Title
Resolution - Approval of Capital Credits Special Distribution during Calendar Year 2026 - J Smith
Other Info
Submitted By: Janelle Smith
Department: Financial Services
Financial Impact and Cost/Benefit Considerations: Expenditure of Cooperative funds estimated in the approximate amount of $5,800,000. Expenditures of staff time limited to ordinary processing requirements.
Discussion
The Capital Credits Policy of Pedernales Electric Cooperative, Inc. ("PEC" or "Cooperative") establishes the process for both General Capital Credits Retirements and Special Capital Credits Retirements including the payment of capital credits to members, former members and deceased members' estates, and permits the discounting of capital credits.
The PEC Board of Directors previously approved a Capital Credits Distribution for the calendar year 2026 in December 2025 (Resolution 2025-376) for General Capital Credits Retirements and Special Capital Credit Retirements for deceased estates.
Pursuant to its Policy, the Cooperative retires capital credits in a manner that permits the Cooperative to comply with all applicable laws, all restrictions imposed by its debt financing covenants, the Cooperative's Articles of Incorporation and Bylaws, and in a manner that is fair to the Cooperative's members and former members, and is reasonable to maintain a healthy financial state.
The Board may now consider a Special Capital Credits Retirements (distribution and payments) to former members under the Policy in an amount not to exceed $5,800,000.
The Board of Directors has conducted an additional review and discussion of the Capital Credits distribution and payment and has determined a Special Capital Credits Retirement is warranted. The Special Capital Credits Retirements (distribution and payment) in an aggregate amount not to exceed $5,800,000, would consist of approximately 36% to the oldest outstanding year(s) with discounting and approximately 64% to the most recent year(s) with...
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