2020-08-04T15:30:19-05:00 2019-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2019-01-01 880106922 MT WHEELER POWER INC MTWH 7752898981 1600 GREAT BASIN BLVD ELY NV 89301 KEVIN ROBISON CEO 7752898981 2020-07-31 1 WILLIAM M MILLER P00439459 8067473806 2020-07-31 X 65.182.80.152 2020-07-31 09:20:18 CD P 954CA8D01CFBC3DD23DC63FC91DC923EB9CBFAF9 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2019 2020-09-23 17:36:50Z KEVIN ROBISON 1600 GREAT BASIN BLVD ELY NV 89301 37919811 0 X WWW.MWPOWER.NET X 1963 NV TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 37 0 50199 0 0 0 35584078 37565232 35584 58634 329636 268472 35949298 37892338 8234 12628 2019474 1997519 3797754 3929470 0 0 0 30500767 32329652 36326229 38269269 -376931 -376931 52150345 60236204 20168615 27347245 31981730 32888959 PROVIDE OUR MEMEBERS WITH SAFE, RELIABLE, CONVENIENT AND EQUITABLE ENERGY SERVICES AND OTHER PRODUCTS DEEMED NECESSARY AND BENEFICIAL TO THE MEMBERS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 7,556 ACTIVE SERVICES AT YEAR END. 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 0 0 0 0 0 0 0 0 0 0 1 53 0 37 1 1 1 0 0 0 0 38479109 549513 0 0 0 X 9 9 1 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X KEVIN ROBISON CEO 7752898981 1600 GREAT BASIN BLVD ELY NV 89315 X KEVIN ROBISON CEO 55.00 X 202965 0 56922 JESSE MURDOCK ENGINEERING MANAGER 40.00 X 137766 0 51317 WILLIAM RICCI OPERATIONS MANAGER 40.00 X 134293 0 48574 SHELLIE WATTS MEMBER SERVICES MANAGER/HR 40.00 X 132686 0 49040 PATRICIA STANTON ACCOUNTING MANAGER 40.00 X 128009 0 47121 JERALD ANDERSON DIRECTOR 14.90 X 14400 0 0 RICK HENDRIX PRESIDENT 13.80 X X 12200 0 0 WADE ROBISON DIRECTOR 2.70 X 11000 0 0 CATHERINE BAKARIC DIRECTOR 7.00 X 10400 0 0 RON MILLER SECRETARY 15.60 X X 10200 0 0 SANDRA GREEN TREASURER 6.50 X X 10200 0 0 MARY KERNER DIRECTOR 2.20 X 10000 0 0 BOB PRATT DIRECTOR 2.80 X 9000 0 0 RON NIMAN VICE PRESIDENT 2.70 X X 6000 0 0 829119 0 252974 5 0 1 0 COOPERATIVE BUILDING SOLUTIONS 77 WESTPORT PLAZA DRIVE STE 250 ST LOUIS MO 63146 CONSTRUCTION CONTRACTOR 2898939 CACHE VALLEY ELECTRIC COMPANY 875 NORTH 1000 WEST LOGAN UT 84323 LINE CONSTRUCTION 611818 DAVEY RESOURCE GROUP INC PO BOX 74142 CLEVELAND OH 44194 GPS MAPPING ENTIRE SERVICE TERRITORY 244634 RECK BROTHERS LLC PO BOX 151372 ELY NV 89315 DIRT WORK/PAVING SERVICES 171473 ELECTRICAL CONSULTANTS INC 3521 GABEL ROAD BILLINGS MT 59102 CONSULTING 162694 7 X SALES OF ELECTRICITY 221000 37403569 37403569 PATRONAGE DIVIDENDS 221000 90180 89650 530 SERVICE FEES 221000 71483 71483 37565232 37563 37563 750 0 750 750 750 21071 0 21071 21071 21071 33314 27473 5841 5841 POLE ATTACHMENT INCOME 221000 212212 212212 INTERNET SERVICE 517000 46799 46799 SECURITY SYSTEM REVENUE 561700 2870 2870 261881 37892338 37570543 50199 271596 X 12628 1997519 353287 2498886 273865 613278 190154 660521 2111135 PURCHASED POWER 26841131 DISTRIBUTION EXPENSE 1001942 ADMIN & GENERAL EXPENSE 723726 CONSUMER EXPENSE 396956 594241 38269269 3462387 7555539 2546422 2495907 4385374 4382797 147855 232062 83107925 40424305 38342116 42683620 3266191 2886279 52150345 60236204 3566757 4478095 641167 719538 13954300 20525351 2006391 1624261 20168615 27347245 X 879569 994576 0 0 31102161 31894383 31981730 32888959 52150345 60236204 X -376931 1284160 X X 0 1 X 0 0 0 1 X 377801 377801 5027591 2767001 2260590 73413801 37657304 35756497 4288732 4288732 42683620 CONSUMER DEPOSITS 1047328 DEFERRED CREDITS 576933 1624261 X 37855413 0 37855413 36925 36925 37892338 36234825 0 36234825 2034444 2034444 38269269 PART IV, LINE 2B: PURSUANT TO SECTION 81.507 OF THE NEVADA REVISED STATUTES CODE AND THE COOPERATIVE'S BYLAWS, THE COOPERATIVE CAN RETAIN ANY CAPITAL CREDIT OF A MEMBER, WHO IS RESIDENT OF NEVADA, WHICH REMAINED UNCLAIMED FOR A PERIOD OF ONE YEAR. THE COOPERATIVE HAS CHOSEN TO APPLY THESE UNCLAIMED PATRONAGE CAPITAL CREDITS TOWARDS GRANTS, SPONSORSHIPS AND DONATIONS TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. UTAH MEMBER-RESIDENTS' UNCLAIMED CAPITAL CREDITS ARE ALSO HELD BY THE COOPERATIVE TO (A) ASSIST LOW-INCOME PERSONS TO PAY THEIR UTILITY BILLS, AND (B) TO PROVIDE SCHOLARSHIPS TO LOCAL GRADUATING HIGH SCHOOL SENIORS. IN THE STATE OF UTAH, PURSUANT TO UTAH'S UNIFORM AGRICULTURAL COOPERATIVE ASSOCIATION ACT (TITLE 3, CHAPTER 1, SECTION 11), THE COOPERATIVE CAN RETAIN CAPITAL CREDITS GIVEN TO ITS MEMBERS THAT REMAIN UNCLAIMED FOR A PERIOD OF THREE YEARS, BUT CAN ONLY APPLY THESE UNCLAIMED CAPITAL CREDITS TO UTILITY BILL ASSISTANCE OF LOW-INCOME PERSONS AND SCHOLARSHIPS FOR HIGH-SCHOOL SENIORS. PART X, LINE 2: THE CORPORATION HAS ADOPTED THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE CORPORATION IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE CORPORATION DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE,OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 36,925. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 36,925. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 1,997,519. 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 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. X X 0 0 0 KEVIN ROBISON CEO 179421 0 10300 0 13244 0 25900 0 31022 0 259887 0 0 0 JESSE MURDOCK ENGINEERING MANAGER 117871 0 2500 0 17395 0 17643 0 33674 0 189083 0 0 0 WILLIAM RICCI OPERATIONS MANAGER 120485 0 2500 0 11308 0 17643 0 30931 0 182867 0 0 0 SHELLIE WATTS MEMBER SERVICES MANAGER/HR 120018 0 2500 0 10168 0 17643 0 31397 0 181726 0 0 0 PATRICIA STANTON ACCOUNTING MANAGER 121869 0 2500 0 3640 0 17643 0 29478 0 175130 0 0 0 FORM 990, PART VI, SECTION A, LINE 2 A BUSINESS RELATIONSHIP EXISTS BETWEEN RICK HENDRIX (DIRECTOR), AND KEVIN ROBISON (GM). BOTH INDIVIDUALS SERVED ON THE BOARD OF DESERET GENERATION & TRANSMISSION AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, THE BYLAWS OF THE COOPERATIVE WERE AMENDED. A SUMMARY OF THE AMENDMENTS ARE AS FOLLOWS: ARTICLE III - BOARD OF DIRECTORS SECTION 3.07 - ELECTION OF DIRECTORS SECTION 3.07.2 WAS AMENDED TO CLARIFY THAT IN JANUARY OF EACH YEAR, THE BOARD SHALL SET THE DATE AND TIME THAT THE RESULTS OF ALL THE VOTES CAST FOR THE ELECTION OF DIRECTORS WILL BE ANNOUNCED. SECTION 3.07.6 WAS UPDATED TO STATE THAT AFTER NOMINATIONS ARE CLOSED, ALL MEMBERS ENTITLED TO VOTE WILL BE MAILED AN OFFICIAL BALLOT PACKAGE. THE BALLOT PACKAGE SHALL INCLUDE AN OFFICIAL BALLOT AND VOTING INSTRUCTIONS, AND IN ORDER FOR ANY BALLOT TO BE COUNTED THE BALLOT MUST CONTAIN THE SIGNATURE OF THE MEMBER. SECTION 3.07.8 WAS ALSO UPDATED TO REFLECT THE AMENDMENTS TO SECTIONS 3.07.2 AND 3.07.6. 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, 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 THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED 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 DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. THE CONFLICT OF INTEREST POLICY IS REVIEWED ON AN ANNUAL BASIS. WHEN A CONTRACT OR BUSINESS TRANSACTION IS UNDER CONSIDERATION AND A DIRECTOR OR EMPLOYEE KNOWS THAT HE, SHE, OR A CLOSE RELATIVE HAS A FINANCIAL INTEREST, THIS INTEREST IS REQUIRED TO BE DISCLOSED FULLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS SHALL DECIDE IF SUCH AN INTEREST SHOULD PREVENT THE COOPERATIVE FROM ENTERING INTO A PARTICULAR TRANSACTION OR CONTRACT. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS UTILIZE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE COMPENSATION SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN NEVADA AND THE NATION. OTHER THAN THE GENERAL MANAGER, THE COOPERATIVE DID NOT HAVE ANY EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, LINE 15B HAS BEEN ANSWERED "NO". 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 SUBMITS A WRITTEN REQUEST, SUBJECT TO APPROVAL. 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. EMPLOYER CONTRIBUTIONS 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 THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE TOTAL AMOUNTS CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. FORM 990, PART VIII, LINE 2: PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO RESULT FROM THE PAYMENT OF INTEREST 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 BORROWER OF THE RURAL UTILITIES SERVICE (RUS), THE ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE RUS. 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 $ 2,852,173 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (93,400) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (56,922) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 13,025 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 575,346 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 203,690 TOTAL WAGES ACCRUED AND/OR PAID $ 3,493,912 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 1,225,694 INJURIES & DAMAGES 500 PUBLIC RELATIONS 53,623 ANNUAL MEETING 28,810 DUES AND SUBSCRIPTIONS 62,177 DIRECTORS 146,667 OUTSIDE SERVICES EMPLOYED 131,444 INSURANCE 119,377 MAINTENANCE OF GENERAL PLANT 317,089 MISCELLANEOUS GENERAL 20,811 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,106,192 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (12,628) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (93,400) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (899,030) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (377,408) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 723,726 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: INTERNET $ 35,607 SECURITY SYSTEM 1,318 SALES 76,108 OPERATING TAXES 348,975 TRANSMISSION 55,234 OTHER DEDUCTIONS 76,999 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 594,241 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 2019 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 1: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ALL ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. EACH GRANT, SPONSORSHIP, AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 1,997,519. PATRONAGE CAPITAL RETIRED - TOTAL -828,366. NET CHANGE IN MEMEBERSHIPS 115,007. 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.