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 880106922 MT WHEELER POWER INC MTWH 7752898981 PO BOX 151000 ELY NV 89315 RANDY EWELL GENERAL MANAGER/CEO 7752898981 2017-11-09 1 WILLIAM M MILLER P00439459 8067473806 2017-11-09 X 65.182.80.152 2017-11-09 13:35:47 CS P BB0A6EFF21CE0653C6B3B49029A3E11A3F81D504 A9554CCAD58A8822C7BC467CA65EE732419EE41B 2016 2017-02-10 21:41:12Z RANDY EWELL PO BOX 151000 ELY NV 89315 34766449 0 X WWW.MWPOWER.NET X 1963 NV TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 37 0 186725 32277 0 0 33555536 34223921 151427 130158 312709 380566 34019672 34734645 17723 11300 1681318 2029274 3072161 3410598 0 0 0 29625402 29773482 34396604 35224654 -376932 -490009 50520676 54719944 21108331 24640812 29412345 30079132 THE COOPERATIVE'S RESPONSIBILITY AND AIM IS TO PROVIDE EXCELLENT AND INNOVATIVE CUSTOMER SERVICE AS REFLECTED IN TOP QUALITY ELECTRIC SERVICE RELIABILITY, AFFORDABLE RATES, EMPLOYEE TEAMWORK AND THE HIGHEST DEGREE OF INTEGRITY IN ALL COOPERATIVE ENDEAVORS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 7,420 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY 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 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 49 0 37 1 1 1 0 0 0 0 34689042 865429 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 RANDY EWELL 7752898981 1600 GREAT BASIN BLVD ELY NV 89301 X RICK HENDRIX PRESIDENT 12.70 X X 12000 0 0 DON PHILLIPS VICE PRESIDENT 2.80 X X 9400 0 0 RON MILLER SECRETARY 4.40 X X 10600 0 0 SANDRA GREEN TREASURER 4.80 X X 10300 0 0 FRANK LEON DIRECTOR 0.60 X 3200 0 0 JERRY MORRILL DIRECTOR 2.70 X 10200 0 0 MARY KERNER DIRECTOR 1.60 X 6000 0 0 WILMA SANFORD DIRECTOR 2.20 X 9800 0 0 JERALD ANDERSON DIRECTOR 15.70 X 16000 0 0 RON NIMAN DIRECTOR 33.30 X 4800 0 0 RANDY EWELL GM/CEO 50.00 X 199738 0 52279 KEVIN ROBISON ASST GM 50.00 X 156740 0 47580 BILL RICCI OPERATIONS MANAGER 40.00 X 121942 0 44331 JESSE MURDOCK ENGINEERING MANAGER 40.00 X 119909 0 47314 JOSEPH PINTAR FOREMAN/LINEMAN 40.00 X 113169 0 40140 MITCHELL MCVIARS FOREMAN/LINEMAN 40.00 X 108962 0 42769 CHAD BLISS FOREMAN/LINEMAN 40.00 X 108576 0 40969 1021336 0 315382 10 0 1 0 CACHE VALLEY ELECTRIC PO BOX 405 LOGAN UT 84323 LINE CONSTRUCTION 248113 OSMOSE UTILITIES SERVICES INC 980 ELLICOTT STREET BUFFALO NY 14209 POLE TESTING 161163 COPENHAVER & MCCONNELL PC 950 IDAHO STREET ELKO NV 89801 LEGAL SERVICES 135471 CHAVIRA TREE TRIMMING 740 SHEEP CREEK ROAD BATTLEMOUNTAIN NV 89820 TREE TRIMMING 127400 4 X SALES OF ELECTRICITY 221000 34104578 34104578 PATRONAGE DIVIDENDS 221000 119343 108733 10610 34223921 130158 25282 104876 750 0 750 750 750 38246 31804 6442 6442 POLE ATTACHMENT INCOME 221000 222541 222541 INTERNET SERVICE 517000 146811 146811 SECURITY SYSTEMS 561700 4022 4022 373374 34734645 34219753 186725 328167 X 10481 819 2029274 548637 1922932 216229 554009 168791 836220 2014420 PURCHASED POWER 24146285 DISTRIBUTION EXPENSE 878539 ADMIN & GENERAL EXPENSE 688390 CONSUMER EXPENSE 390897 818731 35224654 3736147 5558047 555695 2674082 4297236 4868394 1668 87717 73909903 36241194 37452934 37668709 4297692 3862995 179304 50520676 54719944 3298636 4301039 665513 712250 15286694 17440650 1857488 2186873 21108331 24640812 X 655609 690506 0 0 28756736 29388626 29412345 30079132 50520676 54719944 X -490009 1156796 X X 0 1 X 0 0 0 1 X 377801 377801 4775879 2321628 2454251 67376350 33919566 33456784 1379873 1379873 37668709 PATRONAGE CAPITAL - CFC 878046 C PATRONAGE CAPITAL - CRC 6573 C PATRONAGE CAPITAL - NISC 17612 C PATRONAGE CAPITAL - NRTC 99714 C PATRONAGE CAPITAL - FEDERATED 155629 C PATRONAGE CAPITAL - DESERET GENERATION & TRANSMISSION 1948192 C CAPITAL TERM CERTIFICATES - CFC 583314 C INVESTMENT IN MEMBERSHIPS 11000 C ENERGY CONSERVATION LOANS 61915 C MEMBER CAPITAL SECURITIES - CFC 101000 C 3862995 CONSUMER DEPOSITS 632148 DEFERRED CREDITS 1554725 2186873 X 34514095 0 34514095 220550 220550 34734645 32974830 0 32974830 2249824 2249824 35224654 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, 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 220,550. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 220,550. PATRONAGE CAPITAL ASSIGNABLE 2,029,274. 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. SCHEDULE D 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. X X X X 0 0 0 RANDY EWELL GM/CEO 176057 0 10525 0 13156 0 23400 0 28879 0 252017 0 0 0 KEVIN ROBISON ASST GM 131576 0 13500 0 11664 0 17756 0 29824 0 204320 0 0 0 BILL RICCI OPERATIONS MANAGER 112402 0 2700 0 6840 0 15176 0 29155 0 166273 0 0 0 JESSE MURDOCK ENGINEERING MANAGER 109548 0 2700 0 7661 0 15176 0 32138 0 167223 0 0 0 JOSEPH PINTAR FOREMAN/LINEMAN 89487 0 17667 0 6015 0 12058 0 28082 0 153309 0 0 0 MITCHELL MCVIARS FOREMAN/LINEMAN 86309 0 21445 0 1208 0 12000 0 30769 0 151731 0 0 0 KAYSIE EWELL FAMILY RELATIONSHIP 36865 KAYSIE EWELL RECEIVED COMPENSATION AS AN EMPLOYEE OF THE COOPERATIVE. SHE AND OFFICER, RANDY EWELL, ARE FAMILY MEMBERS PER THE 990 DEFINITION OF FAMILY MEMBERS. 0 FORM 990, PART VI, SECTION A, LINE 2 A BUSINESS RELATIONSHIP EXISTS BETWEEN JERALD ANDERSON, BOARD PRESIDENT, RICK HENDRIX, BOARD DIRECTOR, AND RANDY EWELL, GENERAL MANAGER. ALL THREE INDIVIDUALS SERVE 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 THE BYLAWS OF THE COOPERATIVE WERE AMENDED AS FOLLOWS: SECTION 5.07.1, SECRETARY, WAS AMENDED TO INCLUDE SUBSECTION (I), WHICH STATES "IN THE ABSENCE OF THE SECRETARY THE BOARD OF DIRECTORS SHALL APPOINT A DIRECTOR, WITH THE CONSENT OF THE DIRECTOR, TO PERFORM THE DUTIES OF SECRETARY, AND, WHEN SO ACTING, SUCH DIRECTOR SHALL HAVE ALL THE POWERS OF AND BE SUBJECT TO ALL THE RESTRICTIONS SET FORTH IN THIS SECTION 5.07.1 FOR THE SECRETARY". SECTION 5.08.1, TREASURER, WAS AMENDED TO INCLUDE SUBSECTION (D), WHICH STATES "IN THE ABSENCE OF THE TREASURER THE BOARD OF DIRECTORS SHALL APPOINT A DIRECTOR, WITH THE CONSENT OF THE DIRECTOR, TO PERFORM THE DUTIES OF TREASURER, AND, WHEN SO ACTING, SUCH DIRECTOR SHALL HAVE ALL THE POWERS OF AND BE SUBJECT TO ALL THE RESTRICTIONS SET FORTH IN THIS SECTION 5.08.1 FOR THE TREASURER". ARTICLE X, SECTION 10.04, PAYMENT OF CAPITAL CREDITS AND UNCLAIMED CPAITAL CREDITS, SUBSECTION 10.04.03 WAS AMENDED TO STATE "IN THE STATE OF UTAH, THE COOPERATIVE SHALL RETAIN CAPITAL CREDITS GIVEN TO ITS MEMBERS THAT REMAIN UNCLAIMED FOR A PERIOD OF THREE YEARS AFTER THE END OF THE YEAR IN WHICH THE CREDIT IS GIVEN. THE COOPERATIVE SHALL USE THE RETAINED CAPITAL CREDIT TO (A) PAY ALL OR A PORTION OF A LOW-INCOME INDIVIDUAL'S UTILITY BILLS; (B) PROVIDE SCHOLARSHIPS TO GRADUATING HIGH SCHOOL SENIORS IN THE AREA WHERE THE COOPERATIVE PROVIDES SERVICES IN THE STATE OF UTAH; (C) PROVIDE FINANCIAL ASSISTANCE TO, IN THE AREA WHERE THE COOPERATIVE PROVIDES SERVICES IN THE STATE OF UTAH, TO: (I) A SCHOOL; (II) A NON-PROFIT ORGANIZATION OR (III) A COMMUNITY ORGANIZATION. THE COOPERATIVE SHALL ESTABLISH CRITERIA FOR RECIPIENTS OF THE FINANCIAL ASSISTANCE DESCRIBED IN THIS SECTION THAT ARE BASED ON: (A) A RECIPIENT'S FINANCIAL OR OTHER NEEDS; AND (B) THE RECIPIENTS COMMUNITY'S INTEREST". 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 FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION FOR DISCUSSING ITEMS OF A SENSITIVE AND CONFIDENTIAL NATURE. ITEMS DISCUSSED IN EXECUTIVE SESSION ARE NOT DOCUMENTED. HOWEVER, ACTIONS TAKEN BY THE BOARD AFTER EXECUTIVE SESSIONS ARE ADJOURNED ARE FULLY DOCUMENTED IN THE WRITTEN MINUTES. 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 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 COMPARE COMPENSATION FROM OTHER COOPERATIVE'S FORMS 990 AND LOOK AT OTHER EXTERNAL WRITTEN CONTRACTS OF SIMILARLY SITUATED GENERAL MANAGERS AND OFFICERS, WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. A COMPENSATION SURVEY IS ALSO EMPLOYED THAT SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN NEVADA AND THE NATION. THE BOARD AND THE GENERAL MANAGER USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICERS AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEVADA AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENT 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 AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE RUS. THE UNIFORM SYSTEM OF ACCOUNTING 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 $ 2,471,569 LESS DIRECTORS FEES REPORTED ON 1099-MISC (92,300) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (99,859) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 42,195 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 651,614 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 204,337 TOTAL WAGES ACCRUED AND/OR PAID $ 3,177,556 FORM 990, PART IX, LINE 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OUTSIDE SERVICES EMPLOYED $ 174,359 INSURANCE 109,279 MAINTENANCE OF GENERAL PLANT 307,775 REGULATORY COMMISSION EXPENSE 1,003 MISCELLANEOUS GENERAL EXPENSE 95,971 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 688,390 FORM 990, PART IX, LINE 24E OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: BBQ EXPENSES $ 452 INTERNET EXPENSE 122,087 SECURITY SYSTEM EXPENSE 1,768 SALES EXPENSE 54,594 TAX EXPENSE - OTHER 559,230 TRANSMISSION EXPENSE 80,600 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 818,731 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, SPONSORSHIPS 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 2,029,274. PATRONAGE CAPITAL RETIRED - TOTAL -907,374. PATRONAGE CAPITAL RETIRED - DISCOUNT 34,896. 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.