NATURAL DISASTER VICTIMS AND FAMILIES AZ 501(C)(3) LINE 7 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE FOUNDATION N N/A - LESS THAN $50,000 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE FOUNDATION O N/A - LESS THAN $50,000 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE FOUNDATION P EXPENSE REIMBURSEMENT SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE FOUNDATION Q 1014532 EXPENSE REIMBURSEMENT SULPHUR SPRINGS VALLEY ELECTRIC CHARITABLE TRUST N N/A - LESS THAN $50,000 SULPHUR SPRINGS VALLEY ELECTRIC CHARITABLE TRUST O N/A - LESS THAN $50,000