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
2019
Open to Public
Inspection
Inspection
Name of the organization
BAILEY COUNTY ELECTRIC COOPERATIVE
ASSOCIATION
ASSOCIATION
Employer identification number
75-0124533
75-0124533
| Return Reference | Explanation |
|---|---|
| FORM 990, PART VI, SECTION A, LINE 4 | BECAUSE THE BYLAWS GOVERN HOW THE ORGANIZATION OPERATES ON A COOPERATIVE BASIS WITH ITS MEMBERS, THE BOARD OF DIRECTORS ("THE BOARD") PERIODICALLY INITIATES A REVIEW OF THE BYLAWS BY LEGAL COUNSEL IN ORDER TO CLARIFY THE RIGHTS AND RESPONSIBILITIES OF THE MEMBERS, THE BOARD, AND THE COOPERATIVE AS A WHOLE. DURING THE SUMMER AND FALL OF 2019, THE BOARD INITIATED SUCH A REVIEW OF THE COOPERATIVE'S BYLAWS. THE REVIEW RESULTED IN THE FOLLOWING SUMMARIZED CHANGES: ARTICLE I "MEMBERSHIP" - SECTION 1 WAS AMENDED TO: (1) UPDATE THE LIST OF ELIGIBLE MEMBERS TO INCLUDE ASSOCIATIONS AND SUBDIVISIONS OF A GOVERNMENTAL ENTITY, (2) AUTHORIZE THE USE OF AN ELECTRONIC MEMBERSHIP APPLICATION FORMS, (3) STATE THAT ACCEPTANCE OR REJECTION OF MEMBERSHIP APPLICATION IS THE RESPONSIBILITY OF THE BOARD, (4) LIMITS THE NUMBER OF MEMBERSHIPS A MEMBER MAY HAVE TO ONE REGARDLESS OF THE NUMBER OF METERS, (5) LIMITS TRANSFERABILITY OF A MEMBERSHIP, AND (6) AUTHORIZE THE BOARD THE ABILITY TO ESTABLISH CLASSES OF MEMBERSHIPS AND THROUGH POLICIES OF GENERAL APPLICATION, THE TYPES OF SERVICES THAT ARE PATRONAGE ELIGIBLE. ARTICLE I, SECTIONS 3 AND 4 CLARIFY ELIGIBILITY OF A JOINT MEMBERSHIP, UPDATES THE DEFINITION TO INCLUDE ANY LEGAL SPOUSE, DELINEATES THE RIGHTS AND RESPONSIBILITIES OF THE JOINT MEMBERSHIP (INCLUDING THE SHARED RIGHTS AND RESPONSIBILITIES OF EACH LEGAL SPOUSE COVERED UNDER THE JOINT MEMBERSHIP), AND THE PROCESS FOR CONVERTING TO A JOINT MEMBERSHIP. ARTICLE I, SECTION 5 WAS ADDED TO CLARIFY THE VOTING RIGHTS OF ORGANIZATIONAL MEMBERSHIPS FOR NON-NATURAL ENTITIES. TO ENSURE THAT ALL MEMBERS ARE REPRESENTED, INCLUDING NON-NATURAL ENTITIES, THIS NEW SECTION REQUIRES A NON-NATURAL ENTITY TO DESIGNATE AND INFORM THE COOPERATIVE OF THE INDIVIDUAL RESPONSIBLE FOR REPRESENTING ITS VOTING INTERESTS. ARTICLE I, SECTION 6 REPLACES THE FIXED MEMBERSHIP FEE OF $5 WITH AUTHORITY GRANTED TO THE BOARD FOR SETTING A MEMBERSHIP FEE OF NOT LESS THAN $5. IT ALSO CLARIFIES THAT ADDITIONAL FEES MAY BE CHARGED FOR EACH SERVICE CONNECTIONS, EXTENSION AND OTHER AVAILABLE SERVICES OFFERED PURSUANT TO RULES AND REGULATIONS ESTABLISHED BY THE BOARD FOR THE COOPERATIVE AND ITS MEMBERS. ARTICLE I, SECTION 8 WAS ADDED TO ADDRESS THE TERMINATION AND TRANSFER OF MEMBERSHIP, INCLUDING THE CIRCUMSTANCES AND PROCESSES UNDER WHICH A MEMBER MAY BE EXPELLED FROM THE COOPERATIVE. IT ALSO STATES THAT A MEMBERSHIP IS CANCELLED IF THE MEMBER CEASES PURCHASING SERVICES FROM THE COOPERATIVE OR A MEMBER WHO DOES NOT PURCHASE SERVICES FOR A PERIOD OF SIX MONTHS AFTER SERVICE IS AVAILABLE. PROCESSES ARE ESTABLISHED FOR WHEN A MEMBER MAY TRANSFER THE RESPECTIVE MEMBERSHIP AND THE EXTENT TO WHICH THE MEMBERSHIP FEE IS REFUNDABLE. ARTICLE II "RIGHTS AND LIABILITIES OF MEMBERS" WAS EXPANDED TO ADDRESS: (1) LIQUIDATION RIGHTS UPON DISSOLUTION OF THE COOPERATIVE, (2) PROTECTION OF PATRONAGE CAPITAL CREDITS FOR FORMER MEMBERS, AND (3) CONDITIONS OF SERVICES. SPECIFICALLY, LIQUIDATION RIGHTS INCLUDE THE AMOUNTS REMAINING AFTER ALL DEBTS HAVE BEEN PAID AND CAPITAL FURNISHED BY THE MEMBERS HAS BEEN RETIRED. SUCH AMOUNTS REMAINING WILL BE DISTRIBUTED PRO RATA TO THE MEMBERS BASED ON THE RATIO THE AGGREGATE PATRONAGE OF EACH BEARS TO THE AGGREGATE PATRONAGE OF ALL MEMBERS. WITH RESPECT TO THE RIGHTS OF FORMER MEMBER, ANY MEMBER WHOSE MEMBERSHIP HAS TERMINATED CONTINUES TO OWN THE MEMBER'S PATRONAGE CAPITAL CREDITS. HOWEVER, SUCH FORMER MEMBER DOES NOT HAVE VOTING RIGHTS. ADDITIONALLY, A SECTION FOR CONDITIONS OF SERVICES WAS ADDED TO CLARIFY THE COOPERATIVE'S RESPONSIBILITIES TO MAKE REASONABLE PROVISIONS TO SUPPLY A STEADY AND CONTINUOUS ELECTRIC SERVICE WITH RESPECT TO A MEMBER'S CLASS OF SERVICE, THE CONDITIONS WHICH MAY LIMIT THE COOPERATIVE'S ABILITY TO CONTINUOUSLY SUPPLY ELECTRICITY, THE COOPERATIVE'S RESPONSIBILITY TO RESTORE SERVICES, AND LIMITATIONS OF THE COOPERATIVE'S LIABILITY TO THE COST OF NECESSARY REPAIRS OR PHYSICAL DAMAGE APPROXIMATELY CAUSED BY THE SERVICE FAILURE TO THOSE ELECTRICAL FACILITIES OF MEMBER WHICH WERE THEN EQUIPPED WITH THE PROTECTIVE SAFEGUARDS RECOMMENDED OR REQUIRED BY THE THEN CURRENT EDITION OF THE NATIONAL ELECTRIC CODE. ADDITIONALLY, MEMBERS ASSUME FULL RESPONSIBILITY FOR ELECTRIC CURRENT, WIRES, APPARATUS, MACHINERY, OR EQUIPMENT FROM THE POINT OF DELIVERY. ARTICLE III "MEETINGS OF THE MEMBERS" WAS AMENDED TO PROVIDE THE BOARD FLEXIBILITY IN DETERMINING THE TIME AND PLACE OF THE ANNUAL MEETING. THE CHANGES ALSO REAFFIRM THE BOARD RESPONSIBILITIES FOR MAKING ADEQUATE PLANS AND PREPARATIONS. MORE FLEXIBILITY WAS PROVIDED FOR CALLING A SPECIAL MEETING OF THE MEMBERS. THE AMENDED BYLAWS ALLOWS A SPECIAL MEETING TO BE CALLED BY A RESOLUTION OF THE BOARD, A WRITTEN REQUEST SIGNED BY AT LEAST 3 DIRECTORS, A WRITTEN REQUEST SIGNED BY THE PRESIDENT OF THE BOARD, OR BY 10% OR MORE OF ALL MEMBERS. ADDITIONALLY, VOTING RIGHTS WERE UPDATED TO INCLUDE THE REVISED LIST OF PERSONS AND ENTITIES ELIGIBLE FOR MEMBERSHIP AND FOR THE REVISED JOINT MEMBERSHIP PROVISIONS. VOTING RIGHTS ALSO REQUIRE SECRET BALLOTING UNLESS THE NOMINEES FOR ELECTION AS DIRECTOR, AS DETERMINED IN ACCORDANCE TO OTHER PROVISIONS OF THE BYLAWS, DO NOT HAVE FORMAL CHALLENGES, AND WITH PROPER SAFE GUARDS AND VALIDATION PROCEDURES, THE BOARD MAY AUTHORIZE MAIL AND/OR ELECTRONIC VOTING FOR ELECTIONS. ARTICLE IV "DIRECTORS" WAS AMENDED FOR MEMBER ELIGIBILITY TO SERVE AS A DIRECTOR, EXPANDED PROCEDURES FOR REMOVING DIRECTORS AND OFFICERS OF THE BOARD, FILLING VACANCIES ON THE BOARD DUE TO REMOVAL OF A DIRECTOR BY THE MEMBERS OR THE BOARD, AND CLARIFICATION FOR WHEN A DIRECTOR, ACTING IN HIS/HER CAPACITY AS A DIRECTOR IS LIABLE TO THE COOPERATIVE. WITH RESPECT TO MEMBER ELIGIBILITY TO SERVE AS A DIRECTOR, ARTICLE IV, SECTION 2 WAS MODIFIED TO SPECIFICALLY STATE THAT ONLY ONE OF THE LEGAL SPOUSES OF A JOINT MEMBERSHIP MAY BE ELIGIBLE. ADDITIONALLY, THE REVISIONS CLARIFY THAT AN ELIGIBLE MEMBER IS A MEMBER, WHICH IS A NATURAL PERSON AND WHICH, INCLUDING BUT NOT LIMITED TO: (1) LIVES WITHIN THE BOUNDARIES SERVED BY THE COOPERATIVE, (2) DOES NOT WORK FOR OR OWN A COMPETING BUSINESS ENTERPRISE, UNLESS SUCH BUSINESS RELATIONSHIP IS DE MINIMUS, (3) HAS NOT BEEN AN EMPLOYEE WITHIN THE PREVIOUS 5 YEARS PRIOR TO RUNNING FOR A DIRECTOR POSITION, (4) HAS NOT WITHIN 10 YEARS PRIOR TO BECOMING A DIRECTOR OR NOMINEE BEEN CONVICTED OF OR PLEAD GUILTY TO A FELONY OR 2 MISDEMEANORS, NOT INCLUDING TRAFFIC VIOLATIONS, OR ANY OFFENSE INVOLVING MORAL TURPITUDE, AND (5) IS NOT CLOSELY RELATED TO AN INCUMBENT DIRECTOR OR AN EMPLOYEE OF THE COOPERATIVE. THE DEFINITION OF "CLOSELY RELATED" IS ALSO PROVIDED. ARTICLE IV, SECTION 2 WAS ALSO AMENDED TO PROVIDE FOR DUTIES A DIRECTOR MUST SATISFY IN ORDER TO REMAIN A DIRECTOR. THESE DUTIES INCLUDE NOT MISSING MORE THAN THREE MEETINGS IN ANY 12-MONTH PERIOD BEGINNING WITH THE ANNUAL MEETING AND A DUTY TO REMAIN INFORMED ON INDUSTRY INFORMATION IN ORDER TO FULFILL THE FIDUCIARY RESPONSIBILITY THE DIRECTOR HAS TO THE COOPERATIVE AND ITS MEMBERS. UPON ESTABLISHMENT OF THE FACT THAT A DIRECTOR NOMINEE OR AN INCUMBENT DIRECTOR IS IN VIOLATION OF THE PROVISIONS OF ARTICLE IV, SECTION 2, THE DIRECTOR POSITION IS DEEMED VACANT. WITH RESPECT TO NOMINATING DIRECTOR CANDIDATES, ARTICLE IV, SECTION 3 WAS MODIFIED TO CLARIFY THE RIGHTS MEMBERS HAVE TO MAKE NOMINATIONS BY PETITION AND THE NOTIFICATION REQUIREMENTS THE SECRETARY OF THE BOARD HAS TO NOTIFY THE MEMBERS OF ALL CANDIDATES, INCLUDING THE CANDIDATES NOMINATED BY PETITION. NOMINATIONS BY MEMBER PETITION ARE IN LIEU OF NOMINATIONS FROM THE FLOOR AT THE ANNUAL MEETING. WITH RESPECT TO REMOVAL OF DIRECTORS AND OFFICERS AND VACANCIES, ARTICLE IV, SECTIONS 4 AND 5 WERE AMENDED TO FURTHER DEFINE THE PROCESS BY WHICH MEMBERS AND/OR THE BOARD MAY PETITION FOR THE REMOVAL OF A DIRECTOR. THE REVISIONS STATE THAT THE PETITION MUST BE SWORN TO REGARDING THE GROUNDS FOR REMOVAL. THE REVISIONS ALSO REQUIRE THE DIRECTOR, WHOSE REMOVAL IS BEING REQUESTED, BE NOTIFIED OF THE PETITION AT LEAST 10 DAYS PRIOR TO A SPECIAL MEETING FOR DISCUSSING THE CHARGES AND VOTING ON REMOVAL. BOTH THE ACCUSED AND THE ACCUSER HAVE OPPORTUNITIES AT THE SPECIAL MEETING TO DISCUSS AND RESPOND TO THE PETITION. AFTER SUCH DISCUSSION, A VOTE IS TAKEN. IF A DIRECTOR IS REMOVED BY EITHER THE MEMBERS OR THE BOARD, THE BOARD WILL THEN FILL THE VACANCY BY AN AFFIRMATIVE VOTE OF A MAJORITY OF THE REMAINING DIRECTORS FOR THE UNEXPIRED PORTION OF THE TERM. |
| FORM 990, PART VI, SECTION A, LINE 4 | WITH RESPECT TO DIRECTOR LIABILITY, ARTICLE IV, SECTION 7 WAS AMENDED TO LIST THE CIRCUMSTANCES UNDER WHICH A DIRECTOR IS LIABLE TO THE COOPERATIVE, SUCH AS A BREACH OF DUTY OF LOYALTY TO THE COOPERATIVE OR ITS MEMBERS, ACTS OR OMISSIONS NOT IN GOOD FAITH INVOLVING INTENTIONAL MISCONDUCT OR A KNOWN VIOLATION OF LAW, RECEIPT OF AN IMPROPER BENEFIT, AND AN ACT OR OMISSION, THE LIABILITY FOR WHICH IS PROVIDED FOR BY LAW. TO ADDRESS CHANGES IN TECHNOLOGY, ARTICLE V "MEETINGS OF DIRECTORS" WAS UPDATED FOR SPECIFICITY FOR WHEN THE TIMING AND TYPE OF NOTICE OF BOARD MEETINGS, WHEN A WAIVER OF NOTICE APPLIES AND THE ABILITY TO MEET BY TELEPHONE CONFERENCE OR OTHER REMOTE COMMUNICATIONS TECHNOLOGY. THE REVISIONS PROVIDE GUIDANCE FOR HOW THESE TELEPHONIC OR REMOTE MEETINGS ARE TO OCCUR AND TO INSURE THAT EACH DIRECTOR HAS THE APPROPRIATE TECHNOLOGY. ARTICLE VI "OFFICERS" WAS AMENDED AND UPDATED PRIMARILY TO: (1) SPECIFICALLY AUTHORIZE THE SECRETARY OF THE BOARD, WITH APPROVAL OF THE BOARD, TO DELEGATE AUTHORITY TO AN EMPLOYEE OF THE COOPERATIVE FOR CARRYING OUT CERTAIN ADMINISTRATIVE DUTIES OF THE SECRETARY, (2) TO ADDRESS THE INDEMNIFICATION OF OFFICERS ACTING IN GOOD FAITH FOR THE COOPERATIVE AND AUTHORIZE THE PURCHASE OF APPLICABLE INSURANCE, AND (3) TO ADDRESS CONTINUANCE OF THE GOVERNANCE OF THE COOPERATIVE WHEN THERE IS A CATASTROPHIC LOSS OF BOARD MEMBERS. WHEN THE COOPERATIVE EXPERIENCES A LOSS OF FOUR OR MORE DIRECTORS RESULTING FROM AN EVENT OF NATURAL OR HUMAN ORIGIN, A CATASTROPHIC LOSS IS DEEMED TO HAVE OCCURRED. UNDER THESE CIRCUMSTANCES, THE REMAINING DIRECTORS SHALL APPOINT, WITHIN 120 DAYS, INDIVIDUALS MEETING THE DIRECTOR ELIGIBILITY REQUIREMENTS TO SERVE, UNTIL THE NEXT ANNUAL MEETING, AS DIRECTORS FOR THE DISTRICTS LOSING THEIR DIRECTORS. IF ONLY 2 OR LESS DIRECTORS REMAIN OR IF NO DIRECTORS REMAIN, THEN A SPECIAL MEETING OF THE MEMBERS WILL BE CALLED WITHIN 90 DAYS OF THE CATASTROPHIC EVENT FOR ELECTING ELIGIBLE INDIVIDUALS FOR FILLING THE VACANT DIRECTOR POSITIONS UNTIL THE NEXT SCHEDULED ANNUAL MEETING, AT WHICH TIME THE THESE INTERIM DIRECTORS WILL STAND FOR ELECTION. ADDITIONALLY, THE QUORUM REQUIREMENTS ARE SIMPLIFIED IN ORDER TO ALLOW THE COOPERATIVE AND ITS MEMBERS TO RESPOND TO A CATASTROPHIC LOSS OF DIRECTORS. ARTICLE VIII "NON-PROFIT OPERATION" WAS AMENDED IN ORDER TO CLARIFY THE PRE-EXISTING LEGAL OBLIGATION TO ALLOCATE PATRONAGE CAPITAL CREDITS TO ITS MEMBERS. SPECIFICALLY, SECTION 2 DEFINES THE PRE-EXISTING LEGAL OBLIGATION TO INCLUDE MARGINS FROM THE PROVISION OF PATRONAGE BUSINESS. THE OBLIGATION TO ALLOCATE ON THE BASIS OF PATRONAGE DOES NOT CHANGE. UNDER THIS CLARIFICATION, THE BOARD HAS THE AUTHORITY TO DETERMINE HOW LOSSES FROM PATRONAGE BUSINESS ARE HANDLED AS LONG AS SUCH METHODOLOGY IS CONSISTENT WITH ACCEPTED ACCOUNTING PRACTICES, LOAN COVENANTS AND TAX LAW. ADDITIONALLY, SECTION 2 WAS UPDATED TO PROVIDE THE BOARD WITH THE AUTHORITY TO DETERMINE THE NATURE, TIME, METHOD AND EXTENT OF ANY RETIREMENT OF PATRONAGE CAPITAL CREDITS. THIS AUTHORITY INCLUDES THE ABILITY TO RETIRE OR OFFER TO RETIRE PATRONAGE CAPITAL CREDITS AT A DISCOUNT. A MEMBER'S ABILITY TO ASSIGN PATRONAGE CAPITAL CREDITS, SUCH AS IN THE CASE OF A DISSOLVING NON-NATURAL ENTITY, TO OTHER INDIVIDUALS AND MEMBERS IN GOOD STANDING WITH THE COOPERATIVE WAS CLARIFIED. AMOUNTS APPROVED FOR RETIREMENT ARE ALSO CONSIDERED TO BE INDEBTEDNESS BY THE COOPERATIVE TO THE COOPERATIVE. ARTICLE VIII, SECTION 3 WAS UPDATED SPECIFICALLY TO ADDRESS MARGINS DERIVED FROM NON-PATRONAGE BUSINESS. THE ABILITY OF THE BOARD TO UTILIZE SUCH MARGINS TO OFFSET ANY LOSS OF THE COOPERATIVE REMAINS UNCHANGED. IN ADDITION TO THE ABILITY OF THE BOARD TO AUTHORIZE THAT MARGINS FROM NON-PATRONAGE BUSINESS, IN EXCESS OF LOSSES, BE ALLOCATED TO THE MEMBERS, SUCH MARGINS MAY ALSO BE USED TO ESTABLISH RETAINED CAPITAL NOT ASSIGNABLE TO THE MEMBERS EXCEPT IN THE EVENT OF DISSOLUTION OF THE COOPERATIVE. IN ORDER TO IMPLEMENT THE PROVISIONS OF ARTICLE VIII, SECTION 4 WAS ADDED TO CLARIFY THAT THE BOARD HAS AUTHORITY TO ADOPT POLICIES FOR DETERMINING WHICH SERVICES ARE INCLUDED IN THE DEFINITION OF PATRONAGE BUSINESS, WHICH SERVICES ARE USED AS PATRONAGE FOR EQUITABLY ALLOCATING MARGINS FROM PATRONAGE BUSINESS TO THE MEMBERS. THIS AUTHORITY ALSO INCLUDES THE ABILITY TO ALLOCATE SEPARATELY FOR DIFFERENCES IN RATE CLASS, DIFFERENCES IN BUSINESS ACTIVITIES, NET MARGINS WHERE A SEPARATE ALLOCATION IS NEEDED IN ORDER TO EFFECTIVELY RETIRE PATRONAGE CAPITAL, AND INVESTMENTS IN SUBSIDIARIES. ARTICLE IX "DISPOSITION OF PROPERTY" HISTORICALLY PROVIDED LIMITS ON THE AMOUNT AND EXTENT TO WHICH THE BOARD WAS AUTHORIZED TO DISPOSE OF THE OPERATING ASSETS OF THE COOPERATIVE. THESE LIMITATIONS HAVE NOT CHANGED. TO CLARIFY THE REQUIREMENTS OF WHEN THE BOARD MAY AUTHORIZE THE SALE OF AN ASSET AND WHEN MEMBERSHIP APPROVAL IS REQUIRED, ARTICLE IX WAS RE-ORGANIZED AND INCLUDES A PROVISION THAT APPROVAL OF AT LEAST TWO-THIRDS OF THE MEMBERS IS REQUIRED BEFORE A SALE, LEASE OR OTHER DISPOSITION OF A SUBSTANTIAL PORTION OF THE ASSETS OCCURS. HOWEVER, THE BOARD CONTINUES TO BE AUTHORIZED TO EXECUTE MORTGAGES AND OTHER AGREEMENTS IN ORDER TO SECURE INDEBTEDNESS FOR CONSTRUCTING AND OPERATING THE BUSINESS ENTERPRISE FOR WHICH THE COOPERATIVE IS ORGANIZED. THE BOARD MAY ALSO AUTHORIZE, WITH APPROVAL OF THE MAJORITY OF THE MEMBERS, TO SELL LEASE, OR OTHERWISE DISPOSE OF ALL OR A SUBSTANTIAL PORTION OF THE COOPERATIVE'S PROPERTY TO ANOTHER COOPERATIVE DOING BUSINESS IN THE TEXAS UNDER THE SAME STATUTE UNDER WHICH THE COOPERATIVE IS ORGANIZED. ARTICLE X "MISCELLANEOUS" WAS UPDATED TO: (1) ADDRESS THE POWERS THE BOARD HAS FOR ESTABLISHING RULES AND REGULATIONS, CONSISTENT WITH THESE BYLAWS AND OTHER GOVERNING DOCUMENTS, FOR CONDUCTING THE AFFAIRS OF THE COOPERATIVE, (2) PROVIDE THAT THE BOARD SHALL CAUSE THE ESTABLISHMENT OF AN ACCOUNTING SYSTEM AND REQUIRE AN ACCOUNTING OF THE FINANCIAL CONDITION OF THE COOPERATIVE TO THE MEMBERS AT THE ANNUAL MEETING FOLLOWING THE CLOSE OF A FISCAL YEAR, (3) ADDRESS CONFORMITY OF THE BYLAWS WITH CURRENT AND FUTURE LAWS, AND (4) THAT THE BYLAWS ARE A CONTRACT BETWEEN THE MEMBERS AND THE COOPERATIVE. THE OBLIGATIONS AND RELATIONSHIPS OF THE COOPERATIVE TO ITS MEMBERS AND THOSE OF THE MEMBERS TO THE COOPERATIVE ARE, THEREFORE, MADE PERFORMABLE AT THE OFFICE OF THE COOPERATIVE AND ALL SUITS SHALL BE BROUGHT AND MAINTAINED IN THE COUNTY OF THE COOPERATIVE'S HEADQUARTERS. A COMPLETE COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE AT THE FOLLOWING ADDRESS: HTTP://WWW.BCECOOP.COM/CONTENT/BCEC-BYLAWS |
| 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. AMENDMENTS TO THE ARTICLES OF INCORPORATION 2. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 3. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 4. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION |
| 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 | ALL NEW EMPLOYEES AND DIRECTORS ARE REQUIRED TO SIGN A CONFLICT OF INTEREST CERTIFICATION WHEN THEY BEGIN EMPLOYMENT WITH THE COOPERATIVE. ALL EMPLOYEES, DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY AND ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. THE PRESIDENT/CEO REGULARLY MONITORS AND ENFORCES THIS POLICY. |
| FORM 990, PART VI, SECTION B, LINE 15A | THE BOARD OF DIRECTORS UTILIZE INTERNAL RESOURCES AND CONDUCT AN ANNUAL REVIEW BEFORE DETERMINING AND APPROVING THE COMPENSATION OF THE PRESIDENT/CEO. OTHER THAN THE PRESIDENT/CEO, THE COOPERATIVE DID NOT HAVE ANY EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, LINE 15B HAS BEEN ANSWERED "NO". |
| FORM 990, PART VI, SECTION C, LINE 19 | THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF ITS FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. A COPY OF THE COOPERATIVE BYLAWS ARE PROVIDED (1) TO EVERY NEW MEMBER AT THE TIME OF THEIR MEMBERSHIP (2) TO ALL MEMBERS WHEN AN ADMENDMENT IS MADE TO THE COOPERATIVE BYLAWS, AND (3) ARE AVAILABLE ON THE COOPERATIVE'S WEBSITE. 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. |
| 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, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL ELIGIBLE 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, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. |
| FORM 990, PART VII, SECTION A: | THE BOARD OF DIRECTORS CONSIDER THE PRESIDENT/CEO TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE PRESIDENT/CEO IS LISTED AS AN EMPLOYEE OFFICER. |
| 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 COMPANY 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 $ 2,597,266 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (149,614) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (99,282) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 580,251 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 305,428 TOTAL WAGES ACCRUED AND/OR PAID $ 3,234,049 |
| FORM 990, PART IX, LINE 24: | ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 640,820 OFFICE SUPPLIES 122,483 OUTSIDE SERVICES 81,551 DIRECTORS 175,698 ANNUAL MEETING 62,599 INSTITUTIONAL AND GOODWILL ADVERTISING 28,624 MEMBER EDUCATION AND YOUTH PROGRAM 36,321 DUES TO ASSOC. ORGANIZATIONS 43,426 MISCELLANEOUS GENERAL 68,085 REGULATORY COMMISSION 65,372 MAINTENANCE OF GENERAL PLANT 293,471 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 1,618,450 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (149,614) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (662,082) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (371,131) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 435,623 |
| 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 CALENDAR TAX 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 2019 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. |
| FORM 990, PART IX, LINE 1: | ALL 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. EACH DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. |
| FORM 990, PART IX, LINE 24E | OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TRANSMISSION $ 48,422 OTHER DEDUCTIONS 889 SALES 1,238 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 50,549 |
| FORM 990, PART XI, LINE 9: | PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 2,175,456. PATRONAGE CAPITAL RETIRED - TOTAL -2,059,993. PATRONAGE CAPITAL RETIRED - UNCLAIMED -28,574. NET CHANGE IN MEMBERSHIPS 45. RECLASSIFICATION OF CUSTODIAL SCHOLARSHIP AND ENERGY EFFICIENCY ACCOUNTS -1,709. |
| FORM 990, PART XII, LINE 2: | AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FINANCIAL STATEMENT AUDIT YEAR-END OF SEPTEMBER 30. THE TAX RETURN HAS BEEN AND CONTINUES TO BE PREPARED BASED ON A CALENDAR TAX YEAR-END OF DECEMBER 31. 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) 2019
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