Transactions with Related Party — City of Nashua
The Company issued a promissory note to the City of Nashua in the amount of approximately
$120 million to be repaid over a thirty (30) year period with monthly payments of
approximately $707,000, including interest at 5.75%. The Company recorded an additional
amount of approximately $30.6 million as contributed capital. The remaining outstanding
baiance of the note payable to the City at December 31, 2020 and 2019 was approximately
$102 million and $105 million, respectively, as disclosed in Note 11 to these consolidated
financial statements. During 2020 and 2019, dividends of approximately $279,000 and
$280,000, respectively, were declared and paid to the City. The dividends paid to the City
during 2020 comprised approximately $279,000 of regular quarterly dividends declared and
paid; and no special dividend was declared or paid in 2020. The dividends paid to the City
during 2019 comprised approximately $280,000 of regular quarterly dividends declared and
paid; and no special dividend was declared or paid in 2019.
Additional ongoing transactions occur in the normal course of business, between the
Company and the City, related to municipal water usage, fire protection and sewer billing
support services, and property taxes related to real property owned by the Company within
the City of Nashua. For the years ended December 31, 2020 and 2019, respectively,
approximately $3.4 million and $3.4 million were paid to the Company by the City for
municipal water consumption, fire protection charges, and sewer billing support services.
Conversely, the Company paid property taxes to the City of Nashua of approximately $2.7
million for the year ended December 31, 2020, and approximately $2.3 million for the year
ended December 31, 2019.
Rate Stabilization Fund — Restricted Cash
As a part of the acquisition, the Company agreed to contribute $5,000,000 of the proceeds
from the settlement transaction to Pennichuck Water, which was used to establish an RSF,
allowing for the maintenance of stable water utility rates and providing a mechanism to
ensure the Company’s continued ability to meet its obligations under the promissory note to
the City, in the event of adverse revenue developments. Restricted cash consists of amounts
set aside in the RSF account and is adjusted monthly as required in the NHPUC Order, as
discussed in Note 1 of these financial statements.
131
