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Special Bd. of Aldermen — 12/20/2018 Page 4

where the equity investors would like to see you be. They don’t want to get into a hassle with the City of
Nashua.

So that intermediary lender in turn, which would be a non-profit in this case, would loan that same amount to
an investment fund. Remember the key to this is you get the credit by making an investment in the community,
so we’ve got to set up an investment fund to make that happen. That investment fund, in order to create an
$18.5 QEI which nets loans of $18,130,000.00, that investment fund needs to collect $19 million 60 thousand
dollars and the way it does that is it takes the $12 million and change and then it sells the tax credits and
receives for those tax credits $6.1 million dollars. So it is selling $7.2 million dollars at 85% and receiving $6.1.
That $6.1 is added in the investment fund to the $12.8 or whatever it was, $12.9 and that creates a total
capitalization of $19 million 60 thousand dollars.

Then, the investment fund makes the qualified equity investment of $18.5, that is a big number because that’s
what this is based on and it is what the allocation of credits from the CDE will be, it will be for $18,500,000.00.
That moves into a CDE and we talked about, they are another intermediary that not only has the capacity to
award the credits, but serves as the lender. So they will take the $18.5, they will take their fees of 2% of that
and we will have $18, 130,000.00 which we are going to loan to the QALICB And the QALICB is going to be a
to-be-determined non-profit to be created or another entity that steps into this role.

There will be two loans, there will be the $12,900,000 and change loan which equals the bond proceeds and
there will be the $5.2 million dollars which is the net New Market Tax Credit cash. In other words instead of the
City having to pay $18.13 in bonding it is paying $5.2 less than that. The reason it is two loans is that after
seven years, loan B goes away. But it has to stay in there as an obligation to QALICB for 7 years, it is a 0%
loan. It has to stay in there for 7 years because that is the compliance period for the New Market Tax Credit
Program.

Then we are now envisioning that the QALICB owner will be a passive LLC, all it will do is own the building and
collect rent and pay debt service and it will lease it to the City of Nashua. The City of Nashua would in turn
either sub-lease to an operator and we have an operator, Tim and his group the Steering Committee have
selected an operator, that would either be a lease or it would be a contract with the operator. I’m not sure
which it is going to be yet. In most cases the sub-lease for a buck. That is the model, that is the going down
model.

Now we have a business transaction instead of a municipal bonding transaction and that makes it work. So
how do we service the debt on the bond? Well the City of Nashua pays an annual lease payment here, which
is equal to the annual debt service on the bond. The borrower, the QALICB pays the debt service up to the
CDE, the CDE pays it up to the investment fund, the investment fund pays it to the lender, the lender pays it to
the City and the City pays it to the bond purchaser. It is all simple but it is going to take, it is just the way it is
done to qualify under the regulations of IRS and that transaction | just traced can take place in a day with wire
transfers etc. But it is the way we have to do it to make it legitimate private investment. It is relatively simple
when you think about it, it is generating a check from the City that ends up with the City after going through a
couple of other channels. So there are going to be 4 or 5 bank accounts that it is going to pass through on the
way up.

| just have one more slide just to clarify how that cash is raised. So we have the $18.5 equity investment, the
total credits awarded are 39% of the $18.5 which is the $7.2 million, the credit price is .85 cents, that gets a
gross amount of $6.1 million. Down here we go to the $6.1 million and we convert to cash by taking these fees
off and we come up with $5.2 million which is the same as Loan B right there, which goes away and is forgiven
after 7 years. Thatis private investment. | believe that meets the private investment criteria of your resolution.
The investors are usually banks, financial institutions, the big ones, Merrill Lynch, Chase Manhattan, etc. etc.
who are investing their money in turn for some tax shelters.

Special Bd. of Aldermen — 12/20/2018 Page 5

| don’t Know who we are going to use, the one group that has been very, very active in New Hampshire of 95%
of the deals | have done is US Bank out of St. Louis, they are very active in this. Remember there are other
tax credits too that these investors are used to getting involved in. There is the Historic Tax Credit that you get
for rehabbing historic buildings in your historic district, which works very similarly to this. It is a 20% credit
taken over 4 years and there is a low income housing tax credit that institutions such as Chase and Merrill
Lynch and Bank of America and US Bank invest in on a regular basis.

So that is it for now, | would be glad to answer any questions you may have.

Mr. Cummings

Before we get there, may | just — one thing. | just wanted to take what Niel said and give you a real life example
of what was done here in New Hampshire. This is the deal structure that Keene went through for their library
project. This is essentially the very high level overview deal structure that Keene went through for their library
expansion project to be clear. So the City of Keene, they had equity of $2.5 million that was the current
building and land, they had about $8.96 in a loan which was a bond, bond proceeds, they took the $8.9 put it
into this leverage lender model and that leverage lender moved the money over to the CDE The CDE then
leveraged it with the equity investment by US Bank of a full total of just over $5 million, but that wasn’t what
was actually in the project itself, the project netted $4.3 million of cash for a total of about $13 million dollar.
The $13 million was eventually pushed down into the QALICB. The QALICB then separately the City of Keene
transferred the $2.5 down into the QALICB for a $15 million dollar project which then they were the ultimate
operator and master tenant of the library. This is how Keene structured theirs

Mr. Cannon Itis a standard structure. And just one more thing, one of the advantages of this is Keene’s
counsel has done this twice now, for the courthouse and this and is talking to your counsel, so that is really
going to help | think and smooth the deal along as we go forward.

Mr. Cummings

So my last comment that | want to make is to make this all happen there is going to need to be approvals by
the Board of Aldermen along the way. Some actions that will be necessary: development agreement,
approval to push, if you will, the $12.9 down through the system, a transfer of 201 Main Street into the
QALICB, approval of a Master Lease. So there are going to be 4 or 5 resolutions that are going to come
before this body that we are still trying to understand and still try to figure out as we are putting this deal
together. But we are going to need those approvals to ultimately make this work.

A couple of other points | want to make, as you can note, we are only suggesting $12.9 million in this model;
we have authorization for $15.5 so approximately $2.5 million wouldn’t necessarily have to be pushed through
this model. That could be used still for the project or not used at all, and maybe you could potentially reduce
the bond obligation, or if there are other items within the project that you would like to undertake that isn’t in the
current scope, you could use some of that money for, if you will, upgrades or amenities.

Lastly not shown on this deal structure flow chart but is still coming together is the private investment that
would be coming from local charitable contributions which we are targeting at approximately $2.5 million. That
would be a separate non-profit that would be involved with transferring basically those private dollars into the
operator to make that work as well. So that would be underneath the City of Nashua Master Tenant, there still
could be 2 or 3 boxes that are evolving as we are putting this all together.

This took about 3 to 4 months of really serious back and forth with Niel and other members of the team here in
City Hall to get a comfort level to understand the direction we are going and it is constantly evolving. When we
first started this, it looked very similar to this but there were slight differences and tweaks along the way. | just
want to make sure you all understand that this will continue to get refined as we move forward. What we
wanted to do tonight was to introduce the concept, give you a high level overview, have you comfortable with

Special Bd. of Aldermen — 12/20/2018 Page 6

the ideas, because once this train leaves the station, we really need to make sure we have the approvals
necessary to be able to execute on this project. So with that being said, Madam President.

President Wilshire
Thank you and thank you Mr. Cannon for your presentation. | am going to start on this side.

Alderman Gidge

That is if everything goes correctly and every deal obviously Keene a courthouse it certainly or library is
certainly different than what we are doing down here. You must have something that you can show us where
mistakes have been made where this has not worked, where are the weak spots of this? There has to be, it
just doesn’t work like this.

Mr. Cannon Yés it does, especially in this sense. The places it doesn’t work is where the QALICB defaults on

the loan. In this case the loan is the full faith and credit of the City of Nashua. So | don’t see any, unless the
City of Nashua goes into bankruptcy, | don’t see a problem.

Alderman Gidge

Well there are moving parts obviously, when you rent something to somebody and then you rent it individuals
let’s say to run the business, when there are contracts that go into that obviously which has nothing to do with
this, has something to do with us. That is a weak spot if that doesn’t work out.

Mr. Cannon We have had more discussion about that than the numbers.

Alderman Gidge

Is there a place though to have something to show us where it doesn’t work? All this works all the time?

Mr. Cannon Yes because you are going to control, you control the purse strings at the top and building

through a Master Lease at the bottom. The strength of that lease is up to you as is the strength of the
relationship of the City as the Master Lessee in any sub-leases to operators or whatever.

Alderman Gidge

| would just like to ask, please is there anything like this that hasn’t worked? Is there anything we can look at
Has this not worked someplace?

Mr. Cannon | mean the only ones | know that have failed have failed because of default on loans. There are a
couple in Claremont that failed in the mill building. But it was a financial failure not a compliance failure

President Wilshire
Are you all set Alderman Gidge?

Alderman Gidge

Yes | am, thank you.

FINANCE COMMITTEE

JANUARY 6, 2021
7:00 PM

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Meeting ID: 853 0527 4432
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Join by telephone: 1-929-205-6099
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If there is a problem with the audio, please dial 603-821-2049 to advise.

ROLL CALL

PUBLIC COMMENT

COMMUNICATIONS

From: Kelly Parkinson, Purchasing Manager

Re: Lead Inspection/Risk Assessment Services in the amount not to exceed $336,000 funded from
account 54225 Lead Hazard Control Grant: Inspection Services

From: Kelly Parkinson, Purchasing Manager

Re: Hybrid Vans for Transit in the amount not to exceed $346,000 funded from an FTA Low-No Emissions
Grant, FY17 CERF & NH State FY19 Budget Funding

From: Kelly Parkinson, Purchasing Manager

Re: — Landfill Water Quality Testing & Monitoring in the amount of $29,888 funded from account 55699
Other Contracted Services

From: Kelly Parkinson, Purchasing Manager
Re: — Landfill Permit Application in the amount of $30,000 funded from account 81650 Land Improvements

From: Kelly Parkinson, Purchasing Manager

Re: City Hall Building Renovation Change Orders #1, 2 & 3 in the amount of $26,552.21 funded from
account GOFERR Grant

From: Kelly Parkinson, Purchasing Manager

Re: Dependent Eligibility Verification Audit in the amount not to exceed $33,000 funded from Benefits Self
Insurance Fund Account 53999 Other Professional Services

From: Kelly Parkinson, Purchasing Manager
Re: Contract Amendment Jackson Mills Turbine, Generator & Controls Replacement Change Order #1

UNFINISHED BUSINESS

NEW BUSINESS — RESOLUTIONS
NEW BUSINESS — ORDINANCES
RECORD OF EXPENDITURES
GENERAL DISCUSSION

PUBLIC COMMENT

REMARKS BY THE ALDERMEN
POSSIBLE NON-PUBLIC SESSION

ADJOURNMENT

THE CITY OF NASHUA “The Gate City"

Adwunistrative Services
Purchasing Department

December 29, 2020
Memo #21-067

TO: Mayor Donchess
Finance Committee

SUBJECT: Lead Inspection/Risk Assessment Services in the amount not to exceed $336,000 funded
from account 54225 Lead Hazard Control Grant: Inspection Services

Please see attached communications from Carrie Schena, UPD Manager, dated December 23, 2020 for
project specific details related to this purchase. Below please find a summary of the purchase approval
request:

Item: Lead Paint Risk Assessment/Inspection Services
Value: not to exceed $336,000
Vendor: Alchemy Lead Management

Department: 184 Urban Programs
Source Fund: 54225 Lead Hazard Control Grant: Inspection Services

Ordinance: Pursuant to § 5-78 Major purchases (greater than $10,000) A. All supplies and
contractual services, except as otherwise provided herein, when the estimated
cost thereof shall exceed $10,000 shall be purchased by formal, written contract
from the lowest responsible bidder, after due notice inviting bids.

A competitive bidding RFP for this project was issued on November 18, 2020 and the following bids were
received:

Vendor Location Amount Note
Alchemy Lead Management | Manchester, NH | $1797/unit
Credere Associates Westbrook, ME S$4435/unit

We recommend this bid to be awarded to the lowest total cost vendor who met the RFP specified
requirements.

The Urban Programs, and the Purchasing Department respectfully request your approval of this contract.

Regards,
Kelly Parkinson

Purchasing Manager

Ce: S Marchant
J Graziano

229 Main Street * Nashua, New Hampshire 03061 ¢ Phone (603) 589-3330 « Fax (603) 589-3233

Jim Donchess
Mayor e City of Nashua

To: Board of Aldermen

From: Mayor Jim Donchess

Date: December 29, 2020

Re: Multi-Year Contract Award — Lead Paint Risk Assessment and Inspection Services

Pursuant to NRO: § 5-74/B: A contract that extends from the current fiscal year into succeeding
fiscal year(s) in which no funds have been appropriated nor otherwise designated for this purpose
shall be approved by the full Board of Aldermen before the contract shall become binding on the
City.

The Finance Committee has approved and placed on file the notification of the award of the
referenced contract at the January 6, 2021 meeting and as such | am requesting the full Board of
Alderman approve the following contract:

Item: Lead Paint Risk Assessment and Inspection Services
Value: $336,000 (not to exceed)
Vendor: Alchemy Lead Management
Purchasing Memo#: 21-067 dated December 28, 2020
Contract Term: 42 months
Thank you.

229 Main Street * PO Box 2019 * Nashua, New Hampshire 03061-2019
603.589.3260 * fax 603.594.3450 * NashuaMayor@NashuaNH. gov
www.NashuaNH. gov

Community Development 589-3095

i Planni d Zoni 589-3090
CityofNashua Caesars Sao-co89
Community Development Division Urban Programs etre
City Hall, 229 Main Street, PO Box 2019 Boo eee ere on coon
Nashua, New Hampshire 03061-2019 FAX 589-3398

www.gonashua.com

Memo

To: Kelly Parkinson, Purchasing Manager

Ce: Sarah Marchant, CD Director
Janet Graziano, Financial Manager

From: Carrie Schena, UPD Manager
Date: December 29, 2020

Re: Lead Paint Risk Assessment/Inspectional Services (Value: $336,000)
ACTIVITY: 1092.20.10.50 (confirm) ACCOUNT CATEGORY: 54225
LEAD HAZARD CONTROL GRANT: INSPECTION SERVICES

The City was recently awarded a new $5.7M lead-paint and healthy homes grant from HUD’s Office of Lead
Hazard Control & Healthy Homes to address lead hazards in housing occupied by low-income households.
All lead hazards must be identified by a NH licensed Risk Assessor/Lead Paint Inspector per state and
federal requirements. A RFP was issued to solicit qualified proposals to provide this service. The total # of
housing units to be inspected, per our grant agreement with HUD, is approximately 210 over the 42-month
grant period.

The Urban Programs Department evaluated the two proposals received according to the criteria within the
RFP. The Risk Assessor recommended herein successfully completed two similar contracts for the City and
has demonstrated capacity to handle the volume of work. We base this recommendation on the combination
of experience, capacity, quality of work, and cost of services. Further this company qualifies as a Woman
Owned Business (WBE).

The Urban Programs Department and this Office recommend awarding the contract in a sum not-to-exceed
(NTE) $336,000 to Alchemy Lead Management. The source of funding will be the Lead Based Paint
Hazard Control Grant, which has a line item budgeted for risk assessment/lead paint inspection services.

A CONTRACT BETWEEN THE CITY OF NASHUA
AND

ALCHEMY LEAD MANAGEMENT
NAME AND TITLE OF INDEPENDENT CONTRACTOR

189 KELLEY STREET, MANCHESTER, NH 03102
ADDRESS OF INDEPENDENT CONTRACTOR

WHEREAS, the City of Nashua, a political subdivision of the State of New Hampshire, from time to
time requires the services of independent Contractor; and

WHEREAS, it is deemed that the services of Contractor herein specified are both necessary and
desirable and in the best interests of the City of Nashua; and

WHEREAS, Contractor represents they are duly qualified, equipped, staffed, ready, willing and able
to perform and render the services hereinafter described;

Now, THEREFORE, in consideration of the agreements herein made, the parties mutually agree as
follows:

1. DOCUMENTS INCORPORATED. The following exhibits are by this reference incorporated herein and are
made part of this contract:

Exhibit A - General Conditions for Contracts

Exhibit B - Scope of Services

The Contract represents the entire and integrated agreement between the parties and supersedes
prior negotiations, proposals, representations or agreements, either written or oral. Any other
documents which are not listed in this Article are not part of the Contract.

2. WORK TO BE PERFORMED. Except as otherwise provided in this contract, Contractor shall furnish all
services, equipment, and materials and shall perform all operations necessary and required to carry
out and perform in accordance with the terms and conditions of the contract the work described in
Exhibit B.

3. PERIOD OF PERFORMANCE. Contractor shall perform and complete all work within the time periods set
forth in Exhibit B. The time periods set forth in Exhibit B may only be altered by the parties by a written
agreement to extend the period of performance or by termination in accordance with the terms of the
contract. Contractor shall begin performance upon receipt of a Notice to Proceed and a valid
purchase order from the City.

4. COMPENSATION. Contractor agrees to perform the work for a total cost not to exceed $336,000, which,
unless otherwise provided in this contract, shall be paid in accordance with the provisions of Exhibit B.
Requests for payment must include a detailed summary of the expenditures reported in a form that
supports the approved budget. Specifically, contractor agrees to provide the following with each
request for payment:

1. Appropriate invoice forms. The forms shall include the project purchase order number, a listing of
personnel hours and billing rates, and other expenditures for which payment is sought.

2. A progress report. The report shall include a description of the work accomplished, problems
experienced, upcoming work, any extra work carried out, and a schedule showing actual
expenditures billed for the period, cumulative total expenditures billed and paid to date under the
contract, and a comparison of cumulative total expenditures billed and paid to the approved
budget.

Board of Aldermen — 9/12/17 Page 31

gone from the city and will really make a defining moment on what our downtown looks like. I’m going to be
voting in favor of this.

Alderman Siegel

This is really a very difficult decision for me. | agonized it over a long period of time. | would like to thank all
the people who reached out to me. The bottom line is there’s two big forces here. We have this building that
we can build and it is a business. What is that business going to generate? If | look at the numbers right now,
I'll tell you right now the numbers don’t work. The numbers, themselves, as | look at this on the pro forma, they
make a lot of assumptions. They don’t seem to work. On the other hand, what also doesn’t work is a dying
downtown. That’s a problem. What’s the cost of a dying downtown versus the cost of what we are proposing
to build. | really am very, very concerned about the heart of Nashua disappearing. | think given the risk factor
is we buy a building and hopefully it has some value, that’s a consideration. On the other hand, | don’t know if
| want to own that building and over what timeframe? One of the problems | have is there’s no timeframe for
this $4 million. We're going to raise it over what period of time? That’s not specified in here. | would like to
propose an amendment which would be to perhaps set a timeframe for that $4 million to be raised, to make it
more concrete shall we say, and that can’t take longer than | would say 1 % year to two years, or actually one
year.

Alderman Deane
Did you make a motion?

Alderman Siegel

Yes, | would make a motion that we have a timeframe on this.

President McCarthy

| think we want to figure out exactly what the wording is.

Alderman Siegel

| would like to make a motion that the money has to be raised within a certain period of time, and that
timeframe cannot exceed two years.

President McCarthy
We'll start discussion while the city attorney looks at wording.

MOTION BY ALDERMAN SIEGEL TO AMEND THAT THE TIMEFRAME TO RAISE $4,000,000 CANNOT
EXCEED TWO YEARS

ON THE QUESTION
Alderman Deane
There was some money that was slid out of contingency to pay, | would imagine, rent on the building that is

sitting unoccupied. How long is that money going to last? What's the monthly rent or yearly rent on the
building that the city is being asked to pay by the owner?