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MAY 20 PRESENTATION REVISED

NASHUA PERFORMING ARTS CENTER

TABLE 2: DEAL DIAGRAM/FLOW OF FUNDS

TOTAL PROJECT GOST: $ 19,217,500
"EQUITY":
[AMOUNT FINANCED VIA NMTC: 14,700,000

CITY OF NASHUA 15,900,009,

—————————__|[8_4517,500) [is 10,482,500 [Debt Service

BOND

| PURCHASER

Debt Sdrvice Paymants
|

| Loan
$ | 10,482,500

Enity "C"

SENIOR LEVERAGE LENDER Srae na
$ 10,482,500 INVE: NT FU
NON-PROFIT "A" “Annual interest pee noe $4,372,500 Se NESTOR
Payments LOAN + NMTC EQUITY: $ 15,455,000
UPPER TIER FEES: $ 455,000
$ 15,000,600
NMTOS
5,850,000
Agditional Bond Proceeds
14,517,500
QEI interest Payments.
$ 15,000,000
Pancigh! Paymanis
Sub-CDE
QEl: $ 15,000,000
FEES: $ (300,000)}
ae air aA
Projected dollar amounts are estimates $14,700,000
and subject to change based on credit
pricing and finat deal structure. tict Le: intoroft Payments
$ Pees 1
{ NON-NMTCGovERNANcE |
i I
| Master Lease | NON-PROFIT |
| bee Sas Lease Payments = City of Nashua | aaaee |
| ee Toa i ORGANIZATION FOR | |
Debt Service Master Tenant i FUND-RAISIN: i
t ity MP
| Entity "D" |
[Additional Bond Proceeds: $___4517,500
1 1
i
i
i
\

PREPARED FOR THE CITY OF NASHUA
FOR DISCUSSION ONLY
nieleannent 6@gmail.com

“These numbers are subject to change and are based on projected/modeled calculations

Dr ummec 1 i * John S. Kaminski 207.253.0561

jkaminski@dwmlaw.com

ATTORNE A
YS AT LAW 84 Marginal Way, Suite 600

Portland, Maine 04101-2480
207.772.1941 Main
207.772.3627 Fax

April 17, 2019

VIA EMAIL ONLY

Celia Leonard, Esq.

Deputy Corporation Counsel
City of Nashua

229 Main Street

Nashua, NH 03060

Re: Performing Arts Center
Dear Celia:

J am writing as special New Markets Tax Credit (“NMTC”) legal counsel to the City for the
Performing Arts Center project (“PAC”) to recommend some initial actions to be taken by the
City.

The financial structure of NMTC transactions requires that the sponsoring entity, the City in this
case, form one or more affiliated single purpose legal entities. The specific roles that these
entities will serve in the financing structure will be determined in coordination with the funders
and their legal counsel.

As we have discussed, readiness to proceed is critical in receiving an allocation of NMTC. I also
understand that the City wants to close the financing as soon as possible later this year and
commence construction. For these reasons, we recommend that the City form two new voluntary
corporations under New Hampshire law now so that these legal entities are available for the
NMTC financial structure as soon as possible.

I understand that New Hampshire law requires that five individuals act to form each voluntary
corporation. It would be very helpful if any municipal action required to name the five
individuals for each of the corporations be taken as soon as possible so that the formation of the
corporations can be completed.

Please let me know if you or others at the City have any questions.

Yours truly, 4.

4G Kaminski

800.727.1941 | dwmlaw.com

~~

Approval 1:

Approval 2:

Approval 3:

Approval 4:

Approval 5:

Approval 6:

Approval 7:

New Markets Tax Credit (NMTC)
Nashua Performing Arts Center

Anticipated City Approvals

Create 2 RSA 162-G:15 Voluntary nonprofit Corporation, Nonprofit A & B
R-19-136 (introduced and in process)

A) Loan $xxx to Sr. Leverage Lender Nonprofit A
B) Grant $xxxx to QALICB Nonprofit B
C) Agreements among QALICB, City and Sr. Leverage Lender

D) Authorize Mayor to execute all necessary documents related to City’s participation in
NMTC deal

Authorizing Transfer of title to 201 Main Street to QALICB Nonprofit B
Consideration $2,000,000; closing to take place contemporaneously with NMTC closing.

Authorizing the City to enter into a Lease with QALICB Nonprofit B for 201 Main Street
as Master Tenant

Authorizing the City as Master Tenant, to enter into an Operator Agreement with
Spectacle Management

Create Board of Trustees for the Performing Arts Center

Creation of Trust Fund/Special Revenue Account

Note 1: $15.5 million bond authorized by R-18-001, as amended by R-18-09.

May 20, 2019

PUBLIC HEARING
MAY 16, 2019

A Public Hearing was conducted by the Board of Aldermen on Thursday, May 16, 2019, at 7:00 p.m.
at the Nashua High School North Auditorium, 8 Titan Way, Nashua, New Hampshire.

President Lori Wilshire presided; City Clerk Patricia D. Piecuch recorded.

The prayer was offered by City Clerk Piecuch; Pledge of Allegiance was led by David C. Tencza.

The roll call was taken with 11 members of the Board of Aldermen present; Alderman Gidge, Alderman
Laws, Alderman Jette and Alderman Clemons were recorded absent. Alderman Linda Harriott-
Gathright arrived after roll call at 7:08 p.m.

His Honor Mayor James W. Donchess was also in attendance.

President Wilshire turned the public hearing over the Alderman Richard A. Dowd, Chairman of the
Budget Review Committee.

PUBLIC HEARING
R-19-123

RELATIVE TO THE ADOPTION OF THE FISCAL YEAR 2020 PROPOSED BUDGET
FOR THE CITY OF NASHUA GENERAL, ENTERPRISE, AND SPECIAL REVENUE FUNDS

Chairman Dowd

Tonight we will have the public hearing on the FY2020 budget. Before we get started, the process
is we’re going to go through each division and each department. When | call that department, you
may come up to the microphone in the front and make a brief statement. | prefer no speeches.
Then you can ask your questions. You can ask two questions and then | would ask that you wait
until everybody else has had a chance and if you have additional questions, you can come back.

Before we start, | have a memorandum from Scott LeClair, the Chief Chair of the Planning Board
and all the Board Members to myself as Chair of the Budget and Members of the Budget
Committee. The subject is “Request to fund Master Plan update in Proposed FY 2020 City Budget”.
“At its Work Session meeting on May 9" the Planning Board voted unanimously to send a
favorable recommendation to the Budget Committee to fund the City Master Plan. It has been
nearly 20 years since the current adopted Master Plan commenced. State Law recommends
Master Plans be updated every 10 years. The Planning Board also rated the Master Plan update
an “A-2” project in the Capital Improvement Program. The Planning Board cannot attend the
Budget Committee’s May 16" Public Hearing on the Proposed FY20 Budget since it conflicts with
our regular meeting. Please enter this memorandum and consider our above favorable
recommendation at the Public Hearing. Thank you!!!”

MOTION BY ALDERMAN O’BRIEN TO TAKE FROM THE TABLE R-19-123
MOTION CARRIED

Special Board of Aldermen Public Hearing Page 2
Chairman Dowd

Also, if a question comes up and it can’t be answered from the Mayor or Chief Financial Officer, we
have people from every Division here to answer the question. So the first area to be discussed is
General Government.

Mayor Donchess

Mr. Chair | do have this presentation here, an overview of the Budget which | was going to do.
Welcome everybody to Nashua North and our Fiscal 2020 Public Hearing on the proposed budget.
So here are the strategies and some of the things we wanted to accomplish in the FY2020 budget
and they are listed here. First, a lot of paving, 30 miles of paving will be done this year along with
31 miles crack sealing; crack sealing a very cost effective way to maintain the condition of a street
this is in relatively good shape but could deteriorate for a period of 3, 4, 5, 6 years at a very limited
cost. This has been implemented a bit by Public Works in prior years, but this year that program is
being expanded considerably. These 31 miles of streets will cost about $143,000.00 | think the
number is; while the 30 miles of paving will be more like $11 million. So the crack sealing is a very
cost effective way to at least maintain condition.

Another strategy we employed this year is to limit the proposed tax increase to the lowest we could
possibly keep it given some of the challenges that you will see on another slide. That increase | am
saying should be no more than 3%. Another strategy, we want to maintain or improve the quality of
services that we offer and while I’m on this bullet | would like to thank all of the 2,800 City
employees in our schools, in our Public Works, our Wastewater Treatment Plant, at City Hall, who
work very hard every day to provide services to our City’s residents. And | wanted to take this
opportunity to thank each one of them for everything you do for our citizens every day because we
do provide a very cost effective set of services for our citizens.

A new thing is that the budget funds an Energy Manager that will help us reduce energy costs and
cut the emission of greenhouse gases. This is as | mentioned the first time and we think that this
position over time can more than pay for itself. I’ve asked the Board of Aldermen, we wanted to
include this in the budget but somehow it was left out, but we’ve asked the Board of Aldermen to
amend the budget to include half the cost of a grant writer, the other half being in the School
Department. And here, again, we think that by working together with the schools with a
professional grant writer, we can bring in far more money than it costs to pay the grant writer. These
would be grants that might be directed to education but also other areas of City services, other
areas of the City and we think this is a very cost effective way to bring more revenue to Nashua.

Another effect of the budget would be to increase the ELL teachers in the School District by 4.
What we’ve done is we have placed $200,000.00 in the contingency account for that purpose over
and above the recommended School District School Board Budget. The point there is that when
the School Department asks for the money or if the Board of Aldermen wishes to make a change to
the budget to make an immediate transfer that would be provided to the School Department for the
purpose of hiring ELL teachers. Now ELL for anyone listening that doesn’t know what that refers to
that is English Language Learner Teachers. We have a very increasing number, a big increase in
the number of students who come to our schools who do not speak English as a primary language
and we have many languages spoken by the families who kids come to the schools in Nashua from
all the continents of the world. So that we think will at least help to improve English learning by our
students.

Special Board of Aldermen Public Hearing Page 3

Next slide — We want to start Imagine Nashua 2040 which is the first citywide master plan that has
been done in 20 years. The budget funds the first half of that; this would be a two-year project so
we'd need to include money next year as well. The Planning & Economic Development Committee
will obviously and the Planning Board will of course be very involved. We may seek to get citizens
involved as well but the idea is to visualize what our community, to imagine what our community can
be in the next 20 years and incorporate those ideas into the city master plan, which as being 20
years old is out of date.

Another issue that we address here though an increase in revenue, a contribution from our
ambulance provider is to increase the fire dispatchers. Right now there are only two fire
dispatchers on duty at any one time. That number has been constant for decades. The number of
calls that the Fire Department receives on an annual basis has increased from several thousand
way back when this number of dispatchers was first established to over 11,000 calls in the course
of a year. And it may go higher than that, so obviously they are very busy and we rely very greatly
on fire dispatch. They respond to many, many calls not only fires but all medical emergencies,
opioid overdoses and everything else that goes on in the City. So this will take some pressure off
and help us to deliver quality response, emergency response with respect to these 11,000 or
12,000 or more calls a year.

Here is an overview of some of the things in the budget. The budget as proposed is a total of, the
operating budget, of $270,300,000.00. That’s a $4.2 million dollar increase in the budget without
the health care issue, which | will discuss in a minute. The rest of the budget is only up 1.6% but
we have a $3.3 million dollar increase in healthcare costs. As you know, we are self-insured here
which saves the City a lot of money, much cheaper than actually buying insurance, but health care
costs are going up and we are seeing an 11% increase this year which will increase that area of the
budget by $3 million dollars. That is the reason we are trying to be as tight as possible with respect
to everything else, to meet that cost as well as maintain, and in some cases, improve the quality of
services. So we are seeing $7.5 million dollar increase in the budget, which is 2.86%. And the $4.2
million dollar increase | mentioned is the increase but for healthcare, on the base of about $260
some million dollars.

In terms of revenue we are continuing to budget revenue conservatively, David Fredette who is the
City Treasurer of course is responsible for automobile registrations and some other revenues is
very instrumental in helping us project revenues along with the CFO John Griffin. We believe that
the revenue from our vehicle registrations will be stable or maybe up slightly from last year, but it is
a pretty healthy source of revenue. We are in a continuing low interest rate environment, that
means that the income coming in from the City’s investments is quite low. There was a time when
interest rates were higher and that revenue item was actually quite significant because if we have
tens of millions of dollars in the bank and we are getting actual interest on that, that can result in
quite a bit of revenue. But in the current environment, it is very limited.

We also face at least the potential reduction in State Aid Funds, specifically the Stabilization Grant
in the field of education. Now we are hopeful that in the legislature we will see a change in that
trend. The House Budget that passed would make a considerable improvement, help the City very
much and we have a number of members of our Board of Aldermen who serve in that legislative
delegation. So we really appreciate their help there. We do need to try to get the House Budget
now through the Senate, but if it does pass in the form, and it is not vetoed, it gets very involved:
but if it were to pass in the form passed by the House we would definitely see increases in revenue,
particularly in education which we very much need.

Special Board of Aldermen Public Hearing Page 4

Now in terms of the overall challenges, | mentioned already the cost of providing healthcare to
employees is increasing by 11%. $3.3 million dollars of the operating budget which will really drive
the potential tax increase to at or near 3%. If it weren’t for this particular item, the increase would
be closer to 1% or 1.5% in the tax rate. We, therefore, because of that significant cost, asked the
Police, Schools, DPW, and Fire Departments to limit their increase to 2.25% and all other divisions
1.75%. There have been a few variations from that but we’ve tried to hold increases to that amount
to help keep the tax rate at a reasonable level given the other budget challenge that | already
mentioned.

So looking forward in terms of just the kind of things we will be working on, | know the Board of
Aldermen is very on board with all of this. We want to continue to make infrastructure, street and
sidewalk improvements, not only this year but in succeeding years. One project that we have is that
we got a grant to Lock and Whitney Street sidewalks which will be about $1 million dollars. That is
in design, one of the infrastructure improvements that we want to make in the near future. We will
be implementing our Riverfront Master Plan to bring forth the river walks, lighting along the river
walks and cantilevered walkways near the Main Street Bridge. We all believe that the riverfront is a
major asset, a very beautiful asset for the City and that if we make the right investments we can
really bring the river more to life and introduce more of our residents to that area of the City bring
people downtown and just increase the quality of life for everyone.

We are working on the Rail Yard District, which | mentioned in the State of the City address near
Corriveau Routhier and at Henry Hanger to see additional downtown housing located in on those
parcels and in that area of the City where the railyard used to be. We are looking to try to add
additional downtown housing in addition to the railyard district. We can, as time goes on, | think we
will see additional details concerning that. Bringing housing downtown of course adds to the tax
base, increases residents downtown, increases customers for our businesses, strengthens the
downtown business community and just adds a dimension to the community which will attract
various millennial and empty nester residents to downtown. | just in the last few weeks have met a
group of people who have located into the Lofts 34 housing conversion is definitely bringing people
in that were not downtown before. | think all of the housing projects that we are working on will do.
We know that affordable housing is certainly an issue and the project on Marshall and East Hollis
Street, we hope will help to address that; that’s 150 units of so-called workforce housing. That is
targeted to families who are working and make up to $50,000.00 some thousand dollars a year and
offer rents that are less than market.

In conjunction with the Joint Special School Building Committee and our School Board will be
looking to upgrade our Middle Schools in coming years, including either renovating or replacing the
Elm Street Middle School and upgrading the facilities at the other middle schools at the same time.
Dr. Mosley is very committed and the School Board very committed to this middle school project.
Alderman Dowd is Chair of the Joint Special and will be pushing this project forward over the next
few years.

Now kind of a fun thing, some of the accolades that Nashua has gotten in recent, in the last couple
of years, you can see them here. This is due to the efforts of all of our residents, our Board of
Aldermen, our City Government, our business community, our non-profits; everybody is working
together to make Nashua the best place we possibly can. But it has been named one of the safest
places to retire in the country, this is just in 2018. Nashua is named one of the best run cities, |
think 9" in the country. Nashua is named the best place for millennials to live in Hillsborough
County. Nashua is named the most diverse community in New Hampshire and the most inclusive |
might add. Nashua has some of the lowest crime for a mid-sized city, those were all in 2018.

who are at or below the poverty level. Even if they owe no income tax, they would receive money
from the state. This again is money that would feed directly into the local economy.

Please look at the enclosed information. There are two documents that give a summary of
the Plan, plus a tax table showing income tax amounts, and a table showing estimates of what the
payments would be for the Earned Income Tax Credit.

I would like to be on the agenda for a Board of Aldermen meeting and speak about the NH
Tax Shift Plan and discuss the possibility of the City supporting it.

Rep. Paul Henle
Concord Ward Two
Ways and Means

Balance Sheet ($000’s)
As of As of
December 31, 2015 December 31, 2014
(Audited) (Audited)
Assets:

Property, Plant & Equipment, Net $ 183,241 $ 173,287
Current Assets:

Cash 1,246 2,987

Restricted Cash 5,729 5,264

Investments — 2014 and 2015 Bond Project Funds 19,779 16,847

Investments — Bond Refund Escrow - 23,725

Accounts Receivable 4,502 4,631

Inventory 712 802

Other Current Assets “°*! 2.232 1,682
Total Current Assets 34,200 55,938
Other Assets:

Acquisition Premium “°°? 77,028 78,885

Other Assets 16,194 15,697
Total Other Assets 93,222 94,582
TOTAL ASSETS $ 310,663 $ 323,807

Shareholders’ Equity and Liabilities

Shareholders’ Equity $ _ 22.041 $ _ 24,590
Bonds, Notes and Mortgages 206,052 198.032
Current Liabilities:

Line of Credit - -

Current Portion of Long-Term Debt 4,120 26,275

Other Current Liabilities 3,490 2.948
Total Current Liabilities 7,610 29,223
Other Long-Term Liabilities:

CIAC, net 37,929 36,532

Deferred Income Taxes 20,642 20,334

Accrued Pension Liability ‘°°? 8,286 8,017

Other Long-Term Liabilities 8.103 7,079
Total Other Long-Term Liabilities 74,960 71,962
TOTAL SHAREHOLDERS’ EQUITY AND $ 310,663 $ 323,807

LIABILITIES

Special Board of Aldermen Public Hearing Page 5

In 2017 Nashua and Manchester were named one of the happiest places in the country, everybody
is smiling so | know that’s true. In 2017 one of the safest cities in the country and in 2017 one of
the best cities to live in in America, that was, again, Money Magazine.

So we are very proud of our community but as a City Government and as a partner with all of our
residents, we try to do our part to provide quality services and make the City the best place to live
as we possibly can. So thank you Mr. Chair, that’s an overview of what | see in the budget and
therefore we are now prepared to proceed with any questions or comments that residents may
have.

Chairman Dowd

Thank you. So once again | am going to be through each Division and each Department. As | call
that Department, if there are any comments you would like to make, brief comments about the
Department or any questions that you might have, please come up to the microphone. And if the
questions can’t be answered by the Mayor or the Chief Financial Officer, we have people from
every one of the Departments here. So with that the first area is General Government and the first
one is the Mayor’s Office and appropriations are on Page 62 of the budget books. By the way
there’s extra copies of the budget books for anybody that would like one, right up front.

GENERAL GOVERNMENT

101 MAYOR'S OFFICE — None

102 BOARD OF ALDERMEN- None

103 LEGAL DEPARTMENT- None

107 CITY CLERK’S OFFICE- None

109 CIVIC AND COMMUNITY ACTIVITIES — None

111 HUMAN RESOURCES -— None

113 BENEFITS -— None

115 CITYWIDE PENSIONS — None

118 OTHER GENERAL GOVERNMENT - None

131 HUNT BUILDING - None

156 EMERGENCY MANAGEMENT - None

157 CITYWIDE COMMUNICATIONS -— None

166 PARKING OPERATIONS — None

183 ECONOMIC DEVELOPMENT - None