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
GRAHAM COUNTY ELECTRIC COOPERATIVE INC
Employer identification number
86-0079733
86-0079733
| Return Reference | Explanation |
|---|---|
| FORM 990, PART I: | IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET LOSS OF $479,258, WHICH IS THE EFFECT OF NON-OPERATING MARGINS RETAINED AND AN UNALLOCATED WATER DIVISION LOSS. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: WATER DIVISION LOSS $ (409,833) ADD: NON-OPERATING LOSS (69,112) ADD: OTHER ADJUSTMENTS (313) (A) - NET INCOME (LOSS) ON PAGE 1, PART I, LINE 19 $ (479,258) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 349,926 TOTAL 2022 NET LOSS PER FINANCIAL STATEMENTS (A + B) $ (129,332) |
| FORM 990, PART III, LINE 2 | DURING 2022 AND SUBJECT FIRST TO APPROVAL OF THE MEMBERS AND THEN THE APPROVAL BY THE ARIZONA CORPORATION COMMISSION, GRAHAM COUNTY UTILITIES, INC., A WATER DISTRIBUTION UTILITY COOPERATIVE, MERGED INTO THE COOPERATIVE. THE MERGER RESULTED IN A NEW WATER DIVISION. PURSUANT TO THE BYLAWS FOR THE COOPERATIVE,SERVICES OF THE NEW WATER DIVISION ARE PROVIDED ON A PATRONAGE BASIS. THEREFORE, THE COOPERATIVE'S TAX EXEMPT PURPOSE IS EXPANDED TO INCLUDE BOTH THE PROVISION OF ELECTRIC ENERGY AND THE PROVISION OF WATER DISTRIBUTION SERVICES ON A COOPERATIVE BASIS. |
| FORM 990, PART VI, SECTION A, LINE 2 | A BUSINESS RELATIONSHIP EXISTS BETWEEN DIRECTORS GENE ROBERT LARSON AND REUBEN MCBRIDE AT ARIZONA ELECTRIC POWER 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 TRUSTEES. 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 |
| 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 AND PAID PREPARER REVIEW DRAFTS OF FORM 990 PRIOR TO E-FILING. |
| FORM 990, PART VI, SECTION B, LINE 12C | GCEC HAS A CONFLICT OF INTEREST POLICY THAT IS APPLICABLE TO ALL BOARD MEMBERS. DIRECTORS ARE TO MAKE WRITTEN DISCLOSURES OF ANY SUBSTANTIAL OUTSIDE INTEREST IN ANY ENTITY DOING BUSINESS WITH GCEC, INCLUDING BUT NOT LIMITED TO ANY OWNERSHIP INTEREST OR VOTING PRIVILEGE AS A DIRECTOR OR TRUSTEE, IN ORDER TO PERMIT CONSIDERATION BY THE BOARD OF DIRECTORS OF SUCH CONTINUING RELATIONSHIP. SUCH DISCLOSURE SHALL BE MADE AT THE TIME A DIRECTOR ACQUIRES SUCH AN INTEREST. ADDITIONALLY, ALL DIRECTORS SHALL ANNUALLY MAKE A WRITTEN DISCLOSURE OF ANY TO GCEC. GCEC'S GENERAL COUNSEL SHALL ANNUALLY REVIEW WITH THE BOARD OF DIRECTORS THIS POLICY AND MATTERS RELATING TO THEIR COLLECTIVE AND INDIVIDUAL DUTIES AND OBLIGATIONS AS DIRECTORS. SUCH REVIEW SHALL TAKE PLACE DURING THE QUARTER AFTER GCEC'S ANNUAL MEETING. IMPLEMENTATION OF THE POLICY SHALL BE THE RESPONSIBILITY OF THE BOARD OF DIRECTORS, EXCEPT AS OTHERWISE PROVIDED HEREIN BY THE GENERAL MANAGER OR THE GCEC GENERAL COUNSEL. |
| FORM 990, PART VI, SECTION B, LINE 15 | THE BOARD OF TRUSTEES EVALUATES THE PERFORMANCE OF THE CEO/GENERAL MANAGER AND THEN VOTES ON THE ANNUAL SALARY. THE DECISION IS PARTIALLY BASED ON A COMPENSATION SURVEY, WHICH INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT ARIZONA AND THE NATION. CEO/GENERAL MANAGER EVALUATES THE PERFORMANCE OF THE ORGANIZATION'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. A COMPENSATION SURVEY, WHICH INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT ARIZONA AND THE NATION, IS THEN USED TO SET COMPENSATION. |
| FORM 990, PART VI, SECTION C, LINE 19 | THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE PROVIDES A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. THE ANNUAL REPORT, AUDITED FINANCIAL STATEMENTS AND BYLAWS CAN ALSO BE FOUND 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 AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION, AND GROUP TERM LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND EMPLOYER PAID INSURANCE PREMIUMS. |
| 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 TO 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, 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 $ 2,805,106 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-NEC (81,505) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (118,984) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 873,046 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 756,987 TOTAL WAGES ACCRUED AND/OR PAID $ 4,234,650 |
| FORM 990, PART IX, LINE 24: | ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 829,404 OFFICE SUPPLIES 543,474 OUTSIDE SERVICES EMPLOYED 106,298 PROPERTY INSURANCE 14,207 INJURIES & DAMAGES 84,418 EDUCATION & TRAINING 412,458 DIRECTORS 113,507 REGULATORY COMMISSION EXPENSE 28,218 MISCELLANEOUS GENERAL 189,122 RENTS 18,211 MAINTENANCE OF GENERAL PLANT 168,322 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,507,639 LESS: RECLASS OF TRUSTEE FEES TO PART IX, LINE 5 (81,505) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (835,674) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (426,983) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,163,477 |
| 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 WATER DISTRIBUTION SERVICES ON A DIVISIONAL BASIS TO ITS PATRONS AND TO DO SO ON A COOPERATIVE BASIS FOR EACH DIVISION. 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 2022 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 WATER DIVISION INCURRED A LOSS FOR 2022. PURSUANT TO COOPERATIVE TAX LAW AND THE OPERATION AT COST PRINCIPLE, THIS LOSS HAS BEEN CARRIED FORWARD FOR OFFSETTING FUTURE PATRONAGE SOURCED MARGINS FROM THE WATER DIVISION BEFORE PATRONAGE CAPITAL IS ALLOCATED TO THE PATRONS OF THE WATER DIVISION. |
| FORM 990, PART IX: | ALTHOUGH NO LONGER A BORROWER OF THE RURAL UTILITIES SERVICE (RUS), THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR RUS 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 ITS 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 XI, LINE 9: | PATRONAGE CAPITAL ASSIGNABLE 349,926. PATRONAGE CAPITAL RETIRED - TOTAL -464,462. NET CHANGE IN MEMBERSHIPS -3,330. DONATED CAPITAL & OTHER 2,215. OTHER COMPREHENSIVE INCOME 781,835. CONSOLIDATION WITH GRAHAM COUNTY UTILITIES, INC. 42,827. |
| FORM 990, PART XII, LINE 2C: | AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FINANCIAL STATEMENT AUDIT YEAR-END OF SEPTEMBER 30TH. 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) 2021
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