Osage Valley Electric Cooperative

“The cooperative was formed by the members to provide electric service at cost on a cooperative basis.”

“The members of the cooperative vote on the board of directors. Elections are done on a one member one vote basis.”

“The following acts require approval of the members of the cooperative: 1. Dissolution/liquidation of the cooperative 2. Merger or consolidation of the cooperative with another organization 3. Disposal of a substantial portion of the cooperative's assets 4. Amendment to the articles of incorporation 5. Amendment to the bylaws”

“The cooperative has no committees with authority to act on behalf of the governing body. Therefore, and pursuant to form 990 instructions, the question has been answered "no".”

“Management presented a copy of the form 990 to the board for discussion and review prior to filing.”

“Each employee is provided a personnel policy manual and each director is provided a board policy manual that includes the conflict of interest policy for all employees and directors.”

“The board of directors use a compensation survey when determining the compensation of the cooperative's ceo/general manager. The board and the general manager use a compensation survey when determining the compensation of other employees meeting the definition of officer and key employees, if any. The survey includes salaries from similarly situated cooperatives throughout the nation.”

“The cooperative provides a summarized copy of the audited financial statements to the members of the cooperative at the annual meeting. The cooperative will provide a complete copy of the audited financial statements, conflict of interest policy, or governing documents to any member who requests a copy any such document.”

“In order to provide retirement benefits to its employees, the cooperative has established a defined contribution plan under section 401(k) of the internal revenue code. Employer contributions to the plan are made pursuant to the plan document. Additionally, the cooperative participates in a multi-employer defined benefit plan. Contributions to this plan are based on the full funding limitation of such plan. Employer contributions for both plans are available to participating employees, including officers and highly compensated employees, meeting the eligibility requirements of such plans. The cooperative also provides health and life insurance to all eligible employees through a qualified plan. The amounts reported on part vii, column (f) for the officer and highly compensated employees is comprised of the actuarial increase in the defined benefit plan, the total amount contributed by the cooperative to the defined contribution plan and insurance paid on behalf of and for their benefit.”

“Patronage dividends result from the purchase of wholesale power from a generation & transmission cooperative. Patronage dividends also result from the payment of interest from cooperative banks and the purchase of supplies and services from other cooperative organizations. The expenses associated with purchases from and payments to such cooperative organizations are a direct component of cost of the electric service provided by the cooperative to its members.”

“The cooperative annually provides each director who served on the board during the year a questionnaire. The completed questionnaires and time logs are used to complete the applicable questions on the form 990 pertaining to business relationships among directors, officers, and key employees, as well as to determine if there are any transactions which must be reported in detail on schedule l - "transactions with interested persons". If the cooperative was unable to obtain a completed questionnaire, the cooperative relied upon the completed information for the prior year. Ray heuser passed away in september of 2024; therefore, his prior year questionnaire was relied upon while preparing the 2024 form 990. There were no known changes from 2023 to 2024.”

“The accounting records of the cooperative are maintained in accordance with the uniform system of accounts (usoa) as prescribed by the federal regulatory commission for class a and b electric utilities modified for electric borrowers of the the rural utilities service (rus). The usoa does not record expenses in the general expense categories provided on part ix lines 1-23. The cooperative separately states salaries and wages, employee benefits and payroll taxes that are allocated in accordance with their accounting system, but other expenses that are described in lines 1-23 are reported on line 24 under the expense categories required by the usoa.”

“Salaries and wages are allocated to asset, liability, and expense accounts based on the accounting system described above. The following schedule reconciles amounts reported on lines 5-7 to total wages accrued and/or paid: total per lines 5-7 $ 4,464,771 less: director fees reported on forms 1099-nec (250,512) less: employee officer benefits reported on line 5 (243,627) plus: salaries and wages capitalized directly to plant 1,286,207 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 297,706 total wages accrued and/or paid $ 5,554,545”

“Other expenses is comprised of the following: customer accounts $ 400,120 other deductions 313,349 sales 51,490 customer service and information 23,720 total other expenses per form 990, line 24e $ 788,679”

“Pursuant to the form 990 instructions, the amount of patronage dividends paid to the members (hereinafter referred to as "patrons") should be reported on part ix, line 4. The phrase "patronage dividends paid" refers to the process, subsequent to year-end, by which the cooperative allocates patronage capital to and, therefore, operates at cost with its patrons. The cooperative's tax exempt purpose is to provide electricity to its patrons and to do so on a cooperative basis. Tax law defines "operating on a cooperative basis" as subordination of capital, democratic control, and operation at cost. The cooperative operates at cost through the allocation of true patronage dividends (also referred to as allocations of patronage capital) to its patrons. Patronage dividends are considered paid if the allocation is made (1) pursuant to a pre-existing obligation, (2) from the margins produced from the transactions done with or for patrons, and (3) in a fair and equitable manner on the basis of patronage (i.e. Purchases). Additionally, the allocation of patronage dividends should be made within a reasonable time period after the close of the cooperative's year-end of december 31. Each one of these requirements for a true patronage dividend is provided for in the non-profit operation article of the cooperative's bylaws. The amount reported on part ix, line 4 represents the amount of patronage capital that is either allocated or to be allocated to the patrons resulting from their purchase of electricity from the cooperative for the 2024 calendar year. Because patronage dividends are the process by which the cooperative operates at cost with its patrons and thereby a key component to accomplishing its exempt purpose, the cooperative has reported such amounts as an expense for form 990 reporting. Patronage dividends are not an expense for financial statements prepared in accordance with generally accepted accounting principles, however.”

“All grants, sponsorships, and/or donations are made to non-profit and civic organizations that are located in the cooperative's service area, and are intended to improve the communities in which our members reside. Each grant, sponsorship, and/or donation made during the year was below the reporting threshold of schedule i, part ii.”

“Administrative & general expense is comprised of the following: administrative & general salaries, benefits, & other $ 1,542,174 office supplies 96,807 outside services 73,640 injuries and damages 324 employee benefits 139,728 miscellaneous general 122,758 directors 297,285 dues and subscriptions 63,652 maintenance of general plant 735,642 advertising 160,380 annual meeting 77,652 total admin & general exp per financial statements $ 3,310,042 less: reclass of director fees to part ix, line 5 (250,512) less: reclass of labor to part ix, lines 5 & 7 (1,169,241) less: reclass of benefits to part ix, lines 8-10 (628,571) total admin & general expense per form 990, part ix $ 1,261,718”

“Book-tax adjustment: ubi tax basis of construction grants -2,533,397. Patronage capital allocated or to be allocated 3,312,869. Patronage capital retired - total -1,310,614. Patronage capital retired - discount 109,407. Patronage capital retired - unclaimed -171,890. Net change in membership fee 3,050. Donated capital 339,474. Accumulated other comprehensive income -57,133.”

“Audited financial statements were prepared by an independent accountant for the cooperative's financial statement audit year-end of june 30th. The tax return has been and continues to be prepared based on a calendar tax year-end of december 31. The board as a whole is responsible for overseeing the financial statement audit and selecting the independent financial statement auditor.”