Budget Review Committee

BUDGET REVIEW COMMITTEE MARCH 26, 2012 A meeting of the Budget Review Committee was held Monday, March 26, 2012 at 9:15 p.m. in the Aldermanic Chamber. Alderman-at-Large Brian S. McCarthy, Chair presided. Members of Committee present: Alderman-at-Large David W. Deane, Vice Chair Alderman-at-Large Mark S. Cookson Alderman-at-Large Jim Donchess Alderman-at-Large Lori Wilshire Alderman Richard A. Dowd Alderman Mary Ann Melizzi-Golja Members not in Attendance: Also in Attendance: Alderman-at-Large Barbara Pressly Alderman Kathryn D. Vitale Alderman Michael J. Tabacsko PUBLIC COMMENT Geoff Daly, 48 Walden Pond Drive Thank you Mr. Chairman. I know it has been a very emotional rollercoaster tonight, but I really want you to think long and hard and pass this bond. If you don’t spend it you don’t spent it, but at least you have passed it and at least it is there to be considered for the full Board of Aldermen to pass. I’m also asking you, through the Mayor, for a couple of people to join her and sit with Mr. Slattery and say look they are going to pass the bond let’s go back to the table and sort this out because I can tell you right now there is going to be one heck of a problem if this bond doesn’t get passed. Do the right thing; pass it. If it doesn’t get spent at the end of the day nothing is lost, but I think you owe it to the people of Nashua to pass it. You passed it 11/3 or 4 last time, I think you can do the same thing again. Thank you. COMMUNICATION – None UNFINISHED BUSINESS – None NEW BUSINESS – None TABLED IN COMMITTEE MOTION BY ALDERMAN DEANE TO TAKE FROM THE TABLE R-12-18 MOTION CARRIED R-12-18 Endorser: Alderman-at-Large David W. Deane AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED THE AMOUNT OF FOUR MILLION EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($4,850,000) TO PURCHASE THE LAND OFF CONCORD STREET KNOWN AS “PARCEL F” Budget Review – 03/26/12 Page 2 MOTION BY ALDERMAN DEANE TO RECOMMEND FINAL PASSAGE ON THE QUESTION Chairman McCarthy If the committee would indulge me, if you recall at our board meeting where we scheduled the hearing, I had asked that some answers be made available to us regarding the use of Supply Pond and the water sources therein. I met with Mr. Ware and Mr. Conte last week and got answers to those, which I would like to make you aware of. I think you all have a copy of the map that Pennichuck put together after I had talked to them. What I want to do is just go through the history of how the property and the water supply were developed over the years with some help from the map that I think puts some things into perspective. From what we understand about the history of it, the dams around the chain ponds were built about the turn of the century at 1900 and the original distribution from Supply Pond was started then. If you look at the map, and I will try to do this up here…can everybody see the one that is…the dam was built here and this was raised in order to increase the level of Harris Pond and it is believed the materials for that came from down in this general area here because of the way the terrain not lays. When that was done there was a headwall created over here with the drainage into a lower area, which is referred to as Bog 1. If you drive along Manchester Street you can see this off to the side. It is very shallow at the moment, it only has about a foot of water up here, a little more in the middle, but not much and I will explain why in a few minutes. There is an outflow from there that runs into Bog 2, which is this one down here, and underneath all of this is a gravel aquifer that takes water by infiltration from both of these bogs and some that exfiltrates from Harris Pond into this slope and runs down along the same area. That aquifer runs under this, which is referred to as Bog 3, and when this was done that aquifer was used to…because it is fairly nice gravel, to treat some of the water that was put into the ponds. Down in here, in this area right in the middle of the green there is a little spot that says springs, there are approximately 45 2” well pipes that were sunk to a depth of about 15’ or 16’ through the surface and into that aquifer, which is where the water comes up that has infiltrated in Bog 1 and Bog 2, and that is what is referred to as the springs on Parcel F. You note that the water that is running out of them is water that came from Harris Pond and filters back into Supply Pond at the bottom of the hill. This water flows through this little inlet here and over a spillway back into Supply Pond. The plant that was built in 1900 is up in here. You can see a very small, two very small buildings; one right on the pond and one just below, and the one below is where the pump equipment was kept. I believe the pond is at a little over 130’ and that building is at 125’ so that was a gravity feed from the pond into the pump house. When the new treatment plant was built, which is over here, it say…you will see the 145’ contour runs right through the middle of it so it is at 145’. It is several feet above the area of Supply Pond. The inlets from Supply Pond require pumping up into the plant. There is also another pipe that runs generally up through here and has an intake in Harris Pond over here, which is gravity feed into the plant. For some period of time water was mixed from Harris Pond and Supply Pond because the water that comes back up out of this aquifer after it is run through there from the bogs is somewhat more alkaline than the water in Harris Pond, which mixing them made the chemistry easier to balance in the plant. When the plant upgrades were done several years ago basically there was no longer any need to do that, the process itself Budget Review – 03/26/12 Page 3 was changed to deal with the chemistry of Harris Pond and there was no need to mix the water. So Supply Pond has not been used regularly since 2007. There have been some occasions where it has been used if the gravity feed line from Harris Pond to the plant is down for maintenance or having other repairs done or those sorts of things. Then occasionally we will pump from Supply Pond although they have indicated that what they would rather do is for a short number of hours, if that pipe is closed, they use the water that is stored in the tank, which is about a half a day’s output of 6 million gallons or so to make up for the loss in supply. The last time the pumps were operated from Supply Pond was in 2010, and the reason for that was simply to test the pumps when some maintenance was done on those. There has not been use of the pumps to pump from Supply Pond regularly since 2007, and there is no intent to do so again in the future except in cases where there is maintenance. Alderman Cookson Just a quick question; when you make reference to the water storage tank being used, where does it receive its water supply from? Chairman McCarthy It is filled with output from the plan so it is post treatment water that is ready for distribution and it is at a level that is quite a bit above the plant, probably 15-20’. It has pressure that allows it to be used to… Alderman Cookson But it is post treatment, it is not water … Chairman McCarthy Post treatment correct. There is no other source. I had asked whether there was another source that we were using that springs come from. There apparently is not, and Pennichuck is quit convinced of that, that these are man made wells that were sunk there when the two bogs were created so that this aquifer could be used to treat water. Alderman Cookson Bog 1 and Bog 2 are man made? Chairman McCarthy Yes. These were built when the pond system was dammed. Alderman Cookson And what about the kettle hole? Chairman McCarthy The kettle hole is a natural bog created by glacial action. You see this line here that demarks where the water flows towards the kettle hole so everything to this side of these lines does not flow into Supply Pond, Budget Review – 03/26/12 Page 4 but rather flows into this bog and the bog then infiltrates and that water flows under Concord Street and over generally in the direction of the Pennichuck Brook. Pennichuck tells me that the kettle hole, which is at 165’ is generally wet all summer long whereas Bog 3 at 145’, 20’ lower, is generally dry in mid summer, and that is evidence that there is no subsurface flow from the kettle hole bog to bog 3 because otherwise bog 3 would be wet in the summer when there is water in the bog on Parcel F as we refer to it. Alderman Cookson That is your red dashed line? Chairman McCarthy Yeah. Alderman Cookson That is surface water divide? Chairman McCarthy Right. So I guess the questions I had asked were is there another source of water supply to Supply Pond, and the answer is no, which sort of moots the other questions, which were do we need to be able to use that and will the development of Parcel F effect it. I think the answer to those is also no because again it is all coming from Harris Pond in general, it is just a question of what route it takes to get into the plant if it gets there. Alderman Donchess Do you entertain questions? Chairman McCarthy Sure. Alderman Donchess What about the issue that was raised by Mr. Parzych about the swale that I don’t think is on this drawing that runs east and west from the area of the kettle hole over towards just north of the Junior High? Chairman McCarthy It is on here. It runs basically just along this…it is not marked. It is on one of the other maps and I think it runs generally right along this line here that you can see up along the edge of the school. Alderman Donchess And having walked this area with him I’ve seen that. His thinking is that that carries water to another area. Budget Review – 03/26/12 Page 5 Chairman McCarthy My understanding from the folks at Pennichuck is that is a drainage swale that drains over here into the bog and does not drain towards Supply Pond. Alderman Donchess Of course I don’t really consider the proposal to buy Parcel F purely an issue of water quality, but another question; it was stated during the public testimony that 29 million gallons a day is taken from the Merrimack River. Is that accurate and what percentage of the Pennichuck water comes from the Merrimack River? Chairman McCarthy My understanding from the discussion I had the other day with Mr. Ware and Mr. Conti was that we only pump from the Merrimack for about three months during the summer, that right now for example the pumps to the Merrimack are turned off and that all of the water supply is taken from the Pennichuck Brook. Alderman Donchess Except for those months in the summer. Chairman McCarthy In the summer we, and if you are not familiar with how that is done, there is a line that runs from the Merrimack River up here somewhere in Merrimack over to Bowers Pond, which is just above Harris Pond in the system. Alderman Donchess Thank you. Alderman Cookson I’m just trying to forecast a little; seeing that we had a very low snow amount this past winter, it is certainly going to affect all of our water supplies whether you are talking about Harris Pond or Supply Pond, but it is also going to affect the Merrimack River as well. I would guess that it would affect Harris and Supply more than the Merrimack River. Is that a fair assumption? Chairman McCarthy I don’t know that I know enough to answer that, but I can give you some intuitive information from what I understand about snow melt and those things. One of the problems is when we have a very quick spring thaw the snow that melts runs off across the surface because the ground is still frozen and is basically impervious. When we have a winter where most of the precipitation is in the form of rain it may infiltrate better and there may actually be better groundwater recharge from that than from the snow melt. I think it may be more related… Alderman Cookson And when we don’t have snow melt? Budget Review – 03/26/12 Page 6 Chairman McCarthy Well it may be more related to total precipitation levels, and I don’t know if we’re under or over for the year. We’ve had some fairly good rain events so it may well be that the ground water levels are where they would normally be. We would have to… Alderman Cookson The direction I was going is I believe that we may be drawing from the Merrimack River more than those three months this coming season based on potential… Chairman McCarthy It is possible. There was comment of the bogs…since we’ve stopped pumping here, I’m glad you mentioned that…the gate at the top of this headwall is something they open by hand in the spring to flood the bogs and they have not done that in several years so the bogs are quite low at the moment. Alderman Cookson My understanding just as a side, I know that the Board of Directors for Pennichuck met this past Friday. I understood that they were public meetings, but then they were closed, they were non-public, and I thought that the topic of discussion was that of conservation. Chairman McCarthy I don’t know what happened at this Friday’s Directors’ meeting. I don’t know why they would have had a non-public conservation session… Alderman Cookson Okay. Chairman McCarthy …I know they have had some non-public sessions to deal with internal issues; personnel issues, etc. Alderman Cookson Alright. I will look forward to those minutes. Alderman Deane Although it is sort of off topic, who is making all of these motions to go into non-public session? Chairman McCarthy At the Board of Directors’… Budget Review – 03/26/12 Page 7 Alderman Deane Yeah. Chairman McCarthy I have no idea. I haven’t been there. I went to the first one and that was it. Alderman Cookson If I might offer, I had either read or heard somewhere that the Mayor at least provided the language to go into non-public. I’m not sure if she is the one who actually made the motion to go into non-public. Alderman Deane Thank you. I wanted to just discuss this legislation for a minute. Thank you for your presentation. Water is an interesting thing. You can’t always look at what we have for precipitation. If they have to pull out of the Merrimack it is supply and demand. We have some torrid weather and everybody is out watering and so on and so forth. That is what happens. I have no harsh words for anybody. The developer who has a very good reputation in the community and I understand that the developer also made significant investments with engineering and with the rigorous tasks that Attorney Westgate went through with attending all of these public hearings. I don’t feel as though I have made any derogatory comments towards anyone about any of the process. My major disappointment pertaining to this property was the time lapse between the request that Alderman Donchess had made via e-mail and the slight kind of …audio inaudible… return e-mail that he received from the administration, and then further waiting for an answer that took a while. I look at something that had been negotiated for well over a year why it took that long. I look at our process of being able to get the legislation in. Thankfully this piece was simple. I have other things that are still sitting there that are being worked on or whatever is being done with them. We followed our process, but it just seemed like that short window everything just seemed to have ended. The opportunity that one vote and it was over. I don’t fault the developer for moving forward. I understand it is spring time, I understand it is construction season, I understand their investment in the property, I understand they own it, I understand they have all of the approvals, and I understand they have the legal right to move forward and do what they feel is however they want to proceed with the approvals they have in place. That is just the way it is. I’m just a little disappointed in the process. As I stated to you Mr. President we deal with divine intervention by the administration in this room on almost everything we do, everything that is brought to this floor. But this there was none. I look at the property that surrounds the ponds, that surrounds the area. I think it would be interesting to everyone if they looked back and see where this property actually came from. A lot of it was deeded over to the Pennichuck years and years ago, the process that took place back in the ‘80s, and the rest is history. But this is the last remaining parcel in the north end that is now gone. I appreciate the fact that they came before the Pennichuck Special Water Committee and gave a presentation. The whole Pennichuck acquisition process in which the only two Aldermen that are left on this board are myself and Alderman McCarthy from the time it started until the time it was closed upon are the only two left, and there has been Budget Review – 03/26/12 Page 8 an awful lot of meetings and there has been an awful lot of material to digest over those ten years. Alderman Pressly who was citizen Pressly was actively involved with the community side of it; organization and getting people out to vote and whatnot. I was not really happy about having a $4.85 million price tag and I really didn’t, I didn’t support the $3.5 million motion that was made because A) we were told by the administration that wouldn’t be accepted and B) if I had supported that I wouldn’t have been able to reconsider my vote. So I voted in the majority to do so. Strictly out of principle and what we told the community we were going to do when we purchased the water company was to protect what had already happened, I support at least bringing this forward and having a funding mechanism in place. If Mr. Slattery doesn’t want to deal with the City and he wants to start his process, that is up to him, but I think just for the sake of having a funding mechanism in place and keeping it on the table on this board’s end, on our end as Aldermen, not as the administration but as Aldermen, we should pass this. Something that we do as a board. Thank you. Alderman Donchess I also support the legislation. I did express some reservations about the terms that were negotiated with Pennichuck at the time, but the City having gone forward and approved the deal and approving the purchase price including $200 million in debt or whatever it is, I think we should move forward and complete the purchase and save the land whether or not it impacts the water supply. I guess that is in debate, but complete the purchase in order to have an area of conservation around the Pennichuck ponds as we go now. I think people will be very disappointed when, again I’m not criticizing the developer in any respect, but when they see 85 units of housing on a piece of land they consider to be part of the Pennichuck. I think people will be disappointed, it is going to make a mess of traffic on Concord Street, it will contribute to fairly heavy conditions of traffic on Concord Street so I think the City should move forward and sort of complete the deal, and at least authorize the purchase. Chairman McCarthy I actually want to take a minute to answer former Alderman Teeboom’s other two questions about did I know about the HECOP buildings and did I know about Parcel F. Yes, we knew about both of those. We were told during the due-diligence process that Parcel F was for sale and would be transferred and the general…given the price, and given the nature of the land that was a transaction that was reasonable, and we were going to get the cash at the end of it so it didn’t change the material value of the corporation any. Likewise, with the HECOPs, I have no interest in seeing the City be in the commercial real estate business so I’m more than happy to have the company sell off the developer real estate holdings that we have no interest in. As far as I’m concerned the most interesting thing Southwood has is the 400 acres in Merrimack along the north side of the ponds that does flow directly into our water supply. We have faced substantial desire to get those parcels developed and those are the ones that I’m glad we bought because they have much more of an impact than this parcel can have on the supply itself. If we want to spend money on protecting the water supply there are much better ways to do that. I would much rather invest money through the corporation in the purchase of the remaining land in the Bon Terrain development in Amherst, which is hundreds of acres of undeveloped land that sits right on the Pennichuck Budget Review – 03/26/12 Page 9 Brook. It is a huge multi-hundred acre sandy lot, the water that falls on it flows directly into our water supply, and if you go out there you will find there are, among other things, an oil delivery company situated there where I can show you pictures of a truck leaking fuel oil into the ground 70’ from where our water supply comes from. Those are the pieces, and that was never owned by Pennichuck, that is owned by other people, but if Pennichuck wants to put its resources into protecting the water supply, those are the places where the money ought to go because those really do impact the quality and the quantity of our drinking water on a daily basis, and when those are gone we will be in deep trouble because we won’t have the same source of supply that we’ve got now. Alderman Cookson Just to verify, that is a Pennichuck action it needs to take. Chairman McCarthy Yes. Alderman Cookson Alright. Chairman McCarthy I don’t believe we could buy land in another community for conservation. Alderman Cookson Thank you. I wanted to clarify the point… Chairman McCarthy We could try it. Alderman Cookson I think the point that you make is very valid. I think the concern about having an oil delivery and spilling oil and fuel ending up in our water system is a valid point and we should all be concerned about that. I wanted to make sure that this board is not going to take action. We know that we’re not taking action that is an action that Pennichuck needs to take… Chairman McCarthy Correct. Alderman Cookson …and that is something that their Board of Directors should be aware of… Budget Review – 03/26/12 Page 10 Chairman McCarthy Correct. Alderman Cookson Thank you. Alderman Pressly Thank you. I think we all have agonized and struggled with this for some time, and I know when I learned of what was happening after we had taken the vote and learned the full magnitude of what Parcel F was, I was concerned enough and there was discussion on the board enough to go through and really analyze the 16 different non-public meetings that we had from March 31, 2010 to November 9, 2010. We had 16 meetings on the due-diligence. In trying to understand, I know when I learned about this after the vote I really felt very very negligent, how did this slip past me, how come if I had known this was the last parcel in Southwood or in Nashua I would have certainly suggested that our negotiators take care of that before we bought it. I do believe that had we had anybody on the negotiating team that really understood this that they could and should have fought hard to make this, to see to it that Pennichuck did not sell this before we bought it. That did not happen. The question has always been when and how was this presented to the board during due-diligence. I gave all of you a copy of this that I had researched, and the only time the word Parcel F comes up on all of these th 16 meetings is the very very last meeting, which was November 9 . And if you recall we had set that date as the day we were going to take the vote so we all went into that meeting knowing that we were under the gun, we were on a deadline, and we were expected to take a final vote that night. The only time the word Parcel F ever shows up in all of these 16 meetings is the very very last one, and it starts on page 35 and goes to 38. Ironically you must realize it was about 10:00 p.m. when this came up, and if you read it, it is really particularly vague. Interestingly enough it was Alderman Flynn that questioned this, and I commend him for going there. But if you really just go by the minutes and that is all we have to go by, I know there are some members of our board that read volumes and volumes of all sorts of information and that is wonderful, but the only thing we can truly rely on is what was presented to us at these 16 meetings. So if you read it, I mean I don’t think anybody, at least who spoke to it, understood. I should say I realize I do think that certainly the President of our board apparently it turned out had walked this land so he was far more familiar than any of us and certainly than what is in the minutes. With Alderman Flynn’s question, John Patenaude jumped in and said “that Parcel F”. Mayor Lozeau said “That is the parcel; it is right across from the existing Heron Cove. and there was an agreement between Pennichuck and the developer of Heron Cove I think.” Well clearly given the hour she had it mixed up with the other development. If she was negotiating as she says over Parcel F all of this time, at least at this timeframe she did not have it clear in her mind what Parcel F was. Patenaude; “What is it the developer has basically a right to purchase, all of the property subject to approval of development by the City, and I’m trying to remember from memory here, but what governs the price is the number of lots that are approved by the City. So I think at 47 lots it could be 1 or 2 here, but at 47 lots it was $2.1 million that the sale had transpired”. Even Patenaude is not real sure just what it is. “I think that is the property.” Mayor Lozeau; “There actually are two properties in some form of development agreement. One is a property right behind their land that they own on Concord Street that abuts Pennichuck School.” Now that Budget Review – 03/26/12 Page 11 is Parcel F. “…which is in agreement the way Mr. Patenaude is describing. The other one is in Merrimack across from Heron Cove, and Heron Cove is in agreement with the developer. I can’t recall it. It has been I think a 50/50 split.” Patenaude; “That is the HECOP five with John Stabile.” Lozeau; Right and I can’t recall if the developer bought out Pennichuck’s share or if it was still a 50/50.” I can go on here and read it, it is pretty short, but it is clear to me that nobody really was clear, at least with the people who were negotiating this meaning the Mayor and our consultants. It is really pretty vague. Alderman Flynn; “So what transfers to the City under this agreement here?” Again, Alderman Flynn was always looking for the financial part and he is the one who kept honing in on that. Mayor Lozeau “Whatever the deal is that they have right?” Patenaude; “Under the deal?” Alderman Flynn; “Under the agreement that we have are we assuming the same position as Pennichuck had?” Patenaude; “We got 50%, we are the same position.” So they are mixing up the two. Alderman Flynn; “What value is there in that?” Patenaude; Pardon me?” Flynn; “What monetary value is there in that?” Patenaude; “I can’t remember, I really can’t remember that.” President McCarthy; “Depending on the time we either get the interest in the property that Pennichuck current has or if they have transacted a deal by the time we close we will get the cash that comes from it as part of the cash reserves of the corporation.” Flynn; “That is anticipated to be $2 million or $3 million?” Patenaude; “No that was the F lot, the one in back of Pennichuck School that the Mayor talked about.” Lozeau; “Right.” McNamee; “Those two agreements are confidential.” Patenaude; “yes they are confidential.” That is the extent of what we were told about Parcel F. It was confidential, our consultants weren’t sure about it, the Mayor at this time wasn’t sure about it, she has told us subsequent to this that she had been in discussion with the developer over Parcel F for what did she say about a year before that. Well if she had been I would hope she would have told us that, and I would like to think that she and our consultants would have been a lot clearer as to what it was and what the choices were. Subsequent to that, I did, on the record, at another meeting I did ask…I became very upset when I found out it was the last parcel and at one of the meetings that our consultants were there I asked did they know and Patenaude said no he did not. Ardinger, I asked him did you know, and they both said no. I think what happened, and I think the City sort of goofed, but I think it is a forgivable goof because this was such a huge project and everyone really was focusing on how to buy this, how to govern it, and somewhere along the line the land got overlooked. In reading over these minutes over and over again, we did really not have anyone at the negotiating table be it our hired consultants who were these guys speaking and the Mayor, I just don’t think they were focused on saving the land. I do believe I know if I had understood this before we voted that night, I would have asked them to go back and say please negotiate this in our purchase and see to it that that parcel is not sold before we buy it. Some people say that couldn’t have been done. But I think it could have. At this stage we were so far along, both Pennichuck and the City that we were going to proceed, and I do think had the Mayor and our team really thought, if they had fought hard for that land I think we could and should have negotiated it in our purchase. That did not happen. I can forgive them for that because they were working so hard, the prize was to own the water company. But one of the areas that really meant so much to the people that live in that area was that we wanted to buy it to save the land. I really believe that right or wrong, we didn’t have anyone on our negotiating team, based on what they said the night we took the vote, that I just don’t think we had anyone on our team that tried. The only time this could have worked out would have been if they had negotiated it on our purchase and not waiting and just letting them do what they did. I think buying it is really important. I’m not casting any blame on anybody here, but we did not even know what Parcel F really was until three months after we had voted to sign the purchase & sales. Had we known I think a lot of us would have said well wait a minute couldn’t you go back and negotiate that as part of our purchase? But it wasn’t done. We can’t do anything about that now other than to try to make up for Budget Review – 03/26/12 Page 12 it and to purchase the land today. I hope we do, ought to pass this particular, the legislation before us tonight. Thank you. Alderman Vitale I don’t know if it would have made a difference at that time or not. And maybe you know this; buying the land wasn’t what we were before the PUC for, we were before the PUC in a way to say that the water prices, it was in the best interest of the public that we serve to buy the water company to keep the pricing the way it was and everything, and I don’t know if this would have taken a forefront and if they would have considered that because I don’t think that had something to do with the pricing of the company and what the PUC was considering. I don’t know. I voted to bring this before a public hearing and back to this committee to be looked at because you never know if you are going to hear more information or more complete information that will help you make a better decision, and I’m really pretty much back to where I was in saying that, and yeah you can do it and it can be there and you can pass it and have the money there if it ever comes up, but really to even spend this amount of money on this piece of property I still don’t think it is in the best interest of my constituents. Alderman Tabacsko I just wanted to point out something that when Attorney Westgate spoke earlier, and I’m looking at his statement now; the agreement between the developer and Pennichuck goes back to 2005, apparently redone in 2007 with a confidentiality clause so by the time we got that here during the due-diligence on the Pennichuck acquisition that was, and I recall that conversation with Mr. Patenaude, that the concern was what does this do to the overall net value of the transaction. Certainly it was not in my mind anything about conservation land. The way I heard it then and the way I still hear it now is this was a done deal that was part of the deal to get the company. To get the water company bought this was already done and was just a matter of making sure the Ts were crossed and the Is were dotted. That is my recollection. I believe that to be accurate. I’ve said before with the testimony that we’ve had I’m particularly interested in Conservation Commissioner Gillespie’s testimony tonight and previous nights and the professional testimony that the developer brought to the Planning Board, I frankly think that from an environmental standpoint, with the runoff treatment and everything that is contemplated, I think the property is going to be better off developed. That is where I’m coming from. I don’t get to vote here at this committee, but when it comes back to the full board I will not be voting in favor of this. Alderman Dowd Just a couple of things; listening to the piece that you were talking about and you mentioned another area across from Heron Pond, which to the best of my knowledge is not developed, but we keep saying this is the last developable piece of land, but… Alderman Pressly In Nashua. Alderman Dowd …In Nashua. So that other piece is in Merrimack. Budget Review – 03/26/12 Page 13 Alderman Pressly Right. Alderman Dowd Certainly I would hate…I didn’t like seeing that development going in across Manchester Street next to the pond, I am even more against one across the street on the other side. I think those are the pieces of land that really impact our water. Just for clarification, the procedural aspect, if we as a committee were to approve this tonight then I assume it goes to the full board as early as tomorrow night? Chairman McCarthy Probably not tomorrow night. Alderman Dowd So my question is how long will the process take before you could actually make an offer to the developer? My concern is that having listened to his attorney tonight that he is moving forward, that he is making commitments and contracts and stuff. I have to believe dealing with commitments on contracts that the price is going to go up. So even if it were sold to us I have to believe that price that we’re talking about right now is not going to be the number that will make the deal. I’m a little hesitant with the number as it is; I’m certainly more hesitant if the price goes up based on what I have heard tonight relative to the impact on the water supply. As I stated at the last meeting when we brought it back to this committee I, in retrospect, would have liked us to have protected that piece of property for the impact to the residents and the impact on Concord Street, which is going to have a detrimental affect. But at the price we are looking at right now, I’m having real concerns. Alderman Cookson Thank you… Chairman McCarthy I should correct one thing. We certainly could take action on it tomorrow night if we wanted to. Alderman Cookson I was actually going to begin my statements with that fact, and although I was opposed to it on a similar motion a few years ago when there was a firefighter’s collective bargaining agreement that was taken up on a Monday evening and then was brought before the Board of Aldermen the very next night, that Tuesday without the benefit of minutes or the opportunity to review, we didn’t know that was coming before us, I was opposed to that, I have concerns and cautions, but your points are very valid about cost and the ability to get this before a full Board of Aldermen. I think in this instance I would be supportive if the majority of the Aldermen, again if we get a favorable recommendation out of committee this evening and a majority of the Aldermen would like to take it before the full board tomorrow night I would be supportive of that in this particular instance. Budget Review – 03/26/12 Page 14 I also wanted to say that Attorney Westgate made mention to the February 7, 2011 meeting before the Pennichuck Special Water Committee, again I’m thankful that we have technology in the chamber, I was actually able to pull up the meeting minutes from that meeting and I think they are important in two aspects; one is I unfortunately was not able to be at that meeting, I had called in and I arrived at 7:42, 42 minutes after the meeting began, and that particular evening there was a discussion about 200 Concord Street is the title of the discussion, and that is where both Kevin Slattery and Bernard Plante were invited to share with the committee their plans regarding the 34.5 acre property that they were contracted to purchase. It was a brief presentation by Mr. Plante, just a matter of maybe 10-11 paragraphs worth of content that are transcribed in the minutes. And then there were a series of questions. That evening we had Alderman McCarthy chairing, we had Alderman Tabacsko, Alderman Sheehan and Alderman Melizzi-Golja were there but they were not members of the committee that evening, and they participated in the conversation. Again, this meeting took place on February 7, 2011 so just about a year ago. There was a question from Alderman Tabacsko and his question says: “So what is this committee’s role here?” A very valid question. We hear this presentation, we understand that there is going to be development at 200 Concord Street and what is the committee’s role. Chairman McCarthy your response that particular evening was: “Because it is going to come out publicly…” again they had just presented their plan to the Community Development Division just a few days prior to coming to the committee to give this presentation. So Alderman McCarthy’s response is: “Because it is going to come out publicly through the application process, I wanted to make sure the Board was aware of it because it will change the land holdings and cash positions of Pennichuck as we are pursuing the acquisition, and that is basically it. We don’t have any regulatory role and there are no exceptions being sought. I would also point out that the entire project is essentially downstream of any of the water supply.” That was Alderman McCarthy’s statement that evening. Basically it is just because we are concerned about the cash positions and the land holdings of Pennichuck that we are going to pursue. I think we have heard since then that there are other reasons why this property is important; it is a natural bog, if you destroy a natural bog…it serves a purpose within the water ecosystem, if you destroy a natural bog it will take hundreds of years to return to that capability if it ever returns to that capability within the water ecosystem. Any time that you add impervious surface to an area it can’t be good. We’re trying to do better, we are trying to conserve, we’re trying to make sure that we don’t over pave areas. In this particular instance we are welcoming it in a sensitive area. People may argue the fact it is just a bog, but it has a purpose within the water ecosystem. I would be concerned about that. I know that, I believe it was just within the past year or two, it was at least last term I believe there was a group that came before the Infrastructure Committee meeting; it was very similar to the legislation that we are going to be hearing this Wednesday evening about development in front of the four hills landfill. We had a group of concerned citizens come forward and say we don’t want development there, we don’t want a gas station, we don’t want a fast food, we don’t want the lights. I don’t see a lot of distinction between that area on West Hollis Street in front of a landfill where we didn’t want the development versus this area on Concord Street where again it is a very sensitive area. Regardless of where the wards are and what ward you are representing, I think we need to look at the City as a whole and really understand the impact of this. When we went into this deal I believe it was former Alderman Teeboom when he was giving testimony said there were three people that were opposed to the takeover of Pennichuck. That was Alderman Teeboom at the time; it was Alderman Williams, the former Ward 9 Alderman, and myself. I was, I was opposed to the takeover of Pennichuck, but I was able to see that the preservation of the water and the drinking supply and the ability to conserve and save the wetlands was an important piece for the City of Nashua. It was important that we took over. I ultimately supported Budget Review – 03/26/12 Page 15 that, and I hope that many of my colleagues will come to understand and realize this is just as important. We made a promise to the citizens of Nashua to help protect the watershed. There may be other pieces that are more important, this is still the watershed. We went out and we said we’re going to purchase Pennichuck, not just for the water, not just because we were able to provide better rates to our citizens, but because we could also take the land and we could preserve the land that was left. I’m going to support this legislation, R-12-18, Authorizing the Mayor, and again you have to understand how hard that is for me; $4.85 million is not peanuts, it is a lot of money. I am not a supporter of bonding in most instances. I support this one because it finalizes the deal that says we care about the water, we care about the land that supports the water, that cleans the water, and this is just as important as any other part. I’m going to support this. If we have a majority this evening I will also support pulling it out of committee and voting on it tomorrow evening. Chairman McCarthy I need to respond to part of that because while I don’t think you did it intentionally; I think my response to Alderman Tabacsko’s question was taken out of context. Alderman Tabacsko asked what authority the committee had and why we were here listening to Mr. Plante and Mr. Slattery. My response was in answer to that question; you had an existing executed contract between two parties, the purchase and sales agreement that dated back to 2005, Pennichuck was bound to sell the property under the terms of that purchase and sales and intended to do so. We did not have any right to interfere with that. The only reason it comes to the board at all at that point is because one of the features of our merger agreement with Pennichuck was that if there were any substantial change in the holdings of the corporation those had to be pre-approved by us. As a result changing $2 million worth of real estate into $2 million worth of cash required our approval… Alderman Cookson I certainly didn’t mean to misinterpret… Chairman McCarthy If I could finish… Alderman Cookson …the response. I just want to say I read your response verbatim and because I was not at the meeting that was the context that I understood it so I welcome your response. Chairman McCarthy Another feature of the contract is that we could not interfere with the daily business of the corporation, which executing that agreement was part of that, and in fact our merger agreement prescribed a million dollar remedy if we interfered with the corporation’s business. Yeah is it concerning when somebody builds on top of a bog, yes. I don’t think anybody would argue that I am probably the most fervent conservationist on this board… Alderman Cookson I would agree. Budget Review – 03/26/12 Page 16 Chairman McCarthy …we can’t do anything about it in this particular case. We did not have any authority to intervene at that point. Could we have gone back and asked for them to negotiate a different…yeah we probably could have. I don’t think we would have gotten anywhere with it at that point. That is water over the dam if you will pardon the pun. Where we are at now, I have severe problems with this being related to the water supply. One of the questions I asked Mr. Ware the other day is does Pennichuck want to pursue buying this and he said no. I said why not and he said we can’t put it back in the rate base. This is land that was withdrawn from the rate base with the consent of the Public Utilities Commission and a finding by the Public Utilities Commission that none of this land was necessary to the operation of the utility. So we can’t go back now 15, 20 years later and say oh you were wrong this was really part of it and you shouldn’t have ever let us take it out of it. So if we buy it we’re spending taxpayer money on it not ratepayer money. This cannot be reimbursed by the utility… Alderman Cookson I understand… Chairman McCarthy …because they can’t get money back out of the water rate. Alderman Cookson And I take that very seriously, but again to one of the speakers this evening, asbestos wasn’t hazardous 10- 15 years ago either. Alderman Deane I have a couple of questions about taxpayers’ money. The property that the North High School sits on, did we overpay for that? Didn’t we have an opportunity to buy that at a lesser amount than what we finally ended up paying for it as a city? Chairman McCarthy Yup, and I supported buying it at that price, and we didn’t do it. Alderman Deane But I’m saying…and the significant increase was from what we could have bought it at and what we … Chairman McCarthy It was probably about double because the developer went and got approvals on it. We had originally looked at buying it for a park. There was no consensus on the board to pay for it for a park at those prices or for conservation land or just to keep the development from happening on it. It wasn’t until we needed a Budget Review – 03/26/12 Page 17 site for a high school that anybody thought it was worth paying $7 million for. That wasn’t the majority of this board that thought it was worth $3.5 million when we could have acquired it at that price. Alderman Deane I’m not pointing blame at anybody. The Stellos’ Stadium property that was another one where we had an opportunity and there was a lot of debate that went on and in the end we paid through the nose for that. When I hear the concerns about the value of the property yeah it seems like government has deep pockets or it seems like we do our business and decisions are made by, you know people vote the way they feel they should vote or how they represent their constituents, but this is another example of the North High School and Stellos Stadium. This is what this is. That is just my opinion. The other thing Mr. Chairman, the bond council and floating the bond that is all irrelevant. If we were to pass this we could pay cash for that property if in fact it was accepted right? We have cash on hand. When we let these bonds the bonds don’t go out, we’re using cash to fund the projects correct? Chairman McCarthy Of late I believe we have been letting the bonds first. We sometimes will use bond anticipation notes… Alderman Deane Right. Chairman McCarthy …I think the practice of paying cash out of the fund balance and then re-establishing it has stopped. Alderman Deane Why is that? Chairman McCarthy Because it is not really the right way to do business. Alderman Deane That’s all I have. I just wanted to go back in history on a couple of parcels we purchased as a board. Chairman McCarthy I think the lesson there is whenever we are competing for a developable piece of land we’re going to wind up paying a high price for it. Most of the purchases we have made are for conservation lands that are essentially wetlands and we can collect those up at reasonably low prices. Alderman Deane I agree with you, that is why when I hear Mr. Gillespie give his comparison on the acreage and the value it is not correct. Is the property less money per acre, yeah well how much of it is totally under water? It is not Budget Review – 03/26/12 Page 18 really doing an equal comparison, and how much engineering has been done on it and how many approvals have been had on it? All of that adds value to the property as you move forward. Alderman Pressly Thank you. I would just like to clarify something that was said. I agree with Alderman Tabacsko, when I left this meeting and when I voted to purchase on November 9, 2010, I agree with you my perception that night based on what was told to us was that 1) there was absolutely nothing we could do about it, there were two contracts and agreements that would come with the purchase, and I think Alderman McCarthy described it totally accurately that we would either in the purchase we would purchase these agreements or we would get the proceeds from the agreements, and that was what I understood. What I did not know and the only person who has indicated that they did know that it was the very last parcel of anything that Pennichuck had in Nashua was the Mayor, and she has since then said yes she knew it was the last parcel, but our negotiators and consultants did not. I think that is enormously important and I think to me that adds a great deal of value not only monetarily but emotionally. I think we had a right to know that that night. I think if I had know that night that if this is sold there will be nothing in Nashua that we will save in the way of raw land from the purchase…I think we sort of goofed and the only way to remedy that is to buy it. In many people’s minds and hearts it is more money than it is worth, but we have paid high price on a lot of things. Government has an interesting way of doing that. Not only Stellos and the High School, but there are many a times, government often times does not get the best deal in town. I think we have an obligation to remedy what maybe could have been handled differently had we known. Thank you. Alderman Dowd I agree with Alderman Deane on the prices of those two pieces of property; however, in retrospect, we bought those pieces of property because we were going to use them for the public good. We built a big high school which students are going through including the recreation fields and Stellos Stadium; it is used by hundreds and hundreds of kids every week. If we spend the $5 million for this piece of property it is going to sit. I don’t want to belittle the fact that the land is important and we should have rescued it a long time ago, there appear to be reasons that we don’t have it. The thing I’m struggling with is yeah there is going to be an impact to Concord Street and the neighborhood, but for $5 million you can do a lot of mitigation and probably not even spend halfway near that much to do the mitigation that is going to make it probably no more impact than it is today. I’m still struggling with the price of that land. Alderman Cookson Thank you. I respect the previous speaker’s comments and I have to ask, I know that one of our speakers keeps on bringing up the idea of bottling water and I’m wondering if there is any merit in that and if so is there the potential for an additional revenue stream that may eventually help out with the education, help out with conservation. I’m wondering if there is merit behind the idea. Chairman McCarthy Mr. Ware’s answer to that question when I asked him it on Friday was he had investigated it some years back and that if we could convince whoever does such things to certify those springs as being natural Budget Review – 03/26/12 Page 19 springs, which is somewhat of a stretch since those springs come up out of a 2” pipe that sticks up out of the ground, we would have to pipe it to a transfer station near Concord Street and send it off, and when he had investigated that and talked to bottling companies about the cost of bottling, etc., he could not make it come out cash positive, which is why they didn’t pursue it. Alderman Deane Don’t we have an ordinance in place that does not allow water bottling facilities in the City of Nashua’s limits? Chairman McCarthy We in fact do. Alderman Deane I think we passed that in 2003 or whatever date it was. Chairman McCarthy Yeah we passed that… Alderman Deane I mean that could be changed but… Chairman McCarthy We passed that to prevent someone from building a plant that bottled our drinking water and shipped it off somewhere else. Alderman Deane I think that was just reactionary to what was going on if I remember correctly. Alderman Wilshire Thank you Mr. President. My decision tonight is based on the fact that Parcel F is not in the Water Supply Protection District and that there is really no evidence that the development will have an impact on our water supply. I’m not going to be supporting this legislation. Chairman McCarthy The motion is to recommend final passage. Is there any further discussion? Alderman Deane I would like you to go around the room and ask everybody to identify their vote. Budget Review – 03/26/12 Page 20 Chairman McCarthy You are asking for a roll call. A Viva Voce Roll Call was taken, which resulted as follows: Yea: Alderman Deane, Alderman Cookson, Alderman Donchess 3 Nay: Alderman Wilshire, Alderman Dowd, Alderman Melizzi-Golja, Alderman McCarthy 4 MOTION FAILED Chairman McCarthy Is there another motion? Alderman Pressly Will we have time for remarks? Chairman McCarthy We have another item of business… Alderman Pressly Oh sorry about that. Chairman McCarthy …but we need to dispose of this item some way. Alderman Dowd I would like to make a motion for passage of authorizing the Mayor and the City Treasurer to issue bonds not to exceed the amount of $2 million… Chairman McCarthy We have to… Alderman Wilshire We’re still on this one. Alderman Dowd Oh. Budget Review – 03/26/12 Page 21 Chairman McCarthy …we have to do this one… Alderman Dowd Oh, I’m sorry. Chairman McCarthy We can recommend indefinite postponement or we can re-table the resolution. MOTION BY ALDERMAN WILSHIRE TO RECOMMEND INDEFINITE POSTPONEMENT A Viva Voce Roll Call was requested, which resulted as follows: Yea: Alderman Wilshire, Alderman Dowd, Alderman Melizzi-Golja, Alderman McCarthy 4 Nay: Alderman Deane, Alderman Cookson, Alderman Donchess 3 MOTION CARRIED MOTION BY ALDERMAN DEANE TO TAKE FROM THE TABLE R-12-22 MOTION CARRIED R-12-22 Endorsers: Alderman-at-Large Brian S. McCarthy Alderman Michael J. Tabacsko Alderman Richard A. Dowd Alderman-at-Large Lori Wilshire Alderman Mary Ann Melizzi-Golja Alderman Diane Sheehan Alderman Kathy Vitale Alderman-at-Large Jim Donchess AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED THE AMOUNT OF TWO MILLION DOLLARS ($2,000,000) FOR CHARLOTTE AVENUE ELEMENTARY SCHOOL HVAC IMPROVEMENTS MOTION BY ALDERMAN DOWD TO RECOMMEND FINAL PASSAGE ON THE QUESTION Alderman Deane Why aren’t we going into that capital reserve account? Doesn’t that have like close to $5 million in it? Chairman McCarthy No. I think it is down substantially below that now; it is down to around $3 million so this would… Budget Review – 03/26/12 Page 22 Alderman Deane What have they been using that money on? Chairman McCarthy We’ve voted to approve money from there whenever it has been spent and it has been spent on some of the deferred maintenance items that they have come back. I could be wrong, there could be $5 million left, but I don’t think so. We would have to look that up. The feeling was given the current bond condition, the current interest rates, that this would be, and the magnitude of this compared to the balance of the account that we would be better to do this and do some of the other deferred maintenance items for cash out of the capital reserve fund. I would reiterate that I don’t believe the number will come to $2 million at the end. There is about $1.9 million left in the other bond. I asked about that the other night and we will not have finalized numbers until perhaps June when Harvey has finished with invoices from the subs. We will have a final number before the bonds are let and they will be let for whatever the correct amount is. I think it is around $1.6 million, and we will just adjust it down at the time. Any further discussion of this resolution? MOTION CARRIED GENERAL DISCUSSION Alderman Pressly I’m concerned as to what might be coming along any time in the near future just as far as bonding. I was surprised to learn the other night that there might be a public works project coming along at $15 million and then I’ve heard discussion of different departments that are exploring different projects. I would like to know if it is appropriate, if we’re going to start voting on these things piece by piece, if we could get some idea what people are even considering or thinking about in the next couple of years because that might make a big difference in voting on something today if you knew what is coming down the pike. Chairman McCarthy I discussed this with the Mayor and the CFO and Treasurer last week, and we will get a presentation to the board on the anticipated bonds. The Treasurer is currently relaxing on the beach so we will have to wait until he returns. Alderman Pressly That makes it sort of tough. I know the one thing that I think is the most dangerous thing in the City that needs to be fixed immediately are the sidewalks on Main Street. If I had my druthers I would like to submit something, a $4 million bond to get those fixed right away. The hope that there would be some money from the parking meters it turns out that there is not going to be at least this first year. If I looked at all of the things that I think need priority in this city it might be quite different than what the rest of you or each one of us has our own opinion as to what our personal priorities are, but it is tough…I know the group has turned down the one that was really important to me. I think is that fair just to do them as they come in without Budget Review – 03/26/12 Page 23 knowing what the total picture is and not knowing the full impact? Now that this one appears as though it will be turned down, I would like to know what else is coming along before we even vote yes or no on this one. Chairman McCarthy I will work to get …there is no requirement that we do them as a totality. I will work to get that information to the board as quickly as we can. Alderman Pressly Just one more comment; that might effect how I support the things that are coming up pretty quickly. If we don’t know the totality of what is out there and what the choices are it makes it hard to vote on anything currently. Thank you. Alderman Donchess Mr. Chair I would like to see that presentation as well, but my comment is about this easement. I’m going to keep it very brief because I know what time it is, but it is astounding to me that given the ordinance that was in effect, an unrestricted recreational easement, that the Legal Department of the City or whoever agreed to this would have agreed to the types of limitations that occur in here like no bleachers despite the fact that the ordinance says that we can make whatever improvements we want, the restriction of these hours, and then this absurd thing of saying that one musical group can play but not another. Where did that come from and why in the world would the City agree to such a thing? I strongly endorse the Chair’s previous remarks that we should try to get this thing redone because I just can’t believe that the City would have agreed to this. Chairman McCarthy I will work on that. I can tell you where that came from, which is this is the field that the Spartans have been using to practice on. Alderman Donchess Yeah. But they can use it but not the band from the Junior High or whatever or the singing group can’t go out there? It is just ridiculous. Alderman Deane How many other ordinances have been altered unbeknownst to our… Chairman McCarthy If they are unbeknownst I can’t get them. Alderman Deane Do we care anymore? Do we really care? Budget Review – 03/26/12 Page 24 Chairman McCarthy Yes we do. Alderman Dowd We do. Alderman Deane We do? Chairman McCarthy Yeah. Alderman Deane What are we going to do about it? Chairman McCarthy I’m going to pursue getting legal to come in and tell us how we did this… Alderman Deane I would like to know… Chairman McCarthy …and … Alderman Deane How does that affect the legal documents that were filed with the registry? Chairman McCarthy I think we are going to have to re-record the easement at some point in one that is agreed to by this board. I don’t think that one meets the letter of the ordinance that allowed it. Alderman Deane I totally agree with you. I’m just wondering why was it done like that? That is my question that you can… Alderman Donchess I think we should get a report because these things are being done without our knowledge, we should get a report how…this is so absurd, we should get a report as to how this happened, did Legal do this on its own, did it just go out there and say oh fine you know whatever you want you can have it, we’re going to just Budget Review – 03/26/12 Page 25 restrict the public’s rights to do all of these things just because you’ve asked? How did this happen? I think we need a report. Yes it is only one parcel, there is still some use allowed, but how much of this is going on on other subjects that we don’t know about? I think we need to know how this happened. Chairman McCarthy I will try to get an answer to that. Alderman Deane I would hope that you do more than try. Chairman McCarthy I would hope that I do more than try too. Sometimes it is… Alderman Deane We do have some authority here. Chairman McCarthy Yes I understand that. Alderman Deane Well let’s use it. Chairman McCarthy We will. Alderman Deane Thank you. Alderman Cookson I had a conversation with Attorney Bennett this afternoon and I was asking him for the purchase and sales agreement between North Concord Street Properties, Pennichuck, and Southwood, and he indicated that he would be willing to make that inquiry on our behalf, but because of the confidentiality agreement that is part of that contract we would have to do it in a closed session. I wanted to at least gauge the interest of the other members of the Board of Aldermen because it would impact you as well if we were to do this. I would appreciate your support in moving forward and asking Attorney Bennett or our legal counsel to request the purchase & sales agreement. Chairman McCarthy I think it would be fine to see it if we can. Budget Review – 03/26/12 Page 26 Alderman Cookson Thank you. Chairman McCarthy I do understand that we have to look at it in non-public session and we will have to seal the minutes of that meeting because we don’t control the open … Alderman Cookson I understand. So with at least a few nods within this audience that is here this evening I will go forward and request that of our legal counsel to make your… Chairman McCarthy Where do you want to do that? Do you want to do that before this committee or…I’m not sure which committee is the right one to do it. Alderman Cookson I think it would be of interest to the entire board if that is possible. Chairman McCarthy Do you want to do a special board… Alderman Deane Schedule a meeting and everybody can show up if they want to. Chairman McCarthy I will follow up with Attorney Bennett and schedule a meeting. Alderman Cookson Wonderful. Thank you so much. Alderman Tabacsko I guess one thing I would be interested is if there is any kind of caveat before we go into a non-public about this subject, is there any risk. This has gotten so kind of convoluted I just would like to make sure that Corporation Counsel thinks it is a good idea that we pursue this. Chairman McCarthy I will ask him. I think we can. There is an argument that probably does not apply but could be made that since we are in fact the shareholders and not the owners of the agreement, it is private to the corporation itself, but I would expect that we would be allowed to see it. Budget Review – 03/26/12 Page 27 Alderman Tabacsko Thank you. Alderman Cookson I was just going to say something very similar. The conversation that I had with Attorney Bennett said he could make the request. It is up to the parties to share it with us. Chairman McCarthy Is there any other discussion? PUBLIC COMMENT Fred Teeboom, 24 Cheyenne Drive I’m going to be brief. I asked three questions, answered two of them. The first one who knew all of the HECOP buildings were sold prior to the acquisition; who? I’m not sure I got an answer to that. Did you …who knew about the HECOPs being sold? Chairman McCarthy I said I thought that I knew it. We certainly have had discussions in the past about it would be great if we got the company to get rid of the HECOP buildings because they were of no interest to the City’s operation of the water utility. Fred Teeboom For the record, now I do want this on the record, non-public session that has been declassified, not the Attorney Upton the attorney that came after Upton, the older fellow, forgot his name. The guy that came before Ardinger and Company. Chairman McCarthy Are you talking about Attorney Reisch? Fred Teeboom I think that is his name. Chairman McCarthy Alan Reisch, yes. Fred Teeboom He told us worth about $10 million, should take that into account in the purchase. The first thing he said he would do is sell the buildings, get the $10 million. I completely disagree Mr. Chairman your statement that it was not go into the real estate business, absolutely in the real estate business because Pennichuck could Budget Review – 03/26/12 Page 28 have sold those buildings. They need money to pay the $9 million annual debt to the City. From my calculations it is very difficult for them to make that. I’ve gone around and around and around when I was an intervener in Pennichuck Corporation they could never really explain it. Part of the reason of course is that the PUC accounting methods are totally different from any general accounting methods so we could never get to closure on how the $9 million is going to be paid. It is going to be very iffy because remember the current, the old Pennichuck Corporation didn’t have that kind of a debt. If they can’t pay the $9 million the City has to make up the difference. That is clear because the City bought the municipal bond, taxable bond that is why it is 4.09%. If you had a non-taxable bond it would be 2.89%. I got that straight from Treasurer Fredette. About $10 million, Attorney Reisch told us that is worth cash in the bank. Second question you were asked, who knew Parcel F was exempted from the Pennichuck purchase. I guess as I understand it, it was known back in 2005? Chairman McCarthy No. There was some discussion that Pennichuck had an intent to sell it back in 2005. Fred Teeboom So who knew it was going to be exempted from the Pennichuck purchase? When was that or who knew it? Chairman McCarthy As I explained before in our last discussion of the due diligence process it was one of the things that was in the list of items that we were given from the company and it was one of the things that was discussed on the evening that Alderman Pressly mentioned. Fred Teeboom November 9, 2010, late at night in great confusion. Chairman McCarthy Certainly earlier than this. Fred Teeboom You didn’t know about this yourself? Chairman McCarthy What Parcel F? Fred Teeboom Yes, that it was exempted. Budget Review – 03/26/12 Page 29 Chairman McCarthy I certainly knew it when we saw the due diligence report. Fred Teeboom Before that? Chairman McCarthy That was at the time that is when it was appropriate for us to know. Fred Teeboom Never discussed in the private meetings with the Mayor where you have your special little meetings with the Mayor with you and the Mayor and the attorneys met… Chairman McCarthy I don’t know what private meetings you are referring to. Fred Teeboom The same ones I was told not to come to anymore when Rootovich was president, and after three meetings attending it and reporting back to the board I was told not to attend those meetings anymore, but you did, the Mayor did, one other Alderman did, Upton did, Bennett did or McNamee did, but this was never discussed in those meetings with the Mayor? Chairman McCarthy We had no negotiations with Pennichuck and no…you are talking about meetings that took place during the Streeter administration. There was certainly no substantive discussion with the corporation of a merger agreement in that timeframe. Fred Teeboom Never discussed when you had the same meetings with Mayor Lozeau? Chairman McCarthy I never had any meetings with Mayor Lozeau… Fred Teeboom You don’t have those meetings …audio inaudible… Chairman McCarthy I was invited to one or two, but there were no regular meetings… Budget Review – 03/26/12 Page 30 Fred Teeboom Not like under Streeter? Chairman McCarthy …like Street had had no. Fred Teeboom Okay. The third question you didn’t address; if you turn the page of my handout, you didn’t address that question. Chairman McCarthy Which one? Fred Teeboom Well the one that is highlighted in gold and yellow and underlined. Chairman McCarthy Who knew the terms of O-96-06 were changed? Fred Teeboom Yes. Chairman McCarthy I most certainly did. I said I had no idea that they were changed until I saw the changed wording and that is why we’re going to look into how it got that way. Fred Teeboom Alright so that is something you understand this is a serious problem. Alright. Thank you. I am disappointed with the vote not because I care about that land all that much, not because I care about that whole Pennichuck purchase all that much, I think it was a disaster in the making because it has shown and is showing bad faith, all of those people 86% that voted for the acquisition, bad faith. Geoff Daly 48 Walden Pond Drive Mr. Chairman just to clarify what you were told by Mr. Don Ware, the City GIS maps do very clearly show that we have a whole series of storm water drains that go down into the Kettle Bog… Alderman Deane Yup. Budget Review – 03/26/12 Page 31 Geoff Daly They overflow into the swale. As of this afternoon the swale was flowing down towards the crossover that goes into the area where the springs are. We do have flow and rain, well actually water was flowing off the back end of Clovelly Apartments this afternoon. Not much, but a little bit. So we do know the water does flow that way. The other thing is you mentioned about the springs being fed from the upper two ponds, which are adjoined to the Harris Pond. The Harris Pond is actually fed by Bowers Pond where the inlet for the Merrimack River comes in, and as of this afternoon there was water flowing from the Merrimack River into the Bowers Pond. They are pumping. They may not be pumping at the maximum rate. The COE is actually 32 million gallons a day… Chairman McCarthy Could I ask how you know that water was flowing in? Geoff Daly I happened to have gone down by the fish & gun club and with a pair of binoculars you can see it. Chairman McCarthy Are you looking at water coming out of the outtake or at one of the aerators that is used to stir the water in the pond? Geoff Daly The aerators are not in that part, they are actually mounted right alongside the Manchester Street bridge and in… Chairman McCarthy I know where the three… Geoff Daly …the Harris Pond. Right. Because Chris County actually told me they had to put in a new compressor pump and he pointed out the new shed that was being built and was actually being commissioned the day we actually did the inspection with the DES. He pointed out to the DES exactly where they were and then the main one is right alongside Manchester Street next door to the bridge. But Bowers Pond is the intake from the Merrimack River. I didn’t go down to the Merrimack River because at the time I didn’t have enough time. But to come back on the bottling of the water, yes you are correct Don Ware did look at it, I think it was around about 11 years ago, but they also did bottle it in 2007 and put on their Pennichuck Spring Water, and I believe Alderman Deane at that time Alderman Richardson gave you a bottle and a few other people I believe received some bottles as well. Budget Review – 03/26/12 Page 32 Alderman Deane All I have is a bottle of beer left. Geoff Daly Anyway the thing is yes he was right they were going to pump it out towards Concord Street. It is a long distance, but if they were to take the existing piping as is right now that piping goes down around about 25’ top 30’ into the ground. Is it being supplied by the water that comes down through the swales in that area, quite possible. I refer back to the handout I gave you the other day written by the Cornell student. I would like to read to it: “The infiltration rates are often significantly higher than precipitation rates which cause little to no direct runoff.” So we know that whole area, and he is talking here the majority of the Pennichuck Brook watershed has soils with high infiltration rates. That includes the whole area around Parcel F, Parcel N, which is on the other side in Merrimack, the whole area. He wrote a 62 page thesis. If you go on to the Nashua patch I actually posted it there and you can see the whole thesis. This was all based on NRPC, Pennichuck data and his own data. We have a very valuable watershed and I’m very disappointed tonight that you failed to allow the bond to go forward. Tonight I will be going up to Concord, I will be visiting with the Attorney General’s Office, and I will be making a specific charge and it is with reference to the fact that this board was bypassed and the Mayor has refused point blank to answer any of the questions that have ever been put to her and that includes Attorney McNamee when I have communicated with him. As I said back in September something smells. Tonight it even smelt worse. I’m sorry the people who voted no tonight you are going to have to take the consequences when the next balloting comes because the people of the City of Nashua voted for you to buy the Pennichuck Water company and all of the land that goes around it. We failed. I’m sorry; you are going to have to pay the consequences. I don’t like it, but tonight I will be up in Concord at the Attorney General’s Office and I will be making my statements accordingly. Let it drop where it drops. I will again reiterate the Judge found in my favor, granted a non-suit with prejudice which means I can go back to court if I want and now I am being presented with papers demanding I pay $10,000 to Mr. Pinsonault who is representing Mr. Westgate. The City’s attorney, thank goodness, so far has not made any other claims after we went back to court, and I think he did the right thing because it would be a double whammy on the City because the City owns Pennichuck and the City owns the city. Mr. Buffum never went in and made his claim, he wanted any monies. It was only the City and Mr. Pinsonault, but the City has backed off, and Mr. Shepherd who represents me said that was a good thing. Otherwise there would be two strikes against the City, against a citizen who is trying to make sure the right thing is done. I’m glad President McCarthy you are going to look into why this board, general board and chamber was never re-approached on O-96-06. It is a flagrant bypassing of your own City Charter and State law. And I have gone through it very very carefully with the help I must say with the City Clerk giving us the appropriate documents and paperwork so we could make sure we were doing the right thing. But I’m glad you are going to approach it because as Alderman Deane said what else has happened, what else has been passed and not passed through your Chamber? You make rules, you make regulations, and if somebody goes and dumps on you by bypassing you you have within your own City Charter the right to open an investigation. It is written in your Charter to open an investigation. Those people who are investigated they have consequences. Please I’m very disappointed that this Chamber has not done what it said it was going to do. You passed and said you were going to have a bond hearing and now tonight it is gone, and it is not right. The people of Nashua deserve better. Just remember as I said this coming voting season, and yes I am not registered to vote, I haven’t voted in my whole life and that is my choice. Just like you have choices I have choices. Please just remember tonight the City has suffered terribly. Budget Review – 03/26/12 Page 33 And yes I said it was peanuts, I said it was peanuts in the whole picture of what we’re buying, $4.85 million against the $200 off million it basically is, it is a very small amount of money to save something because once that development is in and there is a problem the City is the one who has got to clear it up. The developer is not going to, he is gone. The homeowners are not going to do it. I live in Thoreau’s Landing, it is a condominium association. We’ve got the same problem down there with asbestos and it is costing us a fortune to clean it up. We are going for grant money to do it. Do you think an over 50, 85 unit system is going to go and do that, of course not. They are going to turn around and ask the City to do it. The government hands out too many things sometimes, we have got to have some consequences, and the consequence is now if that development goes in, there is a problem, the City is faced with it. That is why I’m very very sad, very disappointed that you didn’t stand your ground and put the money there. As I said earlier, you don’t have to use it, as long as it is there. You had the opportunity and we didn’t do it. Thank you. REMARKS BY THE ALDERMEN Alderman Deane Mr. Daly there is still one more opportunity at the full Board to try to pass it at that level. This committee only makes recommendations. Nothing is final until the full Board acts upon it. Thank you. ADJOURNMENT MOTION BY ALDERMAN DEANE TO ADJOURN MOTION CARRIED The meeting was declared closed at 11:01 p.m. Alderman Mary Ann Melizzi-Golja Committee Clerk