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Special Bd. of Aldermen — 12/20/2018 Page 21
Alderman Jette

The loans, but you used the ‘s’ again.

Mr. Cannon There are 2 loans, remember there is a Loan A and a Loan B? Loan B is in the amount, the
reason there is two is because Loan A is the amount of the net bond proceeds and Loan B is the amount of the
Tax Credit Equity and at the end of the 7 years, Loan B is forgiven. You still have to pay down Loan A which is
whatever the balance is on the bond at that time.

Alderman Jette

So Loan B after 7 years gets forgiven but during the 7 years we have to make payments on it?

Mr. Cannon Well the payments, no it is interest only and interest equals 0. For tax purposes and everything
else, it has got to sit there because you have to be obligated to perform before it can be forgiven. So it sits
there for 7 years.

Alderman Jette

Ok but when you say we have to pay interest only but the interest is 0, so we are not paying anything.

Mr. Cannon You are paying, usually there is a servicing fee that is paid on that loan and it represented as a
percentage of that loan. We are going to pay all of that upfront because we don’t want the rent to be different
from the bond payment. So that is all going to be capitalized, it is in the budget.

Alderman Jette

Ok so just for clarification, during the 7 year period?

Mr. Cannon Effectively zero.

Alderman Jette

Ok thank you. Director Cummings, | want to give you a chance to clarify because you said and I’m sure you
didn’t, when you said that originally we were talking about $4 million but you think $2 million would suffice, you

are not talking about the $4 million that is required to be raised prior to the bond being issued, | just want to
give you a chance to clarify that in case anyone listening hears that and thinks that is what you meant.

Mr. Cummings

Thank you, no what | was referencing explicitly was the $4 million dollars for an “endowment fund”. $4 million
dollars of private money needs to be raised period. That is understood, my point is though originally when this
was conceived, and the resolution as originally passed made is explicit that $4 million dollars for operating
costs or an endowment was necessary. At this point in time, a $4 million dollar operating reserve or
endowment would be unnecessary and | think you could have something much lower than that.

Alderman Jette

Ok but again the $4 million that has to be raised has not changed?

Special Bd. of Aldermen — 12/20/2018 Page 22

Mr. Cummings

No to be able to move this project forward and actually go to construction, $4 million dollars of private money,
cash, needs to come in to this deal. How we are getting there, in this scenario, as I’ve outlined this equity
investor, for this conversation let’s say it is GE will commit to $7.2 million which we will eventually ultimately
see $5.2 in cash. That is above the $4 million dollar threshold of private money coming in to this deal.
Alderman Jette

Thank you.

Mr. Cummings

One last comment that I’d like to make; one last comment just to make sure it is on the record, this has been
vetted by bond counsel, this has been vetted with attorneys here within the City; we are working in tandem with
everyone and everyone is comfortable with the concepts and the deal structure as outlined.

Alderwoman Melizzi-Golja

| guess just to kind of think about next steps, we just wait to hear you’ve got a commitment? | mean the work
now it is on your side and we wait to get a commitment and then things will start moving again and we will be
required to do some things. And if there is any change in this other than talking about the endowment that
we’ve been talking about that is capturing the private donations raised locally, that may be moving but that is
going to be separate from this at this point?

Mr. Cummings
That’s right.

Alderwoman Melizzi-Golja

| just wanted clarification so everyone is really clear about timelines.

Mr. Cummings

The only other additional comment I'll make is in preparation to that, | will be going out and making sure that a
PR or Public Awareness Campaign occurs a couple times, a few times to make sure everyone is well aware of
this as we move forward so it is to no surprise for everyone.

Alderwoman Melizzi-Golja

Thank you.
Alderman Dowd
Motion to Adjourn.
President Wilshire

Well first we would like to thank our consultant for being here and we appreciate all the time and the
explanation he gave.

Amended
O-16-003

ORDINANCE

ADMINISTRATIVE ENFORCEMENT OF ORDINANCES

CITY OF NASHUA

In the Year Two Thousand and Sixteen

The City of Nashua ordains that Part II “General Legislation” of the Nashua Revised
Ordinances as amended, is hereby further amended by adding the following new Chapter as
follows:

“Chapter 74

ADMINISTRATIVE ENFORCEMENT OF ORDINANCES

§ 74-1. Citation authority.

City departments or officials charged with the responsibility for enforcing the ordinances and
codes of the city are hereby authorized to issue citations for any violation of the ordinances or
codes that they are responsible for enforcing. The enforcement authority provided hereby is
provided for in RSA 31:39-c and is in addition to the authority for ordinance and code
enforcement that currently exists.

§ 74-2. Citation defined.

A citation is a written and/or printed notice describing a specific violation of a city ordinance or
code which is served on the person responsible for the violation. Each day on which a violation
exists or occurs is a separate offense, and a citation may be issued for each offense. A citation
shall be served in the manner described in this chapter, and shall contain the following
information:

A. A clear and concise description of the violation.

B. The location of the violation and the date and time on which it was observed.

C. The name and address of the person responsible for the violation.

D. The penalty for the violation as provided for in this chapter.

E. A statement or table describing the penalties for future occurrences of the same violation.
F. A statement as to whether the citation is being issued for a first, second, or subsequent

offense.

Special Bd. of Aldermen — 12/20/2018

PUBLIC COMMENT - None
REMARKS BY THE ALDERMEN - None

ADJOURNMENT

MOTION BY ALDERMAN DOWD TO ADJOURN
MOTION CARRIED

The meeting was declared adjourned at 8:45 p.m.

Attest: Patricia D. Piecuch, City Clerk

Page 23

NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF NMTC’s

NUMBER 1

Assisted business must be a corporation or partnership that exists in a qualified
area. This is called at Qualified Area Low Income Community Business or
“QALICB”.

This means that the City of Nashua cannot be a direct beneficiary of the
program, but it can participate as a Lessee of QALICB property.

NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF NMTC’s

NUMBER 2

The amount of the tax credit is 39% of Qualified Equity Investment
(“QE!I”). So, for example:

QEI Amount: $1,000,000
Credit Amount @ 39% = $390,000

The credit can be sold to an investor in order to raise cash (equity) for
the project. Current Pricing is estimated at $.85/S1.00. Therefore:

$390,000 in credits sold at $.85 = $331,500 in equity for the project.

NUMBER 3
There are fees involved! Generally, these reduce the value of the NMTC by about 15%.

Proceeds from Sale of Credits: $331,500

Fees @ 15%: ($49,725)

NET EQUITY: $281,775
The key is LEVERAGE!

$281,775 (28%) leverages $718,225 (72%) in debt.

NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF
NMTC’s

NUMBER 4

There is a 7 year compliance period. After that, any
restrictions on the transaction go away!

NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF
NMTC’s

NUMBER 5

Community Development Entities (CDEs) are the key to NMTC
funding. CDEs are awarded credits by the US Treasury. CDE’s
must sub-allocate these credits to worthy projects that meet
program guidelines. Therefore, we must convince 1 or 2 CDEs
that the proposed project has financial strength and results in
positive community impacts.

NASHUA PERFORMING ARTS CENTER: DEAL STRUCTURE

Bond Proceeds
$ 42,927,250

Bond
yments

x

Loan
$ | 12,927,250

Debt Service
Payments

|_ Coan

$ 12,927,250

Debt Service

Payments —

NMTC EQUITY
$ 6,132,750

NMTC's
$ 7,215,000

Qualified [Equity Investment Debt Service

"QEI"
$

Payments

18,500,000

E LOANS

Loan "A":
Loan "B":

12,927,250
5,202,750

18,130,000

Master Lease
Lease Payments =