The 56th Annual Meeting of the members of BEK Communications Cooperative was held June 12, 2008, at the Steele-Dawson School Gymnasium in Steele.

There were 440 qualified voters registered for the election, and 937 beef meals were served to the members, their families and to guests and friends attending the meeting.

Incumbent directors, Sandford Williams, Doug Kalianoff and Virgil Horner were re-elected to the Board of Directors. The winners will serve three-year terms.

The voting results were reported as follows:

•District I—Sanford Williams of Wing, 28 votes, no spoiled ballots.

•District II—Doug Kalianoff of Steele, 120 votes, 7 spoiled ballots.

•District III—Virgil Horner of Strasburg, 66, and Ronald Bauman of Strasburg, 65. There were no spoiled ballots.

•District IV—No election was held.

The election tellers were: Lois Gordian, Wilton; Be-verly Gill, Wilton; Bill Han-son, Wilton; Bonnie Stroh, Tappen; Dawn Dewitz, Steele; Jolene Dewitz, Steele; Al Mosset, Linton; Jerome Senger, Strasburg; Richard Nicklos, Linton, and Teller Coordinator, Linda Rudolph, Dawson.

At the reorganization meeting following the annual membership meeting, the Board of Directors re-elected Leo Meier to serve as President, Doug Kalianoff as Vice President and Sanford Williams as Secretary/Treasurer.

Financial report

Dale Kuntz of Fargo, CPA with the co-op’s accounting firm, Eide Bailly, gave the financial report.

BEK had total income (operating revenues) of $13,992,878 in 2007, up from $12,468,049 the previous year. Nonoperating income (dividends, income from affiliates, etc.) was $1,488,306 for 2007, which was down from the previous year’s $1,657,327.

Net income was $2,283,409, a decrease from $2,610,780 in 2006.

Kuntz explained that the co-op’s lower net income was offset by the sale of stock BEK acquired years ago when another co-op entity was sold to a company that was not a cooperative. He said the original purchase price was about 11 cents per share, and it was sold in 2007 for $37 per share.

By selling the stock when income was down, BEK reduced its income tax liability, Kuntz noted. Consequently, BEK paid $188,600 in income tax in 2007 compared with $281,306 the year before.

CEO/General Manager Derrick Bulawa said the drop in net income was expected and was in the budget because of the co-op’s $10 million expansion into Fiber to the Home technology which enabled the addition of BEKTV services.

He said it will take three to five years for BEK to turn a profit on its television services, and the co-op is meeting its financial targets as projected.

BEK ended 2007 with total assets of $47,322,284, up over $2 million from 2006.

CEO report

CEO Bulawa summarized the co-op’s growth during his annual report to the members.

He said BEK now has fiber optic technology connected to 40 percent of the homes and businesses served. Fiber optic cable is necessary for the co-op to provide virtually unlimited communications services—currently telephone, BEKTV and broadband (high-speed Internet) service.

Bulawa said advanced services in rural North Dakota are critical to the financial stability, viability and competitives of communities, schools and businesses.

Fiber optic cable will be installed in 2008 in Wilton, Regan, Wing, Zeeland, Lehr, Steele, rural Tuttle, Pettibone south and Wishek north.

BEKTV is already available in 11 towns—Linton, Napoleon, Wing, Wishek, Wilton, Lehr, Zeeland, Steele, Hazelton, Strasburg and Hague. In those towns, about 50 percent of the membership has subscribed to BEKTV, which offers 120 channels of digital television.

Bulawa said on screen caller ID and DVR (ability to record up to 100 hours of television programs with no timer or tapes) will be added to BEKTV in 2008.

According to Bulawa, a survey found that 20 percent of BEK’s customers (who responded) use the Internet to generate income. In most cases, members derive a second income by using the service.

BEK members are working from their homes for such employers as Aetna, Coventry, Medcenter One, NISC, Mid Dakota Clinic, St. Alexius Medical Center and Verety.

“The further development of our Internet service is key to creating personal income opportunites for our members and attracting businesses to the area,” Bulawa said.

Over half of the BEK membership has Internet service, and it is currently available to 99 percent of BEK’s members.

Digital TV service

All television stations are converting to digital TV on Feb. 17, 2009, and that will eliminate the use of TV antennas to bring in television signals.

People will have to make a choice to continue to have TV service—cable TV, BEKTV, satellite TV or conversion boxes. BEK is looking into offering conversion boxes, including installation, as a service to members who do not want to subscribe to the other three options.

Bulawa’s presentation included statistics comparing prices of the three major communication companies that serve all or part of BEK’s service area. BEK has the lowest price for a phone, TV and broadband (Internet) package. The comparisons of monthly charges are: BEK $103.95, Qwest $142.97 and Midco $121.95.

BEK statistics

•Service area—5,348 square miles in parts of six counties.

•Members—about 5,500 members and 6,495 lines.

•Cable miles—1,796 miles of fiber optic cable and 2,182 miles of copper cable.

•Lines per miles—1.344 telephone lines per mile of cable.

•Customer investment—Total investment per customer is $10,021.13, which equals $65,087,219 of total plant in service.

•Economic benefit to state—$9,518,162 in purchases, payroll, state taxes and capital credits paid to members.

Meeting details

The Central Dakota Children’s Choir entertained members prior to the meeting and also sang the National Anthem after the Presentation of Flags by the American Legion Color Guard – Napoleon Post No. 72.

This year’s grand prize drawings were for two 32" HD televisions and two personal computers. The winners of the televisions were Dana Schoenhard of Steele and Jerome Senger of Strasburg. The winners of the personal computers were Nina Lawler of Linton and Marlys White of Steele.

About BEK

BEK Communications, a leader in residential communications services and business solutions, is committed to delivering cutting-edge, advanced services and technologies to its customers, according to a news release from the cooperative.

BEK’s reputation of being a market leader is demonstrated by the early adoption of high-speed Internet technology with nearly 100 percent of BEK’s lines being broadband capable.

BEK was first in the state to deploy fiber to the home in rural areas and one of the first in the state to offer Digital TV.

The release stated that BEK has the vision to plan for future services such as the acquisition of wireless licenses and by expanding its technological network and digital voice solutions to the business market in the upper Midwest. BEK Communications has been providing innovative technologies and local support to its membership in Burleigh, Emmons, Kidder, Logan, McLean and McIntosh counties since 1952.