**Rural Telephone Bank**

**Minutes of the 132^nd^ Board Meeting**

**May 12, 2000**

[Time and Place of Meeting]{.underline}

The 132^nd^ meeting of the Board of Directors (Board) of the Rural
Telephone Bank (Bank) was held Friday, May 12, 2000, in the Williamsburg
Room, U.S. Department of Agriculture, Washington, D.C., pursuant to
notice published in the [Federal Register]{.underline} on May 4,
2000*.*^1^ Chairperson (Chair) Jill Long Thompson called the meeting to
order at 9:10 a.m.

[Attendants]{.underline}

Directors present were: Jill Long Thompson John Dillard

> Michael Dunn Curtis Sampson
>
> Carl Whillock David Crothers
>
> Robert Lee Stanton John McAllister
>
> Jimmie Lou Fisher Larry Sevier

Among others present were Acting Governor Christopher McLean and staff
members Roberta Purcell, Ken Ackerman, and Jonathan Claffey. Also
present was Frank Clover of the Office of the General Counsel (OGC).
(Directors not present: Dr. I. Miley Gonzalez, Sharron Harris, and
Michael Jensen.)

[Action on the Minutes]{.underline}

On motion duly made and seconded, the minutes of the February 11, 2000,
board meeting were adopted as prepared.^2^

[Secretary\'s Report]{.underline}

Secretary Curtis Sampson reported that in the second quarter the Bank
approved five loans for a total of \$29,786,400.^3^ These loans were
commingled with \$51,064,000 and \$5,000,000 of RUS cost of money funds
and hardship funds, respectively.

[Treasurer\'s Report]{.underline}

Treasurer John McAllister reported on the finances of the Bank for the
second quarter of FY 2000.^4^\
Mr. McAllister reported, among other things, that net revenue for the
second quarter totalled \$28 million

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^1^ Exhibit 132-1

^2^ Exhibit 132-2

^3^ Exhibit 132-3

^4^ Exhibit 132-4

Minutes of the 132^nd^ Board Meeting

May 12, 2000

as compared to \$27 million for the same quarter in FY 1999; total class
B stock net of conversions to\
C stock amounted to \$719 million as compared to \$662 million on March
31, 1999; and total class C stock increased from \$270 million on March
31, 1999 to \$306 million on March 31, 2000. Advances on loan
commitments for the quarter totalled \$11 million as compared to \$13
million for the same quarter in FY 1999; and unadvanced loan commitments
totalled \$916 million, up from \$904 one year earlier.

Mr. Dillard requested that future Treasurer\'s Reports address
separately the dollar amount of B stock converted to C stock as the
result of the new partial conversion policy. There being no further
comments, the Chair moved on to the next agenda item.

[Privatization Committee Report]{.underline}

Committee Chairman Curtis Sampson expressed the Committee\'s desire to
have the Department of Agriculture support its five recommendations
enumerated in the February, 2000, minutes. Mr. Sampson also restated the
Committee\'s request for an independent financial advisor to perform a
business study to prepare the Bank for privatization. The objective of
the study would be to arrive at the interim financial changes, which are
likely to happen between the present and a possible privatization date,
and from the point of privatization on into the future. The Committee
and RUS staff suggested that (1) staff should participate in the
selection of an appropriate person or firm to assist in the completion
of the study; and (2) an all day or more meeting, whatever is necessary
should be held in Washington, DC, involving the staff of RUS, the
Committee, and other interested parties. The purpose of the meeting
would be to discuss the relative assumptions to be incorporated into the
business study. The estimated cost of such a study is between \$25,000
to \$100,000, depending on how much assistance and how much
participation there is by the industry, by the Committee, and by the
staff. Acting Governor Christopher McLean stated that RUS has requested
the \$100,000 expenditure be considered by the Rural Development Budget
Committee. The Budget Committee may be meeting in the near future and we
should have some information about the funds available for that request.

[Action on the Annual Report for FY 1999]{.underline}

On motion duly made and seconded, the annual report for FY 1999 was
approved as prepared.^5^

[Other Business]{.underline}

Ms. Thompson, Mr. Sevier, Mr. McAllister, and Mr. Claffey expressed
their appreciation to outgoing assistant Ms. Lorena McCoy for her many
years of exemplary service to the Bank.

Minutes of the 132^nd^ Board Meeting

May 12, 2000

[Next Board Meeting in Washington, DC]{.underline}

The August staff briefing and Board meeting dates are as follows:

> Staff Briefing: Thursday, August 3, 2000, at 2:00 p.m.
>
> Board Meeting: Friday, August 4, 2000, at 9:00 a.m.

[Adjournment]{.underline}

Whereupon motion to adjourn was made and the meeting was adjourned at
9:34 a.m.

Signed Curtis Sampson

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Secretary

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^5^ Exhibit 132-5