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V2, PENNICHUCK:?

25 WALNUT STREET
PO BOX 428
NASHUA, NH 03061-0428

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

WWW.PENNICHUCK.COM
March 2, 2022

Mr. Steven A. Bolton
Corporation Counsel
City of Nashua

229 Main Street
Nashua, NH 03060

Re: Pennichuck East Utility, Inc. - Request for Approval of Loan and Grant from the
Drinking Water and Groundwater Trust Fund

Dear Attorney Bolton:

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, and to accept a grant from,
the Drinking Water and Groundwater Trust Fund (“DWGTF”).

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.

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.”

-2-

Proposed Term Loan Borrowing and Grant from the DWGTF

PEU is a New Hampshire public utility corporation providing retail water service to approximately
8,580 customers in the New Hampshire towns of Atkinson, Barnstead, Bow, Chester, Conway,
Derry, Exeter, Hooksett, Lee, Litchfield, Londonderry, Middleton, Pelham, Plaistow, Raymond,
Sandown, Tilton, Weare and Windham. PEU is wholly-owned by Pennichuck which, in turn, is
wholly-owned by the City.

PEU requests the City’s approval for PEU to enter into a term loan with the DWGTF in an
amount of up to $493,500 with an amortization period of up to 25 years, with an interest rate of
1.57% per annum, and to accept a grant from the DWGTF for $211,500. A copy of the approval
and granting of such financing and funding from the DWGTF, thru the NHDES is attached as
Attachment A.

The proceeds from the DWGTF loan/grant will be used for a single project in the W&E
Community Water System (“CWS”) in Windham, NH. This project includes the installation and
construction of an interconnection water main between that CWS and the Salem Municipal water
system, as well as treatment upgrades in the pump station for the CWS in order to accept and treat
the water obtained via that new interconnection. This project is being completed to fully meet
and comply with necessary water source and supply needs for the CWS.

The DWGTF loan will be unsecured, and the grant monies will be accepted as a CIAC
contribution to the Company for this project.

Approval by Pennichuck and PEU. The acceptance of this grant money and the entering into
of this loan, have been approved by the Board of Directors of Pennichuck and PEU. Pennichuck
recommends that the City authorize PEU and Pennichuck to (i) enter into the loan with the
DWGTF; and (ii) accept the approved grant funding.

Other Approvals. As a regulated public utility, PEU must obtain approval of the term
loan/grant from the New Hampshire Public Utilities Commission (“NHPUC”), which will
approve the term loan/grant if it finds the loan to be consistent with the public good. PEU is
filing a petition for approval with the NHPUC contemporaneously with this notice to the City
and expects the NHPUC to consider the petition promptly.

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 [X(3) of
Pennichuck’s Articles of Incorporation, authorize the following actions:

RESOLVED, that the City hereby approves the loan to Pennichuck East Utility, Inc.
from the Drinking Water and Groundwater Trust Fund (DWGTHF), in an amount of up
to $493,500, with a 25-year amortization schedule; and

FURTHER RESOLVED, that the City hereby approves the acceptance of the grant of
$211,500 from the DWGTF by Pennichuck East Utility, Inc.; and

San

FURTHER RESOLVED, that the City hereby authorizes Pennichuck Corporation and
Pennichuck East Utility, 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 affect the DWGTF loan, and take receipt of the approved grant funds.

Respectfully submitted,

PENNICHUCK CORPORATION

Larry D. Goodhue

Chief Executive Officer

cc. Mayor James Donchess

' NEW HAMPSHIRE DRINKING WATER
& GROUNDWATER TRUST FUND

Commission Members

Senator Chuck Morse,
Chair

Senator Tom Sherman,
Vice Chair

Bruce Cohen, NH State
Representative

Linda Gould, NH State
Representative

Andrea Kenter, P.G.,
Public Member

Bernle Rousseau, Public
Member

Bruce Breton, Town
Selectman

Cynthia Harrington, NH
Economic Development

Jason Gagnon, NH Water
Pollution Control
Association

Josh Elllott, Governor's
Designee

Debra Paul, Town with a
Public Drinking Water
System

Marco Phillppon, NH
Water Works Association

Michelle Roberge,
Division of Public Health

Rachel Miller, NH State
Treasury

Representative Bill Boyd,
Public Member

Rick Russman, State or
Regional Land Trust
Member

Robert R. Scott, NH
Department of
Environmental Services

Rodney Barttett, Public
Member

Vacant, NH Fish and Game
Department

Clerk - Vacant

Attachment A.

January 18, 2022

Donald Ware (Donald.Ware@pennichuck.com)
Pennichuck East Utility, Inc.

25 Walnut Street

Nashua, NH 03061

Subject: W&E—Town of Salem interconnection Project

Dear Mr. Ware,

On January 10, 2022, the NH Drinking Water and Groundwater Advisory Commission
(Commission) to the Drinking Water and Groundwater Trust Fund (OWGTF) completed their
review of the submitted special project application. The Commission authorized to award
grant & loan funds to Pennichuck East Utility, Inc. for the following project:

Funding Award Amount
Up to $211,500 in grant funds
Up to $493,500 in loan funds

Project Description
W&E - Town of Salem
Interconnection Project

The next step to move forward with project funding is for you to obtain the authority to accept

- the funds and submit a Drinking Water Infrastructure Project: Final Application The required

documents are listed on the Final Application Checklist. The loan interest rate is 1.57% until
the first Thursday of August 2022. Final applications are due by June 1, 2022.

Once the final application has been submitted, the Utility will enter into a grant agreement and
loan agreement, both must be approved by the Governor and Executive Council. Additionally,
non-construction project related work that has been completed may be eligible for
reimbursement once the funding agreements are in place and approved by the Governor and
Executive Council. Construction may not start without Governor and Executive Council
approval and completion of the required Environmental Review.

a
We ask that you keep us informed of progress made toward seeking the authority to borrow.
Should your project not move forward, please contact us as scon as possible. If you have any
questions, please contact me at 603-271-8321 or at Erin. Holmes@des.nh.gov.

Sincerely,
Erin Holmes, P.E.
DWG Trust Fund Administrator | Mt8E Remediation Bureau

Ce: John Boisvert, PEU Yohn.Boisvert@pennichuck.com)

Michael Unger, S.E., Project Manager NHDES DWGB

httos://www4.des.state.nh.us/nh-dwe-trust/,
P.O. Box 95 | 29 Hazen Orive | Concord, NH 03302-0095
Telephone: (603) 271-8321 Fax: (603) 271-7053 TDD Access: Relay NH {800} 735-2964

CITY OF NASHUA

BOARD OF ALDERMEN

PETITION BY ETCHSTONE PROPERTIES, INC. FOR FULL WAIVER OF IMPACT
FEES (FOR PUBLIC SCHOOL FACILITIES) AS AUTHORIZED UNDER SECTION

190-85 OF THE LAND USE CODE
(Thompson’s Preserve Condominium)

March 3, 2022

NOW COMES Etchstone Properties, Inc., a New Hampshire corporation with an address

of 179 Amherst Street, Nashua, New Hampshire 03064 (the “Petitioner”), by and though its
attorneys, Winer and Bennett, LLP, 111 Concord Street, Nashua, New Hampshire 03064, and
pursuant to Section 190-85 of the Land Use Code, hereby petitions the Board of Aldermen to waive
in full the impact fees imposed by Article VIII of the Land Use Code. In support of this Petition,
Etchstone Properties, Inc. (the Petitioner) states as follows:

1,

The Petitioner is a corporation, organized and existing under the laws of the State of New
Hampshire, with an address of 179 Amherst Street, Nashua, New Hampshire 03064.

The Petitioner developed an elderly housing community known as Thompson’s Preserve
Condominium (the “Community”) at 65 Gilson Road, Nashua, New Hampshire, shown as
Map D, Lot 32 on the City of Assessors’ Maps (the “Premises”). The Premises are located
in the R-30 zoning district.

Approvals for development of the Premises into an elderly housing community (under the
condominium form of ownership) were granted by the Nashua City Planning Board and
one or more State agencies.

The Community consists of thirty-nine (39) individual dwelling units and a community
building (the “Community Building”).

The Community is governed by the state and federal laws and regulations pertaining to so-
called housing for older persons (age 55 and older), including RSA 354-a:15.

The Community is designed to accommodate an “aging in place” resident through certain
architectural design and construction techniques, including single level living and
community services.

The Community Building is fully furnished and is able to accommodate the following:
Programs designed to provide a social life for residents;

Continuing education programs of interest to residents;

Information and counseling services;

Recreational programs;

An accessible physical environment;

cade S

10.

Il.

12.

13.

14.

15.

16.

f. Community areas, a kitchen and great room.

All thirty-nine (39) units have been sold and conveyed to third-party purchasers. There are
currently no school age children residing in the Community and given the nature of the
regulations of housing for older persons, school age children will not likely reside at the

Community.

The Petitioner previously developed Hayden Green Condominium, a 55 and older
community in Nashua, New Hampshire consisting of the 37 units. No school age children
currently reside at Hayden Green Condominium.

Prior to its development of Hayden Green Condominium, the Petitioner also developed
Lexington Place Condominium, a 55 and older community in Hudson, New Hampshire,
consisting of 34 units. No school age children currently reside at Lexington Place

Condominium.

The Petitioner commissioned an independent study by Fougere Planning & Development,
Inc. to determine the number of school children in various age restricted (55 and older
communities) in Southern New Hampshire. A summary of the study (consisting of a cover
page and Table 1) is attached as Exhibit A. The study reveals that in these 55 and older
communities, including Thompson’s Preserve Condominium (the Community), rounding
up there is an average of .005 children per unit. Put another way, of the 1,036 units listed
in the study (Exhibit A), a total of 5 school age children reside in these 1,036 units.

Applying this average (.005 school age children per unit) over the thirty-nine (39) units at
the Community, would result in an expectation of .195 school aged children living in the

Community (less than one school age child).

Based upon Section 190-76, Section 190-77 and Table 77-1 of the Land Use Code, the
(education facilities) impact fees associated with the Community are either $498.50,
$494.50, or 496.00 per unit, depending on the style of the unit.

As a result, without an abatement the thirty-nine (39) elderly housing units in the
Community would generate impact fees totaling $19,269.50. To date, a total of $19,269.50
has been paid to the City of Nashua for these impact fees for all 39 units.

Section 190-85 of the Land Use Code provides, in pertinent part, that the impact fees may
be waived if the “proposed new development consists of ... elderly housing which can be
reasonably expected not to require additional educational facilities”.

In light of the foregoing, in accordance with Section 190-85 of the Land Use Code and
based on the statistics referenced above and detailed in Exhibit A attached, it can be
reasonably expected that the thirty-nine (39) units of elderly housing at the Community
will not require additional educational facilities.

WHEREFORE, the Petitioner respectively requests that pursuant to Section 190-85 of the
Land Use Code, the Board of Aldermen waive in full the impact fees imposed against the
Community and paid by the Petitioner, abate the amount that has been paid ($19,269.50) and return

such amount to the Petitioner.

Respectfully Submitted,

Etchstone Properties, Inc.

By its attorneys,

Winer and Beringtt, LLP
va

Me

Dated March 3, 2022 By’ {9
Ay Bradford Westgate, Esquire
I

Lo
/ 1 Concord Street
(_“ Nashua, New Hampshire 03064

(603) 882-5157
ibwestgate(@winerbennett.com

EXHIBIT A

FOUGERE PLANNING & DEVELOPMENT Inc.
Mark J. Fougere, AICP

253 Jennison Road Milford, New Hampshire 03055
phone: 603-315-1288 = email: Fougereplanning@comcast.net

February 22, 2022

Age Restricted Communities — School Age Children

The City of Nashua’s Land Use Code Article VIII, Impact Fees, Section 190-85 Waiver of
impact fee, provides the ability for an applicant to submit a school impact fee waiver
request to the Board of Aiderman when it “can be reasonably expected not to require
additional educational facilities’. Given the data supplied herein, it is our professional
opinion that a school impact fee waiver should be provided to the managers of the
existing Thompson's Preserve and Walden Woods's age restricted condominium

developments.

Per RSA 674:21 V, impact fees can only be assessed “in order fo help meet the needs
occasioned by that development for fhe construction of or improvement of capital
facilities..”. In addition, the City of Nashua's Land Use Code Article VIII Impact Fees,
Section 190-72 Intent and purpose, C states “Require new development fo contribute
some of its proportionate share of funds spent or to be spent by the City to accommodate
the new developments impact on certain public facilities for education having a rational
nexus to the new development”. It is clear from these legal provisions that any impact
fee charged must be supported with a statistical basis that an impact to the City’s schools
facilities will occur. As detailed in Table One, we reviewed a number of age restricted
developments in New Hampshire totaling 1,036 units and found only 5 school age
children. In Nashua, we reviewed four developments with a total of 246 units and found

no school age children.

Given these pointed findings, no rational nexus exists between the school impact fee and
the proposed use and therefore a full school impact waiver should be granted to the
Thompson's Preserve and Walden Woods age restricted developments.

Mark J. Fougere, AICP
Fougere Planning & Development, Inc.

Table One
School Age Children‘
Age Restricted NH Condominiums

Town Project Name Num. Of Units Unit Types # School
Children

Bedford, NH The Mews 108 Single Family 2
Riverwalk 90 Single Family & Garden 0

Hudson, NH Abbie’s Landing _ 22 Single Family 0
Hudson Meadows 12 Single Family 0
Reeds Brook 31 Single Family 0
Lexington Place 34 Single Family 0
Sparkting River 126 Single & duplex 3

Londonderry, NH_ | Parish Hills 37 Single Family 0
Forest Hills 65 Single Family 0
Buttrick Village 40 Triplex 0
Harvest Village 45 Duplex 0
Sugarplum Hill 36 Single & duplex 0

Merrimack, NH Parker Village _ 99 Single Family & Garden 0
Souhegan River View 45 Single, duplex & Quad 0

Nashua, NH Coliston Yard 75 Garden 0
Thompson’s Preserve 39 Single Family 0
Walden Woods 95 Garden 0
Hayden Green 37 Single & Duplex a]
Total Units/Children 1,036 5
Children Per Unit 004

' School data provided by local SAU Office.