# Presentation: 145078

## Rural Development Utilities Programs

**KENNETH M. ACKERMAN**
**Assistant Administrator,**
**Program Accounting and Regulatory Analysis**
**   ****NARUC Staff Subcommittee on Accounting and Finance**
**Corpus Christi, Texas**
**April 25, 2006**

## Topics

**Rural Development Branding **
**New Administrator**
**Organizational Charts**
**eAuthentication ID**
**Electric / Telecom / Water & Environmental Programs**
**REDLG**
**Accounting Issues**
**Other Issues**

## BUSINESS PROGRAMS

HOUSING PROGRAMS

UTILITIES PROGRAMS

**HOUSING PROGRAMS**
**UTILITIES PROGRAMS**

***RURAL DEVELOPMENT BRANDING***

## Administrator - RUS

- James M. “Jim” Andrew was unanimously confirmed by the Senate as the new Administrator of the Rural Utilities Service on November 10, 2005

## Rural DevelopmentOrganizational Chart

## Program Accounting and Regulatory Analysis

## eAuthentication ID

- Submission of Forms 7 & 12
- Calendar Year 2006
- Rural Development Utilities Programs Data Collection System (DCS)
- Web-based data entry

## eAuthentication ID

- To access DCS, borrower personnel must be identity proofed
- Identity proofing must be performed by a USDA employee trained as a Local Registration Authority (LRA)
- Who are LRAs?
- Field Accountants
- GFRs
- Rural Development State Office personnel

## eAuthentication ID

- What does it take?
- Borrower employee must present him/herself in person
- Employee must produce a government issued identification (e.g. driver’s license)
- Identity proofing will begin May 1, 2006

## eAuthentication ID

- It is vital that borrower employees do not share their User IDs or passwords with others
- All data entered into DCS will be tracked by User ID
- The future will bring additional opportunities to interact with RDUP systems using the USDA eAuth ID

## 

FISCAL YEAR 
LOAN PROGRAM
 SUMMARY 

**FISCAL YEAR **
**LOAN PROGRAM**
** ****SUMMARY**** **

##            Electric Programs Budget                         (Dollars in Million)

**                         ****	****	****	****	****	**
**	****	****	****	****	****	****         ****                         ****2007 ****                                                                                                      ****Loan                                             ****	****    2005            ****	****  2006****	****	****President’s**
_**Program:**__**	**__**	**__**                 Actual          **__**	**__**Actual**__**	**__**      Proposed Budget **_
**Direct 5%****	****	****                    119             ****	****      99                  ****	****       99**
**Municipal Rate****	****	****	****      104             ****	****      99                  ****	****       40         **
**Direct Treasury Rate          ****	****   1,000          ****	****    990               ****	****     700**
**FFB Guaranteed****	****              ****	****	****   2,100          ****	**** 2,600               ****	****  3,000**
**Non-FFB Guaranteed****	****	****         0             ****	****      99                  ****	****         0**
**Section 313A****	****               ****	****   1,000****	****   ****	**** 1,500               ****	****         0**
**	**
**Total Loan Program            ****	****   4,323           ****	**** 5,387              ****	****  3,839****	**

***Summary of Loan Program***

## Loan Subsidies

**MILLIONS**

***Loan Subsidies***

## Loan Approvals Versus Subsidies

**BILLIONS**

**Notes:**
Updated 04/20/2005 by Dave Olivier for Mike Ganley (see Annual Loan Program.xls) for G&T special meeting

## Loans Approved by Type

**BILLIONS**

## Distribution Loans Approved by State for FY 05

| STATE | NUMBER | AMOUNT |
| --- | --- | --- |
| AL | 2 | $18,650,000 |
| AK | 1 | $82,448,000 |
| AR | 1 | $33,231,000 |
| CO | 3 | $45,390,000 |
| FL | 1 | $75,000,000 |
| GA | 7 | $104,411,600 |
| IL | 1 | $1,464,000 |
| IN | 1 | $5,500,000 |
| IA | 2 | $6,000,000 |
| KS | 6 | $31,814,000 |
| KY | 8 | $150,697,000 |
| LA | 3 | $109,698,000 |
| MI | 3 | $35,154,000 |
| MN | 10 | $69,426,000 |

| STATE | NUMBER | AMOUNT |
| --- | --- | --- |
| MO | 2 | $33,216,000 |
| MT | 4 | $22,185,000 |
| NM | 1 | $13,823,000 |
| NY | 1 | $4,300,000 |
| NC | 4 | $129,789,000 |
| ND | 2 | $14,185,000 |
| OH | 2 | $10,713,000 |
| PA | 2 | $22,300,000 |
| SC | 3 | $128,540,000 |
| SD | 8 | $59,310,000 |
| TN | 5 | $78,585,000 |
| TX | 6 | $58,923,000 |
| VA | 2 | $25,800,000 |
| WI | 1 | $5,527,000 |
| WY | 2 | $11,057,000 |

## 
12,354 MILES OF NEW DISTRIBUTION LINES

6,322 MILES OF UPGRADED DISTRIBUTION LINES

188 MILES OF NEW TRANSMISSION LINES

151 MILES OF UPGRADED TRANSMISSION LINES

$82,448,000 FOR GENERATION SYSTEM IMPROVEMENTS

$20,575,447 FOR SERVICE BUILDINGS

NEW AND/OR IMPROVED SERVICE IN 259 OUTMIGRATION COUNTIES AND 124 POVERTY COUNTIES

- 12,354 MILES OF NEW DISTRIBUTION LINES
- 6,322 MILES OF UPGRADED DISTRIBUTION LINES
- 188 MILES OF NEW TRANSMISSION LINES
- 151 MILES OF UPGRADED TRANSMISSION LINES
- $82,448,000 FOR GENERATION SYSTEM IMPROVEMENTS
- $20,575,447 FOR SERVICE BUILDINGS
- NEW AND/OR IMPROVED SERVICE IN 259 OUTMIGRATION COUNTIES AND 124 POVERTY COUNTIES

- Distribution Loan Purposes

## Generation and Transmission Loans Approved

## Generation and Transmission Loans Approved

| STATE | NUMBER | AMOUNT |
| --- | --- | --- |
| AR | 1 | $85,000,000 |
| CO | 1 | $87,548,000 |
| GA | 2 | $287,442,000 |
| IA | 1 | $24,195,000 |
| KY | 2 | $119,480,000 |
| MS | 1 | $88,275,000 |
| MO | 2 | $301,562,000 |
| NC | 1 | $318,221,000 |
| ND | 1 | $2,693,000 |
| OH | 2 | $292,477,000 |
| SC | 1 | $45,085,000 |
| WI | 1 | $280,000,000 |

- Generation and Transmission Loans Approved by State for FY 05

## 
552 MILES OF NEW TRANSMISSION LINES

157 MILES OF UPGRADED TRANSMISSION LINES

$243,278,000 FOR GENERATION SYSTEM IMPROVEMENTS

$707,648,000 FOR 1,846,000 kW OF NEW GENERATION

$501,760,000 FOR GENERATION EMISSION REDUCTIONS

NEW AND/OR IMPROVED SERVICE IN 347 OUTMIGRATION COUNTIES AND 302 POVERTY COUNTIES

- 552 MILES OF NEW TRANSMISSION LINES
- 157 MILES OF UPGRADED TRANSMISSION LINES
- $243,278,000 FOR GENERATION SYSTEM IMPROVEMENTS
- $707,648,000 FOR 1,846,000 kW OF NEW GENERATION
- $501,760,000 FOR GENERATION EMISSION REDUCTIONS
- NEW AND/OR IMPROVED SERVICE IN 347 OUTMIGRATION COUNTIES AND 302 POVERTY COUNTIES

- Generation and Transmission Loan Purposes

## Renewable Energy Loans

**	**** ****	****	****	****	****	****       ****TOTAL**
**TYPE****	****	****	****LOANS****	****	****     DOLLARS**
**WIND****	****	****	****     2 ****	****	****$  1,866,000**
**SOLAR****	****	****      ****	****     2 ****	****	****$10,465,000**
**ENERGY EFFICIENCY****	****     **_**2**_** ****	****	**_**$29,432,000**_
**	****	****	**
**        ****TOTAL****	****	****     6 ****	****	****$41,763,000**

## Rural Economic Development Loans & Grants (REDLG)

*Eligibility:  RUS electric and telephone borrowers (not delinquent on any Federal debt or in bankruptcy proceeding) and certain electric utilities that have prepaid.*
*Purposes:   Revolving loan programs, community development, technical assistance, construction, capital improvements, purchase of machinery and equipment, and working capital.*

## Rural Economic Development Loan Program – FY 2005

**Awarded:**
**Number****	****   ****	****	****49**
**Dollar      ****	****	****$22,322,375**
**Applications Pending:**
**Number****	****   ****	****	****21**
**Dollar****	****  ****	****$10,357,163**
**Balance of Funds Available:  $2,480,264**

## Rural Economic Development Loan/Grant Program FY 2006 Outlook

*Rural Economic Development Loans*
*$25 Million*
*Rural Economic Development Grants*
*$10 Million*

## RUS BOX SCORE

- Hardship Loans
- As of 3/31/2006
- FY Authority .........			$  90,000,000
- Approved (2) ........			_$  37,811,000_
- Remaining .............	  		$  52,189,000
- Applications Pending (2)	  	$  22,590,000

## RUS BOX SCORE

- Municipal Rate Loans
- As of 3/31/2006
- FY Authority .........		      	$      90,000,000
- Approved (1) ........	           	_$        9,584,000_
- Remaining ............                	$      80,416,000
- Applications Pending (3)	  	$      45,779,000

## RUS BOX SCORE

- Treasury Rate Loans
- As of 3/31/2006
- FY Authority .........		   $   900,000,000
- Approved (16) ........		   _$   273,888,000_
- Remaining .............		   $   626,112,000
- Applications Pending (28)	   $   470,649,000

## RUS BOX SCORE

- Loan Guarantees
- As of 3/31/2006
- FY Authority .........		$2,340,000,000
- Approved (8) ........		_$   608,516,400_
- Remaining .............		$1,731,483,600
- Applications Pending (42)	 $ 8,835,741,000

## Telecommunications

- Newly Selected Assistant Administrator
- Jacqueline Ponti
- Currently with the
- International Bureau of the FCC

## TELECOMMUNICATIONSProgram Budgets

**Infrastructure Loan Programs:**
**	****Hardship:****	****       **$145 million       $143 million
**	****Cost of Money:     **$419 million       $247 million
**	****RTB:****	****	****    **   $0	               $0
**	****FFB:****	****	****       **$125 million       $299 million

**2006**

**Program**

**2007 *****(proposed)***

## Dissolution of the Rural Telephone Bank

- 	The President’s Fiscal Year 2006 Budget established the process and terms to implement a dissolution of the RTB due to insufficient demand for the bank’s loans and the availability of adequate financing from other sources.  Stockholders of the RTB are receiving cash payout for their stock at par value.

## Dissolution of the Rural Telephone Bank

-   On April 11, 2006, RTB redeemed the stock of 630 telephone companies and cooperatives.  This represents 85% of stockholders.  Payouts totaled more than $1.2B.  All stock should be redeemed within the next few months.

## TELECOMMUNICATIONSProgram Budgets

**2006**

**Program**

**2007 *****(proposed)***

***TELECOMMUNICATIONS******Program Budgets***

**Grants:                 **$  17.8 M		     $    -0-*
**Loans:**		  $    2.2 B		     $358.9 M*

**Broadband Loan and Grant Program:**

- *Unused appropriation carries over from prior year

## TELECOMMUNICATIONSProgram Budgets

**Distance Learning and Telemedicine  Programs:**
**	****Loans:****	****                  **$25 million           $0
**	****Grants:                    **$25 million           $25 million

**2006**

**Program**

**2007 *****(proposed)***

## Broadband Loan Program:         FY2006 Budget

- 4%  Funding:  $64 Million
- Treasury Rate Funding: $1.085 Billion
- $556 Million – 2 Year Funds:  FY 2006
- $1.601 Billion – Good through FY 2007

## Broadband Program: Statistics

- 158 Applications Received
- Totaling $2,343,000,000
- _Applications Processed as of January 17, 2006_
- 	54 Approved			$   830,000,000
- 	  8 In Review			$   171,000,000
- 	96 Returned  			$1,342,000,000

## Broadband	

- Two new applications totaling $629.5M
- to serve a total of
- 1007 communities in 44 states

## Water and Environmental Programs ($ Millions)

**	**** ****	****	****	**** ****Actual****	**** ****	****	****Proposed****	**
**Direct Loans****	****	**** ****	**$    990.00		$   990.00
**Guaranteed Loans****	****	**$      75.00		$     75.00
**Grants**			  	$    438.00	 	$   346.00
**2005 Hurricanes**		$      45.00	 	$          0
**Solid Waste Mgmt Grants**  	$        3.50		$       3.50
**Individually-owed water well** 	$        0.99		$          0
**Grants for Water and** 		$        0.50		$          0
-      **Wastewater Revolving**
**Total**				**$ 1,552.99****	****	****$  1,414.50**

***Water and Environmental Programs****** *****($ Millions)**

**Notes:**
HTS is Hurricane/Tropical Storm

## Accounting Issues

## FERC Order No. 668Accounting Related to RTO/ISO

- Issued December 16, 2005
- Accounting requirements for public utilities including RTOs
- Established plant accounts, revenue and expense accounts, and procedures related to RTO/ISO accounting
- Effective January 1, 2006
- RDUP has not yet codified this revision

## FASB ED on Pensions and Other Postretirement Benefits

- Issued March 31, 2006
- Comments are due May 31, 2006
- Would require recognition of a liability if the pension or postretirement plan is unfunded or underfunded
- Negative impact on equity

## FASB ED on Pensions and Other Postretirement Benefits

- Currently requires 5 year valuation of postretirement benefit plans
- ED would require annual valuation as of the date of the audit
- Could result in increased volatility of margins
- Would require retrospective application of standard

## Other Issues

## Vacancies

- Field Accountant for Idaho, Washington & Alaska
- Field Accountant for Iowa
- Accounting Branch Chief, Washington, DC
- Senior Staff Accountant, Washington, DC

## RUS Field Accountants

**Kinter**

**Stover**

**Bellinger**

**Haas**

**Partrich**

**Garrett**

**Kirby**

**Kaufman**

**Martin**

**Baker**

**Bunch**

**Rich**

**Johnston**

**Stevens**

**Jergens**

**Vacant**

**Henry**

**Gustin**

**Mueller**

**Johnson**

**Elam**

**Benson**

**Forman**

**Clark**

**Frantz**

**Dellavedova**

**Vacant**
**   ****(Idaho)**

**Haas**
**(Kansas)**

**Shewmake**

**Colberg**

**Vacant**

**La****comb**

## RDUP CPA Seminars

- August 21 – 22		Bahia Resort Hotel				San Diego, CA
- September 18 – 19	Atlanta Sheraton				Atlanta, GA
- October 16 – 17	Albuquerque Marriott 				Albuquerque, NM

## RDUP CPA Seminars

**Topics we expect to cover:**
**Grant Requirements**
**Military Privatization Issues**
**Broadband over Power Lines**
**Disaster Recovery**
**Statistical Sampling**
**Risk Assessment Standards**
**Tax Issues**
**And many, many more**

## http://www.usda.gov/rus/

- _[Kenneth.ackerman@usda.gov](mailto:Kenneth.ackerman@usda.gov)_
- _Kenneth.ackerman@wdc.usda.gov_

## ?