Company Response
3/9/2022
We believe Jodi is misunderstanding some of the nomenclature of a Cooperative. When a Telephone Cooperative has net earnings (profit) at the end of a fiscal year, the Cooperative ALLOCATES those profits to the members of the Cooperative. The Allocation is called a Deferred Patronage Dividend.The Board of Directors of the Cooperative decides when the Deferred Patronage Dividends are RELEASED to the members. Allocations are released (in the form of a check) by Fiscal year, not by member. Historically Allocations are released in CHRONOLOGICAL fiscal year order (not alphabetical by member).This information can be found at our website under the Articles of Incorporation and also referenced in Iowa Code 499.30.
An Allocation of $1,326.98 was made to the Deferred Patronage Dividend Account of Jodi Strait in 2011.This reflects her portion of the 2011 RSA Special Allocation. A letter was mailed to all members notifying them of the Allocation. The Board of Directors has NOT voted to release the 2011 RSA Allocation.
If a member passes away, all Deferred Patronage Dividends are released to the Estate.This is done so the estate can close without having Deferred Patronage Dividend checks arriving years or decades later.
We would be happy to call Jodi and clarify the miscommunication.
ARTICLE IX
Section 1. No dividends or interest shall be paid upon issuing price of Membership in the Association. The Directors shall annually dispose of the earnings of the Association in excess of its operating expenses as provided in Section 499.30 Code of Iowa (1981).
• (A) To provide a reasonable reserve for depreciation, obsolescence, bad debts, or contingent losses or expenses;
• (B) At least ten percent (10%) of the remaining earnings must be added to surplus until surplus equals either thirty percent (30%) of the total of all capital paid in for Stock or Memberships, plus all unpaid patronage dividends, plus certificates of indebtedness payable upon liquidation, earnings from non-member business, and earnings arising from the earnings of other cooperative organizations of which the Association is a member, or one thousand dollars ($1,000.00) whichever is greater. No additions shall be made to surplus when it exceeds either fifty percent (50%) of the total, or one thousand dollars ($1,000.00), whichever is greater;
• (C) Not less than one percent (1%), nor more than five percent (5%) of such earnings in excess of reserves may be placed in an educational fund, to be used as the Directors deem suitable for teaching or promoting Cooperation;
• (D) All remaining net earnings shall be allocated to a revolving fund and shall be credited to the account of each Member ratably in proportion to the business he has done with the Association during each year. Such credits are herein referred to as "Deferred Patronage Dividends";
• (E) The Directors shall determine the percentage or the amount of said allocation that currently shall be paid in cash in a manner consistent with the provisions of Section 499.30 of the Code of Iowa.
Section 3. The Directors may use the revolving fund to pay the obligations or add to the capital of the Association. In such event, the deferred patronage dividends credited to Members shall constitute a charge upon the revolving fund and future additions thereto, and on the corporate assets subordinate to creditors then or thereafter existing. Deferred patronage dividends for any year shall have priority over those for any subsequent year, except that the Directors may, at their discretion, pay deferred patronage dividends of deceased Members who were natural persons, and may pay all other deferred patronage dividends without reference to the order of priority herein prescribed, and except as in Article X of these Articles of Incorporation provided.
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