Midland Power Cooperative

“All electric customers of the cooperative are voting members of the cooperative. Each member has one vote at the annual meeting of the membership.”

“Members of the board of directors are elected to three year terms by the members of the cooperative at the cooperative's annual meeting.”

“Any mergers or amendments to the articles of incorporation or by-laws are subject to approval by the cooperative's members.”

“The 990 return will be presented to the board of directors and approved by the board before it is filed.”

“Directors are required to fill out a conflict of interest disclosure statement annually.”

“Midland power cooperative's board of directors performs an annual review of the general manager using nreca survey data to determine the rate of pay. The general manager uses the same nreca data the board uses in determing the salaries of the key employees and hourly employees that are non-union.”

“Annual reports are distributed at the annual meeting that contain the financial statements, all other policies are available upon request.”

“On march 22, 2012, the members of both midland power cooperative (the cooperative)and humboldt county rural electric cooperative (hcrec) voted to approve the merger between the two electric cooperatives. Pursuant to the terms of the merger and effective january 1, 2013, the cooperative and hcrec were merged into a single electric cooperative with the cooperative as the surviving entity. There was no consideration given as part of the merger and patrons equity of the individual cooperatives has been combined with no adjustments made to the equity accounts of individual patrons of each cooperative. Additionally, no goodwill was recorded as a result of the merger.”

“Retirement of capital credits -831,256. Changes in other equities 83,403. Equity added through acquisition 6,205,348. Patronage dividends paid 1,261,431.”

“The oversight of the financial statements and the selection of an independent accountant to perform the audit of the financial statements by the board of directors has not changed.”

“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.”