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R-16-013
Endorser: Alderman-at-Large Daniel T. Moriarty
AUTHORIZING PENNICHUCK CORPORATION AND PENNICHUCK EAST UTILITY, INC.
TO ENTER INTO A LONG TERM LOAN WITH COBANK

NEW BUSINESS — ORDINANCES

O-16-004
Endorser: Alderman Benjamin Clemons
EXTENDING HOURS OF SALE OF ALCOHOLIC BEVERAGES BY ON-PREMISES LICENSEES

Q-16-005
Endorser: Alderman David Schoneman
REMOVING THREE PARKING SPACES ON LOWELL STREET FROM THE PERMITTED
OVERNIGHT ON-STREET PARKING PROGRAM

PERIOD FOR GENERAL PUBLIC COMMENT

REMARKS BY THE MEMBERS OF THE BOARD OF ALDERMEN
Committee announcements:

ADJOURNMENT

AMENDED
R-16-004

RESOLUTION

RELATIVE TO THE TRANSFER OF $9,282 FROM ACCOUNT #107-51
“CITY CLERK — SALARIES & WAGES” INTO NEW ACCOUNT #107-71 “CITY
CLERK — EQUIPMENT” FOR THE PURCHASE OF A COLOR LASER PRINTER

CITY OF NASHUA

In the Year Two Thousand and Sixteen

RESOLVED by the Board of Aldermen of the City of Nashua that $9,282 be transferred
from Department 107 “City Clerk”, Account 51 “Salaries & Wages” and appropriated into new
account Department 107 “City Clerk”, Account 71 “Equipment” for the purchase of a color laser
printer.

ea) THE CITY OF NASHUA recs

Downtown Tapbrovement Committee

A as —

February 2, 2016

Brian McCarthy, President
Board of Aldermen

229 Main Street

Nashua, NH 03061-2019

Dear Alderman McCarthy,

Please be advised that the Downtown Improvement Committee, during its
most recent meeting on October 22, 2015, voted to recommend to the
Mayor and the Board of Aldermen a final budget for surplus downtown
parking funds generated during the calendar year of 2014. Between
January 1, 2014 and December 31, 2014, $99,000 of parking revenue was
generated in excess of $728,000. The Committee made recommendations
that included investments in infrastructure, beautification and
marketing and promotion of Downtown Nashua.

Pursuant to 0-11-76, the Committee respectfully requests approval of
the following budget by the Board of Aldermen.

* Downtown Circulator - $19,000: The project would include a
Downtown bus shuttle to be operated by Nashua Transit on
Thursday, Friday and Saturday evenings from 6:15 p.m. to 10:00
p.m. The shuttle would provide service every 20 minutes
connecting the parking areas with downtown shops, restaurants
and other activity generators.

It is estimated that the shuttle could be operated at a cost
of $38,000. Recommended funds would leverage Nashua Transit
funds at a 1 toi ratio, cutting the project cost in half. It
is further recommended that $5,000 of the $19,000 be dedicated
to marketing costs.

* Performing Arts Center Feasibility Study - Phase II - $25,000:
This project would complete Phase II of the feasibility study,
and include developing basic physical plans, cost estimates and
operating projections for a potential facility.

The City of Nashua hired Webb Management Services to complete
Phase 1, which is currently underway. Phase I includes an
evaluation of the demand for a new performing arts facility in
Nashua, verifying audience potential, identifying potential
users and uses, and confirming its positioning within the
regional competitive market

229 Main Street « Nashua, New Hampshire 03060 « Phone (603) 589-3307 « Fax (603) 594-3434

* Downtown Public Art - Phase 2 -- $20,000: This project would
include seasonal public art installations in Downtown Nashua
for an additional year.

* Downtown Sign Package--$35,000: This project would further
fund the design, fabrication and installation of a wayfinding
sign package to serve Downtown Nashua. This would replace the
signs that were installed in 2003 and help to direct car-based
and pedestrian visitors to parking lots and attractions. This
would increase navigation to and provide additional exposure
to the businesses along the secondary streets of Downtown.

The Downtown Improvement Committee allocated approximately
$40,631 of calendar year 2013 money to fund the work.
Estimates have revealed that the cost of the work will likely
approach $75,000. Thus, an additional $35,000 is requested
from calendar year 2014 funds.

Should you have any questions about the budget, please feel free to
reach out to me at 603.882.5535

ele late

Marylou Blaisdell
Chair, Downtown Improvement Committee

CC: Mayor Jim Donchess
Downtown Improvement Committee
File

229 Main Street « Nashua, New Hampshire O3060 « Phone (603) 589-3307 « Fax (603) 594-3434

ay
‘& PENNICHUCK 25 MANCHESTER STREET
Be PO BOX 1947

MERRIMACK, NH 03054-1947

@ (603) 882-5197

FAX [603} 913-2305

www. PENNICHUCK.COM

VIA HAND DELIVERY

February 2, 2016

Mr. Stephen Bennett
Corporation Counsel
City of Nashua

229 Main Street
Nashua, NH 03060

Re: — Pennichuck Subsidiaries — Request for Approval of Loans from the New

Hampshire Drinking Water Revolving Loan Fund Program

OQ Dear Attorney Bennett:

Introduction. As you know, the City of Nashua, New Hampshire (the “City”) is the sole
corporate shareholder of Pennichuck Corporation (“Pennichuck”). The City has been the sole
shareholder since the acquisition of Pennichuck on January 25, 2012.

The purpose of this letter is to request that the City, acting in its capacity as sole shareholder,
approve several resolutions authorizing Pennichuck’s three regulated public water utility
subsidiaries, Pennichuck Water Works, Inc. (“PWW”), Pennichuck East Utility, Inc. (*‘PEU”),
and Pittsfield Aqueduct Company, Inc. (“PAC”), to borrow funds from the State of New
Hampshire pursuant to the State Drinking Water Revolving Loan Fund Program (the “SRF
Program”’).

Background. As part of the City’s acquisition of Pennichuck, in accordance with special
legislation enacted by the State Legislature, and as unanimously approved by the Mayor and
Board of Aldermen on January |1, 2011, the corporate structure of Pennichuck and its utility
subsidiaries was retained. This corporate structure was retained for several reasons. First, the
Mayor and Board of Aldermen desired to maintain stability and continuity for customers and
employees of the Pennichuck utilities and the communities they serve. Second, retaining the
corporate structure provided continuity for the existing relationships with regulatory agencies
and financial/banking partners. Third, the Mayor and Board of Aldermen unanimously agreed
that the corporate structure would encourage business-smart decisions and rely upon well-
established governance principles of corporate law, pursuant to Pennichuck’s Articles of

& Incorporation and its by-laws,

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Shareholder Approval of Borrowings Required. Under Article IX of Pennichuck’s Articles of
Incorporation, the City, acting in its capacity as Pennichuck’s sole shareholder, must approve:

“(3) any action to (A) create, incur or assume any indebtedness for borrowed
money or guarantee any such indebtedness of any person, (B) issue or sell
any debt securities or warrants or other rights to acquire any debt securities
of the [Pennichuck] Corporation or any of its Subsidiaries, or (C) guarantee
any debt securities of any person.”

Proposed Borrowings from the SRF Program. Pennichuck requests the City’s approval for
three loans from the SRF Program to PWW, PEU, and PAC. The specifics of these loans are

described below.

(1) PWW Borrowings. Under the proposal, PWW would enter into a new long-
term loan from the SRF Program in the principal amount of up to $1,400,000 to
finance the cost of replacing approximately 4,265 linear feet of water main in the
Nashua Core Water System (Amherst Street area) in Nashua.

(2) PEU Borrowings. Under the proposal, PEU would enter into a new long-term
loan from the SRF Program in the principa! amount of up to $1,650,000 to
finance the cost of replacing approximately 18,600 linear feet of water main in
the Varney Road area at Locke Lake in Barnstead.

(3) PAC Borrowings. Under the proposal, PAC would enter into a new long-term
loan from the SRF Program in the principal amount of up to $440,000 to finance
the cost of installing approximately 4,650 linear feet of water main on Fairview
Road/Catamount Road in Pittsfield.

The Lender — SRF Program. The funds for these loans will be provided by the State of New
Hampshire Drinking Water Revolving Loan Fund Program, This SRF Program is administered
by the New Hampshire Department of Environmental Services (“NHDES”). The SRF Program
provides public and private water systems the opportunity to borrow funds on favorable terms at
interest rates that are below commercial loan rates. Pennichuck has received confirmation from
the NHDES that funding is available for each of these loans and projects.

Terms of the SRF Borrowings. All of the loans will have the same favorable terms, which will
be reflected in separate written Loan Agreements and Promissory Notes issued by each of PWW,
PEU and PAC, as required by the SRF Program. Amounts advanced pursuant to the loans during
the construction period will accrue interest at a rate of 1% per annum, and the total accrued
interest will be due upon substantial completion of the project. The terms of the SRF loans will
require repayment of the loan principal plus interest over a 30-year period for PWW and PAC
and a 20-year period for PEU, commencing six months after the project is substantially
complete. The current interest rate on the SRF Program borrowings is 2.464% per annum,
though the final rate is not locked in until the loan commences its repayment period. The loans

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will be unsecured. The corporate parent, Pennichuck, will provide an unsecured corporate
guaranty of the repayment of the loans in accordance with the terms of a Guaranty Agreement.

Approval by Pennichuck, PWW, PEU and PAC. The loans to finance the projects listed

above and the guaranty of the loans have been approved by the respective Board of Directors of
Pennichuck, PWW, PEU and PAC.

Pennichuck recommends that the City authorize (i) PWW, PEU and PAC to enter into the loans
under the SRF Program; and (ii) Pennichuck to enter into the Guaranty Agreements.

Other Approvals. As regulated public utilities, PWW, PEU and PAC must obtain approval of
the loans from the New Hampshire Public Utilities Commission (“NHPUC”), which will
approve the loans if it finds the loans to be consistent with the public good. PWW, PEU and
PAC will file petitions for approval with the NHPUC in early February, and expect the NHPUC
to consider the petitions promptly. Under the SRF Program, the loans must also be approved by
the Governor and Executive Council.

Lower Costs Are Good for Customers. Pennichuck and its Board of Directors have
determined that the capital projects to be financed by the SRF Program loans will allow PWW,
PEU and PAC to continue to provide safe, adequate and reliable water service to their customers
on a cost-effective basis. The terms of the financings through the SRF Program are very
favorable compared to other alternatives and will result in lower financing costs than would be
available under other debt options. These lower financing costs will be passed on to customers.

Requested Approvals. For the reasons described above, Pennichuck respectfully requests that
the City, acting in its capacity as sole shareholder of Pennichuck and pursuant to Article IX(3) of
Pennichuck’s Articles of Incorporation, authorize the following actions:

RESOLVED, that the City hereby approves the borrowing by Pennichuck Water
Works, Inc. of up to $1,400,000 from the State of New Hampshire pursuant to the State
Drinking Water Revolving Loan Fund Program to finance the cost of replacing
approximately 4,265 linear feet of water main in the Nashua Core Water System
(Amherst Street area) in Nashua;

FURTHER RESOLVED, that the City hereby approves the borrowing by Pennichuck
East Utility, Inc. of up to $1,650,000 from the State of New Hampshire pursuant to the
State Drinking Water Revolving Loan Fund Program to finance the cost of replacing
approximately 18,600 linear feet of water main in the Varney Road area at Locke Lake
in Barnstead;

FURTHER RESOLVED, that the City hereby approves the borrowing by Pittsfield
Aqueduct Company, Inc. of up to $440,000 from the State of New Hampshire pursuant
to the State Drinking Water Revolving Loan Fund Program to finance the cost of
installing approximately 4,650 linear feet of water main on Fairview Road/Catamount
Road in Pittsfield;

-4.

FURTHER RESOLVED, that the City hereby approves the guaranty by Pennichuck
Corporation of the payment by each of Pennichuck Water Works, Inc., Pennichuck East
Utility, Inc., and Pittsfield Aqueduct Company, Inc., of each of the loans authorized in
the three prior resolutions; and

FURTHER RESOLVED, that the City hereby authorizes Pennichuck Corporation,
Pennichuck Water Works, Inc., Pennichuck East Utility, Inc., and Pittsfield Aqueduct
Company, Inc., their Boards of Directors, and their Officers, to take any and all actions
required to obtain all necessary approvals with respect to the actions described in these
resolutions and to execute and deliver such documents as are necessary to effect the
SRF loans and the Guaranty described in these resolutions.

Respectfully submitted,

PENNICHUCK CORPORATION

By: Sl a AL,
Larry D. Goodhue
Chief Executive Officer

ce. Mayor Jim Donchess

CHARGE RATES
For Drinking Water State
Revolving Fund (DWSRF) Loans

Term of Loan ee
5 Years 0.77%
10 Years 1.54%
15 Years 2.31%
20 Years 2.464%
30 Years* 2.464%

“Available to disadvantaged communities only

11-Bond GO Index for December 10, 2015 Is 3.08

Source: NH Department of Environmental Services, December 2015

Na

PENNICHUCK 25 MANCHESTER STREET
PO BOX 1947

MERRIMACK, NH 03054-1947

(603) 882-5191
FAX (603) 913-2305

WWW. PENNICHUCK.COM

VIA HAND DELIVERY

February 2, 2016

Mr. Stephen Bennett
Corporation Counsel
City of Nashua

229 Main Street
Nashua, NH 03060

Re: Pennichuck East Utility, Inc. — Request for Approva! of Loan with CoBank, ACB

Dear Attorney Bennett:

Introduction. As you know, the City of Nashua, New Hampshire (the “City”) is the sole
corporate shareholder of Pennichuck Corporation (“Pennichuck”). The City has been the sole
shareholder since the acquisition of Pennichuck on January 25, 2012.

The purpose of this letter is to request that the City, acting in its capacity as sole shareholder,
approve resolutions authorizing Pennichuck’s regulated public water utility subsidiary,
Pennichuck East Utility, Inc. (““PEU”), to enter into a term loan with CoBank, ACB (““CoBank”).

Background. As part of the City’s acquisition of Pennichuck, in accordance with special!
legislation enacted by the State Legislature, and as unanimously approved by the Mayor and
Board of Aldermen on January 11, 2011, the corporate structure of Pennichuck and its utility
subsidiaries was retained. This corporate structure was retained for several reasons. First, the
Mayor and Board of Aldermen desired to maintain stability and continuity for customers and
employees of the Pennichuck utilities and the communities they serve. Second, retaining the
corporate structure provided continuity for the existing relationships with regulatory agencies
and financial/banking partners. Third, the Mayor and Board of Aldermen unanimously agreed
that the corporate structure would encourage business-smart decisions and rely upon well-
established governance principles of corporate law, pursuant to Pennichuck’s Articles of
Incorporation and its by-laws.

in,