Intermountain Rural Electric Association

“During the year, the cooperative's bylaws were amended. The following is a summary of the changes: article iv - meetings of the members section 9. Action by ballot, made ballot delivery clarifications removing the reference to mail-only delivery. Article v - board of directors section 5. Director qualifications, expanded director qualifications to include rules for former employees. Section 8. Election of directors, made ballot delivery clarifications removing the reference to mail-only delivery, added clarifying language for the third-party ballot process and mail and electronic ballot due dates, edited language regarding the size requirements for candidate biographies, and added tie and recount language.”

“The cooperative was formed by the members to provide electric service at cost on a cooperative basis, as provided for in its bylaws. There is only one class of members.”

“The cooperative is divided into seven districts, and each district is represented by one board member (director). Board members are elected by the respective district members to staggered four-year terms. Elections are by mail ballot, but members may vote in person at the annual meeting.”

“In addition to voting in director elections, the members also must vote and approve any of the following acts that are first approved by a a two-thirds majority of the board of directors: 1.amendment to the articles of incorporation 2.dissolution/liquidation of the cooperative 3.merger or consolidation of the cooperative with another organization 4.disposal of a substantial portion of the cooperative's assets”

“The form 990, including the related schedules, is completed and filed by bsgm, the cooperative's external cpa firm. Form 990 information is provided to bsgm by staff of the cooperative under the direction of the cfo and/or controller, who in turn reviews the governance, management, and disclosure sections required by the form 990, and presents a draft of the completed report to the ceo and board of directors for review.”

“Officers, directors, and key employees are required to disclose any conflicts of interest as events or circumstances giving rise to a conflict occur. The ceo reviews any potential conflicts that are brought to her attention and makes the determination for key employees. The board of directors reviews and makes determinations for the ceo and at the director level. Restrictions on persons with a conflict generally result in removing the person from decision-making authority concerning the conflict and may, in the case of directors, include mandatory abstention from voting on the related agenda item.”

“Compensation of the ceo is evaluated and approved by the board of directors, in comparison with industry standards and other cooperatives. Compensation for management employees, including salaries and benefits, is evaluated by personnel of the people operations department under the direction of the ceo, using comparisons with industry standards, with other cooperatives, and in consideration of local employment and economic markets. The resulting recommendations are reviewed by the ceo and with the board of directors.”

“The bylaws of the cooperative, the annual report, and board minutes are available on the cooperative's website at www.core.coop. The cooperative's articles of incorporation are available on the colorado secretary of state's website. Other cooperative documents, such as the form 990, are available to the public upon request at the cooperative's headquarters office.”

“The cooperative participates in a joint venture by virtue of purchasing an undivided ownership interest in an electric generation facility. The purchase was made pursuant to the long-term power needs and contractual procurement requirements.”

“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 single-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, key employees and highly compensated employees, meeting the eligibility requirements of such plans. In addition, the cooperative participates in a single-employer defined benefit plan which is available to employees covered under the collective bargaining agreements. 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, key employees and highly compensated employees is comprised of actuarial increase in the defined benefit plans, 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 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.”

“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 calendar 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 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.”

“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 $ 29,618,202 less: director fees reported on forms 1099-nec (356,911) less: employee officer benefits included in line 5 (648,999) less: key employee benefits included in line 5 (498,878) plus: salaries and wages capitalized directly to plant 8,243,293 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 2,914,674 total wages accrued and/or paid $ 39,271,381”

“Administrative & general expense is comprised of the following: administrative & general salaries, benefits, & other $ 15,558,475 office supplies 7,779,054 outside services 5,264,506 insurances and damages 3,425,408 miscellaneous general 240,794 directors 488,518 dues and subscriptions 257,014 maintenance of general plant 3,278,532 internal charges for power (153,779) total admin & general exp per financial statements $ 36,138,522 less: reclass of director fees to part ix, line 5 (356,911) less: reclass of labor to part ix, lines 5 & 7 (11,322,753) less: reclass of benefits to part ix, lines 8-10 (4,680,229) total admin & general expense per form 990, part ix $ 19,778,629”

“Other expenses is comprised of the following: consumer expenses $ 3,845,186 other deductions 8,678,061 taxes 9,103,670 transmission 1,302,111 total other expenses per form 990, part ix $ 22,929,028”

“The financial statements are prepared in accordance with accounting principles generally accepted in the united states of america as applied to regulated enterprises, which conform to policies prescribed by the federal energy regulatory commission's uniform system of accounts (usoa). 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.”

“Book-tax adjustment: deferred revenue allocated -37,000,000. Patronage capital assignable 56,528,161. Patronage capital retired -12,537,360. Patronage capital retired - unclaimed 2,655,514. Patronage capital retired - discount 222,367. Donated capital -51,815. Accumulated other comprehensive income - pension & benefits 765,280.”