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A special meeting of the Board of Aldermen was held Monday, May 4, 2020, at 7:00 p.m. via
teleconference.

President Lori Wilshire presided; City Clerk Susan K. Lovering recorded.

Prayer was offered by City Clerk Susan K. Lovering; Alderman Richard A. Dowd led in the Pledge to the
Flag.

President Wilshire

As President of the Board of Aldermen, | find that due to the State of Emergency declared by the
Governor as a result of the COVID-19 pandemic and in accordance with the Governor’s Emergency Order
#12 pursuant to Executive Order 2020-04, this public body is authorized to meet electronically.

Please note that there is no physical location to observe and listen contemporaneously to this meeting,
which was authorized pursuant to the Governor’s Emergency Order. However, in accordance with the
Emergency Order, | am confirming that we are:

a) Providing public access to the meeting by telephone, with additional access possibilities by
video or other electronic means:

We are utilizing WebEx through the City’s IT Department for this electronic meeting. All members of the
Board of Aldermen have the ability to communicate contemporaneously during this meeting through this
platform, and the public has access to contemporaneously listen in to this meeting through dialing the
following number 978-990-5298 and using the password 273974. The Public may also view this meeting
on Comcast Channel 016.

b) Providing public notice of the necessary information for accessing the meeting:

We previously gave notice to the public of the necessary information for accessing the meeting, through
public postings. Instructions have also been provided on the City of Nashua’s website at www.nashuanh.gov
and publicly noticed at City Hall.

c) Providing a mechanism for the public to alert the public body during the meeting if there are
problems with access:

If anybody has a problem accessing the meeting via phone or Channel 016, please call 603-821-2049 and
they will help you connect.

d) Adjourning the meeting if the public is unable to access the meeting:

In the event the public is unable to access the meeting via the methods mentioned above, the meeting will be
adjourned and rescheduled. Please note that all votes that are taken during this meeting shall be done by
roll call vote.

Let’s start the meeting by taking a roll call attendance. When each member states their presence, please
also state whether there is anyone in the room with you during this meeting, which is required under
the Right-To-Know Law.

City Clerk Lovering called the roll and asked them to state the reason he or she could not attend, confirmed
that they could hear the proceedings, and stated who was present with him or her.

The roll call was taken with 13 members of the Board of Aldermen present: Alderman Michael B. O’Brien,
Sr., Alderman Patricia Klee, Alderwoman Shoshanna Kelly, Alderman June M. Caron, Alderman Benjamin
Clemons, Alderman Lopez, Alderman David C. Tencza, Alderman Ernest Jette, Alderman Jan Schmidt,

Board of Aldermen 05-04-2020 Page 2

Alderman Skip Cleaver, Alderman Linda Harriott-Gathright, Alderman Wilshire.

Alderman Dowd was recorded present after roll call; Alderwoman Lu and Alderman Laws were recorded
absent.

Mayor James W. Donchess and Corporation Counsel Steven A. Bolton, and the following from Pennichuck:
Thomas Leonard, Chairman of the Board, Larry Goodhue, Chief Executive Officer, Don Ware, Chief
Operating Officer, George Torres, Corporate Controller were also in attendance.

Susan Lovering, City Clerk

Alderman O’Brien

Alderman O’Brien

| am present and there is nobody else in the room with me.

Alderman Klee

Present, the only being in the room right now is my greyhound, but my husband is in the house and could be
here at any time. | can hear everybody and | am here because of social distancing, thank you.

Alderwoman Kelly

| am here, | can hear everyone, | am alone, well my family may be around but they are not in the room with
me. And | am here because of social distancing.

Alderman Caron
| am here, | am alone and | am social distancing and | can hear you.
Alderman Clemons

| am here, participating via telephone, | can hear everybody and | am participating with the Governor’s
Emergency Order.

Alderman Lopez

| am here, | am alone, | am complying with the Governor’s Emergency Order.
Alderman Tencza

| am here, | can hear everybody and | am alone in the room right now.
Alderman Jette

| am here, there is no one else in the room, | can hear you and | am here because | am staying at home per
the Governor’s Order.

Alderman Schmidt

| am here, | can hear you, the only other beast in the room is my bird and the Governor's Order compels this.

Board of Aldermen 05-04-2020 Page 3

Alderman Cleaver

| am present and | am alone in the room, my daughter is in an adjacent room and | am here because of
social distancing under the Governor’s Orders.

Alderman Harriott- Gathright

| am here, and | am alone and | am practicing social distancing.

President Wilshire

| am here, | am alone and | am practicing social distancing and | can hear you. | also heard from Alderman

Laws and Alderwoman Lu that they will not be attending this evening’s meeting and | don’t see Alderman
Dowd on either. Also joining us, | don’t know if the Mayor is on?

Mayor Donchess

| am.

President Wilshire

Good evening, Mayor.

Mayor Donchess

Good evening Madam President.
President Wilshire

Thank you. Corporation Counsel Steve Bolton. | believe from Pennichuck we have Jay Leonard, Chairman
of the Board, Larry Goodhue, CEO, Don Ware, COO, George Torres, Corporate Controller.

COMMUNICATION

From: President Lori Wilshire
Re: Calling a Special Board of Aldermen Meeting on Monday, May 4, 2020 at 7:00 p.m.

There being no objection, President Wilshire accepted the communication and placed it on file.
President Wilshire

Tonight we are meeting to talk about some Legislation that Pennichuck is needing from us. So | am going to
turn the meeting over to Jay Leonard.

Thomas J. Leonard, Pennichuck Chairman of Board of Directors

My name is Thomas J. Leonard, | am here as Chairman of the Board of Directors. Thank you very much for
accommodating us. | am actually going to actually pass it over to Larry Goodhue right away just to keep
things direct. He knows the most, so thank you very much. | appreciate all your assistance in this.

President Wilshire

Thank you. Larry?

Board of Aldermen 05-04-2020 Page 4

Larry Goodhue, CEO & CFO Pennichuck Corporation

Thank you, Alderman Wilshire and tell me if you can hear me clearly.
President Wilshire

| can hear you clearly.

Larry Goodhue, CEO & CFO Pennichuck Corporation

Very good; Larry Goodhue, CEO of Pennichuck Corporation, CEO and CFO. | am also calling you from my
home. | am alone in my dining room/office. | am socially distancing in compliance with the Governor’s
stay-at-home orders. We had provided this communication to the Board of Alderman as it relates to an
approved PPP Loan under the Federal Government’s Stimulus Act, in the second round of funding that was
actually opened up last weekend by the President and the Congress of the United States.

As Pennichuck Waterworks is a wholly owned subsidiary of Pennichuck Corporation, Pennichuck
Corporation as its sole shareholder, the City of Nashua, New Hampshire, one of the requirements that we
have in that relationship as a debt only funded entity, is that any time we are to consider any debt financing
available to the Corporation and/or any of its subsidiaries, those debt instruments mut be pre-approved
and/or approved by the Board of Aldermen as the collective representing the shareholder.

As | mentioned, the Corporation applied for this PPP loan in the second round of funding. We did not put
an application in the first round of the funding; it was very early on in the process and we were determining
what the impact of the COVID-19 Preparedness and Response was going to be relative to the overall
financial operations and viability of the Corporation. As an essential entity operating in the State, in the City
and in the Region for which we serve, Pennichuck Water Works serves 11 different communities within the
State of New Hampshire including Nashua and part of 10 other as well as sister subsidiary Pennichuck
East Utilities, services another 19 communities within the State and Pittsfield Aqueduct one.

All of the employees that serve any of the entities under the Pennichuck Corporation Corporate Umbrella,
are employees of Pennichuck Waterworks and as such, the loan that was applied for which is a Payroll
Protection Plan Act, our loan is related to the conversation of jobs relative to payroll in carrying out financial
duties. | have provided to the Board of Aldermen a list of the basic tenets under which this loan is being
sought and the reasons for it and | guess at this point in time | would just like to just query that the Board of
Aldermen members did receive that communication that | sent to them this morning?

President Wilshire

Did everyone receive that communication?

Alderman Klee

Yeah.

Alderman Caron

Yes.

Alderwoman Kelly

Yes.

Board of Aldermen 05-04-2020 Page 5

President Wilshire
Very good; | guess we did, thank you Larry.
Larry Goodhue, CEO & CFO Pennichuck Corporation

And so that being said, what | tried to outline in that communication was the basis for which we applied for
this loan, the rationale for it and the overall terms relative to the loan. It is a formulaic calculation based on
the average monthly payroll and payroll related costs for a Corporation and it is a two and a half times
multiple based on that average monthly cost of operation. It is geared towards maintaining a workforce
through this time of COVID-19 response. And as such, when we put in our application on Tuesday, we did
not know if we even had an opportunity at this financing but we felt that we needed to apply for it. We found
out Thursday morning that we had been approved. One of the requirements under this program is once
you got that approval, you have 10 days in which to receive the funds or the commitment is withdrawn.

And that was the basis for us asking for this expedited meeting with the City. We have asked for similar
treatment at the State Level because that is another requirement in our approval as a regulated utility within
the State.

As a debt only funded organization, and since the Corporation was acquired by the City of Nashua on
January 25, 2012, we are a debt only funded organization. We have layers of debt inclusive of the note
payable to the City of Nashua from Pennichuck Corporation in making sure that the cash funding is there to
service the bonds that were issued to purchase the Corporation in 2012. We also have layers of debt
relative to our capital projects at Pennichuck Water Works, Pennichuck East, Pittsfield Aqueduct.

We have various debt instruments related to those and we have three different lines of credit, two are fixed
assets line of credit — one at Pennichuck Water Works for $10 million dollars per year and one at
Pennichuck East for $3 million dollars per year and those are lines of credit to fund capital during a 12-
month calendar year to then be termed out into long-term debt on an annual basis. And then we have a
working capital line of credit that resides at the parent company level to backstop working capital during any
calendar year and it has a 30 day out requirement. That working capital line of credit is currently under an
extension from its original termination date which was last August. It is actually on its third extension,
working with the bank relative to getting a permanent renewal of that line of credit. It is a $4 million dollar
line of credit and it is the backstop for all working capital needs of the Corporation.

We are currently drawn down on that line to the tune of $3 million dollars, so we only have about $1 million
dollar’s-worth of capacity left on that line. Going into our heavy season, as well as in compliancy with the
Governor’s Emergency Orders that put certain restrictions on us as a Regulated Utility during this
Emergency Order COVID-19 Response, in that set or orders it had suspended our ability to collect
accounts should they go into delinquency during this period of time while the order is in place, and must
arrange for special terms for the payment of those arrearages by customers on the back end of that.

We have seen some decline in the timeliness of payments of our bills and as such we needed to look at
what resources were possibly available to help bridge the gap such that we could remain financially viable
and fully functional on behalf of all our customers while we are able to comply with and work with people in
compliancy with the Governor’s Orders allowing them the latitude for the impact that has occurred to
individuals and businesses within the region. So we applied for this, it is an interesting endeavor in that you
apply on an on-line portal, you have no idea how far down in the queue you are; whether you are going to
receive the money and how fast you have to react. We couldn't wait to see how things just continued to
evolve because then all of a sudden that resource would not be available to us and we do not have the
ability to expand the current line of credit with our existing bank. And, in fact, our current extension expires
on July 31° so we’ve discussion with them about whether another extension is available and/or a renewal.

And so this is a necessary element in the overall financial structure for the Corporation to continue to its job
on behalf of Nashua Citizens as well as other customers that we serve in the communities within the State.

Board of Aldermen 05-04-2020 Page 6

And it is actually one — if you think about it, our debt is almost like a set of dominoes, should we not have
that line of credit, we now have a problem relative to the other layers of debt including the note payable to
the City of Nashua. So it is a very vital element in this overall process. |’ve said a lot, | will stop talking for
a minute and field any questions.

President Wilshire

Are there any questions from the Board?

Alderman Lopez

| have a question.

President Wilshire

Alderman Lopez?

Alderman Lopez

Just as a point of order, should we include the letter that was received this morning that was just referenced
in the minutes for this meeting?

From: Larry Goodhue, CEO Pennichuck Corporation
Re: Small Business Administration Paycheck Protection Program Loan

President Wilshire

Are you going to make a motion?
Alderman Lopez

| make that Motion.

MOTION BY ALDERMAN LOPEZ TO ACCEPT AND PLACE ON FILE THE COMMUNICATION FROM
LARRY GOODHUE DATED MAY 4, 2020 BY ROLL CALL

A viva voce roll call was taken which resulted as follows:
Yea: Alderman O’Brien, Alderman Klee, Alderwoman Kelly, Alderman Dowd
Alderman Caron, Alderman Clemons, Alderman Lopez, Alderman Tencza,
Alderman Jette, Alderman Schmidt, Alderman Skip Cleaver,
Alderman Harriot-Gathright, Alderman Wilshire 13
Nay: 0
MOTION CARRIED
There being no objection, President Wilshire accepted the communication and placed it on file.

President Wilshire

Is there any further discussion, questions for Pennichuck before we get into the Legislation?

Board of Aldermen 05-04-2020 Page 7

Alderwoman Kelly

Thank you, Madam President. | had a couple of questions. | wanted to know, you mentioned being a debt
only funded corporation a couple of times. Can you just explain what that means?

Larry Goodhue, CEO & CFO Pennichuck Corporation

Yes, this is Larry Goodhue responding to that question. One of the basic things that occurred when the City
of Nashua purchased Pennichuck Corporation in January of 2012, is we went from being what is called an
“Investor Owned Utility’ or IOU, which traditionally would have 50% equity and 50% debt in its capital
structure. One of the bases for the entire acquisition being approved and being beneficial for the City and the
Corporation and the Corporation’s customers and/or rate payers long-term is that the cost of debt is far less
costly than the cost of equity. So prior to January 25, 2012 we were a publicly traded company on the
NASDEC Exchange and we could issue stock into the public market. When you issue stock into the public
market it is subject to, you know, what that price might be to raise those funds by issuing stocks in the market.
But it also has an expectation, especially as a regulated utility, that you would generate significant enough
profit to not only meet the requirements of the PUC relative to our earnings and allowed earnings, but also
came with that a dividend requirement relative to pay a public company dividend.

In our prior ownership structure and basically a 50/50 debt-equity company, the equity portion or about 50%
of our capital structure had a post tax return in our allowed revenues authorized by the PUC of 9.75%. At the
current tax rates at that time, that resulted in about a 16% pre-tax cost of that part of the capital structure.
With the City’s acquisition that 16% cost went down to less than 6% and as a result, the overall cost to
ratepayers for their water in our structure is far less. However, what it means is, in order to fund all capital
operations within the company and in order to provide for working capital back stop to operations during
seasons — we are a seasonal company, a lot of our revenue is generated during the summer. But during
those off-season months where our revenues may not be enough to meet the fixed operating costs in those
off-season months, you would need that working capital line of credit to backstop those costs. So that, as a
debt company is the case. And the structure was set up to be a structure such that it did not generate excess
profits, but was designed merely to cover the cost of operations including servicing that debt, paying back the
City for their debt to buy the company and to cover our operating costs. Whereas in IOU situation there
would be extra profits generated such that it could provide cash resources to pay a public company dividend
to public company shareholders. That’s a long answer to a short question and hopefully it gives you what you
need but | can add more if you need.

Alderwoman Kelly

If | could follow up please?
President Wilshire
Absolutely.

Alderwoman Kelly

Thank you. Thank you for that answer | thought it was great. Sometimes | think we put words out there and
not everybody is fully understanding of what they are so | like to make sure that people at home listening also
understand what we are talking about. My second question was around your line of credit, you said you were
drawn about $3 million on your $4 million line of credit. Is that, you know, business as usual or does it start in
January and it has become a slow drip? Like how did you end up in that situation?

Larry Goodhue, CEO & CFO Pennichuck Corporation

Well part of that is because of the time of year Alderman. You know, we are coming out of our base

1.

General Terms and Conditions

Definitions. Unless otherwise required by the context, "Independent Contractor’, and its
successors, transferees and assignees (together “Independent Contractor’) includes any of
the Independent Contractor's consultants, sub consultants, contractors, and subcontractors

Independent Contractor Status. The parties agree that Independent Contractor shall have
the status of and shall perform all work under this contract as an Independent Contractor,
maintaining control over all its consultants, sub consultants, contractors, or subcontractors.
The only contractual relationship created by this contract is between the City of Nashua
and Independent Contractor, and nothing in this contract shall create any contractual
relationship between the City of Nashua and Independent Contractor's consultants, sub
consultants, contractors, or subcontractors. The parties also agree that Independent
Contractor is not a City of Nashua employee and that there shall be no:

(1) Withholding of income taxes by the City of Nashua:

(2) Industrial insurance coverage provided by the City of Nashua;

(3) Participation in group insurance plans which may be available to employees
of the City of Nashua;

(4) Participation or contributions by either the Independent Contractor or the
City of Nashua to the public employee’s retirement system;

(5) Accumulation of vacation leave or sick leave provided by the City of
Nashua;

(6) Unemployment compensation coverage provided by the City of Nashua.

Standard of Care. Independent Contractor shall be responsible for the professional
quality, technical accuracy, timely completion, and coordination of all work performed
under this contract. Independent Contractor warrants that all work shall be performed with
the degree of professional skill, care, diligence, and sound practices and judgment that are
normally exercised by recognized professional firms with respect to services of a similar
nature. It shall be the duty of Independent Contractor to assure at its own expense that all
work is technically sound and in conformance with all applicable federal, state, and local
laws, statutes, regulations, ordinances, orders, or other requirements. In addition to all
other rights which the City of Nashua may have, Independent Contractor shall, at its own
expense and without additional compensation, re-perform work to correct or revise any
deficiencies, omissions, or errors in the work or the product of the work or which result
from Independent Contractor's failure to perform in accordance with this standard of care.
Any approval by the City of Nashua of any products or services furnished or used by
Independent Contractor shall not in any way relieve Independent Contractor of the
responsibility for professional and technical accuracy and adequacy of its work. City of
Nashua review, approval, or acceptance of, or payment for any of Independent Contractor's
work under this contract shall not operate as a waiver of any of the City of Nashua's rights
or causes of action under this contract, and Independent Contractor shall be and remain
liable in accordance with the terms of the contract and applicable law.

Independent Contractor shall furnish competent and skilled personnel to perform the work
under this contract. The City of Nashua reserves the right to approve key personnel
assigned by Independent Contractor to perform work under this contract. Approved key
personnel shall not be taken off of the project by Independent Contractor without the prior

GC 2 of 9

Board of Aldermen 05-04-2020 Page 8

consumption months which typically start in say the October timeframe and last until about this time. So this
is before people are starting to water their lawn but we also came out of a year last year where believe it or
not we had a very wet spring in May and June of last year and as such our water usage was lower the first
part of the year, so we actually had revenues that were below what we would have expected for the full year
of 2019.

We also are in the pendency of a rate case seeking rate recovery. We haven't had an adjustment to our
rates, our permanent rates since the 2016 year. That case is in pendency; so part of where we are at in the
line of credit is based on 2019’s overall performance, the time of year it is in 2020 and the fact that we are
awaiting rate relief relative to the rate case. That rate case is hopefully going to be concluded this fall,
however, you know, it is a process that takes time and there are certain latitudes as to whether it is going to
be completed this fall or it will fall into the beginning of next year which actually adds one more layer of the
requirement for this money as a bridge to that end game.

Alderwoman Kelly

Thank you very much.

President Wilshire

Anyone else, questions for Mr. Goodhue? Seeing none, would the Clerk please read the new business?
NEW BUSINESS — RESOLUTION

R-20-035
Endorsers: Mayor Jim Donchess
Alderman Richard A. Dowd
AUTHORIZING PENNICHUCK CORPORATION AND PENNICHUCK WATER WORKS, INC. TO
ENTER INTO A SMALL BUSINESS ADMINISTRATION PAYCHECK PROTECTION PROGRAM LOAN WITH
TD BANK, N.A.
Given its first reading

There being no objection President Wilshire suspended the rules to allow for a second reading of
R-20-05

R-20-035

Endorsers: Mayor Jim Donchess

Alderman Richard A. Dowd
AUTHORIZING PENNICHUCK CORPORATION AND PENNICHUCK WATER WORKS, INC. TO
ENTER INTO A SMALL BUSINESS ADMINISTRATION PAYCHECK PROTECTION PROGRAM LOAN WITH
TD BANK, N.A.
Given its second reading

MOTION BY ALDERMAN O’BRIEN FOR FINAL PASSAGE OF R-20-035 BY ROLL CALL

ON THE QUESTION

Alderman Jette

| was going to say this before, but | couldn’t get your attention. | want to compliment you Mr. Goodhue on
sending that letter. I’d also like to compliment Attorney Bolton for requesting it. It is really helpful for I’m sure

all the Aldermen, but for me in particular to receive that kind of information ahead of the meeting so we can
figure out what this all about. So | appreciate that and the letter explained in detail why you are asking for