20141112Application.pdf

GtvENS PunsLEY,,.
Attorneys and Counselors at Law
601 W. Bonnock Slreet
PO \ox27n
Boise, lD 83701
Telephone: 208-388-l 200
Focsimile: 208-388-l 300
M.givenspu6ley.com
Michoel C. Creomer
M-W1247
[e-mail]
Wa Hand Delivery
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 W . Washington Street
P.O. Box 83720
Boise, lD 83720-0074
RE: Silver Star Telephone Company's Application.
Dear Jean:
I am enclosing an original and seven (7) copies of Silver Star Telephone Company's
application for guarantee approval, together with a filing fee in the amount of $447.22. Please
acknowledge receipt by retuming a conformed copy of this cover letter and application.
Please note that Exhibit A has not yet been executed by Silver Star's secretary. I am
expecting to receive that directly and substitute fully-executed copies as soon as they are
received.
Gory G. Allen
Peter G. Borton
Chisiopher J. Beeson
Clint R. Bolinder
Erik J. Bolinder
Jeff W. Bower
Preston N. Corter
Jeremy C- Chou
Williom C. Cole
Michoel C. Creomer
Amber N. Dino
Thomos E. Dvorok
Jeffrey C. Feredoy
Morlin C. Hendrickson
Brion Holleron
November 12,2014
Don E. Knickrehm
Neol A. Koskello
Deboro K. Kristensen
Michoel P. Lowrence
Fronklin G. Lee
Dovid R. Lombordi
Kimberiy D. Moloney
Emily L. McClure
Kenneth R. McClure
Kelly Grene Mcconnell
Alex P. McLoughlin
Melodie A. McQuode
Chrislopher H. Meyer
Potrick J. Miller
L. Edword Miller
..ludson B. Monlgomery
Deboroh E. Nelson
W. Hugh O'Riordon, LLM
Angelo M. Reed
P. Mork Thompson
Jeffrey A. Wor
Robert B. while
Reiired:
Kennelh L. Pu6ley
Jomes A. Mcclure (r921-20r r)
Roymond D. Givens lt9l7-2008)
%rW,om
MCC/rgm
2272599_t / 1534-58
Enclosure(s)
Michelle Motzkus
Michael C. Creamer (ISB # 4030)
GIVENS PURSLEY LLP
277 North 6th Street, Suite 200
P.O.Box2720
Boise,ID 83701
[phone]
[phone] (fax)
2242542_4 I 1534-58
Attomeys for Silver Star Telephone Company, Inc.
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BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of Silver Star ) Case No. SIL-T-14-01
Telephone Company, Inc. for Authority to )
Execute Guarantee in Favor of the Rural ) APPLICATION OF SILVER STAR
Telephone Finance Cooperative ) TELEPHONE COMPANY
Silver Star Telephone Company, Inc. ("Silver Star" or "Applicant"), by and through its
attorneys Givens Pursley LLP, makes this Application pursuant to Idaho Code $ 61-901 and
IDAPA 31.01 .0l.l4l-147 for authority to execute an unsecured guaranty of payment (the
"Guaranty'') in favor of the Rural Telephone Finance Cooperative ("RTFC") guaranteeing
payment of a loan from RTFC to Silver Star's parent company Horizon Communications, Inc.
("Horizon") in the amount of $2,222,222,00. In support of its Application, Silver Star states as
follows:
l. Applicant is a certificated telephone corporation organized under the laws of the
State of Wyoming providing telecommunication services, including local exchange service,
within the states of Idatro and Wyoming.
2. Silver Star, along with its sister companies, Columbine Telephone Company, Inc.,
a Wyoming corporation, Gold Star Communications, LLC, a Wyoming limited liability company
("Gold Star") and Mountain Land Communications, LLC, a Wyoming limited liability company
(collectively the "Horizon Subsidiaries"), is a wholly-owned subsidiary of Horizon.
3. Silver Star has outstanding loans from RTFC and USDA Rural Utilities Service
("RUS") secured by a most-recent restated mortgage and security agreonent giving RTFC and
APPLICATION OF SILVERSTARTELEPHONE COMPANY,INC. - 1
RUS a security interest in all of Silver Star's real and personal Idaho and Wyoming
approved by the Commissio n in 2002.1
4. Gold Star provides cellular communications services to customers in southwest
Wyoming and southeast Idaho, and intends to install nine new cell towers and related facilities to
improve and extend coverage to Gold Star's customers.
5. Horizon and Gold Star intend that the tower facilities will be constructed with
funds advanced to Horizon through a loan by RTFC (the "Loan") in the principal amount of
$2,222,222.00. A portion of the Loan proceeds will also be used by Horizon to purchase
subordinated capital certificates in RTFC. In consideration of the Loan to Horizon, RTFC will
require Horizon to execute a secured promissory note ("Note") payable in quarterly installments
of principal and interest. Interest initially shall be at a variable rate, subject to Horizon's option
to convert to a fixed rate. The Note has a maturity date eight years from the date of the Note.
The Note is to be secured by a mortgage and a pledge of Horizon's interests in each of the
Horizon Subsidiaries.
6. RTFC also will require a guaranty from Gold Star secured by all of the assets of
Gold Star.
7.
Silver Star.
RTFC will also require an unsecured Guaranty of payment of the Loan from
8. Further details of the Loan to Horizon and Silver Star's proposed Guaranty
pertinent to this Application are contained in the Loan Agreement between Horizon and RTFC
included with other pertinent draft loan documents being submitted on a CD contanporaneously
with this Application as confidential information for Commission and Commission Staff review.
9. Gold Star will compensate Silver Star for providing connectivity over Silver Star
facilities from Gold Star's cell towers under an arms-length agreement to be negotiated between
Silver Star and Gold Star.
10. Silver Star submits that the proposed transaction is consistent with the public
interest. The unsecured obligation to guaranty repayment of the Loan to Horizon will not
further encumber Company assets or affect the revenue requirement of its regulated operations.
The Loan will enable Gold Star, a sister company of Silver Star, to extend and improve cellular
I See IPUC Order No. 29022,CaseNo. SIL-T-02-2.
APPLICATION OF SILVER STAR TELEPHONE COMPANY, INC. - 2
coverage, including termination of cellular traffic to Silver Star customers within Silver Star's
rural southeast Idaho and southwest Wyoming service areas pursuant to an agreement between
Gold Star and Silver Star. The transaction also will produce a stream of revenue from Gold Star
to Silver Star. As such, the Guaranty should not impact Silver Star ratepayers, but should
enhance their telecommunications options.
11. 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.
12. A copy of the Applicant's 2014mid-year financial report is being submitted by
the Applicant to Commission Staff for review under separate cover.
13. A certified copy of Applicant's Board of Directors'resolution authorizing the
proposed transaction is attached hereto as Exhibit A.
14. A Proposed Order granting this Application is attached hereto as Exhibit B.
15. Notice of this Application will be published within seven (7) days of the date of
this Application in The Idaho Statesman (Boise). A copy of this Notice is attached as Exhibit C.
16. 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.
ln the event the Commission determines that formal proceedings on this Application are
necessary, Applicant stands ready for immediate hearing.
17. Applicant has enclosed its filing fee, calculated pursuant to Section 6l-905, Idaho
Code, in the amount of $462.22.
18. All notices and communications with regard to this Application should be served
upon:
Michael C. Creamer
Givens Pursley LLP
601 W. Bannock Street
P. O.Box2720
Boise, ID 83701
Michelle Motzkus, Secretary
Silver Star Telephone Company, Inc.
P.O. Box 226
Freedom, Wyoming 83120
[phone]
APPLICATION OF SILVERSTAR TELEPHONE COMPANY,INC. -3
WHEREFORE, Applicant respectfully requests an Order of this Commission:
l. Granting the foregoing Application of Silver Star Telephone Company, Inc. to
execute and deliver the Guaranty to the Rural Telephone Cooperative; and
2. Granting such other relief as the Commission deems just and reasonable in this
matter.,^kDATED this lT dayofNovernbq
GIVENS PURSLEY LLP
Attorneys for Applicant Silver Star Telephone
Company,Inc.
APPLICATTON O[' SILVER STAR TELEPITONE COMPAnTY, rNC. - 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on th" Pkof Novernb er,20l4I 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, lD 83702
by hand delivering the same to the above-named at the last known address(s) as set forth above.
APPLICATION OF SILVER STAR TELEPHONE COMPANY, INC. - 5
CERTIFIED COPY OF MINUTES AUTHORIZING GUARANTY OF RTFC LOAN
IN THE AMOUNT OF $2,222,222.00
TO HORIZON COMMUNICATIONS, rNC.
I, Michelle Motzkus, do hereby certify that: I am the Secretary of Silver Star Telephone
Company, Inc (the "Company").
The following is a true and correct copy of excerpts from the minutes of a meeting of the
Board of Directors of the Company held August 21, 2074, as they appear in the Minutes Book of
the Company, said resolutions duly adopted thereat; the meeting was duly and regularly called in
accordance with the bylaws of the Company; the Guaranty (the "Guaranty") to be required of
the Company by Rural Telephone Finance Cooperative ("RTFC") was authoizedby the Board
of Directors and said resolutions have not been modified or rescinded:
The Board of Directors of Silver Star Telephone Company having been advised by its
counsel that the Company is legally constituted, is in compliance with all applicable statutory,
regulatory and other legal requirements and is in good standing, and that the Guaranty to be
executed by the Board and given to RTFC as partial consideration for a loan to be made to the
Company's parent Horizon Communications, Inc.("Horizon"), in the amount of $2,222,222.00
(the "Loan") pursuant to a loan agreement ("Agreement") between RTFC and Horizon, which
Guaranty as executed and delivered, will constitute valid and binding obligations of the
Company, enforceable by and against the Company, in accordance with its terms;
RESOLVED. that the Company guarantee the quarterly principal and interest payments on a
long-term loan in the principal amount of $2,222,222 obtained by Horizon Communications,
Inc- from Rural Telephone Finance Cooperative ("RTFC") upon terms and conditions set
forth in the loan agreement presented to this meeting, bearing such interest as is providedin the note(s) or loan agreement evidencing such loan, and providing for payment thereof
within eight (8) years after the date of said agreement;
RESOLVED, that the Company's President, Ron McCue, is hereby authorized to
execute and to deliver to RTFC a Guaranty in favor of RTFC, substantially in the form
presented to the Board of Directors (including as many counterparts as may be required); and
RESOLVED, the Company's President is hereby authorized in the name and on behalf of the
Company to execute and to deliver all such other documents and instruments as may be
necessary or appropriate, to make all payments, to execute any future amendments to said
Guaranty as such individual may deem appropriate within the amount of the Guaranty so
authorized herein and to do all such other acts as in the opinion of such authorized
individual acting may be necessary or appropriate in order to carry out the purposes and intent
of the foregoing resolutions.
SILVER STAR TELEPHONE COMPANY
CASE NO. SIL-T-14-01
ExHIBITA
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of the
Company, this day of Novembe42014.
Secretary
SILYER STAR TELEPHONE COMPAITY
CASENo. SIL-T-14-01
EXHIBITA
Michael C. Creamer (lSB # 4030)
GTVENS PURSLEY LLP
277 North 6th Street, Suite 200
P.O.Box2720
Boise, ID 83701
[phone]
[phone] (fax)
Attomeys for Silver Star Telephone Company, Inc.
In the Matter of the Application of Silver Star
Telephone Company, Inc. for Authority to
Execute Guaranty in Favor of the Rural
Telephone Finance Cooperative
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Case No. SIL-T-14-01
PROPOSED ORDER
On November 12,2014, Silver Star Telephone Company, Inc. (hereinafter Applicant),
frled an Application for authority to execute an unsecured guaranty ("Guaranty") in favor of the
Rural Telephone Finance Cooperative ("RTFC") guaranteeing payment of a loan in the amount
of $2,222,222.00 ("Loan") to be made by RTFC to the Applicant's parent company, Horizon
Communications, Inc., a Wyoming corporation ("Horizon"). The Loan also would be secured
by a mortgage to be given by Horizon to RTFC and a pledge of all of Horizon's stock and/or
interest in each of its wholly-owned subsidiaries. The Loan also is to be secured by a secured
guaranty of Gold Star Communications, LLC, aWyoming limited liability company and one of
Horizon's wholly-owned subsidiaries.
In support of said Application, Applicant alleges that the proceeds of the RTFC loan will
be used by Gold Star to construct up to nine cell towers to improve and extend cellular service to
Gold Star customers in Wyoming and Idaho. Gold Star would contract with Silver Star to obtain
fiber connectivity from the cell towers.
SILVER STAR TELEPHONE COMPANY, INC.
CASE No. SIL-T-I4-01
ExHIBITB
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.
IT IS THEREFORE ORDERED that the Application of Silver Star Telephone Company,
Inc. for authority to execute an unsecured Guaranty substantially in the form of that submitted to
the Commission and thereby guaranty payrnent of the Loan be, and is hereby granted.
DONE by Order of the Idaho Public Utilities Commission this _ day of
,2014.
Paul Kjellander, President
Marsha Smith, Commissioner
Mack Redford, Commissioner
ATTEST:
SILVER STAR TELEPHONE COMPAIIY, INC.
CASE NO. SIL-T-14-01
ExHIBIT B
LEGAL NOTICE OF SILVER STAR TELEPHONE COMPANY
APPLICATION FOR AUTHORITY TO GUARANTY LOAN
CASE NO. SIL-T-I4-01
NOTICE IS HEREBY GIVEN that on November 12,2014, Silver Star Telephone Company
filed with the Idaho Public Utilities Commission an Application for authority to guaranty a loan
in the principal amount of $2,222,222.00 to be made by the Rural Telephone Finance
Cooperative to the Applicant's parent company Horizon Communications, Inc.
The Application is on file with, and may be obtained from, the Commission, whose offices are
located at427 W. Washington, Boise, Idaho 83702-5918 (208-334-0300), or may be viewed on
the Commission's homepage at: http://www.puc.idaho.eov/fileroom/cases/summary/tele.html.
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. If 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,4T2 W. Washington Street, Boise, Idaho 83702.
Jean Jewell, Secretary
Idaho Public Utilities Commission
SILVER STAR TELEPHONE COMPANY, INC.
CASE No. SIL-T-14-01
ExnrnrrC