20010213Application.pdf

GIVENS PURSLEY LLP ECElVED 1
LAw oFFicEs David B.Lombardi Judson 8.Montgomery
277 North 6th Street.Suite 200 Christopher J.Beeson D.David Lorello,Jr.Angela K.Nelson
PO Box 2720,Boise,Idaho 83701 Michael C Creamer Kevin T Maloney W.Hugh O'Riordan
Thomas E Dvorak Kimberly D.Maloney Kenneth L Pursley
TELEPHONE:[phone]ÛÛ o te hn M.Marshall Virginia L Stukel
FACslMILE:208 388-1300 Jacqueline M.Fearnside Kenneth R.McClure Conley Ward
Jeffrey C.Fereday Kelly Greene McConnell Stephanie C.Westermeier
Richard W Jankowski Cynthia A.Melillo Robert B.White
Amanda L.Keating Christopher H.Meyer
Karl T Klein Kendall L.Miller Raymond D.Givens
Debora K.Kristensen L Edward Miller James A.McClure
Franklin G.Lee Patrick J.Miller or cousse
February 13,2001
NEW CASE
HAND DELIVERY
Commissioners
Idaho Public Utilities Commission
472 W.Washington
PO Box 83720
Boise,ID 83720-0074
RE:Case No.U-1017-23,Order 20127
Request for Authorization to Request Fund Advance and for Modification of
Order 20127
Dear Commissioners:
I am writing on behalf of Cambridge Telephone Company ("Cambridge")concerning the
above-referenced order (copy attached),which was issued by the Commission on November 15,
1985.In that order,the Commission authorized Cambridge to borrow up to $931,000from the
Rural Electrification Administration (now Rural Utilities Service "RUS")at a rate of 5%(the
"RUS Loan").
The RUS Loan funds were used to finance construction of telephone and related facilities
in the Cuprum,Indian Valley and Lowman exchanges.A condition of the approval was that
"none of the proceeds of this loan may be used to construct or improve facilities without
obtaining prior approval of [the]Commission."Order at 4.To date,there remains
approximately $653,000 of unadvanced funds which Cambridge wishes to draw on now and in
the near future as expenses are incurred for the followingimprovements:(1)replacement of the
microwave system that serves the Lowman area (approximately $225,000);and (2)upgrade
service to Goodrich area via construction of 2 fiber optic systems to replace existing microwave.
Advances would be requested from RUS on an ongoing basis as work orders/invoices are
received by Cambridge,with an immediate advance of approximately $225,000 being requested
for the costs of the Lowman microwave replacement.
February 13,2001
Page 2
Because of the time that has elapsed since Cambridge requested advances under the RUS
Loan,RUS is requiring that Cambridge enter into the attached Basis Date Agreement,which
confirms the repayment schedule for future advances under the RUS Loan.The Basis Date
Agreement does not change any other terms of the RUS Loan.In connection with the Basis Date
Agreement,RUS requires a legal opinion that all necessary approvals have been obtained.
Cambridge,therefore,is requesting that the Commission authorize Cambridge to obtain
further advances under the RUS Loan,and that the condition in the Commission's Order 20127
requiring specific approval of each advance be rescinded.Cambridge also respectfully requests
that the Commission take this action on an expedited basis by minute entry or,if necessary,under
modified procedure.
Thank you in advance for your consideration of this request.Please advise me
immediately if the Commission will require additional information in connection with this
request.
Sincerely,
ichael C.Creamer
MCC:caw
Enclosures
cc:Jean Jewel,Commission Secretary (via hand delivery)
Rick Wiggins (via U.S.Mail)
Terri Carlock (via hand delivery)
S:\CLIENTS\l256\27\IPUC Loan Advance Authorization Request.wpd
Office of the Secretary
Service Date
NOV 15 1985
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION BY )CAMBRIDGE TELEPHONE COMPANY SEEK-)CASE NO.U-lOl7-23INGAPPROVALFORANREALOANTO)EXPAND AND UPGRADE TELEPHONE )ORDER NO.20127SERVICE.............)
On October 24,1985,Cambridge Telephone Company applied
to this Commission for approval to borrow money from the Rural
Electrification Administration (REA3 in the amount of $931,000 at
a 5%annual interest rate.
The application described the purposes to which the pro-
ceeds of the loan would be put as construction of 61 miles of new
line to serve 218 new subscribers on a one-party basis and to
provide related system improvements such as digital switches at
Cuprum,Indian Valley and Lowman;construction of a new central
office in Indian Valley;and payment of engineering fees.The
application further stated:
In seeking this petition for approval of thisloan,Petitioner acknowledges the change in envi-
ronment,circumstances and uncertainty that pre-sently exists in the telephone industry and spe-cifically consents herein to not expend any of
the loan funds herein requested to be approveduntilsuchtimeasthetelephoneindustrystabil-izes and the specific need demands the expendi-
ture of the funds and Petitioner seeks specificapprovalforthespecificprojectfromtheCom-mission in order to ensure the necessity of theexpendituresandtheabilitytoincludesuchexpendituresinpetitioner's rate base for calcu-
lation of revenue requirements.In this regard
the petitioner request[s]the Commission torecognizethatloanapprovalundertheREA fund-ing arrangements has been obtained for the desig-
nated projects herein specified and that once
ORDER NO.20127 -1-
Commission approval is obtained,the documentswillbeexecutedandreturnedtoREA.The fundsdesignatedunderthisloanagreementthereafter
are not required to expended for five yearsallowingpetitionersufficienttimetocarefullyanalyzethechangingtelephonecircumstancesand
seek prior approval for specific projects from
the Commission prior to actual expenditure of any
of the funds thereunder.With this understand-ing,Petitioner seeks only general approval for
the opportunity to solidify the potential ofborrowingthe$931,000 at 5%at any time within
the next five years,subject to specific priorapprovalbytheCommissionfortheexpenditures
then anticipated.
FINDINGS OF FACT
I
Cambridge Telephone Company is a telephone corporation of
the State of Idaho with its principal office at Cambridge,Idaho.
II
Cambridge proposes to borrow up to $931,000 from the
Rural Electrification Administration (REA)at annual interest rate
of 54.
III
Cambridge proposes to use such proceeds of the loan as it
may borrow to improve or expand physical plant or conduct engi-
neering studies,but will not use the borrowed funds for new plant
investment without receipt of the specific approval of the project
by this Commission.
IV
Cambridge has paid the necessary fees.
ORDER NO.20127 -2-
CONCLUSIONS OF LAW
I
Cambridge Telephone Company is a telephone corporation
qualified to do business in the State of Idaho and subject to this
Commission's regulation.
II
Cambridge's application for approval to borrow money from
the Rural Electrification Administration is within this Commis-
sion's jurisdiction by virtue of Idaho Code §61-901 et seq.
III
The proposed incurrence of debt by Cambridge as author-
ized by this Order will be for a lawful purpose in accordance with
and permitted by the provisions of the governing statutes under
which the application is made.Incurrence of the debt and use of
those funds as described in Cambridge's application is consistent
with the public interest and necessary or appropriate for or con-
sistent with proper performance by Cambridge of its service as a
public utility.
O R D E R
IT IS THEREFORE ORDERED that Cambridge Telephone Company
be,and the same hereby is,authorized to borrow money from the
Rural Electrification Administration (REA)in the amount of up to
$931,000 at an annual interest rate of 54.
ORDER NO.20127 -3-
IT IS FURTHER ORDERED that none of the proceeds of this
loan may be used to construct or improve telephone plant without
obtaining the prior approval of this Commission.
IT IS FURTHER ORDERED that Cambridge must file,as soon
as practicable,copies of the final loan transaction entered into
between it and the Rural Electrification Administration.
IT IS FURTHER ORDERED that the foregoing authorization is
without prejudice to the regulatory authority of this Commission
with respect to rates,utility capital structure,service,
accounts,evaluation,estimates for determination of cost or any
other matter that may come before this Commission pursuant to its
jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no
provisions of Title 61,Chapter 9,Idaho Code,or any other act
or deed done or performed in connection therewith shall be con-
strued to obligate the State of Idaho to pay or guarantee in any
manner whatsoever any security authorized,issued,assumed,or
guaranteed under the provisions of Title 61,Chapter 9,Idaho
Code.
ORDER NO.20127 -4-
DONE by Order of the Idaho Public Utilities Commission at
Boise,Idaho,this day of November,1985.
/PRESIDENT
COMMISSIONER
é COMM S IONER
ATTEST:
ASSISTANT SECRETARY
mg/vs/354L
ORDER NO.20127 -5-
Basis Date Agreement I 1/94RUSTelephoneLoan
Fixed Interest Rate
RUS Project Designation:
Idaho 512 -F8 Cambridge
AGREEMENT
between
UNITED STATES OF AMERICA
and
Cambridge Telephone Company
Dated as of August30,2000
UNITED STATES DEPARTMENT OF AGRICULTURE
RURAL UTILITŒS SERVICE
No.
Basis Date Agreement I1/94
RUS Telephone Loan
Fixed Interest Rate
AGREEMENT,made as of August30,2000,pursuant to the Rural Electrification Act of
1936,as amended (7 U.S.C.901 et sea.),(hereinaftercalled the "Act"),between the UNITED
STATES OF AMERICA (hereinafter called the "Government"),acting through the
Administrator of the Rural Utilities Service,successor to the Administrator of the Rural
Electrification Administration (hereinaftercalled the "Administrator"),and Cambridge
TelephoneCompany,(hereinafter called the "Corporation"),a corporation existing under the
laws of the State of Idaho.
WHEREAS,pursuant to Public Law No.103-354,the Rural Utilities Service (hereinafter
sometimes called "RUS")is the successor of the Rural Electrification Administration (hereinafer
sometimes called "REA")and the Administrator of the Rural Utilities Service is the successor of
the Administratorof the Rural Electrification Administration and,for purposes of the loan
contract,as amended,and the note,the terms "REA"and "Administrator"shall be deemed to
mean respectively "RUS""Administrator of the RUS";
WHEREAS,the Corporation and the Government are parties to a telephone loan contract,
as amended (hereinaftercalled the "Loan Contract"),further described in the Note defined in the
next recital;and
WHEREAS,the Corporationto evidence a loan made by the Government to the
Corporation pursuant to the Loan Contract,executed and delivered the followingdescribed
mortgage note or bond (hereinafter called the "Note")payable to the order of the Government:
DATE PRINCIPAL AMOUNT FINAL MATURITY DATE
November 18,1985 $931,000 November 18,2020
and
WHEREAS,a portion (hereinafter called the "Principal Balance")of the principal
amount of the Note has not been advanced to the Corporation as of the date of this Agreement;
and
WHEREAS,the Govemment and the Corporationpropose that the Government advance
to the Corporation from time to time in accordance with the Act,and the Loan Contract,one or
more amounts totaling not more than the Principal Balance (each such advance being herein
referred to as an "Advance");and
-l-
Basis Date Agreement i 1794
RUS Telephone Loan
Fixed Interest Rate
NOW,THEREFORE,for and in consideration of the mutual agreementsherein
contained,the Government and the Corporation agree as follows:
SECTION l.Each Advance shall be repaid in full with interest hereon,at the rate of five
(5)percent per year,in installments as hereinafter provided,no later than the Final Maturity
Date.
SECTION 2.The Corporation shall make a payment (a "MonthlyPayment")on each
Advance on the last day of each month (hereinafter called the "MonthlyPayment Date")
beginning with the last day of the first full month followingthe date of the Advance.Every
MonthlyPayment shall be (a)substantially equal to every other MonthlyPayment and (b)in an
amount that will pay all principal and interest of such Advance no later than the last Monthly
Payment Date before the Final Maturity Date.The first MonthlyPayment Date shall be
increased by the amount of interest accruing between the date of the Advance and the first day of
the month followingthe month of the Advance.Each MonthlyPayment shall be applied first to
the payment of interest on the Principal Balance and then on account of the Principal Balance.
On the Final MaturityDate any portion of the Advanceremaining unpaid and all interest thereon
shall become due and payable.
SECTION 3.This Agreement shall not be effective unless and until the Corporationhas
obtained all authorizations required by law in order to permit the Corporation to execute this
Agreement.
SECTION 4.All of the terms and conditions of the Note,of any mortgage,deed of trust
or other instrument securing the Note,and of any other agreement to which the Government and
the Corporation are parties,shall stand and remain unchanged and in full force and effect except
only as specifically varied or amended by this Agreement.
SECTION 5.The invalidity of any one or more phrases,clauses,sentences,paragraphs,
or provisions of this Agreement shall not affect any remaining portions thereof.
SECTION 6.This Agreement may be simultaneously executed and delivered in two or
more counterparts,each of which so executed and delivered shall be deemed to be an original,
and all shall constitute but one and the same instrument.
Basis Date Agreement 11/94
RUS TelephoneLoan
Fixed Interest Rate
IN WITNESS WHEREOF the Government has caused this Agreement to be duly
executed and the Corporation has caused this Agreementto be signed in its corporate name and
its corporate seal to be hereunto affixed and attested by its officers thereunto duly authorized,all
as of the day and year first written above.
UNITED STATES OF AMERICA
by
Assistant Administrator
Telecommunications Program
Rural Utilities Service
Executed by the Government
in the presence of:
Witnesses Cambridge Telephone Company
by
(Seal)President
Attest:
Secretary
Executed by the Corporation
in the presence of:
Witnesses