Mountain View Electric Association

“The cooperative has 7 board members; all 7 are allowed to vote, however the board president votes only in the case of a tie.”

“During the year, the cooperative's bylaws were amended. The following is a summary of the changes: article xiii: failure to claim property amended the time period that the member or patron has to claim property or funds from six (6) years to three (3) years. A complete copy of the bylaws can be found on the cooperative's website: www.mvea.coop/about-us/by-laws/.”

“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 board of directors regularly monitors compliance with the conflict of interest policy. Such compliance involves a "certificate to disclose any conflicts of interest", which is completed annually by each director, the ceo, each executive team member and the cooperative's attorney. In addition, any newly appointed or elected board members or individuals recently hired in the capacity of ceo, executive team member or the cooperative attorney will complete a certificate. These cetificates will be submitted to the board president for review and appropriate action. The attorney is responsible for maintaining a current file of these certificates. It is the goal of the policy for the directors, ceo, executive team and the cooperative's attorney to avoid the appearance or existence of conflicts of interest. When a potential conflict of interest or a situation arises that violates, may violate or could appear to violate the intent of the policy, a full and open disclosure of the facts shall be made to the board. The board then makes the proper inquiry, requests the opinion of the cooperative's attorney and makes a determination if a violation of the policy or a conflict of interest exists. If this determination is made, the director will be excused from the meeting and not allowed to participate in the discussion and decisions on such matters. If a director with a conflict of interest that is known to other directors does not declare the conflict of interet or leave the meeting following such declaration, the board may, upon motion, vote to direct the director leave the meeting for discussion and vote.”

“The board of directors annually approves the compensation for the chief executive officer. This process involves the use of a third party compensation survey and an internal performance review. The chief executive officer uses a compensation survey and independent consultant when determining the compensation of the cooperative's other employees meeting the definition of officer and key employees. The survey includes salaries from similarly situated cooperatives throughout the state.”

“The organization makes its governing documents, conflict of interest policy, and financial statements available to the members and public upon request. The bylaws and the annual report, which includes a summarized set of financial statements, can also be found on the cooperative's website (www.mvea.coop).”

“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 to such plan. Employer contributions for both plans are available to participating employees, including officers, key employees and highest compensated employees 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, key employees and highest compensated employees is comprised of the actuarial increase in benefits for the defined benefit plan, total amount contributed by the association 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 for electric borrowers of the rural utilities service. The usoa generally 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 its accounting system. All other expenses of the cooperative are reported on the applicable line based on the functional 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 $12,468,781 less: director fees reported on forms 1099-nec (123,950) less: employee officer benefits included in line 5 (226,020) less: key employee benefits included in line 5 (368,785) plus: salaries & wages allocated to nonoperating margins 83,783 plus: salaries and wages capitalized directly to plant 6,504,106 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 623,606 total wages accrued and/or paid $18,961,521”

“Administrative & general expense is comprised of the following: administrative & general salaries, benefits, & other $ 3,579,200 office supplies 261,921 outside services 490,868 employee benefits & training 150,875 insurances and damages 40,171 directors 211,022 annual meeting expense 202,171 capital credits expense 63,055 dues to associated organizations 174,200 miscellaneous general expense 41,258 regulatory commission 13,899 rent expense 42,914 property taxes 33,989 maintenance of general plant 1,343,119 other - charges for internal use of electricity (203,629) total admin & general exp per financial statements $ 6,445,033 less: reclass of director fees to part ix, line 5 (123,950) less: reclass of labor to part ix, lines 5 & 7 (3,003,847) less: reclass of benefits to part ix, lines 8-10 (1,170,766) total admin & general expense per form 990, part ix $ 2,146,470”

“Other expenses is comprised of the following: sales expense $ 832,470 transmission expense 135,776 other deductions 821,930 total other expenses before reclassification $ 1,790,176 less: reclass of labor to part ix, lines 5 & 7 (479,240) less: relcass of benefits to part ix, lines 5 & 7 (186,787) total other expenses per form 990, line 24e $ 1,124,149”

“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 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.”

“Patronage capital assigned or assignable 10,972,302. Patronage capital retired - total -2,015,530. Patronage capital retired - discount 138,205. Other comprehensive income -112,499. Unclaimed patronage capital reclaimed 2,891,747.”

“Audited financial statements were prepared by an independent accountant for the cooperative's financial statement audit year-end of july 31st. The tax return has been and continues to be prepared based on a calendar tax year-end of december 31.”