2023-11-15T16:37:10-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 730308955 KAY ELECTRIC COOPERATIVE INC KAYE 5803631260 PO BOX 607 BLACKWELL OK 746310607 JASON BOESCH GENERAL MANAGER/CEO 5803631260 2023-11-14 1 JASON BOESCH 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-11-14 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z JASON BOESCH PO BOX 607 BLACKWELL OK 746310607 47141507 0 X WWW.KAYELECTRIC.COOP X 1937 OK TO PROVIDE RELIABLE ELECTRICITY TO OUR MEMBER/OWNERS AT A REASONABLE COST. 9 9 55 0 181558 11888 0 0 38388916 46572928 126518 296711 359438 176654 38874872 47046293 14203 14007 2369033 2839984 3642220 3794489 0 0 0 32715404 40167800 38740860 46816280 134012 230013 91756147 96629831 46536211 49448974 45219936 47180857 KAY ELECTRIC COOPERATIVE IS A RURAL ELECTRIC DISTRIBUTION COOPERATIVE ORGANIZED UNDER THE RURAL ELECTRIC COOPERATIVE ACT. OUR MISSION IS TO PROVIDE DEPENDABLE, AFFORDABLE, AND SAFE ELECTRICITY TO OUR MEMBER-OWNERS. 0 0 SALE OF ELECTRIC POWER TO MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 5,888 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 52 0 55 1 1 1 0 0 0 0 46142421 925619 0 0 0 X 9 9 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 0 1 1 1 0 OK X JOSEPH SOULEK COO 5803631260 300 WEST DOOLIN AVE BLACKWELL OK 74631 X MAX HOHMANN PRESIDENT 4.00 X X 30377 0 0 VERL BRORSEN VICE PRESIDENT 6.20 X X 38177 0 0 RON SHOFFNER SECRETARY/TREASURER 3.20 X X 30510 0 0 TIM BLANTON TRUSTEE 4.90 X 29994 0 0 BRADY HOSTETLER TRUSTEE 3.60 X 28639 0 0 MICHAEL LEBEDA TRUSTEE 3.80 X 26469 0 0 KENT MCANINCH TRUSTEE (JAN-APRIL) 4.20 X 9097 0 0 BART CARDWELL TRUSTEE (MAY-DEC) 4.00 X 21683 0 0 JAKE OLSEN TRUSTEE 4.10 X 28579 0 0 CHAD OTTO TRUSTEE 3.30 X 26641 0 0 JASON BOESCH CHIEF EXECUTIVE OFFICER 55.00 X 220095 0 213794 JOSEPH SOULEK CHIEF OPERATING OFFICER 50.00 X 157601 0 81398 DOUGLAS WORLEY DIRECTOR OF ENGINEERING 50.00 X 159232 0 39448 DAVID CHILDERS DIRECTOR OF ACCOUNTING 40.00 X 136013 0 79199 HEATH LAMBERT DIRECTOR OF OPERATIONS 55.00 X 120763 0 76317 TERRY GRACE LINE FOREMAN 48.00 X 109072 0 40851 1172942 0 531007 6 0 1 0 KC ELECTRIC 4300 S VAN BUREN ENID OK 73703 POWERLINE CONSTRUCTION 1135406 1 X SALES OF ELECTRICITY 221000 45068325 45068325 PATRONAGE DIVIDENDS 221000 990051 990051 GENERATOR & ELECTRICIAN SALES 221000 433220 433220 SERVICE FEES 221000 81332 81332 46572928 131820 131820 77452 17418 82769 3930 -5317 13488 8171 13488 -5317 164891 0 164891 164891 164891 7703 8515 -812 -812 ADMIN & MANAGEMENT SERVICES 561000 168882 168882 OTHER NON-OPERATING INCOME 900099 413 413 169295 47046293 46737819 181558 126916 X 14007 2839984 1141734 1551284 398905 532917 169649 1746905 2707807 PURCHASED POWER 33196156 ADMIN & GENERAL EXPENSE 913335 DISTRIBUTION EXPENSE 616470 UNRELATED BUS. INC. TAX 4325 982802 46816280 865951 136594 500143 3699799 3609762 385424 416682 1243815 2424873 281425 70046 80253524 12613498 62843421 67640026 5288562 4974021 16346007 17011124 301600 346703 91756147 96629831 3349487 6126156 165848 149828 37818842 37982272 5202034 5190718 46536211 49448974 X 232900 234895 0 0 44987036 46945962 45219936 47180857 91756147 96629831 X 230013 -375851 2106759 X X 0 1 X 0 0 0 1 X 1252871 1252871 5288260 3000950 2287310 72059549 9326891 62732658 1652844 285657 1367187 67640026 PATRONAGE CAPITAL - WFEC 14719445 C PATRONAGE CAPITAL - NISC 79943 C PATRONAGE CAPITAL - CFC 1268156 C PATRONAGE CAPITAL - FEDERATED INSURANCE 186450 C PATRONAGE CAPITAL - AECI 157358 C PATRONAGE CAPITAL - OTHER 11175 C CAPTIAL TERM CERTIFICATES - CFC 588597 C 17011124 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 2213768 CONSUMER DEPOSITS 2514768 ACCRUED OPERATING TAXES 79012 DEFERRED CREDITS - CONSUMER ADVANCE FOR CONSTRUCTION 328748 DEFERRED CREDITS - OTHER 54422 5190718 X 45993870 -375851 -375851 46369721 676572 676572 47046293 43299724 0 43299724 3516556 3516556 46816280 PART IV, LINE 2B: EMPLOYEES OF THE COOPERATIVE HAVE ESTABLISHED A SCHOLARSHIP FUND OF WHICH THE ASSETS AND LIABILITIES ARE HELD BY THE COOPERATIVE. PART X, LINE 2: THE COOPERATIVE AND SUBSIDIARY FOLLOW THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE COOPERATIVE IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE AND SUBSIDIARY DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS), OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECLASSIFIED TO PART IX 676,572. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ASSIGNED OR TO BE ASSIGNED 2,839,984. EXPENSES RECLASSIFIED TO PART IX 676,572. PART VII: THE AMOUNT OF INVESTMENTS - OTHER SECURITIES ON FORM 990, PAGE 11, PART X, LINE 12 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART VII HAS BEEN LEFT BLANK. PART IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. X X 0 0 0 JASON BOESCH CHIEF EXECUTIVE OFFICER 206656 0 512 0 12927 0 184177 0 29617 0 433889 0 0 0 JOSEPH SOULEK CHIEF OPERATING OFFICER 137806 0 4491 0 15304 0 52922 0 28476 0 238999 0 0 0 DAVID CHILDERS DIRECTOR OF ACCOUNTING 131655 0 2509 0 1849 0 50000 0 29199 0 215212 0 0 0 DOUGLAS WORLEY DIRECTOR OF ENGINEERING 147928 0 4591 0 6713 0 9629 0 29819 0 198680 0 0 0 HEATH LAMBERT DIRECTOR OF OPERATIONS 115128 0 4141 0 1494 0 47837 0 28480 0 197080 0 0 0 PART II, COLUMN C: INCLUDED IN THIS AMOUNT IS THE INCREASE IN ACTUARIAL VALUE OF BENEFITS PAYABLE UNDER A DEFINED BENEFIT RETIREMENT PLAN. THE CONTRIBUTION RATE FOR PARTICIPANTS IN THE NRECA R&S DEFINED BENEFIT PENSION PLAN ARE THE SAME FOR ALL INDIVIDUALS IN THIS MULTI-EMPLOYER PLAN. THE CHANGE IN ACTUARIAL VALUE FOR EACH PARTICIPANT, HOWEVER, VARIES WITH AGE, YEARS OF SERVICE AND THE CURRENT INTEREST RATE ENVIRONMENT. IN OTHER WORDS, THE OLDER A PLAN PARTICIPANT IS, THE GREATER THE INCREASE IN THAT INDIVIDUAL'S CHANGE IN ACTUARIAL VALUE, ALL OTHER THINGS BEING EQUAL. BECAUSE THIS RELATES TO A MULTI-EMPLOYER PLAN, CASH CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. JASON BOESCH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 171,539 EMPLOYER CONTRIBUTION TO 401(K) PLAN 12,638 TOTAL REPORTED IN COLUMN C $ 184,177 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (171,539) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 62,497 EXPENSE TO THE COOPERATIVE $ 75,135 JOSEPH SOULEK: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 43,609 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,313 TOTAL REPORTED IN COLUMN C $ 52,922 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (43,609) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,805 EXPENSE TO THE COOPERATIVE $ 52,118 DAVID CHILDERS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 41,682 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,318 TOTAL REPORTED IN COLUMN C $ 50,000 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (41,682) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,314 EXPENSE TO THE COOPERATIVE $ 55,632 DOUGLAS WORLEY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 0 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,629 TOTAL REPORTED IN COLUMN C $ 9,629 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (0) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 46,278 EXPENSE TO THE COOPERATIVE $ 55,907 HEATH LAMBERT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 40,473 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,364 TOTAL REPORTED IN COLUMN C $ 47,837 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (40,473) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 41,221 EXPENSE TO THE COOPERATIVE $ 48,585 FORM 990, PART I: IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET INCOME OF $230,013, WHICH IS THE EFFECT OF UNREALIZED GAINS/LOSSES ON INVESTMENTS AND EQUITY METHOD INCOME FROM THE SUBSIDIARY. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: (A) - NET INCOME ON PAGE 1, PART I, LINE 19 $ 230,013 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 2,839,984 (C) - UNREALIZED GAIN/(LOSS) ON INVESTMENTS, PART XI, LINE 5 (375,851) 2022 NET MARGIN PER FINANCIAL STATEMENTS (A + B + C) $ 2,694,146 FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. FORM 990, PART VI, SECTION A, LINE 7B 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 FORM 990, PART VI, SECTION A, LINE 8B 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". FORM 990, PART VI, SECTION B, LINE 11B MANAGEMENT PROVIDED A COMPLETE COPY OF THE FORM 990 TO THE BOARD PRIOR TO ELECTRONIC FILING. FORM 990, PART VI, SECTION B, LINE 12C ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE THE BOARD OF TRUSTEES, OFFICERS, AND HIGHLY COMPENSATED EMPLOYEES TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. TRUSTEES, OFFICERS, AND HIGHLY COMPENSATED EMPLOYEES ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF TRUSTEES USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN OKLAHOMA AND THE NATION. THE CEO USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT OKLAHOMA AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE 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. FORM 990, PART VII, COLUMN F: 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 AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS 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. 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. FORM 990, PART VIII, LINE 2: 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. FORM 990, PART IX: ALTHOUGH THE COOPERATIVE IS NO LONGER A RURAL UTILITIES SERVICE (RUS) BORROWER, ITS ACCOUNTING RECORDS 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. FORM 990, PART IX, LINES 5-7: 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 $ 2,693,018 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-NEC (270,166) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (334,640) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 261,335 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,267,246 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 276,000 TOTAL WAGES ACCRUED AND/OR PAID $ 3,892,793 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 998,824 OFFICE SUPPLIES 208,951 OUTSIDE SERVICES 123,627 WORKMAN'S COMPENSATION & INSURANCES 244,796 EMPLOYEE BENEFITS 126,087 DIRECTORS 323,180 GENERAL MANAGER EXPENSES 6,389 ADVERTISING 29,175 EDUCATIONAL 123,682 MEETINGS 146,538 MISCELLANEOUS GENERAL 136,172 MAINTENANCE OF GENERAL PLANT 184,717 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,652,138 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (270,166) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (870,188) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (598,449) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 913,335 FORM 990, PART IX, LINE 4: 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. FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE AND MANAGEMENT SERVICE COSTS $ 113,891 CUSTOMER SERVICE & ACCOUNTS 245,307 ELECTRICIAN SERVICE 98,241 GENERATOR INSTALLATION 331,941 OPERATING TAXES 74,930 OTHER FEES AND DUES 118,492 TOTAL OTHER EXPENSE PER FORM 990, PART IX $ 982,802 FORM 990, PART IX, LINE 1: 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. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 2,839,984. PATRONAGE CAPITAL RETIRED - TOTAL -855,031. PATRONAGE CAPITAL RETIRED - UNCLAIMED 23,065. NET CHANGE IN MEMBERSHIP 1,995. OCI - POSTRETIREMENT BENEFIT 91,689. DONATED CAPITAL 5,057. FORM 990, PART XII, LINE 2C: 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.