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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
2015
Open to Public
Inspection
Inspection
Name of the organization
ANZA ELECTRIC COOPERATIVE INC
Employer identification number
95-1758102
95-1758102
| 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 A BOOK TO TAX ADJUSTMENT REQUIRED TO CONFORM TO THE FORM 990 INSTRUCTIONS. THE FORM 990 INSTRUCTIONS REQUIRE PATRONAGE DIVIDENDS ALLOCATED OR TO BE ALLOCATED BY THE COOPERATIVE TO MEMBERS AS AN EXPENSE. SPECIFICALLY AS BENEFITS PAID TO OR FOR MEMBERS (PART I LINE 14), PATRONAGE DIVIDENDS ARE AN INCREASE IN EQUITY, SPECIFICALLY PATRONAGE CAPITAL, ON U.S. GAAP BASIS FINANCIAL STATEMENTS. AS NOTED IN THE DISCLOSURE OF PROGRAM ACCOMPLISHMENTS, THE COOPERATIVE PROVIDES ITS MEMBERS WITH UP TO TWO DIFFERENT CLASSES OF SERVICES. ELECTRICITY IS PROVIDED THROUGH THE ELECTRIC DIVISION AND FIBER OPTIC BROADBAND SERVICES ARE PROVIDED THROUGH THE CONNECTANZA DIVISION. MARGINS FROM THE ELECTRIC DIVISION WERE ALLOCATED AS PATRONAGE CAPITAL ON THE BASIS OF ELECTRIC SALES. THE CONNECTANZA DIVISON REPORTED A LOSS OF $270,011. SUCH LOSS IS UNALLOCATED AND IS RETAINED TO OFFSET FUTURE INCOME FROM THE DIVISION. THE NET EFFECT OF THE BOOK TO TAX ADJUSTMENT IS TO SHOW A NET LOSS ON THE FORM 990 EQUAL TO THE LOSS FROM BROADBAND DIVISION. |
| Form 990, Part III, line 2 | DURING THE 2015 YEAR, THE COOPERATIVE BEGAN THE CONSTRUCTION OF A BROADBAND FIBER OPTIC INFRASTRUCTURE WITHIN ITS SERVICE TERRITORY FOR PROVIDING HIGH SPEED INTERNET ACCESS AND RELATED COMMUNICATIONS SERVICES TO ITS MEMBERS. THE GOAL OF THE COOPERATIVE IS TO PROVIDE THIS SERVICE AS AN EXPANSION OF ITS INCOME TAX EXEMPTION. TO ACCOMPLISH THIS PURPOSES, THE BYLAWS WERE AMENDED BY THE MEMBERS SO THAT THE COOPERATIVE WILL PROVIDE THIS SERVICE ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. |
| Form 990, Part VI, Section A, line 4 | ARTICLE IV SECTION 3 OF THE BLYAWS WAS AMENDED TO CLARIFY THE ELIGIBILITY AND QUALIFICATIONS FOR SERVING ON THE BOARD OF DIRECTORS. SPECIFICALLY, SUBSECTIONS (C) AND (E) STATE THAT "...NO PERSON SHALL BE ELIGIBLE TO BECOME OR REMAIN A DIRECTOR OF THE COOPERATIVE WHO (C) IS IN ANY WAY EMPLOYED OR FINANCIALLY INTERESTED IN A COMPETING ENTERPRISE OR BUSINESS SELLING ELECTRICAL ENERGY, ELECTRIC OR PLUMBING APPLIANCES OR SERVICES, SOLAR ELECTRIC OR THERMAL ENERGY APPLIANCES OR SYSTEMS, OR INTERNET EQUIPMENT OR SERVICES TO THE COOPERATIVE AND (E) IS A FORMER EMPLOYEE OF THE COOPERATIVE WITHIN THREE (3) YEARS OF TERMINATION OF THAT EMPLOYMENT. ADDITIONALLY, THE BYLAWS WERE AMENDED TO AUTHORIZE THE COOPERATIVE TO PROVIDE FIBER OPTIC BROADBAND SERVICES TO ITS MEMBERS. SPECIFICALLY, ARTICLE I, SECTION 5 PROVIDES THE RIGHTS AND RESPONSIBILITIES BETWEEN THE COOPERATIVE AND ITS MEMBERS WITH RESPECT TO THE NEW SERVICES. IT FURTHER PROVIDES THAT AMOUNTS PAID FOR FIBER OPTIC BROADBAND SERVICES IN EXCESS OF THE COST OF SERVICE ARE FURNISHED BY MEMBERS AS CAPITAL AND EACH MEMBER SHALL BE CREDITED WITH THE CAPITL SO FURNISHED. ARTICLE VII, SECTION 2 WAS AMENDED TO CLARIFY THAT THE PRE-EXISTING OBLIGATION TO ALLOCATE PATRONAGE CAPITAL INCLUDES ELECTRIC AND FIBERT OPTIC SERVICES. THE AMENDMENTS FURTHER CLARIFY THAT THE ALLOCATION OF PATRONAGE CAPITAL WILL BE CALCULATED BY CLASS OF SERVICE (I.E. ELECTRIC AND BROADBAND). THEREFORE, THE MARGINS OF EACH CLASS OF SERVICE ARE ALLOCATED TO AND PROVIDED AS CAPITAL BY THE MEMBERS PURCHASING THE RESPECTIVE SERVICES. |
| 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 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 THE FILING OF THE FORM 990. |
| Form 990, Part VI, Section B, line 12c | THE CONFLICT OF INTEREST POLICY IS REVIEWED ON AN ANNUAL BASIS, AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS. |
| Form 990, Part VI, Section B, line 15a | THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY AND CONSUMER PRICE INDEX WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN CALIFORNIA AND THE NATION. PER IRS DEFINITIONS OF KEY EMPLOYEES AND OFFICERS THE COOPERATIVE DOES NOT HAVE ANY OTHER EMPLOYEES BESIDES THE GENERAL MANAGER THAT QUALIFIES AS A KEY EMPLOYEE OR OFFICER. AS SUCH PAGE 6, LINE 15B HAS BEEN ANSWERED NO. |
| Form 990, Part VI, Section C, line 19 | THE COOPERATIVE MAILS, TO EACH MEMBER OF THE COOPERATIVE, AN ANNUAL REPORT. INCLUDED IN THE ANNUAL REPORT IS A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT. THE COOPERATIVE WILL PROVIDE, BY APPOINTMENT, A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR THE COOPERATIVE'S GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. |
| Form 990, Page 6, Part VI, Section B, Line 13 | AT 12/31/15 THE COOPERATIVE DID NOT HAVE AN OFFICIAL WHISTLEBLOWER POLICY IN PLACE. THE COOPERATIVE DOES HAVE A GENERAL MANAGER MISCONDUCT ALLEGATIONS POLICY WHICH ADDRESS ISSUES SIMILAR TO A WHISTLEBLOWER POLICY. THE POLICY CONFIRMS A WHISTLEBLOWERS CONFIDENTIALITY WILL BE PROTECTED. |
| 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 PALN 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 OR HIGHLY COMPENSATED EMPLOYEE IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN,THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND THE 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. BEGINNING IN YEAR OF RETIREMENT THE COOPERATIVE PAYS 100% OF THE PREMIUM. THE COOPERATIVE THEN PAYS 50% IN YEAR 2, 25% IN YEAR 3 AND IN YEAR 4 THE COOPERATIVE'S CONTRIBUTION DECREASES TO 0%. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. |
| Form 990, Part VII, Section A | THE BOARD OF DIRECTORS 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. |
| Form 990, Part VIII, LINE 2B | 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 | THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE RURAL UTILITIES SERVICE(RUS). THE UNIFORM SYSTEM OF ACCOUNTING 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 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 $1,273,587 LESS DIRECTORS FEES REPORTED ON 1099-MISC (100,597) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (100,292) PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 104,069 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 206,427 TOTAL WAGES ACCRUED AND/OR PAID $1,383,194 |
| Form 990, Part IX, Line 24 | ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: LEGISLATIVE COMMITTEE $ 36,155 OFFICE SUPPLIES AND EXPENSE 55,651 OUTSIDE SERVICES EMPLOYED 67,550 SUBSCRIPTIONS 1,916 DUPLICATE CHARGES (20,677) DIRECTOR EXPENSES 9,807 ANNUAL MEETING 33,542 DUES 42,559 BROADBAND DIVISION EXPENSES 307,956 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $534,459 |
| 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 AND FIBER OPTIC BROADBAND SERVICES 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 FOR THE 2015 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. THE LOSS OF THE FIBER OPTICS BROADBAND SERVICES DIVISION HAS REMAINED UNALLOCATED. TO THE EXTENT CUMULATIVE MARGINS EXCEED CUMULATIVE LOSSES, PATRONAGE DIVIDENDS WILL BE ISSUED TO SUCH PATRONS IN THE FUTURE. WHEN THIS OCCCURS, PART IX, LINE 4 WILL REFLECT PATRONAGE DIVIDENDS ISSUED TO PATRONS FOR EACH CLASS OF SERVICE. |
| FORM 990, PART IX, LINE 1 | ALL GRANTS, SPONSORSHIPS AND DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. EACH GRANT, SCHOLARSHIP AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. |
| FORM 990, PART X, LINES 17 AND 25 | THE COOPERATIVE PREVIOUSLY INCLUDED ACCRUED EXPENSES (COMPRISED OF "OTHER ACCRUED LIABILITIES AND "ACCRUED LEAVE") AS COMPONENTS OF OTHER LIABILITIES ON LINE 25 OF PART X. HOWEVER, FOR THE 2015 CALENDAR YEAR, THE COOPERATIVE BEGAN REPORTING THESE AMOUNTS ON LINE 17 IN ACCORDANCE WITH FORM 990 INSTRUCTIONS. TO INCREASE CONSISTENCY, ACCRUED EXPENSES IN THE AMOUNT OF $39,529 FOR "OTHER ACCRUED LIABILITIES AND $147,251 FOR "ACCRUED LEAVE" FOR THE 2014 CALENDAR YEAR HAVE BEEN RECLASSED FROM LINE 25 TO LINE 17. |
| Form 990, Part XI, line 9: | NET CHANGE IN MEMBERSHIPS -100. UNCLAIMED CAPITAL CREDIT RETIREMENTS 83,958. RETIREMENT OF PATRONAGE CAPITAL -521,270. RETIREMENT OF PATRONAGE CAPITAL - GAIN 11,063. PATRONAGE CAPITAL ASSIGNABLE 1,212,188. OCI - ADJUSTMENT FOR POST-RETIREMENT MEDICAL PLAN -31,300. |
| Form 990, Part XII, LINE 2B | AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FISCAL YEAR END OF MARCH 31ST. THE COOPERATIVE'S TAX RETURN HAS BEEN AND CONTINUES TO BE PREPARED BASED ON A CALENDAR YEAR END OF DECEMBER 31. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2015
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