SECTION 1. APPORTIONMENT OF EXCESS REVENUES. Florida law provides that revenues of the Cooperative “for any fiscal year in excess of the amount thereof necessary:
(a) To defray expenses of the Cooperative and of the operation and maintenance of its facilities during such fiscal year;
(b) To pay interest and principal obligations of the Cooperative coming due in such fiscal year;
(c) To finance, or to provide a reserve for the financing of, the construction or acquisition by the Cooperative of additional facilities to the extent determined by the Board of Trustees;
(d) To provide a reasonable reserve for working capital;
(e) To provide a reserve for the payment of indebtedness of the Cooperative maturing more than 1 year after the date of the incurrence of such indebtedness in an amount not less than the total of the interest and principal payments in respect thereof required to be made during the next following fiscal year; and
(f) To provide a fund for education in cooperation and for the dissemination of information concerning the effective use of electric energy and other services made available by the Cooperative,
shall, unless otherwise determined by a vote of the members, be distributed by the Cooperative to its members as patronage refunds in accordance with the patronage of the Cooperative by the respective members paid for during such fiscal year. Nothing herein contained shall be construed to prohibit the payment by the Cooperative of all or any part of its indebtedness prior to the date when the same shall become due.” In accordance with this law and as memorialized herein, the membership has voted to allow the Board of Trustees, in its discretion and business judgment, to distribute any statutory excess revenues, should any exist, to the capital accounts of members rather than paying them in cash, and to in turn periodically choose to retire such credits, as set forth in Article VII, Section 3 below. To the extent any member disagrees with the decisions of the Board of Trustees with respect to the allocation or retirement of these statutory excess revenues, the member may not seek arbitration pursuant to Article XI, Section 5 or file a lawsuit if the member opted out of Article XI, Section 5, until the member has first provided written notice to the Board of Trustees at least fifteen (15) calendar days in advance of the next scheduled regular monthly Board meeting and provided the Board of Trustees with a reasonable time to investigate and respond to the matter.
SECTION 2. INTEREST OR DIVIDENDS ON CAPITAL PROHIBITED. The Cooperative shall at all times be operated on a cooperative non-profit basis for the mutual benefit of its members. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its members.
SECTION 3. PATRONAGE CAPITAL IN CONNECTION WITH FURNISHING ELECTRIC ENERGY. In the furnishing of electric energy and other utility services, the Cooperative's operation shall be so conducted that all members will through their patronage furnish capital for the Cooperative. All members acknowledge the need of the Cooperative for capital received from members to operate. In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis, the membership has voted to vest in the Board of Trustees, in its discretion and business judgment, the ability to allocate patronage capital to the accounts of members, rather than paying them in cash, for all amounts received and receivable from the furnishing of electric energy and other utility services in excess of operating costs and expenses properly chargeable against the furnishing of electric energy or other utility service. The formula for determining the amount of such patronage capital for each member or other patron shall be determined by the board. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the members as capital. Such patronage capital amounts are not the same as statutory “excess revenue” as determined under Florida law (as described in Section 1, above). The Cooperative may pay by credits to a capital account on the books of the Cooperative for each member equal to the member’s pro rata share of all such amounts in excess of operating costs and expenses. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each year the amount of capital, if any, so furnished by each member is clearly reflected and credited in an appropriate record to the capital account of each member, and the Cooperative may after the close of the fiscal year notify each member of the amount of capital so credited to his account. Each member agrees that all amounts credited to the capital accounts of any patron shall have the same status as though they had been paid to the member in cash in pursuance of a legal obligation to do so and the member had then furnished the Cooperative corresponding amounts of capital for its use in conducting the business of the Cooperative.
To the extent necessary and in the sole discretion of the board, the Cooperative may establish separate allocation units for utility services other than the provision of electric energy in order to ensure that margins are equitably allocated among all members. The board shall determine the cost allocation and accounting rules for any separate allocation.
All other amounts received by the Cooperative from its operations in excess of cost and expenses shall, insofar as permitted by law, be (a) used to offset any losses incurred during the current or any prior fiscal year; and (b) to the extent not needed for that purpose, may be added to the Cooperative's retained capital or allocated to its members on a patronage basis at the discretion of the board and any amount so allocated may be included as part of the capital credited to the accounts of members, as herein provided. To the extent these amounts are included as part of the capital credited to the accounts of members, such amounts shall be allocated as herein provided.
In the event of dissolution or liquidation of the Cooperative, not to include merger or consolidation with another electric membership cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding capital credits shall be retired without priority on a pro-rata basis before any payments are made on accounts of property rights of members. In the event of a consolidation or merger, all capital credits which have earned by the members or other patrons of the Cooperative shall either be paid or be preserved unimpaired and shall continue to exist as credits to a capital account of each member or other patron in the corporation merged with or created by consolidation. If, at any time prior to dissolution or liquidation, the board shall determine in its sole discretion that the financial condition of the Cooperative will not be impaired thereby, the capital credited to members' accounts may be retired in full or in part. The Board of Trustees shall have the discretion in the exercise of its business judgment to determine the method, basis, priority, and order of retirement, if any, for all amounts heretofore and hereafter furnished as capital.
(a) Retirement of capital credits is the actual payment, as provided by subsection (b) below, of patronage capital to the Cooperative members to whom it has previously been allocated. The Board may, in its discretion, utilize its business judgment to retire patronage capital as allocated on the books of the Cooperative so long as the retirement is consistent with sound business and management practices and the financial stability of the Cooperative will not be impaired thereby. If the Board, in its discretion, utilizes its business judgment to retire patronage capital to members either upon their death or termination of electric service, then the retirement may be discounted in the exercise of the Board’s business judgment. (b) When the Board has determined, pursuant to subsection (a) above, that patronage capital should be retired, the retirement may be accomplished by a bill credit or by the mailing of payment or notice of payment to the person’s last known address of record on file with the Cooperative. No interest shall be paid or payable by the Cooperative on any patronage capital furnished by its members.
In no event may the Board of Trustees retire capital such that it would cause the Cooperative to fall out of compliance with the provisions of any of its mortgage, deed of trust, loan contracts, or other security instruments executed by the Cooperative to secure any indebtedness of the Cooperative.
Capital credited to the account of each member shall be assignable only on the books of the Cooperative pursuant to written instructions from the assignor and only to successors in interest or successors in occupancy in all or part of such member's premises served by the Cooperative unless the board, in its discretion and business judgment, shall determine otherwise.
If any member ("member" used herein shall include a former member) fails to claim any check representing retirement of capital credits or other credits due members by the Cooperative within one year after payment has been attempted by a check mailed to the last address provided by member to the Cooperative, such failure shall be and shall constitute an irrevocable assignment and gift by such member to the Cooperative, less any charges for maintaining the member’s accounts. The Cooperative’s notice obligation to the member shall be satisfied by a good faith attempt to deliver a notice or payment to the member at the last address furnished by the member to the Cooperative. "Fails to claim" shall mean failure to negotiate a check or the return of a check mailed to the last address provided by the member. The date of such assignment and gift shall be one (1) year from the date of the check. To the extent a member disagrees with the decisions of the Board of Trustees with respect to the allocation or retirement of capital credits, the member may not seek arbitration pursuant to Article XI, Section 5, or file a lawsuit if the member opted out of Article XI, Section 5, until the member has first provided written notice to the Board of Trustees at least fifteen (15) calendar days in advance of the next scheduled regular monthly Board meeting and provided the Board of Trustees with a reasonable time to investigate and respond to the matter.
SECTION 4. APPLICABILITY AND ACCEPTANCE OF BYLAWS. The members of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the articles of incorporation and by-laws shall constitute and be a contract between the Cooperative and each member, and both the Cooperative and the members are bound by such contract, as fully as though each member had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the by-laws shall be called to the attention of each member of the Cooperative by posting in a conspicuous place in the Cooperative's office.
SECTION 5. DEBTS OF MEMBERS AND SET OFF. No member of the Cooperative shall be entitled to receive any retirement of capital credits if such member is indebted to the Cooperative in any manner. Any indebtedness due the Cooperative by any member, at the option of the Board of Trustees, may be set off against the capital credits of such member at any time, together with interest thereon at the legal rate accruing on judgments in effect when such amount became overdue, whether the Statute of Limitations has run against such indebtedness or not.