SCHEDULE O
(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.
MediumBullet Attach to Form 990 or 990-EZ.
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OMB No. 1545-0047
2018
Open to Public
Inspection
Name of the organization
ANZA ELECTRIC COOPERATIVE INC
 
Employer identification number

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 $508,078. 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 VI, SECTION A, LINE 4 DURING THE YEAR, THE MEMBERS OF THE COOPERATIVE APPROVED THE FOLLOWING AMENDMENT TO THE BYLAWS AT THE ANNUAL MEETING OF MEMBERS: ARTICLE IV, SECTION 2 WAS AMENDED TO ADJUST THE BOUNDARIES OF THE THREE DIRECTOR DISTRICTS SO THAT EACH DISTRICT WILL HAVE THE SAME NUMBER OF MEMBERS. THIS WAS DONE TO ENSURE THAT NO DIRECTOR DISTRICT IS SUBSTANTIALLY UNEQUAL TO ANOTHER DIRECTOR DISTRICT. A CURRENT COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE AT THE FOLLOWING ADDRESS: HTTPS://WWW.ANZAELECTRIC.ORG/CONTENT/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. 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.
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 WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN CALIFORNIA AND THE NATION. OTHER THAN THE GENERAL MANAGER, 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 MAILS AN ANNUAL REPORT TO EACH MEMBER OF THE COOPERATIVE. INCLUDED IN THE ANNUAL REPORT IS A SUMMARIZED COPY OF THE COOPERATIVE'S FINANCIAL STATEMENTS. 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, PART VII, COLUMN F: IN ORDER TO PROVIDE RETIREMENT BENEFITS TO 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 THE PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF THE 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, DENTAL, VISION AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES 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 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: ALTHOUGH THE COOPERATIVE IS NO LONGER AN 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 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 $ 1,660,267 LESS: DIRECTOR FEES REPORTED ON FORM 1099-MISC (98,325) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (192,921) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 293,947 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 30,558 TOTAL WAGES ACCRUED AND/OR PAID $ 1,693,526
FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 920,315 OFFICE SUPPLIES 57,859 OUTSIDE SERVICES 123,256 DUPLICATE CHARGES (CREDIT) (26,033) DIRECTORS 485,606 ANNUAL MEETING 40,957 DUES & SUBSCRIPTIONS 65,412 DONATIONS 12,936 MISCELLANEOUS GENERAL 89,927 MAINTENANCE OF GENERAL PLANT 106,819 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 1,877,054 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (12,936) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (98,325) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (609,831) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (535,099) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 620,863
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 FOR THE 2018 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/OR 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 GRANT, SPONSORSHIP, AND/OR 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: OTHER DEDUCTIONS $ 11,591 TRANSMISSION 31,495 COST OF BROADBAND ACCESS 190,684 TAXES 1,109 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 234,879
FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 998,133. PATRONAGE CAPITAL RETIRED - TOTAL -275,458. PATRONAGE CAPITAL RETIRED - DISCOUNT 12,616. PATRONAGE CAPITAL RETIRED - UNCLAIMED 62,146. NET CHANGE IN MEMBERSHIPS -150. OCI - PENSIONS & BENEFITS 33,563.
FORM 990, PART XII, LINE 2B: AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FINANCIAL STATEMENT AUDIT YEAR END OF MARCH 31ST. THE TAX RETURN HAS BEEN AND CONTINUES TO BE PREPARED BASED ON A CALENDAR TAX 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) 2018


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