TIN:
SCHEDULE O
(Form 990)
Department of the Treasury
Internal Revenue Service
(Form 990)
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
2021
Open to Public
Inspection
Inspection
Name of the organization
OTERO COUNTY ELECTRIC COOPERATIVE INC
Employer identification number
85-0058679
85-0058679
| Return Reference | Explanation |
|---|---|
| FORM 990, PART I, LINE 19: | WHEN CALCULATING THE AMOUNT OF PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS (I.E. PATRONAGE DIVIDEND), THE COOPERATIVE RECOVERS UNALLOCATED NET LOSSES FROM PRIOR YEAR OPERATIONS AS AN OFFSET AGAINST THE NET MARGINS FOR THE CURRENT YEAR. ACCORDINGLY LINE 19 REPRESENTS THE REMAINING AMOUNT OF THE 2019 UNALLOCATED LOSS UTILIZED IN CALCULATING THE 2021 PATRONAGE DIVIDEND OF $2,879,073, AS REPORTED ON FORM 990, PART I, LINE 14. |
| 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 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. THE DISCUSSION AND REVIEW TOOK PLACE AT THE SCHEDULED BOARD MEETING BEFORE FILING. |
| FORM 990, PART VI, SECTION B, LINE 12C | THE BOARD OF TRUSTEES ARE GOVERNED BY THE BYLAWS. A TRUSTEE IS DISQUALIFIED AND SHALL BE REMOVED IF HE/SHE IS EMPLOYED BY OR INVESTS IN A BUSINESS, WHICH COMPETES WITH THE COOPERATIVE. THE EMPLOYEES ARE GOVERNED BY A CONFLICT OF INTEREST POLICY. THE COOPERATIVE ENFORCES THE POLICY BY EXPLAINING IT TO NEW EMPLOYEES AND BY REMINDING ITS EMPLOYEES OF THEIR DUTIES TO ANNUALLY DISCLOSE CONFLICTS OF INTEREST. |
| FORM 990, PART VI, SECTION B, LINE 15 | ANNUALY, THE BOARD VOTES TO APPROVE THE CEO'S SALARY BASED ON A REVIEW OF A NATIONAL COMPENSATION SURVEY AS WELL AS THE CONSUMER PRICE INDEX. THE CEO DETERMINES THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND/OR KEY EMPLOYEE, IF ANY, BASED ON A REVIEW OF A NATIONAL COMPENSATION SURVEY AS WELL AS THE CONSUMER PRICE INDEX. |
| FORM 990, PART VI, SECTION C, LINE 19 | THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTERST POLICY AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. THE COOPERATIVE ANNUALLY MAILS A SUMMARIZED COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THEIR ANNUAL MEETING NOTICE. ADDITIONALLY, THE BYLAWS AND ARTICLES OF INCORPORATION ARE INCLUDED IN THE MEMBER HANDBOOK THAT IS ALSO AVAILABLE ON THE COOPERATIVE'S WEBSITE. |
| 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 THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS 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 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, PAGE 9, PART VIII, LINE 11A: | THE CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (CARES ACT) ESTABLISHED THE PAYCHECK PROTECTION PROGRAM (PPP) TO PROVIDE LOANS TO SMALL BUSINESSES AS A DIRECT INCENTIVE TO KEEP THEIR WORKERS ON THE PAYROLL. THE LOANS ARE FORGIVEN IF ALL EMPLOYEE RETENTION CRITERIA ARE MET AND THE FUNDS ARE USED FOR ELIGIBLE EXPENSES. DURING THE YEAR, THE COOPERATIVE APPLIED FOR AND RECEIVED A LOAN OF $1,177,587. AFTER FULFILLING THE REQUIREMENTS OF THE PROGRAM, THE COOPERATIVE RECORDED THE ANTICIPATED LOAN FORGIVENESS AS INCOME, BECAUSE THE NATURE OF THE PROGRAM IS COMPRISED OF A BONA FIDE LOAN FOLLOWED BY LOAN FORGIVENESS. ALTHOUGH THE INSTRUCTIONS TO FORM 990 STATE THAT THE AMOUNT OF PPP LOANS THAT ARE FORGIVEN MAY BE REPORTED ON LINE 1E AS CONTRIBUTIONS FROM A GOVERNMENTAL UNIT, THE COOPERATIVE HAS CHOSEN TO REPORT THE PPP LOAN FORGIVENESS AS OTHER INCOME ON LINE 11A. |
| FORM 990, PART IX: | THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RURAL UTILITY SERVICES (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 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 $ 3,223,142 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-NEC (118,832) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (160,796) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,316,254 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSES INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 216,503 TOTAL WAGES ACCRUED AND/OR PAID $ 4,476,271 |
| FORM 990, PART IX, LINE 24: | ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,415,868 OFFICE SUPPLIES 339,605 OUTSIDE SERVICES 120,945 INJURIES AND DAMAGES 476,023 REGULATORY COMMISSION 168,086 MISCELLANEOUS GENERAL 206,437 TRUSTEES 169,340 MAINTENANCE OF GENERAL PLANT 257,879 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,154,183 LESS: RECLASS OF RENTAL EXPENSES TO PART VIII, LINE 6B (1,000) LESS: RECLASS OF TRUSTEE FEES TO PART IX, LINE 5 (118,832) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,006,369) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (556,125) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,471,857 |
| 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 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 2021 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 XI, LINE 9: | PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 2,879,073. PATRONAGE CAPITAL RETIRED - TOTAL -752,615. PATRONAGE CAPITAL RETIRED - DISCOUNT 21,062. OTHER COMPREHENSIVE INCOME - PROVISION FOR PENSIONS AND BENEFITS 11,309. |
| 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) 2021
Additional Data
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