Aldermen, Board of

A special meeting of the Board of Aldermen was held Thursday, October 13, 2011, at 7:00 p.m. in the Aldermanic Chamber. President Brian S. McCarthy presided; Deputy City Clerk Patricia Piecuch recorded. Prayer was offered by Deputy City Clerk Patricia Piecuch; Alderman Deane led in the Pledge to the Flag. The roll call was taken with 12 members of the Board of Aldermen present; Aldermen LaRose and Chasse were not in attendance. Alderman Sheehan arrived after roll call at 7:03 p.m. Her Honor Mayor Donnalee Lozeau and Corporation Counsel James M. McNamee were also in attendance. COMMUNICATIONS MOTION BY ALDERMAN CLEMONS THAT ALL COMMUNICATIONS BE READ BY TITLE ONLY MOTION CARRIED From: Mayor Donnalee Lozeau Re: Special Board of Aldermen Meeting MOTION BY ALDERMAN CLEMONS TO ACCEPT AND PLACE ON FILE MOTION CARRIED President McCarthy Tonight we have an update on the Pennichuck acquisition, and I will ask Mayor Lozeau to introduce the topic. Mayor Lozeau Thank you. I appreciate that Mr. President. I’ve called a special Board of Aldermen meeting tonight because, as many of you recall, the updated schedule of the PUC has us filing a settlement agreement, if we have one, on Tuesday of next week. We wanted to discuss tonight with you a draft settlement agreement, the specifics of which we cannot discuss in a public setting because terms are still being negotiated and discussed. But it is important to get your input on those so I will ask that we go into a non- public session when I’m done with my comments relating to tonight’s meeting. There are times we look at this agreement and think oh it is taking forever and then other times it feels like everything is in a hurry. We made it just under the wire yesterday to get this meeting posted the way it should be posted with the 24 hour notice, and it is because when we were done the technical session yesterday at the PUC it was almost 5:00 p.m. when we were driving home and making the calls to say we better get something on the calendar so that there is an opportunity for you to weigh in, plenty of time before Tuesday. So there is the piece about Tuesday and what that can represent, and there is also the interest on our Pennichuck purchase, which I wanted to also call to your attention because it is another reason that we want to keep things moving along in the right direction. As you know, in our Merger Agreement we have a limit of 6.5% that says we don’t have to complete this transaction if the interest rate is higher than that. Right now, as of today, the interest rate out there for us on a bond that we can call back is 4.7%, and to put that in perspective, that is over $62 million in savings to the ratepayers over the 30 year term. It is very important that we keep our momentum heading in the right direction. I hope you understand me calling a meeting this way, tonight, and bringing some of you in that didn’t have to be here tonight. Thank you Mr. President. I appreciate that. Also, as you know, Mr. Patenaude and Mr. Ardinger are here this evening to discuss that with us in the non-public session. Special Bd. of Aldermen – 10/13/11 Page 2 Alderman Deane I had a question on the $62 million cost avoidance that was mentioned. What were we anticipating rates to be at? Mayor Lozeau I’m comparing the rate to what we put in the merger agreement. Our ceiling was 6.5%. At 6.5%, if you compare what that would have cost to today’s interest rate of 4.7% it is a $62 million savings, actually more than that. Alderman Deane Well it is a cost avoidance it is not a savings. Mayor Lozeau However you… Alderman Deane That is what it is. We haven’t spent any money so we haven’t saved any. What are we paying for rates now? Have we ever paid, in the past 6 or 8 years… President McCarthy This is the first taxable bond that we have ever let. Alderman Deane Okay. So as for taxable bonds then what have the rates been the last 6 or 8 years? President McCarthy They’ve been much worse than this. The corporation was paying on the order of 7% for its taxable bonds. It had some State revolving loan financing that was down in this range of 4.7%, but this is better than we have seen rates I believe for that kind of financing in quite some time. Mayor Lozeau That is correct. Alderman Deane How long has it been at the 4.75%? Mayor Lozeau It is at 4.7%... Alderman Deane 4.7%, I’m sorry. How long has it been at the 4.7%? Special Bd. of Aldermen – 10/13/11 Page 3 Mayor Lozeau The last week or so. Alderman Deane What was it prior to that? Was it a lot higher? Mayor Lozeau It was 5.7%. Alderman Deane So it has gone down a point in the last week or so? Mayor Lozeau Yes. It keeps coming down. John is giving me the look like it has been shifting. We’re looking at it every day Alderman Deane. Alderman Deane Has bond council been to City Hall? Mayor Lozeau Yes. Alderman Deane How did those meetings go? Mayor Lozeau Very well. Alderman Deane Can you elaborate on that? Mayor Lozeau What is it that you’re looking for? Alderman Deane What were the discussions with bond council and how do things look, and what did they have to say? Mayor Lozeau Then discussions with bond council have been that our rate is in a good place right now. We’ve actually been having the discussions this week with the rating agencies as we’re closing the books and finishing our Special Bd. of Aldermen – 10/13/11 Page 4 work. We’ve had discussions about Pennichuck with them, actually about a lot of the work going on in the city, and we’re in good shape. I don’t know what specific thing you’re looking for. It is a good time for the city because of our financial stability, and it is a good time to be doing something like this when we can capitalize on these rates. As you know, our last bond that we sold was 2.67%, which was a 30 year low. That was for a tax exempt geobond. Alderman Deane Thank you Mr. President. President McCarthy Are there any other comments from the board? Is there anything else we can do in public session or do we… Mayor Lozeau I don’t think so. I think that would be all. NON-PUBLIC SESSION MOTION BY ALDERMAN CLEMONS THAT THE BOARD OF ALDERMEN GO INTO NON-PUBLIC SESSION BY ROLL CALL PURSUANT TO RSA 91-A:3,II(e) TO CONSIDER A PENDING CLAIM OR LITIGATION WHICH HAS BEEN THREATENED IN WRITING OR FILED AGAINST THE CITY SECONDED BY ALDERMAN TABACSKO ON THE QUESTION Alderman Cookson Thank you. I’m wondering if it might be appropriate, prior to that motion, seeing that there are members of the public here is there the opportunity for public comment prior to going into non-public? President McCarthy We can do that if you want to, if there is no objection from the board. If there is anyone from the public who would like to speak please come forward and give your name and address. Geoff Daly, 42 Walden Pond Drive Mayor I’m glad to see that the bond is down low and I believe it will go lower. In the bond council’s advice, did they advise or let you know whether you could prepay a proportion of the bond going forward to increase the avoidance as Alderman Deane calls it so that we do have a reduction of the overall debt load and shorten the period of time? I know when we took out a bond and bought our factory down in New Jersey that was one of the things we were able to do through the State of New Jersey was do a certain proportion of prepaying ahead, but it was a set amount and it was something that I think should be looked at very carefully. If we can cut that amount and increase the avoidance charge that would be great. President McCarthy These bonds are simply callable right? Special Bd. of Aldermen – 10/13/11 Page 5 Mayor Lozeau Yes. President McCarthy We can pay the entire thing off if we wish to. Geoff Daly Okay. Thank you very much. President McCarthy Is there anyone else who wishes to speak? If not, the motion was to go into non-public session, A Viva Voce Roll Call was taken, which resulted as follows: Yea: Alderman Clemons, Alderman Vitale, Alderman Craffey, Alderman Deane, Alderman Pressly, Alderman Tabacsko, Alderman Melizzi-Golja, Alderman Cox, Alderman Sheehan, Alderman Wilshire, Alderman Cookson, Alderman McCarthy 12 Nay: 0 MOTION CARRIED The Board of Aldermen went into non-public session at 7:11 p.m. The Board of Aldermen sealed the minutes of the non-public session and returned to the special meeting of the Board of Aldermen at 8:25 p.m. Alderman Pressly Thank you Mr. Chairman. It is great to have our consultants here tonight, and I’ve taken the opportunity, since you are here, to bring up an issue that has happened locally, I hope you are aware of, but if you are not I think it is important that we talk about in open session, and that is regarding the Southwood portion of the purchase. I know that both of you gentlemen do not live in town and so you probably had no way of knowing the passion that existed when we took the vote and decided we must control our water supply. One of the compelling reasons was what the citizens of Nashua, and particularly in the north end of the city, have observed over years as this protected wonderful pristine watershed had been absolutely destroyed. And I know you know the history; it was all done legally, but it was still a heartbreaking situation. You probably did not know how important Southwood was to the purchase, but because some people that live near the site have taken it upon themselves to walk the land and to look over the Southwood portions, they have become very alarmed and have alarmed many of us that there are things that have been happening there that we did not know about. I guess I sort of need to ask you did you folks know about it. I understand there was an environmental audit of some sort done, but were you folks aware? We also did get a letter from Mr. Montopoli, I hope you have seen a copy of that, where he acknowledged that yes these things did exist and they were going to remove them. It might be that my memory is not good in that area, but I do not remember our talking a great deal about the Southwood, and maybe you gentlemen did not realize, but this mysterious Parcel F that was mentioned right towards the end of the disclosure portion, right before we voted to agree and move forward, that that Parcel F was the very last, that was already under agreement and would be transferred was the very last piece of undeveloped Southwood land in Nashua. Special Bd. of Aldermen – 10/13/11 Page 6 I know it is sort of heartbreaking for a lot of us. I know that the Mayor has taken some positive action since then to try to remedy that and give us a chance to find an alternative. I think that is wonderful and I commend her for doing that. At the same time, I’m wondering where some of us went wrong. I would have voted for it even if I had known, but it really was significant to know that that mysterious Parcel F was the last speck of Southwood land that was able to be developed, that had not been developed. It is sort of curious for me and I’m sure others that we find out this agreement was made in ’06. It just seems so strange that it would come about that we would sign an agreement and yet they wouldn’t proceed on the closing until that window of time between signing and closing for our purchase to have that happen. It just seemed sort of a strange coincidence to me. Could you fill us in a little bit? How much did you know, did you know… John Patenaude That agreement has been disclosed and it was disclosed in the disclosure schedules that came with the purchase and sale agreement. That agreement had been executed by the parties prior, I believe 2007 or 2006, in that timeframe, and the parties, Pennichuck had disclosed that contract to us, and it was on the disclosure schedule provided with the purchase and sale agreement. Alderman Pressly That is not what we were told. We asked about it that night and were told it was still a confidential… John Patenaude You didn’t see the agreement because there was a confidentiality section of the agreement…well it could have been disclosed to you and anything on that disclosure schedule that we listed, I believe would have been disclosed to you if you had asked for a copy, similar to we didn’t provide you with all of the environmental reports because there were three thick binders, and I believe, if you went back to your minutes, at that point in time we said that they would be available in either Mr. McNamee’s office or the Mayor’s office for the board, any board member, to review. Those were made available. We talked about, if I remember, I’m just trying to recollect my thoughts here, we had talked about, I will call it the mounds of… Mayor Lozeau Due diligence. John Patenaude …dirt, not dirt but there was the stuff that… Alderman Pressly There was a mound in town that we had a lot of discussion over… John Patenaude No, that’s Mt. Pennichuck, but there is the stuff that came out of the filters, there were discussions about that and we had indicated that there were these… Special Bd. of Aldermen – 10/13/11 Page 7 Mayor Lozeau There was testing. John Patenaude …mounds out there that were represented in the GeoInsight report. The other items, I can’t remember if they were in the report or outside the report that Mr. Montopoli referred to. Alderman Pressly We were told the other night that that environmental report is still confidential. Why can that not be brought forth now? John Patenaude I would leave that to the lawyers. I’m not a lawyer. Alderman Pressly I know you said it is still a non-public document. Is there a reason for that at this stage? James M. McNamee, Esq. Yes, the same reason I gave you the other night. I actually asked Pennichuck if we could have the document and release it since there is so much interest concerning this. The response I had was it still contains, since Pennichuck is still a private corporation publicly traded on the stock exchange, it is still considered material confidential information for Pennichuck so it can’t be released. Alderman Pressly Was it not a study that the City paid for and had done? James M. McNamee, Esq. Yes. Alderman Pressly And so we cannot make it public? James M. McNamee, Esq. That is correct. Alderman Pressly I would like to know were you aware of the bridge and the old Concord Road? John Patenaude Personally, no I was not. Special Bd. of Aldermen – 10/13/11 Page 8 Alderman Pressly It develops that there might be a rather important archeological find on I think one of the sites in Merrimack that the citizens who have walked have noticed. The way you are talking I gather you have been aware of the issues that the citizens have brought forth? John Patenaude Like I said, there is an environmental report out there that was … Alderman Pressly Right. John Patenaude …available to this body when we presented the information. Alderman Pressly There is no way that…I don’t think any of us are going to go in and read it. Were you aware of most everything that these people had seen like the big pipes and all of the various… John Patenaude I personally was not, no. Alderman Pressly You were not? John Patenaude It has been almost a year now and I would have to go back and read the reports verbatim. Alderman Pressly Did anybody in the city look over those reports? John Patenaude Yeah we all did, but… Mayor Lozeau Yes. John Patenaude …it has been a year now. Special Bd. of Aldermen – 10/13/11 Page 9 Alderman Pressly Oh okay. Mayor Lozeau Mr. President if I could, there was nothing in those environmental reports that would have caused us not to proceed with the purchase… Alderman Pressly Oh I agree with that. Mayor Lozeau …there are items that were found, some call it dumping, some call it storage, but they were items that we were aware of. I know that there has been some furor over what seems to be this discovery that nobody was aware of, I’m not sure that I would characterize it the same way. Alderman Pressly Okay. Mayor Lozeau Actually I’m quite certain I wouldn’t characterize it the same way. Alderman Pressly Okay. As far as your memory goes there was nothing in that environmental report that you thought was significant enough to bring up to us? John Patenaude I think we did bring up the … Alderman Pressly Piles. John Patenaude …piles of whether silt or dirt from the filters, and that was mentioned in the reports and we did bring that up to the … Alderman Pressly Just one further question; did you know that Parcel F was the last speck of… John Patenaude Personally, no. Special Bd. of Aldermen – 10/13/11 Page 10 Alderman Pressly …land. You did not know that? John Patenaude No, but there was an agreement there, which had been executed prior to that so… Alderman Pressly I know all of that, I know all of that. The important thing for those of us that Parcel F…I know I didn’t know at the time, and even if I had known it was the last bit of Southwood land in Nashua that had not been developed… John Patenaude I think… Alderman Pressly …I still would have voted to go ahead with the agreement. John Patenaude And I think the Mayor and us have been trying to come up with solutions… Alderman Pressly Right. I mentioned that… John Patenaude …to get there, but… Alderman Pressly …I acknowledged her on that. John Patenaude …you know again, legally there is a document there that was there at the date of closing, it was executed and… Alderman Pressly I know that. We all know that. Mayor Lozeau Mr. President if I could, this opportunity to look at solutions is not because members of the public or the neighborhood have done a petition or any of those other things, I mean I think that is a nice thing for them, but this, and the discussions that have been taking place about Parcel F have been taking place for more Special Bd. of Aldermen – 10/13/11 Page 11 than a year now. Now I understand that there are some people that don’t believe that, but that is actually the case… Alderman Pressly Could you elaborate on that? I mean what do you mean, what were you discussing, you were trying to stop the development a year ago? Mayor Lozeau Yes. For Parcel F we have been trying to find a way for that not to happen for quite some time. Alderman Pressly Oh. I know since before the citizen’s group formed itself? Mayor Lozeau Yes. Alderman Deane Over a year you said, over a year. Mayor Lozeau Over a year. Alderman Pressly A year ago. But I don’t recall you ever mentioning that to us. Mayor Lozeau Well we have talked about that there were three items that none of us were really going to like in this deal… Alderman Pressly Right, but there was no mention that you were making an effort to make some changes. Mayor Lozeau I can’t recall if I told any of you individually, I think… Alderman Sheehan I do. Mayor Lozeau ...I probably did, especially the Alderman that was concerned with that ward, that if there was a way to do something without breaching our agreement, that we were going to try to find a solution. Special Bd. of Aldermen – 10/13/11 Page 12 Alderman Pressly And you started that a year ago so… Mayor Lozeau At least. It is one of the reasons that you see it coming up now is because we’ve been asking them not to move forward. They could have closed a long time ago. Alderman Sheehan Thank you. Just to refresh because I think some of this has gotten to a point where things have been mischaracterized; when it came up that first night, the first meeting we heard about it, I was requesting that she pursue making a different outcome with that parcel, and I had kept in touch with her this whole time and have known this whole time, and I was under the impression that it has come up a couple of times that we’ve asked for an update and it’s there’s nothing ready yet, but that that is something that is being worked on. Additionally, the other information that we got, the piles and everything, that was in our packet. We got a package that outlined what the findings were, what the possible solutions were, and what the costs were. That was in our packet in the whole due diligence thing, it was like a hit sheet of all of the top things so this has not been a secret. Just open your packet and check the one that had the due diligence, it is on the first or second page, and it is there, and it is even broken down by parcel. There is nothing…this was done a long time ago too. This wasn’t done after the citizens group; this was done a long time before. But it has been done. We have it. I have it on my dining room table right now because I’ve referred to it a couple of times. It is there. Alderman Pressly So you’re saying that the citizens group was not a significant issue in this… Mayor Lozeau No, I’m not going… Alderman Pressly …I think it is really important what they have done. Mayor Lozeau I think it is how we characterize it. I think it is wonderful that people care enough to get involved, and I would never mitigate that. I have two people sitting here tonight that are trying to get involved with something. It is something I do a lot of with people. I appreciate that they are involved and engaged and paying attention. I have no problem with that. All I’m trying to say is this has been a concern for quite some time. As a matter of fact, one of the citizens that lead the petition initiative talked to me long before people came in this Chamber about it, and I told her the same thing that I’ve been telling Alderman Sheehan. It is just a matter of sometimes when a deadline is looming it allows you to get some momentum that you wouldn’t have had before. Do I think that the citizens should be involved and bring something to the table, absolutely. Do I think that this would not have happened without their involvement, I don’t. I think it would have happened without their involvement. Special Bd. of Aldermen – 10/13/11 Page 13 Alderman Pressly When you say this you mean your moving … Mayor Lozeau The ability to extend the deadline to try to find something. Alderman Pressly To find something else. Alderman Sheehan I would just like to thank the Mayor for that because it was something important. I appreciate it, and I do value people being involved as well, but I do want to say thank you because it was my main concern. Mayor Lozeau You are welcome. President McCarthy Is there anything else? ADJOURNMENT MOTION BY ALDERMAN DEANE THAT THE OCTOBER 13, 2011, SPECIAL MEETING OF THE BOARD OF ALDERMEN BE ADJOURNED MOTION CARRIED The meeting was declared adjourned at 8:40 p.m. Attest: Patricia Piecuch, Deputy City Clerk