Rita Blanca Electric Cooperative Inc

“The cooperative has 9 board members; all 9 are allowed to vote, however, the board chairman votes only in the case of a tie.”

“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”

“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. The discussion and review was performed at the board meeting immediately before filing the form 990.”

“On an annual basis, the cooperative will require the board of directors to disclose all potential conflicts of interests.”

“The board of directors utilize internal resources and a performance review when determining and setting the compensation of the general manager. The general manager utilizies internal resources and performance reviews when determining and setting the compensation of employees meeting the definition of officer or key employee, if any.”

“The cooperative will provide a complete copy of its governing documents, financial statements and conflict of interest policy to any member who makes a written request of 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 higly 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 officers and highly compensated employees is comprised of 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 accounting records of the cooperative are maintained in accordance with the uniform system of accounts (usoa) as prescribed by the federal energy regulatory commission for class a and b electric utilities modified for electric borrowers of the rural utilities services (rus). 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 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 the total wages accrued and/or paid: total per lines 5-7 $ 2,816,811 less: director fees reported on forms 1099-nec (256,354) less: employee officer benefits reported on line 5 (272,442) plus: salaries and wages capitalized directly to plant 919,579 plus: salaries and wages capitalized/expensed indirectly through clearing & other accounts 624,946 total wages accrued and/or paid $ 3,832,540”

“Administrative & general expense is comprised of the following: administrative & general salaries, benefits, & other $ 687,587 office supplies 99,998 outside services 73,739 safety, injury & damage prevention 132,322 employee benefits 129,134 director fees 349,615 annual meeting 55,885 institutional & goodwill advertising 34,958 dues to associated organizations 228,837 maintenance of general plant 125,093 miscellaneous general expense 17,645 public utility commission 104,951 total admin & general exp per financial statements $ 2,039,764 less: reclass of donations to part ix, line 1 (7,740) less: reclass of director fees to part ix, line 5 (256,354) less: reclass of labor to part ix, lines 5 & 7 (528,530) less: reclass of benefits to part ix, lines 8-10 (292,528) total admin & general expense per form 990, part ix $ 954,612”

“Pursuant to form 990 instructions, the amount of patronage dividends paid to 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 margins produced by 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 tax 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 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.”

“Patronage capital allocated or to be allocated 12,700,790. Patronage capital retired - total -3,669,638. Patronage capital retired - discount 2,992. Net change in memberships 5. Other comprehensive income provision for pension & benefits 15,946.”

“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 31st. Procedural changes did not occur during the year.”