Pennichuck Water Special Committee

REPORT OF THE PENNICHUCK WATER SPECIAL COMMITTEE FEBRUARY 7, 2011 A meeting of the Pennichuck Water Special Committee was held on Monday, February 7, 2011 at 7:02 p.m. in the Aldermanic Chamber. Alderman-at-Large Brian S. McCarthy presided. Members of the Committee present: Alderman-at-Large Mark S. Cookson (7:42 p.m.) Alderman Michael J. Tabacsko Alderman Jeffrey T. Cox Members not in Attendance: Alderman-at-Large Barbara Pressly Also in Attendance: Alderman Diane Sheehan Alderman Mary Ann Melizzi-Golja Alderman-at-Large Ben Clemons Bernard N. Plante, North Concord Street Properties LLC Kevin T. Slattery, North Concord Street Properties LLC James McNamee, Esq., Corporation Counsel John Patenaude Bonalyn Hartley, B.P., Admin & Regulatory Affairs, Pennichuck Corp. Chairman McCarthy Alderman Pressly is unable to be here. Alderman Cookson called to tell me that he was at another meeting and would be here as soon as he could. We have two items on the agenda this evening. The first is a discussion of the project at 200 Concord Street and I would like to invite Bernie Plante and Kevin Slattery to come up and join us. DISCUSSION 200 Concord Street Chairman McCarthy For background; this is a project that has been going on with Pennichuck for some time, and I thought it was important since it has gotten to be more public, that the committee be made aware of the nature of the project. Bernard Plante Thank you Mr. Chairman. I am here tonight with Kevin Slattery. Kevin and I are owners of North Concord Street Properties, LLC a New Hampshire limited liability company that entered into a contract to purchase a 34.5 acre piece of property from Pennichuck Corporation and the Southwood Corporation some years ago. Both Kevin and I are lifelong city residents, and we make our living in the building and development business. We take great pride in our business, our past projects, and pay particular attention to our relationships with the communities in which we work and the customers that we serve. Last Thursday we filed a site and sub-division application with the Community Development Department of the City for this 34 acre tract of land. I will point out the location of the property on the plan (copy attached); this is the Henri Burque Highway here as it approaches and hits Concord Street right here, this is Concord Street looking in a northerly direction, the Merrimack town line is right here, and these several streets; Pennichuck, Rancourt, and Dodge that run easterly off of Concord Street. The Big One ice cream store is located at the corner of Rancourt and Concord right here. This small white box is Lillian’s Motel; the larger box is Clovelly Apartments. This is the recently constructed Pennichuck water supply tank, and right here is the Pennichuck Pennichuck Water Special Committee -2- 02/07/11 Junior High School. Thirty four acres is a little bit odd shaped. There is a long thing strip of land that runs all the way out to Manchester Street near the entrance to the Pennichuck Junior High and near Ferry Road. There is a small wetlands that you can see adjacent to Henri Burque Highway behind Clovelly Apartments, kind of a kettle hole. A supply pond you can see just slightly right here, which is the lowest water storage source for the Pennichuck. The new Pennichuck water treatment facility plant is right here, and the pumping station is here. The balance of the Pennichuck property runs up through here and into Merrimack. Our proposal that was submitted on Thursday is to develop 85 units of elderly housing as prescribed under Section 190-42 of the City Land Use Code. Our relationship with Pennichuck Corporation and the Southwood Corporation relative to Parcel F, as Pennichuck refers to this 34 acre piece of property, began in the spring of 2005 and resulted in North Concord Street Properties, Pennichuck, and Southwood entering into a contract to sell the 34 acres in September of 2005. Our proposal is for 2 styles of elderly housing, some free-standing homes that would have 1 or 2 car garages, 2 bedrooms, living room, kitchen, a single level type home, and a single 48 unit building, parking under the building, an elevated structure that would allow people perhaps a little bit older to simply drive into the building, get out of their cars, get on an elevator and up to their housing unit. The property is generally wooded, and as I said earlier abuts the Pennichuck Junior High, the Pennichuck Corporation water treatment plant and a pumping station down there off of Concord Street. There are two critical environmental factors that affect the site. The first is the water supply protection district, which is part of the City’s Land Use Code, and on your reduced plans you will see that water supply protection district limitation marked on yellow. The other limitation is one imposed upon Pennichuck by the Sasaki report that was generated back in 1980 to determine the amount of excess land it owned. That 500’ buffer is drawn from the supply pond in an easterly and northerly direction that is shown in green on your plan. The water supply protection district ordinance, that is the City of Nashua ordinance, prescribes that a conservation zone of 300’ from the edge of the supply pond, actually the high water mark of the supply pond is established and must remain in its natural state, that is no disturbance of that area can take place, no construction can take place, and you will note on the plan that we are proposing neither construction, well actually we are further because of the 500’ Sasaki setback, which is the green line, we fully comply with the City’s setback requirement plus another couple hundred feet. The site naturally slopes to the north, about half the site slopes to the north toward the Merrimack town line and the Pennichuck Brook, and the other half of the site, kind of the midpoint of the site, slopes back toward the Henri Burque Highway. Two storm water treatment facilities are being proposed; one at the northern end of the site and one at the southern end of the site to treat any storm water that is generated within the roadways before it is discharged in one case in the north to the Pennichuck Brook and to the south into the existing little wetland adjacent to the Henri Burque Highway. Simultaneously with the filing with the City on Thursday, an Alteration of Terrain permit Application was filed with the New Hampshire Department of Environmental Services (NH DES). It is a rather extensive document that takes into consideration the soils, the amount of groundwater that we are recharging, and requires that certain best management practices as NH DES calls them, be employed in the development of a project such as this. This project is not being singled out because of the fact that it is owned by Southwood and Pennichuck. Any project exceeding a certain size must file this Alteration of Terrain permit application. I think that sums up our plans. As I said, we filed on Thursday so the process with the Community Development Division and other City departments is about to start. Chairman McCarthy Are there any questions from the committee? Alderman Cox Pennichuck Water Special Committee -3- 02/07/11 Could you just re-state the total number of units, and I know the 40 unit structure and then how many independent? Bernard Plante There are 85 total units; 37 free standing homes and 48 flats in that single building. Did I say 40? I apologize. Alderman Cox It might be my eyes; it is in very small print on the plan. Thank you. Chairman McCarthy Are there any other questions? Alderman Sheehan Are these single-level homes or are there stairs? Bernard Plante They are. Alderman Tabacsko How tall was the big building? Bernard Plante The limitation, that is RA zoning so the height limitation is 35’ and 2 ½ stories. Alderman Tabacsko Thank you. Chairman McCarthy Do you know offhand how tall the buildings at Clovelly Apartments are? Are those two stories? Bernard Plante Those are two. Yes those are two and three actually. Chairman McCarthy So they are about the same height as what you are proposing for that one building. Bernard Plante Correct. Pennichuck Water Special Committee -4- 02/07/11 Chairman McCarthy Any other questions? Alderman Melizzi-Golja At the end of Concord Street there is a four-unit building. Bernard Plante Yes, and I didn’t mention that. There are four attached units immediately north of Clovelly, right adjacent to Concord Street. I said 37 free standing actually there are 33 free standing homes, there are 4 attached homes right there of similar design to the single family and 48 in the single building. Alderman Tabacsko Up here on Concord Street the Lot 7, that is an existing property I take it you are surrounding? Bernard Plante Lot 7 I believe is Lillian’s Motel. Alderman Tabacsko Okay. Alderman Melizzi-Golja I just have one other question. Is there any sort of social clubhouse sort of area proposed or is it incorporated into another building or is there a separate building? Bernard Plante There is a separate building, and it is right there. You can see some parking. It is between the water supply tank and the 48 unit building, you will see a building of similar size to the senior units with several parking spaces adjacent to it. Alderman Melizzi-Golja Okay, so the first one I see going to the circle that first circle, that one right there? Bernard Plante That is it. Alderman Melizzi-Golja Thank you. Chairman McCarthy Anything else? Pennichuck Water Special Committee -5- 02/07/11 Alderman Tabacsko It doesn’t appear that there are any exceptions to existing code that is being requested. Am I interpreting that correctly… Bernard Plante That is correct. Alderman Tabacsko …that this is in fact all well within? So what is this committee’s role here? Chairman McCarthy 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. The water supply is actually drawn from Harris Pond, which is the next one up from Supply Pond that used to be in Supply Pond, but this is below Supply as well so it doesn’t impact any of the water supply part of the watershed. Alderman Sheehan You mentioned that there would be two storm drain issues that might discharge or two different locations. That is not going to be tied into the regular city storm water program? Bernard Plante No. Chairman McCarthy We don’t tie new construction into the city sewers. They are actually required by DES regulation to process on site. Bernard Plante So it discharges into that pond adjacent to Henri Burque Highway and in the case of the north, the overflow for the detention basin that will be constructed goes into a private line that is owned by Pennichuck. Alderman Sheehan Thank you. Chairman McCarthy Any other questions from the committee? Thank you very much gentlemen. Bernard Plante Thank you. Pennichuck Water Special Committee -6- 02/07/11 UNFINISHED BUSINESS - None NEW BUSINESS – RESOLUTIONS R-11-87 Endorsers: Mayor Donnalee Lozeau Alderman-at-Large Brian S. McCarthy Alderman Kathy Vitale Alderman-at-Large Barbara Pressly Alderman Michael J. Tabacsko Alderman Mary Ann Melizzi-Golja Alderman Jeffrey T. Cox Alderman Diane Sheehan Alderman-at-Large Lori Wilshire AUTHORIZING THE MAYOR TO GIVE PRIOR WRITTEN CONSENT TO PENNICHUCK WATER WORKS, INC. PROPOSED FOURTH CONTRACT WITH ANHEUSER-BUSCH, INCORPORATED Chairman McCarthy I would point out the Mayor was unable to be here this evening, but Mr. Patenaude is here along with a contingent to explain the contract to us. MOTION BY ALDERMAN COX TO RECOMMEND FINAL PASSAGE ON THE QUESTION John Patenaude I asked Bonalyn Hartley from the company to be here tonight because of the negotiations that went on between Anheuser Busch and Pennichuck as you remember during due-diligence we indicated that Pennichuck had given us notice to terminate the contract, which was roughly two years out. Since that time Pennichuck and Anheuser Busch have negotiated a new contract, which has gone into the PUC, but part of that contract needs, they want to make sure that the City is aware of the contract and also has a stamp of approval perse relative to the contract because on the acquisition we would be responsible to continue under this contract. Bonnie if you could just give us some highlights. Bonalyn Hartley I would be glad to. First of all I would like to introduce myself; I’m Bonnie Hartley, I am Vice President of Administration and Regulatory Affairs for the company and have served in that capacity and other capacities for well over 30 years. Thank you John. There has always been a contract with Anheuser Busch back even into the 1970s. This is the fourth contract in a series of contracts we have had with the company. They are special contracts, and in the case of Anheuser Busch there are special circumstances, which allow us through a cost of service study to provide a special arrangement for them. As John said, they had written notice to us they were going to terminate the third contract and through some very long and I think good negotiations we were able to come to terms we think are beneficial both to the company, the community, and to Anheuser Busch. They are our largest customer, they are a little over 8% of out total revenue, and the reason that they have special consideration is that they themselves back in the ‘70s invested in a 24” main that goes from our treatment plant up to the brewery. They also invested in metering equipment and other ancillary equipment to serve them. In addition to that, they are the only customer we have who has onsite storage. This is very Pennichuck Water Special Committee -7- 02/07/11 important because that is a consideration that gives us some flexibility in seasonal peak times because they are not a drain on the system. Those are the main reasons why they are entitled to a special contract. It is also benefit to the other ratepayers and customers in Pennichuck Water Works (PWW) because they are such a large customer and all of the costs that are allocated to them and the rates that they pay help to mitigate other rates for the general meter customer, and even residential customers. So it is an important contract and we are pleased that we were able to come to some what I consider favorable terms for both parties. The key components of the contract; under the old contract we had made available to them 2 million gallons per day of water. Well one of the reasons that the third contract didn’t work well for the company was the fact that they had been able to develop some conservation measures within their plant and that combined with the major upgrades we had at our treatment plant created a mismatch in cost allocations to them, and they said well we don’t need 2 million gallons a day anymore, we are not using it, we have come up with all kinds of recycling of water, which is a good thing, and we don’t need what we had originally asked for in contract 3 and in prior years. At that point, we said well let’s go back and reconsider this and what do you think that you would need to be allocated to you because the allocation of how much we reserve for them is how their costs are allocated in terms of what their rates would be. In this case, they said 1 million gallons per day would be sufficient. The contract calls for Pennichuck to provide about 1 million gallons per day, peak flow of about 1.5 million gallons per day, max hourly of 2 million gallons per day, and this comports to the cost of service study that we now have before the Commission for approval, and that would be the allocation of costs to other customers as well. The contract is broken out into three separate charges and they are going to be based on the actual volume of water used by Anheuser Busch each month. A monthly meter charge; they have two 6” meters and that is going to be a fixed charge every month of approximately, well on the pending rate case of about $1,600 a month. With the two meters combined it would be about $3,200 a month. That is a fixed charge. In addition to that we negotiated what we call a based monthly fixed fee, and that is to ensure that they are going to pay their share of the expenses going forward. Regardless of their usage, they will be paying the company $30,952 a month. They also in addition to the fixed fee, they will be charged, at this point, .9178 cents per CCF of water, which is considerably less than some of the volume metric charges that you will see for some of our other classes of customers; we’re around about $1.50. In event that Anheuser Busch uses less than 650,000 gallons per year, they will true up with us at the end of the year and pay the difference on any shortfall. We’re very happy to have this contract because what it is going to do is it is going to help to stabilize rates, and Anheuser Busch was happy because they still have the ability that they can conserve. For both parties it was, I think, a beneficial contract. Some of the termination provisions; Anheuser Busch obviously wanted some provisions to be able to terminate the contract. They can terminate it with two years’ notice without cause. Why the two years, that enables the company, because they are such a large customer, it would enable us to go back to the Public Utilities Commission (PUC) to set rates accordingly so there was not a revenue shortfall. In addition, we have agreed, they were concerned, we had such a large increase due to the major upgrades to our treatment plant of over $40 million, which I know most of you are aware of, and in my experience with the company this is really a one- time major expense that we should not see for many many years to come, but they were concerned about it so we said alright we will put some limitations on the increase going forward. We have agreed that if their rates increase $1.50 CCFs or up to $1.50 and/or their meter charge goes up around $1,850 that they must give us 90 days notice and then the contract will terminate in a year. Again, giving us time to seek rate relief with the PUC so that we do not have a revenue shortfall. I believe that summarizes the high points and the key points of the contract, but I think it is beneficial both to the company, it also provides that Anheuser Busch is going to pay its fair share of the allocated costs, and we Pennichuck Water Special Committee -8- 02/07/11 have a ten year contract, which is also very good, and they still can conserve. I think all in all it is a good contract for both sides. Chairman McCarthy Do you know offhand how much storage capacity they have onsite? Bonalyn Hartley Brian I don’t. I know it is a good amount, but I don’t, but I can get that for you. Chairman McCarthy It seems like if they had had a day’s storage at 2 million gallons that is now two days, which is actually better for us from a management perspective. Bonalyn Hartley I will find out for you. It is easy information to…it is interesting I was thinking about that today when I was reviewing the contract, and I said I wonder what that storage is up there so I wished I had asked, but I can find out for you. Alderman Tabacsko Thank you. I guess my question is maybe for Mr. Patenaude; the difference between this contract and the previous contract, which presumably is what you based your due-diligence on in the review, that analysis or comparison from the beneficial attributes, how it affects the acquisition by the City. It is great that we had a contract and now another one, but what does that difference really mean? John Patenaude Actually when I looked at it, the old contract called for a minimum projected annual revenue and it was declining each year, and at 2011 it was roughly $379,000 and then 2012 was roughly $303,000 so it was declining each year coming down. Now with just the, as Bonnie indicated, there is the monthly meter charge and that is roughly $3,600 a month, but then just the fixed fee runs about $371,000 if you multiply that out, and then there is the other charge on the actual volume they use so actually I would say we are equal to or a little better than where we were at. The other thing is the way that this whole thing works under the PUC, to the extent it gets approved by the PUC, the revenue requirement doesn’t change so it is a way that it gets allocated out to customers that really changes. Alderman Tabacsko And so then am I correct to interpret that changing from one contract to the next does not have an impact on the rest of the ratepayers at least as far as the rate case that is pending is concerned or am I misinterpreting that? Bonalyn Hartley No you are not. What will happen as Mr. Patenaude has explained, when we set rates there will be a total revenue requirement, and in this case the revenue requirement, which we are looking at right now, is $912,313 for Anheuser Busch. All of the remaining revenue requirement will be allocated amongst all of the other customer classes. There is always an affect when you reallocate on a customer service basis on all classes of Pennichuck Water Special Committee -9- 02/07/11 customers; we have fire protection, we have general metered customers, we have other contracts. There will be some shift for some customers, but it is not going to be any different than it might have been otherwise. And you should know, as Mr. Patenaude said, that under the prior contract the difference is very little for Anheuser Busch. If I am looking at the 2009 test year based on the volumes they used, it was about $844,000. Using the same volumes based on the 2009 usage, we’re talking $912,000 so we are not talking a tremendous difference between what Anheuser Busch had used in the test year versus what this contract provides for now. But this contract is better because as Mr. Patenaude said the other contract had a declining benefit for Anheuser Busch. It really was not good for the company; we couldn’t catch up fast enough to get rate relief. This contract protects us in case of a revenue shortfall from Anheuser Busch. They must true up at the end of the year at least to the level that they have committed to. So it is a good thing. Chairman McCarthy So essentially they are paying almost the same yearly cost, but for reduced usage, and the advantage to them is they would have paid more per unit usage under the old contract with the new rates. Bonalyn Hartley That is correct. But in addition to that, so that it would comport with the cost of service study they had to agree to reducing the availability to them. Originally they had an availability of 2 million gallons per day, now it is only 1 million. Once that got calculated through the current cost of service study that in itself allowed the rates to be reduced. Chairman McCarthy That also gives us our next million gallons a day of expansion without additional capital investment at that point. Bonalyn Hartley Yes. That is correct. That is the way to look at it. And then as Mr. Patenaude said, we asked to consolidate this contract into the current rate case that is pending before the Commission for consideration, and that is before them right now, and we have agreed to what they call rolling discovery; questions regarding this contract and my understanding is staff and the OC have agreed to consider it as part of the case so that will be good. Alderman Sheehan Thank you. My question is to Mr. Patenaude. Have we run this through the revenue model to have a comparison for before and after? John Patenaude The revenue model because it is like squeezing jello so to speak, the revenue model is the amount of money that you need on the projected revenues, and to the extent that Anheuser Busch doesn’t pick it up other customers do, so net is zero impact to the revenue model. It impacts who gets hit, but right now what we are hearing is that there is a very minimal if any differential between the requirement and what the contract gives us. There should be no major impact to customers, but the revenue requirement would be the same regardless of the contract or no contract. What would happen is if this contract didn’t exist the amount would be required from other sources within PWW. Pennichuck Water Special Committee -10- 02/07/11 Alderman Cox What concerns if any do you have with the new termination points that they have added to this contract that weren’t in the previous three contracts? Bonalyn Hartley Actually that is a good question. The reason we put these termination provisions in this contract is that we felt in the last contract we weren’t protected because what happened is they recycled water, which is as I said a good thing, but conserved tremendously and their usage dropped precipitously so what happened was we had a revenue shortfall because they conserved so much. We couldn’t get in for rate relief quickly enough to cover that revenue shortfall. In this particular contract, they have to give us two year’s notice. We can get in and get rate relief within two years. Usually a rate case, you file for a rate case and it can take up to a year to process so you need that time to consider all of the elements of the case particularly when you have a large customer like this that can literally affect your total revenue requirement and your ability to pay your operating expenses comfortably, etc. We feel real comfortable with these provisions and actually negotiated them with that in mind. Chairman McCarthy What was the old termination requirement? John Patenaude It was on a sliding scale depending on when they gave notice within the ten year period. When they gave Pennichuck notice in the spring it was a two-year notice. It is basically the same, but what would happen under… Chairman McCarthy Was that what was required or was that what they chose to give us? John Patenaude That was required, but there is also because of the…there is an adjustment relative to the contract, relative to the adjusted minimum annual charge so it slides down once they give their notice. It gets to be very complex depending on where you are. Here it is just you give notice and you continue the contract until the end of the two years. Chairman McCarthy What is the duration of this contract? John Patenaude Ten years. Chairman McCarthy I guess the good news there is that would seem to indicate that they are not planning to go anywhere. Bonalyn Hartley We thought so. They didn’t share that with us, but that was the indication. You should know that at one point they expressed interested in resurrecting, they have some wells, resurrecting their wells and coming off the Pennichuck Water Special Committee -11- 02/07/11 system altogether. I don’t know how serious they were, but certainly it gave us pause. I think this is good. We don’t want to lose them as a customer. It really helps to mitigate rates for other customers and they have been a good customer over the years. We have had a good relationship and we would like to continue. Plus they are a good employer in the community. Alderman Tabacsko This is just kind of for my own information; you had mentioned earlier about some of the reasons that they get special treatment being that they invested in the line that runs to their plant and the meters and whatnot. Now as it relates to the City’s acquisition and being part of this, who owns that pipe now? Whose pipe is that? Is that part of the asset of Pennichuck? Bonalyn Hartley Yes. It was contributed. So it is ours today, yours tomorrow. Chairman McCarthy It is contributed, but that means it is not used in ratemaking right isn’t that part of the kayak that comes out? Bonalyn Hartley Yes. But we own the asset and we maintain it. When assets are contributed to the company we maintain them, but Alderman McCarthy is correct they are a reduction to rate base. Alderman Tabacsko Thank you. Chairman McCarthy Are there any other questions? The motion before the committee is to recommend final passage of R-11-87. Do you want to ask any questions Alderman Cookson before we vote? Alderman Cookson Could I ask for a recap please? Chairman McCarthy The recap is we like the contract it gives us about the same revenue as the old contract did. Alderman Cookson Could I ask what is the timing on this? What is the consequence of us not passing it at this particular time or at the next Board of Aldermen meeting? Bonalyn Hartley There are some consequences. We have this contract, we have asked to consolidate it with our current rate case, and it is important it does get consolidated so that when the revenue requirement is set and the allocation of all of the revenues amongst the various classes of customers is established that that revenue requirement is solid and that we are not missing a piece. So it is very important from the company’s perspective that this gets approved not only just here but at the Commission so that we can have fair and equitable rates amongst all of the customer classes and not have a revenue shortfall. Pennichuck Water Special Committee -12- 02/07/11 Alderman Cookson If I recall correctly we filed with the PUC this past Friday is that correct? John Patenaude Yes. James McNamee, Esq. Yes, but that is not related to this. This is the Pennichuck rate case that Ms. Hartley is talking about, but the contract as she is saying is important as part of that case because if it were not in there then the revenues would have to be raised from all of the remaining rate users. Alderman Cookson And the timing for that hearing by the PUC is scheduled for when? Bonalyn Hartley Currently we are still in discovery. We just had our fourth set of data requests, which we have answered. There are going to be rolling data requests on Anheuser Busch because this contract came late into the case. We are fortunate they are going to consider it, and we are looking right now for a final hearing on the Pennichuck rate cases somewhere around May 20th, and I apologize they just changed the date so I don’t have it in front of me but I believe there are going to be two hearing dates, and at that time we have a final hearing, all of the testimonies in, hopefully we have a settlement before the Commission and hopefully we have an order some time on July. Alderman Cookson And the reason why we require this resolution to authorize the Mayor to enter into this is because we have signed a Definitive Merger Agreement? James McNamee, Esq. Correct. This is deemed actually in the agreement itself with Anheuser Busch this is referred to as a material contract and we need to have some say in that, we need to ascent to that because it is not in the ordinary course. Alderman Cookson So Pennichuck couldn’t carry through without our authorization or the Mayor’s authorization to have Anheuser Busch considered in the rate case? James McNamee, Esq. Possibly. Alderman Cookson Did I hear two different answers? Pennichuck Water Special Committee -13- 02/07/11 Bonalyn Hartley I think it would be very difficult given that we have a Definitive Merger Agreement. It would be very very difficult for us to proceed, but it would make it an unfortunate circumstance for the rest of the ratepayers in Nashua and the surrounding communities would have to pick up the revenue shortfall from this contract. Chairman McCarthy If you went forward without approval of contract #4 basically the condition of record would be that notice has been given and the contract is to be terminated, which would mean the ratemaking has to take into account the shortfall of that revenue and distributed amongst the other… Bonalyn Hartley It would not be in the best interest of the City or the company or anyone because it is a large customer and they have a large volume of usage and it really stabilizes rates for the rest of the communities. Communities that have high water rates usually don’t have industrial commercial base, which we are fortunate enough to have in this system, and it really stabilizes rates and keeps them affordable for everybody. Besides that they are a major employer and we like to encourage that too. Alderman Cookson Thank you. If I could ask Mr. Chairman, were there any other key points or questions that were discussed this evening that I missed? Chairman McCarthy I don’t think so. There was a recap of what the differences are in the contract and then discussion of the fact that basically the revenues under anticipated usage in the new contract are about the same as the previous revenues were so that it doesn’t impact the model when talking about revenue requirements. Ms. Hartley described that she think that the new contract is beneficial to both the company and the customer at this point. Alderman Cookson Thank you. Chairman McCarthy Any additional questions or discussion? The motion is to recommend final passage of R-11-87 MOTION CARRIED NEW BUSINESS – ORDINANCES – None ADJOURNMENT MOTION BY ALDERMAN COX TO ADJOURN MOTION CARRIED The Pennichuck Water Special Committee meeting was adjourned at 7:46 p.m. Alderman Jeffrey T. Cox Committee Clerk  ) ,,0" _i,," ..f- O 'Lc. PREPARED FOR: MASTER SITE PL.AN yner/Sw-anson, Inc. (LOT 8 . 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