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Board of Aldermen 05-04-2020 Page 9

this Resolution. But if | could Madam President, could | still ask Mr. Goodhue some questions?

President Wilshire

Alderman Jette.

Alderman Jette

So will this qualify for forgiveness so that the money you are borrowing under this program if it is paid, if it is
used to pay wages, then it is eligible for being forgiven. So in the end this money will not have to be

repaid? Is that correct?

Larry Goodhue, CEO & CFO Pennichuck Corporation

Yes Alderman Jette. It is a very specific calculation; we have to use the money within 8 weeks after the
funds being given to us. It has to use 75% for payroll, up to 25% for very specific non-payroll related costs.
We feel fairly certain that all, if not nearly all of this amount, will be a forgiven amount that allows for that
bridge relative to us being able to comply with the Governor’s Orders and service to our customers and
they are dealing with their own individual circumstances at this time.

Alderman Jette

And could | follow up Madam President?
President Wilshire

Alderman Jette.

Alderman Jette

In your letter you also indicated that because of the Governor's Emergency Orders, you cannot stop
providing water to people even though they might not be paying the bill. Do you have any testament as to
how much of that will be recovered once the crisis is over or will most of that be lost?

Larry Goodhue, CEO & CFO Pennichuck Corporation

We don't have a clear look at that. The best comparison we can have was the 2008/2009 financial crisis,
where a good number of residents were impacted and local businesses were impacted. In that financial
crisis, excuse me, one of the things that is in the Governor’s Order is when people are in this situation, they
need to work with us in setting up a payment arrangement to pay that deferred amount in no less than 6
months’ time. However, should you have a resident that you know, they lose their job, they vacate their
house, they get foreclosed on, they move out of the area, all of a sudden they are no longer a customer of
ours, we will never be able to recover that deferred sum of money.

That same situation could happen with the unfortunate circumstance where a business might be using
some water and then they go out of business and they file Chapter 11 or whatever and that may never be a
collectable amount. So there is a portion of this that could be as far as the delinquent payments, could be
non-recoverable. However, like | say, the only basis that we have as far as any kind of a reasonable
comparison was the 2008/2009 financial crisis. We did see some of that, though a part of it was mitigated
by the fact that people were able to come back on and work with us and pay their past due bills; and/or
some of the banks may have foreclosed on some properties, actually paid the past due amounts in order to
transact and resell those properties. So we don’t know yet what that full impact might be whether we will
get deferred payments, delayed payments and/or it will be a permanently uncollectable item at this time.

Board of Aldermen 05-04-2020 Page 10

Alderman Jette

Ok thank you.

President Wilshire

All set Alderman Jette?

Alderman Jette

Yes thank you very much.

President Wilshire

Anyone else? The Motion before us is for Final Passage of Resolution R-20-035.

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

Resolution R-20-035 declared duly adopted.

ADJOURNMENT

MOTION BY ALDERMAN O’BRIEN THAT THE MAY 4, 2020, SPECIAL MEETING OF THE BOARD OF
ALDERMEN BE ADJOURNED BY ROLL CALL

A viva voce roll call was taken to adjourn the Board of Aldermen meeting which resulted as follows:
Yea: Alderman O’Brien, Alderman Klee, Alderwoman Kelly, Alderman Dowd,

Alderman Caron, Alderman Clemons, Alderman Tencza,

Alderman Jette, Alderman Schmidt, Alderman Cleaver,

Alderman Harriott-Gathright, Alderman Wilshire 12
Nay: Alderman Lopez 1
MOTION CARRIED

The meeting was declared adjourned at 7:33 p.m.

Attest: Susan K. Lovering, City Clerk

Graham, Donna

From: Goodhue, Larry <larry.goodhue@PENNICHUCK.com>
Sent: Monday, May 04, 2020 9:36 AM

To: Board of Aldermen

Ce: Bolton, Steve

Subject: FW: [EXTERNAL] PPP Loan

CAUTION: This email came from outside of the organization. Do not click links/open attachments if source is unknown.

From: Goodhue, Larry

Sent: Monday, May 4, 2020 9:35 AM

To: Bolton, Steve <BoltonS@nashuanh.gov>

Cc: Ware, Don <donald.ware@PENNICHUCK.com>; Thomas J. Leonard <tjleonard@lawyersnh.com>
Subject: RE: [EXTERNAL] PPP Loan

Hello Steve,

Here is the information you requested in support of the PPP loan. Do you need me to send it a different manner, or is including it in this email all
you needed?

e The Company applied for a PPP Loan as an essential service organization in the State,

« As such, we must continue full operations in support of all of our customers in the regions we serve in 30 communities in the State, inclusive
as the regulated water supplier for the City of Nashua

* The Company is a debt-only funded organization, and as such, is not structured by its approved rate structure, to provide for any excess
profits, but rather to cover its cost of operations

* The company has a significant portion of its revenues that are restricted for their usage to provide for the repayment of all of the
Company’s debt obligations, to independent third party lenders, as well as its note payable to the City of Nashua

« The Company has a $4 million line of credit to back stop working capital needs, for which it is currently drawn on at the level of $2.7-3.0
million

¢ The Line of Credit is currently under extension for renewal, and as such, the Company’s ability to maintain liquidity is vital to servicing that
line, and obtaining a further extension or renewal of that line. Absent that renewal, the Company would be in a severe financial situation.

1

The Company, under the Governor’s emergency orders, must continue to service all of its customers, but is constrained for exercising full
authority in its collection of water bills in a normal manner. Shutoff notices and further actions have been stopped during this timeframe.
The emergency orders have already shown some impact upon the delinquency of payments on billed amounts to customers, and the overall
impact of this is yet to be determined, as businesses may or may not be able to reopen and re-employ their employees. And, the impact of
those closures or impediments, would have an indirect or direct impact on the Company’s ability to collect revenues to support fixed and
variable costs of operations.

Under the emergency orders, the Company must work with ratepayers in negotiating payment plans for deferred amounts, for a period to
not less than 6 months for those payment plans.

The Company is also in the process of completing certain rate case activities and other financing activities, all of which are to recoup
revenue levels needed to cover current costs. Delays in any of these, coupled with reduction in receipts for billed amounts, would cause the
Company’s ability to cover its working capital needs to be compromised. And, the Line of Credit would quickly be insufficient to meet those
needs.

lf that occurs, the Company’s ability to maintain its workforce would be compromised, and as such, its ability to meet its responsibilities as
an essential service provider in the region would be at risk.

The PPP loan, as defined and approved, is based upon the Company’s ability to keep its workforce employed.

is aloan at 2.5x average monthly payroll and associated benefits.

Is to be used at Jeast 75% for payroll and payroll related costs over an 8-week period after funding

Can be used up to 25% for certain non-payroll costs, including: rent, lease payments, interest on debt, and utilities

If certain requirements under the PPP program can be met, the loan is forgivable, based upon specific calculations, up to 100% (as a grant)
And amounts not forgiven are deferred for repayment for 6 months, and then amortized for repayment over 18 months at a 1% interest
cost.

This loan in essence gives an added layer of working capital needed to sustain operations, over and above the Line of Credit, and at an
interest rate approximately 1/3 of that line and potentially at a zero cost to ratepayers.

Thanks, Steve. Please let me know if you need anything additional.

ie PENN GH UGK

Larry D. Goodhue

Chief Executive Officer

Pennichuck Water

25 Manchester St.

Merrimack, New Hampshire 03054
Ph: (603) 913-2312

The contents of this e-mail and any attachments are confidential, and may be privileged or otherwise protected from disclosure, and are the property of Pennichuck Corporation and/or any of its subsidiaries. The e-mail and its
content are only fo be used by the intended recipient of the e-mail, unless specifically authorized by the sender. if you are not the intended recipient, then the use, disclosure, copying, distribution or reliance upon this email, its

2

SPECIAL BOARD OF ALDERMEN
MAY 4, 2020

7:00 p.m Meeting is being conducted remotely in accordance with Governor’s Emergency
Order #12 pursuant fo Executive Order 2020-04

Callin Number: 1-978-990-5298 Access Code: 273974#

lf anybody has a problem accessing the meeting via phone or Channel 99, please call 603-821-2049 and they
will help you connect.

PRESIDENT LORI WILSHIRE CALLS ASSEMBLY TO ORDER

PRAYER OFFERED BY CITY CLERK SUSAN LOVERING
PLEDGE TO THE FLAG LED BY ALDERMAN BEN CLEMONS
ROLL CALL

COMMUNICATION

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

DISCUSSION

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 PATCHECK
PROTECTION PROGRAM LOAN WITH TD BANK, N.A.

ADJOURNMENT

Board of Aldermen

City of Nashua
229 Main Street Lori Wilshire
Nashua, NH 03061-2019 President, Board of Alderrnen

(603) 589-3030

May 1, 2020

Susan K. Lovering, City Clerk
City of Nashua

229 Main Street

Nashua, NH 03061-2019

Dear Ms. Lovering:

Please be advised | am hereby calling a Special Meeting of the Board of Aldermen for Monday,
May 4, 2020, at 7:00 p.m. which will be held remotely relative to Resolution R-20-035.

Thank you.

jncerely, . .
Lori Wilshire
President

cc: Mayor Jim Donchess
Steven A. Bolton, Corporation Counsel

bay ry id oo oF ELige

Fer Tad GF. © AUS
Ufa SEMETP Re, bre mo
asd ses I ALD Gale

R-20-035

RESOLUTION

AUTHORIZING PENNICHUCK CORPORATION AND PENNICHUCK
WATER WORKS, INC. TO ENTER INTO A SMALL BUSINESS
ADMINISTRATION PATCHECK PROTECTION PROGRAM LOAN WITH TD
BANK, N.A.

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 or assume any indebtedness for borrowed
money or guarantee any such indebtedness on behalf of Pennichuck or its subsidiaries; and

WHEREAS, Pennichuck Water Works, Inc. (““PWW”) is a regulated New
Hampshire public water utility corporation providing retail water service to New Hampshire
customers, and is a wholly owned subsidiary of Pennichuck Corporation, 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 Pennichuck and PWW borrowing up to a total of $2,600,000
in an aggregate principal amount from TD Bank, N.A., under the Small Business
Administration Paycheck Protection Program (15 U.S. § 636(a)(36), the “Program”’) to raise
proceeds for the following purposes: (1) to pay wages and benefits to employees; and (2) to
pay rent, utilities and other expenses authorized under the Program.

AND, FURTHER, BE IT RESOLVED by the Board of Aldermen of the City of
Nashua that the City approves PWW’s issuing one or more notes to TD Bank, N.A., under
the Program at an interest rate of 1% and with a term of two years, and on such other terms
as required by the Program and as may be determined by PWW in response io prevailing
market conditions.

i Vv 202

RESOLUTION: R-20-035

PURPOSE: Authorizing Pennichuck Water Works, Inc. to issue notes
to TD Bank, N.A., under the Small Business
Adniinistration Paycheck Protection Program

RSERS: Mayor Jim Donchess

Alderman Richard A. Dowd

FISCAL NOTE: None.

ANALYSIS
This resolution approves the proposal by d Pennichuck Water Works to issue one or more
notes to TD Bank, N.A., under the Small Business Administration Paycheck Protection Program
as described in the resolution.

Pennichuck has provided additional information 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/ Steven A. Bolton

Date: May 1, 2020

A regular meeting of the Board of Aldermen was held Tuesday, April 28, 2020, at 7:30 p.m. via
teleconference and broadcasted on the Education Channel 99.

President Lori Wilshire presided; City Clerk Susan Lovering recorded.
Prayer was offered by City Clerk Susan Lovering; Alderman June M. Caron 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 Governors 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 Governors 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 (515) 604-9094 and using the access code 355 211 880.
The Public may also view this meeting on Comcast Channel 99.

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 99, 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.

written approval of the City of Nashua, except in the event of termination of employment.
Independent Contractor shall, if requested to do so by the City of Nashua, remove from the
job any personnel whom the City of Nashua determines to be incompetent, dishonest, or
uncooperative.

City of Nashua Representative. The City of Nashua may designate a City of Nashua
representative for this contract. If designated, all notices, project materials, requests by
Independent Contractor, and any other communication about the contract shall be
addressed or be delivered to the City of Nashua Representative.

Changes to Scope of Work. The City of Nashua may, at any time, by written order, make
changes to the general scope, character, or cost of this contract and in the services or work
to be performed, either increasing or decreasing the scope, character, or cost of Independent
Contractor's performance under the contract. When Independent Contractor seeks changes,
Independent Contractor shall, before any work commences, estimate their effect on the cost
of the contract and on its schedule and notify the City of Nashua in writing of the estimate.
The proposal for a change shall provide enough detail, including personnel hours for each
sub-task and cost breakdowns of tasks, for the City of Nashua to be able to adequately
analyze the proposal. The City of Nashua will then determine in writing if Independent
Contractor should proceed with any or all of the proposed change.

Except as provided in this paragraph, Independent Contractor shall implement no change
unless the City of Nashua in writing approves the change. Unless otherwise agreed to in
writing, the provisions of this contract shall apply to all changes. The City of Nashua may
provide verbal approval of a change when the City of Nashua, in its sole discretion,
determines that time is critical or public health and safety are of concern. Any verbal
approval shall be confirmed in writing as soon as practicable. Any change undertaken
without prior City of Nashua approval shall not be compensated and is, at the City of
Nashua's election, sufficient reason for contract termination.

TERMINATION OF CONTRACT

A. Termination, Abandonment, or Suspension at Will. The City of Nashua, in its sole
discretion, shall have the right to terminate, abandon, or suspend all or part of the project
and contract at will. If the City of Nashua chooses to terminate, abandon, or suspend all
or part of the project, it shall provide Independent Contractor 10 days’ written notice of its
intent to do so.

If all or part of the project is suspended for more than 90 days, the suspension shall be
treated as a termination at will of all or part of the project and contract.

Upon receipt of notice of termination, abandonment, or suspension at will, Independent
Contractor shall:

1. Immediately discontinue work on the date and to the extent specified in the notice.

2. Place no further orders or subcontracts for materials, services, or facilities, other
than as may be necessary or required for completion of such portion of work
under the contract that is not terminated.

3. Immediately make every reasonable effort to obtain cancellation upon terms
satisfactory to the City of Nashua of all orders or subcontracts to the extent they
relate to the performance of work terminated, abandoned, or suspended under the

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