Red River Valley Cooperative Power Association

“There is only one class of members. All members have the same voting rights. Each household represents one member.”

“All members of the cooperative may vote for directors in all districts. Directors may only be nominated by members of the directors' districts.”

“Changes in articles of incorporation or by-laws, mergers, or consolidations must be approved by members of the cooperative.”

“There are no committees with authority to act on behalf of the board of directors.”

“The director of finance and ceo review a draft of the form 990. Once the draft was deemed accurate, the form 990 was presented to the board of directors at a board meeting and approved at that time by the board.”

“All employees and board of directors are covered by the policy. The directors shall sign a certificate upon taking office disclosing any potential conflicts. At any point in time should a conflict arise it must be brought to the board immediately. The full board reviews any potential conflicts and makes the determination if a conflict exists. Board members with a conflict will abstain from voting. This would be documented in the minutes.”

“Board members annually review the performance of the chief executive officer. Directors review and utilize the nreca national and regional ceo compensation form and any known regional ceo salaries as a guide. Written board minutes are kept of the salary deliberation. There are no other officers or key employees.”

“The governing documents, conflict of interest policy and financial statements are available upon request.”

“Officer and director compensation reported on part ix, line 5 does not equal the total compensation reported on part vii, line 1b for these individuals. The difference of $16,446 is due to the difference between the current year contributions (a current year expense) and the increase in actuarial value. The increase in actuarial value is not a current year expense, but is reported as compensation for purposes of part vii. Included in part vii, column "f", other compensation, is the estimated annual increase in the actuarial vaule of the defined benefit plan. For the following individuals, the estimated increase is: richard whitcomb: $24,724 jared person: $2,028 this amount is an estimate of the increase of the value of the plan and is not a current year expense of the cooperative. Current year contributions into the defined benefit plan were as follows: richard whitcomb: $35,530 jared person: $7,668”

“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 and on schedule d part xi and xiii. In reference to part ix, line 4, the cooperative has interpreted "patronage dividends paid" as capital credits allocated to members under the pre-existing obligations pursuant to the bylaws of the cooperative.”

“The labor reported on line 5 is already included in distribution expense, adminstrative & general expense and customer expense. Therefore, these amounts are being subtracted out as an other deduction on line 24e.”

“Retirement of capital credits -347,439.”