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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 990-EZ 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
2014
Open to Public
Inspection
Inspection
Name of the organization
BANDERA ELECTRIC COOPERATIVE INC
Employer identification number
74-0498072
74-0498072
| Return Reference | Explanation |
|---|---|
| Form 990, Part VI, Section A, line 3 | DURING 2014 THE COOPERATIVE HIRED T. LYNN MIDGETTE, P.C. TO BE THEIR INTERIM CFO AND THEN FULL TIME CFO. TOTAL COMPENSATION PAID TO T. LYNN MIDGETTE FOR THE TAX YEAR 2014 WAS $61,307. |
| Form 990, Part VI, Section A, line 4 | ARTICLE III OF THE BYLAWS WERE AMENDED TO STATE THAT THE BOARD OF DIRECTORS HAS THE AUTHORITY TO ESTABLISH AND DEFINE DIRECTOR QUALIFICATIONS. ARTICLE III OF THE BYLAWS WERE AMENDED TO STATE THAT NOMINATIONS FOR OFFICIAL DIRECTOR CANDIATES SHALL BE MADE BY WRITTEN PETITION INCLUDING A FORMAL APPLICATION PACKAGE. IN ADDITION, NO LATER THAN FORTY-FIVE (45) DAYS AFTER THE PETITION/APPLICATION PACKAGE IS SUBMITTED THE DIRECTOR CANDIDATE VALIDATION COMMITTEE SHALL DETERMINE WHETHER OR NOT THE PETITION/APPLICATION PACKAGE IS VALID, BASED ON VERIFICATION OF THE INFORMATION REQUIRED PURSUANT TO PARAGRAPHS (B)-(F). VALIDATED PETITONS/APPLICATION PACKAGES WILL BE PLACED ON THE BALLOT. (C) DIRECTOR CANDIDATE VALIDATION COMMITTEE THE BEC GENERAL MANAGER WILL SEEK THREE (3) MEMBERS FROM THE DISTRICT TO SERVE ON A DIRECTOR CANDIDATE VALIDATION COMMITTEE. THE COMMITTEE SUBMITS THE PETITION LIST TO BEC STAFF FOR SIGNATURE VALIDITY. THE COMMITTEE IS RESPONSIBLE FOR REVIEWING ALL APPLICATION PACKAGES FOR COMPLIANCE WITH DIRECTOR QUALIFICATIONS OF SECTION 3 & 4. ARTICLE V, SECTION 1 OF THE BYLAWS WAS AMENDED TO STATE THE MINIMUM REQUIREMENTS TO HOLD AN OFFICER POSITION ARE AS FOLLOWS, A) DESIRE TO SERVE IN THE POSITION, B) HOLDS A CCD CERTIFICATION, C) SERVED ON THE BOARD A MINIMUM OF 2 YEARS. ARTICLE III, SECTION 11 WAS AMENDED TO STATE TO ASSIST THE BOARD PRESIDENT, THE BOARD WILL HAVE A STANDING ETHICS/DISCIPLINE SUBCOMMITTEE OF 2 MEMBERS, ROTATED EQUALLY ON AN ANNUAL BASIS WITH THE BOARD PRESIDENT AS THE THIRD MEMBER OF THE SUBCOMMITTEE. |
| 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS. |
| Form 990, Part VI, Section B, line 11 | MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION, REVIEW AND APPROVAL PRIOR TO FILING. THE DISCUSSION AND REVIEW WAS PERFORMED AT THE BOARD MEETING IMMEDIATELY BEFORE FILING THE FORM 990. |
| Form 990, Part VI, Section B, line 12c | ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE ALL OFFICERS, EMPLOYEES, AND BOARD OF DIRECTORS TO CERTIFY, VIA A SIGNED STATEMENT, THAT THEY HAVE COMPLIED WITH THE COOPERATIVE'S CODE OF ETHICS AND ARE NOT AWARE OF ANY UNREPORTED VIOLATIONS OF THE CODE THAT HAVE OCCURRED. THESE ACTIONS ARE IN COMPLIANCE WITH THE COOPERATIVE'S POLICY "CODE OF ETHICS", C05-4, PART II, #11. |
| Form 990, Part VI, Section B, line 15 | THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, FORM 990 OF OTHER COOPERATIVES AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. AT LEAST ANNUALLY, THE BOARD WILL REVIEW THE PERFORMANCE OF THE GENERAL MANAGER AND CONSIDER THE GENERAL MANAGER'S COMPENSATION PACKAGE. THE EXISTING MARKET VALUE OF THE POSITION BEING PAID BY RURAL ELECTRICS OF COMPARABLE SIZE SHALL SERVE AS A GUIDE IN THE COMPENSATION REVIEW, PER THE COOPERATIVE'S WAGE AND SALARY POLICY NO. E04-18. THE BOARD AND THE GENERAL MANAGER USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, FORM 990 OF OTHER COOPERATIVES AND 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 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, CODE OF ETHICS POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. COPIES OF THE COOPERATIVE'S GOVERNING DOCUMENTS, CODE OF ETHICS POLICY AND FINANCIAL STATEMENTS ARE ALSO AVAILABLE TO THE PUBLIC ON THE COOPERATIVE'S WEBSITE. |
| Part VI, Section A, Line 1 | ALL BOARD MEMBERS ARE ALLOWED TO VOTE. |
| 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, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE OFFICER, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER. 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 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 | 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 MODIFIED FOR ELECTRIC BORROWERS OF THE NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION(CFC). THE UNIFORM SYSTEM OF ACCOUNTING DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE SEPARETLY 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 UNIFORM SYSTEM OF ACCOUNTS. |
| 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 $3,687,576 LESS DIRECTORS FEES REPORTED ON 1099-MISC (121,137) LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (88,980) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 6,433 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,062,991 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 972,208 TOTAL WAGES ACCRUED AND/OR PAID $5,519,091 |
| 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. OFFICE SUPPLIES AND EXPENSE $424,830 OUTSIDE SERVICES EMPLOYED 706,786 WORKMEN'S COMPENSATION, GENERAL LIABILITY, AND OTHER INSURANCE 162,631 INSTITUTIONAL AND GOODWILL ADVERTISING 3,864 DUES TO ASSOCIATED ORGANIZATIONS 72,038 ANNUAL MEETING EXPENSE 57,203 MAINTENANCE OF GENERAL PLANT 704,832 REGULATORY COMMISSION EXPENSE 110,524 MISCELLANEOUS GENERAL EXPENSE 1,258,558 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $3,501,266 |
| Form 990, Part IX, Line 24e | THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24E TRANSMISSION EXPENSE 179,394 MISCELLANEOUS GENERAL EXPENSE 34,069 TAX EXPENSE - OTHER 122 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $213,585 |
| Form 990, Part IX, Line 4 | THE FORM 990 INSTRUCTIONS SPECIFICALLY STATE 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 BASIS 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 THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2014 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 OLBIGATION 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 2014 MARGIN THAT HAS BEEN OR IS TO BE 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: | NET CHANGE IN MEMBERSHIPS 7,580. PATRONAGE CAPITAL RETIREMENT -2,002,100. OTHER COMPREHENSIVE INCOME - PROVISION FOR PENSION & BENEFITS 84,294. GAIN FROM ESTATE CAPITAL CREDIT RETIREMENTS 86,195. NET DECREASE IN CAPITAL CREDITS PAYABLE - UNDER $5 3,004. PATRONAGE CAPITAL ASSIGNABLE 4,814,493. |
| Form 990, Part XII Line 2 | THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2014
Additional Data
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