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2016-17 Annual Report Nebraska Cooperative Council
2016-17Annual Report
Nebraska Cooperative Council
Cooperative Principles:•VoluntaryandOpenMembership
•DemocraticMemberControl
•MemberEconomicParticipation
•AutonomyandIndependence
•Education,Training&Information
•CooperationamongCooperatives
•ConcernforCommunity
NCC Mission Statement:To defend, protect, and enhance the agricultural cooperative movement through pro-active programs in education, legislation, government affairs, communication, and regulatory issues.
Inside this Report:MessagefromtheChairman&President3Leadership4StateLegislation-2017Session5NCCPoliticalActionCommittee9Federal&StateRegulations10DirectorEducation12YouthEducation14AnnualMeeting/HallofFame15Financials16Membership17
30 Nebraska supply/marketing co-ops operating:
343 additional branch locations in Nebraska
56 additional branch locations out of state
3 Rural electric co-ops
1 Transport co-op
1 Telephone co-op
2 Out-of-state co-ops with a branch in Nebraska
1 Out-of-state rural electric co-op
2 Livestock Marketing Agencies
7 Participating Members
38 Supporting Members
NCC Member Supply/Marketing Co-op Stats: 60,225+ total voting members
5,350+ employees (full and part-time)
$5.7 billion total sales
$3.2 billion total assets
$123 million net savings
$331.5 million employeepayrollwithbenefits
$201.6 million investment in new equipment and facilities in past year
$42.2 million total patronage refunds in past year
$22 million equity/estate redemption in past year
$14 million property taxes paid in past year
$4 million federal/state income taxes paid in past year
NCC Member Cooperativesby the Numbers (Annual)
(estimated as of 8-31-17)
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 3
Message from theChairman & President
DavidBriggsChairman
RockyWeberPresidentAs the patrons, owners, management and vendors of Ne-
braska’s farmer owned cooperatives gather for the 72nd con-secutive time, we are grateful as an association for the oppor-tunity to continue to defend, protect and enhance Nebraska’s farmer owned cooperatives and their over 60,000 members.
The mission of the Nebraska Cooperative Council, however, is not accomplished only by its staff or its Board of Directors. The mission of the Council can only be achieved with the active participation of its Local, Participating, and Supporting Mem-bers. This participation is reflected in more than just payment of annual dues. It is directly reflected in the countless hours of time and talent offered by those who serve on the Council’s committees and indirectly by those who respond to requests for information and action on behalf of Nebraska’s farmer owned cooperatives.
On the legislative front, the Council reviewed 223 indi-vidual pieces of legislation out of the 667 introduced in the Nebraska Legislature in 2017. Of these, 107 were followed and with the recommendation of the Council’s Legislative Advisory Committee, the Council actively took positions on 64 bills.
In Washington, the Council actively engaged the Nebraska Congressional Delegation on pension premium reform, H.R. 3596, the “Right Sizing Premium Pension Act of 2017”, with-out which the Co-op Retirement Plan covering nearly 8,000 current and former farmer cooperative employees in Nebraska will face significant increases in guaranty association premi-ums. We are currently in the process of educating and lobby-ing our Congressional Delegation about the importance of the Section 199 deduction and how critical it has been to not only cooperatives, but to their farmer owners as well in an effort to remove its repeal from the pending tax reform proposals.
For cooperative directors, managers and employees, the Council’s education programs were attended by 367 partici-pants with topics ranging from credit issues to how the digital revolution is challenging retail agriculture at a time when farm and ag retail margins continue to narrow. In addition to these topical programs, the Council continued to offer its Director Certification Program that over 80 new cooperative directors participated in and its Board Officer Seminar which is a free-form program that allows Boards of Directors to communicate and educate each other about the best practices of successful boards.
As a result of in-depth surveys and informal communica-tions with the Council Membership, the Excellence in Coop-erative Education Committee examined the Council’s existing programs and directed the Council to establish a DCP Refresh-er program for experienced directors to brush up on the basics taught in the four phases of DCP with added content for issues concerning the role of the Boards of Directors and how direc-tors communicate with management and to their owner/patrons on the vision and direction of the cooperative.
At its annual budgeting and dues meeting in July, the Board of Directors authorized the Nebraska Cooperative Council Legacy Initiative which will be introduced at the Annual Meet-ing on November 15, 2017. The Legacy Initiative will involve a committee of nearly 20 representatives of Nebraska’s farmer owned cooperatives who will question, survey, analyze and re-view options to foster relationships between the farmer owned cooperatives of the 21st century with farmers of 21st century.
While farm demographics continue to shrink the number of farmers and ranchers and economies of scale continue to push the redeployment of cooperative assets through mergers and strategic partnerships, these facts demonstrate the strength of your association: 40 local farm cooperative, rural electric, telephone, transportation and livestock marketing members, 7 Participating Members, 38 Supporting Members, 9 members of the NCC Board of Directors, 41 members of the Council’s standing committees and 18 members of the Legacy Initiative Steering Committee, along with input and assistance from doz-ens of managers, key-employees and local cooperative board members on a regular basis.
A contemporary political figure once wrote: “It takes a Village.” We believe that it takes a Cooperative of dedicated persons working with a common mission. THANK YOU for your role in defending, protecting, and enhancing the agricul-tural cooperative movement.
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council4
2016/17 Council LeadershipBoard of Directors
CommitteesLegislative Advisory Committee
RockyWeber...................NebraskaCooperativeCouncil (Co-chair)DeanThernes..................FarmersPride,BattleCreek (Co-chair)AaronBecker..................FarmersCo-op,PilgerMattCaswell...................AGP,OmahaJeffLoschen....................CooperativeProducersInc.,HastingsJameyNygren.................FarmCreditServicesofAmerica,OmahaJohnOehlerking.............MidwestFarmersCo-op,ElmwoodRandyRobeson...............FrontierCo-opCo.,BrainardTimRowe........................CountryPartnersCo-op,GothenburgDavidBriggs...................WESTCO,Alliance(ex-officio)
NCC-Political Action CommitteeDeanThernes..................FarmersPride,BattleCreek (Chair)CarlDickinson................CentralValleyAgCo-op,YorkTomHansen....................AgValleyCo-op,EdisonMaryKayLyon.................CHSInc,HoldregeDougOlsen....................PanhandleCo-opAssn.,ScottsbluffBillSchuster....................AuroraCo-opElevatorCo.KentTaylor......................Farmers/RanchersCo-opAssn,AinsworthRonVelder......................FarmersCo-op,DorchesterDavidBriggs...................WESTCO,Alliance (ex-officio)
RockyWeber...................President&GeneralCounselEdWoeppel....................Education&ProgramDirector
Staff
Chair:DavidBriggsWESTCOAlliance
Vice Chair:DeanThernesFarmersPrideBattleCreek
Secretary:DaveBeckman
CentralValleyAgCo-opYork
EvanBrandesAuroraCo-opElevatorCo.
Aurora
JohnOehlerkingMidwestFarmersCo-op
Elmwood
KentTaylorFarmers/RanchersCo-opAssn
Ainsworth
RandyRobesonFrontierCo-opCo.
Brainard
TimRoweCountryPartnersCo-op
Gothenburg
MikeHechtnerCoBankOmaha
Excellence in CooperativeEducation Committee
DaveBeckman................CentralValleyAgCo-op,York (Chair)DonAnthony...................CHSInc,LexingtonEvanBrandes..................AuroraCo-opElevatorCo.TodClark........................CountryPartnersCo-op,GothenburgJayGeu..........................FrenchmanValleyFarmersCo-op,ImperialTomHouser....................CoBank,OmahaMikeNohavec.................FarmersCo-op,DorchesterDavidBriggs...................WESTCO,Alliance (ex-officio)Dr.GregMcKee..............UniversityofNebraska-Lincoln (ex-officio)EdWoeppel....................NebraskaCooperativeCouncil
Hall of Fame CommitteeDarylErickson.................Greenwood (Chair)DonWiseman.................Fairbury (Vice Chair)JerrellDolesh..................TildenEdFoster........................GothenburgDougNuttelman.............StromsburgDavidBriggs...................WESTCO,Alliance (ex-officio)RockyWeber...................NebraskaCooperativeCouncil (ex-officio)
GlendaGaston...............OfficeManager/AdminAssistantDebMazour....................ProgramCoordinator/AdminAssistant
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 5
State Legislation - 2017 Session
WhiletheCouncilmonitorsalllegislativeactivityinordertokeepitscooperativemembersabreastofanylegislativechangesthatmayaffecthowcoopera-tivesconductbusiness,theprimaryresponsibilityoftheCouncilinthelegislativearenaistomonitorandeffectlegislationthatpertainsto“cooperativespecificissues.”Thislegislativepriorityincludes,butisnotlimitedto,legislativeactionaffecting:•Cooperativesasbusinessentitiesuniquefrom
corporationsandlimitedliabilitycompanies•Cooperativecorporategovernanceandthe
rightsandobligationsofcooperativeboardmembers,stockholdersandpatrons•Laws,includingtaxcodes,thatmayaffecthow
cooperativesallocatepatronagetotheirpatrons•Equitymanagementandequityredemption
restrictions•Securitiesandother“safeharbor”exemptions
thatprovidecooperativestheabilitytoraiseandman-ageequityTheselegislativeprioritiesinvolveissuesthataffect
theverynatureofthecooperativebusinessmodel,whetheritbealocalorregionalcooperative,autilitycooperative,atransportationcooperative,ortheFarmCreditSystem,CoBankorrelatedcooperativeentitiesuniquelyformedtoservetheneedsofcooperativebusinessorganizations.
The2017LegislatureadjournedonMay23.Atotalof173billsbecamelaw.FulldescriptionsofthestatusofthebillsaffectingcooperativeswereemailedouteachweektomembersintheformofLegislative Updateswithatotalof15forwardedduringthesession.Duringthesession,theCounciltracked107billsand
resolutionsthatcouldimpactcooperatives.Listedherearesomeofthemoresignificantbillswefollowed.TheCouncil’spositionisindicatedinparentheses(S=support,O=oppose,M=monitor).
BECAME LAW
LB 22 - Transfer to State General Fund (O)TheGovernorsignedLB22onFebruary15thand
becausethebillincorporatedtheemergencyclause,provisionsbecameeffectiveonFebruary16th.LB22aspassedincludedmanytransfersfromvariousdepartments,agencies,etc.toclosethecurrentfiscalyearbudgetgap;however,itdidnotincludetheoriginal$700,000pro-posedtransferfromthePetroleumReleaseRemedialActionCashFund(PRRACF)totheGeneralFundwhichwasthecauseoftheCouncil’soppositiontothebill.ThePRRACFtransferaswellasmanyothertransfersfromvariousfundswerestrippedfromthebillbytheAppropriationsCommit-teepriortothebill’spassage.TheCommitteeindicated“transfersfromcashfundsandtheCashReserveFundcanbedeferredandconsideredaspartofthebudgetprocessfortheupcomingFY18andFY19biennialbudget.”
LB 164 - Commercial Drivers License (O)LB164requiresthatthecommercialdriverslicense
disqualificationperiodformorethanonetrafficviolationatatimebeservedseparatelyandcon-secutively(toconformtofederallaw)ratherthanconcurrently.TherestrictionsonCDL’sarealreadysoburdensomethatitisdifficulttorecruitandretaincommerciallylicenseddriversandthiswouldonlyexacerbatetheproblem.ProvisionsofLB164wereultimatelyamendedintoLB
263viacommitteeamendmentAM538andpassedbytheLegislature.
LB 203 - Employment Security (S)LB203wasintroducedattherequestoftheDepartment
ofLabortodiscouragehabitualoffendersofunemploymentbenefitsthatgetajobandworkjustlongenoughtoqualifyforunemploymentbenefitsandthenquitthejob.Afterthebenefitsrunout,theywillgetanotherjobandthenrepeatthecycle.LB203extendsthewaitingperiodbetweenwhenapersonquitsajobandtheniseligibleforbenefits,
(Continuedonpage6)
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council6
hopefullytoencouragepeopletoremainemployedandnotmilkthesystem.Anindividualwhovoluntarilyleavesajobwithoutgoodreasonisrequiredtoearnfourtimestheirweeklybenefitamounttoagainbeeligibleforunemploy-mentbenefits.
LB 331 - Fund Transfers (O)LB331waspartoftheGovernor’sbudgetandmakes
numeroustransfersofFundbalancesincludingatransferofupto$1.5millionin2018and2019fromthePetroleumReleaseRemedialActionCashFund(PRRACF)tocovertheDEQ’scost-shareobligationsundertheFederalCompre-hensiveEnvironmentalResponseCompensationandLiabil-ityActof1990.Additionally,transfersfromthePRRACFtotheSuperfundCostShareCashFundareauthorizedunderthedirectionoftheLegislature.TheCouncilcommuni-catedouroppositiontothisbillaswebelievethemoneywithinthesefundsshouldbeusedforthepurposeinwhichtheywerecollected.However,withtheamountofmoneythatwasneededtobalancetheStatebudget,itwasclearthatthetransferswithinLB331weregoingtohappen.
CARRIED OVER TO THE 2018 SESSION
LB 477 - Fuel Pricing/Labeling (O)LB477,asintroducedbySenatorsMcCollisterand
Groene,wouldplacelimitationsonhowautomotiveenginefuelisadvertisedandsoldinthestateofNebraska.Thebillwouldmakeitillegaltoadvertiseanenginefuelonapricesign(likebelow)thatisnotavailableatallfuelingposi-tionsunlessasecondenginefuelisavailableatallfuelingpositionsandisadvertisedonthesamesign,inthesamefontsizeandillumination.Thebillfurtheraddressestheadvertisingofautomotiveenginefuelsthatisdistributedthroughablendingretaildispenser.
Duringthebill’shearing,theCounciltestifiedinop-positiontothebillindicatingthatmanycooperativesthatoperateolderandsmallerretailfacilitieswouldbeim-pacted.Inordertocomply,thesesiteswouldeitherrequirenewsignageadvertisingthepriceofallavailablebrandsorrequiresubstantialreconfigurationoftanks,pipingandpumpsinordertomakealladvertisedproductsavailableatallfuelingpositions.Ineitherevent,LB477wouldsub-jectthesesitestounwarrantedandunnecessaryexpensesatatimewhenmarginsonthesaleoffuelarenotenoughtojustifysuchadditionalexpense.Theultimateeffectwouldbetheclosureofmanyolderruralretailfuelsiteswhichwouldburdenthepublicandcurtailtheservicesofferedbyfarmerownedcooperatives.WecommunicatedwiththeNebraskaPetroleumand
ConvenienceStoreRetailersAssociation(NPCSRA)aswellasSenatorMcCollisteraboutourconcernswithLB477ascurrentlydrafted.ItisourunderstandingthatLB477isbeingproposedtorectifytheactionsofoneortworetail-ersthatothersbelievewereconductingdeceptivetradepracticesinthemarketplace.TheproblemisthatLB477asacureofoneproblemwouldhavematerialunintendednegativeconsequencestootherautomotiveenginefuelretailers.TheCouncilcontinuestoworkwiththeNPCSRA,Sena-
torMcCollister,andmembersoftheAgricultureCommitteeaboutourconcernswithLB477ascurrentlydrafted.
LB 215 - E-15 Tax Credit (S)LB215wouldprovidea5¢/gallontax
creditforanyretailerwhosoldE-15fuelduringthepriorcalendaryear.Thetotalcreditallowedstatewidewouldbe$1mil-lionwithaJanuary1,2018startdateforthecredits.ThepurposeofLB215istoencourageretailerstoaddinfra-structuretobroadentheuseofE-15.TheCounciltestifiedinsupportofLB215andfurtherencouragedtheRevenueCommitteetoincludeinanyconsiderationofexpandedtaxcreditsorbio-fuelsadvancedblendsofbiodieselfuelsuchasB-5.
LB 477 will be carried over to the 2018 session. If passed, the gas station sign at left would be illegal. The Council has held numerous meetings indicating our opposition to the bill as it would have negatively impacted many cooperatives that operate older and smaller retail facilities. We are continuing to work with Senator McCollister, members of the Ag Committee, and the Nebraska Petroleum & Convenience Store Association about our concerns with LB 477 as currently drafted.
State Legislation(continuedfrompage5)
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 7
LB 261 - NE Worker Adjustment & Retraining Notification Act (O)LB261wouldadopttheNebraskaWorkerAdjustment
andRetrainingNotification(NWARN)Act.ItislargelyaduplicationofthefederalActwithlowerthresholdssinceNWARNwouldapplytoemployerswith25ormoreem-ployees,includingpart-timeemployees.LB261providesforsubstantialcivilliabilityandpen-
alties.Ifanemployerfailstowarntheemployees,theemployerwouldbeliablefordoublebackpayforeachdayofviolationforeachemployeeplusthevalueofbenefitsandanyothereconomicdamagessufferedbytheaffectedemployeesplusreasonableattorney’sfeesandcosts.Fur-thertheAttorneyGeneralcouldtakecivilactiononbehalfoftheemployeesandseekcivilpenaltiesof$500perdaymultipliedbythenumberofemployeesforeachdaynotifi-cationwasnotgiven.ThereisnoreasontoduplicatethefederalWARNAct
onastatelevelandimposesuchdraconianpotentialdam-agesandpenaltiesonNebraskaemployers.Nebraska’sfarmerownedcooperativesnotcurrentlysubjecttothefederalWARNActwouldbeburdenedwithnew,potentiallycostlyandunnecessaryregulationwithoutanyapparentneedtobroadencurrentlyexistingfederallaw.
LB 354 - Wage Disclosure Act (O)LB354wouldbaranemployerfromrequestingorre-
quiringajobapplicanttoprovidecurrentorpriorwagesormakingthatrequestasaconditionforinterviewinganap-plicant.Itwouldalsobaranemployerfromseekingwageinformationfromtheapplicant’scurrentorprioremployer.AviolationwouldbeaClassIVmisdemeanor(minimumfineof$100orupto$500).Nebraska’sruralemployershaveadifficulttimefinding
andmaintainingaqualifiedworkforce.Thisisparticularlytrueinareasrequiringspecializedtrainingorupperman-agementexperience.Theabilitytohireiscompromisedifanemployerdoesnotknoworcannotdeterminewhetherornotanapplicantwouldfindajobofferattractiveiftheemployercannotascertainwhatcompensationwouldbenecessarytolandanewemployee.
LB 372 - Employment (O)LB372wouldadd“familycareresponsibilities”tothe
listoffactorsthatemployersmaynotconsiderinmakingdecisionsregardingthehiringorretainingofemployees.Using“familycareresponsibilities”wouldbeconsidereddiscriminationthesameasexistingdiscriminationprohibi-tionsbasedonestablishedprotectedclasscategories.Familycareresponsibilitiesaredefinedinthebillto
encompassactivitiesthat“providedirectandongoingcareofaperson’sspouse,child,parent,sibling,grandchild,orgrandparentorachildorparentofsuchperson’sspouse.”Weforwardedaletterofoppositionforthehearing
indicatingthatwebelievethedefinitionoffamilycarere-sponsibilitiesinLB372istoobroadandsoinclusivethatitwouldbeimpossibletoidentifyaseparateclassofpersonsforwhomprotectionmayberequiredorwhenprotectionmayberequired.
LB 374 - Income Tax Credit / NE Advantage Act (O)LB374wouldprovideapassthroughcorporatetax
creditequalto100%oftheNebraskaincometaxliabilitytobedistributedwith50%toallshareholdersand50%toallemployeesofthecorporation.ItwouldalsoprovideasunsetdatefortheNebraskaAdvantageAct.LB374isinconsistentwiththefoundationalfederaltax
provisionsoffarmerownedcooperatives(SubchapterT)thatprovidethatnetmarginsoffarmerownedcooperativesbeownedbyanddistributedtothosepatronsinthepro-portionoftheirrespectivebusinessdonewiththecoopera-tive.Apatronmayincludestockholdersandemployees,butnotnecessarily.Manypatronsareneitherstockholdersorpatronsbutearnpatronageallocations,whicharethedistributionofnetearningsofthecooperative.Consistentwithfederaltaxcode,Nebraska’sfarmerownedcoopera-tiveshaveArticles&BylawsthatrequiredistributionofnetsavingstopatronsonpatronagebasispursuanttoSub-chapterToftheInternalRevenueCode.
LB 420 - Fair Choice Hiring Act (O)LB420wouldadopttheFairChoiceHiringActwhich
wouldprohibitanyemployerwith15ormoreemployeesoremploymentagencyfromrequestingcriminalhistoryfromanapplicantuntiltheemployerhasdeterminedtheapplicantmeetstheminimumemploymentqualification.Currentlyonlypublicemployershavethisstandard.Thisbillsimplyaddsanotherlayerofregulationonour
businesscommunityandwouldcreateaprotectedclassofemployeesthatcurrentlyhavenospecialprotectionunderotherapplicableemploymentstatutes.TheCounciloppos-eseffortstocomplicateorcreatespecialrightsduringthehiringprocess,rights,whichifviolated,wouldlikelygivesomerighttocivilactionbyapplicantsagainstemployers.
LB 471 - Texting/Emailing while Driving (S)LB471wouldmaketexting/emailingwhiledrivinga
primaryaction.Currentlytexting/emailingwhiledrivingisasecondaryaction.Becausecooperativesoperate
heavycommercialtrucksandoftenaretransportinghazardouschemi-cals,safetyforthedriversandenvi-ronmentisaprimaryconcern.LB471isgearedtowardcreatingsaferroadwayswhichthecooperativessupportfortheirdrivers.
LB 473 - Employee Rest Periods (O)LB473wouldrequireemployersof6ormorepeopleto
allowemployeesa15-minuterestperiodforevery4hoursworkedwithnoreductionincompensation.Thiswouldbeinadditiontoaregularlyscheduledlunchperiod.Underthebill,anyemployerinviolationwouldbeguiltyofaClassIIImisdemeanor(upto3monthsinjailorafineof$500orboth).TheCouncilstronglyopposesfurtherstatutoryregula-
tionoftheworkplacewhichLB473seekstoimpose.The(Continuedonpage8)
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council8
Councilfurtherstronglyopposesthecriminalizationoftheactofanemployerfailingtoallowa15-minuterestperiod.Workplacesandworkdayscannotbesostructuredthatthelawmustgoverneveryminuteoftheemploymentexpe-rience.
LB 496 - Community Development Law (S)LB496wouldcreateanavenueforapublic/private
incentiveplanforconstructionofnewhousingforcur-rentornewemployeesthatwouldincludeinvestmentsbymunicipalitiesandprivatedevelopers.Thekeypurposeistoencouragesufficientqualityhousingforacommunity’sworkforce.Anotherpurposeistopreventthespreadofblightandsubstandardconditions.LB496wouldspe-cificallymakevillagesandcitiesofthefirstandsecondclasseligibletoparticipateinworkforcehousingincentiveprograms.Nebraska’sfarmerownedcooperativesdirectlyem-
ploynearly6,500employees,andindirectlysupportmorethan13,000jobs,thevastmajorityofwhichareinruralcommunities.Thelackofqualityhousingandotherinfrastructuresuchashighspeedinternetarehurdlestotherecruitmentandmaintenanceofqualifiedandexperiencedemployeesinruralcommunities.
LB 629 - Exempt CDL holders from hazardous waste endorsement requirements (S)LB629wouldallowapersonpossessingaCDLautho-
rizingoperationofaClassAcombinationvehicletooper-ateaClassA,BorCcommercialmotorvehiclewithoutahazardousmaterialsendorsementiftheperson:1.Isactingwithinthescopeofhis/heremploymentas
anemployeeofacustomharvesteroperation,agrichemi-calbusiness,farmretailoutletandsupplier,orlivestockfeeder;and2.Isoperatingaservicevehiclethatwas(A)transport-
ingdieselfuelof1,000gallonsorless;andwas(B)clearlymarkedwith“flammable”or“combustible”placard,asappropriateCooperativesfaceacontinuingshortageofqualified
CDLdriverstohandleover-the-roaddeliveriesofcom-moditiesandagriculturalinputs.LB629wouldbeahelp-fulstepinexpandingthescopeoftasksthatcurrentCDLdriversmaybeabletoperform.
LR 17CA - Property Taxes (O)LR17CAisaconstitutionalamendmentfortheNovem-
ber2018ballottoeliminaterequirementsthatpropertytaxesbeleviedbyvaluationuniformlyandproportionately.Itspecificallyremovescurrentlanguagethatprovidesthatagriculturalandhorticulturallandmaybeclassedsepa-ratelyanddistinctly.Agricultureisthelife-bloodofNebraska’seconomy.The
recentgrosslydisproportionatehikesinagriculturalrealestatetaxeshavemaderealestatetaxesthesecondhighest
annualcostlyinputperacreforfarmers.Thisisatatimewhenitisdifficulttomakeanyprofitperacreduetocom-moditypricesandinputcosts.Nebraska’sfarmerownedcooperativesareownedby
over60,000Nebraskafarmersandranchers.Theirinter-estsareourinterests,andweopposeanyefforttofurtherburdenNebraska’sfarmersandrancherswithrealestatetaxes.ThepositionoftheCouncilisthatagriculturalandhorticulturallandshouldretainaseparateanddistinctiveclarification.
KILLED
LB 404 - Train Crew (O)LB404wouldhaverequiredtwo-
mancrewsonatrainorlightenginewhetherthetrainwasonoroffthemainline.TheCouncilopposedthebillatthehearingsinceitwouldhaverequiredatwo-mancrewwhencooperativeswereloadingshuttlesoffthemainline.
LB 526 - Debtor Rights (O as intro)Asoriginallyintroduced,LB526wouldhavechanged
provisionstodebtor’srightsandgarnishmentstatutes.Thebillwouldhaveloweredthepercentofweeklydisposableearningsavailableforgarnishmentsfromthecurrent25%to15%fortheheadofahousehold.Foranon-headofhousehold,theprotectablepercentagewouldhavealsoraisedfromthecurrent15%to25%.Thebillfurtherstatedthatnocreditorshallgarnish
wagesinthesamemonththatproceedsfromadepositinafinancialinstitutionhavealsobeengarnishedfromthesamedebtorandthatupto$2,000inalldepositswouldbeexemptfromgarnishment.CommitteeamendmentAM930removedseveralsec-
tionsofthebillleavingonlyachangethatnoimprisonmentbeallowedunlessthedebtorwasfoundtobeinwillfulcon-temptofcourt.Thisamendmentremovedalloftheprovi-sionsofLB526thatwereobjectionabletotheCouncil.
LB 547 - Eminent Domain / Review by NE Power Review Bd (O)LB547soughttocreatemorecompetitioninthe
marketplacebybarringpublicly-ownedutilitiesfromusingeminentdomaintorestrictprivateelectricgenerationortransmissioninNebraska.Thebillwouldhavealsoexemptedaprivatelydevel-
opedelectricgenerationortransmissionprojectfromreviewbytheNebraskaPublicPowerBoard.ThebillwasforwardedtoourREAmembersforreview.
Theirconsensuswasthatprivatelyownedutilitiesarepush-ingthesechangestobenefittheirstockholders,notthecitizensofNebraska.
State Legislation(continuedfrompage7)
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 9
NCC Political Action Committee
...tothefollowingmemberswhoprovidedvoluntarycontributionstotheNCC-PACforthe2016-17fiscalyear:
Ainsworth - Farmers/Ranchers Co-op Assn
Alliance - Panhandle Rural Electric Membership
Alliance - WESTCO
Aurora Co-op Elevator Co
Battle Ceek - Farmers Pride
Brainard - Frontier Co-op Co
Clarkson - Farmers Union Co-op Supply Co
Dodge - Cooperative Supply Inc N/S
Dorchester - Farmers Cooperative
Edison - Ag Valley Co-op N/S
Elmwood - Midwest Farmers Co-op
Elsie - Hi-Line Co-op Inc
Fairfield N/S Co-op Fertilizer
Friend - Farmers Union Co-op Co
Gothenburg - Country Partners Co-op
Grand Island - Central Co-op N/S Transport Co
Hastings - Cooperative Producers Inc
Hemingford - Farmers Co-op Elevator Co
Holdrege - CHS Inc
Holyoke CO - CHS/Grainland Co-op
Imperial - Frenchman Valley Farmers Co-op
Lindsay - Farmers Co-op Assn
Scottsbluff - Panhandle Co-op Assn
Sidney - Crossroads Co-op Assn
Wauneta Co-op Oil Co
Wausa - CHS Inc
York - Central Valley Ag Co-op
Ag Processing Inc
Allied Producers Co-op
Austin Mutual Insurance Co
CHS Inc
CHS Insurance
Gardiner Thomsen
Land O’Lakes Inc
Lincoln Inspection Service
Milliman, Inc.
TheNCCPoliticalActionCommitteecontinuestobeasignificantpartoftheCouncil’soveralllegislativeprogram.TheNCC-PACwasestablishedin1999tohelpgainac-cesstolegislatorsfromurbanandruralareasofthestatethroughvoluntarycontributionsfrommembers.Astheurbanareasofthestatecontinuetogrowin
population,itisimportantthattheCouncilhasaccesstothestatesenatorsservingthoseareas.ThroughthePAC,theCouncilhastheopportunitytocommunicatewithandeducatestatesenatorsregardingissuesthatareimportanttocooperativesandruralNebraska.Withtermlimits,theabilitytoupdateandeducate
senatorshasbecomeevenmorecrucial.Assenatorsmoveinandoutofleadershippositionsmuchmorerapidly,maintainingopencommunicationhasbecomemuchmorecritical.NCC-PACactivelyparticipatesinurbanandrurallegislativeracestohelpdevelopabroadbaseofrelation-shipswithpolicy-makers.FollowingitscandidateinterviewsinJuly2016,NCC-
PACprovidedcampaigndonationsto36legislativecan-didatesin23legislativeraces.Throughoutthe2016-17fiscalyearNCC-PACcontributedin36instancestoincum-bentsholdingfundraisersorapost-electioncontributiontosuccessfulcandidates.NCC-PACcontributed$42,250tolegislativecandidatesinthe2015-2016electioncycleandanadditional$8,100sincethe2016election.ContributionstoNCC-PACbyMembersandParticipat-
ingMembersoftheNebraskaCooperativeCouncilwere$21,694forthe2016-2017cycleand$15,687todateforthe2017-2018cycle.Twenty-eight(28)LocalMem-bers,three(3)ParticipatingMembersandfive(5)Sup-portingMembersvoluntarilycontributedtotheNCC-PACthroughthisperiod.AttheendofthefiscalyearonAugust31,2017,NCC-PACmaintainedabalanceof$95,472foruseinthe2018legislativecycle.Inordertoprovidestatesenatorsandotherpolicymak-
erswiththemostcurrentinformationregardingcoopera-tives,inearlyJanuary2017,theCouncilpreparedanddis-tributedaLegislativeReferenceGuidebooklet.TheGuidecontained(1)anoverviewoftheCouncilandcumulativefiguresfortheimpactcooperativeshaveonNebraska’seconomy;(2)amapofthecooperativelocationsineachlegislativedistrict;(3)anindividualizedFactSheetforeachcooperativememberwiththeheadquartersandallbranchlocationsplustheco-op’stotalnumberofemployees,vot-ingmembers,sales,payroll,investmentinnewequipment/facilities,propertytaxespaid,federal/stateincometaxespaid,patronagerefunds,andequity/estateredemptions;(4)aFactSheetontheregionalcooperativesinNebraskaandtheirimpactonNebraska’seconomy;and(5)theUNL’sFinalReportofApril7,2016of“TheEconomicImpactandTaxRevenueImpactofNebraskaSupply/Mar-ketingandRegionalCooperatives.”
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council10
Federal & State RegulationsTheCouncilcontinuestoworkcloselywiththe
NationalCouncilofFarmerCooperatives(NCFC)andtheAgRetailersAssociationregardingfederallegislationandregulations.NCFChasacontinuouspresencewithNebraska’scongressionaldelegation,theirrespectivestaffs,andpolicymakerswhichallowstheviewsoffarmerownedcooperativestobeheldintheforefrontofanydiscussions.NCFC,alongwithstrongsupportfromstate
councilssuchasNebraska,monitorsanyeffortsthatwouldthreatenthecooperativebusinessmodel.Is-suessuchasmandatoryequityredemption,interestonmembers’equity,securities,patronageredemp-tion,CapperVolsteadrepeal,andmanymorearecontinuallymonitoredtoensurethatthecooperativebusinessmodelisnotcompromised.TheAgRetailersAssociationrepresentsretail-
ers,distributors,andsuppliersofcropprotectionproducts,fertilizer,equipment,technologyandotherservices.
FEDERAL ACTION
Inlate2016andagaininOctober2017,theCouncilhasbeeninvolvedwithourcongressionaldelegationinsupportofthe“RightSizingPensionPremiumActof2017”(H.R.3596)alsoknownas“Kelly/Kind”.ThisisanissueofgreatimportancetoNebraska’sfarmerownedcooperativesandtheover7,900employeesofthosecooperativesthatareparticipantsintheCo-opRetirementPlan(the“Plan”),whichisadefined-benefit“multiple-employer”pensionplansponsoredbyUnitedBenefitsGroup.Withoutachangeinthelawthatthe“RightSizingPen-
sionPremiumActof2017”willbring,therewilloccuranoverchargingofpremiumsbythePensionBenefitGuarantyCorporation(PBGC)forthePlaninwhichnearlyallofNebraska’sfarmerownedcooperativesparticipate.Languageincludedinthelegislationwouldreduceboth
theflatrateandvariableratePBGCpremiumchargedplanscoveredbytheCooperativeandSmallEmployerCharityPensionFlexibilityActof2014(CSECPlans).The2014legislationprovidedcertainexceptionsfromfundingrulesapplicabletosingleemployerpensionplansbecauseCSECPlansposevirtuallynoriskofdefaulttothePBGC.ThePBGCpremiumrelatedlanguageinthecurrent
legislationreducesthepremiumforCSECPlansinrecogni-tionofthefactthattheriskprofileofCSECplansdifferssubstantiallyfromsingleemployerpensionplans.Inotherwords,thiscurrentlegislationwouldmakefundingrulesandPBGCpremiumsconsistentinthatbothwouldrecog-nizethefactthattheseplansofferlittlerisktothePBGC.
WhyisthissosignificanttoNebraskans?ThetotalPBGCpremiumspaidbyjustNebraskaCooperativesinthelastthreeyearswere:
2014 $1,523,322 2015 $1,897,653 2016 $3,447,448
TheseextremeincreaseshavebeenduringatimeofeverimprovingfundinglevelsforthePlan.IftheseamountsarenotrequiredtobepaidouttothePBGC,theycanbeusedtoimprovethefundingoftheCo-opRetirementPlan,thusstrengtheningtheprogramforallparticipantsandfreeingupfundsthecooperativesneedforwagesandhir-ingofNebraskans.Over7,900Nebraskans,including4,000activeem-
ployees,participateinthePlan(theremainderbeingretiredemployeesreceivingbenefits).Over$1.5millioninretire-mentbenefitpaymentsflowbacktoNebraskacommunitieseachmonth.UnitedBenefitsGrouphasprovideduswiththefollow-
inginformationtoletyouknowhowvitalthislegislationistothePlanaffectingNebraska’scooperativesandtheircur-rentandformeremployees:Withoutthislegislation,andifinterestratesremainatcurrentlevels,theCo-opRetire-mentPlanisprojectedtobepaying$23.3millioninPBGCpremiumfortheyearendingMarch31,2021versusthe$8.9millionpaidintheyearendingMarch31,2016.The$23.3millionrepresents2.4%ofprojectedpayrollinthefiscalyearendingin2021.Thesescheduledpremiumincreasesareinspiteofthefact,asstatedabove,thatthePlanposesvirtuallynorisktothePBGC.H.R.3596,the“RightSizingPensionPremiumActof
2017”,willhaveasignificantimpactontheabilityofmanyfarmer-ownedcooperativestopreventtheunnecessarydiversionofscarceinvestmentandoperatingcapitalto
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 11
pensionfundingrequirementsintendedforothertypesofplansunderthePensionProtectionActof2006(PPA).Themajorityoffarmercooperativesparticipatinginmultiple-employerplanshavefewerthan100employees.TheCo-opRetirementPlanisoneofifnotthemost
valuableemployeebenefitofferedbyNebraska’sfarmerownedcooperativesthatparticipateintheplan.Nebras-ka’sfarmerownedcooperativesareproudtobeleadersinprovidinggoodpayingemploymentwithexcellentbenefitsinruralNebraska.ThisisamatterofsignificanteconomicimpacttoNebraska’sfarmerownedcooperativesandtheircurrentandformeremployeesthatparticipateinthePlan.OnOctober25,2017CongressmanJeffFortenberry
becameoneoftheCo-SponsorsofH.R.3596.
STATE REGULATORY AGENCY
Energy Source ExemptionIn2016theNebraskaLegislaturepassedLB774which
wasintroducedonbehalfoftheNebraskaCooperativeCouncil.ItamendedNeb.Rev.Stat.§77-2704.13(2)toprovidethatsalesandusetaxshallnotbeimposedonthesaleandpurchaseofenergywhenmorethan50%oftheenergypurchasedisusedinprocessinggrain,withthetermprocessingincludingdryingandaeratinggrainincommer-cialagriculturalfacilities.BeginningOctober1,2016,theinclusionofgraindryingANDaerationresolveddisputesarisingafterthatdatewiththeNebraskaDepartmentofRevenue(NDOR)regardingwhetherenergyusedinaerat-inganddryinggrainisprocessinggrainforpurposesofthesalestaxexemption.However,withregardtorefundclaimsfiledforperiods
beforethenewlawwentintoeffect,theNDOR’sinterpreta-tionofwhatconstitutes“processing”grainforpurposesofthesalestaxexemptioncontinuestobeunclear.WhilethechangeinthelaweffectiveOctober1,2016,willincreasetheavailabilityoftheenergyusesalestaxexemption,forperiodspriortothischange,whethercertainfacilitiesqualifyfortheexemptionremainedatissuedependinguponthestructure,sizeandageofthefacility.Earlyin2017industryrepresentativesengagedbythe
Council,TomJeffers,andRockyWebermetwithNDORstaffinanattempttoresolveanylingeringissuesforperi-odspriortoOctober1,2016.Whileitinitiallyappearedthatwemaystillneedtolitigatethepre-October1,2016languagetoassistseveralmembersonrefundclaims,itnowappearsthatNDORstaffandtheaffectedcoopera-tiveshavebeenabletoresolveissuesonthoseinterimclaimswithoutadditionallitigationorlegislation.
Sales & Use Tax Exemption For Depreciation on Parts for Ag Machinery & RepairsFiscalyearendingAugust31,2017sawanendtothe
Council’seffortsregardingchallengingtheNebraskaDe-partmentofRevenue’s(NDOR)interpretationandapplica-tionoftheagriculturalmachineryandequipmentsalesandusetaxrefundprovidedinNeb.Rev.Stat.§77-2708.01
anditsapplicationtothepurchaseoffertilizertanktrailersandagmachinerypartsandrepairs.Intwocasesinvolvingthesameissues,theNDOR’s
partialdenialofsalestaxrefundclaimssubmittedforsalestaxpaidonthepurchaseofagmachinerypartsandrepairsandfertilizertanktrailerswasappealedtotheDistrictCourtofLancasterCounty,Nebraska.OnFebruary21,2016,theDistrictCourtofLancasterCountyissuedanOrderineachcaseaffirmingtheNDOR’spartialdenialofrefundclaimswithrespecttoagmachineryandequipmentpartsandrepairs.WithrespecttotheNDOR’sdenialofsalesandusetaxrefundclaimsforthepurchaseoffertilizertanktrailers,theDistrictCourtreversedtheNDOR’sdecisionandgrantedtherefundclaimsforsalestaxpaiduponthepurchaseofnewfertilizertanktrailers.OnMarch21,2016,theDistrictCourt’sOrdersaffirm-
ingtheNDOR’spartialdenialofsalesandusetaxrefundclaimsforagmachinerypartsandrepairsinbothpendingmatterswereappealedtotheNebraskaCourtofAppeals.ThematterwaslaterpickedupforreviewbytheNebraskaSupremeCourt.Thecentralissueonappealwastheproperinterpreta-
tionofthephrase“depreciablerepairsorparts”withinSection77-2708.01.OnApril7,2017,theNebraskaSupremeCourtis-
sueditsdecisiondenyingtheCooperatives’appealoftheNDOR’spartialdenialoftheirrespectiveagmachinerypartsandrepairsrefundclaims.TheSupremeCourtgener-allysidedwiththeNDORregardingtheproperinterpreta-tionofSection77-2708.01andfurtherstatedthetaxpayer“maintainstheburdentoshowthatpersonalpropertytaxhasbeenpaidondepreciablerepairsandpartsbeforetheclaimantisentitledtoasalestaxrefund.”Goingforward,thisdecisionhasalimitedimpacton
Cooperatives’agmachineryreplacementpartssalestaxrefundclaimsasthestatuteatissuewasreplacedwithanexemptionthatremovedtherequirementthattheagmachinerybedepreciableforpurposeoftheexemption.Thus,agmachineryrepairorreplacementparts,whetherdepreciableornot,purchasedafterOctober1,2014,likelyqualifyforasalestaxexemptionunderNeb.Rev.Stat.§77-2704.64.
PSC Schedule A & E RatesOnMay16,2017,theNebraskaPublicServiceCom-
missionvotedtomaintainthecurrentScheduleAandErates.Thismeansthemaximumratesforreceiving,han-dling,anddelivery(one-timecharge)willremainat36¢/buforallgrains,15¢/cwtfordryediblebeans,and30¢/cwtforpopcorn.Thestorageandinsuringmaximumrateswillremainat.00165¢/bu/dayforallgrains,.0039¢/cwt/dayfordryediblebeans,and.0025¢/cwt/dayforpopcorn.
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council12
Director EducationTheCouncil’seducationprogramsfor2016/17con-
cludedwiththeBoardOfficerSeminaronFebruary23rdinLaVista.Throughoutthewinterof2017,atotalof367peoplefrom83%ofourlocalcooperativemembersand7ParticipatingandSupportingMembersattendedtheCouncil’sdirector/managementandemployeeorientedprograms.Thetighteningoftheageconomywasaconstanttheme
throughouttheprograms.Presenterswereaskedtochal-lengethethinkingofattendeesduringtheirpresentationsregardingcurrentandfuturechangesthatfarmercoopera-tiveswillfacefromtherapidlygrowingdigitaleconomy.Attheendoftheday,thegoalofNCCeducationprogramsistonotonlyeducatebuttoalsoexpandthehorizonsofwhatthefuturedemandsforsuccessfulcooperatives,theirmanagers,anddirectors.Thisyear’sparticipantsinoureducationprogramshad
theopportunitytohearfromspeakersfrom6universitiesand8differentstates.Thisdiversityallowedforawideavenueofperspectiveanddiscussionontheissuesfacingcooperatives.
Director/Manager WorkshopTheDirector/ManagerWorkshopwasheldonNo-
vember18,thedayaftertheCouncil’sAnnualMeetinginKearney.PresentationswereprovidedbyDr.DavidKohl,retiredfromVirginiaTechUniversity,andDr.ScottDowneyfromPurdueUniversity.Atotalof98peopleattendedtheworkshop.Dr.Kohlbegantheworkshopwithanoverviewofthe
economicconditionsastheycurrentlyexistandwhatmaybeonthehorizon.Healsoaddressedwhatproducersneedtodointhisenvironmentaswellaswhatagribusi-nesses,suchascooperatives,needtodotoremainviableduringthiseraofcompressedmargins.FollowingDr.Kohl’spresentation,Dr.Downeyspecifi-
callyaddressedconsolidatingmarketswithquestionssuchas:• Whatisyourmarketshare• Whatisthecompositionofyourmarket• Whatisyourtargetmarket• Whatareyoumissingouton• Whatisyourmarketsharevsyoursalestrategy• Doyourfacilitiesfityourcustomersandyourstrate-
gies• Howdoyouevaluatescalevsefficiency
Director Certification ProgramDCPwasheldinKearneyonJanuary5-6andisde-
signedtoacceleratetheprocessbywhichdirectorsbecomeactive,effectiveboardmembers.Forthenewdirector,trainingisveryimportanttoestablishanunderstandingoftheresponsibilitiesoftheposition.Allfourphaseswereofferedduringthetwodayswith
81phasescompletedand25graduatesthisyear.Phase1focusesontherolesandresponsibilitiesofdirectorsandthelegalfoundationofcooperatives.Phase2addressesplanningandcontrolforboardmembers.Phase3focusesonfinancialstatementsandutilizingtermsinanalysisofthecooperative.Phase4isdedicatedtocommunicationissues,primarilybetweenboardandmanagement.FacilitatorswereDr.GregMcKee,UNL;TomHouser,
CoBank;Dr.KeriJacobs,IowaStateUniversity;BillKutilek,CrosbyGuenzelLLP;andRockyWeberandEdWoeppelfromtheCouncil.Inaddition,NeilStedman(MidwestFarmersCo-op,Elmwood)andRodSchroeder(retiredmanager)servedonapanelforPhase4.
Cooperatives For Tomorrow SeminarCooperativesforTomorrow(CFT)washeldinLincoln
onFebruary1with76peopleattending.Itcontinuedwithits“BigPicture”themebyfeaturingavarietyofspeakersandpresentersthatnormallywouldnotbeavailabletolocaldirectorsinNebraska.Weutilizenationallyknownspeakersfromacademic,businessandcooperativesystemstoprovidelocaldirectorswiththeopportunitytoobtainadifferentviewpointonissuesfacingtheircooperative.Speakersaddressedthefertilizerindustry,thefutureof
ethanol,Nebraska’sroleinfeedingtheworld,andwhatthefutureholdsforagricultureingeneral.Dr.LowellCatlettprovidedanexcellent,thought-pro-
vokingkeynotepresentationafterdinner.Otherpresenta-tionswereprovidedbyGlennBuckley,ChiefEconomistforNPKFertilizerAdvisoryServices;JerryPeters,CFOofGreenPlains;andDr.RogerElmore,UNL.OurthankstoCoBankforsponsoringtheeveningreceptionanddinner.
Cooperative Issues SymposiumTheCooperativeIssuesSymposium(CIS)washeldon
February2inLincolnandfocusedonBigData.Combin-ingCISwithCFTallowedthepre-registeredBoardChair-menandCEO’s,aswellastheNCCBoardofDirectorsto
Participants at the Director/Manager Workshop on November 18, 2016, listen to Dr. Scott Downey from Purdue University.
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 13
EDUCATION PLANNING
OnMarch15,2017,theNCCExcellenceinCoop-erativeEducationCommittee(ECEC)metinKearneytoreviewthe2016-17educationprogramresultsandtobeginplanningthetopicsfor2017-18.Inaddition,theECECdiscussedlong-termchanges,ifany,thatNCCshouldconsiderforitseducationprograms.Inpreparationforthediscussiononlong-termedu-
cationalneeds,Councilstaffsurveyedallcooperativemanagersanddirectors.Thesurveyrequiredpeopletorespondinwriting(ratherthanselectinganumberorananswer)whichusuallymeansyouwillhavefewerresponses.Becauseitwasawrittenresponse,thosewhorespondedobviouslyputsomethoughtintotheiranswerssowefeelconfidentwiththeresults.ThesurveyindicatedaneedforaDCPrefresher
coursewiththefollowingtopicsrankedhighestbydirectorsandmanagersalike: *Roles&ResponsibilitiesofDirectors *Board/ManagementCommunication
attendthe“AggieBreakfast”,whichisabi-weeklybreakfastsponsoredbyseveralagrelatedtradeassociationswithmembersoftheLegislature.TheCouncilhadover20representativesattheBreakfastwhichgavethemanop-portunitytointeractwithseveralstatelegislatorsandhearreportsonvariouspiecesofpendinglegislationfromthoseinattendance.TheCISfocusedonBigDataanditseffectsonagricul-
tureandagriculturalcooperatives.Whilethepotentialforutilizingdatatoincreaseefficiencyinagricultureisreadilyapparent,thequestioninvariablycomesbackto“How”and“atWhatCost”.Dr.JohnPower,PresidentofLSCInternationalInc.,
openedthemeetingwithapresentationontherole“BigData”iscurrentlyplayinginagriculture.JeremyWilson,TechnologySpecialistwithCropIMS,discussedthecom-panydataapplicationsthattheyareprovidingcustomers.JonahKolb,Moore&WarnerAgGroupLLC,addressedthe“AmazoningofAgriculture”andtheimpactthatinternetmarketingmayhaveonbrickandmortarretailers.Afollow-uppaneldiscussionwithGalenKuskaofExeter,MikeBergenofAurora,TerryPanbeckerofFortDodgeIA,andGregRoseofSanJose,CAregardingBigData’simpactonthefarmconcludedtheday.Seventy-nine(79)peopleattendedCIS.
Board Officer SeminarThefinalprogramofthewinterwastheBOS.This
programwasheldinLaVistaonFeb23,thedaypriortoCoBank’smeeting,with33peopleattending.CouncilPresidentRockyWeberandBillKutilekwithCrosbyGuenzelLLPfacilitatedtheday’sdiscussion.TheBOSformatisan
openforumdiscussionwithlocalboardleaders.Avarietyoftopicswerediscussedduringtheday.Thiswasonceagainthehighestratedprogramofallourofferings.
Credit WorkshopPeriodicallytheCouncilhasconductedCreditWork-
shopsforco-opmanagersandemployees.Afterreceivingseveralinquiriesoverseveralmonthsrelatingtopatroncreditaccountsandriskmanagement,aworkshoptitled“PuttingthePiecesTogether–ManagingCreditRiskinaRiskyEnvironment”wasconductedonApril11inKearney.Topicscoveredwere:• Earlydetectionofcreditproblems(includingtipson
howtoidentifypotentialcreditexposureearlyandminimizedefaultrisktotheco-op)
• TipstoManagingCreditRisks• StatutoryLiens&UniformCommercialCodeLiens• NebraskaSecretaryofStateCentralFilingSystem• PositioningtheCooperativewithotherCreditors• PurchasesofEncumberedGrain• SecuringtheSuperAccount-Policy/Procedure• CollectionProcessfromStarttoFinish• ImprovingYourChancesofRecoveryinBankruptcyFacilitatorswereChadGent,SeniorVicePresidentof
FarmCreditServicesofAmerica,andAttorneysBillKutilekandAndrewPeasefromtheCrosbyGuenzellawfirm.Atotalof43individualsattendedwitheachreceivinga
comprehensivebinderforfuturereference.Theevaluationsshowedthatattendeesvaluedthepresentationandgainedinformationtohelptheminthefuture.
StrategicPlanningwasthenexthighestrankedtopicbybothdirectorsandmanagers.Themorningwasspentonreviewingthe2016/17
programsandplanningfor2017/18.Intheafter-noon,thediscussionturnedtolonger-termplanning.ThefinalconsensusoftheCommitteewastosetagoalforarefresherDCPprogramthatmayincorporateadigitalplatformtoallowBoardmemberstoreviewtheprogramcontentfromtimetotime.Severalplanningmeetingshavetakenplaceto
developtheDCPRefresherCourse.Dr.GregMcKee,Dr.KeriJacobs,TomHouser,RockyWeberandEdWoeppelhaveparticipatedincreatingthisnewoffer-ing.Thecoursewillbeaone-dayofferingthatwhilehavingsomesimilarityfromyeartoyear,willinvolverotatingtopicsasnecessarytoaddresstimelytopics.Inthefuturetheprogramsmayincorporateadigitalplat-formtoallowBoardmemberstoreviewtheprogramcontentfromtimetotime.
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council14
Youth EducationCO-OPS 101TheCouncilcontinuedtoprovideCo-ops101presen-
tationsatcommunitycollegesandtheUNLCooperativesClass,andthisyearalsoofferedthepresentationforhighschoolstudents.Overall,duringthe2016/2017academicyear,wemade13presentationsfor178students.ContactswiththeCommunityCollegesinvolved11
presentationsfor150studentsat5communitycolleges(SoutheastCommunityCollege-Beatrice,NortheastCom-munityCollege-Norfolk,CentralCommunityCollege-Hast-ings,CentralCommunityCollege-Columbus,andtheNe-braskaCollegeofTechnicalAgricultureatCurtis).ContactswiththeUniversityofNebraskainvolvedtheundergraduateCooperativesclasswith20students.HighSchoolcontactsincluded1presentationfor
studentsatTheCareerAcademyatSoutheastCommunityCollege-Lincoln.SCCofferedthe2-daySCCEarlyAgEx-perienceforstudentstohavetheopportunitytolearnaboutthemanycareersthatagriculturehastooffer.Withahostofguestspeakersandanumberoffieldtrips,studentsbe-camemuchmoreawareofagriculturalopportunities.TheCouncilprovidedtheopeningpresentationoftheprogram.Thesepresentationsallowustoreachacriticalaudi-
encewiththecooperativemessage.Thesestudentswillbecomefutureemployeesandmembersofcooperativessoitisimportantthattheyhaveaworkingunderstandingofcooperatives.ThisprogramhasbeenpartiallyfundedbytheCHSFoundation.CooperativeeducationfromhighschoolgradesthroughcollegeremainsastatedgoaloftheExcellenceinCooperativeEducationCommittee.
STATE AG TEACHERS CONFERENCEOnJune7,EdWoeppelprovidedremarksattheState
AgTeachersConferenceinKearney.Edhighlightedtherecentcooperativeeconomicimpactstudyandcareerop-portunitiesinhisremarks.
COOPERATIVES CLASS AT UNLTheUniversityofNebraska-Lincolnofferedthe“Roleof
CooperativesinAgriculture”classforthethirdyearinthefallof2016.Thefirsttwoyears,itwasaone-credit-hourclass;however,inthefallof2016itbecameathree-credit-hourclasstaughtbyDr.GregMcKee.Atotalof20studentswereenrolledintheFall2016classthatallowedstudentstogainanin-depthunderstandingofthecooperativebusinessmodel.
COOPERATIVE SPEAKING CONTESTTheCouncil,alongwiththeCHSFoundation,spon-
soredtheStateFFACooperativeSpeakingContestonApril6-7inLincoln.Atotalof79studentsparticipatedatthedistrictcon-testswith23qualifyingforthestatecontest.Thisyear’swinnerwasJaceStagemeyer
fromtheO’NeillFFAChapter.SecondplacewasawardedtoHaileyCoufaloftheHowells-DodgeFFAChapter,andthirdplacewenttoJaclynFreyoftheBooneCentralFFAChapter.
On March 1, 2017, the Council presented a “Co-ops 101” at the Nebraska College of Technical Agriculture-Curtis. Jim Porter, an employee from Country Partners Co-op at Gothenburg, participated to tell student about employment opportunities at cooperatives.
Incorporated within the Cooperatives Class at UNL are many guest speakers to provide students the opportunity to hear from a variety of cooperative representatives. Pictured above are Don Anthony (top left), corporate board member of CHS, Inc headquartered at Inver Grove Heights, MN as well as a former board member of Country Partners Co-op at Gothenburg and Dale Piper (top right), retired manager of Midwest Farmers Co-op at Elmwood.
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 15
Annual Meeting / Hall of FameNCC Cooperative Hall of FameFormerNCCPresidentRobertC.AndersenofLincoln
becamethe63rdpersontobeinductedintotheNe-braskaCooperativeCouncilCooperativeHallofFame.Bobbeganhiscareerincooperativesin1974aftertwoyearsofserviceintheU.S.NavyandashortstintintheFarmersHomeAdministration.InBob’searlyyearsasExecutiveSecretaryoftheCouncil,membershipwasaconcern.Membershipgrewover32%from1973to1976whichstrengthenedtheCouncilconsiderably.Inthelate70’stheDirectorCertificationProgram
wasaddedalongwithamulti-stateeducationagree-mentwithIowaandCoBank.The80’ssawsignificantlegislativeinvolvementwithaginputliens,“doublejeop-ardy,”andcrudeoiloverchargerefundsbeingimportantissues.Inthe90’stheCouncilimplementedascholar-
shipprogramandtheHallofFame.Inthe2000’stheNebraskaCooperativeCouncilEducationFoundationwasformed,andorganizedfly-instoWashington,DCbegan.InadditiontotheoutstandingleadershipthatBob
providedforcooperatives,healsoservedontheboardsoftheNebraskaAgriculturalLeadershipCouncil(LEAD),theNebraska4-HFoundation,AgBuildersofNebraska,Ag40,theLowerPlatteSouthNRD,andtheNationalCouncilofFarmerCooperatives.Bob’s42yearsofcooperativeleadershipadvanced
andprotectedthefarmerownedcooperativesystemandtheinterestsofits55,000Nebraskafarmers/ranchers.
TheCouncilhostedits71stAnnualMeetingonThurs-day,November17,2017.Twohundredfourteen(214)peopleattendedtheeventthatwasheldattheHolidayInninKearney.NCCPresident&GeneralCounselRockyWeberpre-
sentedthe2015/16FinancialReportaswellasthePresi-dent’sReport.NCCBoardChairDavidBriggspresentedtheChairman’sReport,NCCBoardViceChairDeanThernespresentedthePACReport,andNCCBoardSecre-taryBruceFavingerprovidedtheExcellenceinCooperativeEducationCommitteeReport.BoardelectionresultswereannouncedwithDaveBeck-
manofCVA-YorkandDeanThernesofFarmersPride-BattleCreekbothre-electedtotheBoardforfouryearterms.Inaddition,theParticipatingMembersre-electedMikeHechtnerofCoBanktotheboardattheirmeetingonOctober19,2016.ThefeaturedspeakerfortheAnnualMeetingwasKris
(Tanto)Paronto.Mr.ParontoisaformerArmyRangerwhowasinvolvedindefendingU.S.interestsintheSeptember11,2012,terroristattackinBengazi,Libya.Hehelpedsaveover20liveswhilefightingoffterroristsfromtheCIAAnnexforover13hours.Thiswasaveryrivetingpresenta-tionthatwaswellreceivedbytheaudience.ThefinalportionoftheAnnualMeetingwasdevoted
totheHallofFameinduction.ThisyearRobertAndersenwasinductedintotheHallofFame.Bobwasthelong-timePresidentoftheCounciluntilhisretirementinFebru-aryof2016.InadditiontohisHallofFameinduction,theNebraskaCooperativeCouncilEducationFoundationhonoredBobbyannouncingthatitwouldbesponsoringascholarshipinhisnameforanundergraduatestudentattheUniversityofNebraskaCollegeofAgriculturalSciencesandNaturalResources.AfteradjournmentoftheAnnualMeeting,themember
receptionwasheldwhichprovidedagreatopportunityfornetworkingandallowingmemberstocatchupwithHallofFameinducteeBobAndersen.
Pictured above are some of the 210+ cooperative representatives who attended the Council’s Annual Meeting.
Retired NCC President Bob Andersen (center) accepts his Hall of Fame certificate after being inducted into the NCC Cooperative Hall of Fame. Also pictured are NCC President Rocky Weber (left) and NCC Board Chairman David Briggs (right).
Keynote speaker Kris (Tanto) Paronto, former Army Ranger, gave a riveting talk with a “never give up” message about the September 11, 2012, terrorist attack in Bengazi, Libya, where he helped save over 20 lives while fighting off terrorists from the CIA Annex for over 13 hours. The story has subsequently been made into a book and movie titled “13 hours”.
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council16
GENERAL FUND 2017 2016Revenue and Support: Members’ Dues $625,641 $624,771 Participating Members’ Dues 102,962 107,832 Meetings 40,097 36,212 Workshops 148,814 129,723 Interest Income 3,545 3,555 Gain on Sale of Equipment - 19,382 Miscellaneous 2,188 511 Total Revenue and Support 923,247 921,986 Expenses: Salaries 409,384 536,816 Social Security Tax 25,405 34,082 Unemployment Tax 301 389 Employee Insurance 19,090 6,238 Retirement 44,348 45,450 Total Personnel Expenses 498,528 622,975 Accounting Fees 7,653 7,335 Auto - 12,141 Books and Magazines 1,798 3,398 Consulting Services/Contract Labor 25,000 25,902 Depreciation 7,982 13,626 Directors’ Fees 10,991 12,524 Dues/Contributions 6,633 7,503 Equipment Leases 1,689 - Impact Study - 19,394 Information Technology 7,162 -
Insurance 7,462 5,062 Legacy Initiative 39,875 - Legal Fees 4,551 27,962 Meetings 46,039 76,230 OfficeSupplies 6,625 8,522
Parking 4,545 - Postage 890 744 Promotions 2,232 - Property Taxes 213 492 Rent 30,701 32,336
Repairs and Maintenance 5,174 11,105 Telephone 5,933 7,330 Travel 12,373 7,223 Workshops 70,030 56,631 Youth Education - 2,700 Miscellaneous - 565 Total Expenses 804,079 961,700
Increase (Decrease) in Net Assets 119,168 (39,714)Net Assets - Beginning of Year 616,983 656,697 Net Assets - End of Year $736,151 $616,983
ANHYDROUS SALES & USE TAX FUND 2017 2016Revenue and Support: Contributions Received $ - $ 1,770 Interest Income - 6 Total Revenue and Support 0 1,776Expenses: Legal Fees 175 19,610 Total Expenses 175 19,610
Increase (Decrease) in Net Assets (175) (17,834)Net Assets - Beginning of Year 175 18,009Net Assets - End of Year $ - $ 175
STATEMENTS OF ACTIVITIESAugust 31, 2017 and 2016
2016/17 Financial Statements STATEMENTS OF FINANCIAL POSITION
August 31, 2017 and 2016
ASSETS 2017 2016Current Assets: Cash and Cash Equivalents: Cash - Unrestricted $933,628 $802,410 Cash - Restricted - FFE 36,556 112,351 Cash - Restricted - NCC-PAC 98,597 85,810 Cash - Restricted - NACA 44,980 44,891 Cash - Restricted - UNL Tickets 1,488 1,438 Cash - Restricted - Energy Source 13,419 27,163 Cash - Restricted - Anhydrous Sales & Use Tax - 175 Total Cash and Cash Equivalents 1,128,668 1,074,238
Mutual Fund Investments - Restricted - FFE 693,965 656,086 KRVN Golden Notes - Unrestricted 1,250 2,500 Certif of Dep - Unrestricted 146,584 100,677 Certif of Dep - Restricted - NACA 13,200 13,128 Interest Receivable - Unrestricted 758 699 Interest Receivable - Restricted - FFE 185 185 Deferred Compensation Assets 4,186 4,186 Prepaid Expenses 14,590 14,092 Total Current Assets 2,003,386 1,865,791
Investments: KRVN Golden Notes - Unrestricted 40,750 15,750 KRVN Golden Notes - Restricted - FFE 6,500 6,500 Certif of Dep - Unrestricted 48,689 92,869 Cash Value of Deferred Comp. Assets 33,492 37,678 Total Investments 129,431 152,797 Property & Equipment: Furniture&OfficeEquipment 97,891 97,891 Accumulated Depreciation (92,861) (84,879) Net Property & Equipment 5,030 13,012
TOTAL ASSETS $2,137,847 $2,031,600
LIABILITIES & NET ASSETSCurrent Liabilities: Trade Payables - FFE $ 22,178 $ - Prepaid Dues 409,949 370,590 Prepaid NCC-PAC Contributions 3,125 4,109 Deferred Compensation Payable 4,186 4,186 Accrued Expenses 36,865 45,316 Total Current Liabilities 476,303 424,201
Long-Term Liabilities: Deferred Rent 8,313 9,120 Deferred Compensation Payable 33,492 37,678 Total Long-Term Liabilities 41,805 46,798
Net Assets: Unrestricted 736,151 616,983 FFE - Restricted 715,028 775,122 NCC-PAC - Restricted 95,472 81,701 NACA - Restricted 58,181 58,019 NCC-UNL Tickets - Restricted 1,488 1,438 Energy Source - Restricted 13,419 27,163 Anhydrous Sales & Use Tax - Restricted - 175 Total Net Assets 1,619,739 1,560,601
TOTAL LIABILITIES & NET ASSETS $2,137,847 $2,031,600
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 17
ENERGY SOURCE FUND 2017 2016Revenue and Support: Contributions Received $ - $38,984 Interest Income 10 12 Total Revenue and Support 10 38,996 Expenses: Legal Fees 13,754 37,865 Total Expenses 13,754 37,865 Increase (Decrease) in Net Assets (13,744) 1,131Net Assets - Beginning of Year 27,163 26,032Net Assets - End of Year $13,419 $27,163
FUND FOR EXCELLENCE (FFE) FUND 2017 2016Revenue and Support: Interest Income $ 533 $ 653 Investment Income from Marketable Securities 16,099 19,406 Unrealized Gain on Marketable Securities 16,467 20,444 Increase in Annuity Cash Surrender Value - 592 Total Revenue and Support 33,099 41,095 Expenses: Professor Expenses 93,193 10,282 Total Expenses 93,193 10,282 Increase (Decrease) in Net Assets (60,094) 30,813Net Assets - Beginning of Year 775,122 744,309Net Assets - End of Year $715,028 $775,122
NATIONAL AFFAIRS COOPERATIVEACTION (NACA) FUND
2017 2016Revenue and Support: Interest Income $ 162 $ 184 Total Revenue and Support 162 184
Expenses: Meetings - 12,829 Travel - 2,426 Total Expenses - 15,255 Increase (Decrease) in Net Assets 162 (15,071)Net Assets - Beginning of Year 58,019 73,090Net Assets - End of Year $58,181 $58,019
NCC-PAC FUND 2017 2016Revenue and Support: Contributions Received $21,694 $38,552 Interest Income 192 225 Total Revenue and Support 21,886 38,777
Expenses: Donations 8,100 42,250 OfficeSupplies 15 156 Total Expenses 8,115 42,406 Increase (Decrease) in Net Assets 13,771 (3,629)Net Assets - Beginning of Year 81,701 85,330Net Assets - End of Year $95,472 $81,701
UNL TICKETS FUND 2017 2016Revenue and Support: Contributions Received $45,202 $45,675 Interest Income 1 2 Total Revenue and Support 45,203 45,677
Expenses: UNL Tickets 20,604 21,131 UNL Contribution 24,000 24,000 Postage 549 572 Total Expenses 45,153 45,703 Increase (Decrease) in Net Assets 50 (26)Net Assets - Beginning of Year 1,438 1,464Net Assets - End of Year $1,488 $1,438
2016/17Membership
SUPPLY/MARKETING COOPERATIVESAinsworth - Farmers/Ranchers Co-op Assn
Alliance - WESTCO
Aurora Co-op Elevator Co
Battle Creek - Farmers Pride
Brainard - Frontier Co-op Co
Cedar Bluffs - Farmers Union Co-op Assn
Clarkson - Farmers Union Co-op Supply Co
Dodge - Cooperative Supply Inc N/S
Dorchester - Farmers Cooperative
Edison - Ag Valley Co-op, N/S
Elmwood - Midwest Farmers Co-op
Elsie - Hi-Line Co-op Inc
Fairfield N/S Co-op Fertilizer Assn
Friend - Farmers Union Co-op Co
Gothenburg - Country Partners Co-op
Hastings - Cooperative Producers Inc
Hayes Center - Hayes County Farmers N/S Co-op
Hemingford - Farmers Co-op Elevator Co
Henderson Community Co-op Assn
Holdrege - CHS Inc
Imperial - Frenchman Valley Farmers Co-op
Lindsay - Farmers Co-op Assn
Pilger - Farmers Co-op
Ravenna - Farmers Co-op Assn
Scottsbluff - Panhandle Co-op Assn
Sidney - Crossroads Co-op Assn
Talmage - Farmers Co-op Co
Wauneta Co-op Oil Co
Wausa - CHS Inc.
York - Central Valley Ag Co-op
RURAL ELECTRIC COOPERATIVESAlliance - Panhandle Rural Electric
Membership Assn
Grant - Midwest Electric Co-op Corp
O’Neill - Niobrara Valley Electric Member-
ship Corp
TRANSPORT COOPERATIVEGrand Island - Central Co-op N/S Transport Co
TELEPHONE COOPERATIVEBlue Hill - Glenwood Telephone
Membership Corp
OUT-OF-STATE SUPPLY/MARKETING COOPERATIVESHiawatha KS - Ag Partners Co-op, Inc
Holyoke CO - CHS/Grainland Co-op
OUT-OF-STATE RURALELECTRIC COOPERATIVETorrington WY - Wyrulec Company
LIVESTOCK MARKETING AGENCIESAllied Producers’ Co-op
Producers Livestock Marketing
PARTICIPATING MEMBERSAg Processing Inc
CHS Inc
CoBank
Dairy Farmers of America, Inc
Farm Credit Services of America
Growmark, Inc
Land O’Lakes Inc
SUPPORTING MEMBERSAon Risk Solutions
Arthur J. Gallagher Risk Management
Services, Inc
Associated Benefits Corp
Associated Milk Producers, Inc
Austin Mutual Insurance Co
Berkley Agribusiness Risk Specialists
BNSF Railway
Capital Recovery, Inc
Chubb Agribusiness/Penn Millers
CHS Insurance Services, LLC
CliftonLarsonAllen CPAs
Continental Western Group
EBM Construction, Inc
Farm Credit Council Services
Four Points Federal Credit Union
Frisbie Construction Co, Inc
Gardiner Thomsen CPAs
Holmes Murphy & Associates
Howalt+McDowell Insurance
Inspro Inc
INTLFCStone, LLC
KFSA
Lewis Goetz
Lincoln Inspection Service
McPherson Concrete Storage Systems, Inc
Milliman, Inc
Nationwide Agribusiness Insurance Co
Nebraska Corn Board
Nebraska Ethanol Board
Nebraska Rural Radio Assn
Olsson Associates
Pawling, Finn & Torell, CPAs LLC
SilverStone Group
The Cooperative Finance Assn
Triangle Insurance
Union Pacific Railroad
United Benefits Group
United Suppliers, Inc
August 31, 20172016/17 Annual Report - Nebraska Cooperative Council 19
Nebraska Cooperative Council134 South 13th Street, Suite 503
Lincoln, NE 68508Ph: 402/475-6555
Email: [email protected]: www.nebr.coop
