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permanent employees and the probationary period shall be credited as part of the
employee's seniority. The City agrees to provide training for certification as Career
Fire Fighter at its expense in accordance with State law. In the event the employee
is absent by reason of illness or injury, the Department may, at its discretion,
extend the probationary period by the amount of time absent over seven (7) duty
shifts during that nine (9) month probationary period, up to three (3) additional
months.

D. In addition to the bargaining unit seniority list, Nashua Fire Rescue
shall establish a time in rank seniority list for each division. Time tn rank in any
division shall commence on the first day at work in that division and end when the
employee leaves the division for any reason.

Article 17 - PERSONNEL REDUCTIONS AND RECALL

A. — Inthe case of a reduction of personnel within the bargaining unit, the
employee with the least seniority shall be laid off first. In the event an employee
must be involuntary demoted as a result of a reduction of personnel, such demotion
shall be accomplished in accordance with the time in ranks seniority list for the
division and the employee with the least seniority shall be demoted first.

B. The names of employees laid off from the bargaming unit will be
maintained on a recall list for two years from the date of layoff and such
employees will be offered recall in the order of greatest seniority tf vacancies occur
in their job classifications. If a laid off employee is notified by telephone or by a
letter sent to his/her last known address on the records of the Fire Department to
return to work, he/she must notify the Department within two (2) days of his/her
intentions to comply or accept and must report to work within ten (10) days of such
notification or he/she shall cease to have any rights based on seniority and shall be
terminated. Recalled employees who return to work will be credited with prior
length of service, provided such employee has not withdrawn his/her contributions
from the State Retirement System.

C. If a driver's job 1s totally eliminated or is not covered on a 24-hour
basis, any driver affected shall be given the opportunity to fill another full-time
driver's job of his or her choice on the basis of seniority, unless he or she is shown
not to be qualified. In the event of reassignment, the driver shall be obligated to
complete only the remaining portion of his/her driver probationary period not
completed at the time of reassignment.

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D. Any employee demoted as the result of a reduction of personnel
which is involuntary and non-disciplinary will be maintained on a list. Employees
who are on the demotion list shall be reassigned to fill any vacancies that may
occur in the division from which they were demoted in according with the
demotion list and time in ranks seniority list for the division.

Article 18 - APPOINTMENTS, PROMOTIONS AND DEMOTIONS

A. The State of New Hampshire Fire Service Traming Division or an
equivalent organization agreed upon in writing by the City and the Union shall
conduct and supervise written examinations for available promotions within the
Nashua Fire Department which are specified below and which specify a
requirement for such examination.

B. The Testing Agency shall submit to the Board of Fire Commissioners
the names of the candidates who pass the written examinations for each available
promotional opportunity.

C. All promotions to classifications in the bargaining unit and to the
Deputy Chief and Deputy Chief-Traiming classification out of the unit shall be
made from the ranks in accordance with the procedures set forth under this
Paragraph C, and in Paragraphs D through N below, unless those from the ranks
are shown not to be qualified. Qualifications, in part, for the rank of Lieutenant,
Acting Lieutenant, Fire Alarm Lineman, Inspector/Public Education Officer,
Assistant Superintendent, Inspector/Investigator, Fire Marshall, Superintendent,
Captain, Deputy Chief and Deputy Chief Training shall be determined by a written
examination conducted by the Testing Agency. A passing mark of seventy percent
(70%) must be attained. Years of service on the Nashua Fire Department will add
one (1) point for each year of service in-grade to the passing written examination
mark. However, ifall members can test for a position, one (1) point for each year
of service in the Nashua Fire Department will be added to the passing written
examination mark. A passing written examination mark of seventy percent (70%)
must be attained before such seniority points are added. Seniority points shall be
calculated based on the effective date of the test results, and shall be recalculated
based on the date each vacancy occurs. Seniority points shall be added only once.

D. — For vacancies in Specialist Divisions, the five (5) candidates who pass
the examinations and attain the highest combined scores of the examinations and
seniority points shall be the eligible candidates considered in accordance with
promotional policy by the Fire Commissioners for the first vacancy. However, for

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vacancies in the Fire Marshal Division, as of January 1, 2021, to be eligible to take
the exam, members must have their Fire Inspector I and Fire Investigator
certifications. For each additional vacancy, the candidate who attains the next
highest combined scores shall be added to the list of candidates. If the foregoing
process results in there being less than five (5) candidates available for
consideration, the Fire Commission shall consider the candidates who do pass the
examinations in accordance with previous arbitration decisions. In the event the
Fire Commissioners wish to consider candidates’ conformance to performance
standards, written copies of such performance standards shall be furnished to each
member of the bargaining unit at least six (6) months prior to the date of such
consideration. As part of the testing process, the Fire Commissioners may require
all candidates for positions in the Mechanical and Fire Alarm divisions to
participate in a practical skills examination process. This Paragraph D shall apply
to all promotions to classifications other than Deputy Chief, Captain, and
Lieutenant.

E. — The written examinations for Lieutenant and Acting Lieutenant will
be given in March. The day of the written examination will be rotated through the
four different platoons. The results of the written examination will stand for
twenty-four (24) months from May 1 next following the administration of the
examination. The posting for the examinations will contain the information in
items (1) and (2) of Paragraph I. For the rank of Lieutenant, the nine (9)
candidates who pass the written examination and attain the highest combined
scores of the written examination and in-grade service year points shall be the
eligible candidates considered in the interview process described in Paragraphs J
and K below.

F. — _ Written examinations for Captain and Deputy Chief will be given in
March or April. The list of those who pass the written examination will stand for
twenty-four (24) months from May 1 next following the administration of the
examinations. For the rank of Captain, the six (6) candidates who pass the written
examination and attain the highest combined scores of the written examination and
in-grade service year points shall be the eligible candidates considered in the
interview process described in Paragraphs J and K below. For the rank of Deputy
Chief, the three (3) candidates who pass the written examination and attain the
highest combined scores of the written examination and time in-grade points shall
be the eligible candidates considered in the interview process described in
Paragraphs J and K below.

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G. In the event that there is a tie for the ninth (9'") candidate for a
Lieutenant vacancy; the sixth (6'") candidate for a Captain vacancy; or the third
(3) candidate for a Deputy Chief vacancy, all candidates affected by the tie scores
shall continue in the process.

Should a tie occur as noted above, then at the Deputy Chief and oral
interview steps (Paragraphs J and K), the highest ranked candidate shall be given a
number equal to the number of candidates being considered and then so on to one
(1) point for lowest ranked candidate. However, in no case shall the final
promotional lists exceed the following number of candidates:

Lieutenant nine (9);
Captain six (6); and
Deputy Chiefs three (3).

H. Promotional opportunities occurring because of vacancies and new
positions which the Fire Commissioners wish to fill on a permanent basis, and for
which qualified candidates are not available on a current list under D, E and F
above shall, except in an emergency be posted within ten (10) days after the
vacancy occurs. The test date for each such vacancy shall be posted for a period of
twenty (20) days, and each person eligible to take the test who is on vacation or
other extended leave shall be sent a notification of the posting by mail. For
positions in the Suppression Division, the tests shall not be scheduled earlier than
six (6) months after the initial date of posting to allow for study time. For
positions in the Specialist Division, tests shall not be scheduled earlier than ninety
(90) days after the mitial date of posting to allow for study time.

I. All test postings shall include the following information:
1. The study materials on which the examinations will be based.
2. All tests will be based upon relevant sources not to exceed

1,400 pages of material. Starting January 1, 2021, all tests for the Fire
Marshal Division will be based upon relevant sources not to exceed 1,000
pages of material.

J. The names of all eligible candidates as defined in Paragraphs C
through F above shall be submitted by the Assistant Chief to the Deputy Chiefs for
their recommendation, no scores will be provided only that the candidate has
passed and is moving on in the promotional process. The Deputy Chiefs, meeting

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together, shall review and consider each candidate's abilities, past performance,
and compliance with Nashua Fire Rescue rules and regulations. The Deputy
Chiefs, acting as one body, shall rank the candidates relative to each other. For
Lieutenant candidates, the Deputy Chiefs shall give their highest ranked candidate
nine (9) points and so on to one (1) point for their lowest ranked candidate. For
Captain candidates, the Deputy Chiefs shall give their highest ranked candidate six
(6) points and so on to one (1) point for their lowest ranked candidate. For Deputy
candidates, Deputy Chiefs shall give their highest ranked candidate three (3) points
and so on to one (1) point for their lowest ranked candidate. The rankings shall be
given in a sealed envelope to the Human Resources Department at the conclusion
of the Deputy Chiefs’ review and consideration. The Deputy Chiefs’ ranking shall
be provided by the Human Resources representative to the panel set forth in
Paragraph K below prior to the oral interview process and to the Board of Fire
Commissioners at the time the final promotional lists are determined. Should the
Deputy Chiefs be unable to reach agreement on the rankings for any position, the
procedure set forth in Paragraphs K. 3 & 4 below shall be utilized. In the case of a
tie score between candidates, the candidate with most time in-grade shall be ranked

higher.

K. — The oral interview process shall be administered as follows:

1. Eligible candidates as defined in Paragraphs D through H above shall
be interviewed by a panel that consists of a quorum of the Board of Fire
Commissioners and the Chief of the Department or designee.

2. A representative from Human Resources will assist in the process.

3. After all eligible candidates have been interviewed, each panel
member shall rank the candidates relative to each other. For Lieutenant
candidates, panel members shall give their highest ranked candidate nine (9)
points and so on to one (1) point for their lowest ranked candidate. For
Captain candidates, panel members shall give their highest ranked candidate
six (6) points and so on to one (1) pomt for their lowest ranked candidate.
For Deputy candidates, panel members shall give their highest ranked
candidate three (3) points and so on to one (1) point for their lowest ranked
candidate.

4. The Human Resources representative will collect all rankings and add

the points for each candidate to determine the aggregate score for each
candidate. All scores shall be given to the Human Resources representative

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and they will notify by mail candidates who have passed with NO scores just
that the candidate has passed and is moving on in the promotional process.
Once the interviews are complete and all scores are added then all
candidates shall be notified by mail their final score and placement on the
promotional list. The Lieutenant candidates receiving the highest aggregate
score shall be awarded nine (9) points for the interview and so on to one (1)
point for the lowest aggregate score. Captain candidates receiving the
highest aggregate score shall be awarded six (6) points for the interview and
so on to one (1) point for the lowest aggregate score. The Deputy Chief
candidate receiving the highest aggregate score shall be awarded three (3)
points for the interview and so on to one (1) point for the lowest aggregate
score. The Human Resources representative will submit the panel’s final
rankings to the Fire Commission. In the case of a tie score between
candidates, the candidate with most time in-grade shall be ranked higher.

L. The Fire Commission shall meet to compile and approve the
promotional lists. The Fire Commissioners shall add the pots from the oral
interview and Deputy Chiefs’ rankings to the combined written examination score
and years of service point / in-grade points for each candidate. The candidates
shall be ranked from the highest overall score to the lowest overall score and these
shall constitute the promotional lists. In the case of a tie score between candidates,
the candidate with most time in-grade shall be ranked higher.

M. Promotions shall be made within forty-five (45) days of the vacancy
from the names on the promotional lists. Regardless of vacancies, a promotional
list for the Lieutenant, Captain and Deputy Chief ranks will be formulated by May
Ist and stand for twenty-four months or until depleted. Promotions from these
promotional lists will be made as vacancies in the applicable ranks occur. When a
vacancy occurs, the Fire Commissioners shall, except as provided below, offer the
candidate ranked first on the appropriate promotional list the first vacancy and so
on until the list is exhausted or expires. The Fire Commissioners may skip over
candidates on the promotional lists for suspensions imposed within three (3) years
of the promotional opportunities. The Fire Commissioners may skip over
candidates on the promotional lists for written warnings imposed within six (6)
months of promotional opportunities, except that candidates for Deputy Chief
vacancies shall be skipped over no more than one (1) time; candidates for Captain
vacancies shall not be skipped over more than two (2) times; and, candidates for
Lieutenant vacancies shall not be skipped over more than three (3) times. The
candidate’s name will remain on the list and will be reconsidered each time a
vacancy occurs subject to the Fire Commissioners’ right to skip over the candidate

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until the list expires or is depleted or the discipline is removed from the candidate’s
file. In the event that the list is exhausted, the Deputy Chief’s review (Paragraph J)
and the oral interview process (Paragraph K ), will be used to formulate another list
using the eligible candidates specified in Paragraphs D through F. Seniority points
and time in rank points will be recalculated as of the date a vacancy occurs and
candidates may change position on the promotional list as a result. N.For the rank
of Lieutenant and Acting Lieutenant, an applicant must have completed five (5)
consecutive years of service as a Fire Private with the Nashua Fire Department to
be eligible to take the examinations. Eligibility for the tests to be given under
Paragraph E above shall be determined as of March 1. Eligibility for the tests to be
given under Paragraph H above shall be determined as of the date the vacancy
occurs. However, a Fire Private whose anniversary date for ftve years of service
falls within the period during which a promotional list is current will be allowed to
take the examinations, provided that such Fire Private's eligibility for promotion
will not become effective until the Fire Private’s anniversary date. Sole
consideration and absolute preference shall be given to those who have completed
five (5) consecutive years with the Department unless they are shown not to be
qualified.

N. — For the rank of Lieutenant and Acting Lieutenant, an applicant must
have completed five (5) consecutive years of service as a Fire Private with the
Nashua Fire Department to be eligible to take the examinations. Eligibility for the
tests to be given under Paragraph E above shall be determined as of March 1.
Eligibility for the tests to be given under Paragraph H above shall be determined as
of the date the vacancy occurs. However, a Fire Private whose anniversary date
for five years of service falls within the period during which a promotional list 1s
current will be allowed to take the examinations, provided that such Fire Private's
eligibility for promotion will not become effective until the Fire Private's
anniversary date. Sole consideration and absolute preference shall be given to
those who have completed five (5) consecutive years with the Department unless
they are shown not to be qualified.

O. For the rank of Captain, an applicant must have completed two (2)
consecutive years of service as a Lieutenant with the Nashua Fire Department to be
eligible to take the written examination. Eligibility will be determined as of March
1 for the tests under Paragraph F above and as of the date the vacancy occurs for
the tests under Paragraph H above. However, a Lieutenant whose anniversary date
for two (2) years of service falls within the period during which a promotional list
is current will be allowed to take the examination provided that such Lieutenant’s

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eligibility for promotion becomes effective on the Lieutenant’s anniversary date of
two (2) years as Lieutenant.

P. For the rank of Deputy Chief, an applicant must have completed one
(1) year of service as a Captain with the Nashua Fire Department to be eligible to
take the written examination. Eligibility will be determined as of March 1 for the
tests under Paragraph F above, and as of the date the vacancy occurs for the tests
under Paragraph G above. However, a Captain whose anniversary date for one (1)
year of service falls within the period during which a promotional list is current
will be allowed to take the examination provided that such Captain’s eligibility for
promotion will not become effective until the Captain’s one year anniversary date.

Q. The Training Division will be known as the Training/Safety Division.

Q.1. The Superintendent of Training/Safety shall be known as the Captain
of Traming/Safety. The Captain of Training/Safety will have the same duties and
responsibilities as that of the former Superintendent. The Captain of
Training/Safety shall be placed on the payroll grade and step grid at the grade and
step provided for Superintendents.

The employee holding the position of Captain Training/Safety, as defined in
this paragraph, may take promotional tests for line positions, based on his/her line
rank and service time prior to promotion to Lieutenant Training/Safety or Captain
Traming/Safety, whichever came first.

Q.2. This will be part of Emergency Services Group (Suppression)

Q.3. Four (4) Lieutenant positions shall be created and then filled per
Article 18, these positions are responsible for training, admmnistration,
documentation and coordination, as well as Emergency Scene Safety Officer.

Q.3.a. If the Board of Fire Commissioners does not fund the Lieutenant
positions set forth in paragraph Q.3. above, the Board of Fire Commissioners may
create and fund an “Assistant Superintendent” Position to be known as the
“Traming/Safety Lieutenant’, to be assigned to the “Traming/Safety Division”.
This Training/Safety Lieutenant shall work four (4) ten-hour days.

(O.3.a. above is from the sidebar agreement of 10/1/12)

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The employee holding the position of Lieutenant Training/Safety, as defined in this
paragraph, may take promotional tests for “line” positions based on his/her line
rank and service time prior to promotion to Lieutenant Training/Safety, as defined
in this paragraph.

Q.4. Training Superintendent, 4-10 hour days per week, Training /Safety
Lieutenant, 10/14 schedule.

Q.5. Traming/Safety Lieutenants instruct basic Fire Fighter evolutions.
Example: hose, ladders, SCBA, pumps, EMS etc.

Q.6. Training/Safety Lieutenants are available for Station Assignments as
per Article 36, Section C.

Q.7. Training/Safety Lieutenant positions are covered positions seven (7)
days per week twenty-four (24) hours per day, and will be part of officers’
overtime list.

Q.8. All Lieutenants promoted before July 1, 2003 are not transferable to
the Traiing/Safety Division under Article 4, they are however allowed to request
assignment in the Training Safety Position.

Q.9. As soon as practical all suppression officers will be given the State of
New Hampshire Fire Standards and Training, Incident Scene Safety Officer on
duty.

R. — Inorder to fill vacancies in the rank of Assistant Superintendent, a test
will be given. Employees who are currently third ranking specialists in that
division will be considered eligible to take the test. If only one Third Ranking
Specialist passes the test, he shall be promoted to Assistant Superintendent. In the
event that there is no third ranking specialist in that division, no third ranking
specialist passes the test, or no third ranking specialist chooses to test, then all
members of Nashua Fire Rescue who have completed one (1) year of service will
be eligible to take the exam. However, for vacancies in the Fire Marshal Division,
as of January 1, 2021, to be eligible to take the exam, members must have their
Fire Inspector I and Fire Investigator certifications. Eligibility will be determined
as of the date the vacancy occurs. If no Third Ranking Specialist passes the exam
but, more than one other employee does pass the exam, then the current
promotional policy will be used to promote the Assistant Superintendent.

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-3-

businesses that serve rural America. As a GSE, CoBank issues its debt securities with the
implicit full faith and credit of the United States Government and uses these low cost funds to
make loans to companies like PEU that meet its charter requirements. As a result of the implicit
backing of the U.S. Government, CoBank’s borrowing costs are lower than commercial banks
and financial institutions, and these lower costs are passed on to its borrowers. In addition to the
lower rates, CoBank loans generally have fewer covenants or restrictions as compared to loans
from commercial banks and other financial institutions.

Approval by Pennichuck and PEU. The CoBank loan and guaranty have been approved by the
Board of Directors of Pennichuck and PEU.

Pennichuck recommends that the City authorize (i) PEU to enter into the loan with CoBank; and
(ii) Pennichuck to guaranty the loan.

Lower Costs Are Good for Customers.

Pennichuck and its Board of Directors have determined that the capital projects to be financed by
the CoBank loan will allow PEU to continue to provide safe, adequate and reliable water service
to their customers on a cost-effective basis. The terms of the loan 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.

The cash generated from the intercompany debt refinancing will be utilized to repay and restructure
current debt payable to Pennichuck, without negatively impacting the customers of PEU.

Other Approvals. As a regulated public utility, PEU must obtain approval of the loan from the
New Hampshire Public Utilities Commission (““NHPUC”), which will approve the loan if it finds
the loan to be consistent with the public good. PEU will be filing a petition for approval with the
NHPUC in early February and expects the NHPUC to consider the petition promptly.

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 loan to Pennichuck East Utility, Inc.
from CoBank, ACB, in an amount up to $2,200,000, with a 25-year amortization
schedule.

FURTHER RESOLVED, that the City hereby approves the guaranty by Pennichuck
Corporation of the payment by Pennichuck East Utility, Inc. of the loan authorized in
the prior resolution; and