May 17, 2001 Minutes

Twelve of the nineteen members (there is one vacancy) were present, representing a quorum:

Davis, Fr. William - by telephone

Parrino, Cheryl- by telephone

Gumper, Frank- by telephone

Rivera, Robert- by telephone

Hess, Kevin- by telephone

Sanders, Dr. Jay- by telephone

Jackson, Jimmy- by telephone

Talbott, Dr. Brian- by telephone

Lubin, Joel - by telephone

Thoms, Allan- by telephone

Ouye, Kathleen - by telephone

Wheeler, Tom- by telephone

One member joined the meeting in progress:

Hogerty, Martha - by telephone

Five members were absent:

Bryant, Anne

Lineberry, Isiah

Davis, Fr. William

Rosenblum, Lisa

Gold, Heather

Officers of the Corporation present:

Barash, D. Scott - Assistant Secretary

Haga, Robert - Assistant Treasurer

Others present for the meeting:

Name

Company

Faunce, Donna

USAC

Flannery, Irene

USAC

Howard, Cathy- by telephone

USAC

a1.

Revision of the Guidelines for Temporary Investments of USAC Funds to Update the Rating Agency for Investments in Bank Securities of Domestic Banks. Mr. Haga explained that a minor technical change had to be made due to a merger of the rating agencies. The rating agency that USAC used no longer exists and a new rating agency with comparable ratings had to be found. After reviewing other rating agencies, the Investment Committee found an agency with comparable ratings and recommends to the Board to update the Guidelines to reflect that change.

On a motion duly moved and seconded, the Board adopted the following resolution:

RESOLVED, That the USAC Board of Directors accepts the recommendation of the USAC Investments Committee to adopt the revised "Guidelines for Temporary Investments of USAC Funds" and further directs the Treasurer and Assistant Treasurer to use the revised Guidelines in managing the funds of the Corporation.

a2.

Approval of Contract Negotiations for USAC's Billing, Collection, Disbursement, and Financial Services - Confidential & Proprietary. On a motion duly moved and seconded, the Board adopted the following resolution:

RESOLVED, That the USAC Board of Directors determines that discussion of the proposals to perform billing, collection, disbursement, and financial management functions for USAC shall be conducted in Executive Session.

See Executive Session.

a3.

Miscellaneous.

• Election of a Director to the USAC Board of Directors and Election of a Director to the High Cost & Low Income Committee of the Board. Mr. Gumper announced that the FCC has approved the appointment of Ms. Karen Buller as the low-income consumer representative to fill out the term vacated by Mr. Butler. The Board must now elect the new member to the USAC Board of Directors. Consistent with the By-laws, the low-income consumer representative is entitled to a seat on the High Cost & Low Income Committee and the Board needs to appoint Ms. Buller to that Committee.

On a motion duly made and seconded, the Board adopted the following resolutions:

RESOLVED, That the USAC Board of Directors, in accordance with USAC's corporate By-laws, and due to the resignation of Board member Mr. Tony Butler, hereby elects Ms. Karen Buller to the USAC Board of Directors to replace Mr. Butler as the low-income consumer representative, whose term shall begin immediately and expire on December 31, 2002; and,

RESOLVED FURTHER, That the USAC Board of Directors hereby appoints Ms. Karen Buller to the High Cost & Low Income Committee as the low-income consumer representative.

i1.

Report on USAC's FCC Financial Reporting Issues - Confidential & Proprietary. On a motion duly moved and seconded, the Board adopted the following resolution:

RESOLVED, That the USAC Board of Directors determines that discussion of matters related to USAC's FCC financial reporting shall be conducted in Executive Session.

See Executive Session.

i2.

Miscellaneous. NONE.

On a motion duly moved and seconded, the Board voted at 4:37 p.m. Eastern Time to go into Executive Session for purposes of discussing the two confidential and proprietary items as noted above.

a2.

Approval of Contract Negotiations for USAC's Billing, Collection, Disbursement, and Financial Services - Confidential & Proprietary. Staff reviewed the vendor contract proposals submitted in response to USAC's Request for Proposals for USAC's billing, collection, disbursement, and financial services.

On a motion duly moved and seconded, the Board voted at 4:50 p.m. Eastern Time to go back into Open Session to vote on the resolution, as the resolution is not confidential and proprietary.

a2.

Approval of Contract Negotiations for USAC's Billing, Collection, Disbursement, and Financial Services - Confidential & Proprietary. On a motion duly moved and seconded, the Board adopted the following resolution:

RESOLVED, That the USAC Board of Directors accepts the recommendation of the USAC Executive Committee and approves entering into contracts with PricewaterhouseCoopers and LaSalle Bank to provide Billing, Collection, Disbursement, and Financial Services, and allows the Investments Committee to utilize Bank One as an outside investment manager consistent with the Investment Guidelines.

On a motion duly moved and seconded, the Board voted at 4:51 p.m. Eastern Time to go into Executive Session for purposes of discussing the confidential and proprietary item concerning USAC's financial reporting issues as noted above in #iBOD01.

i2.

Report on USAC's FCC Financial Reporting Issues - Confidential & Proprietary. Mr. Gumper reported on a recent meeting between certain USAC Board members and the FCC concerning USAC's financial reporting issues. Board members consulted with counsel concerning this matter.

On a motion duly moved and seconded, the Board adjourned from Executive Session and reconvened in Open Session at 5:20 p.m. Eastern Time to report out the discussion during Executive Session.