2011-06-23T09:39:51-05:00 2010-12-31 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2010-01-01 410212180 Dakota Electric Association DAKO 6514637134 4300 220th Street W Farmington MN 550249583 LOU ANN WEFLEN 6514637134 2011-06-16 1 LISA CHAFFEE CPA 7012398500 2011-06-16 2010 2016-02-24 21:20:13Z Lou Ann Weflen 4300 220th Street W Farmington MN 550249583 190791471 0 X www.dakotaelectric.com X 1939 MN Electric Distribution Coop 12 10 233 0 93599 0 0 0 173104984 190481060 27745 134292 -24489 7782 173108240 190623134 124399 88126 0 0 20082305 20829547 0 0 0 146751312 159936039 166958016 180853712 6150224 9769422 251967095 260497174 151335914 151252006 100631181 109245168 We are a member-owned, member-focused electric distribution cooperative, striving to exceed our members' energy expectations in a changing world. 0 0 Provide electric and related services and products for approximately 101,000 member/customers. 0 0 0 0 0 0 0 0 1 0 1 0 1 1 0 1 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 79 0 1 233 1 1 1 0 0 0 0 184229727 1457331 0 X 12 10 1 0 0 0 1 1 1 1 0 0 0 1 0 1 0 1 0 0 X X Carla Henke 6514637134 4300 220th St W Farmington MN 55024 X James Sheldon 9.20 X X 26598 0 0 William Holton 7.70 X X 20460 0 0 Paul Trapp 5.00 X X 20460 0 0 Kenneth Danner 13.40 X X 20460 0 0 Carl Potter 8.70 X 20460 0 0 Clay Van De Bogart 8.40 X 20460 0 0 Janet Lekson 12.90 X 20460 0 0 Judy Kimmes 7.60 X 20460 0 0 Margaret Schreiner 16.60 X 20460 0 0 Gerald Pittman 12.00 X 20460 0 0 Ray Nicolai 6.70 X 20460 0 0 Ronald Swagger 11.90 X 20460 0 0 Greg Miller 44.00 X 278514 0 93544 Lou Ann Weflen 44.00 X 179805 0 67941 Dirk Rotty 41.00 X 161032 0 50405 Douglas Larson 45.00 X 161180 0 44868 Michael Fosse 43.00 X 176785 0 68429 Randall Poulson 42.00 X 166184 0 88651 Craig Turner 41.00 X 120265 0 39692 Jeff Willaby 42.00 X 113479 0 22572 Malinda Mehrhoff 40.00 X 112689 0 40971 Michael Briggs 40.00 X 120980 0 45518 John Thurmes 45.00 X 122332 0 34161 1964903 0 596752 11 0 1 0 NPL Construction Co 2355 W Utopia Rd Phoenix AZ 850274167 Underground Construction 2052279 Wright Tree Service Inc 2943 Paysphere Circle Chicago IL 606742973 Tree Trimming 480157 Asplundh Tree Expert Co 708 Blair Mill Road Willow Grove PA 190901784 Tree Trimming 273853 Kubra Data Transfer 39577 Treasury Center Chicago IL 606949500 Customer Billing 192694 Premier Locating LLC 2034 Cty Rd 35 W Buffalo MN 55313 Locating Services 188516 10 Electric 221000 190387461 190387461 Vehicle Repair Service 811000 59510 59510 Dispatching Services 561439 30813 30813 Electric Surge Suppres 453310 3276 3276 190481060 169377 169377 35085 -35085 -35085 -35085 141034 133252 7782 7782 190623134 190395243 93599 134292 88126 1744327 12366538 3213148 2432612 1072922 101228 45243 2351106 2452659 1761471 181495 136580 5813241 8423170 542256 Cost of Purchased Power 130704861 Property & Other Taxes 3500108 External Contract Labor 1797625 Distribution Plant Main 1084322 Bad Debt Expense 699922 340752 180853712 674504 1134770 721009 18016319 20557752 2660 55 4164622 4230662 742211 781967 250279890 92186192 156193201 158093698 8633419 9787866 56334652 61513515 6484498 4396889 251967095 260497174 31342937 37745405 2122885 1778665 103324982 106929080 10000000 4545110 4798856 151335914 151252006 X 0 0 0 0 100631181 109245168 100631181 109245168 251967095 260497174 X 9769422 -1155435 X 0 1 1 X 0 3432620 3432620 7091021 2674665 4416356 235162241 89511527 145650714 4594008 4594008 158093698 Great River Energy Cap Credits 58385542 C NRUCFC Cap Credits 2562699 C Other Cooperative Capital Credits 457744 C Cooperative Memberships 2200 C MN Rural Electric Trust 105330 C 61513515 FAS106 post-employment benefits 4100359 Capital Lease 698497 4798856 190623134 180853712 9769422 -1155435 -1155435 8613987 190658219 0 190658219 -35085 -35085 190623134 180888797 35085 35085 180853712 0 180853712 Description of Uncertain Tax Positions Under FIN 48: Part X: Dakota Electric is exempt from income taxes under Section 501(c)(12) of the Internal Revenue Code and the State of Minnesota. MES provides for deferred taxes on temporary differences arising from assets and liabilities whose basis is different for financial reporting and income tax purposes. Dakota Electric has adopted the provisions of Accounting Standards Codification Topic ASC 740-10 (previously Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes), on January 1, 2009. The implementation of this standard had no impact on the financial statements. The unrecognized tax benefit accrual was zero as of December 31, 2010 and December 31, 2009, respectively. Dakota Electric will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if such penalties and interest are incurred. Under normal circumstances, Dakota Electric is no longer subject to federal or state tax examinations by tax authorities for years before 2007. MES and its subsidiaries are no longer subject to federal or state tax examinations by tax authorities for years before 2008. Dakota Electric and subsidiaries undergo an annual analysis of various tax positions, assessing the likelihood of those positions being upheld upon examination with relevant tax authorities, as defined by ASC 740-10. Part XI, Line 8 - Other Adjustments: Members Offline Capital Credit Retirement -456,541. Estate & Senior Capital Credit Retirement -123,529. Gain on Capital Credit Retirement 277,920. Equity in Earnings of Subsidiary 392,748. General Capital Credit Retirement -1,246,190. Other 157. Part XII, Line 4b - Other Adjustments: Loss on Sale of Assets -35,085. Part XIII, Line 2d - Other Adjustments: Loss on Sale of Assets 35,085. 1 DCTC Foundation 1300 East 145th St Rosemount MN 55068 411488605 501(c)(3) 40000 Community Support Minnesota Zoo 13000 Zoo Boulevard Apple Valley MN 55124 510147653 501(c)(3) 11000 Community Support 173 2 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: The cooperative receives verification from the donees of their tax-exempt status to ensure the funds are spent for charitable purposes. X 1 1 X X X X 0 0 0 Greg Miller 225000 0 32600 0 20914 0 80955 0 12589 0 372058 0 0 0 Lou Ann Weflen 168500 0 5000 0 6305 0 55352 0 12589 0 247746 0 0 0 Dirk Rotty 149900 0 5000 0 6132 0 43714 0 6691 0 211437 0 0 0 Douglas Larson 146000 0 5000 0 10180 0 32279 0 12589 0 206048 0 0 0 Michael Fosse 154500 0 5000 0 17285 0 55840 0 12589 0 245214 0 0 0 Randall Poulson 149900 0 5000 0 11284 0 77633 0 11018 0 254835 0 0 0 Craig Turner 117125 0 1400 0 1740 0 27103 0 12589 0 159957 0 0 0 Malinda Mehrhoff 105550 0 1050 0 6089 0 28382 0 12589 0 153660 0 0 0 Michael Briggs 116950 0 1200 0 2830 0 38827 0 6691 0 166498 0 0 0 John Thurmes 95100 0 24280 0 2952 0 21812 0 12349 0 156493 0 0 0 Part I, Line 1a Health club dues are available to all employees of DEA and are included in the W-2s of the employees. These dues are limited to $240 per year and employees must attend 12 times per month. Supplemental Information Part III 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 for the following employees. 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 are reflected in the statement for Form 990, Part VII, Column f. Great River Energy BOD Overlap 130704861 Board directors Carl Potter and Clay Van De Bogart serve on both board of directors. Dakota Electric Association purchases its wholesale power from Great River Energy. 0 Form 990, Part VI, Section A, line 2 Janet Lekson, Gerald Pittman, James Sheldon, and Greg Miller have a business relationship, as they all served on the Midwest Energy Services, Inc board from January to August. In August an outside director replaced Gerald Pittman on the MES board. Kenneth Danner, Janet Lekson, Ronald Swagger and Greg Miller have a business relationship, as they all served on the Consulting Engineers Group board. Judy Kimmes, Gerald Pittman and Greg Miller had a business relationship, as they all served on the Energy Alternatives, Inc. board from January to August. In August Kenneth Danner replaced Gerald Pittman on the EA board, and thus Kenneth currently has a business relationship with those listed. Form 990, Part VI, Section A, line 6 The organization has members, all of which are in the same class with the same voting rights. Form 990, Part VI, Section A, line 7a There are four districts and each district has 3 board members - all members vote on all four districts. Form 990, Part VI, Section A, line 7b Members have the power to remove any director or officer if their actions cause substantial harm to the interests of the organization. Members also have the right to alter, amend or repeal the bylaws if approved by majority of votes cast. Form 990, Part VI, Section A, line 8b The Cooperative does not have an executive committee with the authority to act on behalf of the full Board of Directors. Form 990, Part VI, Section B, line 11 The Board of Directors were provided a copy of the Form 990 for their review at the May 26, 2011 board meeting. Form 990, Part VI, Section B, line 15a The full Board serves as the compensation committee. The Board often uses a consultant or a salary survey or comparison of wages from other comparable sized electric cooperatives. The wages data may come from 990s of cooperatives of similar size or from the NRECA compensation survey. Following year end, the Board of Directors deliberates as to whether or not safety, distribution, reliability and other factors were met. If these factors were met the Board will award all or a portion of incentive pay. The compensation approval process of the President/CEO last took place in April 2010. The compensation of the Vice President of Finance is determined by the CEO through a performance evaluation, as well as periodic area market salary comparisons. This performance evaluation last took place in May 2010. The HR Department uses comparison wage data from surveys for all positions to determine appropriate market compensation, but the board does not vote on the compensation of other positions. Form 990, Part VI, Section C, line 19 The financial statements are available to the public on the website or upon request. Other Compensation Form 990, Part VII, Column F, Other Compensation: Included in other compensation is the estimated current year increase in the actuarial value of the defined benefit plan for the following employees: Greg Miller $68,204, Lou Ann Weflen $46,777, Dirk Rotty $36,069, Mike Fosse $47,965, Randall Poulson $69,988, Craig Turner $21,177, Doug Larson $24,829, Jeff Willaby $17,581, Malinda Mehrhoff $23,339, Mike Briggs $32,920, and John Thurmes $17,009. 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 for this defined benefit plan for the following employees were: Greg Miller $58,665, Lou Ann Weflen $43,239, Dirk Rotty $35,372, Mike Fosse $39,039, Randall Poulson $37,714, Douglas Larson $35,135, Jeffrey Wilaby $19,027, Malinda Mehrhoff $24,725, Michael Briggs $27,469, John Thurmes $22,240, and Craig Turner $27,481. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Members Offline Capital Credit Retirement -456,541. Estate & Senior Capital Credit Retirement -123,529. Gain on Capital Credit Retirement 277,920. Equity in Earnings of Subsidiary 392,748. General Capital Credit Retirement -1,246,190. Other 157. Total to Form 990, Part XI, Line 5: -1,155,435. Loan Guarantee for Another Organization Form 990, Schedule R, Part V, Line 2d Consulting Engineers Group, Inc. (CEG) and Energy Alternatives, Inc. (EAI) are wholly owned subsidiaries of Midwest Energy Services, Inc. (MES), which is a wholly owned subsidiary of Dakota Electric Association (DEA). The long-term debt with CFC and line of credit recorded by these organizations are obligations of the ultimate parent company, Dakota Electric Association (DEA). However, EAI, CEG and MES are obligated to DEA to repay the debt to DEA in the similar terms as is stated in the notes between DEA and the creditors. Substantially all assets are pledged as security on the mortgage notes. The CFC notes generally mature 10 to 35 years from the date of issuance and are due at various dates ranging from 2012 to 2029. The amount reported on Sch R, Part V, Ln 2d reflects the December 31, 2010 balances. Helping Neighbors Trust 4300 220th Street West Farmington MN 55024 411837793 Charity - Energy Assistance MN 501(c)(3) 9 Dakota Electric Association 0 Midwest Energy Services Inc 4300 220th Street West Farmington MN 550249583 411757574 Parent Company of Energy Alternatives & Consulting Engineers Group MN N/A C 95730 5333646 1.00000 Energy Alternatives Inc 4300 220th Street West Farmington MN 550249583 411938868 Electric Generation MN MIDWEST ENERGY SERVICES INC C 4245570 22750287 1.00000 Consulting Engineers Group Inc 4300 220th Street West Farmington MN 550249583 411919396 Engineering Services MN MIDWEST ENERGY SERVICES INC C 1205596 5326765 1.00000 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 1 0 0 Midwest Energy Services D 872956 EOY Actual Balance Energy Alternatives Inc D 12782975 EOY Actual Balance Consulting Engineers Group D 2589000 EOY Actual Balance Midwest Energy Services I Midwest Energy Services N Energy Alternatives Inc N Consulting Engineers Group N Midwest Energy Services P Energy Alternatives Inc P Consulting Engineers Group P