Ownership Administration Guidelines

Adopted Pursuant to Board Policy B.2.3.1.
Revised 02/09/12

Definition of an Owner

  • Owners of a cooperative

  • Joining fees and invested capital

Owner Status

  • "In good standing"

  • Active/inactive status

  • Donated capital

Categories of Ownership

  • Invested

  • Investing

  • Group/organization

Investing Owners

  • Investing capital

  • Delinquent status

  • Account Closure

The Senior Card

Evidence of Ownership

Owner Benefit Eligibility

Owner Benefits

Voting

Patronage Rebates

Household Affiliation

Owner Responsibilities

Owner Resignation and Capital Refunds

  • Resignation requests

  • Deceased owners

  • Refund guidelines

The Ownership Agreement

  • Invested/investing owner agreement

  • Group/organization agreement

Definition of an Owner


Because co-op members supply capital and participate democratically, Wheatsville's members are its owners. Therefore, the terms owner and member are sometimes used interchangeably at Wheatsville. Ownership in Wheatsville Co-op commences upon signing an Ownership Agreement and payment of a joining fee and capital investment as provided in these guidelines.

A non-refundable joining fee is assessed to all owners to help cover administrative costs of ownership and is treated as income to the co-op. Capital contribution requirements established in this document for Invested Owners are intended to ensure a sound level of owner investment in Wheatsville and may be changed from time to time by the board of directors. Invested Owner capital becomes part of the co-op's equity but it is refundable upon an owner's resignation from the co-op, provided the total capital remaining is adequate to meet current and projected needs.
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Owner Status


To remain "in good standing," an owner must invest the required capital in a timely manner and continue to provide the co-op with a current mailing address. Owners who fail to meet these conditions may be denied owner benefits.

Prior to June 1, 2008, if mail was returned and the co-op had not received an updated address after two years, the ownership account was changed from "active" status to "inactive" status, and any capital associated with the account was considered donated to Wheatsville as provided in our bylaws and the Ownership Agreement at that time. Donated capital will revert to the owner's account without penalty once a current address has been reestablished.
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Categories of Ownership


Invested and Investing are the different categories of ownership available to owners. Wheatsville also has Group Ownerships for qualifying organizations. All of these categories of ownership convey ownership rights and responsibilities.

Invested:

  • Owner has paid in full a $15 joining fee, and

  • Owner has invested, in full, the capital requirement of $55.

Investing:

  • Owner has paid in full a $15 joining fee, and

  • Owner is investing at least $10/month (minimum amount) toward the capital requirement of $55.

Group/Organization:

  • Group has paid in full a $15 joining fee, and

  • Group has invested in full a capital investment as determined by Wheatsville's General Manager. This capital investment takes into consideration:

  • The history the organization has had with Wheatsville,

  • The group's ability to invest,

  • The number of people who will realize benefits from ownership, and

  • For what purposes the ownership will be used.

  • The Ownership Agreement for group/organization owners must specify the capital investment requirement, who will be entitled to benefits of ownership, and a designated individual to represent the group. All Group Ownerships have one vote, which is cast by the Group Representative. To be eligible for a Group Ownership, an entity must be a non-profit organization or organized "on a cooperative basis," as provided in the Texas Business Organizations Code, section 251.151.

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Investing Owners

All Investing Owners are required to pay a minimum of $10 capital per month until they are fully invested. This process should take no more than six months (a.k.a. investing "in a timely manner"). Upon completion of capital payments, the account will be considered fully Invested.

Failure to invest fully within the allotted time will result in obtaining a delinquent status, whereupon owner benefits will be denied until the capital balance is paid in full. At least once a year beginning with our fiscal year ending May 31, 2009, the ownership roster of both active and inactive (donated) accounts will be reviewed for delinquent Investing Owners. Any delinquent account with a total paid-in amount, including both joining fee and investment, of less than $70 will be closed and the invested capital will be refunded to the owner.
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The Senior Card


In 1995 Wheatsville discontinued the Senior Card, which was exclusively available to senior citizens over the age of 62. This arrangement did not supply the co-op with capital or a joining fee, but its cardholders were eligible to receive most owner benefits. Although we no longer open new Senior Card accounts, we still honor those which are still active and in good standing.

Once a year, Wheatsville will review its Senior Card roster for accounts which have seen no activity within the year. A correspondence letter requesting the card holder's confirmation of continued interest in retaining their card privileges will then be mailed out to those accounts. If a confirmation reply is not received by Wheatsville, the status of that account will be changed from active to closed.
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Evidence of Ownership


Each ownership account is assigned an Owner Card that is used to store the owner's contact information and patronage history. It is the owner's responsibility to present their card when shopping at the co-op and some situations may require that owners show their state ID to verify their eligibility for certain benefits. Ownerships are not transferable.
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Owner Benefit Eligibility

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Owner Benefits


Benefits of Wheatsville Co-op's owners include, but are not limited to:

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Voting


All owners are entitled to one democratic vote in co-op elections, which are held at least once a year, and are strongly encouraged to become informed and to participate in the voting process. Group/organization accounts get one vote, cast by the Group Representative.
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Patronage Rebates


The Internal Revenue Code provides a special opportunity for member-owned cooperatives to reduce their taxable income by declaring a patronage dividend, or rebate, allocating a portion of the owners' purchases back to them at the end of the year. This potentially benefits both the individual owners and the co-op as a whole. Each year the board of directors determines whether a rebate is appropriate and, if so, the amount of the patronage allocation. Typically, 20% of the total allocation is paid out to fully Invested Owners based on their patronage during the fiscal year and 80% of the allocation is retained by the co-op as additional equity. The retained portion is allocated to individual owner accounts in the proportion their patronage bears to the total qualifying patronage. This retained patronage equity will remain on the books until the co-op is dissolved as an organization or until such time as the board of directors may decide to distribute all or part of it back to the owner accountholders or otherwise allocate it in accordance with legal procedures. Rebates are generally restricted to fully Invested Owners in good standing who have sufficient patronage to justify the expense of distributing their portion. Additionally, patronage rebates may only be picked up and redeemed upon presentation of a photo ID by the payee listed on the rebate.
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Household Affiliation

Invested and Investing Owners sharing a household may request to accumulate patronage under one account.  A Household Affiliation agreement must be signed by all parties involved and will designate one of the individual owners to be listed as payee on the patronage voucher if one is issued.  This affiliation may be cancelled at any time upon request by one or more members of the household or if the household members cease to reside at the same address.

In March, 2009, all pre-existing "Household Accounts" were divided into separate individual ownerships and linked with a Household Affiliation.  Any patronage vouchers issued will be made out to the individual who was listed as the primary account holder at the time the accounts were separated.
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Owner Responsibilities


Ownership of Wheatsville carries certain responsibilities. Owners who choose to use the services of Wheatsville must accept these responsibilities in order to maintain a prosperous cooperative. To remain in good standing, all owners must invest in a timely manner and maintain a current address. Other owner responsibilities include, but are not limited to the following:

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Owner Resignation and Capital Refunds


A resignation will be granted to any owner who completes a resignation request. The owner's account will be closed and any refundable capital will be returned to the owner at the address provided with the request, according to the guidelines set forth below. Upon request with proper documentation such as letters testamentary, Wheatsville will close the account of a deceased owner and refund the capital investment to the legal representative of the estate.

Refund Guidelines

  • Refund requests must be submitted in writing and must specify the name of the person making the request and the address to which the refund should be sent.

  • Refunds will normally be mailed within thirty days after the written request is received.

  • Board policy B.2.8.2 provides that no capital refund request by any member shall be paid out if it would cause the total paid-in member capital and donated capital to fall below an amount considered adequate to capitalize Wheatsville's current and projected needs, currently $400,000.

  • If refund requests are received that cannot be honored because they would cause total capital to fall below the designated minimum, they will be logged and paid in the order the requests were received, as new owner capital is paid in to replace the capital being paid out.

  • Policy B.2,8 will not be interpreted to prevent the refund of excess capital (i.e., amounts paid on individual accounts in excess of the full investment requirement for those accounts), upon receipt of a proper refund request.

These refund guidelines do not apply to retained owner patronage, which may continue to be held as owner equity, subject to the same treatment as retained allocations to all other owner patrons, even after the ownership account is closed.
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The Ownership Agreement

Invested/Investing Owner Agreement:

  • I agree to pay the joining fee and capital requirement in full, or make timely capital payments.

  • I have the right to vote in co-op elections. I will respect the rights and opinions of other owners. I agree to abide by all decisions made in accordance with the bylaws, certificate of formation, and board policy.

  • I understand that co-op policies, including those concerning owner investments and refunds, are subject to change by the board of directors and/or the vote of the ownership.

  • I will stay informed and if I fail to keep the co-op informed of my current address, I may become ineligible to receive owner benefits, including patronage rebates.

  • I understand that while equity investments are generally refundable, the board retains the right to withhold refunds when necessary to protect the co-op's financial viability.

  • My capital balance due is $_________, which is to be paid in installments of $10 or more per month.

Group/Organization Agreement:

  • We agree to pay the joining fee and capital requirement in full.

  • We are entitled to one democratic vote in co-op elections. We will respect the rights and opinions of other owners. We agree to abide by all decisions made in accordance with the bylaws, certificate of formation, and board policy.

  • We understand that co-op policies, including those concerning owner investments and refunds, are subject to change by the board of directors and/or the vote of the ownership.

  • We will stay informed and if we fail to keep the co-op informed of our current address, we may become ineligible to receive owner benefits, including patronage rebates.

  • We understand that while equity investments are generally refundable, the board retains the right to withhold refunds when necessary to protect the co-op's financial viability.

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