2016-10-25T13:41:36-05:00 2015-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2015-01-01 850027414 CENTRAL VALLEY ELECTRIC COOPERATIVE INC CENT 5757463571 PO BOX 230 ARTESIA NM 88211 CHARLES PINSON EXECUTIVE VICE PRESIDENT 5757463571 2016-10-20 1 Matt R Willis P00419741 8067473806 2016-10-20 X 2015 2017-02-10 21:41:12Z CHARLES PINSON PO BOX 230 ARTESIA NM 88211 70665179 0 X WWW.CVECOOP.ORG X 1937 NM TO PROVIDE ELECTRIC ENERGY TO RURAL AREAS AT COST ON A COOPERATIVE BASIS 7 7 103 0 0 0 0 0 74799178 70217353 541581 412180 38273 35646 75379032 70665179 11834 9241 12320524 12232098 5135807 6017360 0 0 0 57910867 52406480 75379032 70665179 0 0 166457362 180719993 70866380 74413827 95590982 106306166 CENTRAL VALLEY ELECTRIC IS A MEMBER-FOCUSED ELECTRIC COOPERATIVE DEDICATED TO PERSONALIZED QUALITY SERVICE FOR ITS MEMBERS AND THE ECONOMIC VITALITY IN THE SURROUNDING COMMUNITIES. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 15,361 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 0 0 1 0 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 1 52 0 103 1 0 0 0 0 0 72333401 672054 0 X 7 7 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 0 1 1 0 X CHARLES PINSON 5757463571 1403 N 13TH STREET ARTESIA NM 88211 X DARRELL ATKINS PRESIDENT (1/2015 - 2/2015) 8.00 X X 788 0 0 CHARLES WAGNER PRESIDENT 7.12 0.50 X X 25671 0 0 MICHAEL BENNETT VICE PRESIDENT 6.47 0.50 X X 25716 0 0 WESLEY PILLEY SECRETARY/TREASURER 7.10 0.50 X X 25552 0 0 JACK CASE TRUSTEE 3.35 X 24703 0 0 JASON CIEMPA TRUSTEE 5.61 X 25505 0 0 LARRY BENEDICT TRUSTEE 6.61 X 26043 0 0 STEVE SPENCE TRUSTEE (3/2015 - 12/2015) 7.31 X 19261 0 0 CHARLES PINSON EXECUTIVE VICE PRESIDENT 43.45 0.50 X 179006 0 133569 MICHAEL ANDERSON ASSISTANT MANAGER 41.02 X 129812 0 112232 PHILIP RUSSELL MCKEE OPERATIONS ENGINEER 40.00 X 121353 0 96214 GARY CONKLIN LINE SUPERINTENDENT 40.00 X 107261 0 121984 WADE NELSON ENGINEER 40.00 X 110201 0 62347 820872 0 526346 5 0 1 0 DEANS INC 409 COMMERCE ROAD ARTESIA NM 88210 CONSTRUCTION CONTRACT - LABOR 2181811 ARC POWER-LINE CONSTRUCTION PO BOX 1745 ARTESIA NM 88211 CONSTRUCTION CONTRACT - LABOR 1593366 SGS ENGINEERING LLC 401 50TH STREET LUBBOCK TX 79404 CONSULTING ENGINEERS 392977 CARIBOU CONSTRUCTION 124 BRIDON WAY JEROME ID 83338 CONSTRUCTION CONTRACT - LABOR 306115 ELITE TRANSMISSION & DISTRIBUTION ELECTR 7699 CANYON DRIVE AMARILLO TX 79110 CONSTRUCTION CONTRACT - LABOR 264300 8 X ELECTRIC ENERGY 221000 67744777 67744777 POWER SUPPLY EQUITY 221000 2160198 2160198 PATRONAGE DIVIDENDS 221000 312378 312378 70217353 412180 412180 7037 0 7037 7037 6831 206 POLE ATTACHMENT INCOME 221000 28609 28609 28609 70665179 70224184 0 440995 X 9241 12232098 485814 3710719 550485 981120 289222 943993 7545887 COST OF PURCHASED POWER 42008267 ADMIN AND GEN EXPENSE 1325956 CUSTOMER ACCOUNTS 554456 27921 70665179 X 6244055 5880149 2604580 2628074 4365887 4307123 140264 108992 3165399 2771099 1637954 1069405 174682090 26908922 134432782 147773168 1688 1688 13864753 16180295 166457362 180719993 5435971 5617513 46278789 48715380 19151620 20080934 70866380 74413827 X 0 0 0 0 95590982 106306166 95590982 106306166 166457362 180719993 X 0 10715184 X X 0 0 0 225067 225067 13812903 1765706 12047197 148914560 25143216 123771344 11729560 11729560 147773168 CAPITAL CREDITS - COBANK 725875 C FEDERATED RURAL ELECTRIC INSURANCE 201903 C CAPITAL CREDITS - PVT COOPERATIVE 774 C CAPITAL CREDITS - NRTC 94836 C CAPITAL CREDITS - NRUCFC 24544 C CAPITAL CREDITS - LEACO RURAL TELEPHONE 12805 C OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS 2111 C CAPITAL CREDITS - NISC 44237 C WFEC G&T - DONATED CAPITAL 14939310 C WFEC G&T 133900 C 16180295 CUSTOMER DEPOSITS 160482 UNCLAIMED PATRONAGE CAPITAL CHECKS 444824 DEFERRED CREDITS 17804321 ACCUMULATED PROVISION FOR PENSIONS AND BENEFITS 310226 FUEL COST ADJUSTMENT 1361081 20080934 X 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 THEIR TAX POSITIONS 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. SCHEDULE D Part VII: THE AMOUNT OF INVESTMENTS - OTHER SECURITIES ON FORM 990, PAGE 11, PART X, LINE 12 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 VII HAS BEEN LEFT BLANK. X X 1 1 X X 0 0 0 CHARLES PINSON EXECUTIVE VICE PRESIDENT 159235 0 14487 0 5284 0 108981 0 24588 0 312575 0 0 0 MICHAEL ANDERSON ASSISTANT MANAGER 114912 0 6571 0 8329 0 87033 0 25199 0 242044 0 0 0 PHILIP RUSSELL MCKEE OPERATIONS ENGINEER 111892 0 2953 0 6508 0 84662 0 11552 0 217567 0 0 0 GARY CONKLIN LINE SUPERINTENDENT 98033 0 4278 0 4950 0 95817 0 26167 0 229245 0 0 0 WADE NELSON ENGINEER 100747 0 4254 0 5200 0 38406 0 23941 0 172548 0 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS - PURSUANT TO APPLICABLE TRAVEL POLICIES, THE COOPERATIVE WILL REIMBURSE THE GENERAL MANAGER AND TRUSTEES FOR THE COST OF HIS/HER SPOUSE TO ACCOMPANY HIM/HER ON OFFICIAL BUSINESS OF THE COOPERATIVE. HEALTH CLUB DUES - PURSUANT TO THE COOPERATIVE'S WELLNESS PROGRAM, THE COOPERATIVE WILL REIMBURSE A PORTION OF HEALTH CLUB DUES FOR EMPLOYEES OR TRUSTEES. 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 CONTRIBUTION TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS AND REPRESENT THE TRUE COST TO THE COOPERATIVE. CHARLES PINSON ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $105,293 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,688 TOTAL REPORTED IN COLUMN C: $108,981 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (105,293) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 42,693 EXPENSE TO COOPERATIVE $ 46,381 MICHAEL ANDERSON ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 84,374 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,659 TOTAL REPORTED IN COLUMN C: $ 87,033 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (84,374) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 30,724 EXPENSE TO COOPERATIVE $ 33,383 PHILIP RUSSELL MCKEE ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 82,414 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,248 TOTAL REPORTED IN COLUMN C: $ 84,662 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (82,414) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 26,472 EXPENSE TO COOPERATIVE $ 28,720 GARY CONKLIN ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 93,551 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,266 TOTAL REPORTED IN COLUMN C: $ 95,817 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (93,551) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 26,044 EXPENSE TO COOPERATIVE $ 28,310 WADE NELSON ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,169 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,237 TOTAL REPORTED IN COLUMN C: $ 38,406 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (36,169) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 25,893 EXPENSE TO COOPERATIVE $ 28,130 DEANS INC ENTITY MORE THAN 35% OWNED BY FAMILY MEMBER OF DIRECTOR ATKINS. 2181811 DEANS, INC. IS A CONTRACTOR PROVIDING ELECTRICAL DISTRIBUTION LINE CONSTRUCTION AND MAINTENANCE WORK. CONTRACTS ARE AWARDED THROUGH A COMPETITIVE BID PROCESS. THE RELATED DIRECTOR RECUSES HIMSELF FROM VOTING ON SUCH CONTRACTS. 0 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. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS; 2. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE; 3. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION; 4. AMENDMENTS TO THE ARTICLES OF INCORPORATION; AND 5. AMENDMENTS TO THE BYLAWS. Form 990, Part VI, Section A, line 8b EXECUTIVE SESSION MINUTES FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION FOR DISCUSSING ITEMS OF A SENSITIVE AND CONFIDENTIAL NATURE. WHEN THIS OCCURS MANAGEMENT AND OTHERS IN ATTENDANCE ARE REMOVED FROM THE MEETING ROOM. 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 11 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 THE FILING OF THE FORM 990. Form 990, Part VI, Section B, line 12c TRUSTEES MUST DISCLOSE TO THE BOARD PRESIDENT AND EMPLOYEES MUST DISCLOSE TO THE GENERAL MANAGER ANY SITUATION, WHICH, IN HIS OR HER OPINION, VIOLATES, MAY VIOLATE, OR COULD APPEAR TO VIOLATE THE INTENT OF THIS POLICY. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S EXECUTIVE VICE PRESIDENT. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEW MEXICO AND THE NATION. THE EXECUTIVE VICE PRESIDENT USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE ORGANIZATION'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEW MEXICO AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE WILL PROVIDE 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 VI, Section A, Line 1 THE COOPERATIVE HAS 7 BOARD MEMBERS; ALL 7 ARE ALLOWED TO VOTE, HOWEVER THE BOARD PRESIDENT ONLY VOTES IN THE CASE OF A TIE. 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 THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND THE INSURANCE PAID ON BELHALF OF AND FOR THEIR BENEFIT. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. Form 990, Part VII, Section A THE BOARD OF DIRECTORS CONSIDER THE EXECUTIVE VICE PRESIDENT TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE EXECUTIVE VICE PRESIDENT IS LISTED AS AN EMPLOYEE OFFICER. Form 990, Part VIII, Line 2 PATRONAGE DIVIDENDS 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 VIII, LINE 2 THE COOPERATIVE AND WESTERN FARMERS ELECTRIC COOPERATIVE (WFEC), A RURAL ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, HAVE ENTERED INTO A WHOLESALE POWER CONTRACT WHERE WFEC WILL PROVIDE THE COOPERATIVE WITH ELECTRIC POWER. AS PART OF THE AGREEMENT THE COOPERATIVE MUST CONTRIBUTE EQUITY TO WFEC IN A MANNER AND AMOUNT SUCH THAT, AS OF JUNE 1, 2026, THE COOPERATIVE HAS CONTRIBUTED EQUITY TO WFEC COMPARABLE TO THE AMOUNT OF EQUITY CONTRIBUTED TO WFEC BY PRIOR EXISTING MEMBERS. THE PURPOSE OF THE CONTRIBUTION IS TO OBTAIN A POWER SUPPLY IN ORDER TO MEET THE TERMS OF THE WHOLESALE PURCHASE CONTRACT. PURSUANT TO APPROVAL BY THE NEW MEXICO PUBLIC REGULATION COMMISSION, THE EQUITY CONTRIBUTION IS RECOVERED MONTHLY FROM THE MEMBERS THROUGH THE SALE OF ELECTRICITY. 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 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 $ 4,196,533 LESS DIRECTORS FEES REPORTED ON 1099-MISC (173,239) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (133,569) PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,968,834 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 815,110 TOTAL WAGES ACCRUED AND/OR PAID $ 6,673,669 Form 990, Part IX, Line 24 THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24 OFFICE AND SUPPLIES $ 91,059 OFFICE EXPENSE - JANITOR 71,084 OUTSIDE SERVICES 125,901 INJURIES AND DAMAGES 81,107 REGULATORY COMMISSION EXPENSE 361,697 DIRECTORS EXPENSES 68,429 ADVERTISING 39,198 ANNUAL MEETING 32,706 DUES & MEMBERSHIP FEES 128,998 CAPITAL CREDITS 9,149 RENTS 31,937 MAINTENANCE OF GENERAL PLANT 38,459 MAINTENANCE OF SCADA EQUIPMENT 17,344 MISCELLANEOUS GENERAL EXPENSE 228,888 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $1,325,956 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 2015 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 X, LINES 17 AND 25 THE COOPERATIVE PREVIOUSLY INCLUDED ACCRUED EXPENSES (COMPRISED OF "ACCRUED EMPLOYEE COMPENSATED ABSENCES", "ACCRUED TAXES", AND "OTHER CURRENT ACCRUED LIABILITES") AS COMPONENTS OF OTHER LIABILITIES ON LINE 25 OF PART X. HOWEVER, FOR THE 2015 CALENDAR YEAR, THE COOPERATIVE BEGAN REPORTING THESE AMOUNTS ON LINE 17 IN ACCORDANCE WITH FORM 990 INSTRUCTIONS. TO INCREASE CONSISTENCY, ACCRUED EXPENSES IN THE AMOUNT OF $615,516 FOR "ACCRUED EMPLOYEE COMPENSATED ABSENCES", $733,121 FOR "ACCRUED TAXES AND $22,270 FOR "OTHER CURRENT ACCRUED LIABILITES" FOR THE 2014 CALENDAR YEAR HAVE BEEN RECLASSED FROM LINE 25 TO LINE 17. Form 990, Part XI, line 9: OTHER COMPREHENSIVE INCOME PROVISION FOR PENSIONS & BENEFITS -10,909. PATRONAGE CAPITAL ASSIGNABLE 12,232,098. PATRONAGE CAPITAL RETIRED -1,506,005. Form 990, Part XII, Line 2B AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FISCAL YEAR END OF JUNE 30TH. THE TAX RETURN HAS BEEN AND CONTINUES TO BE PREPARED BASED ON A CALENDAR YEAR END OF DECEMBER 31. 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. CENTRAL VALLEY ELECTRIC EDUCATION FOUNDATION PO BOX 230 ARTESIA NM 88211 850323120 SCHOLARSHIPS TO MEMBERS AND CHILDREN TO GO TO NEW MEXICO COLLEGE/UNIVERSITY NM 501(C)(3) PF CENTRAL VALLEY ELECTRIC COOPERATIVE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 CENTRAL VALLEY ELECTRIC EDUCATION FOUNDATION NA - LESS THAN 50000 O EMPLOYEE HOURS X HOURLY RATE