2021-11-15T22:18:49-06:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 740783753 MID-SOUTH ELECTRIC COOPERATIVE ASSOCIATION MID- 9368255100 PO BOX 970 NAVASOTA TX 778680970 ANDREW DALLMEYER SR. VICE PRESIDENT 9368255100 2021-11-11 1 ANDREW DALLMEYER 999009999 WILLIAM M MILLER P00439459 8067473806 2021-11-11 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z MID-SOUTH SYNERGY KERRY KELTON PO BOX 970 NAVASOTA TX 778680970 91777303 0 X WWW.MIDSOUTHSYNERGY.COM X 1940 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 8 8 166 0 -686 0 0 0 89827261 91366715 38686 140122 144976 22836 90010923 91529673 370 195 5948272 3479555 7900557 8535006 0 0 0 74888847 78469454 88738046 90484210 1272877 1045463 314645801 371819528 195776169 247541477 118869632 124278051 X THE COOPERATIVE'S AND ITS SUBSIDIARIES' MISSION IS TO PROVIDE QUALITY SERVICE (ELECTRICITY, WATER, WASTEWATER, INTERNET, & SOLAR) AT A REASONABLE PRICE, BRINGING VITAL SERVICES TO INCREASE BOTH THE QUALITY OF LIFE AND ECONOMIC HEALTH IN THE MID-SOUTH SYNERGY SERVICE AREA. 1 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 34,260 ACTIVE SERVICES AT YEAR END. COMMUNICATIONS DIVISION:PROVIDING BROADBAND INTERNET SERVICES THROUGH THE CONSTRUCTION OF A FIBER OPTIC NETWORK. WHEN CUMULATIVE NET MARGINS DERIVED FROM MEMBER SALES OF BROADBAND INTERNET SERVICES EXCEED CUMULATIVE NET LOSSES FROM SUCH SALES, THE COOPERATIVE WILL ALLOCATE PATRONAGE CAPITAL TO THE MEMBERS. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 1 1 1 0 0 1 79 0 166 1 1 1 0 0 0 0 89513183 4417303 0 0 0 X 8 8 1 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X ANDREW DALLMEYER SR VICE PRESIDENT 9368255175 7625 HIGHWAY 6 NAVASOTA TX 77868 X DENNIS MCWHORTER DIRECTOR 4.50 1.50 X 20288 0 0 MARSHALL SHIRLEY PRESIDENT 4.00 1.00 X X 18975 0 0 RUSSELL WATSON DIRECTOR 4.20 1.50 X 18713 0 0 DANNY PIERCE DIRECTOR 3.10 1.20 X 15825 0 0 JAMES MORRISON VICE PRESIDENT 2.40 1.00 X X 15038 0 0 JACK SHEPHERD SECRETARY/TREASURER 2.70 1.50 X X 14775 0 0 PAUL MALEK DIRECTOR 2.80 1.50 X 14775 0 0 KENNETH MCDOUGALD DIRECTOR 1.80 1.00 X 13200 0 0 KERRY KELTON GENERAL MANAGER/CEO 65.00 1.00 X 418119 0 108850 TROY MORRIS SR. VICE PRESIDENT 55.00 1.00 X 255020 0 86222 MIKE MCDOUGALD SR. VICE PRESIDENT 50.00 1.00 X 247570 0 72547 ANDREW DALLMEYER SR. VICE PRESIDENT 50.00 1.00 X 233623 0 50056 DENNIS GILMORE SR. VICE PRESIDENT 50.00 X 191961 0 51391 DAVID WILLIAMS VP OPERATIONS 45.00 X 181941 0 57173 MELANIE CABALLERO VP ADMINISTRATIVE SERVICES 55.00 X 145142 0 60633 DIANNE SECHELSKI VP BILLING 40.00 X 144914 0 56538 CATHY BARKER HUMAN RESOURCES MANAGER 40.00 X 125668 0 39448 BRANDON NORTHCUT BUSINESS INTELLIGENCE MANAGER 40.00 X 135300 0 27479 JARED ANDERSON LINE FOREMAN 47.60 X 127106 0 30002 RUSSELL SMITH IT MANAGER 40.00 X 142112 0 10810 JAMES IDOM SYSTEM OPERATIONS SUPERVISOR 40.00 X 122152 0 14402 2602217 0 665551 41 0 1 0 NATIONAL ONDEMAND INC PO BOX 2407 BURLINGTON NC 27216 SMART GRID CONSTRUCTION 11584479 LINETEC SERVICES INC 19820 N 7TH AVE SUITE 120 PHOENIX AZ 85027 LINE CONSTRUCTION 3608977 MCCORD ENGINEERING INC 916 SOUTHWEST PARKWAY EAST COLLEGE STATION TX 77840 ENGINEERING 3355353 MDR CONSTRUCTION INC 621 E BAYLIS CHAPEL RD COLUMBIA MS 39429 LINE CONSTRUCTION 2531835 FINWAY PO BOX 682 CONROE TX 77305 LINE CONSTRUCTION 2443435 23 SALES OF ELECTRICITY 221000 86080668 86080668 PATRONAGE DIVIDENDS 221000 4708594 4708594 SERVICE FEES 221000 409371 409371 BROADBAND REVENUE 517000 164023 164023 OTHER PROGRAM REVENUE 221000 4059 4059 91366715 33519 33519 162125 10536 151589 151589 152275 -686 110180 3577 106603 106603 106603 233517 -233517 -233517 POLE ATTACHMENT INCOME 221000 104764 104764 104764 91529673 91285473 -686 244886 X 195 3479555 2493289 4189937 608754 804446 438580 7158982 9692854 PURCHASED POWER 48168138 DISTRIBUTION EXPENSE 5741613 ADMIN & GENERAL EXPENSE 3924018 CONSUMER EXPENSE 2419949 1363900 90484210 1951288 1879670 6106947 5869172 73630 73630 271310 205407 1773056 4021874 337125169 38211081 250138713 298914088 48892900 52627053 5437957 8228634 314645801 371819528 9019708 11769811 8755691 11848470 28024 27851 168432988 217980853 9539758 5914492 195776169 247541477 X 2933920 3204960 0 0 115935712 121073091 118869632 124278051 314645801 371819528 X 1045463 4362956 X X 0 1 X 0 0 0 1 X 8150867 8150867 29549732 4085885 25463847 243188073 34125196 209062877 56236497 56236497 298914088 PATRONAGE CAPITAL - CFC 378836 C PATRONAGE CAPITAL - TEC 695127 C PATRONAGE CAPITAL - BEPC 30987710 C PATRONAGE CAPITAL - OTHER 373455 C CAPITAL TERM CERTIFICATES - CFC 481833 C COBANK E-STOCK 6138889 C SCHOLARSHIP FUND 10400 C ECONOMIC DEVELOPMENT FUND 10787 C OTHER INVESTMENTS 65465 C INVESTMENTS IN AFFILIATED COMPANY - MSEC 13484551 C 52627053 CONSUMER DEPOSITS 2515508 UNBILLED POWER COST 951000 OTHER CURRENT AND ACCRUED LIABILITIES 776508 DEFERRED CREDIT - UNCLAIMED PROPERTY 444404 DUE TO AFFILIATED COMPANIES 64902 ACCRUED OPERATING TAXES 1162170 5914492 X PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. 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 RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. 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 RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. 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 FOLLOWS 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 (IRS), OR OTHER STATE TAXING AUTHORITY, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. 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 X X X 0 0 0 KERRY KELTON GENERAL MANAGER/CEO 325251 0 27637 0 65231 0 101506 0 7344 0 526969 0 0 0 TROY MORRIS SR. VICE PRESIDENT 192019 0 28459 0 34542 0 75271 0 10951 0 341242 0 0 0 MIKE MCDOUGALD SR. VICE PRESIDENT 190447 0 27464 0 29659 0 59791 0 12756 0 320117 0 0 0 ANDREW DALLMEYER SR. VICE PRESIDENT 161864 0 24915 0 46844 0 40459 0 9597 0 283679 0 0 0 DENNIS GILMORE SR. VICE PRESIDENT 129323 0 34400 0 28238 0 38997 0 12394 0 243352 0 0 0 DAVID WILLIAMS VP OPERATIONS 132852 0 11370 0 37719 0 46812 0 10361 0 239114 0 0 0 MELANIE CABALLERO VP ADMINISTRATIVE SERVICES 112736 0 11364 0 21042 0 47355 0 13278 0 205775 0 0 0 DIANNE SECHELSKI VP BILLING 113100 0 10500 0 21314 0 47714 0 8824 0 201452 0 0 0 CATHY BARKER HUMAN RESOURCES MANAGER 97253 0 11572 0 16843 0 30960 0 8488 0 165116 0 0 0 BRANDON NORTHCUT BUSINESS INTELLIGENCE MANAGER 109505 0 7150 0 18645 0 20672 0 6807 0 162779 0 0 0 JARED ANDERSON LINE FOREMAN 87748 0 38901 0 457 0 22620 0 7382 0 157108 0 0 0 RUSSELL SMITH IT MANAGER 125654 0 8214 0 8244 0 10711 0 99 0 152922 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. KERRY KELTON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 88,693 EMPLOYER CONTRIBUTION TO 401(K) & 457(B) PLAN 12,813 TOTAL REPORTED IN COLUMN C $ 101,506 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (88,693) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 35,318 EXPENSE TO THE COOPERATIVE $ 48,131 TROY MORRIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 56,110 EMPLOYER CONTRIBUTION TO 401(K) PLAN 19,161 TOTAL REPORTED IN COLUMN C $ 75,271 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (56,110) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,733 EXPENSE TO THE COOPERATIVE $ 41,894 MIKE MCDOUGALD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,165 EMPLOYER CONTRIBUTION TO 401(K) PLAN 11,626 TOTAL REPORTED IN COLUMN C $ 59,791 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,165) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,760 EXPENSE TO THE COOPERATIVE $ 34,386 ANDREW DALLMEYER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 28,475 EMPLOYER CONTRIBUTION TO 401(K) PLAN 11,984 TOTAL REPORTED IN COLUMN C $ 40,459 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (28,475) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 18,368 EXPENSE TO THE COOPERATIVE $ 30,352 DENNIS GILMORE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 24,675 EMPLOYER CONTRIBUTION TO 401(K) PLAN 14,322 TOTAL REPORTED IN COLUMN C $ 38,997 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (24,675) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 16,110 EXPENSE TO THE COOPERATIVE $ 30,432 DAVID WILLIAMS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,798 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,014 TOTAL REPORTED IN COLUMN C $ 46,812 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,798) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 16,092 EXPENSE TO THE COOPERATIVE $ 26,106 MELANIE CABALLERO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,230 EMPLOYER CONTRIBUTION TO 401(K) PLAN 11,125 TOTAL REPORTED IN COLUMN C $ 47,355 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,230) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 14,008 EXPENSE TO THE COOPERATIVE $ 25,133 DIANNE SECHELSKI: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,401 EMPLOYER CONTRIBUTION TO 401(K) PLAN 11,313 TOTAL REPORTED IN COLUMN C $ 47,714 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,401) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 14,298 EXPENSE TO THE COOPERATIVE $ 25,611 CATHY BARKER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 21,740 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,220 TOTAL REPORTED IN COLUMN C $ 30,960 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (21,740) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 12,145 EXPENSE TO THE COOPERATIVE $ 21,365 BRANDON NORTHCUT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 10,115 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,557 TOTAL REPORTED IN COLUMN C $ 20,672 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (10,115) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 11,153 EXPENSE TO THE COOPERATIVE $ 21,710 JARED ANDERSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 12,064 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,556 TOTAL REPORTED IN COLUMN C $ 22,620 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (12,064) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 10,429 EXPENSE TO THE COOPERATIVE $ 20,985 RUSSELL SMITH: EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,711 TOTAL REPORTED IN COLUMN C $ 10,711 ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,632 EXPENSE TO THE COOPERATIVE $ 24,343 MIKE MCDOUGALD FAMILY RELATIONSHIP - DIRECTOR (K. MCDOUGALD) 247570 EMPLOYMENT 0 KENNETH MCDOUGALD FAMILY RELATIONSHIP - OFFICER (M. MCDOUGALD) 13200 DIRECTOR 0 FORM 990, PART III, LINE 2 MSEC COMMUNICATIONS LLC OFFERS HIGH SPEED INTERNET TO AREAS WITHIN MID-SOUTH ELECTRIC COOPERTIVE'S SERVICE AREA. FORM 990, PART VI, SECTION A, LINE 2 KENNETH MCDOUGALD, DIRECTOR, HAS A FAMILY RELATIONSHIP WITH MICHAEL MCDOUGALD, EMPLOYEE OFFICER. 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: ARTICLE III - MEMBER MEETINGS AND MEMBER VOTING SECTION 3.01 - ANNUAL AND REGULAR MEMBER MEETINGS, WAS AMENDED TO STATE THAT UNLESS OTHERWISE PROVIDED IN THE BYLAWS, REGULAR MEETING OF THE MEMBERS SHALL BE HELD ANNUALLY ON SUCH DATE AND SUCH PLACE IN THE AREA SERVED BY THE COOPERATIVE. THE SECTION ALSO ADDED THAT TO THE EXTENT AUTHORIZED BY THE BOARD OF DIRECTORS, THE ANNUAL MEMBER MEETING MAY BE HELD WITHOUT A GEOGRAPHIC OR PHYSICAL LOCATION IF THE ANNUAL MEMBER MEETING IS HELD THROUGH THE INTERNET OR OTHER ELECTRONIC COMMUNICATION TECHNOLOGY. SECTION 3.02 - SPECIAL MEMBER MEETINGS, WAS ALSO AMENDED TO ADD THE USE OF ELECTRONIC COMMUNICATIONS TECHNOLOGY FOR SPECIAL MEMBER MEETINGS. SECTION 3.03 - CONDUCT AND ATTENDANCE AT MEMBER MEETINGS, WAS ALSO AMENDED TO ADD THE USE OF ELECTRONIC COMMUNICATIONS TECHNOLOGY FOR MEMBER MEETINGS, STATING THAT "MEMBERS PARTICIPATING IN A MEMBER MEETING THROUGH THE INTERNET OR OTHER ELECTRONIC COMMUNICATIONS TECHNOLOGY ARE DEEMED PRESENT, AND MAY VOTE ON MATTERS SUBMITTED TO THE MEMBERS, IF ANY, INCLUDING AN OPPORTUNITY TO COMMUNICATE, AND TO READ OR HEAR THE PROCEEDINGS OF THE MEMBER MEETING, SUBSTANTIALLY CONCURRENTLY WITH THE PROCEEDINGS. IF THE BOARD AUTHORIZES PARTICIPATION THROUGH THE INTERNET OR OTHER ELECTRONIC COMMUNICATIONS TECHNOLOGY, THEN THE NOTICE OF THE MEMBER MEETING MUST DESCRIBE THE MEANS OF ELECTRONIC COMMUNICATION TO BE USED." SECTION 3.07 - MEMBER WAIVER OF NOTICE, WAS AMENDED TO ADD ATTENDANCE BY INTERNET OR OTHER ELECTRONIC COMMUNICATIONS TECHNOLOGY. SECTION 3.10 - MEMBER VOTING, WAS AMENDED TO ALLOW THE USE OF INTERNET OR OTHER ELECTRONIC COMMUNICATIONS TECHNOLOGY VOTING. SECTION 3.13 - CREDENTIALS AND ELECTION COMMITTEE OR THIRD-PARTY ORGANIZATION, WAS AMENDED TO ADD A THIRD-PARTY ORGANIZATION IN THE TITLE AS WELL AS THE DESCRIPTION, STATING THAT FOR THE MEMBER MEETING CONSISTING OF AN UNEVEN NUMBER OF MEMBERS BETWEEN THREE (3) AND ELEVEN (11) OR AUTHORIZE THE ENGAGEMENT OF A THIRD-PARTY ORGANIZATION TO ACT IN LIEU OF THE C&E COMMITTEE, AS DETERMINED BY THE BOARD OF DIRECTORS TO BE IN THE BEST INTEREST OF THE COOPERATIVE." ARTICLE IV - BOARD OF DIRECTORS SECTION 4.05 - DIRECTOR ELECTIONS, WAS AMENDED TO FURTHER EXPLAIN THE VOTING PROCESS AND THE PROCESS OF AN ELECTION THAT RESULTS IN A TIE. ARTICLE VII - COOPERATIVE OPERATION SECTION 7.01 - NONPROFIT AND COOPERATIVE OPERATION, WAS AMENDED TO ADD MEMBER AND NON-MEMBER TO THE FOLLOWING IN POINT 3: MAY NOT PAY INTEREST OR DIVIDENDS ON CAPITAL FURNISHED BY MEMBERS AND NON-MEMBER PATRONS. SECTION 7.02 - ALLOCATING CAPITAL CREDITS, AMENDED PART A. MEMBER AND NON-MEMBER PATRON AND PART C. POWER SUPPLY CAPITAL CREDITS, TO ADD "IF THE BOARD DETERMINES, IN ITS SOLE DISCRETION, TO BE IN THE BEST INTEREST OF THE COOPERATIVE." SECTION 7.06 - REASONABLE RESERVES, WAS AMENDED TO ADD NON-MEMBER TO THE FOLLOWING: THE COOPERATIVE SHALL KEEP RECORDS NECESSARY TO DETERMINE, AT ANY TIME, EACH MEMBER'S AND/OR NON-MEMBER PATRON'S RIGHTS AND INTEREST IN ANY REASONABLE RESERVES. 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. FORM 990, PART VI, SECTION B, LINE 12C ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE THE BOARD OF DIRECTORS AND ITS OFFICERS TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. THE BOARD OF DIRECTORS WILL ALSO COMPLETE AND SIGN THE FORM 990 DISCLOSURE QUESTIONNAIRE. THE SIGNED COPIES WILL BE KEPT IN THE PERSONNEL FILE FOR EACH INDIVIDUAL. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVE'S IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER/CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS/CEOS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE GENERAL MANAGER/CEO USES THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVE'S IRS FORMS 990 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 SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. 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 OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE EMPLOYEE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE 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. ALL BENEFITS ARE FOR EMPLOYEES ONLY. THE BOARD OF DIRECTORS DO NOT RECEIVE ANY OF THE BENEFITS LISTED ABOVE. 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: ALTHOUGH THE COOPERATIVE IS NO LONGER A RURAL UTILITIES SERVICE (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 $ 6,683,226 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (131,589) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (543,410) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 3,505,712 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 3,235,991 TOTAL WAGES ACCRUED AND/OR PAID $12,749,930 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 3,932,172 OFFICE SUPPLIES 403,102 OUTSIDE SERVICES 209,730 DIRECTORS 238,450 SAFETY/TRAINING 1,361,945 MEETINGS 124,025 REGULATORY COMMISSION EXPENSES 132,685 MAINTENANCE OF GENERAL PLANT 1,178,952 MISCELLANEOUS GENERAL EXPENSE 186,896 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 7,767,957 LESS: RECLASS OF TOWER EXPENSE TO PART VIII, LINE 6B (686) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (131,589) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (2,703,204) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,077,636) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 3,854,842 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 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, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: SALES $ 868,380 OTHER DEDUCTIONS 116,644 TOTAL OTHER EXPENSES PER FROM 990, LINE 24E $ 985,024 FORM 990, PART XI, LINE 9: NET CHANGE IN MEMBERSHIPS 271,040. NET INCOME FROM EQUITY METHOD INVESTMENTS 852,546. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 3,479,555. PATRONAGE CAPITAL RETIRED - TOTAL -1,923,564. PATRONAGE CAPITAL RETIRED - DISCOUNTED 1,683,379. 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. 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