2017-11-13T15:31:40-06:00 2016-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2016-01-01 840185658 DELTA MONTROSE ELECTRIC ASSOCIATION DELT 9702494572 PO BOX 910 MONTROSE CO 81402 JASEN BRONEC CEO 9702494572 2017-11-02 1 WILLIAM M MILLER P00439459 8067473806 2017-11-02 X 65.182.80.152 2017-11-02 08:29:28 CD P BB0A6EFF21CE0653C6B3B49029A3E11A3F81D504 587910E538FB33049B4D87AFCCD061243FC33F22 2016 2017-02-10 21:41:12Z JASEN BRONEC PO BOX 910 MONTROSE CO 81402 66674530 0 X WWW.DMEA.COM X 1938 CO WE ENERGIZE AND SERVE OUR COMMUNITIES. 9 9 106 0 365134 -60019 0 0 67158405 65621598 522208 527486 594091 524381 68274704 66673465 1791 602 373761 431456 7836376 8681309 0 0 0 57207679 55769260 65419607 64882627 2855097 1790838 178724545 187073409 82577871 89273036 96146674 97800373 X WE ENERGIZE AND SERVE OUR COMMUNITIES BY ENSURING THE SAFETY OF OUR MEMBERS AND EMPLOYEES; PROVIDING MEMBERS WITH COMPETITIVE RATES, BALANCED WITH QUALITY SERVICE AND RELIABILITY; MAXIMIZING EFFICIENCIES, OPERATIONALLY AND THROUGH ENERGY EFFICIENCY AND CONSERVATION; PROMOTING LOCAL ECONOMIC DEVELOPMENT; AND BEING NIMBLE AS WE INVESTIGATE AND PURSUE ENERGY OPTIONS. 0 0 SALE OF ELECTRIC POWER TO MEMBERS - 32,759 ACTIVE SERVICES 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 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 0 0 0 0 0 0 0 1 1 1 0 1 87 0 106 1 1 1 0 0 0 0 65192378 2625832 0 X 9 9 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X X WADE PYNES VP FINANCE & ACCOUNTING 9702494572 11925 6300 ROAD MONTROSE CO 81402 X WILLIAM PATTERSON PRESIDENT 10.00 X X 18050 0 0 MARK ECKHART VICE PRESIDENT 6.00 X X 14900 0 0 BRADLEY R HARDING SECRETARY 5.00 X X 7475 0 0 MARSHALL COLLINS ASST. SECRETARY 5.00 X X 13500 0 0 TONY PRENDERGAST DIRECTOR 15.00 X 13925 0 0 OLEN LUND DIRECTOR 10.00 X 9525 0 0 KYLE MARTINEZ DIRECTOR 10.00 X 19125 0 0 JAMES ELDER DIRECTOR 9.80 X 16050 0 0 JOHN GAVAN DIRECTOR 6.00 X 13575 0 0 TERRY BROWN DIRECTOR 4.50 X 12575 0 0 JASEN BRONEC CEO 40.00 20.00 X 215978 40002 81974 COREY THURLOW VP FINANCE & ACCOUNTING 45.00 X 137610 0 15085 STEVEN METHENY VP POWER SUPPLY 50.00 X 188532 0 71703 KENT DAVENPORT VP ENGINEERING 42.00 X 170085 0 98367 DOUGLAS COX VP OPERATIONS 45.00 X 146382 0 87670 VIRGINIA HARMAN VP MEMEBER SERVICES & HR 46.00 X 140241 0 32347 SHELBY BEAR SYSTEM DESIGN SUPERVISOR 40.00 X 137780 0 32683 LARRY DONATHAN EQUIPMENT TECH FOREMAN 40.00 X 128935 0 35074 ROBERT HALL OPERATIONS SUPERVISOR 40.00 X 127486 0 55704 1531729 40002 510607 37 0 1 0 OUTBACK POWER COMPANY PO BOX 725 HAVRE MT 595010725 FIBER CONSTRUCTION 2365922 ASPLUNDH TREE EXPERT CO 1700 SOLUTIONS CENTER CHICAGO IL 606771007 TREE TRIMMING 498579 DEL-MONT CONSULTANTS INC 125 COLORADO AVE MONTROSE CO 81401 ENGINEERING 476027 TITAN ELECTRIC 6702 COAL ROAD CASPER WY 82604 FIBER CONSTRUCTION 463433 EXPONENTIAL ENGINEERING COINC 2950 E HARMONY RD 265 FORT COLLINS CO 80528 SYSTEM ENGINEERING 282550 12 X SALES OF ELECTRICITY 221000 62433838 62433838 PATRONAGE DIVIDENDS 221000 1389485 1389485 SERVICE FEES 221000 1104722 1104722 RENEWABLE ENERGY CREDITS 221000 618574 618574 ELECTRIC WHEELING 221000 49916 49916 25063 25063 65621598 475668 17248 458420 52883 1065 51818 51818 51818 DISPATCHING REVENUE 517000 347886 347886 POLE ATTACHMENT INCOME 221000 126491 126491 SALES TAX DISCOUNTS 221000 50004 50004 524381 66673465 65671602 365134 636729 X 602 431456 1118033 5433713 612937 1048073 468553 2477175 5379989 PURCHASED POWER 40641001 ADMIN & GENERAL EXPENSE 2847549 DISTRIBUTION EXPENSE 1280803 CONSUMER EXPENSE 1014586 2128157 64882627 2701429 2699821 9026000 9190000 3783525 6850711 219808 187304 2602355 2715012 5523899 5116219 176469268 72922028 98174744 103547240 -39205 50985360 51035923 5707425 5770384 178724545 187073409 7252480 8603155 405125 256366 67758073 71806901 7162193 8606614 82577871 89273036 X 0 0 0 0 96146674 97800373 96146674 97800373 178724545 187073409 X 1790838 -137139 X X 0 1 X 1 0 0 1 X 1898741 1898741 10721543 1588457 9133086 153286520 71333571 81952949 10562464 10562464 103547240 CAPITAL TERM CERTIFICATES 1624312 C PATRONAGE CAPITAL - CFC 505573 C PATRONAGE CAPITAL - FEDERATED INSURANCE 270448 C PATRONAGE CAPITAL - NISC 183407 C PATRONAGE CAPITAL - TSG&T 47506384 C PATRONAGE CAPITAL - WUESC 916097 C PATRONAGE CAPITAL - OTHER 28702 C MEMBERSHIPS - ASSOCIATED CO-OPS 1000 C 51035923 CUSTOMER ENERGY PRE-PAYMENTS 233000 ACCUMULATED PROVISION FOR RETIREMENT SICK LEAVE 172618 ACCRUED OPERATING TAXES 813393 REGULATORY LIABILITY 4000000 ACCUMULATED PROVISION FOR PENSION AND BENEFITS 99069 DEFERRED CREDITS 3288534 8606614 X PART IV, LINE 2B: PURSUANT TO THE BYLAWS OF THE COOPERATIVE, A PATRON IS DEEMED TO HAVE CONTRIBUTED HIS/HER/ITS PATRONAGE CAPITAL RETIREMENT IF THE RESPECTIVE CHECK OR OTHER FORM OF PAYMENT HAS BEEN UNCLAIMED FOR A PERIOD OF FIVE YEARS AND SIX MONTHS AND FOR WHICH PROPER NOTIFICATION TO THE PATRON HAS BEEN MADE. SUCH UNCLAIMED PATRONAGE CAPITAL RETIREMENTS ARE USED TO ESTABLISH A FUND FOR EDUCATIONAL, CHARITABLE, ALTERNATIVE OR ENERGY PURPOSES AND FOR OTHER ACTIVITIES APPROVED BY THE BOARD OF DIRECTORS THAT WILL BENEFIT THE COOPERATIVE'S SERVICE TERRITORY. THE APPLICABLE BOARD POLICY PROVIDES SPECIFIC GUIDANCE REGARDING THE ELIGIBLE GRANTS AND SCHOLARSHIPS. 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 OR APPLICABLE STATE TAXING AUTHORITY, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. SCHEDULE D, PART IX THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5 PERCENT 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 0 0 0 JASEN BRONEC CEO 194512 40002 0 0 21466 0 54993 0 26981 0 297952 40002 0 0 COREY THURLOW VP FINANCE & ACCOUNTING 131292 0 6000 0 318 0 5182 0 9903 0 152695 0 0 0 STEVEN METHENY VP POWER SUPPLY 148893 0 6000 0 33639 0 48509 0 23194 0 260235 0 0 0 KENT DAVENPORT VP ENGINEERING 140190 0 4000 0 25895 0 70745 0 27622 0 268452 0 0 0 DOUGLAS COX VP OPERATIONS 122463 0 4000 0 19919 0 60978 0 26692 0 234052 0 0 0 VIRGINIA HARMAN VP MEMEBER SERVICES & HR 130914 0 8000 0 1327 0 12501 0 19846 0 172588 0 0 0 SHELBY BEAR SYSTEM DESIGN SUPERVISOR 112714 0 4000 0 21066 0 31742 0 941 0 170463 0 0 0 LARRY DONATHAN EQUIPMENT TECH FOREMAN 126195 0 2121 0 619 0 20579 0 14495 0 164009 0 0 0 ROBERT HALL OPERATIONS SUPERVISOR 102647 0 6000 0 18839 0 36146 0 19558 0 183190 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. JASEN BRONEC: TOTAL REPORTED IN COLUMN C $ 54,993 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (54,993) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 32,850 EXPENSE TO THE COOPERATIVE $ 32,850 COREY THURLOW: TOTAL REPORTED IN COLUMN C $ 5,182 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (5,182) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 21,964 EXPENSE TO THE COOPERATIVE $ 21,964 STEVEN METHENY: TOTAL REPORTED IN COLUMN C $ 48,509 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,509) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 26,900 EXPENSE TO THE COOPERATIVE $ 26,900 KENT DAVENPORT: TOTAL REPORTED IN COLUMN C $ 70,745 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (70,745) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 25,551 EXPENSE TO THE COOPERATIVE $ 25,551 DOUGLAS COX: TOTAL REPORTED IN COLUMN C $ 60,978 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (60,978) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 24,143 EXPENSE TO THE COOPERATIVE $ 24,143 VIRGINIA HARMAN: TOTAL REPORTED IN COLUMN C $ 12,501 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (12,501) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 21,985 EXPENSE TO THE COOPERATIVE $ 21,985 SHELBY BEAR: TOTAL REPORTED IN COLUMN C $ 31,742 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (31,742) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 19,031 EXPENSE TO THE COOPERATIVE $ 19,031 LARRY DONATHAN: TOTAL REPORTED IN COLUMN C $ 20,579 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,579) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 16,133 EXPENSE TO THE COOPERATIVE $ 16,133 ROBERT HALL: TOTAL REPORTED IN COLUMN C $ 36,146 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,146) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 19,170 EXPENSE TO THE COOPERATIVE $ 19,170 FORM 990, PART I, LINE 5 THE NUMBER OF EMPLOYEES REPORTED ON LINE 5 REPRESENTS THE NUMBER OF W-2'S ISSUED BY THE COOPERATIVE AND NOT NECESSARILY THE NUMBER OF EMPLOYEES NORMALLY EMPLOYED BY THE COOPERATIVE AND REPORTED TO RUS. FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, REVISIONS TO ARTICLE VIII OF THE BYLAWS REGARDING CAPITAL CREDIT ALLOCATIONS WERE ADOPTED. A CURRENT COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE AT: WWW.DMEA.COM/CONTENT/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 TO ELECT 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; AND 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, REVIEW AND APPROVAL 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 CONDUCTS AN ANNUAL REVIEW OF THE CONFLICT OF INTEREST POLICY, AND OBTAINS THE SIGNATURE OF EACH BOARD MEMBER ACKNOWLEDGING THE REVIEW OF THE POLICY. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM COOPERATIVES LOCATED IN COLORADO AND THE NATION. THE MANAGEMENT COMPENSATION PLAN IS APPROVED BY THE BOARD OF DIRECTORS. THE BOARD AND THE CEO USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE ORGANIZATION'S OTHER OFFICERS. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT COLORADO AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. THIS IS DONE IN COMPLIANCE WITH BOARD POLICY 10, SECTIONS 1-4. ANNUALLY THE COOPERATIVE PROVIDES A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. FINALLY, THE COOPERATIVE'S BYLAWS AND FINANCIAL STATEMENTS CAN BE FOUND ON THEIR WEBSITE, WWW.DMEA.COM. FORM 990, PART VII, COLUMN F IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, 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 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, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES. FORM 990, PART VIII, LINE 2B 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 AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE RURAL UTILITIES SERVICES (RUS). THE UNIFORM SYSTEM OF ACCOUNTS 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 UNIFORM SYSTEM OF ACCOUNTS. 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 $ 6,551,746 LESS DIRECTORS FEES REPORTED ON 1099-MISC (138,700) LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (97,059) LESS KEY EMPLOYEE BENEFITS REPORTED ON LINE 5 (170,069) PLUS SALARIES & WAGES ALLOCATED TO NONOPERATING MARGINS 34,691 PLUS SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 1,493,717 PLUS SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 1,080,620 TOTAL WAGES ACCRUED AND/OR PAID $ 8,754,946 FORM 990, PART IX, LINE 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: INSURANCE $ 62,569 INJURIES AND DAMAGES 17,375 OUTSIDE SERVICES 473,838 SUPPLIES AND EXPENSES 1,502,214 ADVERTISING 47,771 DIRECTORS EXPENSES 56,598 MAINTENANCE OF GENERAL PLANT 570,102 MISCELLANEOUS GENERAL EXPENSE 117,082 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 2,847,549 FORM 990, PART IX, LINE 24E OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: ECONOMIC DEVELOPMENT $ 10,000 OTHER DEDUCTIONS 40,911 SALES EXPENSE 80,094 TRANSMISSION 328,713 DISPATCHING EXPENSES 425,153 TAXES 484,129 GEOTHERMAL AND HYDRO 759,157 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 2,128,157 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 2016 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 AND DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. EACH GRANT, SCHOLARSHIP 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 ASSIGNABLE 431,456. PATRONAGE CAPITAL RETIRED - TOTAL -327,925. PATRONAGE CAPITAL RETIRED - DISCOUNT 132,812. EQUITY METHOD INCOME (LOSS) -373,482. DMEA UTILITIES SERVICES LLC PO BOX 910 MONTROSE CO 81402 841556992 ALTERNATIVE ENERGY AND BROADBAND INVESTMENTS CO DELTA MONTROSE ELECTRIC ASSOCIATION C 56473 2875542 1.00000 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 DMEA UTILITIES SERVICES LLC A 17248 LINE OF CREDIT DMEA UTILITIES SERVICES LLC O 309821 LABOR DISTRIBUTION DMEA UTILITIES SERVICES LLC P 0 N/A - LESS THAN $50,000 DMEA UTILITIES SERVICES LLC Q 2380216 INVOICES AND WORKORDERS