Kandiyohi Power Cooperative

“Membership is affected by: 1) procuring service from the cooperative or 2) providing a continuing periodic operating revenue stream for the cooperative. Currently, the cooperative has one class of members, but has the right to define rights and privileges of multiple classes of membership, per its bylaws.”

“The cooperative's members vote on regional representatives to the governing body (board). The board consists of nine members that serve 3 year terms on a staggered basis.”

“Decisions of the board are not subject to approval by the membership. However, the cooperative's members elect the board of directors and members may petition to remove a board member with 20% of eligible voters signing. An election would then be held to determine whether the director is removed or retained.”

“Contemporaneous minutes are not taken on all committee meetings because committees are viewed only as advisory to the full board. Any actions taken would be done at the full board level and documented as part of the board meeting.”

“A draft copy of the 990 is presented to the board for review before filing.”

“All board members were required to fill out a conflict of interest questionnaire in regard to the current tax year.”

“The board of directors annually reviews and sets the salary for the ceo. The nreca compensation survey among other documents is used for comparability data.”

“Copies of policies are available for review at coop offices on request with appointments prearranged.”

“As required by form 990 instructions, form 990, part ix, line 4 (benefits paid to or for members) includes patronage dividends paid. This amount is an expense for purposes of form 990, but is not recognized as an expense under g.a.a.p. Reporting requirements, which are used for book income. The result is a book to tax difference which is disclosed on part xi. In reference to part ix, line 4, the cooperative has interpreted "patronage dividends paid" as capital credits allocated to members under the preexisting obligations pursuant to the bylaws of the cooperative.”

“K-1 income heartland security services, llc -9,060. Retirement of patronage capital -1,026,797. Book income heartland security services, llc 7,172. Allocated capital credits 2,535,879. Retired capital credit gain 157,070. Actuarial gain on defined benefit plan 25,500. Non-operating margins retained 303,134.”