Blue Earth Nicollet Faribault Cooperative Electric Association

“The cooperative is comprised of a single class of approximately 14,000 member-owners, each of which has equal rights in ownership, governance, and voting rights at the annual meeting, with the exception of member-owners who are elected to the board of directors.”

“The member-owners of the cooperative have the authority to elect the members of the board of directors.”

“Changes to the governing documents (bylaws and articles of incorporation) must be approved by the member-owners after they have been approved by the board of directors. Approval occurs when at least 50% of the member-owners vote to approve.”

“There are no committees with board authority to act on behalf of the governing body. All committee recommendations are taken to the full board for action.”

“The leaders of every department, general manager, and board of directors will review the 990 prior to submitting it to the irs.”

“The cooperative maintains a written policy as to what includes a conflict of interest and how any potential issues will be handled. Board policy states that directors must disclose any possible conflicts of interest. The policy covers all directors and employees. Determinations of whether a conflict exists and review of potential conflicts are made by the board of directors for board members and the general manager, department heads for employees, and general manager for department heads.”

“Surveys of comparable minnesota electric cooperatives are conducted and used to determine executive compensation. There are no written contracts for executives. There is also a performance review in the compensation process. This process was last completed in 2014.”

“Governing documents, conflict of interest policy, and financial statements are available upon request and published with the annual report to members.”

“Capital credits retired -1,027,097. Membership changes 319. Patronage dividends allocated 1,728,130. Heartland security services k-1 -12,681.”

“The process for oversight of the annual financial statement audit and selection of an independent accountant has not changed from the prior year.”

“The irs instructions state that patronage dividends paid by section 501(c)(12) organizations to their members should be reported on line 4. The organization has interpreted patronage dividends paid to mean patronage dividends allocated or to be allocated for the current year. Since this allocation is not an expense under generally accepted accounting principles (gaap), this has resulted in a reconciling item to net assets in part xi on page 12 of the form 990 and in part xii on schedule d.”