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DECISION MEMORANDUM - 1 - DECEMBER 20, 2022
DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: JOHAN E. KALALA-KASANDA
DATE: DECEMBER 20, 2022
RE: IN THE MATTER OF THE EXTENSION OF THE UNIVERSAL
SERVICE FUND (USF) ADMINISTRATOR’S CONTRACT.
The current contract between the Commission and the Administrator of the Universal
Service Fund (“USF”), Alyson Anderson is due to expire on December 31, 2022. Idaho Code §
62-610 authorizes the Commission to establish the USF and Idaho Code § 62-610(5) directs the
Commission to adopt rules “for the implementation and administration of the universal service
fund.”. Universal Service Fund Rule 102 states that the Commission “shall contract with an
administrator of the universal service fund.” IDAPA 31.46.01.102.
The USF provides a fund that allows for the universal availability of local exchange
service at reasonable rates and message telecommunications service (“MTS”) at reasonably
comparable prices throughout the state of Idaho. Idaho Code § 62-610(1).
BACKGROUND
Pursuant to the USF statutes, the Commission contracted with Ms. Anderson to
administer the program since its inception in 1988. Under the terms of the contract, Ms.
Anderson performs the duties of the USF Administrator including, but not limited to, collecting
remittances and distributing program funds; filing annual and quarterly reports; and performing
other duties as required by the Commission.
DECISION MEMORANDUM - 2 - DECEMBER 20, 2022
Under the current contract, the Administrator is compensated for duties performed in the
administration of the USF at a rate of $18,000 annually. The administrator’s compensation is not
to exceed a total amount of $18,000 in any given year without the expressed written permission
of the Commission. USF Contract § 3.1. The current contract also provides that the USF fund
must be audited by a neutral third party at least once every three years or upon termination of the
Contract. USF Contract at § 2.6. The USF Contract will be extended for a year with a new
expiration date of December 31, 2023, and the term of the Contract will be for a period of one
(1) year. USF Contract at § 3.4. Either party may terminate the Contract by giving 90 days
notice. Id.
STAFF RECOMMENDATION
Staff believes that Ms. Anderson has admirably performed the duties as the USF
Administrator. She has been the Administrator since the establishment of the program and has
efficiently discharged her duties during her tenure. Staff, recommends that the Commission enter
into this contract extension for a one (1) year period to expire on December 31, 2023. Staff
believes that the extension is needed to work out details of a new contract to include enhanced
fiduciary requirements. The new expiration date also aligns better with annual reporting
requirements.
COMMISSION DECISION
Does the Commission wish to extend the current contract with Ms. Anderson as the USF
Administrator for a one-year period ending December 31, 2023, pursuant to Idaho Code § 62-
610 (5)?
________________________________
Johan E. Kalala-Kasanda
Udmemos/USF Decision Memo
CONTRACT FOR USF ADMINISTRATOR 1
CONTRACT FOR USF ADMINISTRATOR
1. Identification of Parties and Purpose of Contract
1.1 Parties. This Contract for USF Administrator (Contract) is entered into by and
between the IDAHO PUBLIC UTILITIES COMMISSION (Commission) whose principal office
is located at 11311 W. Chinden Blvd., Building 8 Suite 201-A, PO Box 83720, Boise, Idaho 83720-
0074, (208) 334-0300, and ALYSON ANDERSON (Administrator), with offices located at 1964
N. 300 E., Centerville, UT 84014-1085, (801) 294-5343.
1.2 Statutory Authority. The Commission has implemented a Universal Service Fund
(USF or Fund), under Idaho Code §§ 62-610 through 62-610F, to assure reasonable rates for local
and toll services for customers served by high-cost local exchange telephone companies. Idaho
Code § 62-610(5) requires the Commission to provide for the administration and distribution of
the Fund to eligible telephone corporations. Idaho Code § 62-610F requires the Commission to
contract with a neutral third party for administration of the Fund.
2. Responsibilities of the USF Administrator
2.1 Incorporation by Reference. The Administrator shall fulfill the duties and
obligations imposed by Idaho Code §§ 62-610 through 62-610F, the Commission’s USF Rules
(IDAPA 31.46.01), and orders of the Commission. The legal requirements of all such statutes,
rules, and orders, as currently in effect or amended in the future, are incorporated by reference into
this Contract.
2.2 Cycle of Cash Flow. USF surcharge revenue will be transferred from the
telephone corporations to the Fund on a monthly basis as provided by order or rule of the
Commission. The Administrator will also disburse funds in accordance with Commission
directives on a monthly basis, unless otherwise provided by order or rule. The Administrator will
monitor the receipt and disbursement of funds and retain accurate records to account for the Fund
balance at any given time.
2.3 Checking Account. The Administrator shall establish a checking account for the
receipt and distribution of funds paid into and out of the Fund, respectively. The checking account
shall be established at a reputable financial institution acceptable to the Commission. The
Administrator shall exercise full access and control over the checking account. Additionally, the
checking account shall have two Commission employees on the account signature card: the
President of the Commission (or designee) and the Commission Executive Director (or designee).
CONTRACT FOR USF ADMINISTRATOR 2
The checking account shall be established so that the above-listed Commission employees may
only access and make changes to the checking account if both Commission employees authorize
the action. The checking account shall be established so that the Commission receives a monthly
account statement.
2.4 Determination of Eligibility to Participate. The determination of eligibility to
participate in the Fund will rest solely with the Commission. Once a telephone corporation has
been found by order to be eligible, the Commission will notify the Administrator that a specific
funding should be distributed to the telephone corporation on a monthly basis, as provided by
order. The funding is ongoing until further notice by the Commission or may be for a specific
period of time, as provided by order.
2.5 Insurance. The Administrator shall maintain comprehensive general liability
insurance in the minimum amount of $1,000,000 per occurrence. The insurance company shall be
properly licensed to do business in Idaho and reasonably satisfactory to the Commission.
2.6 Third-Party Audit. The Administrator shall contract with a neutral third-party to
audit the USF fund at least every three years, or upon notice of termination of this Contract.
3. Compensation—Term of Contract
3.1 Compensation of Administrator. The Administrator shall be compensated for
duties performed in the administration of the USF at a rate of $18,000 annually. The
Administrator’s compensation under this paragraph shall not exceed a total annual amount of
$18,000 without the expressed written permission of the Commission.
3.2 Additional Compensation. In addition to the compensation in Paragraph 3.1, the
Administrator shall be reimbursed for reasonable expenses of administration incurred pursuant to
a budget approved in advance by the Commission. Reasonable expenses of administration shall
include, but not be limited to: normal office expenses; necessary travel expenses; the cost of
ensuring against errors and omissions arising out of the performance of the Administrator’s duties;
and defraying the costs of a neutral third-party auditor. Travel expenses shall be reimbursed at the
mileage, lodging, and per diem rates not to exceed those amounts authorized for claims by State
of Idaho employees.
3.3 Reimbursement. The Administrator’s compensation and expenses shall be paid
from the Fund. The Administrator shall reimburse herself from the Fund in accordance with
Paragraphs 3.1 and 3.2. The Administrator’s expenses and compensation shall be reported to the
CONTRACT FOR USF ADMINISTRATOR 3
Commission quarterly, under IDAPA 31.46.01.301. The Administrator’s quarterly report shall
also include an hours log summarizing the number of hours spent on each of the Administrator’s
responsibilities. The Commission may instruct the Administrator to submit an update budget
whenever it feels that sufficient variances exist between administrative expenses and the
administrative budget, as approved.
3.4 Term. This Contract shall become effective on January 1, 2023. The term of this
Contract shall be for a period of one (1) year. Notwithstanding the foregoing sentence, either party
may terminate its rights and obligations arising out of this Contract by giving ninety (90) days’
prior written notice to the other party to this Contract. Upon termination of this Contract, the
Administrator shall be due any unpaid compensation and/or expenses as outlined in Paragraphs
3.1 and 3.2 for duties performed pursuant to this Contract, up to the time of termination. The
Contract may also be renewed and extended.
4. Miscellaneous Provisions
4.1 No Assignment of Contract. The Contract shall not be assigned by either party
without the prior written consent of the other party.
4.2 Amendment to Contract. Any changes to the Contract must be in writing and
signed by the Commission and the Administrator.
4.3 Confidential Information. The Administrator recognizes that the data provided
for use in Fund calculations is deemed confidential by the entities providing it and by the entities
by which information has been provided. The Administrator will not disclose the information
received from any entity to any person or entity other than the Commission and its Staff without
the prior written consent of the provider of the information and the entities about which the
information has been provided. Confidential information in the possession of the Administrator
shall be protected from unauthorized disclosure. The confidentiality obligation contained in this
paragraph shall survive termination of this Contract.
4.4 Indemnification.
a. The Administrator shall indemnify, defend, and save harmless the State of Idaho
(State), its officers, agents and employees from and against any and all liability, claims,
damages, losses, costs, expenses, actions, attorneys’ fees and suits whatsoever caused by
or arising out of the Administrator’s negligent or wrongful performance, acts or omissions
under this Contract or failure to comply with any state or federal statute, law, regulation or
CONTRACT FOR USF ADMINISTRATOR 4
rule. Nothing contained in this Contract shall be deemed to constitute a waiver of the State’s
sovereign immunity, which immunity is hereby expressly reserved.
b. Upon receipt of the State’s tender of indemnity and defense, the Administrator
shall immediately take all reasonable actions necessary, including, but not limited to,
providing a legal defense for the State, to begin fulfilling its obligation to indemnify,
defend, and save harmless the State. The Administrator’s indemnification and defense
liabilities described herein shall apply regardless of any allegations that a claim or suit is
attributable in whole or in part to any act or omission of the State under this Agreement.
However, if it is determined by a final judgment that the State’s negligent act or omission
is the sole proximate cause of a suit or claim, the State shall not be entitled to
indemnification from the Administrator with respect to such suit or claim, and the State, in
its discretion, may reimburse the Administrator for reasonable defense costs attributable to
the defense provided by any Special Deputy Attorney General appointed pursuant to
Subparagraph 4.4(c).
c. Any legal defense provided by the Administrator to the State under this section
must be free of all conflicts of interest, even if retention of separate legal counsel for the
State is necessary. Any Attorney appointed to represent the State must first qualify as and
be appointed by the Attorney General of the State of Idaho as a Special Deputy Attorney
General pursuant to Idaho Code §§ 67-1401(13) and 67-1409(1).
4.5 Not an Employment Contract. This Contract is not an employment contract. The
Administrator at all times remains an independent contractor, and this Contract does not create an
employee/employer relationship. Idaho Code § 61-1303(1)(a). The Administrator shall be
responsible for paying all employment-related taxes and benefits, such as federal, state and local
income tax withholding, social security contributions, and employment insurance premiums,
health and life insurance premiums, pension contributions, and similar items.
4.6 Worker’s Compensation. Before this Contract takes effect, the Administrator
must submit evidence of worker’s compensation insurance coverage or provide a statement that
she is the owner of a sole proprietorship, a working member of a partnership, or an officer of a
corporation owning more than 10% of the issued and outstanding voting stock of the corporation.
See Idaho Code § 72-212. A certificate of proof of coverage from the Administrator’s insurance
carrier will satisfy the requirement of submission of proof of worker’s compensation coverage.
CONTRACT FOR USF ADMINISTRATOR 5
4.7 Compliance with Law. In performing this Contract, the Administrator shall
comply with all applicable laws, rules and determinations of government agencies.
4.8 Tax ID. The Administrator’s tax identification number is 348-54-5447.
4.9 Contact and Notice.
a. All contact and direction relating to this Contract shall be with Daniel Klein,
and reports and other work performed under this Contract shall be forwarded to the
Commission Secretary at the address set out below.
b. Notice to either party shall be made in writing and delivered by first class mail,
postage prepaid, by personal delivery or facsimile copy at the following address:
USF Administrator Commission
Alyson Anderson
1964 N. 300 E.
Centerville, UT 84014-1085
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
11331 W. Chinden Blvd.
Building 8, Ste. 201-A
Boise, Idaho 83714
4.10 Waiver. The failure of the Commission to enforce any provision of this Contract
shall not constitute a waiver by the Commission of that or any other provision.
4.11 Governing Law. Both parties agree that this Contract shall be governed by and
construed in accordance with the laws of the State of Idaho. Parties hereby consent to the
jurisdiction of the courts of Ada County in the State of Idaho in the event of any dispute with
respect to this Contract.
4.12 Entire Agreement. The Contract constitutes the entire agreement between the
parties. This Contract supersedes all prior agreements or understandings between the
Administrator and the Commission.
4.13 Execution in Counterparts. This Contract may be executed in counterparts, each
of which shall be deemed an original and all of which together shall be considered one and the
same contract.
CONTRACT FOR USF ADMINISTRATOR 6
4.14 Mediation. Should any dispute arise between the parties to this Contract, it is
agreed that the dispute will be submitted to a mediator, agreed to and compensated equally by both
parties, prior to commencement of any litigation. Mediation will be conducted in Boise, Idaho.
Both parties agree to exercise their best efforts in good faith to resolve all disputes in mediation.
4.15 Fiscal Necessity and Non-Appropriation. The Legislature of the State of Idaho
(Legislature) is under no legal obligation to make appropriations to fulfill this Contract. This
Contract shall in no way or manner be construed so as to bind or obligate the State beyond the
term of any particular appropriation of funds by the Legislature as may exist from time to time.
The State reserves the right to terminate this Contract in whole or in part (or any order placed
under it) if, in its sole judgment, the Legislature fails, neglects, or refuses to appropriate sufficient
funds as may be required to continue such payments, or requires any return or “give-back” of funds
required to continue payments, or if the Executive Branch of the State of Idaho mandates any cuts
or holdbacks in spending, or if funds are not budgeted or otherwise available, or if the State
discontinues or makes a material alteration of the program under which funds were provided. The
State shall not be required to transfer funds between accounts in the event that funds are reduced
or unavailable. All affected future rights and liabilities of the parties shall thereupon cease within
ten (10) calendar days after notice to the Administrator. Further, in the event of non-appropriation,
the State shall not be liable for any penalty, expense, or liability, or for general, special, incidental,
consequential or other damages resulting therefrom.
4.16 Severability. The parties agree that if any term or provision of this Contract is
declared by a court of competent jurisdiction to be illegal or in conflict with any law, the validity
of the remaining terms and provisions shall be construed and enforced as if the Contract did not
contain the particular term or provision held to be invalid.
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CONTRACT FOR USF ADMINISTRATOR 7
The parties by the signature below of their authorized representatives, hereby acknowledge
that they have read this Contract, understand it and agree to be bound by its terms and conditions.
DATED at Boise, Idaho, this 20th day of December 2022.
IDAHO PUBLIC UTILITIES COMMISSION
By:
ERIC ANDERSON, PRESIDENT
USF ADMINISTRATOR
By:
ALYSON ANDERSON
Reviewed and Approved:
Maria Barratt-Riley:
I:\Legal\CONTRACTS\USF_Anderson\USF CONTRACT\USF Contract 1-year (12-13_rn).docx
CONTRACT FOR USF ADMINISTRATOR 8
Pursuant to Paragraph 4.6 (Worker’s Compensation) of the Contract, I certify that:
I am a sole proprietor contracting with the Idaho Public Utilities Commission and I am therefore
exempt from provisions of the worker’s compensation law. See Idaho Code § 72-212.
ALYSON ANDERSON DATE