20240917Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: JOHAN E. KALALA-KASANDA
DAYN HARDIE,DEPUTY ATTORNEY GENERAL
DATE: SEPTEMBER 17, 2024
RE: 2023-2024 IDAHO UNIVERSAL SERVICE FUND ANNUAL REPORT
AND RECOMMENDATIONS; CASE NO. GNR-T-24-05.
On July 15, 2024, the Administrator of the Idaho Universal Service Fund Report(IUSF),
Alyson Anderson(Administrator), filed the Annual Report' of the IUSF for the fiscal year July
1, 2023, through June 30, 2024. On August 20, 2024, after several discussions with Staff, the
Administrator filed an Amended Annual Report correcting the errors identified by Staff.
On August 30, 2024, the Idaho Telecom Alliance (ITA) through its Attorneys Ms.
Cynthia A. Melillo of Cynthia A. Melillo PLLC, filed comments of the ITA in response to the
Administrator's 2024 Annual Report.
On September 3, 2024, Staff filed a decision mem02 recommending the Commission
approve the Administrator's budget for 2025 and adopt the administrator-recommended Option
3: Adjust Inventories, Adjust Surcharge Rates & Adjust Funding To Meet Statewide Averages,
using 125% of all statewide averages. The Commission declined to make a decision based on
the lack of consensus between Staff s recommendation and the ITA's position. The Commission
directed interested parties to supplement the record for a future decision.
On September 4, 2024, following the Commission's September 3, 2024, Decision
Meeting, wherein the Commission directed interested parties to supplement the record the
' On August 14,2024,for confidentiality purposes only,the Administrator filed a redacted copy of her Annual
Report.
2 See Case No.GNR-T-24-05
DECISION MEMORANDUM - 1 - SEPTEMBER 17, 2024

Administrator filed an Addendum to her Amended Annual Report(Addendum). The Addendum
was the result of conversations between the Administrator, Staff, and the ITA. Staff conducted a
thorough audit of all the information contained in each report(including the Amendment and
Addendum) that the Administrator filed with the Commission.
The September 4, 2024, the Addendum modified Option 5 to include adjustments for the
calculation of the funding levels to meet 100% statewide average to more accurately calculate
future fund balances. As a result these calculations, the inventories have been adjusted according
to the most recent five-year trend. The 2024-2025 estimated IUSF-authorized disbursements,
including the adjustments to company funding per rule 106, IDAPA 31.46.01.106,using 100%
of all statewide averages, will be $1,384,680, a decrease from the current disbursement level of
$1,698,610. Consistent with Option 5 in the Administrator's initial set of recommendations,
surcharge rates would be increased to $0.51 per residential line, $0.82 per business line, and
$0.008 per intrastate MTS/WATS billed minute. The fund will generate surcharge revenues of
$1,437,958,. Taken together with the yearend from 2023-2024, the fund is anticipated to have
$1,783,924 available. The fund is estimated to have a yearend balance of approximately
$369,943 on June 30, 2025, an increase of$23,978 from 2023-2024, as shown in Table 1, if the
Commission approves modified Option 5.
DECISION MEMORANDUM - 2 - SEPTEMBER 17, 2024

Table 1
OPTION 5-ADJUST INVENTORIES FOR 5 YEAR AVERAGE,ADJUST
SURCHARGE RATES&FUNDING TO MEET 100%STATEWIDE
THRESHOLDS
FUND
RATE $ CHANGE
BANK BALANCE 7/1/24 $ 345,966
ANNUALINVENTORY
RESIDENTIAL LINES 50,990 0.51 $312,059
BUSINESS LINES 40,514 0.82 398,658
TOLL MINUTES 90,905,158 0.008 727,241
TOTAL IUSF SURCHARGE REVENUE 1,437,958
ESTIMATED INTEREST INCOME 0
ESTIMATED TOTAL FUNDS AVAILABLE 7/1/24-6/30/25 1,783,924
ESTIMATED IUSF DISBURSEMENTS 1,384,680
ESTIMATED ADMINISTRATIVE EXPENSES 29,300
TOTAL ESTIMATED EXPENSES 1,413,980
PROJECTED INCOME/DRAWDOWN 23,978
PROJECTED BALANCE 6/30/25 $369,943
Staff has concluded that although this agreement does not address all the issues affecting
the ISUF, it nevertheless moderately alleviates the level of distress that the fund is undergoing at
the moment. Staff acknowledges that this agreement is merely a temporary measure that will
grant a temporary lifeline to the fund while fundamental issues, such as funding sources,
legislative actions, and eligibility of the recipients of the disbursement, are addressed.
DECISION MEMORANDUM - 3 - SEPTEMBER 17, 2024

STAFF RECOMMENDATION
Staff recommends the following:
1. The Commission approve the Addendum to the Amended Report filed by the
Administrator;
2. The Commission approve the Administrators budget;3
3. The Commission adopts Option 5 -Adjust Surcharge Rates &Adjust Funding To
Meet 100% Statewide Averages; and
4. The Administrator continues to provide quarterly cash flow analysis to the Staff.4
COMMISSION DECISION
1. Does the Commission approve the Addendum to the Amended Report filed by the
Administrator?
2. Does the Commission wish to approve the Administrators budget?
3. Does the Commission wish to adopt Option 5 -Adjust Surcharge Rates &Adjust
Funding To Meet 100% Statewide Averages?
4. Does the Commission wish to accept the Staff s final recommendation for quarterly
cash flow reports to monitor revenue impacts from unforeseen changes in line counts
or access minutes?
5. Anything else?
Johan E. Kalala-Kasanda
Commission Staff
I:\Uti1ity\UDMEM0S\GNR-T-24-05 Decision Memo.docx
3 See September 3,2024 DECISION MEMO in Case No.GNR-T-24-05
4 See September 3,2024 DECISION MEMO in Case No.GNR-T-24-05
DECISION MEMORANDUM - 4 - SEPTEMBER 17, 2024