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.
Go to www.irs.gov/Form990 for the latest information.
OMB No. 1545-0047
2018
Open to Public
Inspection
Inspection
Name of the organization
VALLEY ELECTRIC ASSOCIATION INC
Employer identification number
88-0089964
88-0089964
| Return Reference | Explanation |
|---|---|
| PART I - CHANGE IN TAX STATUS: | VALLEY ELECTRIC ASSOCIATION, INC. ("THE COOPERATIVE") PROVIDES ELECTRICITY TO ITS MEMBERS AND PATRONS ON A COOPERATIVE BASIS. PURSUANT TO INTERNAL REVENUE CODE SECTION 501(C)(12), THE COOPERATIVE IS EXEMPT FROM FEDERAL INCOME TAXES IN ANY YEAR THAT 85% OR MORE OF ITS REVENUE IS RECEIVED OR RECEIVABLE FROM MEMBERS. THIS ANNUAL TEST OF MEMBER REVENUE IS COMMONLY REFERRED TO AS THE 85% MEMBER INCOME TEST. IN ALL CALENDAR YEARS PRIOR TO 2017, THE COOPERATIVE RECEIVED AT LEAST 85% OF ITS REVENUE FROM MEMBERS AND OPERATED AS A COOPERATIVE EXEMPT FROM FEDERAL INCOME TAXES. ACCORDINGLY, FORM 990 WAS PREPARED AND FILED FOR THESE YEARS. FOR THE 2017 CALENDAR TAX YEAR, THE AMOUNT OF REVENUE AND INCOME THAT WAS RECEIVED OR RECEIVABLE FROM MEMBERS WAS LESS THAN 85%. THEREFORE, THE COOPERATIVE OPERATED AS A TAXABLE COOPERATIVE AND FILED FORM 1120 "U.S. CORPORATION INCOME TAX RETURN" IN LIEU OF FORM 990. FOR THE 2018 CALENDAR TAX YEAR, THE COOPERATIVE ONCE AGAIN RECEIVED MORE THAN 85% OF ITS REVENUE FROM MEMBERS AND IS FILING FORM 990 IN LIEU OF THE FORM 1120 FILED FOR THE PRIOR YEAR. DUE TO THE FACT THE COOPERATIVE DID NOT FILE FORM 990 FOR THE 2017 TAX YEAR, AND PURSUANT TO THE FORM 990 INSTRUCTIONS, THE PRIOR YEAR COLUMN ON PART I, LINES 8 THROUGH 19 HAS BEEN LEFT BLANK. FOR PART X "BALANCE SHEET" REPORTING, THE BEGINNING BALANCE SHEET NUMBERS FOR THE COOPERATIVE AGREE TO THE ENDING BALANCE SHEET REPORTED ON THE 2017 FORM 1120. |
| FORM 990, PART VI, SECTION A, LINE 4 | DURING THE YEAR, THE BYLAWS OF THE COOPERATIVE WERE AMENDED EFFECTIVE APRIL 28, 2018. A SUMMARY OF THE CHANGES ARE AS FOLLOWS: ARTICLE I - MEMBERSHIP SECTION 1 SUBSECTION (B) AND SECTION 6 WAS EXPANDED TO INCLUDE THE PURCHASE OF TRANSMISSION AND DISTRIBUTION SERVICE ALONG WITH ELECTRIC SERVICE. ARTICLE II - RIGHTS AND LIABILITIES OF MEMBERS SECTION 1 WAS CLARIFIED TO INCLUDE IF THE ASSOCIATION OPERATES MULTIPLE DIVISIONS, THEN THE PROVISIONS OF THIS SECTION SHALL BE APPLIED ON A DIVISIONAL BASIS TO THE CURRENT AND FORMER MEMBERS OF SUCH DISSOLVING DIVISION. ARTICLE IV - DIRECTORS SECTION 2 SUBSECTION (A) WAS EXPANDED TO INCLUDE TRANSMISSION, DISTRIBUTION, OR ENERGY SERVICE TO THE LIST OF QUALIFICATIONS. SECTION 4 WAS CLARIFIED TO STATE THAT THE NOMINATING COMMITTEE SHALL NOMINATE A MINIMUM OF ONE (1) AND A MAXIMUM OF THREE (3) PERSONS FROM A DISTRICT FOR NOMINATIONS. THE COOPERATIVE SHALL PROVIDE THE NOMINATING COMMITTEE WITH THE APPROPRIATE INFORMATION TO SELECT THE SLATE OF NOMINEES. ARTICLE VI - OFFICERS SECTION 11 WAS CLARIFIED TO LIST SPECIFIC EMPLOYEE TITLES IN WHICH THE BOARD APPROVES THE POWERS, DUTIES, AND COMPENSATION FOR SUCH POSITIONS. ARTICLE VII - NON-PROFIT OPERATION A NEW SECTION 1 WAS ADDED TO PROVIDE DEFINITIONS FOR SPECIFIC TERMS IN THIS ARTICLE. THE TERMS "PATRON", "OTHER UTILITY TYPE SERVICES", AND "COOPERATIVE SERVICES" ARE DEFINED AND REPLACE EXISTING TERMINOLOGY THROUGHOUT THE ARTICLE. SECTION 3 WAS EXPANDED FOR THREE PRIMARY ITEMS. FIRST, IT PROVIDES THAT WHEN AN OVERALL LOSS IS INCURRED, THEN THE BOARD SHALL HAVE THE AUTHORITY UNDER ACCEPTED ACCOUNTING PRACTICES AND APPLICABLE TAX LAW TO PRESCRIBE THE MANNER IN WHICH SUCH LOSS SHALL BE HANDLED. NOTWITHSTANDING ANY PROVISION IN SECTION 3 OF THIS ARTICLE VII, FOR EACH FISCAL YEAR: (A) MARGINS AND LOSSES ARE CALCULATED SEPARATELY FOR EACH DISTINCTIVE COOPERATIVE SERVICE, (B) THE BOARD SHALL CHOOSE THE METHOD FOR HANDLING LOSSES FOR EACH COOPERATIVE SERVICE IN ACCORDANCE WITH OTHER PROVISIONS OF SECTION 3 OF THIS ARTICLE VII, AND (C) THE MARGINS FOR EACH RESPECTIVE COOPERATIVE SERVICE, AFTER TAKING INTO CONSIDERATION ANY PRIOR YEAR LOSSES CARRIED FORWARD TO OFFSET MARGINS OF THE CURRENT FISCAL YEAR, SHALL BE ALLOCATED TO THE CAPITAL ACCOUNT OF PATRONS ON THE BASIS OF PATRONAGE SOLELY TO THE PATRONS OF EACH COOPERATIVE SERVICE. SECONDLY, SECTION 3 PROVIDES THAT THE BOARD HAS THE AUTHORITY TO CHOOSE THE METHOD FOR DETERMINING THE PATRONAGE AND ALLOCATION OF MARGINS FOR EACH COOPERATIVE SERVICE PROVIDED THAT SUCH METHOD IS FAIR AND EQUITABLE TO THE PATRONS. INSOFAR AS PERMITTED BY LAW, THE BOARD IS AUTHORIZED TO NET MARGINS AND LOSSES OF MULTIPLE COOPERATIVE SERVICES INTO ONE OR MORE ALLOCATION UNITS. ADDITIONALLY, ALL OTHER MARGINS OTHER THAN FROM THE FURNISHING OF COOPERATIVE SERVICES MAY NOW BE USED TO ESTABLISH RESERVES AND OTHER CAPITAL NOT ASSIGNABLE TO THE PATRONS PRIOR TO THE DISSOLUTION OF THE ASSOCIATION. THIRDLY, SECTION 3 CLARIFIES THE METHOD, BASIS, PRIORITY AND ORDER OF RETIREMENT SHALL BE DETERMINED SEPARATELY FOR EACH COOPERATIVE SERVICE BASED ON THE OPERATIONAL AND CONTRACTUAL NEEDS OF EACH. THEREFORE, THE BOARD SHALL HAVE THE POWER TO RETIRE PATRONAGE CAPITAL OF EACH DIVISION INDEPENDENT OF ANY OTHER DIVISION. IN NO EVENT, HOWEVER, SHALL PATRONAGE CAPITAL BE RETIRED IF SUCH RETIREMENTS WOULD VIOLATE ANY APPLICABLE LAW OR REGULATION, OR IF SUCH RETIREMENTS WOULD BREACH ANY PROVISION OF ANY MORTGAGE OR LOAN CONTRACT EXECUTED BY THE COOPERATIVE. |
| 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 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 COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. |
| FORM 990, PART VI, SECTION B, LINE 12C | DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE CONFLICT OF INTEREST POLICY IS EXPLAINED TO ALL NEW DIRECTORS COMING ON THE BOARD. 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. BOARD MINUTES ARE NOTED WHEN A DIRECTOR HAS A CONFLICT OF INTEREST. |
| FORM 990, PART VI, SECTION B, LINE 15 | THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY AND AN INDEPENDENT CONSULTANT WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEO'S FROM COOPERATIVES LOCATED IN NEVADA AND THE NATION. THE BOARD AND CEO USE A COMPENSATION SURVEY AND AN INDEPENDENT CONSULTANT WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEVADA AND THE NATION. |
| FORM 990, PART VI, SECTION C, LINE 19 | THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE'S BYLAWS, ARTICLES OF INCORPORATION, ANNUAL REPORT, AND AUDITED FINANCIAL STATEMENTS FOR MOST RECENT YEAR ARE ALSO AVAILABLE ON THE COOPERATIVE'S WEBSITE. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE CONFLICT OF INTEREST POLICY OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. |
| 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 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 THE 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 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 ASSOCIATION 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 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 $12,218,359 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (170,600) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (1,081,695) LESS: KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (411,622) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 31 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 4,567,107 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 3,637,509 TOTAL WAGES ACCRUED AND/OR PAID $18,759,089 |
| FORM 990, PART IX, LINE 24: | ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 8,884,843 OFFICE SUPPLIES 74,393 OUTSIDE SERVICES 2,109,626 INJURIES & DAMAGES 96,103 EMPLOYEE PENSION & BENEFITS 277,417 MEETINGS 796,915 RENT 199,399 MISCELLANEOUS GENERAL EXP 341,029 DIRECTORS 233,368 DUES 30,081 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $13,043,174 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (170,600) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (4,672,542) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (3,274,609) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 4,925,423 |
| FORM 990, PART IX, LINE 24E: | OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CONSUMER $ 1,413,294 SALES 233,324 OTHER DEDUCTIONS 33,767 POLITICAL CAMPAIGN CONTRIBUTIONS 59,608 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 1,739,993 |
| FORM 990, PART XI, LINE 9: | PATRONAGE CAPITAL RETIRED - TOTAL -128,495. PATRONAGE CAPITAL RETIRED - DISCOUNT 68,465. DONATED CAPITAL -158. NET CHANGE IN MEMBERSHIPS 6,340. RETAINED MEMBERSHIPS 13,547. OTHER COMPREHENSIVE INCOME ADJUSTMENT FOR POST-RETIREMENT BENEFITS 407,995. |
| 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. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2018
Additional Data
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