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Wednesday, March 14, 2012

Pennichuck directors grapple with unique status as corporate board under city ownership

If you want to know what the new board of directors of Pennichuck Corp. is up to, just go to one of their Friday morning meetings, if you have the time.

Or, you can go online and read the minutes of their meetings at However, be prepared to wait a while.

So far, one set of board of directors meeting minutes have been posted on the Pennichuck website under “company reports,” and that happened after The Telegraph asked for them. Minutes are supposed to be posted once they’re approved by the directors, said John Patenaude, chief executive officer of Pennichuck Corp.

The board has held two meetings so far; minutes for the Jan. 27 meeting are now posted online. The Feb. 24 minutes will be posted after they’re approved later this month, Patenaude said.

Until Wednesday, the Jan. 27 minutes weren’t on the website and their whereabouts were the subject of some confusion.

Thomas J. Leonard, chair of the 10-member Pennichuck board, said Wednesday at first that he didn’t know if the minutes would be posted on the website or how the public would gain access to them.

“I really don’t know how. I’m not part of the administration,” Leonard said.

Later that day, the minutes went up.

While Pennichuck officials have decided to allow the meetings of the board of directors and minutes to be open to the public, figuring out how to make them public has been one of the many challenges for the new public water utility.

The fact that it is open to public scrutiny is the choice of the company, and by its sole stockholder, the city of Nashua, and is not required by law, said Patenaude.

Even though Nashua now owns the company, the Pennichuck board of directors is a corporate board, not a municipal board, Patenaude said.

Under RSA 293-a, state law holds that a corporate board is ruled by its bylaws, Patenaude said. When the city acquired the company, the city aldermen reviewed and approved the bylaws.

The bylaws state the company will abide by the state Right to Know Law. However, the city, as the corporate shareholder, could have opted not to include that provision, Patenaude said.

“Our goal is to be open and transparent,” said Leonard.

Several people from the public have attended the meetings held since the city of Nashua closed on a stock purchase deal in January to acquire the company and its subsidiaries, including Pennichuck Water Works, the local water utility. The $200 million deal was years in the making and culminated the city’s efforts to control its drinking water supply and the watershed that feeds it.

Although Pennichuck’s bylaws say the company is subject to right to know, that very question is in the hands of a court.

After the city acquired the company, The Telegraph sought to obtain and publish the salaries of Pennichuck employees through the state’s Right to Know Law. The newspaper argued the company is now a public body subject to the law because it is owned by the city.

A union representing a majority of the company’s workers obtained a temporary restraining order preventing the company from releasing the salaries, which have been private before the city’s ownership, and preventing The Telegraph from publishing the salaries.

Just because the city holds all of Pennichuck’s stock doesn’t mean that Pennichuck is now an arm of the city, the union’s attorneys argued.

A hearing on the issue is scheduled for later this month in Hillsborough County Superior Court.

“We’re waiting on that whole thing,” Leonard said.

While the company’s goal is to be transparent, the courts will have something to say about that issue, Leonard said.

Nashua Mayor Donnalee Lozeau said the Pennichuck board would operate in a way that is open to the public.

“So far, that’s what we’ve been doing,” said Lozeau, who as mayor will also serve as a director during the transition into city ownership.

Interestingly, one of the things the board did during its first meeting was go into nonpublic session. Lozeau made the motion to enter nonpublic session, as well as the motion to seal the minutes from public view.

No other city official in on the board, and after Lozeau’s term expires in two years, no city official will hold a seat on the board.

The Pennichuck board isn’t under the city’s jurisdiction, Lozeau said.

“I do think that there is a distinct separation, as there should be,” she said.

Unlike city boards, Pennichuck’s minutes aren’t posted on the city’s website. It’s more appropriate for them to be published on Pennichuck’s website, Lozeau said.

Same with meetings. While board and committee weekly meetings are posted on the city’s site, those are, or should be, published on Pennichuck’s website, Lozeau said.

“I think that this is a learning process. There are going to be some bumps along the way,” she said.

Patrick Meighan can be reached at 594-6518 or