20221213_MIDT2201_jtcsjo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOSEPH TERRY
CLAIRE SHARP
DATE:DECEMBER 13,2022
RE:MIDVALE TELEPHONE'S REQUESTFOR AUTHORITY TO BORROW
FROM THE RURAL UTILITIES SERVICE;CASE NO.MID-T-22-01
On November 22,2022,Midvale TelephoneExchange ("Midvale"or "Company")filed
an application requesting authorityto execute a Mortgage and Promissory Note in an amount of
$10,583,267.The interest rate on the loan is subsidized and will be 2%with a term of 22 years.
Staff calculated the application fee to be $680.02.A partial payment of the fee was received on
November 23,2022,with the remaining balance received on November 30,2022.
The proposed loan and grant proceeds will pay for and partially reimburse general funds
to:(a)extend broadbandinternet to certain additional service areas within Stanley,Idaho;
Cascabel,Arizona;and Young,Arizona;(b)provide for router and switch upgrades to handle
broadband traffic growth;(c)deploy additional fiber optic and buried cable networks in those
areas;(d)extend fiber-to-the-house and broadband ethernet transport facilities to provide larger
pipes and redundantpaths;and (e)for related system improvements.
STAFF DISCUSSION AND RECOMMENDATION
The Company's proposed projects will improve service to existing customers and make it
possible for the Company to meet new service demands.The additional infrastructure will
further serve the goals of universal internet service.The interest rates proposed in the loan
documents,are significantlybetter than a company the size of Midvale could reasonably expect
to receive from the open market.
Due to recent legislation,there may be grants available for these projects.Staff expects
the Company will pursue these grants where available.Staff recommends that any grants
received for these projects be tracked in a separate account.
Staff recommends the Commission approve the loan.To monitor any loan covenants,
Staff also recommends the followingreporting requirements:
1.The Company shall provide copies of the final loan approvals including
documentation for advances.
2.The Company shall provide a copy of any executed collateral documentation.
3.The Company shall provide copies of all annual certification,covenant reports,and
letters regarding the determinations.
COMMISSION DECISION
Does the Commission wish to approvethe application with Staff's recommended
reporting requirements?
Does the Commission wish to order the Company to pursue all applicable grants and
record all grants for these projects in separate accounts?
Joseph Terry