Swisher Electric Cooperative Inc

“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. The disposal of a substantial portion of the cooperative's assets 4. Amendment to the articles of incorporation”

“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.”

“On an annual basis, the cooperative will require the board and its employees to complete and sign a conflict of interest certification and disclosure form. The board will also complete and sign the form 990 disclosure questionnaire. The signed copies will be kept in the personnel file for each individual.”

“The board of directors discuss and evaluate the performance of the general manager for determining compensation. The board and the general manager use the expertise of an independent compensation consultant when determining the compensation of the cooperative's other employees meeting the definition of officer and key employees, if any.”

“A summary of the annual financial statements are handed out to members at the annual membership meeting. The cooperative will provide a complete copy of the audited financial statements to any member who requests a copy. The cooperative's conflict of interest policy is available to the public upon request at the cooperative's headquarters.”

“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, meeting the eligibility requirements of such plans. The cooperative also provides health, dental, vision and life insurance to all eligible employees, through a qualified plan. The amounts reported on part vii, column (f) for the officers 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. In addition to the above pension plans, the cooperative also provides post-retirement health insurance benefits through an unfunded welfare benefit plan. The value of these benefits has not been estimated.”

“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.”

“Although the cooperative is no longer a rural utilities service (rus) borrower, its accounting records are maintained in accordance with the rus uniform system of accounts (usoa) as prescribed for rus electric borrowers. The usoa does not record expenses in the general expense categories provided on part ix lines 1-23. The cooperative separately reports salaries and wages, employee benefits and payroll taxes that will be allocated in accordance with their accounting system, but other expenses that are described in lines 1-23 will be 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 $ 2,713,200 less: director fees reported on forms 1099-nec (179,371) less: employee officer benefits included in line 5 (249,596) plus: salaries and wages capitalized directly to plant 492,577 plus: salaries and wages capitalized/expensed indirectly through clearing & other accounts 291,566 total wages accrued and/or paid $ 3,068,376”

“Administrative and general expense is comprised of the following: administrative & general salaries, benefits, & other $ 707,684 office supplies 30,126 software maintenance 190,335 outside services employed 90,718 injuries and damages insurance 122,327 employee pension & benefits 7,202 directors 193,947 dues to associated organizations 60,657 employee travel 43,867 advertising 31,894 miscellaneous general 136,544 annual meeting 53,465 community public relations & area development 36,618 member services relations 32,876 maintenance of general plant 147,249 regulatory commission 36,629 total admin & general exp per financial statements $ 1,922,138 less: reclass of director fees to part ix, line 5 (179,371) less: reclass of labor to part ix, lines 5 & 7 (566,042) less: reclass of benefits to part ix, lines 8-10 (297,216) total admin & general expense per form 990, part ix $ 879,509”

“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.”

“Patronage capital allocated or to be allocated 1,469,884. Patronage capital retired - total -1,612,252. Patronage capital retired - discount 6,395. Other comprehensive income - provision for pension & benefits 196,129.”

“The board as a whole is responsible for overseeing the financial statement audit and selecting the independent financial statement auditor. Procedural changes did not occur during the year.”