CAPITAL CREDITS/MEMBERSHIP
Customers of Columbus Telephone Co. who pay/have paid a nonrefundable $15.00 membership fee are eligible to earn capital credit patronage.
As a nonprofit telephone cooperative, Columbus Telephone Co. allocates our annual operating margins, or profits, to members receiving service during the year. These margins (revenue in excess of expenses) are allocated using a proportional ratio (dollar amount of service that each member accrues in a year compared to the total service purchased by all members) and are called Capital Credits. They are used by Columbus Telephone Co. for operating funds and paid back to our members as the financial condition of the cooperative permits and as bylaw provisions are met.
If you cease to purchase services from Columbus Telephone Co., please keep us informed of your address in future years. This will enable us to forward payment when the capital credits are refunded for the year or years of your membership.
Please remember
• Your Capital Credit Allocation Notice that arrives in the mail during August/September time frame is not a bill.
• These amounts are NOT now payable and do not represent cash, but rather your equity in Columbus Telephone Co.
• You can not apply this amount to your bill.
Frequently asked questions
What are capital credits?
The difference between a cooperative such as Columbus Telephone Co. and an investor owned utility is a cooperative is owned by the member-customers it serves. As a member-owner, you share in the profits of the co-op. At the close of each fiscal year, all revenue received in excess of expenses (i.e. profits) is allocated back to the membership in the form of capital credits. This allocation is based on the dollar amount of services purchased during the year.
How do Capital Credits work?
- Allocations: Each year, you are "allocated" your portion of the previous year's profits based on the amount of services you purchase from Columbus Telephone Co. in relation to the total amount of services by all members during the year. The amount is put into a "holding account" for a number of years and used by Columbus Telephone Co. to fund capital needs such as equipment, operating expenses, inventory etc. This is an underlying principle of the cooperative business model and is one more way we keep your rates as low as possible. This "allocation" becomes your equity in the cooperative and is maintained in a separate account (Capital Credit Account) assigned to you. (Allocation notices are mailed in August/September)
- What should a member do if he or she moves from our service area?
The member should inform our office of any changes in his/her mailing address. It is a member's responsibility to make sure the cooperative has up-to-date address information at all times. Each year, refund checks are returned to the cooperative with invalid addresses. Columbus Telephone Co. can be contacted by phone, fax or email to update an address. - What happens in case of a deceased member?
The bylaws provide for the option of early retirement of the capital credits of a deceased member to his or her estate, spouse or surviving heirs. The deceased member's capital credit will be discounted for early retirement & paid out in a lump sum. When paying out a deceased members account an affidavit (available from Columbus Telephone Co. ) must be signed. Columbus Telephone Co. associates can notarize the affidavit (free). The completed Capital Credit Affidavit and a copy of the death certificate are needed to complete the capital credit retirement. Upon the death of either spouse in a joint membership, the name of the deceased person is removed from the membership and the membership is then held solely by the surviving spouse. A copy of the death certificate is required.
