S&T Telephone cooperative's subscribers/members actually own the company and elect a board of directors that sets policy to represent members’ interests and ensure the company’s success. To do that, board members must be knowledgeable about the cooperative and the evolving telecommunications industry, telco management, state and federal regulation, the competitive environment, and the company’s long-range plans and future prospects. Equally important, directors must communicate that understanding to management and subscribers, and develop the relationships essential to succeed in an indispensable, multibillion-dollar business.

S&T Telephone's members are those telecommunication subscribers located in our ILEC exchanges of Brewster, Dighton, Grinnell, Healy, Kanorado, Levant, Menlo, Russell Springs, and Winona. The subscibers must meet all of the criteria set forth in the current bylaws. Members are eligible for capital credits. It is important that you understand how the captial credit process works. It is equally important that you keep us updated when your situation changes (i.e., address change, divorce, marriage, death of member, business dissolution, etc.) as it can affect our ability to pay allocated capital credits in the future.

Capital Credit FAQs

Q. What is a notice of capital credit allocations?

S&T sends a notice to members each year showing the amount that has been allocated to them based on the amount billed for their telecommunications services and the associated gross operating margin during that year.

Q. What is a capital credit allocation?

Margins are “allocated” or assigned to members who belong to the cooperative during the year in which a margin is generated. The allocation is based on the member’s proportion of service usage for that year. Each member’s portion is referred to as a “capital credit allocation.”

Q. How do I know if I have capital credits?

You begin accumulating capital credits when you begin receiving telecommunications services. S&T sends allocation information annually. Members may request a statement detailing the status of their capital credit accounts.

Q. How do I earn capital credits?

The amount of capital credits you earn in a given year is based on the amount of capital contributed to the cooperative through payment of your monthly bill for services and the amount of operating margins realized by the cooperative.  Capital Credits are usually retired, which means paid to the member, as a percentage of certain prior year’s allocations.

Q. How do I become a member of the cooperative?

S&T customers who are eligible for cooperative membership must live in the S&T Telephone Association, Inc. service area, which includes these communities: Brewster, Dighton, Grinnell, Healy, Kanorado, Levant, Menlo, Russell Springs, and Winona. Customers in these areas must subscribe to telephone or Internet service to qualify for membership.

Q. What are capital credits?

S&T Telephone Association, Inc. is a not-for-profit cooperative that is owned by its members. Capital credits are one of the many benefits of membership in the cooperative. At the end of each year, any excess operating margins are allocated to S&T’s members that received service during that year in the form of capital credits. The amount of excess operating margins, if any, varies every year. Capital credits are generally allocated as equity on the cooperative’s books to accounts associated with each member.

Q. What is required to remove or change a member’s name on the capital credit check?

Each scenario may vary based on the member’s situation.  If a change needs to be made to the membership name, S&T requires legal documents to support the change. Please provide original documents.  The original documents will be returned to you upon request.  Please contact us with any questions concerning your capital credit allocations by email at capcred@sttelcom.com.

Q. Are capital credits taxable income?

For residential service accounts, capital credits are generally not taxable. For businesses (which includes rentals), according to Internal Revenue Service guidelines, members receiving capital credits checks in excess of $600 are required to complete the IRS’ Form W-9. Please seek assistance from your tax advisor.

Q. What are unclaimed capital credits?

When capital credits are retired, meaning a check has been issued and mailed to the member’s address on record, the cooperative sometimes receives returned mail marked “undeliverable.”  It is important to update your mailing address to ensure you receive future capital credit checks. After 24 months, these unclaimed capital credits will be transferred to a donations account and will be unavailable to be reclaimed.

Q. Can I receive my capital credit allocation whenever I want?

No. Capital credits allocations are simply a record of your pro rata share of the margins. Since the capital is not held in an account and is reinvested to support the operations and growth of the business, the entire balance cannot be retired to you at once. There is no legal obligation imposed on the Cooperative to retire capital credits or to pay out the balances in full. The method, amount and timing of capital credit retirements is at the sole discretion of the board of directors.

Q. What happens to my capital credits if I stop receiving service from S&T?

Allocated capital credits remain on the S&T’s books in your name and account number until they are retired. Capital credit retirements (payments) are made years after capital credits have been allocated. Please notify us of your new mailing address.

Q. How often does S&T retire or return capital credits?

Each year the board of directors reviews the financial status of the cooperative to determine whether a refund is feasible and if so, how much.  While capital credits are allocated every year, they are not automatically retired or refunded to the members every year.  S&T uses margins (i.e. capital credits) to fund the operating activities and upgrades to your infrastructure and equipment, with the intent of repaying this capital to the members in later years.  The Board of Directors strive to operate in a prudent business manner so that the member-owners will continue to have the very best telecommunications services possible at an afforable cost consistent with sound economy and good management.

Q. What’s the difference between allocated and retired capital credits?

Allocated Capital Credits are amounts entered on to the cooperative’s permanent financial records representing each member’s pro rata share of annual excess operating margins. Every year, S&T’s Board of Directors reviews the financial health of the cooperative and determines whether any previously allocated Capital Credits will be paid out to members. Capital Credits that are paid out to members are referred to as retired Capital Credits.

Q. What is retirement of capital credits or refund?

It is the return of members’ capital credits. Retiring capital credits is a way of ensuring that each generation of members pays its own way. S&T operates on an at-cost or nonprofit basis by annually allocating to each member, based on the member’s purchase of services, operating revenue remaining at the end of the year. Later, as finances permit, these allocated amounts, or capital credits, are returned to members, by check.

 

View the current ByLaws (PDF)