2020-09-28T16:44:06-05:00 2019-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2019-01-01 850096243 LEA COUNTY ELECTRIC COOPERATIVE INC LEAC 5753963631 PO BOX 1447 LOVINGTON NM 882601447 BOBBY FERRIS EVP & GENERAL MANAGER 5753963631 2020-09-25 1 WILLIAM M MILLER P00439459 8067473806 2020-09-25 X 65.182.80.152 2020-09-25 16:59:57 CD P 954CA8D01CFBC3DD23DC63FC91DC923EB9CBFAF9 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2019 2021-04-22 16:20:28Z BOBBY FERRIS PO BOX 1447 LOVINGTON NM 882601447 99169621 0 X WWW.LCECNET.COM X 1949 NM TO PROVIDE ELECTRIC ENERGY TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 94 0 6528 0 0 0 102228424 97604853 831062 1340562 211794 195683 103271280 99141098 26854 27642 7511385 6308836 5564902 6951695 0 0 0 90168139 85852925 103271280 99141098 0 0 210710019 217662086 113130375 118534939 97579644 99127147 NONE 0 0 SALE OF ELECTRIC POWER TO OUR MEMBERS AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 16,304 CONNECTED METERS 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 1 1 0 0 1 57 0 94 1 1 1 0 0 0 0 98971406 2726023 0 0 0 X 9 9 0 0 1 0 1 1 1 1 0 0 0 1 0 0 0 1 0 0 X BOBBY FERRIS EVP & GENERAL MANAGER 5753963631 1300 W AVENUE D LOVINGTON NM 882601447 X BOBBY FERRIS GENERAL MANAGER 60.00 X 289343 0 156909 BOBBY KIMBRO SYSTEM OPERATING MANAGER 50.00 X 183565 0 84875 MICHAEL FARIS ACCOUNTING MANAGER 50.00 X 151420 0 115794 JOHN BENARD DISTRIBUTION MANAGER 50.00 X 154343 0 99333 DOUG GRUENWALD LINE FOREMAN 50.00 X 134828 0 61847 JANETTE FARIS ADMIN SERVICE MANAGER 50.00 X 130697 0 5091 ROBERT CAUDLE VICE PRESIDENT 11.80 X X 31288 0 0 CHARLES KINSOLVING TRUSTEE 6.80 X 25099 0 0 RANDALL MCCORMICK TRUSTEE 7.50 X 23949 0 0 JOHN GRAHAM PRESIDENT 11.80 X X 23299 0 0 DAN HARDIN SECRETARY/TREASURER 2.80 X X 22727 0 0 KENNY WALLACE TRUSTEE 2.30 X 22099 0 0 CHARLES GARNER JR TRUSTEE 3.90 X 21299 0 0 JASON SWANN TRUSTEE 2.30 X 20749 0 0 TRAVIS GLENN TRUSTEE 3.20 X 20149 0 0 1254854 0 523849 16 0 1 0 HIGHER POWER 14201 CALIBER DR STE 300 OKLAHOMA CITY OK 73134 DISTRIBUTION LINE CONSTRUCTION 1621333 WESTCON CONSTRUCTION 260 S 17TH STREET LAS CRUCES NM 88002 SUBSTATION CONSTRUCTION 911824 ARC CONSTRUCTION 655-4 SEVEN RIVERS HWY ARTESIA NM 88210 DISTRIBUTION LINE CONSTRUCTION 667058 BHI ENERGY POWER 110 PROSPERITY BOULEVARD PIEDMONT SC 29673 DISTRIBUTION LINE CONSTRUCTION 143471 ALAMON 315 W IDAHO STREET KALISPELL MT 57901 POLE INSPECTIONS 114874 6 X SALES OF ELECTRICITY 221000 95461941 95461941 PATRONAGE DIVIDENDS 221000 2053116 2053116 SERVICE FEES 221000 89196 89196 OTHER PROGRAM REVENUE 221000 600 600 97604853 1321784 1321784 6528 0 6528 6528 6528 24623 5845 18778 18778 18778 28330 22678 5652 5652 POLE ATTACHMENT INCOME 221000 183503 183503 183503 99141098 97610505 6528 1524065 X 27642 6308836 656910 4425885 811440 714654 342806 2063923 4480023 PURCHASED POWER 71676969 DISTRIBUTION EXPENSE 3029268 ADMIN & GENERAL EXPENSE 2240549 COST OF REMOVAL, NET 1350663 1011530 99141098 971520 573255 14469958 16709680 12352387 12177924 2883552 2760877 1189902 1007339 175080853 73735376 95785888 101345477 43566050 40861647 778790 833959 29284981 31252865 9426991 10139063 210710019 217662086 7143715 8929659 8838 259 56503825 53661298 49473997 55943723 113130375 118534939 X 35865 36320 0 0 97543779 99090827 97579644 99127147 210710019 217662086 X 0 1547503 X X 0 1 X 0 0 46482 1025272 1071754 9202770 2836615 6366155 157664345 70898761 86765584 7141984 7141984 101345477 EQUITY CONTRIBUTION - WFEC 22250222 C PATRONAGE CAPITAL - WFEC 7483812 C PATRONAGE CAPITAL - FEDERATED 815626 C PATRONAGE CAPITAL - CFC 204262 C PATRONAGE CAPITAL - TEC 245959 C PATRONAGE CAPITAL - COBANK 90587 C PATRONAGE CAPITAL - NISC 25905 C CAPITAL TERM CERTIFICATES - CFC 134270 C OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS 2222 C 31252865 COST OF REMOVAL LIABILITY 42576965 CONSUMER DEPOSITS 2459610 POWER COST RECOVERY - OVER COLLECTED 4889462 ACCRUED OPERATING TAXES 697487 DEFERRED CREDITS - UNCLAIMED PATRONAGE CAPITAL 5320199 55943723 X 99141098 0 99141098 0 99141098 92832262 0 92832262 6308836 6308836 99141098 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 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 XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 6,308,836. PART VII: THE AMOUNT OF INVESTMENTS - OTHER SECURITIES ON FORM 990, PAGE 11, PART X, LINE 12 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 VII 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 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 UNIVERSITY OF THE SOUTHWEST 6610 N LOVINGTON HWY HOBBS NM 88240 850164940 GOVERNMENT 6000 ANNUAL DONATION 1 PART II: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE MADE TO NON-PROFIT, CIVIC, AND GOVERNMENTAL ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X X 1 1 X X 0 0 0 BOBBY FERRIS GENERAL MANAGER 286215 0 1843 0 1285 0 145387 0 11522 0 446252 0 0 0 BOBBY KIMBRO SYSTEM OPERATING MANAGER 178732 0 1826 0 3007 0 68129 0 16746 0 268440 0 0 0 MICHAEL FARIS ACCOUNTING MANAGER 147100 0 1826 0 2494 0 97335 0 18459 0 267214 0 0 0 JOHN BENARD DISTRIBUTION MANAGER 150031 0 1724 0 2588 0 82377 0 16956 0 253676 0 0 0 DOUG GRUENWALD LINE FOREMAN 132031 0 1949 0 848 0 41617 0 20230 0 196675 0 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS - PURSUANT TO APPLICABLE TRAVEL POLICIES, THE COOPERATIVE WILL REIMBURSE TRUSTEES AND EMPLOYEES FOR THE COST OF HIS/HER SPOUSE TO ACCOMPANY HIM/HER ON OFFICIAL BUSINESS OF THE COOPERATIVE. NO REIMBURSEMENTS WERE REPORTED DURING 2019. HEALTH OR SOCIAL CLUB DUES - PURSUANT TO THE COOPERATIVE'S WELLNESS POLICY, THE COOPERATIVE WILL PAY UP TO $600 ANNUALLY FOR THE COST OF AN EMPLOYEE'S GYM MEMBERSHIP. THREE EMPLOYEES (KIMBRO, FARIS, AND BENARD) RECEIVED THIS BENEFIT DURING THE YEAR. 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. BOBBY FERRIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 122,437 EMPLOYER CONTRIBUTION TO 401(K) PLAN 22,950 TOTAL REPORTED IN COLUMN C $ 145,387 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (122,437) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,444 EXPENSE TO COOPERATIVE $ 51,394 BOBBY KIMBRO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 62,770 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,359 TOTAL REPORTED IN COLUMN C $ 68,129 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (62,770) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 53,858 EXPENSE TO COOPERATIVE $ 59,217 MICHAEL FARIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 93,113 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,222 TOTAL REPORTED IN COLUMN C $ 97,335 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (93,113) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 40,949 EXPENSE TO COOPERATIVE $ 45,171 JOHN BENARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 77,923 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,454 TOTAL REPORTED IN COLUMN C $ 82,377 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (77,923) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 39,593 EXPENSE TO COOPERATIVE $ 44,047 DOUG GRUENWALD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 38,424 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,193 TOTAL REPORTED IN COLUMN C $ 41,617 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (38,424) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,528 EXPENSE TO COOPERATIVE $ 33,721 FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, THE MEMBERS OF THE COOPERATIVE APPROVED AMENDMENTS TO THE BYLAWS AT THE ANNUAL MEETING. THE FOLLOWING IS A SUMMARY OF CHANGES: ARTICLE I - MEMBERSHIP SECTION 2, REGARDING MEMBERSHIP CERTIFICATES WAS REMOVED. ARTICLE III - MEETINGS OF MEMBERS SECTION 1, ANNUAL MEETING, WAS AMENDED TO STATE THE ANNUAL MEETING MAY BE HELD AT ONE OF THE COUNTIES SERVED BY THE COOPERATIVE. SECTION 3, NOTICE OF MEMBERS' MEETINGS, WAS AMENDED TO STATE THAT NOTICE OF MEETINGS MAY BE DELIVERED ELECTRONICALLY. SECTION 4, QUORUM, WAS AMENDED TO STATE A QUORUM SHALL BE MET WHEN FIVE PER CENTUM (5%) OF THE MEMBERS, AS REFLECTED ON THE MEMBERSHIP ROLLS OF THE COOPERATIVE ON THE RECORD DATE WHICH WILL BE THE END OF THE MONTH PRIOR TO THE ANNUAL MEETING DAY OF THE MEMBER MEETING HAVE REGISTERED DURING THE REGISTRATION PERIOD, WHICH SHALL BE DETERMINED BY THE BOARD BUT WHICH SHALL NOT BE ANY LONGER THAT SEVEN (7) DAYS PRIOR TO THE ANNUAL MEETING. SECTION 6, CREDENTIALS AND ELECTION COMMITTEE, WAS AMENDED TO STATE THE BOARD OF TRUSTEES SHALL, AT LEAST SIXTY (60) DAYS BEFORE ANY MEETING OF THE MEMBERS APPOINT A CREDENTIALS AND ELECTION COMMITTEE. THE COMMITTEE SHALL CONSIST OF AN UNEVEN NUMBER OF MEMBERS, NOT LESS THAN FIVE(5), WHO ARE NOT EXISTING COOPERATIVE EMPLOYEES, AGENTS, OFFICERS, TRUSTEES OR KNOWN CANDIDATES FOR TRUSTEE, AND WHO ARE NOT MEMEBERS OF THE SAME HOUSEHOLD OF EXISTING COOPERATIVE EMPLOYEES, AGENTS, OFFICERS, TRUSTEES OR KNOWN CANDIDATES FOR TRUSTEE. SECTION 8, ORDER OF BUSINESS, WAS AMENDED TO ADD THAT THE FIRST ORDER OF BUSINESS IS TO DETERMINE THE EXISTENCE OF A QUORUM BASED ON REGISTRATION OF THE MEMBERS. ARTICLE IV - TRUSTEES SECTION 4, NOMINATIONS, WAS AMENDED TO STATE THE SECRETARY SHALL BE RESPONSIBLE FOR SERVING WITH THE NOTICE OF THE MEETING. ARTICLE V - MEETINGS OF TRUSTEES SECTIONS 1 AND 2, REGULAR MEETINGS AND SPECIAL MEETINGS, WAS AMENDED TO STATE REGULAR MEETINGS OF THE BOARD OF TRUSTEES SHALL ALSO BE HELD MONTHLY AT SUCH TIME AND PLACE IN A COUNTY SERVED BY THE COOPERATIVE. SECTION 3, NOTICE OF TRUSTEES' MEETINGS, WAS AMENDED TO STATE NOTICE OF THE MEETINGS MAY BE SENT ELECTRONICALLY. ARTICLE VI - OFFICERS SECTION 11, COMPENSATION, WAS AMENDED TO STATE THE POWERS, DUTIES, AND COMPENSATION OF OFFICERS, AGENTS AND THE MANAGER SHALL BE FIXED BY THE BOARD OF TRUSTEES. A COMPLETE COPY OF THE BYLAWS CAN BE FOUND AND VIEWED ON THE COOPERATIVE'S WEBSITE AT: HTTPS://WWW.LCECNET.COM/BYLAWS 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 TRUSTEES. 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 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 15A THE BOARD OF TRUSTEES USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN NEW MEXICO 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 COMPLETE COPY OF ITS GOVERNING DOCUMENTS AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE MAILS A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. 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 HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE EMPLOYER CONTRIBUTIONS TO THE 401(K) PENSION PLAN AND THE 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 A FUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. FORM 990, PART VII, SECTION A: THE BOARD OF TRUSTEES CONSIDERS THE GENERAL MANAGER TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE GENERAL MANAGER IS LISTED AS AN EMPLOYEE OFFICER. 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 RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED RUS ELECTRIC BORROWERS. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. THE COOPERATIVE SEPARATELY STATES 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 $ 5,082,795 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-MISC (210,658) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (156,909) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 40 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,055,283 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 1,033,109 TOTAL WAGES ACCRUED AND/OR PAID $ 6,803,660 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 2,414,353 OFFICE SUPPLIES 341,891 OUTSIDE SERVICES EMPLOYED 226,298 INJURY & DAMAGES 86,202 EMPLOYEE BENEFITS (232,552) REGULATORY COMISSION 311,182 TRUSTEES 308,913 ASSOCIATION DUES 163,376 MISCELLANEOUS GENERAL 36,153 ADVERTISING - CONSERVATION & SAFETY 371,734 ANNUAL MEETING 98,139 CAPITAL CREDIT 4,848 MAINTENANCE OF GENERAL PLANT 207,931 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 4,338,468 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (27,642) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (210,658) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,431,852) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (427,767) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 2,240,549 FORM 990, PART IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TRANSMISSION $ 434,611 CUSTOMER ACCOUNTS & SERVICE 488,749 TAXES - PROPERTY & OTHER 78,561 SALES 9,609 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $ 1,011,530 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 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 XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 6,308,836. PATRONAGE CAPITAL RETIRED -5,239,834. NET CHANGE IN MEMBERSHIPS 455. OTHER COMPREHENSIVE INCOME PROVISION FOR PENSIONS AND BENEIFTS 478,046. FORM 990, PART XII, LINE 2C: THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE AUDIT AND SOLICITING THE CPA WHO WILL PERFORM THE AUDIT. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. LEA COUNTY ELECTRIC EDUCATION FOUNDATION PO BOX 1447 LOVINGTON NM 88260 850351147 TO PROVIDE COLLEGE SCHOLARSHIPS TO MEMBERS OF THE COOPERATIVE. NM 501(C)(3) PF LEA COUNTY ELECTRIC COOPERTIVE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 LEA COUNTY ELECTRIC EDUCATION FOUNDATION O N/A - LESS THAN $50,000