Yampa Valley Electric Association

“The association has 9 board members; all 9 are allowed to vote.”

“During the year, the cooperative's bylaws were amended. The following is a summary of the changes: article x - dispostion of property: section a, changed maximum percentage of property value that the board of directors can sell from 10% to 15%. A copy of the bylaws can be found on the cooperative's website: https://www.yvea.com/about-us/company-documents/yvea-bylaws.”

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

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

“The association 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 provided a copy of the return to the board of directors prior to filing the form 990.”

“The board of directors perform an annual review and utilize internal resources when determining the compensation of the ceo. A written employment contract is also employed. The ceo utilizes internal resources as well as a compensation survey when determining the compensation of the cooperative's other employees meeting the definition of officer and key employees, if any.”

“The association will provide a complete copy of its governing documents, conflict of interest policy, and audited financial statements to any member who requests a copy of any such document. Annually, the association provides a copy of the audited balance sheet and income statement to the members of the association with the annual report. Additionally, a complete copy of the bylaws are located on the cooperative's website. Https://www.yvea.com/yvea-bylaws”

“In order to provide retirement benefits to its employees, the association 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 association 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 employee officers, key employees and highly compensated employees, meeting the eligibility requirements of such plans. The association also provides health, dental and life insurance to all eligible employees, including employee officers, key employees, and highly compensated employees, through a qualified plan. The amounts reported on part vii, column (f) for the employee officers, key employees, 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 association to its members.”

“Although no longer a usda rural utilities service (rus) borrower, the accounting records of the association are maintained in accordance with the rus uniform system of accounts (usoa) 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 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.”

“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 association allocates patronage capital to and, therefore, operates at cost with its patrons. The association'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 association 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 association'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 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 association for the 2024 calendar year. Because patronage dividends are the process by which the association operates at cost with its patrons and thereby a key component to accomplishing its exempt purpose, the association 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 $ 9,376,925 less: director fees reported on forms 1099-nec (136,248) less: employee officer/key employee benefits (524,221) plus: salaries and wages allocated to nonoperating margin 28,258 plus: salaries and wages capitalized directly to plant 2,008,423 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 573,892 total wages accrued and/or paid $11,327,029”

“Administrative & general expense is comprised of the following: administrative & general salaries, benefits, & other $ 2,664,692 employee training & benefits 805,214 office supplies 553,087 outside services 682,872 injuries & damages 392,867 insurance & regulatory fees 107,984 recruitment 24,660 dues & subscriptions 163,671 directors 414,805 maintenance of general plant 982,822 miscellaneous general 90,075 luminate fiber admin & general 1,411,718 total admin & general exp per financial statements $ 8,294,467 less: eliminating entries (215,520) less: reclass of director fees to part ix, line 5 (136,248) less: reclass of labor to part ix, lines 5 & 7 (3,676,226) less: reclass of benefits to part ix, lines 8-10 (1,359,568) total admin & general expense per form 990, part ix $ 2,906,905”

“Other expenses are comprised of the following: cost of internet sales and service $ 797,322 merchandising expenses 62,415 sales 189,061 transmission 317,255 other deductions 28,899 provision for income tax expense (benefit) (39,512) total other expenses per form 990, line 24e $ 1,355,440”

“Donated capital 7,078. Patronage capital allocated or to be allocated 7,507,027. Patronage capital retired - total -3,005,218. Patronage capital retired - discount 50,579. Luminate fiber sales - ubi tax basis of contribution in aid of construction -711,382. Unclaimed patronage capital contributed -3,347. Luminate fiber sales - ubi tax basis adjustment for sale of asset 38,557. Book-tax adjustment: deferred revenue allocated -3,500,000.”

“The board of directors have assigned members to an audit committee to oversee the financial statement audit and select the independent financial statement auditor.”