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m. For identifying and ensuring that the City complies with laws, regulations, grants, and
contracts applicable to its activities and its federal award programs and implementing
systems designed to achieve compliance with applicable laws, regulations, grants, and con-
tracts applicable to activities and its federal award programs.

n. For adjusting the financial statements to correct material misstatements and confirming to us
in the management representation letter that the effects of any uncorrected misstate-
ments aggregated by us during the current engagement and pertaining to the current year
period(s) under audit are immaterial, both individually and in the aggregate, to the financial
statements as a whole.

o. For maintaining adequate records, selecting and applying accounting principles, and safe-
guarding assets.

p. For confirming your understanding of your responsibilities as defined in this letter to us in
your management representation letter.

With regard to the supplementary information referred to above, you acknowledge and under-
stand your responsibility: (a) for the preparation of the supplementary information in accordance
with the applicable criteria; (b) to provide us with the appropriate written representations regarding
supplementary information; (c) to include our report on the supplementary information in any
document that contains the supplementary information and that indicates that we have reported
on such supplementary information; and (d) to present the supplementary information with the
audited financial statements, or if the supplementary information will not be presented with the
audited financial statements, to make the audited financial statements readily available to the
intended users of the supplementary information no later than the date of issuance by you of the
supplementary information and our report thereon.

As part of our audit process, we will request from management and, when appropriate, those charged
with governance, written confirmation concerning representations made to us in connection with
the audit.

Reporting

We will issue a written report upon completion of our audit of the City’s basic financial statements.
Our report will be addressed to the Mayor and Board of Aldermen of the City. We cannot provide
assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions, add an emphasis-of-matter or other-matter paragraphs,
or withdraw from the engagement.

In accordance with the requirements of Government Auditing Standards, we will also issue a written
report describing the scope of our testing over internal control over financial reporting and over
compliance with laws, regulations, and provisions of grants and contracts, including the results of
that testing. However, providing an opinion on internal control and compliance over financial
reporting will not be an objective of the audit and, therefore, no such opinion will be expressed.

Provisions of Engagement Administration, Timing, and Fees

During the course of the engagement, we may communicate with you or your personnel via fax
or e-mail, and you should be aware that communication in those mediums contains a risk of
misdirected or intercepted communications.

Edward J. Boyd, Jr, CPA is the engagement principal for the audit services specified in this letter.
Those responsibilities include supervising the City’s services performed as part of this
engagement and signing or authorizing another qualified firm representative to sign the audit
report.

Our fees are based on the amount of time required at various levels of responsibility, plus actual
out-of-pocket expenses. Invoices will be rendered monthly and are payable upon presentation.
Our fees for audit services for June 30, 2020 - 2021 will be $122,500 and $125,000, respectively.

We will notify you immediately of any circumstances we encounter that could significantly affect
this initial fee estimate. Whenever possible, we will attempt to use the City’s personnel to assist
in the preparation of schedules and analyses of accounts. This effort could substantially reduce
our time requirements and facilitate the timely conclusion of the audit. Further, we will be
available during the year to consult with you on financial management and accounting matters
of a routine nature.

You agree to inform us of facts that may affect the basic financial statements of which you may
become aware during the period from the date of the auditor’s report to the date the financial
statements are issued.

Other Services

We will assist in compiling the financial statements, including note disclosures, and preparing the
government-wide financial staternents (by consolidating various funds into governmental activities,
and recording all long-term assets, long-term jiabilities, and net position classifications from infor-
mation provided by the City).

We will also assist in the compilation of the following information based on information gathered
during the audit process:

e Management’s Discussion and Analysis

® Data Collection Form

With respect to any nonattest services we perform, which may include assistance with the com-
pilation of financial statements, the City’s management is responsible for (a) making all
management decisions and performing all management functions; (b) assigning a competent
individual to oversee the services; (c) evaluating the adequacy of the services performed;

(d) evaluating and accepting responsibility for the results of the services performed: and
(e) establishing and maintaining internal controls, including monitoring ongoing activities.

Group Audit Considerations

Our audit will be a group audit as defined by AU-C Section 600. We have identified Pennichuck
Corporation and Nashua Airport Authority as components of our group audit. Our Firm will act as
the auditor for Pennichuck Corporation. Another firm will act as the auditor for the Nashua
Airport Authority and we will communicate to the other auditor our intention to rely on their
opinion on the applicable components’ financial statements. At the conclusion of our audit we
will obtain this representation and approval to rely on such opinion.

Other Matters

We understand that your employees wil! locate any documents or support for any other trans-
actions we select fer testing.

We are not hosts for any client information. You are expected to retain all financial and non-
financial information to include anything you upload to a portal and are responsible for down-
loading and retaining anything we upload in a timely manner. Portals, including ShareFile, are only
meant as a method of transferring data, are not intended for the storage of client information,
and may be deleted at any time. You are expected to maintain control over your accounting systems
to include the licensing of applications and the hosting of said applications and data. We do not
provide electronic security or back-up services for any of your data or records. Giving us access
to your accounting system does not make us hosts of information contained within.

If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers’ proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.

During the course of the audit, we may observe opportunities for economy in, or improved controls
over, your operations. We will bring such matters to the attention of the appropriate level of man-

agement, either orally or in writing.

In accordance with the requirements of Government Auditing Standards, a copy of our latest external
peer review report of our firm is available upon request for your consideration and files.

We agree to retain our audit documentation or work papers for a period of at least five years from
the date of our report.

At the conclusion of our audit engagement, we will communicate to those charged with governance
the following significant findings from the audit:

a. Our view about the qualitative aspects of the City’s significant accounting practices.

b. Significant difficulties, if any, encountered during the audit.
c, Uncorrected misstatements, other than those we believe are trivial, if any.
d. Disagreements with management, if any.

e. Other findings or issues, if any, arising from the audit that are, in our professional judgment,
significant and relevant to those charged with governance regarding their oversight of the
financial reporting process.

f. Material, corrected misstatements that were brought to the attention of management as
a result of our audit procedures.

Representations we requested from management.
Management’s consultations with other accountants, if any.

i. Significant issues, if any, arising from the audit that were discussed, or the subject of cor-
respondence, with management.

The audit documentation for this engagement is the property of Melanson Heath and constitutes
confidential information. However, we may be requested to make certain audit documentation
available to regulators and federal agencies and the U.S. Government Accountability Office
pursuant to authority given to it by law or regulation, or to peer reviewers. If requested, access
to such audit documentation will be provided under the supervision of Melanson Heath’s per-
sonnel. Furthermore, upon request, we may provide copies of selected audit documentation to
these agencies and regulators. The regulators and agencies may intend, or decide, to distribute
the copies of information contained therein to others, including other governmental agencies.

Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement
with, the arrangements for our audit of the financial statements including our respective

responsibilities.

We appreciate the opportunity to be your financial statement auditors and look forward to working
with you and your staff.

Respectfully,

GLA] Bod.

Edward J. Boyd, Jr., CPA
Principal

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RESPONSE:
This letter correctly sets forth our understanding.

Acknowledged and agreed on behalf of the City of Nashua, New Hampshire by:

Name:

Title:

Date:

10

R-20-039

RESOLUTION

AUTHORIZING PENNICHUCK CORPORATION AND PENNICHUCK WATER
WORKS, INC. TO ISSUE TAXABLE BONDS OF UP TO $75,000,000

CITY OF NASHUA

In the Year Two Thousand and Twenty

WHEREAS, the City of Nashua is the sole shareholder of Pennichuck Corporation
(“Pennichuck”) and each of its subsidiaries;

WHEREAS, Article IX (3) of the Articles of Incorporation of Pennichuck and Article V
§2 of the by-laws of Pennichuck require the approval of the sole shareholder (the City of
Nashua) for Pennichuck to create, incur, assume, or guarantee any indebtedness for borrowed
money, which includes contracting a loan on behalf of Pennichuck or its subsidiaries; and

WHEREAS, Pennichuck Water Works, Inc. is a regulated New Hampshire public water
utility, and is a wholly owned subsidiary of Pennichuck which, in turn, is wholly owned by the
City of Nashua.

NOW, THEREFORE, BE IT RESOLVED by the Board of Aldermen of the City of
Nashua that the City approves the borrowing by Pennichuck Water Works, Inc. of up to
$75,000,000 of issuance of taxable bonds to finance and refinance currently outstanding debts of
approximately $58,500,000, finance monies to refill its MOERR RSF for $5,500,000, and to
fund the cost of issuance and any escrow deposits amounts required and any allowance needed
for the issuance of the bonds at a premium, should that be required.

LEGISLATIVE YEAR 2620

RESOLUTION: R-20-039

PURPOSE: Authorizing Pennichuck Corporation and Pennichuck Water
Works, Inc. to issue taxable bonds of up to $75,000,000

ENDORSERS: Alderman-at-Large Lori Wilshire
COMMITTEE
ASSIGNMENT: Budget Review Committee
FISCAL NOTE: None.

ANALYSIS

This resolution approves the proposal by Pennichuck Corporation and one of their regulated
public water subsidiaries to issue up to $75,000,000 in taxable bonds as described in the
resolution.

We have forwarded additional information provided by Pennichick on the proposal to the Board
of Aldermen.

Article IX (3) of Pennichuck Corporation’s Articles of Incorporation and Article V §2 of the
Pennichuck Corporation’s by-laws requires City approval for the borrowing.

Approved as to form: Office of Corporation Counsel

By: /s/ Dorothy Clarke

Date: May 20, 2620

R-20-040

RESOLUTION

AUTHORIZING THE MAYOR AND CITY TREASURER TO BORROW FROM THE
NEW HAMPSHIRE DEPARTMENT OF ENVIRONMENTAL SERVICES STATE
REVOLVING LOAN FUND AN ADDITIONAL AMOUNT NOT TO EXCEED TWO
MILLION FIVE HUNDRED THOUSAND DOLLARS (32,500,000) FOR PUMP
STATION UPGRADES

CITY OF NASHUA

In the Year Two Thousand and Twenty

WHEREAS R-15-150 “Authorizing the Mayor and City Treasurer to borrow an amount
not to exceed Eight Million Five Hundred Thousand Dollars ($8,500,000) through the issuance
of bonds and/or a loan through the New Hampshire Department of Environmental Services State

Revolving Loan Fund for pump stations upgrades” was passed by the Board of Aldermen on July
14, 2015; and

WHEREAS the pump station upgrades project has been broken into two phases with
Phase I having an estimated cost of $4,885,000 and currently funded through a loan from the
New Hampshire Department of Environmental Services State Revolving Loan Fund. Additional
funding is needed to complete Phase II of the pump station upgrades, which has an estimated
cost of $6,115,000, requiring the city to borrow an additional amount up to $2,500,000,
increasing the total authorization for the Pump Stations Upgrade Project from $8,500,000 to
$11,000,000.

NOW THEREFORE, BE IT RESOLVED by the Board of Aldermen of the City of
Nashua that the Mayor of the City of Nashua and the City Treasurer of the City of Nashua are
hereby authorized to borrow an additional amount up to Two Million Five Hundred Thousand
Dollars ($2,500,000), which increases the total project amount not to exceed Eleven Million
Dollars ($11,000,000), through the low interest loan program offered through the State of New
Hampshire Department of Environmental Services, identified as the State Revolving Loan Fund.
The proceeds of said loans shall be used to fund the Pump Stations Upgrade Project Phase I and
I.

Mayor James Donchess is hereby authorized on behalf the City of Nashua to file an
application for a loan to be made in accordance with New Hampshire Code of Administrative
Rules Chapter Env-Wq 500. If such loan is made the City of Nashua agrees to repay the loan as
stipulated in the loan agreement.

RESOLUTION R-20-046

The Treasurer for the City of Nashua is hereby authorized to furnish such information
and take such other action as may be necessary to enable the City of Nashua to qualify for the
loan.

The Treasurer for the City of Nashua is hereby designated as authorized representative of
the City of Nashua for the purpose of furnishing such information, data and documents
pertaining to the City of Nashua for the loan as may be required, and otherwise to act as the
authorized representative of the City of Nashua in connection with this application.

RESOLVED FURTHER that the Mayor is authorized to enter into the required
contracts therefore as well as any amendments to be made thereto or any other documentation
necessary for the receipt of said funds.

RESOLUTION:

PURPOSE:

ENDORSER(S):

COMMITTEE
ASSIGNMENT:

FISCAL NOTE:

LEGISLATIVE YEAR 2020
R-20-040

Authorizing the Mayor and City Treasurer to borrow from the
New Hampshire Department of Environmental Services State
Revolving Loan Fund an additional amount not to exceed two
million five hundred thousand dollars ($2,500,000) for pump
station upgrades

Mayor Jim Donchess

Budget Review Committee
Board of Public Works

It is anticipated that the additional loan ($2,500,000) will be
approved in FY 21 for a term of twenty years. It is estimated that
the interest rate will be approximately 2.0% and the total cost for
the loan will be approximately $3,025,000 including interest. The
average annual payment will be approximately $153,000 with the
beginning years at a higher amount.

ANALYSIS

This resolution authorizes the Mayor and the City Treasurer of the City of Nashua to borrow up
to $2,500,000 in additional funds from the State of New Hampshire Revolving Loan Fund to be
used for expenses related to completing the Pump Stations Upgrade Project.

Pursuant to Nashua City Charter §54-a, this Resolution requires a “duly advertised public
hearing”. Also see NH RSA 33:9, which requires a 2/3 vote for passage of this Resolution.

This legislation should be referred to the Board of Public Works.

Approved as to accountstructure, Financial Services Division

numbers, and amount:

Approved as to form:

By: /s/ David Fredette
Office of Corporation Counsel
By: /s/ Dorothy Clarke

Date: May 20, 2020