Cooperative members pool their resources. The members share in the co-opâs profits, rather than the profits going to one company owner.
Paynesville and Zion Mutual Insurance Company, the Melrose Credit Union, the Farmers Union Oil Company and AMPI (Associated Milk Producers, Incorporated) are Paynesvilleâs cooperatives.
Paynesville and Zion is a ãtownship mutual,ä mutual manager Ruth Rothstein said. This means that all the policyholders live in specific townships. It is one of 113 township mutuals in the state. Mutuals write approximately 85 percent of Minnesotaâs farm insurance, Rothstein said.
Paynesville and Zion was started by local farmers in 1894. They pooled their money to protect themselves from financial hardships, mainly those resulting from fire.
The mutual is owned by its policy holders. Paynesville and Zionâs operating territory covers 130 townships. Their 22 agents can write in all of Stearns, Kandiyohi and Meeker counties. They can write in parts of Pope, Todd, Benton, Morrison and Douglas counties.
The major benefits for a Paynesville and Zion member are the ãprice and service,ä Rothstein said. The prices are competitive because the mutual operates for member benefit, not company profit.
Local agents are ãinterested in and concerned forä their policyholders, Rothstein said.
ãCommunication is the most important part of insurance,ä she said. ãAgents need to know the policyholderâs exposure so they are able to recommend the correct coverages. The policyholder needs to inform the agent of any changes which need to be made to the policy so he or she has the correct coverages at the time of loss.ä
Paynesville and Zion is working on promoting fire safety. A fire safety representative meets with all of Paynesville and Zionâs policyholders. Together, they review fire hazards. They also discuss fire safety. Faulty woodstoves and smoke alarms are common fire hazards.
Paynesville and Zion sells reduced cost fire extinguishers, smoke alarms and lightning arrestors to policyholders. With these precautions, the mutual hopes to ãprotect property and save lives,ä Rothstein said.
Paynesville and Zion is run by a board of directors that meets monthly. Everyone on the board is a policyholder with Paynesville and Zion. There is also an annual meeting that all policyholders are invited to.
The tan building on the west end of Minnie Street is a small part of a $100 billion dollar national industry: the credit union.
In 1849, the first credit union was formed in Germany. Poor farmers, workers and trades people pooled their money.
The first U.S. credit union opened in 1909. Credit Unions are stable institutions, too. No credit union closed during the Great Depression of the 1930s.
The Melrose Credit Union began in 1939. In 1986, some Paynesville citizens petitioned the credit union and asked for membership.
Melrose Credit Union members all live or work or are relatives of people who live or work in specific school districts. Any relative of a member can also join the Melrose Credit Union. In 1986, the credit union expanded to include the Paynesville Area School District borders. Paynesville members used the Albany or Melrose offices. In 1993, the Melrose Credit Union opened its Paynesville office.
The members - the people who save at or borrow from the Melrose Credit Union - are also the owners. The benefits that credit union members get are seen in interest rates, branch manager Troy Stang said.
Their narrow margin between profits and costs allows the credit union to make these interest rates available. Since the credit union does not operate for profit, they are able to give their members better interest rates, Stang said.
The Melrose Credit Union can offer lower interest rates on loans. The credit union offers higher rates on savings, checking and money market accounts and on IRAs and CDs.
Also, there isnât a minimum loan amount. Credit unions traditionally work with lower income people, Stang said. Some members have borrowed ã$20 for gas and groceries,ä Stang said. After working with the financial planners, loan officers and other credit union staff, these same people go from ãmaking it month to monthä to taking out a home loan.
Members can get financial counseling and budgeting help free.
A board of directors, a credit committee and a supervisory committee oversee the credit operations.
Board members are people from all areas of the credit unionâs field of membership: Melrose, Albany, Grey Eagle, Freeport and Paynesville school districts. They are elected to three-year terms by credit union members. The board creates policies and advises the credit union management.
The supervisory committee provides checks and balances for Melrose Credit Union. The credit committee keeps tabs on the lending staff and makes sure that credit union loans will be paid back.
Melrose Credit Unionâs main goal is to ãput money back into the community in the form of loans,ä Stang said.
The credit union believes in ãgiving back to the community,ä Stang said. They do this in the form of scholarships and involvement in the schools. They also sponsor the 55 Alive driving classes for senior citizens.
The credit union is a nonprofit financial institution that is ãhere to provide,ä Stang said.
The Paynesville Farmers Union Co-op Oil Company is owned by its customers.
Any customer can become a member by opening an account. They are paid dividends, based on the co-opâs annual profits: 20 percent in cash and 80 percent in company stock.
The Paynesville co-op is not a branch of any larger chain.
ãWeâre a stand-alone company,ä general manager Mark Jaskowiak said.
The Farmers Union Oil Company in Paynesville was formed in 1953. Local farmers needed a farm supply co-op. They talked to their neighbors, Jaskowiak said, and farmers invested. The initial investment was $25, and the cooperative started with the $25 investments of area farmers.
Through their membership in a co-op, area farmers were able to purchase the supplies they needed at ãstabilized prices,ä Jaskowiak said. Because the co-op is ãowned by users,ä it has ãfair and consistent prices.ä
The co-op began with fuel. Through the years, it has expanded to a store and gas station and selling propane and fertilizer.
The first board of directors were the farmers who started the Paynesville co-op. Today, the co-op is governed by a five-person board, which is elected by voting members. The board members are local farmers.
The board meets monthly. They decide credit policies, hire the general manager, set employee policies, approve major equipment and facility purchases and review financial statements.
Any co-op customer can become a stockholder. Only members who earn most of their income from farming are voting members. These are also the only members that can sit on the board. Right now, the co-op has 1400 members. Six hundred are voting members.
The co-op is growing, both in members and in sales. Their sales have almost doubled since 1992, Jaskowiak said.
The Farmers Union Co-op Oil Company is a ãself-sufficient business,ä Jaskowiak said. ãIt is truly owned by the customer.ä
AMPI, originally Paynesville Milk Products, merged with Five Star Dairy in 1964. In 1969, Five Star merged with AMPI.
The second merger took place so dairy farmers from Texas, Oklahoma, Kansas and other southern states could be part of the cooperative. Through the merger, the southern farmers could take advantage of the Midwestâs markets and marketing agencies, manager Ken Gniffke said.
In 1988, AMPI began making cheese products. Before, they manufactured butter and nonfat dried milk products.
Right now, AMPI products are marketed all over the United States. Members are from all over the country, Canada and Mexico.
AMPI has grown from 90 members to 800 members in a 21-county region that stretches from Pelican Rapids to Grove City and from Pierz to Alexandria. AMPIâs members are the dairy farmers that the cooperative serves.
AMPI is divided into two regions: the north central region and the southern region. There are 14 divisions in the north central region, and the Paynesville division encompasses 54 districts. Each district has about 100 members, Gniffke said.
Paynesvilleâs AMPI plant operates 24 hours per day, seven days a week. Every day, three semi truck loads of cheese are manufactured there.
AMPI is governed by a board of directors. The regions, divisions and districts all have boards. The boards set company policies, approve construction projects and act in an advisory capacity, Gniffke said.
Rural electric cooperatives
Three rural electric cooperatives serve the Paynesville area: Meeker Co-op Light and Power, Stearns Electric Association and Kandiyohi Co-op Electrical Power Association.
Both Meeker and Kandiyohi began in 1935. Stearns formed in 1937. The Meeker co-op was started to ãbring electric power to the countryside,ä said Dee Bollin, part of the member services staff.
Rural electric co-ops were formed because ãfor-profitä utility companies wouldnât serve rural areas, said Frank Haynes, Stearns communications specialist. These companies found it too expensive to serve rural areas.
President Franklin Roosevelt made low-interest loans available to anyone who would build their own power lines. So, the farmers in many rural areas pooled their money and brought electricity to rural areas.
According to Louise Swenson, secretary to Kandiyohiâs general manager, area farmers knew that electricity was coming, so they formed the Kandiyohi co-op.
Meeker serves about 7,200 members. Anyone can be a member of the Meeker co-op. To join, they need to buy one share. Each member holds one share in the co-op, Bollin said.
All three co-ops are governed by boards. These boards meet monthly. Every member has a ãvoiceä in the co-op, Bollin said. The boards are one main benefit for co-op members. They have a vote and a voice in the company. Board members are ãaccountable to their neighbors,ä Swenson said.
The boards have annual meetings that all members are invited to. Here, they can ãcome and have their say,ä Haynes said. In a for-profit electrical company, the same kind of meetings are held, but are only open to stockholders.
Swenson echoed Bollinâs comment. People feel they are a part of the company because it is a co-op, she said.
ãYou own the business,ä Swenson said.
Electrical co-op members also see benefits in the form of capital credits. Members receive checks each year. The size of the checks differs for each member, according to how much energy she or he used throughout a year.
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