2021-11-15T22:24:45-06:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 710139955 PETIT JEAN ELECTRIC COOPERATIVE CORPORATION PETI 5017452493 PO BOX 37 CLINTON AR 72031 DONNIE COLLINS PRESIDENT 5017452493 2021-11-09 1 DONNIE COLLINS 999009999 WILLIAM M MILLER P00439459 8067473806 2021-11-09 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z MICHAEL KIRKLAND PO BOX 37 CLINTON AR 72031 33450657 0 X WWW.PJECC.COM X 1940 AR TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 9 9 65 0 0 0 0 0 34041880 31942962 758560 1220085 142823 283929 34943263 33446976 7759 9740 4590153 2746651 5124732 5274934 0 0 0 25323599 25677604 35046243 33708929 -102980 -261953 106276985 106545292 63811228 64528991 42465757 42016301 TO PROVIDE RELIABLE AND QUALITY ELECTRIC SERVICE AT FAIR AND COMPETITIVE PRICES. WE PROVIDE LEADERSHIP WITHIN LOCAL COMMUNITIES TO FACILITATE POSITIVE GROWTH WITHIN OUR SERVICE AREA. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 20,381 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 29 0 65 1 0 0 0 0 0 31848209 2865357 0 0 0 X 9 9 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X MARIANNE PYEATT MANAGER OF FINANCE AND ACCOUNTING 5017452493 270 QUALITY DR CLINTON AR 72031 X RICHARD COLLINS JR DIRECTOR 7.30 X 30829 0 0 FREDERICK HERMAN SECRETARY/TREASURER 3.30 X X 24434 0 0 DONNIE COLLINS PRESIDENT 2.90 X X 24084 0 0 JEREL BROWN DIRECTOR 3.10 X 24084 0 0 DARRELL ALLEN DIRECTOR 3.50 X 23872 0 0 CARROL BRADFORD VICE PRESIDENT 3.00 X X 23840 0 0 ADDISON WOOD DIRECTOR 2.70 X 23776 0 0 WILLIAM DERICKSON DIRECTOR 1.50 X 23731 0 0 TERRY KIRKENDOLL DIRECTOR 2.80 X 23390 0 0 MICHAEL KIRKLAND CEO/GENERAL MANAGER 55.00 X 219785 0 153149 SHERRY BETTIS MANAGER OF FINANCE AND ACCOUNTING 43.00 X 111323 0 86902 MARIANNE PYEATT MANAGER OF FINANCE AND ACCOUNTING 47.00 X 52016 0 5922 WILLIAM TESTER BRANCH MANAGER 55.00 X 120228 0 69617 JOHNNY MOORE MANAGER OF OPERATIONS 50.00 X 114428 0 74113 ADAM MCJUNKINS SUBSTATION TECHNICIAN 58.00 X 121858 0 63742 MICHAEL GARBOW MANAGER OF ENGINEERING 41.00 X 110402 0 67302 THOMAS HENDERSON LEAD LINEMAN 57.00 X 118569 0 46407 1190649 0 567154 12 0 1 0 ASPLUNDH TREE EXPERT CO PO BOX 532729 ATLANTA GA 30353 RIGHT OF WAY CLEARING 1523234 ARKANSAS ELECTRIC COOPERATIVE INC PO BOX 190257 LITTLE ROCK AR 72219 RIGHT OF WAY CLEARING, CONSTRUCTION, & T 936691 MULTI-STATES ELECTRIC INC PO BOX 193665 LITTLE ROCK AR 72219 REPAIRS TO EQUIPMENT 242411 KLASSMEYER CONSTRUCTION CO INC PO BOX 847 CONWAY AR 72033 RIGHT OF WAY CLEARING & CONSTRUCTION 210828 MISSISSIPPI-TENNESSEE TRANSFORMER PO BOX 1764 GREENWOOD MS 38935 REPAIRS TO EQUIPMENT 140389 5 X SALES OF ELECTRICITY 221000 31281774 31281774 PATRONAGE DIVIDENDS 221000 531304 531304 SERVICE FEES 221000 105464 105464 OTHER PROGRAM REVENUE 221000 24420 24420 31942962 951208 951208 2073 2073 268877 0 268877 268877 268877 4497 3681 816 816 POLE ATTACHMENT INCOME 221000 222752 222752 OTHER NON-OPERATING INCOME 221000 58288 58288 281040 33446976 31943778 0 1503198 X 9740 2746651 851137 2773126 736253 682803 231615 2099716 3590780 PURCHASED POWER 14415013 DISTRIBUTION EXPENSE 3454918 OPERATING TAXES 751488 ADMIN & GENERAL EXPENSE 640912 724777 33708929 543681 1490277 6511896 4600601 4376957 4811649 630652 794166 991812 754754 119964978 38331912 79664059 81633066 12882554 12047430 675374 413349 106276985 106545292 1664320 2173378 55249440 54658068 6897468 7697545 63811228 64528991 X 312325 318995 0 0 42153432 41697306 42465757 42016301 106276985 106545292 X -261953 -187503 X X 0 1 X 0 0 1697955 1697955 3642219 1202447 2439772 113953093 37129465 76823628 671711 671711 81633066 PATRONAGE CAPITAL - AECC 9943019 C PATRONAGE CAPITAL - AECI 542910 C PATRONAGE CAPITAL - CFC 305872 C PATRONAGE CAPITAL - FEDERATED 298217 C PATRONAGE CAPITAL - NISC 174506 C CAPITAL TERM CERTIFICATES - CFC 755550 C ARKANSAS RURAL ELECTRIC SELF-INS TRUST 23257 C OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS 4099 C 12047430 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 3573912 CONSUMER DEPOSITS 1384110 ACCRUED PROPERTY TAXES 760000 REFUNDABLE AID TO CONSTRUCTION 583224 UNCLAIMED CAPITAL CREDITS 1396299 7697545 X 33446976 0 33446976 0 33446976 30962278 0 30962278 2746651 2746651 33708929 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) 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 2,746,651. 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 OZARK HEALTH FOUNDATION PO BOX 74 CLINTON AR 72031 861078345 501(C)(3) 5350 PURCHASE MEDICAL EQUIPMENT (STEAM TABLE) FOR HOSPITAL 1 PART II: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS REPORTED ON FORM 990, PART IX, LINE 1 ARE MADE TO DOMESTIC 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 0 0 0 MICHAEL KIRKLAND CEO/GENERAL MANAGER 208562 0 107 0 11116 0 128952 0 24197 0 372934 0 0 0 SHERRY BETTIS MANAGER OF FINANCE AND ACCOUNTING 100737 0 249 0 10337 0 63965 0 22937 0 198225 0 0 0 WILLIAM TESTER BRANCH MANAGER 106824 0 336 0 13068 0 45538 0 24079 0 189845 0 0 0 JOHNNY MOORE MANAGER OF OPERATIONS 105022 0 319 0 9087 0 53873 0 20240 0 188541 0 0 0 ADAM MCJUNKINS SUBSTATION TECHNICIAN 116880 0 249 0 4729 0 40477 0 23265 0 185600 0 0 0 MICHAEL GARBOW MANAGER OF ENGINEERING 102324 0 265 0 7813 0 44365 0 22937 0 177704 0 0 0 THOMAS HENDERSON LEAD LINEMAN 118140 0 173 0 256 0 19295 0 27112 0 164976 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. MICHAEL KIRKLAND: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 118,475 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,477 TOTAL REPORTED IN COLUMN C $ 128,952 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (118,475) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 58,975 EXPENSE TO THE COOPERATIVE $ 69,452 SHERRY BETTIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 58,569 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,396 TOTAL REPORTED IN COLUMN C $ 63,965 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (58,569) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,172 EXPENSE TO THE COOPERATIVE $ 38,568 WILLIAM TESTER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 40,037 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,501 TOTAL REPORTED IN COLUMN C $ 45,538 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (40,037) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,814 EXPENSE TO THE COOPERATIVE $ 39,315 JOHNNY MOORE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,372 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,501 TOTAL REPORTED IN COLUMN C $ 53,873 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,372) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,814 EXPENSE TO THE COOPERATIVE $ 39,315 ADAM MCJUNKINS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,895 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,582 TOTAL REPORTED IN COLUMN C $ 40,477 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,895) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,718 EXPENSE TO THE COOPERATIVE $ 27,300 MICHAEL GARBOW: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 38,725 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,640 TOTAL REPORTED IN COLUMN C $ 44,365 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (38,725) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,814 EXPENSE TO THE COOPERATIVE $ 39,454 THOMAS HENDERSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 19,295 EMPLOYER CONTRIBUTION TO 401(K) PLAN -0- TOTAL REPORTED IN COLUMN C $ 19,295 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (19,295) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,640 EXPENSE TO THE COOPERATIVE $ 22,640 FORM 990, PART I: 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 LOSS OF ($261,953), WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. 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 EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/20 $ 405,107 LESS: UNBILLED REVENUE 12/31/19 (667,060) (A) - NET DECREASE EQUALS NET LOSS ON PART I, LINE 19 $ (261,953) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 2,746,651 TOTAL 2020 NET MARGIN (A + B) $ 2,484,698 FORM 990, PART VI, SECTION A, LINE 2 BUSINESS RELATIONSHIP: WILLIAM DICKERSON (DIRECTOR), DONNIE COLLINS (DIRECTOR), AND MICHAEL KIRKLAND (CEO) SERVED ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVE CORPORATION (AECC) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. CARROL BRADFORD (DIRECTOR), RICHARD COLLINS (DIRECTOR), AND MICHAEL KIRKLAND (CEO) SERVED ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVES, INC (AECI) 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 DIRECTORS THROUGH VOTING DISTRICTS. BASED ON GEOGRAPHICAL LOCATION, THE MEMBERS ARE ASSIGNED TO A DISTRICT AND REPRESENTED BY A DIRECTOR VOTED ON AND LIVING IN THE RESPECTIVE DISTRICT. EVERY FIVE YEARS AT THE END OF THE RESPECTIVE DIRECTOR'S TERM, ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. PURSUANT TO THE REQUIREMENTS OF ARTICLE IV, SECTION 6 OF THE BYLAWS, MEMBERS ALSO HAVE THE ABILITY TO PETITION AND VOTE FOR THE REMOVAL OF A DIRECTOR. 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. MEMBER INITIATED PROPOSALS 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 DIRECTORS AND OFFICERS ARE RESPONSIBLE TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO ANNUALLY COMPLETE A DISCLOSURE OF ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS IS RESPONSIBLE FOR DETERMINING THE COMPENSATION FOR THE CEO BASED ON AN ANNUAL REVIEW. INTERNAL AND/OR EXTERNAL RESOURCES ARE ALSO USED TO COMPARE ANNUAL COMPENSATION WITHIN THE INDUSTRY. THE BOARD OF DIRECTORS AND CEO DETERMINES COMPENSATION FOR OFFICERS OF THE COOPERATIVE ANNUALLY BASED ON A COMPENSATION SURVEY. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A COPY OF THE BYLAWS AT THE TIME AN APPLICATION FOR SERVICE IS COMPLETED. ADDITIONALLY, THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE MAILS A COPY OF THE ANNUAL REPORT, WHICH INCLUDES FINANCIAL STATEMENTS AND RELEVANT FINANCIAL DATA FOR THE PAST THREE YEARS. ADDITIONAL INFORMATION REPORTED TO THE ARKANSAS PUBLIC SERVICE COMMISSION (APSC) IS AVAILABLE TO THE PUBLIC ON THE ASPC 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 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 OFFICERS AND THE HIGHLY COMPENSATED EMPLOYEE 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 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 RURAL UTILITIES SERVICE (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, 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 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 TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 3,624,263 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (222,040) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (245,973) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,536,613 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 542,488 TOTAL WAGES ACCRUED AND/OR PAID $ 5,235,351 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,400,216 OFFICE SUPPLIES 158,420 OUTSIDE SERVICES 214,191 INSURANCES 70,623 DIRECTORS 227,049 ANNUAL MEETING 12,270 MISCELLANEOUS GENERAL 117,743 REGULATORY COMMISSION 61,021 MAINTENANCE OF GENERAL PLANT 123,140 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,384,673 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (222,040) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (950,531) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (571,190) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 640,912 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CONSUMER ACCOUNTS $ 539,747 CUSTOMER SERVICE AND INFORMATION 78,439 TRANSMISSION 62,976 OTHER DEDUCTIONS 43,615 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 724,777 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 2,746,651. PATRONAGE CAPITAL RETIRED -2,680,369. UNCLAIMED PATRONAGE CAPITAL RETIREMENTS RETAINED PER STATE LAW 223,508. NET CHANGE IN MEMBERSHIPS 6,670. OTHER COMPREHENSIVE INCOME PROVISION FOR POST-RETIREMENT BENEFIT OBLIGATION -483,963.