2023-11-15T19:21:26-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 740880083 SAN BERNARD ELECTRIC COOPERATIVE INC SANB 9798653171 PO BOX 1208 BELLVILLE TX 77418 MIKE ABLES CEO/MANAGER 9798653171 2023-11-15 1 MIKE ABLES 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-11-15 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z MIKE ABLES PO BOX 1208 BELLVILLE TX 77418 107498998 0 X WWW.SBEC.ORG X 1939 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 8 8 123 0 337 0 0 0 97337314 106734702 87289 153818 118700 134804 97543303 107023324 31264 59581 3882497 7694076 7786410 7989682 0 0 0 85833286 91239525 97533457 106982864 9846 40460 290497219 291758444 198517507 192598483 91979712 99159961 SBEC PROVIDES AFFORDABLE, RELIABLE ELECTRICITY AND INNOVATIVE AND PERSONALIZED ENERGY SERVICES FOR OUR MEMBER-OWNERS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 31,784 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 89 0 123 1 1 1 0 0 0 0 106528611 6502377 0 0 0 X 8 8 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 0 0 1 1 0 X JARED JANICEK BUSINESS GROUP MANAGERCFO 9798653171 309 WEST MAIN STREET BELLVILLE TX 77418 X JOHN ALLEN DIRECTOR (JAN-NOV) 12.00 X 20810 0 0 LARRY CHANEY DIRECTOR 8.00 X 15308 0 0 SAMMY CONDRA PRESIDENT 15.00 X X 34133 0 0 VANCE R ELLIOTT ASST SECRETARY/TREASURER 9.00 X X 24110 0 0 COLT HAACK 2ND VICE CHAIRMAN 12.00 X X 32683 0 0 NORMAN KIECKE 1ST VICE PRESIDENT 6.00 X X 33083 0 0 CHARLES MATULA SECRETARY/TREASURER 4.00 X X 17960 0 0 KARL N MICKLITZ DIRECTOR 9.00 X 20903 0 0 BRUCE R PILCIK CHAIRMAN (JAN) 8.00 X X 2827 0 0 LORI WALKER 3RD CHAIRMAN 10.00 X X 20310 0 0 MICHAEL ABLES CEO 55.00 X 212471 0 158363 BILLY MARRICLE PRESIDENT/GM (JAN) 45.00 X 86748 0 5417 JARED JANICEK BUS GROUP MANAGER 48.00 X 128406 0 64095 JAMES JOUETT ELECTRIC SYSTEMS GROUP MGR 50.00 X 179446 0 157318 SHAWN BARD IT GROUP MANAGER 42.00 X 138369 0 83457 ROBERT HROMADKA LINE CREW LEADER 47.00 X 127873 0 96046 WILLIAM PESCHEL MAINT/CONSTRUCTION MANAGER 41.00 X 118347 0 103608 JAMES PHILLIPS 1ST CLASS LINE TECH 55.00 X 127063 0 73455 JOHN SPIESS MEMBER SERVICES MANAGER 43.00 X 132301 0 89281 1473151 0 831040 18 0 1 0 D & J POWER INC 15507 HUDDLESTON DR CYPRESS TX 77429 LINE MAINTENANCE & CONSTRUCTION 2414010 ABC PROFESSIONAL TREE SERVICES 201 FLINT RIDGE RD WEBSTER TX 77598 ROW CLEARING 1176618 MCCOY TREE SURGERY PO BOX 720342 NORMAN OK 73072 ROW CLEARING 576855 BDG TREES LLC 2015 AHRENS ST HOUSTON TX 77017 ROW CLEARING 571343 OVER & UNDER LLC 15483 CR 424 SOMERVILLE TX 77879 LINE MAINTENANCE & CONSTRUCTION 504076 10 X SALES OF ELECTRICITY 221000 99371964 99371964 LEASE INCOME FROM LCRA 221000 5041103 5041103 PATRONAGE DIVIDENDS 221000 1606964 1606964 SERVICE FEES 221000 618424 618424 OTHER PROGRAM REVENUE 221000 96247 96247 106734702 80357 80357 115705 42244 73461 73461 73461 447277 433430 13847 13510 337 OTHER NON-OPERATING INCOME 221000 66389 66389 POLE ATTACHMENT INCOME 221000 50068 50068 DISPATCHING REVENUE 519200 4500 4500 120957 107023324 106814601 337 208386 X 59581 7694076 1214391 4461009 907632 1067902 338748 6273532 8968540 PURCHASED POWER 67796723 DISTRIBUTION EXPENSE 5450961 CONSUMER EXPENSE 1278920 ADMIN & GENERAL EXPENSE 720385 750464 106982864 906403 721004 3041917 3946801 91829 66802 4874562 5037568 75236953 70283509 293638089 89949562 199583306 203688527 5382142 6593749 1380107 1420484 290497219 291758444 7672786 9092587 73495 82519 59134 182723946 175449908 7964761 7996854 198517507 192598483 X 52520 50390 0 0 91927192 99109571 91979712 99159961 290497219 291758444 X 40460 7139789 X X 0 1 X 1 0 0 1 X 1958022 1958022 6360690 4186330 2174360 283104660 85763232 197341428 2214717 2214717 203688527 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 3595006 CONSUMER DEPOSITS 965326 DEFERRED CREDITS - UNCLAIMED CAPITAL CREDITS 349540 DEFERRED CREDITS - ADVANCES FOR CONSTRUCTION 1306698 DEFERRED CREDITS - ENERGY PREPAYMENTS 390290 DEFERRED CREDITS - OTHER 388 POWER COST ADJUSTMENT - OVER COLLECTED 1347393 OTHER LIABILITIES 42213 7996854 X 107023324 0 107023324 0 107023324 99288788 0 99288788 7694076 7694076 106982864 PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR SCHOLARSHIPS TO ENABLE STUDENTS FROM RURAL AREAS TO ATTEND COLLEGE, TECHNICAL SCHOOL OR OTHER POST SECONDARY EDUCATION INSTITUTION. ANY AMOUNTS SO DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. THE COOPERATIVE HAS PUT INTO PLACE AN "OPERATION ROUNDUP" PLAN. MEMBERS WHO WISH TO PARTICIPATE IN THE PLAN VOLUNTARILY ROUND THEIR ELECTRIC BILLS UP TO THE NEAREST WHOLE DOLLAR. THE DIFFERENCE IS USED TO FUND THE PLAN. THE "OPERATION ROUNDUP" FUNDS ARE MAINTAINED IN A SEPARATE ACCOUNT AND USED TO SUPPORT EDUCATION PROJECTS, YOUTH PROJECTS, COMMUNITY PROJECTS AND EMERGENCY ASSISTANCE WITHIN THE COMMUNITIES AND AREAS SERVED BY THE COOPERATIVE. PART X, LINE 2: THE COOPERATIVE HAS ADOPTED 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 DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 7,694,076. 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. PART VIII: THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 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 VIII HAS BEEN LEFT BLANK. PART XII, LINE 4B: FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID OR ALLOCATED TO THE MEMBERS IS REPORTED AS AN INCREASE IN EQUITY AND NOT AS AN EXPENSE. THEREFORE, NET INCOME PER THE AUDITED FINANCIAL STATEMENTS IS REPORTED GROSS OF THE AMOUNT OF PATRONAGE DIVIDENDS THAT ARE EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. HOWEVER, BECAUSE THE ALLOCATION OF PATRONAGE DIVIDENDS IS ONE ASPECT OF HOW THE COOPERATIVE FULFILLS ITS TAX EXEMPT PURPOSE OF OPERATING ON A COOPERATIVE BASIS, THE AMOUNT OF PATRONAGE DIVIDENDS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS REPORTED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". 0 AUSTIN COUNTY FAIR ASSOCIATION PO BOX 141 BELLVILLE TX 77418 741048551 501(C)(3) 6550 0 2022 DONATION COLORADO COUNTY FAIR ASSOCIATION INC 316 SPRING ST COLUMBUS TX 78934 742181450 501(C)(3) 5650 0 2022 DONATION WALLER COUNTY FAIR ASSOCIATION 21988 FM 359 HEMPSTEAD TX 77445 741481196 501(C)(3) 14075 0 2022 DONATION 3 X X X X 0 0 0 MICHAEL ABLES CEO 200167 0 8981 0 3323 0 132047 0 26316 0 370834 0 0 0 JAMES JOUETT ELECTRIC SYSTEMS GROUP MGR 170516 0 3816 0 5114 0 145299 0 12019 0 336764 0 0 0 ROBERT HROMADKA LINE CREW LEADER 123124 0 2229 0 2520 0 69221 0 26825 0 223919 0 0 0 WILLIAM PESCHEL MAINT/CONSTRUCTION MANAGER 112134 0 2530 0 3683 0 79330 0 24278 0 221955 0 0 0 SHAWN BARD IT GROUP MANAGER 133121 0 3041 0 2207 0 55388 0 28069 0 221826 0 0 0 JOHN SPIESS MEMBER SERVICES MANAGER 126580 0 2704 0 3017 0 76817 0 12464 0 221582 0 0 0 JAMES PHILLIPS 1ST CLASS LINE TECH 124196 0 1832 0 1035 0 43852 0 29603 0 200518 0 0 0 JARED JANICEK BUS GROUP MANAGER 125076 0 2919 0 411 0 34361 0 29734 0 192501 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. MICHAEL ABLES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 132,047 EMPLOYER CONTRIBUTION TO 401(K) PLAN -0- TOTAL REPORTED IN COLUMN C $ 132,047 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (132,047) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 46,087 EXPENSE TO THE COOPERATIVE $ 46,087 JAMES JOUETT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 135,054 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,245 TOTAL REPORTED IN COLUMN C $ 145,299 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (135,054) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,106 EXPENSE TO THE COOPERATIVE $ 57,351 ROBERT HROMADKA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 63,118 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,103 TOTAL REPORTED IN COLUMN C $ 69,221 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (63,118) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,478 EXPENSE TO THE COOPERATIVE $ 34,581 WILLIAM PESCHEL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 72,390 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,940 TOTAL REPORTED IN COLUMN C $ 79,330 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (72,390) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,231 EXPENSE TO THE COOPERATIVE $ 39,171 SHAWN BARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 47,048 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,340 TOTAL REPORTED IN COLUMN C $ 55,388 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (47,048) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 38,687 EXPENSE TO THE COOPERATIVE $ 47,027 JOHN SPIESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 69,179 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,638 TOTAL REPORTED IN COLUMN C $ 76,817 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (69,179) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,397 EXPENSE TO THE COOPERATIVE $ 41,035 JAMES PHILLIPS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 38,841 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,011 TOTAL REPORTED IN COLUMN C $ 43,852 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (38,841) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,338 EXPENSE TO THE COOPERATIVE $ 28,349 JARED JANICK: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 26,504 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,857 TOTAL REPORTED IN COLUMN C $ 34,361 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (26,504) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 24,480 EXPENSE TO THE COOPERATIVE $ 32,337 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 $40,460, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THEREFORE, IT HAS REVENUE IN DECEMBER OF EACH YEAR THAT IT HAS EARNED BUT WILL NOT BILL UNTIL THE FIRST BILLING CYCLE OF THE FOLLOWING YEAR. THE COOPERATIVE ESTIMATES THIS REVENUE AND RECORDS IT AS ACCRUED UNBILLED REVENUE IN ORDER TO MATCH THE REVENUE WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES THE REVENUE TO MEMBERS IN THE YEAR IT IS BILLED RATHER THAN WHEN ACCRUED. THIS TIMING DIFFERENCE IS FAIR AND EQUITABLE BECAUSE IT MATCHES THE PATRONAGE DIVIDEND ALLOCATED WITH THE BILLING RECORDS USED TO ALLOCATE THE MARGINS. DUE TO THE TIMING OF WHEN THE COOPERATIVE ALLOCATES ACCRUED UNBILLED REVENUE, PAGE 1, PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/22 $ 1,389,915 LESS: UNBILLED REVENUE 12/31/21 (1,349,455) (A) - NET INCREASE EQUALS NET INCOME ON PAGE I, LINE 19 $ 40,460 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 7,694,076 TOTAL 2022 NET MARGIN (A + B) $ 7,734,536 FORM 990, PART VI THE BYLAWS OF THE COOPERTIVE WERE AMENDED DURING THE YEAR - ARTICLE IV DIRECTORS, SECTION 4.05. DIRECTORATE DISTRICTS, HAS BEEN AMENDED TO CHANGE THE BOUNDARIES OF THE DISTRICTS. DISTRICT 1. NOW READS, "DISTRICT 1. BEGINNING ON FM 362 IN GRIMES COUNTY IN THE SBEC SERVICE TERRITORY, EAST OF FM 362 BACK TO THE WALLER - GRIMES COUNTY LINE INCLUDING NORTH GRIMES COUNTY. THEN EAST OF CLARK ROAD, TO NORTH OF REIDS PRAIRIE ROAD, TO EAST OF NEWLAND ROAD, TO NORTH OF RILEY ROAD TO EAST AND SOUTH OF KYLE ROAD, TO EAST OF BOWLER ROAD TO FM 1488. THEN SOUTH OF FM 1488, TO THE WALLER-HARRIS COUNTY LINE. THE SBEC SERVICE TERRITORY OF HARRIS COUNTY SOUTH OF FM 1488 TO IMHOF ROAD, THEN WEST OF KICKAPOO ROAD TO JOSEPH ROAD. NORTH OF JOSEPH ROAD TO THE WEST OF THE WALLER - MONTGOMERY COUNTY LINE NORTH BACK TO FM 1488 INCLUDING THE NORTHERN PORTION OF THE SBEC SERVICE TERRITORY IN MONTGOMERY COUNTY." DISTRICT 2. NOW READS, "WALLER COUNTY SOUTH OF US HWY 290 WITH THE BRAZOS RIVER AS WESTERN BORDER TO FM 3346, NORTH OF FM 3346 TO FM 359. THEN EAST OF FM 359 AND SOUTH ALONG BOZEMAN, SOUTH-EAST OF NEIMAN, AND SOUTH ALONG GARRET ROAD WITH THE WALLER COUNTY LINE AS THE EASTERN AND SOUTHERN BORDER." DISTRICT 3. NOW READS, "NORTH AUSTIN COUNTY (NORTH OF STATE HIGHWAY 159 IN THE WESTERN HALF OF THE COUNTY AND NORTH OF FM 529 IN THE EASTERN HALF OF THE COUNTY). WALLER COUNTY NORTH OF FM 529 TO FM 359 THEN NORTH TO FM 3346 AND SOUTH OF FM 3346 BACK WEST TO STATE HWY 159 AT THE BRAZOS RIVER." DISTRICT 4. NOW READS, "SOUTH AUSTIN COUNTY (SOUTH OF STATE HIGHWAY 159 AND FM 529). WALLER COUNTY SOUTH OF FM 529 TO FM 359 THEN SOUTH, THEN NORTH ALONG BOZEMAN ROAD, NORTH-WEST OF NEIMAN, AND NORTH ALONG GARRETT ROAD TO THE BRAZOS RIVER." DISTRICT 8. NOW READS, "CENTRAL WALLER COUNTY NORTH OF US HWY 290 AND EAST OF THE BRAZOS RIVER. GRIMES COUNTY LINE TO FM 362, THEN SOUTH BACK TO THE WALLER - GRIMES COUNTY LINE. WEST OF CLARK ROAD, TO SOUTH OF REIDS PRAIRIE ROAD, TO WEST OF NEWLAND ROAD, TO SOUTH OF RILEY ROAD TO WEST AND NORTH OF KYLE ROAD, TO WEST OF BOWLER ROAD TO FM 1488. THEN NORTH OF FM 1488 CROSSING THROUGH HARRIS COUNTY AND THEN BACK TO THE WALLER-HARRIS COUNTY LINE WITH US HWY 290 AS THE SOUTHERN BORDER." DISTRICT 9. NOW READS, "BEGINNING IN HARRIS COUNTY AT THE INTERSECTION OF KICKAPOO ROAD AND IMHOF ROAD, THEN EAST OF KICKAPOO ROAD TO JOSEPH ROAD. SOUTH OF JOSEPH ROAD TO THE EAST OF THE WALLER - MONTGOMERY COUNTY LINE NORTH BACK TO FM 1488 INCLUDING THE SOUTHERN PORTION OF THE SBEC SERVICE TERRITORY IN WALLER AND MONTGOMERY COUNTIES. THE BYLAWS HAVE ALSO BEEN AMENDED TO CHANGE ANY REFERENCE TO "CHAIRMAN" OF THE BOARD OF DIRECTORS TO "PRESIDENT", AND "VICE CHAIRMAN" TO "VICE PRESIDENT" THROUGHOUT THE DOCUMENT. UNDER ARTICLE VI OFFICERS; MISCELLEOUS, SECTION 6, "PRESIDENT/GENERAL MANAGER" HAS BEEN CHANGED TO "CEO/GENERAL MANAGER." FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAD 8 BOARD MEMBERS AT YEAR END; ALL 8 ARE ALLOWED TO VOTE, HOWEVER, THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. 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 PER DISTRICT. 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 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 PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. THE CONFLICT OF INTEREST POLICY IS REVIEWED ON AN ANNUAL BASIS. FORM 990, PART VI, SECTION B, LINE 14: THE COOPERATIVE DOES NOT HAVE A WRITTEN DOCUMENT RETENTION AND DESTRUCTION POLICY IN PLACE, BUT FOLLOWS THE RUS RECOMMENDATIONS REGARDING DOCUMENT RETENTION AND DESTRUCTION. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS AND A COMPENSATION COMMITTEE COMPARE FORMS 990 OF OTHER COOPERATIVES AND USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE PRESIDENT/GM. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE PRESIDENT/GM UTILIZES AN INDEPENDENT COMPENSATION CONSULTANT, FORMS 990 OF OTHER COOPERATIVES, AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. FINALLY, THE COOPERATIVE'S FINANCIAL STATEMENTS, GOVERNING DOCUMENTS, AND BYLAWS CAN BE FOUND ON ITS WEBSITE. FORM 990, PARTS VI & VII: THE COOPERATIVE ANNUALLY PROVIDES EACH DIRECTOR 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 DIRECTORS, OFFICERS, AND KEY EMPLOYEES, 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. THE COOOPERATIVE WAS UNABLE TO OBTAIN A QUESTIONNAIRE FROM DIRECTOR JOHN ALLEN AND OFFICER BILLY MARRICLE, AND THEREFORE RELIED UPON THEIR PRIOR YEAR QUESTIONNAIRES WHILE PREPARING THE RETURN. 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, KEY EMPLOYEES 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 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. 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) AS 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 $ 5,675,400 LESS: DIRECTORS FEES REPORTED ON FORM 1099-NEC (222,127) LESS: OFFICER & KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (385,193) PLUS: SALARIES & WAGES ALLOCATED TO POWER 54,682 PLUS: SALARIES & WAGES ALLOCATED TO NONOPERATING MARGINS 13,325 PLUS: SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 3,340,552 PLUS: SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 411,768 TOTAL WAGES ACCRUED AND/OR PAID $ 8,888,407 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TAXES - PROPERTY & OTHER $ 504,927 TRANSMISSION 245,537 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 750,464 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 IS 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 ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,152,509 OFFICE SUPPLIES 261,399 OUTSIDE SERVICES EMPLOYED 105,049 REGULATORY COMMISSION 167,694 DUPLICATE CHARGES (CREDIT) (125,080) DIRECTORS 318,243 DUES PAID TO ASSOCIATED ORGANIZATIONS 91,875 MISCELLANEOUS GENERAL 880,995 MAINTENANCE OF GENERAL PLANT 267,206 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,119,890 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (58,736) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (222,127) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,387,493) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (731,149) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 720,385 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. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 7,694,076. PATRONAGE CAPITAL RETIRED - TOTAL -2,539,815. PATRONAGE CAPITAL RETIRED - DISCOUNT 737,138. NET CHANGE IN MEMBERSHIPS -2,130. OTHER COMPREHENSIVE INCOME-PROVISION FOR POST-RETIREMENT BENEFIT OBLIGATION 1,250,520.