Consolidated Telcom 2024 Annual Meeting Book

ANNUAL REPORT 2024

Official Notice of Annual Meeting The annual meeting of Members of Consolidated Telcom will be held at Trinity High School Auditorium (Empire Road & 8th Ave. W.) in Dickinson, ND at 6:00 p.m. on the 19th day of June, 2024 to take action upon the following matters: 1. Report on the number of persons present in order to determine the existence of quorum.

2. Reading of the Notice of the Meeting.

3. Reading of minutes of previous meetings of members and taking of necessary action.

4. Presentation and consideration of report of officers, directors, and committees.

5. Election of Directors - the following members have been nominated for Director by the Nominating Committee pursuant to the By-Laws:

District 1 (Dodge, Dunn Center, Halliday, Manning) - Janet Wanek

District 6 (Hettinger, Regent) - Paula Anderson

District 7 (Mott, Richardton) - Duane Zent Registration will begin at 4:30 p.m. in the Commons Area at Trinity High School.

Dated this 20th day of May A.D. 2024 — Janet Wanek, Secretary

Agenda 4:30 - 5:45 p.m.

Dinner in the cafeteria

5:15 - 5:45 p.m.

Entertainment - Bingo with prizes

6:00 p.m.

Call to Order: Welcome Determination of Quorum Reading of Notice of Meeting Reading of Minutes of Previous Member Meeting Officer, Financial & Committee Report Naming of the Election Board Election of three (3) Directors: District 1 (Dodge, Dunn Center, Halliday, Manning) - Janet Wanek District 6 (Hettinger, Regent) - Paula Anderson District 7 (Mott, Richardton) - Duane Zent Unfinished Business: - Announce & Introduce Newly Elected Directors Adjournment

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Many Door Prizes will be given away!

Board of Directors

Brenda Volesky

Jan Stebbins

Bill Schaller

Paula Anderson

Duane Zent

1. Call to Order: The President, or in the absence of the President, the Vice President, shall act as chairman of the annual meeting or of any special meeting of members.

2. Points of Order: The chairman shall preserve order and, consulting with legal counsel, decide all questions of procedure and order. Questions of procedure and order not governed by statute, the Cooperative’s Articles of Incorporation nor by its Bylaws shall be decided by the chairman, subject to a motion appealing the chairman’s decision.

3. Who Recognized: When two or more members rise to speak, the chairman shall designate the order of speaking.

4. Identification: Every member recognized to speak, shall first identify himself or herself.

5. Rules As To Speaking: No member shall speak more than twice on the same subject without consent of the majority of the members present, nor more than once until every member choosing to speak on the subject pending shall have spoken. No member shall occupy the floor more than five minutes the first time, and three minutes the second time, without the consent of a majority of the members present.

6. Non-Members Right to Speak: When all members wishing to speak on the pending subject shall have spoken, or at any time by consent of a majority of the members present, any non-members may be allowed to speak subject to the same rules governing the members.

7. Program Schedule: The order of business set forth in the Cooperative’s Bylaws and reprinted in the meeting notice shall be the official meeting agenda. Appropriate motions addressing subjects not specifically covered by the agenda shall be made only under the categories

Scott Bachmeier

Janet Wanek

of “unfinished business” or “new business” as may be appropriate.

8. Motion To Be Stated And Seconded Before Consideration: No motion shall be received for consideration unless the same shall be stated by a member and seconded by another member.

9. Motion Under Consideration: After a motion has been stated and seconded no other motion shall be received except a motion to adjourn, lay on the table, withdraw, or amend, until after a vote on the motion is taken or the motion is withdrawn.

10. Motion May Be Withdrawn: If a motion has been stated and seconded, it may be withdrawn at any time before amendment by the member who made the motion, and with the consent of a majority of the members present.

11. Motion To Adjourn: A motion to adjourn shall be in order, except when a delegate is addressing the chair, or vote is being taken.

12. How A Motion Is Passed: Except as otherwise stated in these rules and except as governed by statute, the Cooperative’s Articles of Incorporation or by its Bylaws, all motions contemplated by these rules shall require a majority vote of the members present.

13. Motion To Suspend The Rules: These rules shall be subject to a motion to suspend the rules, if such motion does not affect rules established by statute, the Cooperative’s Articles of Incorporation or by its Bylaws. A motion to suspend these rules must be adopted by a vote of 2/3rds of the members present.

14. Scope Of These Rules: These rules are intended to govern member meeting procedure. There shall be no other meeting rules except these rules.

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Bryan Personne

General Manager/CEO

Bill Schaller President

Board President and Manager’s Report Welcome to the 63rd Annual Meeting of Consolidated.

2023 was a busy year for your cooperative as we continued our work to enhance and improve the services we provide to you. Early in the year we completed our network ring upgrade to 200G from the existing 10G capacity. The ring is the mainline fiber transport that connects all of the communities we serve. It is the backbone upon which all of our services ride back to our offices in Dickinson and then out to the world. The need for this upgrade was driven by increased Internet usage by our members and it ensures that Consolidated has the bandwidth available to meet your needs in the future.

We also enhanced our cable television (CATV) service product by making it available as a streaming service. It is now possible for our members to have CATV service without the need for traditional set top boxes which helps to reduce our operating costs.

While this may not appeal to all, many members already have streaming devices and now they can simply add our “App” to enjoy our CATV service through that device without the need for a set top box.

2023 was also our kick off year for expanding fiber to the home in rural Belfield. Work began south of the interstate in August and we were able to place 105 miles of fiber and 72 drops before freeze up.

Construction will resume in the South half of the Belfield exchange in early Spring this year and will begin in the North half simultaneously with multiple crews running to keep the project moving forward.

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As explained last year, there are many people in this exchange that do not have access to broadband Internet or even reliable telephone service. This project offers Consolidated an opportunity to expand its customer base and bring much needed services to an area adjacent to our existing service area. Having a larger customer base helps us keep rates affordable for all by sharing operational costs. This project is win-win. It’s good for Consolidated’s existing members and good for our family, friends and neighbors in the Belfield exchange that don’t have access to these services today.

Consolidated continues to be in sound financial condition with 2023 combined operating revenues of $47,714,338 and combined expenses of $42,400,472 for a net margin of $4,946,711 for the year. Capital credit disbursements are evaluated annually by the Board of Directors. In addition to regular capital credit disbursements for 75 year olds and estates, there will be a modest general retirement and retirement of refunded federal excise taxes.

Family, friends and neighbors serving family, friends and neighbors. This is why we were formed 63 years ago and it is why we still exist today. We are grateful for the dedication and service of all the employees of Consolidated. We would also like to thank you as members for your continued loyalty and support. Your cooperative will continue to strive to provide you the most innovative services that are available in today’s digital world. Consolidated’s future looks bright and we look forward to serving you.

Director Candidates Janet Wanek, lives in Halliday, ND, has worked as a registered dietitian for the past 16 years in various career fields, including Dunn County NDSU Extension but currently works for the Southwestern District Health Unit. Growing up in Southwest North Dakota, Janet knows the importance of giving back to the community you live in, so she also serves as an EMT with the Halliday Rural Fire and Ambulance and has served on various boards including as a City Commissioner in Halliday for 8 years.

Janet and her husband, Jarret, who is a diesel mechanic for North American Coal Freedom Mine in Beulah, bought one of the oldest homes in Halliday in 2013 and continue to remodel and make it their own as they balance life with their two kids. Janet tries to make time to enjoy hunting, spending time with her family, or golfing from time to time.

Janet Wanek

District 1 Dodge, Dunn Center, Halliday and Manning Exchanges

Paula Anderson District 6 Hettinger and Regent Exchanges

Duane Zent

District 7 Mott and Richardton Exchanges

Paula Anderson has served on the board of Consolidated since 2009. She has been both board secretary/treasurer and vice president. Paula grew up in Mott, married a farmer from Regent and raised 4 children. Larry and Paula’s oldest son, Denver and wife, MaryBeth farm together with them south of Regent. Paula has worked and held several volunteer positions in the Mott/Regent area. Having attended Dickinson State College and taken accounting classes, she has enjoyed bookkeeping and is passionate about rural development. She completed the Director Core Curriculum with NTCA (National Telecommunications Cooperative Association). She is a graduate of RLND (Rural Leadership North Dakota) program. Paula currently serves on the Hettinger County Historical Society, the R E & T (Rural Electric and Telco) Committee, the RDFC (Rural Development Finance Corporation) board and the Dakotas America board.

As a board member, she has used her experience and passion in seeing Rural Development happen in Southwestern North Dakota. Paula enjoys seeing Consolidated continue to thrive, offering fiber optics for their customers, both private and business. Our commitment to a state-of-the-art network will provide excellent customer experience and service for years to come.

I grew up on a farm south of Richardton, North Dakota where my parents, Joseph & Katherine Zent, raised me and my five siblings. I attended Richardton High School and graduated in 1976. After graduating high school, I chose to pursue a degree in Diesel Mechanics from Wahpeton State School of Science and graduated in 1978. In 1979, I married Karen Welsch. We made the decision to reside on my family’s farm to help my mom continue farming and run the dairy operation, as my dad passed away in the fall of 1975. My brother, Richard, and his family also moved back to the farm, and we continue to run a similar operation today.

Karen and I have four children and eight grandchildren. Our youngest son, Garrett, and Richard’s son, Justin, farm with Richard and me. Our farm and ranch operation consists of growing corn, wheat, sunflowers, and canola. We also run a cow/calf operation.

I am currently a member of St. Stephens Knights of Columbus and the Richardton Lions Club. I serve as Vice President of the Richardton/Taylor School Board and have served on this board for 20 plus years.

I am also a member of the St. Stephens Church Board and Richardton Community Development Board.

My involvement in the community is something I take great pride in. Having the opportunity to help make a positive impact in our community, school, and church is very important to me.

My faith and family have always and will always be the most important part of my life. Time spent with Karen, our children, and grandchildren is something I cherish beyond words. My hobbies consist of fishing, hunting, and snowmobiling, which are activities I now enjoy sharing with my family.

I have greatly appreciated the opportunity to serve on the Consolidated Board for the last six years and am looking forward to serving another term.

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The 2023 Prestigious Eagle Award Winner

Carl Ebert

CEO/General Manager, Bryan Personne, presented the Eagle Award to Carl Ebert at the Employee Appreciation Social on December 8, 2023. “Picking one employee each year for the Eagle Award is always challenging as we have so many exceptional employees that work for Consolidated,” Personne says.

Carl has been employed with Consolidated since 2007 and is a Combination Tech in our Hettinger exchange. He serves on the Hettinger City Council and is the friendly, trusted face of Consolidated in Hettinger, Reeder, and beyond. Carl is always willing to help, has a smile on his face, and pride in his work! He is at the office early each morning to design his day around customer needs.

On behalf of the Consolidated management team and board of directors, thank you Carl for a job well done!

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Financials The Members, Consolidated Telcom and Subsidiary - Dickinson, North Dakota Eide Bailly, LLP audited, in accordance with generally accepted auditing standards, the consolidated balance sheets of Consolidated Telcom and Subsidiary as of December 31, 2022 and 2023, and the related consolidated statements of patronage capital and cash flows (not presented herein) for the years then ended. Eide Bailly, LLP issued their opinion on our consolidated financial statements that based on their audit, the financial statements present fairly, in all material respects, the financial position of Consolidated Telcom and Subsidiary as of December 31, 2022 and 2023, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The information set forth in the accompanying condensed consolidated financial statements was derived from the audited financial statements. Complete audited financial statements and their opinion are on file at the Cooperatives office.

Sarah Haich Chief Financial Officer – Consolidated Telcom

Balance Sheet Cash and cash equivalents Investments in held-to-maturity debt securities Investments in securities Telecommunications accounts receivable, net of allowance Other accounts receivable, net of allowance Interest receivable Note receivable Materials and supplies Prepayments

2023 $13,585,752 2,767,986 6,136,533 443,380 1,707,700 48,731 111,000 1,674,307 1,119,006

2022 $15,750,642 2,652,339 5,600,615 473,915 1,744,683 21,774 111,000 1,703,071 1,344,381

Total current assets

27,594,395

29,402,420

Investments and Noncurrent Assets Investments in held-to-maturity debt securities Other investments Note receivable Note receivable - related party Deferred income taxes Intangible assets, net of accumulated amortization

120,639 7,623,103 509,370 445,099 18,923

878,674 7,269,809 620,482 465,499 41,322

Total investments and noncurrent assets

8,742,472

9,307,591

Less accumulated depreciation and amortization

209,655,853 23,813,396 7,295,824 240,765,073 139,693,841

202,626,624 23,708,050 4,196,354 230,531,028 128,500,742

Net telecommunications and other plant

101,071,232

102,030,286

$137,408,099

$140,740,297

Current Assets

Telecommunications and Other Plant Telecommunications plant Other plant Under construction Total investment in plant

25,338

31,805

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Financials Liabilities & Equities Current Liabilities Current maturities of long-term debt Accounts payable Advance billings and customer deposits Accrued taxes - other Accrued employee benefits Other current liabilities

2023 $ 7,499,802 2,818,266 472,508 82,981 152,323 803,550

2022 $ 7,279,095 2,837,689 307,703 115,871 181,057 781,764

Total current liabilities

11,829,430

11,503,179

Long-Term Debt, Less Current Maturities

37,372,422

44,871,860

Other Liabilities Deferred income taxes Accrued employee benefits Deferred revenue - ARRA Other non-current liabilities

5,673,872 2,127,075 1,737,876 19,848

5,250,502 2,079,858 2,000,983 22,211

Total other liabilities

9,558,671

9,353,554

60,463,423 18,184,153 78,647,576

58,040,663 16,971,041 75,011,704

$137,408,099

$140,740,297

Equities Patronage capital Other equities Total equities

Patronage Capital & Other Equities

Patronage Capital

Other Equities

Total

$ 56,101,460

$ 14,561,253

$ 70,662,713

2022 net margin

5,649,372

-

5,649,372

Retirement of capital credits

(1,505,628)

163,132

(1,342,496)

Transfer unallocated prior year margins

(2,246,656)

2,246,656

-

42,115

-

42,115

58,040,663

16,971,041

75,011,704

2023 net margin

4,946,711

-

4,946,711

Retirement of capital credits

(1,589,924)

249,702

(1,340,222)

(963,410)

963,410

-

29,383

-

29,383

$ 60,463,423

$ 18,184,153

$ 78,647,576

Balance, January 1, 2022

Federal excise tax refund Balance, December 31, 2022

Transfer unallocated prior year margins Federal excise tax refund Balance, December 31, 2023

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Financials Consolidated Statement of Operations Operating Revenues

Local network access Network access services Long distance network services Cable television services Internet services Retail equipment sales Leased equipment revenue Miscellaneous Uncollectibles

2023 $ 3,055,021 19,229,093 634,085 7,185,767 10,405,588 2,572,187 590,410 4,095,691 (53,504)

2022 $ 3,445,671 20,409,075 689,111 7,332,560 9,970,090 2,485,041 686,478 3,928,913 (42,256)

Total operating revenues

47,714,338

48,904,683

Operating Expenses Plant specific operations Plant nonspecific operations Maintenance Depreciation and amortization Customer operations Corporate operations Cable television programming Cost of equipment sales Operating taxes, other

6,881,826 4,210,027 1,191,652 12,965,525 5,516,063 4,482,849 6,365,715 636,713 150,102

6,360,707 4,430,664 1,348,638 12,405,635 5,123,882 4,192,080 6,387,625 836,963 155,926

Total operating expenses

42,400,472

41,242,120

5,313,866

7,662,563

Investment income (loss) Loss on sale of equipment Equity earnings in affiliated company

Other nonregulated income, net of expenses

1,094,036 574,218 (177,698)

(511,127) (6,220) 622,483 (143,721)

Net nonoperating margin (loss)

1,490,556

(38,585)

Net Margin Before Interest Expense & Income Taxes

6,804,422

7,623,978

Interest Expense

1,411,942

1,631,770

Net Margin Before Income Taxes

5,392,480

5,992,208

445,769

342,836

$4,946,711

$5,649,372

Net Operating Margin Nonoperating Margin (Loss)

Provision for Income Taxes Net Margin

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Operating Revenues $47,714,338

Network Access 19,229,093 40.30% Internet 10,405,588 21.81% Television Service 7,185,767 15.06%

Network Access 19,229,093 40.30%

Miscellaneous 4,042,187 8.47% Local Network 3,055,021 6.40% Retail Sales 2,572,187 5.39% Long Distance 634,085 1.33% Lease Revenue 590,410 1.24%

Depreciation and Amortization 12,965,525 30.58%

Operating Expenses $42,400,472

Cost of CATV Programming 6,365,715 15.01% Plant Specific 6,881,826 16.23% Customer Operations 5,516,063 13.01% Plant Non-Specific 4,210,027 9.93% Corporate Operations 4,482,849 10.57% Maintenance 1,191,652 2.81% Cost of Retail Equipment Sales 636,713 1.50% Operating Taxes 150,102 0.35% 9

Depreciation & Amortization 12,965,525 30.58%

PHONE

Customer Counts

15,000 7,500

INTERNET

TV

17,165

15,796 13,232

10,671

9,153

7,484

0

2019

2020

2021

2022

2023

Members Equity

$ 64,887,304

$ 70,662,713

$ 75,011,704

$ 75,647,576

2019

2020

2021

2022

2023

$ 141,610,965

$ 140,740,297

$ 137,408,099

$0

$ 146,671,243

$20,000,000

$ 61,733,482

$40,000,000

$ 150,901,991

$60,000,000

2019

2020

2021

2022

2023

Total Assets $150,000,000 $100,000,000 $50,000,000 $0

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Minutes of Annual Meeting of Members CONSOLIDATED TELCOM MINUTES OF ANNUAL MEETING OF MEMBERS JUNE 21, 2023 Call to Order: The Annual Meeting of Members of Consolidated Telcom was held at was held at Trinity High School, at Dickinson, North Dakota, on June 21, 2023, commencing at 6:00 p.m., pursuant to call and notice.

The Annual meeting was called to order by the President, Bill Schaller, who presided. The Secretary of the Cooperative, Paula Anderson, acted as Secretary and kept the minutes of the meeting. Also attending was the Attorney for the Cooperative, Haylee Culver, who took notes for the purpose of assisting the Secretary in preparing the minutes.

Financial Reports: Sarah Haich, Director of Finance and Accounting, presented the Financial Reports. Total assets were down from $141,610,965 to $140,740,297 and equities were up from $70,622,713 to $75,011,704. The 2022 net margin was $5,649,372. She asked for any questions, and there were none. A motion was duly made, seconded, and carried to accept the Financial Reports.

Minutes: The President then called for the reading of the Minutes of the Annual Meeting of Members held on June 22, 2022, which had been printed along with the Notice. Thereafter, a motion was duly made and seconded to dispense with the reading of the Minutes of the Annual Meeting of Members and to approve the Minutes. The motion carried, and the Minutes of the 2022 Annual Meeting of Members were approved.

Elections: The President announced that the next order of business would be the election of Directors in accordance with the Notice of Meeting. Nominating Committee Chairperson Wayne Mrnak reported the results of the Nominating Committee meeting to the members. The Committee nominations were Brenda Volesky, District 3, and Scott Bachmeier, District 4.

President Schaller reported that the Nominating Committee nominated Brenda Volesky to fill the vacancy occurring on the Board of Directors from District No. 3. There were no nominations submitted by petition. Upon motion duly made, seconded and unanimously carried, it was resolved that nominations for Director for District No. 3 be declared closed, and that the Secretary be directed to cast a unanimous ballot for Brenda Volesky.

President Schaller reported that the Nominating Committee nominated Scott Bachmeier to fill the vacancy occurring on the Board of Directors from District No. 4. There were no nominations submitted by petition. Upon motion duly made, seconded and unanimously carried, it was resolved that nominations for Director for District No. 4 be declared closed, and that the Secretary be directed to cast a unanimous ballot for Scott Bachmeier.

Approval of Reports: The President announced that the next order of business would be the reports,

Introduction of Guests: General Manager Bryan Personne introduced guests in attendance: Dustin

Introduction: President Schaller first introduced all of the Directors. He next introduced the General Manager of Consolidated Telcom, Bryan Personne, and Attorney Haylee Culver.

Quorum: The President next called upon the Secretary concerning registration and the presence of a quorum, to which the Secretary reported that a quorum was present to do business, there being 113 members registered at the commencement of the meeting.

Notice: The President next called for the reading of the Notice of Annual Meeting of members. The Secretary read the Notice of Meeting.

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and referred the members to the written report contained in the Meeting Booklet and allowed time for questions or comments on the report. There being no questions, on motion duly made, seconded, and unanimously carried, the President’s and General Manager’s Joint Report was accepted.

Maier, ReadiTech Engineering and Carissa Swenson, BAND director.

General Manager’s Remarks: General Manager Bryan Personne welcomed special guests. Mr. Personne thanked the staff of Consolidated for their continued hard work and dedication to the Cooperative.

He also recognized the Eagle Award Winner for 2022, Amanda Kessler.

Mr. Personne stated that the financial position of the company is strong. There is good cash flow, and Consolidated is able to take on projects without debt.

Mr. Personne commented on the national usage trends and noted that Consolidated is in line with those trends. NetVoice has helped mitigate usage issues, and provides a lower cost, quality service to customers.

Last year there were 2700 users of NetVoice, and as of the meeting date there were 2937 users. Mr. Personne stated that there are no plans to move away from offering services like telephone and cable. There is an increase in the number of customers taking Broadband services.

Mr. Personne reported that approximately 18 months ago Consolidated started a project to upgrade the

network ring from 20 gig capacity to 200 gig. This will have a significant impact on the network ability to handle traffic. The upgrade is almost complete, with Amidon and Rhame being the last communities to update.

Mr. Personne reported on the Belfield project which will serve the entire exchange of Belfield. Consolidated received a grant which covers roughly 75% of the project costs.

Mr. Personne recognized the local scholarship winners: Emily Ash, Taj Blauer, Reese Campbell, Tanner DeFoe, Gracie Doe, Max Lefor, McKaylee Kalstrom, Tacy Palahniuk, Cole Manolovits, and Luke Heiser.

The President called for any unfinished, new, or other business to come before the meeting. There being no further unfinished, new, or other business, upon motion duly made, seconded, and carried, the meeting was adjourned at 6:39 p.m. ____________________________ Paula Anderson, Secretary Attest: ____________________________ Bill Schaller, President

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Scholarships 2024 Consolidated Scholarship Winners

Molly Robb

Jazlyn Ottmar

South Heart HS

Mott/Regent HS

Isabel Kirsch

Gus

Bohmbach

Dickinson HS

Killdeer HS

Kaeden Krieg

Dickinson HS

Sadie

Stevenson Dickinson HS

Katherine Schneider

Trinity HS

Nathan Dix

Bowman Cnty HS

Anna

Nasset

Harper Skaare

Mott/Regent HS

Trinity HS

2024 Dual Credit Scholarship Winners

Reagen Coyle

Bowman Cnty HS

Adyson Karsky

Trinity HS

OLivia DeFoe

Hettinger HS

Harper Skaare

Trinity HS

Consolidated is proud to award a $1000.00 scholarship to ten graduating seniors whose parents or guardians are Consolidated customers. Applicants were judged primarily on the written essay topic, “How has technology contributed to your community?”

Consolidated also added a new dual credit scholarship this year for students taking college credit courses online or in person where there is cost to them. We were honored to award four - $250 scholarships to students in our service area.

We are proud to offer these programs and show our commitment to the youth in our service area.

Congratulations to this year’s Consolidated scholarship winners, and the entire class of 2024!

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Consolidated’s 2024 Summer Series Details at consolidatednd.com/events

Wednesday, July 31st – Richardton HS Football Field 6:00 pm ... Concessions Dusk ... Movie begins, Minions The Rise of Gru Wednesday, August 7th – Halliday City Park 6:00 pm ... Concessions Dusk ... Movie begins, Super Mario Bros Movie Wednesday, August 14th – Gladstone North Park 6:00 pm ... Concessions Dusk ... Movie begins, Paw Patrol: The Mighty Movie

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