2019-11-12T08:20:39-06:00 2018-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2018-01-01 850096243 LEA COUNTY ELECTRIC COOPERATIVE INC LEAC 5753963631 PO BOX 1447 LOVINGTON NM 882601447 BOBBY FERRIS EVP & GENERAL MANAGER 5753963631 2019-10-28 1 WILLIAM M MILLER P00439459 8067473806 2019-10-22 X 65.182.80.152 2019-10-28 16:22:20 CD P 2EBFA2265763A01132BE48D36E167D9476E1DDEB 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2018 2020-04-17 16:48:07Z BOBBY FERRIS PO BOX 1447 LOVINGTON NM 882601447 103366215 0 X WWW.LCECNET.COM X 1949 NM TO PROVIDE ELECTRIC ENERGY TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 90 0 5160 0 0 0 93631952 102228424 944389 831062 322838 211794 94899179 103271280 28170 26854 7185758 7511385 6685216 5564902 0 0 0 81000035 90168139 94899179 103271280 0 0 203854853 210710019 108078454 113130375 95776399 97579644 NONE 0 0 SALE OF ELECTRIC POWER TO MEMBERS - 16,187 CONNECTED METERS WERE PROVIDED POWER AT YEAR END AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 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 63 0 90 1 1 1 0 0 0 0 106558553 5124280 0 0 0 X 9 9 0 0 0 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 JOHN GRAHAM PRESIDENT 12.90 X X 25667 0 0 ROBERT CAUDLE VICE PRESIDENT 8.30 X X 30676 0 0 DAN HARDIN SECRETARY/TREASURER 3.30 X X 23473 0 0 RANDALL MCCORMICK TRUSTEE 10.90 X 25749 0 0 KENNY WALLACE TRUSTEE 3.10 X 22267 0 0 TRAVIS GLENN TRUSTEE 5.00 X 19949 0 0 CHARLES KINSOLVING TRUSTEE 3.60 X 23467 0 0 CHARLES GARNER JR TRUSTEE 6.10 X 24267 0 0 JASON SWANN TRUSTEE 7.00 X 25807 0 0 BOBBY FERRIS GENERAL MANAGER 60.00 X 260292 0 157690 BOBBY KIMBRO SYSTEM OPERATING MANAGER 50.00 X 177237 0 110469 MICHAEL FARIS ACCOUNTING MANAGER 50.00 X 156944 0 113241 JOHN BENARD DISTRIBUTION MANAGER 50.00 X 154842 0 90158 JANETTE FARIS ADMIN SERVICE MANAGER 50.00 X 141585 0 22287 DOUG GRUENWALD LINE FOREMAN 50.00 X 129751 0 62637 1241973 0 556482 13 0 1 0 HIGHER POWER 14201 CALIBER DR STE 300 OKLAHOMA CITY OK 73134 DISTRIBUTION LINE 1572605 ARC POWER LINE CONSTRUCTION 6551-4 SEVEN RIVERS HWY ARTESIA NM 88210 DISTRIBUTION LINE 655717 LASCO POBOX 877 HOBBS NM 88241 GENERAL CONTRACTOR 298952 DIXIE ELECTRIC POBOX 842751 DALLAS TX 75284 DISTRIBUTION LINE 271343 MCLEAN ENGINEERING POBOX 2587 MOULTRIE GA 31776 SYSTEM ENGINEERING 234625 12 X SALES OF ELECTRICITY 221000 99828232 99828232 PATRONAGE DIVIDENDS 221000 2175555 2175555 OTHER PROGRAM REVENUE 221000 117790 117790 SERVICE FEES 221000 106847 106847 102228424 835853 835853 5160 0 5160 5160 5160 64821 69612 -4791 -4791 -4791 47924 25323 22601 22601 POLE ATTACHMENT INCOME 221000 184033 184033 184033 103271280 102251025 5160 1015095 X 26854 7511385 639304 3372962 769398 450109 333129 2063715 4249043 PURCHASED POWER 75619429 DISTRIBUTION EXPENSE 2935608 ADMIN & GENERAL EXPENSE 2781910 COST OF REMOVAL, NET 1327205 1191229 103271280 944269 971520 17943682 14469958 7756706 12352387 2801546 2883552 1475966 1189902 168107115 72321227 91180901 95785888 40941420 43566050 857942 778790 29953111 29284981 9999310 9426991 203854853 210710019 9270864 7143715 105451 8838 51462123 56503825 47240016 49473997 108078454 113130375 X 35640 35865 0 0 95740759 97543779 95776399 97579644 203854853 210710019 X 0 1803245 X X 0 1 X 0 0 46482 1025272 1071754 6409725 2630758 3778967 155421487 69690469 85731018 5204149 5204149 95785888 EQUITY CONTRIBUTION - WFEC 22250222 C PATRONAGE CAPITAL - WFEC 5632249 C PATRONAGE CAPITAL - FEDERATED 759687 C PATRONAGE CAPITAL - CFC 212626 C PATRONAGE CAPITAL - TEC 207208 C PATRONAGE CAPITAL - COBANK 83247 C CAPITAL TERM CERTIFICATES - CFC 137520 C OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS 2222 C 29284981 COST OF REMOVAL LIABILITY 41091037 CONSUMER DEPOSITS 2455126 DEFERRED CREDITS 5160668 ACCRUED OPERATING TAXES 767166 49473997 X 103271280 0 103271280 0 103271280 95759895 0 95759895 7511385 7511385 103271280 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 7,511,385. 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 PAID OR 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 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 1 1 X X 0 0 0 BOBBY FERRIS GENERAL MANAGER 258125 0 1639 0 528 0 148038 0 9652 0 417982 0 0 0 BOBBY KIMBRO SYSTEM OPERATING MANAGER 173240 0 1624 0 2373 0 100539 0 9930 0 287706 0 0 0 MICHAEL FARIS ACCOUNTING MANAGER 148004 0 1624 0 7316 0 97766 0 15475 0 270185 0 0 0 JOHN BENARD DISTRIBUTION MANAGER 145666 0 1624 0 7552 0 74182 0 15976 0 245000 0 0 0 JANETTE FARIS ADMIN SERVICE MANAGER 131322 0 1733 0 8530 0 20214 0 2073 0 163872 0 0 0 DOUG GRUENWALD LINE FOREMAN 127308 0 1624 0 819 0 44023 0 18614 0 192388 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 2018. 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. NO REIMBURSEMENTS WERE REPORTED DURING 2018. 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 $ 130,971 EMPLOYER CONTRIBUTION TO 401(K) PLAN 17,067 TOTAL REPORTED IN COLUMN C $ 148,038 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (130,971) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,269 EXPENSE TO COOPERATIVE $ 39,336 BOBBY KIMBRO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 95,336 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,203 TOTAL REPORTED IN COLUMN C $ 100,539 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (95,336) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,687 EXPENSE TO COOPERATIVE $ 47,890 MICHAEL FARIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 93,551 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,215 TOTAL REPORTED IN COLUMN C $ 97,766 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (93,551) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,317 EXPENSE TO COOPERATIVE $ 36,532 JOHN BENARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 69,856 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,326 TOTAL REPORTED IN COLUMN C $ 74,182 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (69,856) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 31,226 EXPENSE TO COOPERATIVE $ 35,552 JANETTE FARIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 16,320 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,894 TOTAL REPORTED IN COLUMN C $ 20,214 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (16,320) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,371 EXPENSE TO COOPERATIVE $ 33,265 DOUG GRUENWALD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 40,923 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,100 TOTAL REPORTED IN COLUMN C $ 44,023 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (40,923) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,943 EXPENSE TO COOPERATIVE $ 27,043 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 $ 4,012,266 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-MISC (221,322) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (157,690) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 17 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 768,389 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 784,191 TOTAL WAGES ACCRUED AND/OR PAID $ 5,185,851 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 2,385,707 OFFICE SUPPLIES 288,205 OUTSIDE SERVICES EMPLOYED 367,770 INJURY & DAMAGES 14,912 EMPLOYEE BENEFITS (267,874) REGULATORY COMISSION 340,090 TRUSTEES 311,873 ASSOCIATION DUES 147,186 MISCELLANEOUS GENERAL 32,139 ADVERTISING - CONSERVATION & SAFETY 406,062 ANNUAL MEETING 66,547 CAPITAL CREDIT 868 MAINTENANCE OF GENERAL PLANT 221,835 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 4,315,320 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (26,854) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (221,322) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,019,426) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (265,808) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 2,781,910 FORM 990, PART IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TRANSMISSION $ 549,833 CUSTOMER ACCOUNTS & SERVICE 567,932 TAXES - PROPERTY & OTHER 69,474 SALES 3,990 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $ 1,191,229 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 2018 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 7,511,385. PATRONAGE CAPITAL RETIRED -5,279,252. NET CHANGE IN MEMBERSHIPS 225. OTHER COMPREHENSIVE INCOME PROVISION FOR PENSIONS AND BENEIFTS -429,113. 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