Capital Credits and Allocations

What is a Patronage Allocation?

An allocation is the process of adding the amount earned for the year to your capital credit account. At the end of each year SMTA allocates margins to each member on a prorated basis according to the total amount paid for local services.

What are Capital Credits?

When you sign up for local services from SMTA, you become a member of a cooperative association with more than 100 years of customer service experience and technical expertise. Membership establishes your ownership and guarantees access to quality services that support your lifestyle. You earn capital credits based on the services you subscribe to, in other words, your patronage to the cooperative.

My letter showed my Capital Credits for the year, so when do I get my money?

What is shown on the letter is the allocation of any net proceeds the cooperative had for the prior year. Actual payments, called a distribution in the form of patronage dividends, are made at the discretion of the Board of Directors.

Why are Patronage Dividends not paid when allocated?

Capital credits are retained by the cooperative for a period of time to reduce debt, to replace and improve plant and equipment as well as to provide for the stable, ongoing operation of the cooperative.

How often does the Board of Directors declare that a distribution be made?

The bylaws call for the payment of patronage dividends when the financial condition of the cooperative permits. The board of Directors determines when such payments are made."

Do I need to contact the cooperative each year to see if a Distribution has been made?

Past and Current customers of the cooperative will automatically receive any distributions that are made via postal mail to the last known billing address. It is important to keep the cooperative informed of any change of address.