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Commonly Asked Questions About Your Capital Credits
What is a Cooperative? A non-profit based service organization owned and operated by its members. In many ways it’s like any other business; but in several important ways it’s unique and different. A cooperative business belongs to the people who use it – people who have organized to provide themselves with the goods and services they need. A cooperative operates for the benefit of its members.
What are Capital Credits? The difference between the cost of doing business and the actual revenues received each year is calculated and the remaining dollars are then credited in the names of the members on the books of the cooperative for that year. These Credits do NOT represent cash held in your name.
What happens to the Capital Credits on a member’s account when they pass away? Credits are payable to the heirs of the estate of a deceased member. There is some paperwork which must be completed before the Credits are paid. Please contact the MCTC office for more information about this process.
How is the amount of credit to each individual account determined? Each year the difference between the cost of doing business and the actual revenues received is computed by MCTC. This amount is equal to the total Patron’s Equity for that year. A detailed allocation process is then applied to compute each member’s share of the Patron’s Equity. This computation is affected by the member’s contributions to revenue through local service revenues, access minutes, and directory advertising.
The Credits I am receiving payment for now were added to my account may years ago. Why does it take so long to receive payment of these Credits? The distribution is based, in part, upon the amount of cash available to MCTC at the time the distribution is made. In the years when the company was being established, any available cash was needed to build up the system infrastructure. For many years, no patronage distributions were made. When it became possible to make payment of Capital Credits, the Board of Directors authorized payment, beginning with the first year of Credits accumulated.
Can I receive my Capital Credit payments early? MCTC has a retirement plan for early payout of capital credits to all members 80 years and older. Members of this age group will benefit by having the option now to receive their capital credits in full rather than through the normal yearly disbursement. An early retirement request form must be completed before Credits are paid.
Do I receive interest on my unpaid Capital Credit balance? No. According to the MCTC Bylaws, a member’s Capital Credits account is not an interest-bearing account.
Can I deduct my Capital Credits from my phone bill? No. The Credits can only be distributed when the Board of Directors authorizes payment or in the event of a member’s death.
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