2016-11-15T13:55:17-06:00 2015-12-31 450250958 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2015-01-01 450217439 McKenzie Electric Cooperative Inc MCKE 7014449288 PO Box 649 Watford City ND 588540649 John Skurupey CEO 7014449288 2016-10-28 1 LISA CHAFFEE CPA P00193453 7012398500 2016-10-28 2015 2017-02-10 21:41:12Z John Skurupey PO Box 649 Watford City ND 588540649 175274909 0 X http://www.mckenzieelectric.com X 1945 ND The tax-exempt purpose of the Organization is to deliver electricity to members. 9 9 73 0 0 0 0 0 129463661 174871203 229414 336698 -38659 -4467 129654416 175203434 11892 8980 25542799 29959606 4797920 5736080 0 0 0 99121945 139270413 129474556 174975079 179860 228355 323700983 334935220 208176241 190100373 115524742 144834847 To make available and to serve all consumers within its boundaries with electric energy.To ensure an adequate source of central station power and work to make that energy as reliable as possible at the lowest possible cost. 0 0 The Cooperative delivers electric energy to members. In 2015 the Cooperative served 4,013 members. 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 0 0 0 0 0 0 0 1 1 0 0 1 59 0 1 73 1 0 0 0 0 0 339145290 367373 0 X 9 9 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 0 1 1 1 0 X Jamie Cross 7014449288 PO Box 649 Watford City ND 588540649 X Clayton Monsen Chairperson 5.10 0.10 X X 11633 0 0 Donald Link Vice Chairperson 6.80 0.10 X X 21704 0 0 Rondee Hanna Secretary/Treasurer 5.60 0.10 X X 20205 0 0 Travis Thompson Director At Large 5.90 0.10 X 18804 0 0 Cameron Wahlstrom Director 3.60 0.10 X 11997 0 0 Glen Houghton Director 5.40 0.10 X 19104 0 0 Dennis Johnson Director 4.70 0.10 X 10002 0 0 Ray Tescher Director 8.20 0.10 X 23954 0 0 Tim Wasem Director 3.80 0.10 X 19055 0 0 John Skurupey CEO 46.70 0.10 X 208320 0 71217 Gary Highley COO 40.00 0.10 X 115945 0 3114 Jamie Cross Business Manager 47.40 0.10 X 99306 0 12444 Steven Lautenschlager Contractor Management 43.70 0.00 X 113484 0 7451 Dwite Brew Key Accounts/Energy Serv. 48.30 0.00 X 113196 0 5546 James Hansen Operations Manager 46.40 0.00 X 106513 0 15121 Matthew Preszler Journeyman Lineman 48.60 0.00 X 108589 0 9720 Colt Rangen Journeyman Lineman 46.90 0.00 X 105879 0 12312 1127690 0 136925 7 0 1 0 HDR Inc PO Box 3480 Omaha NE 68103 Engineering Services 23135144 Probst Electric Inc 875 South 600 West Heber City UT 84032 Line Construction 19700446 4 T Construction Inc PO Box 250 Emmet ID 83617 Line Construction 6998681 Highmark Inc PO Box 491 Black Hawk SD 57718 Substation Construction 6811308 Electrical Consultants Inc 3521 Gabel Road Billings MT 59102 Engineering Services 6582549 24 Electric Revenues 221000 168922208 168922208 Capital Credits 221000 5930748 5930748 NDSBI K-1 Income 900099 -274 -274 18521 18521 174871203 214573 214573 66991 71475 -4484 -4484 -10291 5807 122125 0 122125 122125 122125 17 0 17 17 175203434 174860929 0 342505 X 8980 29959606 690096 4183348 515662 346974 1400456 8868037 Cost of Power 122578982 Distribution 6630896 Admin & General 2296368 Property Taxes 1551916 -4056242 174975079 28838391 26741952 40381196 87456558 18474761 24724421 1993553 1485630 8802659 12977216 68165 23052 222438335 68182922 203200317 154255413 21941751 27270788 190 190 323700983 334935220 29599447 22400373 1054 1056 31849093 41249617 146726647 126449327 208176241 190100373 X 0 0 77157441 105933043 38367301 38901804 115524742 144834847 323700983 334935220 X 228355 29081750 X 0 1 X 1 0 0 1 X 2192251 2192251 2158929 1398279 760650 150108412 66784643 83323769 67978743 67978743 154255413 Patronage Capital Credits - Power Suppliers 23830878 C CFC Investment 79107 C Patronage Capital Credits - Other Assoc. Companies 2360803 C Special Funds - Reserved Cash 1000000 C 27270788 Deferred Credits 124666537 Post-Retirement Benefit Obligations 2685 Power Cost Reserve 1313638 Plant Retirement Reserve 466467 126449327 X 175133456 -70252 -70252 175203708 -274 -274 175203434 144946606 0 144946606 30028473 30028473 174975079 Part IV, Line 2b: The members of the Cooperative can elect to round up their monthly electric bill to the next dollar. These funds collected from the membership are held in a Cooperative account until they are released to the McKenzie Electric Operation Roundup, Inc. These funds are transferred directly to the Operation Round Up on a monthly basis. Funds that exist at the end of year are a result of a timing difference in the receipt of the funds and the release of them to the Operation Round Up. For the year ended December 31, 2015 the account held $1,056. Part X, Line 2: The Cooperative is exempt from income taxes under Section 501(c)(12). The Cooperative files Federal Form 990T for its Unrelated Business Taxable Income (UBTI). The Cooperative complies with the provisions of Accounting and Standards Codification (ASC) 740-10. As of December 31, 2015, the unrecognized tax benefit accrual was zero. The Cooperative evaluates its tax positions that have been taken or are expected to be taken on income tax returns to determine if an accrual is necessary for uncertain tax positions. The Cooperative will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if such penalties and interest are incurred. The Cooperative is no longer subject to Federal tax examinations by tax authorities for years before 2012. The Cooperative undergoes an annual analysis of various tax positions, assessing the likelihood of those positions being upheld upon examination with relevant tax authorities. Part XI, Line 2d - Other Adjustments: Expenses Included in Revenue on Financial Statements -68,867. NDSBI Loss per Financials -1,385. Part XI, Line 4b - Other Adjustments: NDSBI Loss per K-1 -274. Part XII, Line 4b - Other Adjustments: Patronage Capital Credits Allocated During Current Year 29,959,606. Expenses Included in Revenue on Financial Statements 68,867. X X X 0 0 0 John Skurupey CEO 206547 0 0 0 1773 0 69264 0 1953 0 279537 0 0 0 Schedule J, Part II, column C, Deferred Compensation: Included in other compensation is the estimated current year increase in the actuarial value of the defined benefit plan. These amounts do not represent any current year contributions to the plan. They are estimates of the increase in the actuarial value of the plans received from the NRECA. The current year expense and the increase in actuarial value for each employee is reflected in the Schedule O statement for Form 990, Part VII, column F. Form 990, Part VI, Section A, line 6 Each Member has one vote. Form 990, Part VI, Section A, line 7a Members elect the Board of Directors. Form 990, Part VI, Section A, line 7b Changes to the By-Laws are subject to the approval of the Members. Form 990, Part VI, Section A, line 8b There are no committees with the authority to act on behalf of the full governing body. Form 990, Part VI, Section B, line 11 The Form 990 was presented at a board meeting. The CEO and Business Manager reviewed the Form 990 prior to it being presented to the Board prior to be filed with the IRS. Form 990, Part VI, Section B, line 12c Prior to becoming a Board Member, an individual must disclose any potential conflicts. A nominating committee determines if any of the disclosures by a prospective candidate represent a conflict. Board Members are required to disclose any conflicts that arise during their tenure. Annually there is a discussion when the Board is asked to complete the relationship letters which are completed for the Form 990. The CEO and Business Manager are subject to the employee Conflict of Interest Policy. Anyone with a conflict must abstain from voting on the issue in question. Form 990, Part VI, Section B, line 15 The process for determining the compensation for the CEO and Business Manager includes the review of state wide salary data through NDAREC and consulting, as needed, by the NRECA consulting service. Compensation for all management positions and union contracts are approved by the Board. The process for the CEO takes place annually in the month of May. The process for the Business Manager takes place annually in the month of August. Form 990, Part VI, Section C, line 19 The financial statements are presented at the annual meeting held by McKenzie Electric Cooperative, and they are also in the Dakota Living Magazine. Copies of the governing documents, conflict of interest policy, and financial statements are available upon request. Form 990, Part VII, Section A, Column (F) Included in column "F", Estimated Amount of Other Compensation, is the estimated annual increase in the actuarial value of the defined benefit plan. The estimated increase for John Skurupey is $63,009, Jamie Cross $6,650, James Hansen $10,385, Matthew Preszler $3,537, and Colt Rangen $9,912. Dwite Brew and Steven Lautenschlager were not plan participants at the end of 2015. This amount is an estimate in the increase of the value of the plan and is not a current year expense of the Cooperative. The current year expense for this defined benefit plan was $74,781, $18,171, $24,952, $8,990, and $21,139 for John Skurupey, Jamie Cross, and James Hansen, Matthew Preszler, and Colt Rangen, respectively. Dwite Brew and Steven Lautenschlager did not participate in the plan in 2015. Form 990, Part IX, Allocated Costs, Line 24e The labor, pension and payroll taxes reported on lines 5-10 are already included in distribution expense, administrative & general expense and customer expense. Therefore, these amounts are being subtracted out as an other deduction on line 24e in the amount of $(5,736,080). Form 990, Part IX, Line 4 The Cooperative has interpreted the instructions to Part IX, Line 4, to mean patronage capital allocated for the year, rather than patronage capital retired. This is consistent with the Bylaws of the Cooperative. Form 990, Part XI, line 9: Retired Capital -1,231,679. Patronage Capital Credits Allocated During Current Year 29,959,606. Retired Capital Credits Gain 354,934. NDSBI Book to Tax Difference -1,111. McKenzie Electric Operation Roundup Inc PO Box 649 Watford City ND 588540649 311681245 Charitable Purposes ND 501(c)(3) Line 7 McKenzie Electric Cooperative Inc 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0