2015-10-30T11:13:11-05:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 860059728 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE INC SULP 5203842221 350 N HASKELL WILLCOX AZ 85643 CREDEN HUBER CEO/GENERAL MANAGER 5203842221 2015-10-12 1 William M Miller P00439459 8067473806 2015-10-12 X 2014 2016-04-25 22:37:26Z CREDEN HUBER 350 N HASKELL WILLCOX AZ 85643 106820507 0 X WWW.SSVEC.ORG X 1938 AZ TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 10 10 245 0 248606 162454 0 0 109514136 105580056 175934 171224 1011321 954657 110701391 106705937 209293 213974 5373075 8214283 11227464 12381044 0 0 0 93891559 85896636 110701391 106705937 0 0 285519336 288046908 196354857 190931006 89164479 97115902 X WE SHALL BE THE VENDOR OF CHOICE FOR ENERGY AND OTHER SERVICES, BY PROVIDING THE BEST VALUE TO OUR MEMBERS THROUGH COMPETITIVE PRICING, EXCEPTIONAL CUSTOMER SERVICE, AND SUPERIOR COMPETENCE. WE RECOGNIZE THE VALUE OF THE EMPLOYEES AND ACKNOWLEDGE THEIR INITIATIVE, INTEGRITY, AND COMMITMENT TO OUR CUSTOMERS' SATISFACTION. WE SHALL CONTINUE OUR STRONG COMMITMENT TO OUR COMMUNITIES AND UPHOLD THE HIGHEST DEGREE OF CORPORATE INTEGRITY. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 51,047 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. ELECTRIC DISTRIBUTION SERVICES (THE DELIVERY, BUT NOT THE SALE OF ELECTRICITY, TO A CUSTOMER OVER LINES OWNED, OPERATED AND MAINTAINED BY THE COOPERATIVE) WERE PROVIDED TO THE CLASS B MEMBERSHIP ON A COOPERATIVE BASIS. 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 1 0 1 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 1 492 0 245 1 1 1 0 0 0 0 97822597 6868816 0 X 10 10 0 0 1 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 AZ X CREDEN HUBER 5203842221 350 N HASKELL AVE WILLCOX AZ 85643 X KATHRYN THATCHER PRESIDENT 10.00 1.00 X X 11825 0 0 PAT ENGLISH VICE PRESIDENT 2.00 1.00 X X 13325 0 0 HAROLD HINKLEY SECRETARY 6.00 1.00 X X 9075 0 0 DANIEL BARRERA TREASURER 9.00 1.00 X X 6450 0 0 LESLIE THOMPSON DIRECTOR 1/14 - 4/14 6.00 1.00 X 5300 0 0 JOSEPH FURNO DIRECTOR 1/14 - 4/14 6.30 1.00 X 3625 0 0 DONALD GENE MANRING DIRECTOR 7.80 1.00 X 11875 0 0 DONALD KYTE DIRECTOR 5.00 1.00 X 7525 0 0 DAVID LUNA DIRECTOR 6.00 1.00 X 11550 0 0 CURTIS NOLAN DIRECTOR 3.00 1.00 X 4825 0 0 SANDRA HUNTINGTON DIRECTOR 1/14 - 4/14 10.70 1.00 X 6825 0 0 EDWARD MOLINA DIRECTOR 2.30 1.00 X 8525 0 0 THOMAS GOODMAN DIRECTOR 4/14 - 12/14 6.00 1.00 X 8700 0 0 CREDEN HUBER CEO/GENERAL MANAGER 48.00 X 361685 0 198823 KIRBY CHAPMAN CFO & ADMIN OFFICER 45.00 X 213936 0 64350 ANSELMO TORRES CHIEF OPERATIONS & ENGINEE 50.00 X 214433 0 108708 JACK BLAIR CHIEF MEMBER SERVICES 50.00 X 179860 0 74480 RON OROZCO ENGINEERING MANAGER 42.00 X 136109 0 60946 ORSON GARNSEY IT MANAGER 44.00 X 128631 0 20997 JAMES GROSS CONTROLLER 43.00 X 122366 0 22362 LAINIE KELTNER CUSTOMER SERVICE MANAGER 43.00 X 119869 0 43204 ALVIE SMITH TECH SERVICES & FLEET MANAGER 46.00 X 118026 0 48367 1704340 0 642237 23 0 1 0 POWER ENGINEERS 3940 GLENBROOK DR HAILEY ID 83333 ENGINEERING & CONSULTING SERVICES 494426 OSG BILLING SERVICE PO BOX 5895 ENGLEWOOD NJ 07631 BILLING SERVICE 423363 LLOYD CONSTRUCTION 2180 N WILMONT RD TUSCON AZ 85712 CONSTRUCTION - DIRTWORK 280874 GONZALES CONSTRUCTION 4543 N 111TH GLEN PHOENIX AZ 85037 CONSTRUCTION - DIRTWORK 242867 ASPLUNDH PO BOX 827464 PHILADELPHIA PA 19182 TREE TRIMMING SERVICES 219740 16 X ELECTRICITY SALES 221000 99174300 99174300 PATRONAGE DIVIDENDS 221000 4320841 4320224 617 DISTRIBUTION SERVICES 221000 1474182 1474182 SERVICE FEES 221000 610733 610733 105580056 171224 171224 109 109 7347 699212 0 0 7347 699212 706559 706559 121455 114570 6885 6885 INTERNET COMMISSIONS 519100 228166 228166 OUTSIDE SERVICES 811000 12553 12553 TECH SERVICES 541900 208 208 177 177 241104 106705937 105579439 248606 877892 X 213974 8214283 1525700 6745988 1627591 1904237 577528 5053079 10692934 PURCHASED POWER 56681170 DISTRIBUTION EXPENSE 7551029 ADMIN & GENERAL EXP. 2726503 UNRELATED BUS. INC. TAX 96842 3095079 106705937 991037 2277833 321081 2322373 8420987 6434681 192525 135098 2644314 3174247 1915124 1964469 337960022 121553067 217412062 216406955 45114956 47376340 8507250 7954912 285519336 288046908 5958647 5122468 174016290 169714894 16379920 16093644 196354857 190931006 X 191620 192740 0 0 88972859 96923162 89164479 97115902 285519336 288046908 X 0 7951423 X X 0 0 1 1 2296554 2296554 12094772 4088436 8006336 314407579 117464631 196942948 9161117 9161117 216406955 PATRONAGE CAPITAL - AEPCO 39859791 C PATRONAGE CAPITAL - CFC 2467247 C PATRONAGE CAPITAL - NISC 53729 C PATRONAGE CAPITAL - NRTC 39379 C PATRONAGE CAPITAL - FEDERATED 372192 C PATRONAGE CAPITAL - CRC 16248 C COBANK EQUITY INVESTMENT 399462 C ASSOCIATED ORGANIZATIONS - GENERAL FUNDS 1010 C ASSOCIATED ORGANIZATIONS - GCSECA BLDG 190350 C CAPITAL TERM CERTIFICATES-CFC 3976932 C 47376340 CONSUMER DEPOSITS 2481299 ACCUMULATED PROVISION - PENSIONS & BENEFITS 2502954 OTHER CURRENT & ACCRUED LIABILITIES 7962427 DEFERRED CREDITS 3146964 16093644 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 ITS TAX POSITION 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 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. 0 IFMWRF COMMERCIAL SPONSORSHIP PROGRAM PO BOX 12100 FT HUACHUCA AZ 85670 860101982 501(C)(3) 20000 OPERATIONAL ASSISTANCE FOR FAMILY & MORALE, WELFARE AND RECREATION DEPARTMENT. SIERRA VISTA CHAMBER OF COMMERCE 21 EAST WILCOX DRIVE SIERRA VISTA AZ 85635 742586694 501(C)(6) 15000 SPONSORING LOCAL ACTIVITIES HOSTED BY THE CHAMBER OF COMMERCE. BENSON BOBCATS BOOSTER CLUB INC 360 S PATAGONIA STREET BENSON AZ 85602 861038547 501(C)(3) 6420 SUPPORT OF PRO WRESTLING FUNDRAISER. COCHISE EDUCATION FOUNDATION PO BOX 208 C/O ROBERT BLAKELY BISBEE AZ 85603 263735497 501(C)(3) 5350 SPONSORSHIP OF TEACHER OF THE YEAR BANQUET. NORTHERN COCHISE COMMUNITY HOSPITAL 901 W REX ALLEN DR WILLCOX AZ 85643 860208451 501(C)(3) 6500 SPONSOR FUNDRAISING EVENT REX ALLEN DAYS INC PO BOX 429 WILLCOX AZ 85644 510166786 501(C)(3) 5600 ANNUAL SPONSORSHIP AND QUEEN'S CROWN SPONSORSHIP THE SALVATION ARMY PO BOX 1838 SIERRA VISTA AZ 85636 941156347 501(C)(3) 5500 DONATION FOR NEW BUILDING COCHISE COLLEGE FOUNDATION 4190 W HWY 80 DOUGLAS AZ 85607 860211414 501(C)(3) 5250 SPONSOR ECONOMIC RESEARCH MULTICULTURAL EDUCATIONAL PROGRAMS INC 100 E EUCLID AVENUE SUITE 113 DES MOINES IA 50313 020703805 501(C)(3) 5500 DONATION FOR BLACK HISTORY MONTH, SUPPORT FOR EXHIBIT AND SUMMER PROGRAMS UNIVERSITY OF ARIZONA FOUNDATION 1111 N CHERRY AVE TUCSON AZ 85721 866050388 501(C)(3) 10000 WATER WISE PROGRAM DONATION 9 1 Schedule I, Part II 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. X 1 1 X X 0 0 0 CREDEN HUBER CEO/GENERAL MANAGER 311574 0 480 0 49631 0 192748 0 6075 0 560508 0 0 0 KIRBY CHAPMAN CFO & ADMIN OFFICER 164874 0 370 0 48692 0 59286 0 5064 0 278286 0 0 0 ANSELMO TORRES CHIEF OPERATIONS & ENGINEE 166378 0 170 0 47885 0 104701 0 4007 0 323141 0 0 0 JACK BLAIR CHIEF MEMBER SERVICES 150253 0 100 0 29507 0 73903 0 577 0 254340 0 0 0 RON OROZCO ENGINEERING MANAGER 133750 0 285 0 2074 0 58382 0 2564 0 197055 0 0 0 LAINIE KELTNER CUSTOMER SERVICE MANAGER 108142 0 1670 0 10057 0 42628 0 576 0 163073 0 0 0 ALVIE SMITH TECH SERVICES & FLEET MANAGER 103507 0 3190 0 11329 0 45867 0 2500 0 166393 0 0 0 FORM 990, 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. 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. CREDEN HUBER ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $184,948 401(K) EMPLOYER MATCH 7,800 TOTAL COLUMN C: 192,748 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (184,948) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 83,257 TOTAL COOPERATIVE CASH CONTRIBUTION 91,057 KIRBY CHAPMAN ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 53,686 401(K) EMPLOYER MATCH 5,600 TOTAL COLUMN C: 59,286 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (53,686) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 46,519 TOTAL COOPERATIVE CASH CONTRIBUTION 52,119 ANSELMO TORRES ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 99,143 401(K) EMPLOYER MATCH 5,558 TOTAL COLUMN C: 104,701 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (99,143) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 46,368 TOTAL COOPERATIVE CASH CONTRIBUTION 51,926 JACK BLAIR ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 69,159 401(K) EMPLOYER MATCH 4,744 TOTAL COLUMN C: 73,903 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (69,159) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 39,546 TOTAL COOPERATIVE CASH CONTRIBUTION 44,290 RON OROZCO ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $54,316 401(K) EMPLOYER MATCH 4,066 TOTAL COLUMN C: 58,382 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (54,316) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 36,756 TOTAL COOPERATIVE CASH CONTRIBUTION 40,822 LAINIE KELTNER ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $39,380 401(K) EMPLOYER MATCH 3,248 TOTAL COLUMN C: 42,628 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (39,380) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 27,014 TOTAL COOPERATIVE CASH CONTRIBUTION 30,262 ALVIE SMITH ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $42,686 401(K) EMPLOYER MATCH 3,181 TOTAL COLUMN C: 45,867 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (42,686) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 26,439 TOTAL COOPERATIVE CASH CONTRIBUTION 29,620 FEDERATED RURAL ELECTRIC INSURANCE EXCHANGE THE COOPERATIVE'S CEO/GM, CREDEN HUBER, SERVES ON FEDERATED'S BOARD 669466 THE COOPERATIVE OBTAINED INSURANCE THROUGH FEDERATED RURAL ELECTRIC INSURANCE EXCHANGE AND PAYS INSURANCE PREMIUMS TO FEDERATED RURAL ELECRIC INSURANCE. 0 Form 990, Part VI, Section A, line 4 THE BYLAWS WERE AMENDED TO STATE THAT UPON LEGAL SEPARATION OR DIVORCE OF THE HOLDERS OF A JOINT MEMBERSHIP, SUCH MEMBERSHIP SHALL CEASE AND NEW OR SEPARATE MEMBERSHIPS WILL BE OPENED FOR EACH MEMBER. BOTH INDIVIDUALS, IN SUCH INSTANCE, SHALL CONTINUE TO BE LIABLE FOR THE DEBTS DUE TO THE COOPERATIVE. THE BYLAWS WERE AMENDED TO STATE THAT MEMBERS SHALL VOTE BY U.S. MAIL OR APPROVED ELECTRONIC MEANS. THE BYLAWS WERE AMENDED TO STATE THAT ONLY NATURAL PERSONS THAT HAVE THE CAPACITY TO ENTER INTO LEGALLY BINDING CONTRACTS SHALL BE ELIGIBLE TO BECOME DIRECTORS. NO MEMBER SHALL BE ELIGIBLE TO BECOME OR REMAIN A DIRECTOR WHO: A. IS NOT A BONA-FIDE RESIDENT OF THE PARTICULAR DISTRICT, FOR AT LEAST ONE YEAR PRIOR TO THE ELECTION, FROM WHICH THE DIRECTOR IS ELECTED. F. WHO HAS BEEN CONVICTED OF A FELONY; G. WHO HAS HAD A CRIMINAL JUDGMENT ENTERED AGAINST HIM/HER BASED ON FRAUD, THEFT, DECEIT, MISREPRESENTATION, CONSPIRACY, BREACH OF TRUST, BREACH OF FIDUCIARY DUTY, OR INSIDER TRADING. H. WHO IS NOT A MEMBER IN GOOD STANDING OF THE COOPERATIVE; I. WHO HAS MADE A MATERIAL MISREPRESENTATION OF FACT TO THE MEMBERS OR OTHER DIRECTORS IN THE PROCESS OF THE DIRECTOR'S ELECTION OR APPOINTMENT TO THE BOARD OF DIRECTORS; J. WHO HAS INTEREST OR CONTROLLING INTEREST IN ANOTHER ORGANIZATION THAT IS NOT IN GOOD STANDING OF THE COOPERATIVE OR THE QUALIFICATIONS OF THIS SECTION OF THE BYLAWS; K. WHO IS EMPLOYED BY, MATERIALLY AFFILIATED WITH, OR SHARES A MATERIAL FINANCIAL INTEREST WITH ANY OTHER DIRECTOR; L. WHO IS NOT A LEGAL CITIZEN OF THE USA; M. WHO DID NOT GRADUATE FROM HIGH SCHOOL OR EARNED AN EQUIVALENT DEGREE OR CERTIFICATION. WHILE DIRECTOR, HE/SHE MUST: 1. BE LOYAL TO THE COOPERATIVE 2. TREAT SENSITIVE ISSUES WITH CONFIDENTIALITY; 3. DISCLOSE CONFLICTS OF INTEREST; 4. ACTIVELY SUPPORT THE OBJECTIVES OF THE COOPERATIVE; 5. EXERCISE AND INSIST UPON SOUND BUSINESS PRINCIPLES IN THE CONDUCT AND AFFAIRS OF THE COOPERATIVE; 6. UPHOLD THE LAWS AND REGULATIONS PERTAINING TO COOPERATIVE BUSINESSS ACTIVITIES; 7. SERVE ALL MEMEBERS OF THE COOPERATIVE WITHOUT GIVING SPECIAL CONSIDERATION TO ANY INDIVIDUAL OR GROUP; 8. NOT COMMUNICATE FALSE OR MISLEADING INFORMATION TO MEMBERS OF THE COOPERATIVE OR PUBLIC; 9. NOT EXPLOIT OR PERMIT EXPLOITATION OF THE POSITION OF DIRECTOR; 10. ABIDE BY AND SUPPORT DECISIONS AND POLICIES MADE BY THE MAJORITY OF THE BOARD; 11. TREAT OTHER BOARD MEMBERS WITH DIGNITY AND RESPECT; 12. MAINTAIN HIGH STANDARDS OF PERSONAL CONDUCT; 13. SEEK EDUCATION AND TRAINING TO IMPROVE PERFORMANCE AS A DIRECTOR; 14. MAINTAIN AND NOT VIOLATE THE CONFIDENTIALITY OF ALL MATTERS DISCUSSED BY DIRECTORS AND STAFF IN THE CONDUCT OF THE COOPERATIVE AFFAIRS UNLESS THESE MATTERS BECOME PUBLIC KNOWLEDGE; 15. MAINTAIN AND NOT VIOLATE THE CONFIDENTIALITY OF THE BOARD ROOM DISCUSSIONS AND ISSUES PRESENTED THEREIN; 16. ACT IN GOOD FAITH. UPON ESTABLISHMENT OF THE FACT THAT A BOARD MEMBER IS HOLDING THE OFFICE IN VIOLATION OF ANY OF THE FOREGOING PROVISIONS, THE BOARD OF DIRECTORS MAY REMOVE SUCH BOARD MEMBER FROM THE BOARD IN THE MANNER PROVIDED BY BOARD POLICY. 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS, AND 4. CHANGES TO THE BYLAWS OR ARTICLES OF INCORPORATION. Form 990, Part VI, Section B, line 11 MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR REVIEW AND APPROVAL PRIOR TO FILING. Form 990, Part VI, Section B, line 12c THE DIRECTORS REVIEW THE CONFLICT OF INTEREST POLICY ANNUALLY, AND IMMEDIATELY ADDRESS ANY QUESTIONS OR CONCERNS IF THEY ARISE. THE BOARD OF DIRECTORS AND OFFICERS ARE ALSO REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE BOARD AND THE GENERAL MANAGER USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. Form 990, Part VI, Section C, line 19 THE COOPERATIVE ANNUALLY MAILS A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE. THE COOPERATIVE ALSO PROVIDES COPIES OF THEIR CURRENT AND PAST ANNUAL REPORTS AND GOVERNING DOCUMENTS ON THEIR WEBSITE. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. 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. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES A MATCHING CONTRIBUTION UP TO 3% OF A PARTICIPATING EMPLOYEE'S SALARY. 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 KEY EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS AND KEY EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER OR KEY EMPLOYEE IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE OFFICER OR KEY EMPLOYEE, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER OR KEY EMPLOYEE. 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 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 UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES MODIFIED FOR ELECTRIC BORROWERS OF THE RURAL UTILITIES SERVICE(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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $8,271,688 LESS DIRECTORS FEES REPORTED ON 1099-MISC (109,425) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (263,173) LESS KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (183,188) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 20,433 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 3,438,720 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 3,086,850 TOTAL WAGES ACCRUED AND/OR PAID $14,261,905 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 SUPPLIES AND EXPENSE $277,089 OUTSIDE SERVICES EMPLOYED 810,415 INSURANCE - INJURIES AND DAMAGES 197,942 DUES PAID ASSOCIATED ORGANIZATIONS 274,119 FORT HUACHUCA EXPENSES 204,826 SAFETY 101,815 DIRECTORS EXPENSES 117,996 EMPLOYEE ACTIVITIES 85,777 MAINTENANCE OF GENERAL PLANT 151,899 CAPITAL CREDITS 17,984 MISCELLANEOUS GENERAL EXPENSE 186,365 ADMINISTRATIVE & GENERAL EXPENSE -OTHER 300,276 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $2,726,503 Form 990, Part IX, Line 24e THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24E. TAX - OTHER $ 366,804 CONSUMER ACCOUNT AND SERVICE 1,723,662 SALES EXPENSE 193,368 TRANSMISSION EXPENSE 658,648 INTERNET EXPENSES 65,837 PHONE CARD EXPENSES 86 OTHER DEDUCTIONS 86,674 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $3,095,079 Form 990, Part IX, Line 4 THE FORM 990 INSTRUCTIONS SPECIFICALLY STATE THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS 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 MEMBERS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS MEMBERS 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 MEMBERS. 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 MEMBERS, AND (3) IN A FAIR AND EQUITABLE BASIS 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 COOPERATIVES BYLAWS AND IS SUMMARIZED AS FOLLOWS: (A) IN ORDER TO INDUCE PATRONAGE AND TO ASSURE THAT THE COOPERATIVE WILL OPERATE ON A NONPROFIT BASIS, THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL ITS MEMBERS FOR ALL AMOUNTS RECEIVED AND RECEIVABLE FROM THE FURNISHING OF ELECTRIC ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY ARE RECEIVED WITH THE UNDERSTANDING THAT THEY ARE FURNISHED BY THE MEMBERS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH MEMBER FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY MEMBER SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE MEMBER IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE MEMBER HAD THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2014 CALENDAR YEAR. AS NOTED ABOVE, SUCH AMOUNTS ARE ALLOCATED SUBSEQUENT TO YEAR-END IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). THE AMOUNTS ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY TO THE MEMBERS AND ARE DONE PURSUANT TO THE OBLIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS MEMBERS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS IS THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS MEMBERS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2014 MARGIN THAT HAS BEEN OR IS TO BE ALLOCATED TO THE MEMBERS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND IS NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. AS A RESULT, THE DIFFERENCE BETWEEN THE COOPERATIVE'S GAAP BASIS FINANCIAL STATEMENTS AND THE REVENUE LESS EXPENSES REPORTED ON PART I, LINE 19 IS THE AMOUNT OF PATRONAGE DIVIDENDS REPORTED AS BENEFITS PAID TO MEMBERS. Form 990, Part XI, line 9: NET CHANGE IN MEMBERSHIPS 1,120. PATRONAGE CAPITAL CREDIT RETIREMENTS -301,775. PATRONAGE CAPITAL ASSIGNABLE 8,214,283. GAIN ON RETIREMENT OF ESTATE CAPITAL CREDITS 22,430. OTHER COMPREHENSIVE INCOME - PROVISION FOR PENSIONS AND BENEFITS 15,365. Form 990, Part XII, Line 2 AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FISCAL YEAR END OF JUNE 30TH. ADDITIONALLY, AS A RESULT OF A FEDERAL AWARD, THE ORGANIZATION WAS REQUIRED AND UNDERWENT AN AUDIT AS SET FORTH IN THE SINGLE AUDIT ACT AND OMB CIRCULAR A-133 FOR THE 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 OF DIRECTORS HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE FOUNDATION 350 N HASKELL WILLCOX AZ 85643 860488826 FUND EDUCATIONAL YOUTH ACTIVIES AND QUALIFIED PROGRAMS AZ 501(c)(3) PF SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE INC 1 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE CHARITABLE TRUST 350 N HASKELL WILLCOX AZ 85643 860993649 ASSISTANCE TO NATURAL DISASTER VICTIMS AND FAMILIES AZ 501(c)(3) Line 7 SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 SULPHUR SPRINGS VALLEY ELECTRIC COOP FOUNDATION - NA LESS THAN 50000 Q CASH