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cooperate in good faith to agree upon a timeline for LIBERTY to complete such relocation,
which shall in all events be as soon as is reasonably possible under the circumstances. If any
relocation of the Encroachments shall be necessary, NASHUA shall provide an alternative
location for the Encroachments within the Gas Easement Area, subject to LIBERTY’s approval,
not to be unreasonably withheld, conditioned or delayed. All notices sent to LIBERTY pursuant
to this Agreement shall be directed to the following address:

Liberty Utilities (EnergyNorth Natural Gas) Corp.
ATTN: Gas Engineering

130 Elm St

Manchester, NH 03101

5. This agreement shall be binding upon and inure to the benefit of the parties and
their heirs, successors, legal representatives, and assigns. This agreement shall run with the title
to the Property.

6. LIBERTY hereby agrees to indemnify and hold NASHUA harmless from and
against any and all liabilities, damages, claims, costs and expenses, including reasonable
attorney’s fees and court costs, which may be imposed upon or asserted against NASHUA
arising from or in any way connected with. the Encroachments or arising in any way from
this agreement, except to the extent the same arise from the negligence or willful misconduct of
NASHUA, its agents, employees or contractors.

7. LIBERTY also hereby agrees to, indemnify and hold NASHUA harmless and
accepts all risks of loss associated with respect to the Encroachments, as a result of constructing
the Encroachments. NASHUA shall not in any way, be liable or responsible to reimburse
LIBERTY for the Encroachments, damage to the Encroachments, replacement cost or otherwise,
except to the extent the same arises from the negligence or willful misconduct of NASHUA, its
agent, employees or contractors. The construction and use of the Encroachments ts at
LIBERTY’s own risk of loss, which risk is accepted by LIBERTY.

8. This Agreement shall be interpreted in accordance with the laws of the State of

New Hampshire. The parties agree that any action arising from or relating to this agreement
shall be filed in the Superior Court of Hillsborough County, New Hampshire.

This Agreement and Consent to Joint Use and any amendments thereto shall be recorded
at the Hillsborough County Registry of Deeds.

[Remainder of Page Left Intentionally Blank; Signature Page Follows]

EXECUTED by the parties the day and year first above written.

CITY OF NASHUA

Mayor James W. Donchess, duly authorized

Mayor’s authority pursuant to R-21-xxxx approved by the Nashua Board of Alderman on
XXXXXKXX.

State of New Hampshire
County of Hillsborough } ss.

The foregoing instrument was acknowledged before me on this day of

, 2021, by James W. Donchess, Mayor of the City of Nashua, a New
Hampshire municipal corporation, on behalf of the municipality.

Notary Public

Printed Name
My Commission Expires:

LIBERTY UTILITIES
(ENERGYNORTH NATURAL GAS) CORP.

Neil Proudman, President, duly authorized
State of New Hampshire
County of } ss.

The foregoing instrument was acknowledged before me on this day of
, 2021, by Neil Proudman, President. Liberty Utilities (EnergyNorth Natural
Gas) Corp. on behalf of said corporation.

Notary Public

Printed Name
My Commission Expires:

Michael Richard Paradis

Melania Marcu

State of New Hampshire
County of } ss.

The foregoing instrument was acknowledged before me on this day of
2021, by Michael Richard Paradis.

Notary Public

Printed Name
My Commission Expires:

State of New Hampshire
County of } ss.

The foregoing instrument was acknowledged before me on this day of
2021, by Melania Marcu.

Notary Public

Printed Name
My Commission Expires:

LEGISLATIVE YEAR 2021

RESOLUTION: R-21-169
PURPOSE: Authorizing the City of Nashua to enter an Agreement and

Consent to Joint Use with Liberty Utilities and making a
supplemental appropriation of $38,394

ENDORSERS: Alderman Patricia Klee

Budget Review Committee

COMMITTEE Planning Board
ASSIGNMENT: Board of Public Works

FISCAL NOTE: Supplemental appropriation of money received by Liberty
Utilities for a specific purpose.

ANALYSIS

This resolution authorizes the City of Nashua to enter into an Agreement and Consent to Joint
Use with Liberty Utilities. As this includes a modification to an casement granted to the City,
Charter $77 provides that the Planning Board “shall review and make recommendations to the
mayor and board of aldermen on all focations for proposed municipal building and facilities,
including educational, [and] on the purchase and sale of any land by the city.”

This legislation also appropriates $38,394 of F¥2022 unanticipated revenue from Public Works
Administration and Engineering ~ Miscellaneous Revenue into Public Works Administration and
Enyineering — Construction Services. This represents a one-time payment from Liberty Utlities
to cover the City’s cost to reline the existing drain line in the area of 39 Swart Terrace, where the
new vas main will be installed. Charter Sec. 53 permits specific non-budyget. supplementary
appropriations. There should be notice and a public hearing. A two-thirds vote 1s required under
Charter Sec. 56-b for an item or amount not in the mayor’s budget. A roll call is required under
Charter Sec, 49,

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

Approved as to account Financial Services Division
structure, numbers,

and amount: By: _/s/ David G. Fredette
Approved as to form: Office of Corporation Counsel

By: /s/ Dory Clarke

Date: September 8, 2021

A Special Meeting of the Board of Aldermen was held Tuesday, September 21, 2021, at 7:01 p.m. in the Aldermanic
Chamber and via Zoom teleconference which meeting link can be found on the agenda and on the City’s website
calendar.

President Lori Wilshire presided; Deputy City Clerk Allison Waite recorded.

Prayer was offered by Deputy City Clerk Allison Waite; Alderman Ernest Jette led in the Pledge to the Flag.

Let’s start the meeting by taking a roll call attendance. If you are participating via Zoom, please state your presence,

reason for not attending the meeting in person, and whether there is anyone in the room with you during this meeting,

which is required under the Right-To-Know Law.

The roll call was taken with 12 (8 in attendance and 4 via Zoom) members of the Board of Aldermen present:
Alderman Michael B. O’Brien, Sr., Alderman Richard A. Dowd, Alderman June M. Caron, Alderman Benjamin
Clemons (via Zoom), Alderman Thomas Lopez, Alderman David C. Tencza (via Zoom), Alderwoman Elizabeth Lu (via
Zoom), Alderman Ernest Jette, Alderman Jan Schmidt, Alderman Brandon Laws (via Zoom), Alderman Skip Cleaver
(via Zoom), Alderman Linda Harriott-Gathright, Alderman Wilshire.

Alderman Patricia Klee and Alderwoman Shoshanna Kelly were not in attendance.

DISCUSSION

Discussion with New Hampshire Retirement System

President Wilshire to introduce Marty Karlon and Jan Goodwin from the NH Retirement System.

President Wilshire

I’m sorry for all the technical difficulties for our guests. I’m going to turn this over to you Mr. Karlon.

Marty Karlon, Director of Communications and Legislative Affairs

Thank you for the technical difficulties. I’m having some of my own trying to load a PowerPoint on this laptop. | think our
IT Department is (inaudible) and it’s almost impossible to open a file on here. So | did bring hard copies to go through.
It’s a little old school but I'll distribute those because | don’t think this is going to open. While I’m doing that, this is our
Executive Director Jan Goodwin and she can have some opening remarks before we get to the presentation.

Jan Goodwin, Executive Director of NH Retirement System

So thank you very much members of the Council for inviting us to come and talk to you about the retiree system. We've
got a talk that we’ve prepared for you that’s about the past, present, and future of NHRS that will explain to you why the
contribution rates are what they are now and what we're thinking they'll be in the future.

If you'd like, we can start without the electronic slide show and we can just tell you when to turn the page if you’d like.
Alderman Dowd

Excuse me. With the masks, you have to pull the microphone very close.

Jan Goodwin, Executive Director of NH Retirement System

Okay. Thank you very much for that suggestion.

Marty Karlon, Director of Communications and Legislative Affairs

Apologies. It apparently is on this laptop. It won't allow me to open the file. I’m going to close out. Again, apologies.
Would you prefer us to stand when we’re presenting?

Special Board of Aldermen 09-21-2021 Page 2
President Wilshire
No you’re fine seated. That’s fine.

Marty Karlon, Director of Communications and Legislative Affairs

Just for the record, my name is Marty Karlon and I’m the Director of Communications and Legislative Affairs at the
Retirement System. I’ve been there about 11 years. I’m going to do the first half of the presentation which deals with
some of the issues that occurred in the past and how they brought us to where we are now. Then Jan is going to take
the presentation home with a look at some current numbers and where we’re headed. I'll be glad to take questions from
the panel if at the will of the Chair during or we can take them at the end, whichever you all prefer. Whatever your style
is.

Really you know especially with the New Hampshire Retirement System and the timescales it works on — you need to
sort of understand the past and some decisions that were made back then to see — to get a better picture of where we
are now, and how we got there, and what’s been done about it by both the Retirement System, the legislature, and
everyone else. So I'll go to slide two which is just the beginning. NHRS is an entity and has been around since 1967.
There were separate retirement plans for the four member groups that we independently governed by different boards
and the legislature combined and consolidated those plans at the NHRS back in ’67. As it is now when the plan was set
up, there were two membership categories. Group | which is employees and teachers, and Group II which is police and
fire. Our plan is for full-time employees only.

At the time the plan was set up, the State contributed 40 percent of the employer contributions for teachers only. That
was a holdover from the predecessor teacher plan that the State had at least since the early ‘50s as far back as | could
confirm and always contributed 40 percent of the employer costs towards teachers.

In 1977 on slide 3, that employer subsidy was modified and expanded. The State reduced the teacher contribution from
40 percent to 35 but at the same time created a 35 percent contribution subsidy for police officers and firefighters for the
cost of the communities contribute to the retirement system for those positions. | believe in 1974 there were
improvements to the Group 2 police and fire plan and the bills were coming due on that with the ‘77 rates and | think was
one of the reasons that spread the legislature to take this action. That subsidy had been in place for many years until it
was reduced in 2009 and then eventually eliminated a couple years later.

So moving to slide 4 - 1983. We call this one heads | win, tails you lose and the issue here and the decision was that it
was a relatively young plan. There were far more active members than retirees than in cost of living adjustments were
being paid for either through the general fund or through some other employer assessment formula. But you know in the
long term, policymakers looked at that and said you know as the retiree population grows, you know, we need to have a
better, more stable source of funding for COLAs - cost of living adjustments - than the general fund. So they created
what was called, “the special account” at the time and this was funded by, and it's in quotes, “excess earnings”. This
was essentially when our investment return exceeded a certain point. Any funds over and above that, that return were
segregated in the special account to pay other COLA or post-employment benefits. So it was seemed like a good idea
when you were exceeding your assumed rate of return as a model, but it did not prove to be the case over the long term
and that was the funding particularly for the medical subsidy benefit was determined to be an IRS issue with the special
account In the early mid 2000s and it was repealed in 2011. So this is one of the first steps to creating a structural
unfunded liability with the retirement system and it plays into some decisions in the ‘90s and then some economic
impacts in the 2000s is one of the sort of the legs of how we got to where we are liability wise.

1984 - a Constitutional amendment was passed in New Hampshire by referendum Article 36A and that did three things
essentially. It established the pension funds in the trust are for the exclusive benefit of NHRS members not to be
diverted for any other purpose. It required the trustees to set actuarially sound employer contribution rates so they, you
know, then would have any leeway on what the actuary crunches the numbers and they go with that. Then it also
required employers to pay those rates in full each fiscal year.

Now, this distinguishes NHRS from several States around the country that you might have heard about if you follow
pension issues where funding levels are and liabilities are much greater than in New Hampshire, such as Illinois, New
Jersey, Kentucky, and in those jurisdictions, there is no Constitutional provision. So the legislature grants as much
money as it feels like you can afford that year. So they're not necessarily fully funding their pension obligations as
they’re accrued and that's a hole that you just keep digging and it gets harder and harder to get out. We had 36A in New
Hampshire and | think there was a Constitutional convention a few years earlier and this was one of the proposals that
came out of that. There were some unsuccessful attempts by governors in the ‘70s and ‘80s to borrow against the trust
fund for other State priorities or defer payments of their State's pension obligation. So that's where 36 A came from.

Special Board of Aldermen 09-21-2021 Page 3

The following year, and this was sort of wending parallel tracks through the courts. There was a Supreme Court case
Sununu v. NHRS and obviously Sununu the elder. The issue there was whether the Executive Council could approve
NHRS contracts for vendors, and investments, and such, and the court found that we are not an executive branch
agency and we're operating for the exclusive benefit of the members. So that sort of got us farther removed from the
hurly burly of State government in the Executive Branch.

Alderman O’Brien

One question, Madam President, if | may

President Wilshire

Alderman O'Brien.

Alderman O’Brien

Yes. Mr. Karlon are you sharing the screen? Did you get the program working?

Marty Karlon, Director of Communications and Legislative Affairs

It's still frozen. So...

Alderman O’Brien

Okay cuz | took this — I’ve received some text. Since it's still frozen, | took it down to go back on. Did you want to back
up where it's still frozen?

Marty Karlon, Director of Communications and Legislative Affairs

Probably not. It’s just my file is open here and | suspect...
Alderman O’Brien
Okay. That's why | took it down. Okay. Thanks you Madam President.

Marty Karlon, Director of Communications and Legislative Affairs

(inaudible) that even opening one of my own files has become problematic. We haven't been out on the road, obviously,
very much in the past year and a half either. Good break for a question because the next slide is “1991 Digging the
Hole”. This is a really significant slide and I'm probably going to talk more about it than | need to but this is sort of an
extremely important issue that kind of led us down the path we were.

So it a little bit further back in the late ‘80s, we had a couple of very strong investment years in excess of 25% in back to
back years and there was some (inaudible) in the legislature in 88 — °89 to increase or improve benefits for our
membership in Group | and Group II include creating a medical subsidy benefit that was initially only for Group |. What
happened is the way our rates are cycled, the State is on a two year budget cycle and that follows our rate cycle. So the
1989 valuation is what would ultimately lead to the 1992 - ‘93 fiscal year rates. So in the interim between 1989 and

91, you know we had a recession across the country. New Hampshire was hit particularly hard and | recognize several
of you from when | lived in Nashua and you were around back then. Banks were closing left and right on Main Street,
condos were underwater, and there were a lot of pressures on both the State and local governments. | think Nashua
was even also impacted by a revaluation that sort of shifted the tax burden because the commercial property had
dropped so much.

So you know as that was coming, the rates for ’92 — ‘93 we're going to be on a percentage increase basis significantly
higher than they were in prior years. | mean they were still much lower than they are an absolute percentage is now, you
know, but even that increase was difficult for policymakers to want to undertake in the recession. So there was
legislation adopted in 1991 that did a few things. It changed the actuarial method - the way the actuarials crunched the
numbers to develop the rates to an open group aggregate. It was an actuarial methodology that was allowed at the time
and it stretched liabilities out over a much farther period. So it lowered, you know, the rates in the short term but it was
sort of design where you'd almost never catch up. They also by legislation set our assumed rate of return at an
extremely high level and this was going to be sort of a temporary stopgap solution to get the '92 — ‘93 rates recertified.

Special Board of Aldermen 09-21-2021 Page 4

So, you know, this is one where you could say how could this happen. | think people trying to make, you know,
reasonable decisions based on the information they had.

You can point fingers in every direction to say who should have spoken up, including our Board, membership,
employers, you know, but you know, it happened. It was not a temporary solution. The mandate on the assumed rate of
return was repealed the following year, but that Open Group Aggregate stayed as the method for calculating rates
through the 2009 rates. So that was essentially like drilling a hole in the bottom of your boat and forgetting about it for 18
years and then when your ankles get wet, you wonder what happened. So you know and those changes were in the
early years, sort of papered over by the fact that we did have a very strong 1990s like anyone in the markets. We had |
think eight years out of nine where it was 10 to 20% return. So the special account was getting filled. We were still
hitting our return assumptions and we had this technical term would be “funky math for calculating our rates” and things
were swimming along until the early 2000s, when we had the .com bubble in the recession after 9/11. That got the
legislature thinking that maybe this wasn't the right way to do it and, you know, constituent groups and ultimately in 2007,
some legislation was adopted, replaced the Open Group Aggregate with Entry Age Normal, which is right now the only
standard way to calculate rates allowed under GASB and actuarial standards and created the 30 year amortization of the
unfunded liability, which at the time was 2.4 billion. The liability was hidden. The number looked much lower when you
were using the Open Group Aggregate Method. So it was a bit of a, you know, a shock. The special account funding to
that was cut off until certain triggers were matched. So no more money was flowing from investment income into the
special account and they also created a commission in HB 876 to make additional recommendations of reform of the
retirement system was essentially what we're referring to was the first “Decennial Commission’.

President Wilshire

Alderman Jette do you have a question?

Alderman Jette

Yes. You mentioned “GASB”. What is GASB?”

Marty Karlon, Director of Communications and Legislative Affairs

Oh Governmental Accounting Standards Board. It's not a mandate, but to get a clean audit opinion, it needs to adhere
to the GASB standards for different things.

Alderman Jette
Thank you.

Marty Karlon, Director of Communications and Legislative Affairs

You're welcome. So in 2008, additional legislation followed the 2007 changing the methodology and closing the loop —
vetting a closed period on the debt was sort of foundational issues that shored up you know, patch those holes in the
floor and you're still up to your ankles in water but, you Know, there's no more water coming in.

In 2008, the legislature made additional changes. They created an Independent Investment Committee to manage the
plan’s investments, transferred money from the special account into the body of the trust fund to mitigate some of the
employer costs of the time, froze the medical subsidy benefit, which is essentially very close now but the increases in it
were frozen, and revise the definition of earnable compensation. So what employees and other members earn not all
the pay types are allowed. They previously had been. There was a lawsuit challenging some of these decisions. It went
on for several years and will kind of close the book on the lawsuits on us on a future slide. So, you know, that was more
cleanup. 2007 - 2008 combined, you know, we're sort of dealing with some structural issues.

In 2009, obviously, 2008 - 2009 Great Recession. You know, dire days for all and the State was looking to manage its
funding as well. So it that employer subsidy | talked about earlier that had been around since the late ‘70s was lowered
by legislation to 30% in fiscal 10 and 25% in fiscal ‘11. It was slated to bounce back to 35% in fiscal 12 but in 2011, that
was repealed entirely instead. So you know, that also drew a lawsuit from school districts, and counties and employers.
That was decided, | think in 2014.

Then 2011. So we talked about structural things. We talked about State funding for employers. In 2011 - 2012, the
legislature came in and sort of looked toward the benefit side towards the member side is to what to cut and how to
manage that. So through what it ultimately became part of House Bill 2, which is the Budget Trailer Bill but there was by

Special Board of Aldermen 09-21-2021 Page 5

far the most significant changes to the pension system since it was established. In a set of changes, member
contributions were increased as a percent of pay. Several benefit provisions were reduced for non-vested active
members and for future hires. Some of the pension formulas themselves were changed so they would generate a lower
result for, you know, non-vested in future generations. It changed the composition of our Board of Trustees to bring
more employers on, you know, a huge slate of changes.

Essentially at that point, you Know, we had two benefit plans - Group | and Group II and what this did was created three
tiers of benefits within each group. So there was a lot of changes there. Again, these provisions drew two lawsuits
against the State. One specifically on the increased to member contributions and one basically on everything else in it.
Over a period of decisions between 2012 and 2016, the Supreme Court decided in favor of the State and all of these
cases. The City of Concord was the lead plaintiff in the employer subsidy case. They said that was not an unfunded
mandate. In all of the benefit cases that were brought by various labor groups, you know, in other interested parties,
they claim the court found that those were not an unconstitutional breach of contract and they introduced into New
Hampshire the legal concept of the “unmistakability doctrine”, which has been applied in other States if the legislature
does not have an unmistakable intent in passing legislation that does not represent a contract and can be changed by
future legislative bodies. So everything that, you know, passed between 2007 and 2011, all stood up in court.

So brought us to 2017. A lot of the heavy lifting was done but, you know, the smoke had not yet cleared and the
commission to look at the long term viability of the retirement system, which was created in 2007, was going to convene
every 10 years. So we had Decennial Commission in 2017 that met for a period of three or four months in the fall of 17
to look at the plan. Folks from all ends of the political spectrum, and the members, employers, retirees, legislators, local
representatives, because about a 21 member commission, looked at that and they made several suggestions. They
thought that overall the funding progress was moving in the right direction but they suggested revisions to working after
retirement for NHRS retirees with participating employers. They adopted layered amortization which is sort of a difficult
concept for a non-actuarial like myself to convey but basically, it's a mechanism to reduce a lot of volatility with future
liabilities by spreading them out over 20 year periods going forward. We'll talk a little bit more about that on one of the
funding slides.

They recommended a one-time payment to retirees in lieu of a cost of living adjustment because of costs, made several
other proposals that were ultimately adopted by the legislature. Some as is some with, you know, legislation, legislative
negotiation, modifying them a little bit. The Commission actually had funding from the State and they used some of that
money to hire the Center for Retirement Research at Boston College to do sort of an independent third party review of
NHRS and the changes that the legislature has made over the past 10 years. If you're not familiar and, you know,
they're not in the headlines that much, but they are very well regarded nationally as a nonpartisan Retirement Research
Center both in public and private sector, retirement issues. They do a lot of work. You'll hear them on the nightly
business review and things like that quite a bit representatives from there. They looked at NHRS and found that in 2017,
we use among the more conservative assumptions for mortality and rate of return compared to other State plans which
they created as a good thing. They found that our investment returns over the trailing preceding 10 years exceeded
most other plans. We were above average with returns and sort of a head scratcher for everybody in the room ourselves
included because we hadn't crunched those numbers was that our total government costs for NHRS at the time were
lower than the national average. Fifteen percent (15%) of government spending to 18% nationally, which was an eye
opener.

They also were charged with looking at why has the unfunded liability grown since 2007. Again, it was 2.4 billion than it
was 5 billion as of 2017. What they found were three main drivers to that. We have the great recession and had a
significant loss in fiscal 09 15 percent and we’re digging out from under that for the next 10 years. What reductions to
our assumed rate of return over that period and finally, a level percent amortization. This plays into how the pension
debt is being funded down through employer contributions and level percent is set up so that we're not quite paying off
the principal in the early years like a mortgage. You're almost just making the interest payments or even less than that.
So the liability sort of grows is an intended consequence of the plan. We've just kind of crossed over into not negative
amortization in this past year. So that's their take on where we were at, you know, which was fairly detailed. That report
and the Decennial Commission's report are both available on the State website and MRRs if anybody is interested and |
could follow up with a link to it to Linda.

That kind of brings us to the present. So I'll give you a break from my voice and let Jan take over. But at the break if
anybody has any questions about anything, I'd be glad to try to answer them.

President Wilshire

Anyone have any questions at this point. Seeing none.