Cooperatives are unique businesses in several ways. One important difference between the Oneota Community Food Co-op and other grocery stores in our area is that part of our cooperative’s profit can be returned to member/owners in the form of a patronage dividend.
The good news is that our store was more profitable than we expected in 2015! The Board of Directors has declared a patronage dividend for the fiscal year 2015. This dividend is based on the dollar amount of your purchases at the store during a fiscal year. Co-op patronage dividends have two parts – a cash portion (usually 20%) sent to the owner and a retained portion (the remaining 80%) which co-ops keep to reduce debt, purchase new equipment, complete repairs, improve services and to fund long term development plans for the Co-op. This reduces our tax liability this year by about $15,000 and puts this money back into the hands of our member/owners and our community.
In the coming months, member/owners who spent more than approximately $1,164 in the store will be receiving a portion of those purchases back in the form of a check. The deadline to cash your Patronage Dividend will be 90 days from the date of the check. If you do not cash your check within the 90-day period, you give up your right to this dividend and it becomes income for the Co-op. In this case, the Co-op would be required to pay income tax on the dividend plus the 80% retained. Cashing your check is a good thing for you and the Co-op!
Furthermore, if you have not completed payments on your member/owner share the dividend check will first go towards paying that share remainder off. This includes if you are current on payments and are currently a Member in Good Standing. For example, if you joined in 2014 and chose to pay for your share in yearly increments of $20, you would still owe $80 towards the purchase of your share in the Co-op. (Total cost of a share in the Oneota Co-op is $140.) If you were due a dividend check of $12.16 based on your 2015 purchases, this amount would automatically be put towards your share payments in our system. Therefore, your next share payment – due by March 1, 2017 would be $7.84 – to remain current and in good standing.
But wait, there’s more…our Co-op has always looked for ways to give back to our community and help build a healthier environment in which we work and play. This year, you will have an option to bring back your signed check (or mail it to us) and donate your patronage to a local non-profit organization. In the next few months, our board will be determining which organization(s) will be chosen for this exciting option.
(UPDATE: The organization that will be the recipient of member/owners generosity in the way of signing their dividend check over will be the Farmers Market Coupon Program, which is part of the Community Food Pantry at First Lutheran Church in Decorah. To donate your patronage dividend check to this organization, please endorse the dividend check and either drop off your check at the Co-op, or mail it back to us.)
This is the fourth patronage dividend issued by the Co-op over the past twenty-two years and the second one in three years. This reflects the fact that our Co-op is in a strong financial position, especially in a year that we purchased our second building. We are in the initial planning stages of the expansion project and will have more to update our membership as 2016 progresses. None of this would be possible without the on-going support of our member/owners who generate almost 77% of the Co-op’s sales. If you are a member/owner, think of this check as your reward for doing business with the Co-op. Thank you for making that choice this past year.
Brita Nelson, Board President
David Lester, General Manager