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Unaudited Cash Flow Statement

Cash Plaw on a GAAP basis forthe fourth quarter of 2021 as compared to the fourth quarter of
2020, and the year-to-date 2021 versus 2020, are as follows:

($000"s)
Quarter Ended Year-to-Date
December 31. December 31, December 31. December 31,
202) 2020 2071 2020
Operating Activities:
Net Income (Loss) $ (400) $ (2.577) $3,699) $ (1,984)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation and Amortization 2,275 2,223 8,843 8,637
Provision for Deferred Taxes 200 790 (161) 534
(Gain) on Disposition of Property (345) 0 (345) 0
Other 235 (8) (33) (33)
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Reecivable (1.37%) (964) (1,084) (3,154)
(Increase) Decrease in Inventory (59) 28 (135) 50
(Increase) Decrease in Other Assets 3.837 (3,686) 8,544 (2,441)
Increaye (Decrease} in Accounts Payable 898 287 (S21) (559)
Increase (Decrease} in Other Liabilities (2,509) 4.265 (2.206) 2,619
Net Cash Provided by (Used in} Operating Activities 2.757 358 9,203 3.669
Investing Activities:
Purchases of Property, Plant & Equipment,
including the Debt Component of AFUDC (2,690) (4,419) (8.816) (10,165)
(Increase) Decrease in Restricted Cash/tnvestments 0 0 0 0
Proceeds from Sale of Property 7I2 0 429 0
Change tn Deferred Land Costs 0 0 0 0
Net Cash Provided by (Used in) Investing Activities (1.978) (4.4193 (8.387) (10.164)
Financing Activities:
Borrowings (Repayments) on Line of Credit 1,055 218 1,128 (3,803)
Payments on Long-term Debt (1,156) (1,064) (6,348) (77.588)
Contributions in Aid of Construction 17 15 40 35
Proceeds from Long-term Borrowings 2,546 2,255 9.614 87,290
Debt tssuance Costs 6 0 0 0
Dividends Paid (69) __(70) _ (279) (280)
Net Cash Provided by (lJsed in) Financing Activities __ 2.393 1.354 4.155 5.654
Increase (Decrease) in Cash and Cash Equivalents 3,172 (2,707) 4,971 (842)
Cash and Cash Equivalents al Beginning of Period 11231 12.139 _ 9,492 10,274

Cash and Cash Equivalents at End of Period $ 14.403 $ 9.432 $ 14403 F_ 9432

LIABILITIES

Unaudited Balance Sheet (3000's)
As of As of
December 31. 20° | December 31. 2020
Assets
Property, Plant & Equipment, Net $ 245,197 $ 242,469
Current Assets:
Cash 1,493 310
Restricted Cash **! 12,656 8,885
Investments = Bond Project Funds 255 237
Accounts Receivable “e*? 9,869 8.785
Inventory 733 598
Other Current Assets ***? __ 143 1.797
Total Current Assets 26.437 20,612
Other Asseis
Acquisition Premium *“*! 65,082 67,202
Other Assets 12,517 17,014
Total Other Assets 77,599 84.716
TOTAL ASSETS $ 149,233 $ 347,297
Shareholders’ Equity and Liabilities
Shareholders’ Pquity $ 13.464) $ 41?
Bonds, Notes and Mortgages “"*° 233,265 226.912
Current Liabilities:
Lines of Credit 6,608 5,480
Current Portion of Long-Term Debt 6,607 6,020
Other Current Liabilities 6.245 $A74
Total Current Liabilities 19,460 16,974
Other Long-Term Liabilities:
CIAC, net $7,302 56,536
Detersed Income Taxes 14,850 14,941
Accrued Pension Liability 8**® 12.159 15,424
Other Long-Term Liabilities 15,661 16,108
Total Other Long-Term Liabilities 99.972 102.999
TOTAI. SHAREHOLDERS’ EQUITY AND $ 349.233 $ 347,297

Notes to Balance Sheet

Note | (Restricted Cash) ~ At December 31, 2021, the balance of $12.7 million represents an
increase of $1.8 million from the end of 2020, mainly due to the cash generated from the increased
revenue levels year-over-year, as well as the approved changes in the allowed revenue structure
for Pennichuck Water Works in its last filed rate case (and pending for Pennichuck East Utility in
its currently approved rate case), which has a new structure element included (the MOFF -
Material Operating Fxpense Factor} designed to reinforce the Company's ongoing cash flaw
position on an ongcing basis, and between permanent rate filings

Note 2? (Accounts Receivable} — At December $1, 2021, the balance in Accounts Receivable
increased approximately $1.1 milliun from the year-end total at December 31, 2020 of $8.8 million
This is attributed to: (1) revenue increases generated by the regulated utilities due to the incrcased
consumption levels year-over-year, and (2) the additional $2.3 million in recoupment revenues
recorded for Pennichuck Water Works (which remain a5 unbilled receivables as of December 31,
2021), resulting from the December 9, 202] NHPUCT order as previously discussed.

Note 3 (Other Current Assets) — At December 31, 2021, approximately $0.9 million of this
balance is comprised of prepaid property taxes, which will be expensed in the first quarter of
2022, relating to taxes paid in November and December of 2021 for the second half of the

ey

properly tax year ended March 31, 2021

Note 4 (Acquisition Premium} = In accordance with GAAP, the Acquisition Premium is being
written-off over the 40-ycar life of the pnacipai of the City Acquisition Debt. This amortization
will continue until the full value of this asset is wrilten off in January 2042.

Naic_5 (Bonds, Notes and Mortgages) - At December 31, 2021, the balance in Bonds, Nates and
Mortgages increased approximately $6.4 million from the year-end total at December 31, 2020 of
$226.9 million. This is attributed to the additional financed amounts for capital projects which
have been incurred for ongoing infrastructure replacement, in conformity with the Company's key
mission objectives.

Note 6 (Accrucd Pension Liability) - During 2021, approximately $1.1 million was contributed into
the Pension Plan, while approximately $0.8 million in benefit payments were made to participants,
and approximately $2.9 million of investment gains were recorded, attributed to changes in market

values.

Capital Expenditures

Capital expenditures in the fourth quarter of 2021 were $2.2 million compared to $4.9 million in
the fourth quarter of 2020. For the year 2021, capital expenditures were $8.7 million as
compared to $10 7 million in 2620

The major expenditures for 2021 were as follows:

Kessler Farm Tank Replacement $3.967,000
Coburn Woeds Main Replacements $653,000
Merrimack River Pumping Station $270,000
Locke Lake Surface Water ‘I'reatment $253,000

Rate Cases

Pennichuck Water Works — On October 21. 2021, Pennichuck Water Works filed an emergency
tariff sheet request for approval with the NHPUC. The Company's emergency tariff filing was on
behalf of a single customer, the Merrimack Village District (MVD), and would allow this
customer to purchase bulk water al Penmichuck Water Works” variable cost of production. The
initial rate to be billed will be $0.67 per cubic feet. This would allaw MVD access to Pennichuck
Water Works” bulk water supply in late 2021 and during 2022. while MVD's water supply
systems are brought into compliance with water quality regulations for PFAS contaminants

On November 12, 2021, the NEEPUC issued Order No. 26,552, with an effective date of
November 20, 2021, approving Pennichuck Water Works’ request for an cmergency tariff filing
on behalf of a single customer, the MVD. This emergency tariff is on a temporary basis and
must not excced a term longer than six months from the effective date. In conjuncvon with this,
Pennichuck Water Works also opened a docket under DW 21-134 for the approval of a special
contract for these emergency rates, in order to bring those rates into full force and cffect
{preceding and succeeding the emergency rate tariff), upon approval, for the time period trom
which the emergency usage of this water was initialed on October 20, 2021, for a period not to
execed a termination date of December 31, 2022

Pennichuck Last Utility On November 24, 2020, Pennichuck East Utility filed a request with
the NI{PUC for a rate increase of 21.05% over its current rates for the test year 2019, effective
December 24, 2020, for which 15.0% of this increase request was related to a request for a
temporary rate increase effective for services rendered on or alter December 24, 2020. Tne
15.0% temporary rate increase would be inclusive of a 2.98% QCPAC surcharge which was
approved on Deceinber 6, 2019 in Order No. 26,313 and a 1.97% QCPAC surcharge which 1s
currently pending in DW 20-019. This temporary rate incrcase request! was approved on
August 16, 2021, with Order No. 26.508, at a rate of 14 03%,

On February 18, 2022, the NHPUC issued Order No. 26,586 approving a permanent rate increase of
16.79%, becoming effective with services rendered as of December 24, 2020 for its customers. The

implementation of this permanent rate increase has not yet gone effective. as the Company ts seeking
final approval of its recoupment calculations for the rale increase, with the Commission.

Pittsfield Aqueduct ~- On November 16, 2020, Pittslield Aqueduct filed a request with the
NEEPUC fora rate increase of 11.18% over its current rates for the test year 2019, effective

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December 17, 2020. The overall rate increase is subject to the normal regulatory filing process
with the NHPUC, as followed for all prior rate case filings, and as such, the final permanent rate
increase granted will be effective retroactive back to the filing date.

On November 9, 2021, the NHPUC issued Order No. 26,544 approving a permanent rate
increase of 5.45%, becoming effective with services rendered back to December 17, 2020.

Finaneing

On April 2, 2021, the Company's Pennichuck Water Works subsidiary issued approximately
$5.2 million of tax-exempt and taxable bonds through the NH Business Finance Authority as
reimbursement for its 2020 capital improvements in Pennichuck Water Works’ water supply,
distribution and support systems. The bond issuance was approved by the Pennichuck Board of
Directors and the Sole Shareholder. This issuance had previously received NHPUC approval on
Order No. 26,10, dated February 2, 2018, which authorized up to $32.5 million in bonds via
multiple issuances for the years 2018-2021. This April 2021 bond issuance was the last annual
issuance that will occur from this overall multi-year bonding approval.

On May 6, 2020, the NHPUC issued Order No. 26,354 which permitted Pennichuck Water Works
to borrow up to $2,563,662 from the federal Small Business Administration Paycheck Protection
Program. This loan includes a 2-year maturity at an interest rate of | percent, which includes a
provision in which a portion or all of the loan can be forgiven if all employees are kept on the
payroll for eight weeks upon disbursement of the loan proceeds The loan proceeds were disbursed
by TD Bank, Inc., on behalf of the Small Business Administration on May 8, 2020. The PPP loan
was approved by the Pennichuck Corporation Board of Directors and the Sole Shareholder

On February 2, 2022, the Small Business Administration determined that the Company was
ineligible for forgiveness of the $2.5 million PPP loan which was established as part of the CARES
Act. The PPP loan is payable over two years from the initial approval date of the loan, at an interest
rate of. 1%. Monthly payments on this obligation begin on February 18, 2022, with a final maturity
date of May 7, 2022.

Qualified Capital Proiect Adjustment Charge (OCP AC)

On February 19, 2020, Pennichuck Water Works filed a petition with the NHPUC for a 3.83%
QCPAC surcharge on all capital improvements completed and placed in service by Pennichuck Water
Works in 2019. On December 9, 2021, the NHPUC issued Order No. 26,555 approving a QCPAC
surcharge of 3.90% for capital projects placed in service in 2019. This order became effective with
services rendered back to April 23, 2020 and allows for recovery in the form of a monthly
recoupment surcharge, to be collected over a twelve-month period from the date of the order.

On February 11, 2021, Pennichuck Water Works filed a petition with the NHPUC for a 5.44%
QCPAC surcharge (inclusive of the 3.83% filed for and approved in Order No. 26,555) on all
capital improvements completed and placed in service by Pennichuck Water Works in 2020.
The Commission has not issued an Order approving this requested surcharge. When the
Commission issues the Order, the surcharge will become effective retroactively to customers on
a “service rendered basis” back to April 1, 2021, which is the date for which Pennichuck Water
Works’ annual bond issuance associated with these capital investments and the QCPAC
surcharge will be completed and funded. The Order will allow recoupment of the surcharge

City of Nashua

Purchasing Department
Administrative Services Division (603) 589-3330
229 Main Street - Nashua, NH 03060 Fax (603) 594-3233

April 27, 2022
Memo #22-259

TO: Mayor Donchess
Finance Committee

SUBJECT: Billboard Advertising in the amount not to exceed $55,010 funded from accounts
Grants/61250 Marketing & Promotion

Please see attached communications from Bobbie Bagley, Director of Division of Public Health &
Community Services, dated April 14, 2022 for project specific details related to this purchase. Below please
find a summary of the purchase approval request:

Item: Billooard Advertising

Value: Total not to exceed $55,010; $51,159.30 to come from grants and $3,850.70 to
come from the City’s General Fund

Vendor: OutFront Media Advertising

Department: 171 Community Services
Source Fund: 61250 Marketing & Promotion

Ordinance: Pursuant to § 5-84 Special purchase procedures. A/ (7) Purchases under extensions
of contracts when no price increase exceeds 10% per year.

The Division of Public Health and Community Services: Community Services Department, and the
Purchasing Department respectfully request your approval of this contract.

Regards,
Kelly Parkinson

Purchasing Manager

Ce: B Bagley
J Graziano

from all its customers based on their actual bills incurred between April |, 2021 and the final
effective date of the Order.

On February | 1, 2021, Pennichuck East Utility filed a petition with the NHPUC for a 4.08%
surcharge on all capital improvements completed and placed in service by Pennichuck East
Utility in 2020. The Commission has not issued an Order approving this requested surcharge.
When the Commission issucs the Order, the surcharge will become effective retroactively ona
“service rendered basis” back to a date on or around September 28, 202), consistent with the
date for which Pennichuck East Utility completed its annual debt financing with CoBank, ACB,
which is done each year to convert FALOC borrowings used to fund capital projects for the
previous ycar, to a term loan with repayment terms of up to 25 ycars, The Order will allow
recoupment of the surcharge from all its customers based on their actual bills incurred between
this estimated September 28, 2021 date and the final effective date of the Order. The Company
has filed a settlement agreement with the Commission for this docket, along with the NH
Department of Energy Staff, which if approved would result in this recoupment being billed over
a five-month period of time, once the Order goes cffcctive.

Ofer Events

PFOA Contamination Issucs

As has been disclosed in the past, during 2016, the Company was significantly involved in
assisting the New Hampshire Department of Environmental Services (“NHDES”) in assessing
and bringing remediation solutions to bear, in light of the PFOA contamination issues discovered
in the towns surrounding the Saint-Gobain Performance Plastics (“SGPP”) site in north
Merrimack. This included self-instituting comprehensive and regular testing of the Company's
water supplies and water systems, not only in the area adjacent to this site, but taking and
processing at Icast two sets of tests at all water sources that the Company owns throughout the
State. This was done in order to detect if any Icvels of contamination existed in the water
sources, to aid the NHDES in completing their statewide assessment, and to allow the Company
to respond with certainty to any of its customers as to any detectable Jevels. With regards to the
water supply systems directly adjacent to or connected to the Mcrrimack Village District, the
Company has been taking periodic regularly scheduled samples since this contamination site was
disclosed in March of 2016. The results of these tests were that none of the Company's water
sources had detectable levels exceeding EPA lifetime advisory Icvels, or the State's emergency
and impending permancnt standard detection levels.

Additionally, at the request of the NHDES, during 2016 and 2017 the Company was asked to
enter into a contract with SGPP for the design of the expansion of public water to residents in the
northern portion of Litchfield, where private wells had been contaminated, in some cases well
above acceptable levels, Based upon the results of that design work, the Company was then
contracted by SGPP to expand the public water system owned by the Company in Litchfield to
approximately 460 property owners, including nearly 10 miles of new water mains and nearly
10 miles of new service lines. The cost of the design work and the expansion of the water
systein has and is being paid totally by SGPP and was contributcd to the Company as
Contributions in Aid of Construction (CIAC), as assets to be owned by the Company, the Town
or DOT (for pavement restoration on town or State roads), or the residents (in the case of the
service lincs) going forward. Also, during 2018 the Company was asked by NHDES to contract
for similar design services with SGPP for expansion of its public water system in southern

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Bedford. This project was initiated in 2018, and was completed during 2019, bringing water to
approximately 90 new customers in that community.

The Company was once again asked by the NHDES to design a further buildout for SGPP in
Litchfield to bring public water to an additional 30 residences in Litchfield, due to this
contamination site. SGPP entered into another contract with the Company for the expansion of
the Company’s water system in that area, construction of which was completed between 2019
and early 2020, and was fully paid for by SGPP, and included in CIAC assets at such time as that
project was completed.

As of March 20, 2018, SGPP and NHDES entered into a Consent Decree. Under the Consent
Decree, SGPP needed to fulfill their obligations by November 2019 on all of these identified
activities, and/or request an extension of time to fulfill their obligations, due to circumstances
outside of their control, including the availability of qualified contractors to complete the
buildout of the public water system in the impacted areas.

A similar effort on behalf of'Textiles Coated International, Inc. (“TCI”) in the town of Amherst,
due to PFOA contamination related to their previous existence as a manufacturer in that town,
was also undertaken at the request of the NHDES. The Company was contracted to do design
services for the expansion of the public water system in that area of Amherst, by TCI, and
construction of the expansion of that part of the system began in 2017, and was fully completed
in 2018. Once again, the entire cost of this project was borne by TCI, and has become part of the
Company's owned infrastructure as CIAC assets.

The Company continues to work with the NHDES as it relates to PFAS issues that are continuing
and expanding in southern NH. This includes situations that have evolved in municipal systems
immediately adjacent to the Company’s service areas, in the communities of Hudson and
Merrimack, as well as communities for which the Company owns the public water franchise,
such as Londonderry. The overall impact and build-out of the public water distribution system,
how that will be constructed, who will ultimately own or supply water into those systems, and
the overall cost and timing for those systems to be designed, bid and built, is yet to be
determined.

Company Geals - 2022
The Company’s main goals for 2022 were/are as follows:

© Complete Pennichuck East Utility Rate Case for test year 2019, with new permanent rates
expected late Q2 2022 (Order received in Q1 2022)

@ File annual Pennichuck Water Works and Pennichuck East Utility QCPAC cases (filed in
February 2022)

e File Pennichuck Water Works rate case (2021 test year)

® Complete Bond issuance reimbursement financing in April for Pennichuck Water Works
2021 Capex

® Complete CoBank term loan financing in Q2/Q3 for Pennichuck East Utility 2021 Capex
reimbursement/refinance

© Seek additional funding sources (loans or grants) from NH DWGTF, SRF, or other, for
planned capital projects

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© Continued roll-out and implementation af company-wide Customer Security Program, to the
benefit and safety of customers and employees

¢ Continued training, meitoring and succession planning throughout (he organization, including
impending retirements occurring in 2022 and 2023 for certain key rales

e Continue to promote customer education through newsletters and social media

e Complete upgrades to the Bowers Dam spillway, tncluding replacement of the spillway gate
and the construction of an auxiliary spillway

e Amend process monitoring in systems treating for the removal of manganese to ensure
compliance with the proposed NHDES primary drinking water MCL

© Continue to collect and process all necessary compliance samples to ensure compliance with
NHDES and EPA MCLs

e Work with external engineering consultants to evaluate improvements to the Water ‘Treatment
Plant to achieve optimal PFAS removal, chemical feed and storage, and improved monitoring
at the plant

© Continued participation in multiple educational outreach efforts within the Company's customer
coverage radius

e Continual enhancement and review of cybersecurity needs, risks and tools

¢ Comprehensive review of Emergency Action Plan conducted during Internal Control Review
process

© = Cityworks (CMMS application)

© Refinement of Operaticnal Insights assessment of the Nashua core, and extension of
that assessment tc other Pennichuck Water Works and Pennichuck East Utility CWS

© Incorporation of vertical assets into Operational Insights

© Asset Management

© Incorporate operations data ({‘ows, pressure, water quality) into dashboards accessible
by “point and click” in GIS

¢ Implementation of Source Water Protection Plans for Locke Lake and the Merrimack River
¢ Continued monitormg and response to COVID-19 pandemic, including but not limited to:
© Timing of possible resumption of “fut! normal” operating activities
© Ongoing monitoring and protection of customers and employees served
© Continued monttoring and response to financial impact on the Company of the pandemic

© Compliancy with OSHA ETS, if upheld and enforceable

Sincerely,
Lary D. Goodhue

Chief Executive Officer and
Chief Financial Officer

R-22-027

RESOLUTION

AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS
NOT TO EXCEED THE AMOUNT OF THREE MILLION SEVEN HUNDRED
THOUSAND DOLLARS ($3,700,000) FOR THE REPLACEMENT AND UPGRADE OF
RADIO COMMUNICATIONS EQUIPMENT

CITY OF NASHUA

in the Year Two Thousand and Twenty-Two

RESOLVED by the Board of Aldermen of the City of Nashua that the Mayor of the City
of Nashua and the City Treasurer of the City of Nashua are hereby authorized to issue and sell
general obligation bonds of the City in an aggregate principal not to exceed three million seven
hundred thousand dollars ($3,700,000). The proceeds of said bonds shall be used to upgrade and
replace radio communications equipment, and the useful life of the equipment is 7 years.

Pursuant to Nashua City Charter §54-a, this resolution requires a “duly advertised public
hearing.” Also see N.H. RSA 33:9, which requires a 2/3 vote for passage of this resolution.

The bonds shall be general obligations of the City of Nashua, payable as to principal and
interest from ad valorem taxes, which will be levied without limitation as to rate or amount on all
taxable property within the territorial limits of the City of Nashua.

The bonds shall bear the manual and facsimile signature of the City Treasurer and the
Mayor. In accordance with Chapter 91 of the New Hampshire Acts of 2005, bonds issued
pursuant to this resolution shall not require an authenticating certificate of a bank or trust
company doing business in the State of New Hampshire or the Commonwealth of Massachusetts,
or the Commissioner of Revenue Administration.

The bonds are to be issued in fully-registered form by means of a book-entry system or
otherwise and shall have such terms and conditions and be in such form, subject to the provisions
of this resolution and applicable law, as shall be determined by the Mayor and the City
Treasurer.

RESOLVED FURTHER, that the Mayor is authorized to enter into the required
contracts therefor as well as any amendments to be made thereto or any other documentation
necessary for the receipt of said funds.