20030417Application.pdf

CONLEY WARD
GIVENS PURSLEY LLP
277 North 6th Street, Suite 200
P. O. Box 2720
Boise, ID 83701
[phone]
[phone] (fax)
Idaho State Bar # 1683
RECEIVED 0FiLED
2033 APR '6 PM~:
iD!\HJ Prini ii'.UTILITIES co~1HISSION
Attorneys for Columbine Telephone Company, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of Columbine
Telephone Company, Inc. d/b/a Teton Telecom
for Authority to Borrow from the Rural
Telephone Finance Cooperative ("RTFC") in
an Amount Not to Exceed $8 500 000
Case No. ('lff.~r; IJ j ~tJ
APPLICATION OF COLUMBINE
TELEPHONE COMPANY
Columbine Telephone Company, Inc. d/b/a Teton Telecom ("Columbine" or
Applicant"), by and through its attorneys Givens Pursley LLP, makes this Application
pursuant to Idaho Code 9 61-901 for authority to execute a Loan Agreement in an amount
not to exceed $8 400 000 with the Rural Telephone Finance Cooperative ("RTFC"). In
support of its Application, Columbine states as follows:
1. Applicant is a certificated telephone corporation organized under the laws of
the State of Colorado providing telecommunication services including local exchange
service within the states of Idaho and Wyoming.
2. All notices and communications with regard to this Application should be
served upon:
Conley Ward
Givens Pursley LLP
277 North 6th Street, Suite 200
P. O. Box 2720
Boise, ID 83701
APPLICATION OF COLUMBINE TELEPHONE COMPANY-
Allen Hoopes
Columbine Telephone Company, Inc.
P. O. Box 226
Freedom, Wyoming 83120
[phone]
3. The proposed R TFC senior credit facility constitutes a crucial element in the
restructuring ofthe ownership of Silver Star Telephone Company ("Silver Star
Columbine s sister corporation. At present, 100% of Silver Star s stock is held by
Hoopes Telephone Management, LP ("HTM"), which is in turn owned by Mel Hoopes.
The proceeds from the proposed RTFC loan would be deposited in a Wells Fargo
Investment Management Account ("IMA") designed to partially fund life insurance
premiums on Me! Hoopes' life. The underlying life insurance policies are issued in favor
of Silver Star in order to fund a buy-sell agreement that will enable Silver Star to
purchase Silver Star s stock from HTM on Mel Hoopes death. The Silver Star stock will
then be distributed to Silver Star s current management and to other employees through
an Employee Stock Ownership Plan ("ESOP"
4. The actual amount of the funds to be deposited in the Wells Fargo IMA is
500 000. However, the total loan amount will be approximately $8 350 000, with the
excess used to fund RTFC's patronage capital requirement. The loan will initially carry
an interest rate equivalent to RTFC's variable rate at the time of closing (currently 5.25%
per annum) with a term of 15 years.
5. The proposed transaction is consistent with the public interest. Silver Star and
Columbine are closely held family corporations that, in the absence of the buy-sell
agreement described above, would be financially disrupted by the passing away of their
principal owner. The buy-sell agreement is a crucial element of an overall estate plan
that will assure a smooth transition in the ownership of Silver Star and Columbine
without jeopardizing the companies' financial health.
APPLICATION OF COLUMBINE TELEPHONE COMPANY -
6. A copy of the Applicant's most recent Annual Report showing the authorized
and outstanding classes of Applicant's securities is on file with the Commission, and the
Applicant respectfully requests the Commission take official notice thereof. A certified
copy of Applicant's Board of Directors ' resolution authorizing the proposed transaction is
attached hereto as Exhibit A.
7. A Proposed Order granting this Application is attached hereto as Exhibit B.
8. Notice of this Application will be published within seven (7) days in The Idaho
Statesman (Boise). A copy of this Notice is attached as Exhibit C.
9. Applicant submits that the public interest does not require a hearing on this
matter and it requests that the Commission process this Application and determine this
matter by Modified Procedure, pursuant to Rule 23 of the Commission s Rules of Practice
and Procedure. In the event the Commission determines that formal proceedings on this
Application are necessary, Applicant stands ready for immediate hearing.
10. 90.5 percent of Applicant's total book value is located in Idaho. Applicant has
therefore attached its filing fee, calculated pursuant to Section 61-905 , Idaho Code, in the
amount of$972.87.
WHEREFORE, Applicant respectfully requests an Order of this Commission:
1. Granting the foregoing Application of Columbine Telephone Company, Inc. to
execute and deliver to the Rural Telephone Cooperative a Loan Agreement in an amount
not to exceed $8 400 000;
Granting such other relief as the Commission deems just and reasonable in
this matter.
DATED this 16th day of April 2003
Con y Ward
GIVENS PUR LEY LLP
Attorneys for Applicant
APPLICATION OF COLUMBINE TELEPHONE COMPANY - 3
ulQ
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 16th day of April , 2003 I caused a true and
correct copy of the foregoing to be served upon:
Ms. Jean Jewell , Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, ID 83702
by hand delivering the same to the above-named at the last known addresses) as set forth
above.
-\~
:n. J~.'d--,c...
APPLICATION OF COLUMBINE TELEPHONE COMPANY - 4
CERTIFIED COpy OF MINUTES AUTHORIZING LOAN
APPLICATION AND AGREEMENT
, Bonnie E. Hoopes, do hereby certify that: I am the Secretary of Columbine
Telephone Company, Inc (the "Member
The following is a true and correct copy of excerpts from the minutes of a meeting
of the Board of Directors of the Member held , 2003 , as they appear in
the Minutes Book of the Member, said resolutions duly adopted thereat; the meeting was
duly and regularly called in accordance with the bylaws of the Member; the Loan
Application and Agreement (the "Agreement") to be submitted to Rural Telephone
Finance Cooperative ("RTFC") was authorized by the Board of Directors and said
resolutions have not been modified or rescinded:
The Board of Directors of Columbine Telephone Company having been advised
by its counsel that the Member is legally constituted, is in compliance with all applicable
statutory, regulatory and other legal requirements and is in good standing, and that an
application to be made to RTFC for a loan and its approval by RTFC, together with the
execution of an agreement as authorized by the Board, will constitute valid and binding
obligations of the Member, enforceable by and against the Member, in accordance with
the terms of these documents;
RESOLVED, that the Member borrow from the Rural Telephone Finance
Cooperative ("RTFC") an amount which shall not exceed in the aggregate
400 000 for a term as set forth in the Agreement, and at such interest rate or
rates as shall be prescribed in the Agreement executed by and on behalf of the
Member and delivered to RTFC, the proceeds of such loan to be used for purposes
set forth in the Agreement and consistently with the requirements of existing
agreements and security documents of the Member; and
RESOLVED, that the President of the Member be and is hereby authorized to
execute, on behalf of the Member, an agreement substantially in the form of the
Agreement presented to this meeting, to revise and modify said Agreement within
the amount so authorized; and to apply such further documents as may be need to
comply with RTFC's requirements; and
RESOLVED, that the President is authorized on behalf of the Member to request
and receive funds pursuant to the Agreement; and
RESOLVED, that the appropriate officers are authorized to take all actions they
deem advisable to carry out the purpose of these resolutions.
COLUMBINE TELEPHONE COMPANY
CASE No. COL-O3-
EXHIBIT A
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of
the Member, this day of ,2003.
Secretary
COLUMBINE TELEPHONE COMPANY
CASE No. COL-O3-
EXHIBIT A
Conley Ward, Idaho State Bar # 1683
GIVENS PURSLEY LLP
277 North 6th Street, Suite 200
P. O. Box 2720
Boise , ID 83701
[phone]
[phone] (fax)
Attorneys for Columbine Telephone Company, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of Columbine
Telephone Company, Inc. d/b/a Teton Telecom
for Authority to Borrow from the Rural
Telephone Finance Cooperative ("RTFC") in
an Amount Not to Exceed $8 500 000
Case No.
PROPOSED ORDER
, April 16, 2003 , Columbine Telephone Company, Inc. (hereinafter Applicant),
filed an Application for Loan Approval with this Commission requesting authority to
execute a loan contract amendment and supplemental mortgage in the amount of not
more than $8 400 000 with the Rural Telephone Finance Cooperative ("RTFC"
In support of said Application, Applicant alleges that the proceeds of the R TFC
loan will be used to restructure the ownership of Silver Star Telephone Company,
Columbine s sister corporation.
After examining the Application and supporting documents and being fully
advised in the premises, the Commission hereby finds that a hearing in this matter is not
required, and that the proposed transaction is consistent with the public interest and the
Applicant's proper performance of its duties as a public utility.
COLUMBINE TELEPHONE COMPANY
CASE No. COL-O3-
EXHIBIT B
IT IS THEREFORE ORDERED that the Application of Columbine Telephone
Company for authority to execute a loan contract with the RTFC in an amount not to
exceed $8 400 000 be, and the same is hereby granted.
DONE by Order of the Idaho Public Utilities Commission this day of
2003.
Paul Kjellander, President
Dennis S. Hansen, Commissioner
Marsha Smith, Commissioner
ATTEST:
COLUMBINE TELEPHONE COMPANY
CASE No. COL-O3-
EXHIBIT B
LEGAL NOTICE OF SILVER STAR TELEPHONE COMPANY
APPLICATION FOR AUTHORITY TO BORROW FUNDS
NOTICE IS HEREBY GIVEN that on April 16, 2003 , Columbine Telephone
Company, completed and filed with the Idaho Public Utilities Commission an
Application for authority to borrow up to $8 400 000 from the Rural Telephone Finance
Cooperative and in connection with the borrowing, to execute a telephone loan contract
amendment and a supplemental mortgage.
The Application is on file and is available for public inspection at the Idaho Public
Utilities Commission. Any person desiring to comment on said Application must file
petitions or protests with the Idaho Public Utilities Commission within fourteen (14) days
of the filing date. If no protests are received within this time limit, the Commission may
consider the Application and enter its Order without setting the matter for hearing.
written protests are filed with the Commission within the time limit set, the Commission
will consider the same, and in its discretion, may set a hearing. Petitions or protests must
be filed with: Jean Jewell, Secretary, Idaho Public Utilities Commission, Statehouse
Boise, Idaho 83720.
Jean Jewell, Secretary
Idaho Public Utilities Commission
COLUMBINE TELEPHONE COMPANY
CASE No. COL-O3-
EXHIBIT C