Roosevelt County Electric Cooperative Inc

“The cooperative has 7 board members; all 7 are allowed to vote. However, the board president 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 trustees. 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 5. Amendment to the bylaws”

“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 provided a copy of the form 990 to the board for discussion and review. Any comments received from the board are addressed prior to filing.”

“The board of trustees evaluates the performance of the general manager/executive vp and then votes on his annual salary. The decision is partially based on a compensation survey, which includes salaries from similar cooperatives throughout new mexico and the nation. The board of trustees and executive vp/general manager evaluates the performance of the organization's other employees meeting the definition of officer and key employees, if any. A compensation survey, which includes salaries from similar cooperatives throughout new mexico and the nation, is then used to help set compensation.”

“The bylaws of the cooperative are located on its website. The cooperative also annually provides a copy of the audited balance sheet and income statement to the members of the cooperative with the annual report. Additionally, the cooperative provides a complete copy of its conflict of interest policy and audited financial statements upon request of a member.”

“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 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.”

“The accounting records of the cooperative are maintained in accordance with the rural utilities services (rus) uniform system of accounts (usoa) as prescribed for electric borrowers of the 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 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 $ 2,201,645 less: trustee fees reported on forms 1099-nec (73,089) less: employee officer benefits reported on line 5 (181,277) plus: salaries and wages capitalized directly to plant 737,756 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 345,112 total wages accrued and/or paid $ 3,030,147”

“Administrative and general expense is comprised of the following: administrative & general salaries, benefits & other $ 300,568 office supplies 15,701 accounting 321,565 outside services employed 102,678 employee pension and benefits 206,007 regulatory commission 105,103 directors 111,014 dues paid to associated organizations 67,612 capital credit 7,386 annual meeting 22,410 advertising 28,475 miscellaneous general 13,346 maintenance of general plant 114,806 total admin & general exp per financial statements $ 1,416,671 less: reclass of trustee fees to part ix, line 5 (73,089) less: reclass of labor to part ix, lines 5 & 7 (520,725) less: reclass of benefits to part ix, lines 8-10 (243,535) total admin & general expense per form 990, part ix $ 579,322”

“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 2022 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.”

“Other expenses is comprised of the following: transmission $ 67,514 taxes 259 sales 2,840 total other expenses per form 990, part ix $ 70,613”

“Patronage capital allocated or to be allocated 287,206. Patronage capital retired -496,916. Other comprehensive income (loss) - provision for pensions & benefits -355,817. Equity method income (loss) from subsidiary -25.”

“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.”