North Star Electric Cooperative Incorporated

“The Cooperative has 5,378 voting members. Each member has one vote.”

“The Cooperative is divided into 7 districts. Each district is represented by one board member. Members can only vote for board members within their district.”

“Changes to the Cooperative's bylaws must be approved by the Cooperative's members. The directors are limited by the bylaws as to decisions relating to the sale of the Cooperative, mergers and other significant transactions.”

“The Cooperative did not have any committees with the authority to act on behalf of the Board of Directors.”

“The Finance Manager and General Manager reviewed the Form 990 prior to presenting the Form 990 to the Board of Directors. The Board of Directors reviewed and approved the Form 990 at the May 2018 board meeting.”

“The Cooperative expects Directors or employees who have conflicts of interest to disclose them immediately as they occur. Due care is taken to avoid unethical behavior and ensure honesty and accountability. The responsibility for the review and determination of board conflicts rests with the Board President. The responsibility for the review and determination of employees' conflicts rests with the General Manager. All members are required to abstain from voting on any conflict of interest situation that may arise.”

“NRECA data is gathered by the Board of Directors. The General Manager salary will be within the average range of the data - not highest and not lowest. The Board approves the General Manager salary. Minutes are kept of the board meeting deliberations. This annual process last took place in August 2017. The General Manager reviews the performance evaluation of the Finance Manager. This process was last performed in August 2017.”

“The Cooperative's bylaws are distributed to all new members. Financial statements are shared with members at the annual meeting. Monthly board meeting minute summaries are reported in the Cooperative's newsletter each month. The Cooperative's code of conduct is available upon request.”

“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 is $24,479 for Robyn Sonstegard, $221,114 for Ann Ellis and $143,832 for Marty Mollberg. This amount is an estimate in the increase of the value of the plan and is not current year expenses of the cooperative. The current year expense for this defined benefit plan was $23,397, $38,683, and $28,705 respectively.”

“Audited Financials: Although the Cooperative did not have an audit for the calendar year ended December 31, 2017, it did have its annual audit performed by an independent accountant for the period from August 1, 2016 through July 31, 2017. The audit period was chosen in order to reduce the cost of the audit, as it is not performed during peak season for the audit firm. The Cooperative is scheduled to have an independent audit performed for the period August 1, 2016 through July 31, 2017.”

“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.”

“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 $(2,537,458).”

“Retirements of Capital Credits -575,507. Changes in Membership 115. Unclaimed and Abandoned Capital Credits 9,374. Gain on Retirement of Capital Credits 13,229. Patronage Capital Allocated in the Current Year 659,759.”