I received a capital credits allocation letter. What does it mean?
This information is provided each year as an official record of your capital credits. Since we are a member-owned cooperative, we allocate our profits (the money left over after all expenses are paid) to our member-owners, based on how much each member paid for their MTA services during the year.
These allocations or capital credits are your share of the margins that we have assigned to a holding account in your name. These amounts are not payable at this time, and do not represent cash, but rather your patronage capital or equity in the cooperative and evidence of your ownership in MTA.
The funds belong to individual member-owners, but are retained by the cooperative as working capital. The availability of this working capital reduces the amount of money MTA must borrow, which assists in providing members with state-of-the-art services at the lowest possible cost.
How are capital credits paid?
The bylaws of the cooperative call for MTA to use capital credits as operating funds. On an annual basis, MTA’s Board of Directors reviews the financial condition of the cooperative and elects to either approve or disapprove a return of capital credits to its members.
Throughout the last decade, when the Board approved the return of capital credits, it was based on a 20 year rotation cycle plus a portion of the capital credits allocated in the previous year. For example, the 2005 return contained capital credits from 1985 and 2004.
At some later date, the Board may determine that the financial condition of the cooperative permits us to retire capital credits again. At that time we will mail out checks or credit customers’ bills. We do not retire capital credits on an individual basis. Only when financial conditions permit us to retire capital credits to all members during a specific time period, will we make a cash retirement.
What if I move away and don’t have MTA service anymore?
Please stay in touch. It is important that MTA be advised of any address or member name changes, even if you no longer have active service. Should the Board decide that the financial condition of the cooperative permits a return of capital credits for a year in which you were an active member, we will mail you a check.