| FORM 990, PART VI, SECTION A, LINE 4 |
DURING THE YEAR, THE COOPERATIVE AMENDED ITS BYLAWS. ARTICLE III, SECTION 2(B) WAS MODIFIED TO STATE THAT IN ORDER TO BE ELIGIBLE TO BE A DIRECTOR, AN INDIVIDUAL MUST BE A MEMBER IN GOOD STANDING OF THE COOPERATIVE FOR AT LEAST TWELVE (12) CONSECUTIVE MONTHS PRIOR TO AND INCLUDING MARCH 15 OF THE YEAR OF ELECTION OR APPOINTMENT. A COMPLETE COPY THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE AT WWW.CTEC.COOP/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 |
| 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 |
ON AN ANNUAL BASIS, THE COOPERATIVE REQUIRES THE BOARD OF DIRECTORS, PRINCIPAL OFFICERS, AND COMMITTEE MEMBERS TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. THE BOARD OF DIRECTORS ALSO COMPLETE AND SIGN THE FORM 990 DISCLOSURE QUESTIONNAIRE. ALL INDIVIDUALS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD AS SOON AS POSSIBLE. PERIODIC REVIEWS ARE DONE TO ENSURE COMPLIANCE WITH THE COOPERATIVE CONFLICT OF INTEREST POLICIES. |
| FORM 990, PART VI, SECTION B, LINE 15 |
AT THE BEGINNING OF THE YEAR, THE CEO MEETS WITH THE COOPERATIVE'S GOVERNING BOARD AND SETS SPECIFIC WRITTEN GOALS FOR THE UPCOMING YEAR. THESE GOALS ARE INCORPORTED INTO A MATRIX THAT IS USED FOR REVIEW AND EVALUATION OF THE CEO'S PERFORMANCE. IF THE BOARD DETERMINES THAT THE WRITTEN GOALS HAVE BEEN MET, THE CEO'S COMPENSATION IS SET IN AN AMOUNT COMPARABLE TO THE AVERAGE OF THE MEDIAN OF CEO COMPENSATION FOR REGIONAL ELECTRIC COOPERATIVES OF SIMILAR SIZE ACCORDING TO THE MOST CURRENT COMPENSATION SURVEY CONDUCTED BY THE NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION. THE CEO USES THE NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEE, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. |
| FORM 990, PART VI, SECTION C, LINE 19 |
THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE BYLAWS ARE ALSO AVAILABLE ON 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 AND HIGHLY COMPENSATED EMPLOYEES, 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 OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF 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 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 COOPERATIVE 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 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 $ 5,132,841 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (173,345) LESS: OFFICER EMPLOYEE BENEFITS REPORTED ON LINE 5 (210,738) LESS: KEY EMPLOYEE BENEFITS INCLUDED ON LINE 5 (48,324) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 2,699,312 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 617,512 TOTAL WAGES ACCRUED AND/OR PAID $ 8,017,258 |
| FORM 990, PART IX, LINE 24: |
ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 1,472,316 OFFICE SUPPLIES 178,856 OUTSIDE SERVICES EMPLOYED 94,203 INSURANCE 446,894 REGULATORY COMMISSION 115,439 DUES 107,530 DIRECTORS 62,003 MAINTENANCE OF GENERAL PLANT 344,997 MISCELLANEOUS GENERAL 241,249 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,063,487 LESS: RECLASS OF NON-OPERATING ADMIN EXPENSE (78,000) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (173,345) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (908,584) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (469,304) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,434,254 |
| FORM 990, PART IX, LINE 24E: |
OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TRANSMISSION $ 11,538 OTHER DEDUCTIONS 66,711 TAXES - OTHER 155,843 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $ 234,092 |
| FORM 99O, 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 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 XI, LINE 9: |
PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 7,047,275. PATRONAGE CAPITAL RETIRED - TOTAL -1,718,823. PATRONAGE CAPITAL RETIRED - DISCOUNT 249,076. NET CHANGE IN MEMBERSHIPS 14,685. OTHER COMPREHENSIVE INCOME - POST RETIREMENT BENEFITS 494,321. EQUITY METHOD INCOME FROM SUBSIDIARY 73,176. |
| FORM 990, PART XII, LINE 2C: |
THE EXECUTIVE COMMITTEE OVERSEES THE FINANCIAL STATEMENT AUDIT AND RECOMMENDS THE INDEPENDENT AUDITOR TO THE FULL BOARD. |
| 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. |
Attach to Form 990 or 990-EZ.