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City of Nashua

Planning Department
229 Main Street
Nashua, New Hampshire 03061-2019

Planning & Zoning 603 589-3090
WEB www. nashuanh.gov

MEMORANDUM

Date: May 29, 2020

To: Ald. Lori Wilshire, President, and Board of Aldermen
Ald. David Tenceza, Chair and Planning & Economic Development
Committee
Ald. Michael B. O’Brien, Sr., Chair and Committee of Infrastrcture

From: Linda McGhee, Deputy Planning Manager

RE: Referral from the Board of Aldermen on proposed O-20-014, allowing the
temporary adjustment of site plans by the Community Development Director or
Designee to allow for greater outdoor seating at restaurants.

At the Nashua City Planning Board's regularly scheduled meeting of May 28, 2020
the Planning Board voted unanimously to make a favorable recommendation on O-
20-014, with the change that “No” fee shall be charged in the first paragraph.

If you have any questions concerning this notification, please contact me at 589-
3110.

cc: Mayor Jim Donchess
Donna Graham, Legislative Assistant
Susan Lovering, City Clerk
scott LeClair, Chair, NPCB
Sarah Marchant, Community Development Director

athe

THE CITY OF NASHUA

"The Gate City"

Financial Services Division

Office of the Chief Financial Officer
TO: President Lori Wilshire

Members of the Board of Aldermen

ce: Mayor Jim Donchess
FROM: John L. Griffin, Chief Financial Officer/Comptroller
DATE: June 2, 2020
RE: Fire Union [AFF Local #789 Collective Bargaining Agreement

The purpose of this communication is to provide a bit more detail regarding concerns that have
been raised about the affordability of the recently submitted collective bargaining agreement
between the City and the Nashua Fire Rescue [AFF Local #789 unit.

The Total Base Pay and Other Salary Costs on line 26 of the Cost Analysis shows that total
salary costs called for in the contract would rise 17.3% by July 1, 2022 (the start of FY23).
These costs would rise 4.2% in FY20, 3.8% in FY21, 4.2% in FY22 and 4.1% in FY 23. At the
end of the contract period, the base pay and other salary costs would increase from $15.0 million
to $17.6 million ($17.3%). The 3.5% increases in base pay for the four years of the contract do
not account for the complete increases in salaries.

Pension and Benefits costs are anticipated to rise from a base of $7.9 million in FY2019 to
approximately $9.4 million in FY2023, an increase of $1.5 million (18.1%) in these cost items.

On an average employee basis, the sum of these costs, also referred to in the analysis as the Total
Compensation Package, will increase from $134,916 in FY2019 to $158,601 in FY2023, an
increase of $23,685 (17.6%).

229 Main Street « Nashua, New Hampshire 03060 « Phone (603) 589-3173 « Fax (603)
589-3168

Steven A. Bolton
Corporation Counsel
BoltonS@nashuanh.gov

Dorothy Clarke
Deputy Corporation Counsel
ClarkeD@nashuanh.gov

Celia K. Leonard
Deputy Corporation Counsel
LeonardC@nashuanh.gov

CITY OF NASHUA
OFFICE OF CORPORATION
COUNSEL

FIRST MEMORANDUM

229 Main Street
P.O. Box 2019
Nashua, NH 03061-2019

T: (603) 589-3250
F: (603) 389-3259

Legai@nashuanh.gov

TO: Board of Aldermen

FROM: Office of Corporation Counsel
Dorothy Clarke, Esquire’| yy]

DATE: — June 3, 2020

RE: R-20-043 “Authorizing Pennichuck Corporation and Pennichuck East Utility, Inc. to
enter into a term loan and renew a fixed asset line of credit with CoBank, ACB” —

letter from Pennichuck without confidential financial documents

Attached please find a letter from Pennichuck with supporting information for Resolution

R-20-043 “Authorizing Pennichuck Corporation and Pennichuck East Utility, Inc. to enter into a

term loan and renew a fixed asset line of credit with CoBank, ACB”.

Please note that the letter references Attachment B-1, which is a confidential term sheet

for the term loan with CoBank, ACB, and Attachment B-2, which is a confidential term sheet for

the fixed asset line of credit renewal with CoBank, ACB. Those two attachments are not

included in the document attached to this memo. Those two documents, which are confidential

financial documents, will be provided to the Board separately.

VIA ELECTRONIC DELIVERY

May 22, 2020

Mr. Steven A. Bolton
Corporation Counsel
City of Nashua

229 Main Street
Nashua, NH 03060

Re: Pennichuck East Utility, Inc. — Request for Approval of Term Loan and renewal of Fixed
Asset Line of Credit with CoBank, ACB

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 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.

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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 Term Loan Borrowing and FALOC extension/renewal from CoBank

PEU is a New Hampshire public utility corporation providing retail water service to
approximately 8,300 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 has entered into a Master Loan Agreement with CoBank dated as of February 9, 2010 (the
“Master Loan Agreement”), which provides the framework for CoBank to make loans to PEU from
time to time. A copy of the Master Loan Agreement is attached to this letter as Attachment A.

PEU requests the City’s approval for PEU to enter into a term loan with CoBank in an amount of
$803,275 with an amortization period of up to 25 years, with an interest rate to be determined
based on market conditions (currently estimated at approximately 4.3% per annum). A copy of
the CONFIDENTIAL term sheet for the term loan with CoBank is attached to this letter as
Attachment B-1.

The proceeds from the CoBank loan will be used to refinance and repay up to approximately
$803,275 of Fixed Asset Line of Credit (“FALOC”) borrowings by PEU, under its $3 million
FALOC with CoBank, which was used to fund capital improvements to the PEU water system
infrastructure during 2019, which were not funded by State of New Hampshire Drinking Water
Revolving Loan Fund (SRF) or NH Drinking Water and Groundwater debt or grants.

The FALOC with CoBank was approved by the Company's Board of Directors, the NH Public
Utilities Commission (“NHPUC”), and the City of Nashua as shareholder, in March of 2018 (in
NHPUC Order No. 26,117; Docket PWC 17-157), to provide for capital improvements financing
during each calendar year, with subsequent annual refinancing and repayment of amounts
borrowed with term loans, consistent with the Company’s allowed rate structure with the
NHPUC, under Order No. 26,179 (Docket DW 17-128).

With this request, the Company is also requesting approval to renew and extend the FALOC with
CoBank for a period of three years, past the current expiration date of the facility as of
September 30, 2020. A copy of the CONFIDENTIAL term sheet for the FALOC renewal with
CoBank is attached to this letter as Attachment B-2.

The CoBank loan will be secured by (i) a security interest in PEU*s equity interest in CoBank
(consisting of PEU’s $181,781 eared equity investment in CoBank from patronage dividends
received since 2010, and PEU’s right to receive future patronage dividends), and (11) the

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unconditional guarantee of PEU’s obligations to CoBank by Pennichuck pursuant to the
Guarantee of Payment (Continuing) dated as of February 9, 2010 between Pennichuck and
CoBank (the “Guaranty Agreement”), a copy of which is attached to this letter as Attachment C.

The Lender ~ CoBank, ACB. CoBank is a government sponsored enterprise (“GSE”) owned
by its customers, who consist of agricultural cooperatives, rural energy, communications and
water companies and other businesses that serve rural America. Asa GSE, CoBank issues its
debt securities with the implicit full faith and credit of the United States Government and uses
these low-cost funds to make loans to companies like PEU that meet its charter requirements.
Asa result of the implicit backing of the U.S. Government, CoBank’s borrowing costs are lower
than commercial banks and financial institutions, and these lower costs are passed on to its
borrowers. In addition to the lower rates, CoBank loans generally have fewer covenants or
restrictions as compared to loans from commercial banks and other financial institutions.

Approval by Pennichuck and PEU. The CoBank loan and guaranty, as well as the FALOC
renewal, have been approved by the Board of Directors of Pennichuck and PEU.

Pennichuck recommends that the City authorize (1) PEU to enter into the loan with CoBank; and
(ii) Pennichuck to guaranty the loan, and (iii) PEU shall be authorized to extend and renew its
FALOC with CoBank for another three years.

Lower Costs Are Good for Customers. Pennichuck and its Board of Directors have
determined that the capital projects to be refinanced by the CoBank loan, and the renewal and
extension of the FALOC, will allow PEU to continue to provide safe, adequate and reliable water
service to their customers on a cost-effective basis, The terms of the loan and FALOC 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.

Other Approvals. As a regulated public utility, PEU must obtain approval of the term loan and
FALOC renewal from the New Hampshire Public Utilities Commission (“NHPUC”), which will
approve the term loan and FALOC renewal if it finds the loan to be consistent with the public
good. PEU has filed a petition for approval with the NHPUC as of May 22, 2020 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 IX(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 CoBank, ACB, in an amount of $803,275, with a 25-year amortization schedule;
and

FURTHER RESOLVED, that the City hereby approves the guaranty by Pennichuck
Corporation of the payment by Pennichuck East Utility, Inc. of the loan authorized in
the prior resolution; and

FURTHER RESOLVED, that the City hereby approved the renewal of the Fixed Asset
Line of Credit (“FALOC”) for Pennichuck East Utility. Inc.. with CoBank, ACB, ata
facility level of $3 million for a period of three years; and

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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 CoBank loan, and the guaranty described in these resolutions.

Respectfully subrnitted,

PENNICHUCK CORPORATION

By: cS LAS

Larry D. Goodhue
Chief Executive Officer

cc. Mayor James Donchess

ATWkaha taer &

MLA No. RX0848
MASTER LOAN AGREEMENT

THIS MASTER LOAN AGREEMENT (this “Agreement”) is entered into as of February 9,
2010, between PENNICHUCK EAST UTILITY, ENC., a New Hampshire corporation (the
“Company”), and CoBANK, ACB, a federally chartered instrumentality of the United States
(“CoBank”),

BACKGROUND

From time to time, CoBank may make loans and extend other types of credit to or for the account
of the Company. In order to facilitate the making of such loans and other types of credit, the parties are
entering into this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
ate hereby acknowledged, the parties agree as follows:

ARTICLE 1
DEFINITIONS AND RULES OF INTERPRETATION

SECTION 1.01. Definitions. Capitalized terms used in this Agreement and defined in
Exhibit A hereto shall have the meanings set forth in that Exhibit.

SECTION 1.02, Rules of Interpretation. The rules of interpretation set forth in Exhibit A
shail apply to this Agreement.

ARTICLE 2
THE SUPPLEMENTS

SECTION 2.01, Promissory Notes and Supplements. fn the event the Company desires to
borrow from CoBank and CoBank is willing to lend to the Company, the parttes will enter into a
promissory note and supplement hereto (cach a "Promissory Note and Supplement"). Each Promissory
Note and Supplement will set forth CoBank’s commitment to make a loan or loans to the Company, the
amount of the loan(s}, the purpose of the loan(s), the interest rate or interest rate options applicable to the
loan(s), the Company's promise to repay the loans, and any other terms and conditions applicable to the
particular loan(s). Each loan will be governed by the terms and conditions set forth in this Agreement and
in the Promissory Note and Supplement relating to that loan. In the absence of a Promissory Note and
Supplement hereto duly executed by CoBank, CoBank shall have no obligation to make a loan to the
Company under this Agreement.

SECTION 2.02. Notice and Manner of Borrowing New Loans. Except as otherwise
provided in a Promissory Note and Supplement: (A) loans will be made available on any Business Day
upon the telephonic or written request of an authorized employee of the Company (which request, if
made telephonically, shall be promptly confirmed in writing if required by CoBank); (B) requests for
loans must be received by 12:00 noon Company's local time on the date the loan is to be made; and (C)
loans will be made available by wire transfer of immediately available funds to such account or accounts
as may be authorized by the Company on forms supplied by CoBank,

SECTION 2.03. Method of Payment. The Company shall make all payments to CoBank
under this Agreement and each Promissory Note and Supplement hereto by wire transfer of immediately
available funds, by check, or, if specified by separate agreement between the Company and CoBank, by
automated clearing house (ACH) or other similar cash handling processes. Wire transfers shall be made
to ABA No. 307088754 for advice to and credit of "CoBANK" (or to such other account as CoBank may
direct by notice). The Company shall give CoBank telephonic notice no later than 12:00 noon
Company’s local time of its intent to pay by wire, and funds received after 3:00 p.m. Company’s local
time shalt be credited on the next Business Day. Checks shall be mailed to COBANK, Department 167,
Denver, Colorado 80291-0167 (or to such other place as CoBank may direct by notice}, Credit for
payment by check will not be given until the latter of the next Business Day after receipt of the check or
the Business Day on which CoBank receives immediately available funds.

SECTION 2.04. Security and Guaranty.

(4) Security. The Company's obligations hereunder and under each other Loan
Document to which the Company is a party (whether executed contemporaneously herewith or at a later
date) shall be secured by a statutory first priority Lien on all equity which the Company may now own or
hereafter acquire or be allocated in CoBank and all proceeds thereof.

(8) = Credit Support. In addition to the above, the Company’s obligations hereunder
and under each Prornissory Note and Supplement hereto shall be guarantied by Pennichuck Corporation
(the “Guarantor”) pursuant to a guarantee of payment in form and content acceptable to CoBank (as
amended or restated from time to time, the “Guaranty”).

ARTICLE 3
CONDITIONS PRECEDENT

SECTION 3.01. Conditions Precedent to the Initial Promissory Notes and Supplements
Hereto. CoBank's obligation to make a loan or loans under the initial Promissory Note and Supplement
hereto (or, in the event that more than one Promissory Note and Supplement is being executed on the
date hereof, each initial Promissory Note and Supplement hereto), is subject to the following conditions
precedent, which, in the case of instruments and documents, must be in form and content acceptable to
CoBank:

(A) This Agreement. CoBank shall have received a duly executed original of this
Agreement.

(B) Guaranty and Related Documents. (1) A duly executed original Guaranty; (2)
copies, certified by the Secretary of the Guarantor as of the date hereof (or as of another date acceptable
to CoBank), of such board resolutions, evidence of incumbency, and other evidence as CoBank may
require that the Guaranty has been duly authorized, executed and delivered by the Guarantor; and (3) an
opinion of counsel to the Guarantor, which counsel and opinion must be in form and content acceptable
to CoBank.

(C) Consent and Agreement. A consent and agreement (the “Consent and
Agreement”) between the Company, Pennichuck Water Works, Inc. (“PWW”), and CoBank in form and
content acceptable to CoBank.

(D) =‘ Secretary’s Certificate. CoBank shall have received an original certificate of
the Secretary of the Company dated as of the date hereof (or as of another date acceptable to CoBank)

SANBORN HEAD

20 Foundry Street
Building Trust. Engineering Success. Concord, NH 03301
Mr. Jeff Lafleur December 8, 2021
Superintendent File No. 3066.11
Nashua Division of Public Works, Solid Waste Department
840 West Hollis Street Sent via email

Nashua, NH 03062

Re: Updated Budget Opinion
Phase IV Permitting and Construction Documents
City of Nashua Four Hills Landfill
Nashua, New Hampshire

Dear Jeff:

Sanborn, Head & Associates, Inc. (Sanborn Head) appreciates the opportunity to be of
continued service to the City of Nashua (City). As you are aware, on December 7, 2020,
Sanborn Head provided the City with a Revised Budget Opinion to provide permit support
tasks to be completed after the submission of the Phase IV Type I-A Permit Modification
Application (PMA) and the Alteration of Terrain Application. These tasks included:

=» Permit Support Services:
a Solid Waste Bureau completeness review letter*
a Solid Waste Bureau design review letter
a AoT Bureau design review letter*
a NHF&G general review letter*
a Support & meetings

=» Type II PMA and Construction Bid Documents

Sanborn Head recommended that the City budget $215,000 to complete the above-listed
tasks. To date, the City issued purchase orders for, and Sanborn Head completed, the tasks
denoted with an “*.” As discussed, the City requested that Sanborn Head provide an updated
cost opinion to address the remaining listed tasks above and include bid-phase services.
Based on our latest conversations, the City is planning to bond the remaining Permit Support
Services and the first Type I] PMA and Construction Bid-Phase Services.

Remaining Permit Support Scope Items

Sanborn prepared a response to comments letter, dated July 16, 2021, related to the NHDES’s
Phase IV Type I-A PMA completeness review letter. The City received a second completeness
letter from the NHDES, dated December 3, 2021, requesting additional information to
support the Phase IV PMA. Based on our last meeting with the NHDES and the City, which
occurred on November 10, 2021, the NHDES indicated that this would be their last request
for additional information. However, based on our experience preparing these permits for
similar projects within the State, and given the current permitting nature of these types of

SANBORN, HEAD & ASSOCIATES, INC. www.sanbornhead.com