Columbus Electric Cooperative Inc

“During the year the cooperative's bylaws were amended. The following is a summary of the changes: article xii - amendments this article was amended to state the following: "except as hereafter stated, these by-laws may be altered, amended or repealed ("amendment") by the members at any duly noticed annual member meeting or a special member meeting, provided that notice of such meeting shall have stated the proposed amendment. Corrections of typographical errors, adjustments to formatting or other non-substantive modifications of the bylaws shall not be considered "amendments" hereunder and may be made in the ordinary course of business upon approval in a regular meeting of the board of trustees. The board of directors is authorized to adopt policies to implement these provisions. Unless otherwise provided in these bylaws or applicable law, these bylaws may be amended by the affirmative ballot vote of the majority of the members voting in person at any annual member meeting or a special member meeting called for that purpose, provided a quorum is present at the commencement of the meeting. Notice: notice of any meeting at which the members will consider a proposed bylaw amendment must: 1. Contain the specific proposed amendment and any explanation of the proposed amendment deemed necessary and appropriate by the board; and, 2. State that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment; amendments proposed by board: the board may propose any amendment to the bylaws to the members for consideration at an annual member meeting or special member meeting at which a quorum is present. Amendments proposed from the floor at the annual meeting: upon a resolution adopted by a majority of those present and voting at an annual member meeting or special member meeting, at which a quorum is present, proposing an amendment of the bylaws, the cooperative will bring said proposed amendment to the membership at its next annual member meeting or at a special member meeting called for the purpose of considering the proposed amendment. Amendments proposed by petition: except for amendments relating to the sale or disposition of cooperative assets or territory, the members of the cooperative may request consideration of an amendment to these bylaws by presenting a petition to the board of directors signed by at least five (5) percent of the total membership. The proposed amendment shall be attached to the petition. The cooperative will present the proposed amendment and make its recommendation regarding adoption of the proposed amendment to the membership at its next annual member meeting or at a special member meeting called for the purpose of considering the proposed amendment. The petition from the members must be submitted a minimum of 180 days before the annual member meeting."”

“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 and paid preparer review drafts of form 990 prior to e-filing. Board reviews annual filings at monthly meetings.”

“The cooperative does not have a written policy, but the board and management annually review the services that are related to board, management or employees to disclose those relationships and approve the use of those services that are in the best interest of the cooperative.”

“Annually, the board of trustees determine the compensation of the general manager. Other than the general manager, the cooperative did not have any employees meeting the definition of officer or key employee. Therefore, and pursuant to form 990 instructions, line 15b has been answered "no".”

“The cooperative will provide a complete copy of its governing documents and audited financial statements to any member who requests a copy 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 highly 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 officer and highly compensated employees 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.”

“The board of trustees consider the general manager to be both the top management official and the top financial official. Therefore, only the general manager is listed as an employee officer.”

“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 cooperative annually provides each trustee who served on the board during the year a questionnaire and time log. The completed questionnaires and time logs are used to complete the applicable questions on the form 990 pertaining to business relationships among trustees and officers, as well as to determine if there are any transactions which must be reported in detail on schedule l - "transactions with interested persons". If the cooperative was unable to obtain a completed questionnaire and/or time log, the cooperative relied upon the completed information for the prior year. Mr. William cloudt passed away during 2022 and the cooperative did not receive a questionnaire from him; therefore, his prior year questionnaire was relied upon while preparing the 2022 form 990. There were no known changes from 2021.”

“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 service(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 total wages accrued and/or paid: total per lines 5-7 $ 1,249,924 less: trustee fees reported on forms 1099-nec (177,976) less: employee officer benefits reported on line 5 (103,190) plus: salaries and wages capitalized directly to plant 373,912 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 237,516 total wages accrued and/or paid $ 1,580,186”

“Administrative & general expense is comprised of the following: administrative & general salaries, benefits, & other $ 495,197 office supplies 76,308 outside services 213,410 directors 235,272 annual meeting 42,804 institutional & goodwill advertising 40,012 dues to associated organizations 72,014 miscellaneous general 37,086 utility commission 70,313 maintenance of general plant 119,192 total admin & general exp per financial statements $ 1,401,608 less: reclass of director fees to part ix, line 5 (177,976) less: reclass of labor to part ix, lines 5 & 7 (263,365) less: reclass of benefits to part ix, lines 8-10 (142,244) total admin & general expense per form 990, part ix $ 818,023”

“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 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.”

“Patronage capital allocated or to be allocated 420,453. Patronage capital retired -314,877. Net change in other equities -91,501.”

“Audited financial statements were prepared by an independent accountant for the cooperative's financial statement audit year end of july 31. The tax return has been and continues to be prepared based on a calendar tax year end of december 31. The board as a whole is responsible for overseeing the financial statement audit and selecting the independent financial statement auditor.”