When you sign up for communication services from DirectLink, you become a member of a cooperative association with more than 115 years of member service experience and technical expertise. Membership establishes your ownership and guarantees access to quality services that support your lifestyle. You earn dividends, or capital credits, based on the services you subscribe to and the overall financial success of the cooperative. The membership elects a board of directors to represent member’s interests, set policies and ensure the company’s success. You earn capital credits based on the services you subscribe to, in other words, your patronage to the cooperative.
Frequently Asked Questions:
What are capital credits?
DirectLink is a cooperative. When you signed up for communication service(s) with us, you established your equity interest in the association. In other words, you became a part owner of DirectLink. As a member cooperative, DirectLink seeks to provide members with the highest quality service at the most affordable rates. At the end of each fiscal year, DirectLink allocates margins to each member on a prorated basis according to the total amount paid for communication services(s). These allocations are known as patronage dividends or capital credits. Upon approval of the Board of Directors, these allocations are refunded to our members through patronage distributions.
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 DirectLink allocates margins to each member on a prorated basis according to the total amount paid for telephone services.
What is a distribution?
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 allocations not paid-out when allocated?
Net margins are a source of working capital provided by the members and are used by the co-op for any proper purpose such as facility/plant upgrades and payment of debt.
How often does the Board of Directors declare that a distribution should be made?
According to the cooperative bylaws
, “Credits… may be retired by the Board of Directors at its discretion and direction as to timing, method and type of retirement.” There is no schedule as to when distributions are made. Previous distributions were made in the years 1982, 1989, 1996, 1998, 2002, 2005, and 2007.
Do I need to contact the cooperative each year to see if any distribution has been declared?
Current members of the cooperative (those who currently receive communication service(s) through the cooperative) will automatically get any distributions declared mailed to them at their billing address. Those members who no longer get local service from the cooperative will be mailed a distribution notice to their last known address. This notice will contain a form to sign and return to the cooperative letting us know that it is okay to send the check to that address and to notify us of any address change. It is important to keep the cooperative informed of any change of address.
Why has DirectLink not done a distribution since 2007?
In 2008 DirectLink began deployment of fiber throughout the city of Canby to bring our members the most current technology to provide the Broadband speeds required to meet the demands of Internet use. Our commitment to deploying fiber has expanded beyond the city limits to encompass our entire 84 square mile Canby serving area and the 16 square miles of our Mt. Angel service area. This deployment is costly and requires every available dollar and resource to accomplish our goal. As our revenues decline and the need for capital investment increases it becomes more difficult for the Board to authorize a distribution. Our priority has been and will continue to be to provide the highest quality services to our members.
What services do I receive patronage dividends for?
Members receive capital for all DirectLink products and services including telephone lines, calling features, high-speed Internet, DirectLink long distance, yellow page ads, any service included in a service bundle, and any other service billed on your DirectLink billing statement.
Are payments of patronage dividends taxable?
If the cost of the service was not taken as a deduction on your tax return when the service was received, the return of the excess paid for the service (patronage dividend payments) is not taxable income. However, most businesses claim telephone service provided to the business as a business expense and therefore would have to claim patronage dividends as income. The cooperative cannot advise its members on tax issues. You should check with your tax advisor.
Upon the death of a member and as requested by an authorized survivor DirectLink will distribute the Patronage held on the deceased’s account.
Member Estate Payouts will be paid at a discounted rate. They will be discounted 5% per year up to 20 years. Any amount 20 years or older will be paid at 100%. All Patronage on the account will be retired.
If you have any questions regarding Patronage you may email Patronage@DirectLink.coop, call our Patronage voice mail hotline at 503.263.5999 and leave a message, or you may write us at PO Box 880, Canby, OR 97013 to the attention of the Patronage Department.