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TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
Attach to Form 990 or 990-EZ.
Information about Schedule O (Form 990 or 990-EZ) and its instructions is atwww.irs.gov/form990.
OMB No. 1545-0047
2013
Open to Public
Inspection
Inspection
Name of the organization
DENTON COUNTY ELECTRIC COOPERATIVE INC
DBA COSERV ELECTRIC
DBA COSERV ELECTRIC
Employer identification number
75-0233075
75-0233075
| Return Reference | Explanation |
|---|---|
| Form 990, Part I, Line 19 | THE LOSS REPORTED ON PAGE 1, PART I, LINE 19 DIFFERS FROM THE TOTAL NET MARGINS REPORTED ON THE COOPERATIVE'S AUDITED FINANCIAL STATEMENTS DUE TO BOOK TO TAX ADJUSTMENTS REQUIRED TO CONFORM TO THE FORM 990 INSTRUCTIONS. THE FIRST ADJUSTMENT IS FOR THE EQUITY METHOD INCOME RECORDED ON THE COOPERATIVE'S BOOKS AND INCLUDED IN TOTAL NET MARGINS. U.S. GAAP REQUIRES THE COOPERATIVE TO RECORD ON ITS BOOKS THE EQUITY METHOD INCOME FROM ITS WHOLLY OWNED SUBSIDIARY. EQUITY METHOD INCOME IS NOT INCOME FOR IRS FORM 990 PURPOSES AND AS SUCH HAS BEEN REPORTED AS AN OTHER CHANGE IN NET ASSETS. THE SECOND ADJUSTMENT IS FOR THE PATRONAGE DIVIDENDS ALLOCATED OR TO BE ALLOCATED BY THE COOPERATIVE TO MEMBERS. WHEREAS THE FORM 990 REQUIRES SUCH AMOUNTS TO BE REPORTED AS AN EXPENSE, PATRONAGE DIVIDENDS ALLOCATED OR TO BE ALLOCATED ARE AN INCREASE IN CAPITAL AND EQUITY, SPECIFICALLY PATRONAGE CAPITAL, ON U.S. GAAP BASIS FINANCIAL STATEMENTS. |
| Form 990, Part VI, Section A, line 4 | THE BYLAWS WERE AMENDED DURING THE YEAR TO (1) CLARIFY WHEN ANNUAL MEETING NOTICES ARE DEEMED RECEIVED IF MAILED WITH FIRST CLASS POSTAGE PAID, (2) CLARIFY WHEN BALLOTS ARE CONSIDERED TIMELY RECEIVED BY THE COOPERATIVE, (3) CLARIFY DIRECTOR QUALIFICATIONS REGARDING JOINT MEMBERSHIPS AND U.S. CITIZENSHIP, AND (4) TO PROVIDE GUIDANCE REGARDING THE TYPES AND FORMS OF WRITTEN COMMUNICATION THAT MAY BE USED WHEN THE BYLAWS REQUIRE A WRITTEN NOTICE TO BE PROVIDED TO THE MEMBERS. |
| 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS; 2. THE DISSOLUTION/LIQUIDATION OF THE COOPERATIVE; 3. THE MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION; AND 4. AMENDMENTS TO THE ARTICLES OF INCORPORATION. |
| Form 990, Part VI, Section B, line 11 | 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 | ALL DIRECTORS, OFFICERS, AND EMPLOYEES OF THE COOPERATIVES ARE REQUIRED TO ANNUALLY CERTIFY THAT THEY HAVE COMPLIED WITH THE CODE OF CONDUCT AND ARE NOT AWARE OF ANY UNREPORTED VIOLATIONS OF THE CODE THAT MAY HAVE OCCURRED. |
| Form 990, Part VI, Section B, line 15 | THE CEO IS SUBJECT TO AN ANNUAL EVALUATION BY A COMPENSATION COMMITTEE, WHICH IS COMPRISED OF THE BOARD OF DIRECTORS. A COMPENSATION SURVEY AND AN INDEPENDENT COMPENSATION CONSULTANT ARE USED WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM SIMILARLY SITUATED COOPERATIVES, UTILITIES, AND OTHER BUSINESSES LOCATED IN THE DALLAS/FT. WORTH METROPLEX AREA, TEXAS AND THE NATION. THE CEO USES A WAGE AND SALARY PLAN APPROVED BY THE BOARD, WHICH IS BASED ON A COMPENSATION SURVEY, WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY, FROM SIMILARLY SITUATED COOPERATIVES, UTILITIES, AND OTHER BUSINESSES LOCATED IN THE DALLAS/FT. WORTH METROPLEX AREA, TEXAS AND THE NATION. |
| Form 990, Part VI, Section C, line 19 | ANNUALLY, THE COOPERATIVE PROVIDES A CONDENSED SET OF AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE BY PUBLISHING THE COOPERATIVE'S ANNUAL REPORT IN THE CO-OP POWER MAGAZINE. THE BY-LAWS AND ANNUAL REPORT, WHICH INCLUDE THE CONDENSED FINANCIAL STATEMENTS, CAN ALSO BE FOUND ON THE COOPERATIVE'S WEBSITE. |
| FORM 990, PART VI, QUESTION 9 | THE NAMES AND ADDRESSES OF DIRECTORS,OFFICERS AND KEY EMPLOYEES, WHO CANNOT BE REACHED AT THE COOPERATIVE'S ADDRESS, ARE AS FOLLOWS: MR. MIKE DREYSPRING 45 STEWART STREET DURANGO, CO 81303 |
| 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. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES A MATCHING CONTRIBUTION UP TO 3% OF A PARTICIPATING EMPLOYEE'S SALARY. 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, LONGTERM DISABILITY, ACCIDENTAL DEATH & DISMEMBERMENT AND GROUP TERM LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND EMPLOYER PAID INSURANCE PREMIUMS. 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 PER INDIVIDUAL 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 TO 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, Line 24(e) | THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24(e). CONSUMER ACCOUNTS & SERVICE $ 897,361 MISCELLANEOUS 285,786 OTHER OPERATING EXPENSE 888,639 SALES 1,123,927 TAXES - MUNICIPAL FRANCHISE FEES 3,957 TAXES - PROPERTY & OTHER 3,505,184 TOTAL OTHER EXPENSES PER FORM 990 LINE 24(e) $6,704,854 |
| Form 990, Part IX | ACCOUNTING SYSTEM: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES. THE UNIFORM SYSTEM OF ACCOUNTING DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE WILL BREAK OUT SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH ITS 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 UNIFORM SYSTEM OF ACCOUNTS. |
| Form 990, Part IX, Lines 5-7 | RECONCILIATION OF WAGES PER RETURN TO TOTAL WAGES ACCRUED AND/OR PAID SALARIES AND WAGES ARE ALLOCATED TO ASSET, LIABILITY, AND EXPENSE ACCOUNTS BASED ON THE ACCOUNTING SYSTEM DESCRIBED ABOVE. IN AN EFFORT TO EXPLAIN WHY THE AMOUNTS REPORTED ON LINES 5-7 DO NOT AGREE TO THE TOTAL WAGES ACCRUED AND/OR PAID THE FOLLOWING RECONCILIATION IS PROVIDED. TOTAL PER LINES 5-7 $17,977,516 LESS DIRECTORS FEES REPORTED ON 1099-MISC (269,670) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (760,032) PLUS SALARIES AND WAGES ALLOCATED TO ASSET ACCOUNTS 5,333,288 TOTAL WAGES ACCRUED AND/OR PAID $22,281,102 |
| Form 990, Part IX, Line 24 | THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24. ADMINISTRATIVE & GENERAL EXPENSE $2,407,215 OUTSIDE SERVICES 1,637,069 PROPERTY INSURANCE 591,215 LOSS/DAMAGES 314,749 MAINTENANCE OF GENERAL PLANT 41,822 MISCELLANEOUS GENERAL AND ADMINISTRATIVE 3,927,673 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 8,919,743 |
| Form 990, Part IX, Line 4 | BENEFITS PAID TO MEMBERS: THE FORM 990 INSTRUCTIONS CLARIFIES THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS 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 MEMBERS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS MEMBERS 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 MEMBERS. 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 MEMBERS, 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 AND IS SUMMARIZED AS FOLLOWS: (A) IN ORDER TO INDUCE PATRONAGE AND TO ASSURE THAT THE COOPERATIVE WILL OPERATE ON A NONPROFIT BASIS, THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL ITS MEMBERS FOR ALL AMOUNTS RECEIVED AND RECEIVABLE FROM THE FURNISHING OF ELECTRIC ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY ARE RECEIVED WITH THE UNDERSTANDING THAT THEY ARE FURNISHED BY THE MEMBERS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH MEMBER FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY MEMBER SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE MEMBER IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE MEMBER HAD THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2013 CALENDAR YEAR. AS NOTED ABOVE, SUCH AMOUNTS ARE ALLOCATED SUBSEQUENT TO YEAR-END IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). THE AMOUNTS ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY TO THE MEMBERS AND ARE DONE PURSUANT TO THE OBLIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS MEMBERS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS IS THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS MEMBERS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2013 MARGIN THAT WERE ALLOCATED TO THE MEMBERS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND IS NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. AS A RESULT, THE DIFFERENCE BETWEEN THE COOPERATIVE'S GAAP BASIS FINANCIAL STATEMENTS AND THE REVENUE LESS EXPENSES REPORTED ON PART I, LINE 19 IS THE AMOUNT OF PATRONAGE DIVIDENDS REPORTED AS BENEFITS PAID TO MEMBERS. |
| Form 990, Part XI, line 9: | EQUITY METHOD INCOME (LOSS) FROM SUBSIDIARY COMPANY 5,227,727. NET CHANGE IN MEMBERSHIPS 109,581. OTHER COMPREHENSIVE INCOME - POST EMPLOYMENT BENEFITS & AFFILIATES 2,451,666. PATRONAGE CAPITAL ASSIGNED 51,250,059. PATRONAGE CAPITAL RETIRED - TOTAL -18,719,642. PATRONAGE CAPITAL RETIRED - DISCOUNT 8,785,254. |
| Form 990, Part XI, Line 2c | PURSUANT TO BOARD POLICY, THE BOARD OF DIRECTORS IS THE AUDIT COMMITTEE AND IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. |
| FORM 990, SCHEDULE R, PARTS IV AND V | THE DISCLOSURES PERTAINING TO COSERV INVESTMENTS LP INCLUDE THE FOLLOWING ENTITIES WHICH WERE DISREGARDED OF ITS SOLE OWNER FOR FEDERAL TAX REPORTING PURPOSES, AS OF DECEMBER 31, 2013: COSERV UTILITY GP LLC COSERV UTILITY HOLDINGS LP COSERV NATURAL LLC COSERV GAS LTD COSERV LLANO, LLC COLLIN COUNTY EQUIPMENT, LTD. THIRTY SEVEN REALTY GP LLC THIRTY SEVEN REALTY HOLDINGS LP LLANO UTILITY SERVICES LLC |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2013
Additional Data
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