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PENNICHUCK: 25 WALNUT STREET
PO BOX 428
NASHUA, NH 03061-0428
(603) 882-5191
FAX (603) 913-2305
WWW.PENNICHUCK COM
VIA HAND DELIVERY
May 26, 2022
Mr. Steven A. Bolton
Corporation Counsel
City of Nashua
229 Main Street
Nashua, NH 03060
Re: Request for Approval of Loans from the New Hampshire State Revolving Fund
to Pennichuck Water Works. Inc. - AMENDED from May 24. 2022 Letter
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 several resolutions authorizing Pennichuck’s regulated public water utility subsidiary,
Pennichuck Water Works, Inc. (“P'WW”), to borrow funds from the New Hampshire State
Revolving Fund (the “SRF Fund” or “SRF’”).
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:
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“(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. Pennichuck requests the City’s approval for two loans from the SRF
Fund to PWW. The specifics of these loans are described below:
¢ under the proposal, PWW would enter into a new long-term loan from
the SRF Fund in the principal amount of $300,000 to fund the Twin
Ridge Interconnection Main project.
* under the proposal, PWW would enter into a new long-term loan from
the SRF Fund in the principal amount of $240,000 to fund the Sweet Hill
Interconnection Main project.
Both of these projects pertain to community water systems in Plaistow, NH, serviced and
owned by PWW, and for which an interconnection to the new Plaistow Municipal Water
System is both economically advantageous currently and into the future, but also provides for
water quantity and quality issues that need to be addressed for those community water systems.
The Lender. The funds for these loans will be provided by the New Hampshire State Revolving
Loan Fund. The SRF Fund is administered by the New Hampshire Department of Environmental
Services (“NHDES”). The SRF Fund 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 these projects.
Terms of the Borrowings. The loans will have favorable terms, which will be reflected in a
written Loan Agreement and Promissory Note issued by PWW, as required by the SRF Fund.
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 projects. The terms of the SRF Fund loans will require repayment of the loan principal plus
interest over a period not to exceed 20 years, commencing six months after the project is
substantially complete. The current interest rate on the SRF Fund borrowing is 1.256% per
annum, though the final rate is not locked in until the loans commence their repayment periods.
The loans 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.
Approyal by Pennichuck and PWW. The loans to finance the projects and the guaranty of the
loans have been approved by the respective Boards of Directors of Pennichuck and PWW.
Pennichuck recommends that the City authorize (i) PWW to enter into the loans under the SRF
Fund, and (ii) Pennichuck to enter into the Guaranty Agreement for the loans.
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Other Approvals. As a regulated public utility, PWW 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 will file a petition for approval with
the NHPUC during the week of May 23, 2022 and expects the NHPUC to consider the petition
promptly, Under the SRF Fund, the loans must also be approved by the Governor and Executive
Council, which is anticipated to occur in July 2022.
Lower Costs Are Good for Customers. Pennichuck and its Board of Directors have
determined that the capital projects to be financed by the SRF Fund loans will allow PWW to
continue to provide safe, adequate and reliable water service to its customers on a cost-effective
basis. The terms of the financing through the SRF Fund 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 [X(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 $300,000 from the State of New Hampshire pursuant to the State Revolving
Loan Fund to fund the Twin Ridge Interconnection Main project in Plaistow, NH;
RESOLVED, that the City hereby approves the borrowing by Pennichuck Water Works,
Inc. of up to $240,000 from the State of New Hampshire pursuant to the State Revolving
Loan Fund to fund the Sweet Hill Interconnection Main project in Plaistow, NH;
FURTHER RESOLVED, that the City hereby approves the guaranty by Pennichuck
Corporation of the payment by Pennichuck Water Works, Inc. of the loans authorized
in the prior resolutions; and
FURTHER RESOLVED, that the City hereby authorizes Pennichuck Corporation and
Pennichuck Water Works, 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 Fund loans and the guaranty described in these resolutions.
Respectfully submitted,
PENNICHUCK CORPORATION
By: oF eA
Larrf D. Goodhue
Chief Executive Officer
cc. Mayor James Donchess
Board of Aldermen
City of Nashua
229 Main Street
Nashua, NH 03061-2019
(603) 589-3030
MEMORANDUM
TO: Board of Aldermen
FROM: Donna Graham, Legislative Affairs Manager
DATE: June 9, 2022
SUBJ: Communications Received from the Public
Attached please find communications received from the public as follows:
From: Laurie Ortolano
Re: Interest Paid for Abatement Appeals not settled expeditiously
From: Denise Muccioli
Re: Overflow Parking Issues ~ Roby Park ~ Action is Required
From: Fred Teeboom
Re: Letter on the anticipated tax rate and the spending cap (corrected)
Graham, Donna
ee a
From: Laurie Ortolano
Sent: Wednesday, June 01, 2022 1:07 PM
To: Graham, Donna
Subject: Re: Interest Paid for Abatement Appeals not settled expeditiously
CAUTION: This email came from outside of the organization. Do not click links/open attachments if source is
unknown.
Donna,
Could you please place this email into the upcoming Board Packet and could you provide it to the Budget
committee packet as well.
Good Morning,
I have been concerned with Nashua's ability to settle abatement appeals in a timely manner such that the costs to
taxpayers are minimized. As of 2022, late interest payment is 6%; legislation was passed this year to reduce the
interest payment to 4% for years beyond 2022,
I have tried to follow these abatement appeals since I began attending Board of Assessor meetings in 2019. 1
filed an abatement in 2018 that ended up going to a full appeal and settled in 2021. The City paid me about
$450 in interest payments over 2018-2021 and this is a relatively low amount because it was a residential
property, but for commercial property, the interest payment for running out abatement appeals 3-5 years, is
costly to taxpayers.
The interest payments are not the only costs. The legal departments' deliberate drag out of these appeals is
inefficient and costly to the staff.
In speaking an official in Manchester, that city cleans up all their abatement and appeals as quickly as possible.
I learned several weeks ago that 2021 abatements (which were filed by March 1, 2022) are their primary
workload. There were only four 2020 abatement appeals to settle and these were court involved. The assessing
office handles all their appraisal internally for ALL commercial properties (Mall, hotels, etc).
Attached are the 2020-2022 Overlay account summaries for abatements and abatement appeals.
In 2020, the City paid $16,700 in interest for 2017 and 2018 abatement appeals. In 2021, the City paid
$167,000 in interest for 2017 and 2018 abatement appeals. And in 2022, the City paid $145,000 in 2017, 2018
and 2019 in interest penalty. Over $300,000 in interest penalties have been paid to settle long standing
abatement appeals. Someone should question why we are unable to do better. This appears to be Nashua's
practice before 2018.
Attached are the 2020-2022 Overlay Analysis Reports filtered for 2017 and 2018 payments.
Laurie Ortolano
41 Berkeley St
Nashua
