SCHEDULE O
(Form 990)

Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ

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OMB No. 1545-0047
2022
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 GAIN REPORTED ON PAGE 1, PART I, LINE 19 DIFFERS FROM THE TOTAL NET MARGINS REPORTED ON THE COOPERATIVE'S DECEMBER 31, 2022 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 DIVISION REPORTED A NET MARGIN OF $565,853. DUE TO THE RECOVERY OF PRIOR YEAR LOSSES FROM TCFE CONNECTANZA DIVISION PURSUANT TO THE OPERATION AT COST PRINCIPLE, PART I, LINE 19 REPORTS REVENUE IN EXCESS OF EXPENSES OF $565,853, EQUAL TO THE AMOUNT OF THE LOSS RECOVERY.
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. THE COOPERATIVE APPLIED FOR AND RECEIVED A LOAN OF $620,900. 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 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 $ 2,258,263 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (96,104) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (226,228) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 301,015 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 131,479 TOTAL WAGES ACCRUED AND/OR PAID $ 2,691,425
FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,016,275 OFFICE SUPPLIES 82,850 OUTSIDE SERVICES 226,350 DUPLICATE CHARGES (CREDIT) (34,572) DIRECTORS 691,886 ANNUAL MEETING 77,194 DUES & SUBSCRIPTIONS 81,777 DONATIONS 23,300 MISCELLANEOUS GENERAL 83,903 MAINTENANCE OF GENERAL PLANT 154,236 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,403,199 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (23,300) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (96,104) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (927,134) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (665,580) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 691,081
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 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 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: THE BOARD APPROVES ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS. THE APPROVAL PROCESS PLACES AN EMPHASIS ON ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, WITH THE INTENT OF IMPROVING THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. DEPENDING ON NEED, DONATIONS TO OTHER ORGANIZATIONS ARE ON A CASE BY CASE BASIS. 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: COST OF BROADBAND ACCESS $ 164,369 TAXES 27,163 TRANSMISSION 52,926 OTHER DEDUCTIONS 1,411 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 245,869
FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 562,147. PATRONAGE CAPITAL RETIRED - TOTAL -328,935. PATRONAGE CAPITAL RETIRED - DISCOUNT 10,008. PATRONAGE CAPITAL RETIRED - UNCLAIMED 78,937. NET CHANGE IN MEMBERSHIPS -130. OCI - PENSION & BENEFITS -50,509.
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) 2022


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