Board of Aldermen 05-04-2020 Page 9
this Resolution. But if | could Madam President, could | still ask Mr. Goodhue some questions?
President Wilshire
Alderman Jette.
Alderman Jette
So will this qualify for forgiveness so that the money you are borrowing under this program if it is paid, if it is
used to pay wages, then it is eligible for being forgiven. So in the end this money will not have to be
repaid? Is that correct?
Larry Goodhue, CEO & CFO Pennichuck Corporation
Yes Alderman Jette. It is a very specific calculation; we have to use the money within 8 weeks after the
funds being given to us. It has to use 75% for payroll, up to 25% for very specific non-payroll related costs.
We feel fairly certain that all, if not nearly all of this amount, will be a forgiven amount that allows for that
bridge relative to us being able to comply with the Governor’s Orders and service to our customers and
they are dealing with their own individual circumstances at this time.
Alderman Jette
And could | follow up Madam President?
President Wilshire
Alderman Jette.
Alderman Jette
In your letter you also indicated that because of the Governor's Emergency Orders, you cannot stop
providing water to people even though they might not be paying the bill. Do you have any testament as to
how much of that will be recovered once the crisis is over or will most of that be lost?
Larry Goodhue, CEO & CFO Pennichuck Corporation
We don't have a clear look at that. The best comparison we can have was the 2008/2009 financial crisis,
where a good number of residents were impacted and local businesses were impacted. In that financial
crisis, excuse me, one of the things that is in the Governor’s Order is when people are in this situation, they
need to work with us in setting up a payment arrangement to pay that deferred amount in no less than 6
months’ time. However, should you have a resident that you know, they lose their job, they vacate their
house, they get foreclosed on, they move out of the area, all of a sudden they are no longer a customer of
ours, we will never be able to recover that deferred sum of money.
That same situation could happen with the unfortunate circumstance where a business might be using
some water and then they go out of business and they file Chapter 11 or whatever and that may never be a
collectable amount. So there is a portion of this that could be as far as the delinquent payments, could be
non-recoverable. However, like | say, the only basis that we have as far as any kind of a reasonable
comparison was the 2008/2009 financial crisis. We did see some of that, though a part of it was mitigated
by the fact that people were able to come back on and work with us and pay their past due bills; and/or
some of the banks may have foreclosed on some properties, actually paid the past due amounts in order to
transact and resell those properties. So we don’t know yet what that full impact might be whether we will
get deferred payments, delayed payments and/or it will be a permanently uncollectable item at this time.
