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Saturday, March 24, 2012

Pennichuck board gets educated on company financials

MERRIMACK – The members of the Pennichuck Corp. board of directors are still getting their feet wet in heading what’s believed to be the country’s only municipally owned private water utility.

The 10-member group held a public board meeting Friday morning.

“The board is learning how to work together and is beginning to understand the different skill sets each person brings to the table,” said Nashua Mayor Donnalee Lozeau, who sits on the board.

Lozeau will be a board member for two years. Once that term is up, no Nashua official will hold a seat on the board.

“The board brings real skills to the table already,” Lozeau said. “They’re capable to deal with the issues coming before them. But it’s still a learning curve to come to understand Pennichuck as a corporation and all of its subsidiaries. It’s a lot of information.”

The city of Nashua closed on buying Pennichuck and its subsidiaries for $200 million in January.

Along with local water utility Pennichuck Water Works, the city acquired regulated utilities Pennichuck East and Pittsfield Aqueduct in the deal, as well as Pennichuck Water Service Corp. and Southwood Corp., Pennichuck’s real-estate subsidiary.

Among the business discussed Friday, the board approved a $69,977.89 dividend be paid to the city on April 25. Nashua became Pennichuck’s sole shareholder when it purchased roughly 4.7 million of Pennichuck shares at $29 a share for a total cost of about $137.8 million as part of the acquisition. Lozeau likened the payment toward the city’s $200 million bonds to a payment on “a hydrogen car that will last 30 years.”

The meeting, held at Pennichuck’s Manchester Street headquarters in an area near the watershed, was the third the board has held since it took over in January.

Friday’s business was largely administrative, appointing Pennichuck officials to offices vacated by former employees, as well as assigning board members to committees.

Controller Larry Goodhue was appointed as the company’s chief financial officer and treasurer, replacing Thomas Leonard, former CFO, senior vice president and treasurer.

Goodhue spent a good portion of the meeting going over the financials for Pennichuck Water Works and its subsidiaries.

Suzanne Ansara was appointed corporate secretary for Roland Olivier, Pennichuck’s departing general counsel, corporate secretary and president of Southwood Corp.

Goodhue, Pennichuck CEO John Patenaude and human resources director Mary DeRoche were appointed as trustees of the savings plan for Pennichuck employees, replacing Leonard and former President and CEO Duane Montropoli.

Lozeau was appointed to the board’s Nominating/Governance Committee, along with board members Elizabeth Dunn and Paul Indeglia.

Lozeau joined the committee to help determine how the three spots left on the board could be filled.

The Merrimack Valley Water District may get to nominate somebody for a position on the board, Lozeau said. The board is also weighing whether to bring back a former board member from Pennichuck prior to the acquisition. The board emphasized other shifts Pennichuck must make now that it’s considered a public company.

“Now that we’re effectively a publicly owned company or owned by a public entity, we may want to be more transparent with the selection process of our auditor,” board member Jim McMahon said.

Questions of transparency have been a focus of board meetings since the group first met Jan. 27 and entered into nonpublic session that day.

The board met in nonpublic session again Friday, citing the state statute that permits nonpublic meetings relating to acquisition, sale or lease of property, which could affect the company adversely if discussed publicly. The agenda for Friday’s nonpublic session consisted of three items of business, board Chairman Jay Leonard said.

“Everybody agrees that our goal is to be as much in the public as reasonably possible under Right to Know, but also in the context of protecting these very clear concerns in our business,” Leonard said.

The last nonpublic session dealt with a human resources issue and a property issue, Leonard said. The minutes from that meeting are still sealed.

“Other than some of the H.R. matters, I would anticipate that some of these (minutes) will become unsealed,” Lozeau said.

Indeglia was the only board member to vote against going into nonpublic session Friday.

Toward the end of the public part of the meeting, Patenaude addressed Pennichuck’s efforts to focus on teaching conservation tactics through education initiatives such as watershed tours during “Water Week” in May.

Under new ownership, Lozeau said Pennichuck will likely be approaching conservation with a new consciousness. The next board meeting will be April 27.

Maryalice Gill can be reached at 594-6490 or mgill@nashuatelegraph.com. Also, follow Gill on Twitter (@Telegraph_MAG).