NASHUA — Several municipalities may soon be reimbursed the money they spent helping the city acquire Pennichuck Corp. nearly two years ago.
According to Brian McCarthy, president of the Merrimack Valley Regional Water District and president of the Nashua Board of Aldermen, a significant amount of money was spent on legal fees by eight municipalities in southern New Hampshire during the acquisition.
One law firm representing the regional water district is owed more than $100,000, according to McCarthy, who said each community is also owed money for helping to develop the charter.
For the first time since the city acquired the water company in early 2012, Pennichuck Corp. recently declared a shareholder dividend to Nashua in the amount of $500,000. McCarthy said half of that dividend payment should be given to the Merrimack Valley Regional Water District for distribution among the eight municipalities.
Mayor Donnalee Lozeau agrees and is requesting that the Board of Aldermen this week reaffirm its obligation to the MVRWD to reimburse it for expenses incurred as a result of its participation in the Pennichuck Corp. acquisition process.
“The city’s remaining obligation under the (settlement) agreement is to reimburse the district for its expenses in an agreed-to amount of $250,000,” says a memo written to the Board of Aldermen from the mayor. “It is just short of two years since the district fulfilled its obligations to the city.”
Several of the communities that make up the MVRWD spent money on legal fees, developing a charter and ultimately supporting the acquisition, said McCarthy, explaining that money is now owed back to them.
Aldermen are expected to vote on the proposed reimbursement on Tuesday, he said.
Once the $250,000 reimbursement is distributed, McCarthy said the remaining shareholder dividend payments — in the amount of $500,000 each year up to $5 million — will be kept by the city.
“This is the first payment from Pennichuck. Really, it is a refund for these other towns that kicked in some money to buy the water company,” said Alderman-at-Large Barbara Pressly, who encouraged the municipalities to form the MVRWD in 2004.
While Pressly agrees that the money is owed back to the communities, her primary concern is a separate obligation by the city that dedicates one seat on the Pennichuck Board of Directors to the MVRWD.
Although a seat has been reserved, Pressly said it has been vacant for nearly two years, which she believes violates a previous order by the Public Utilities Commission.
“That is really frustrating,” Pressly said on Sunday. “These towns represent 25 percent of the water company. By denying them a voice, it is absolutely inappropriate and absolutely wrong.”
Acknowledging the communities deserve the money they are owed, she said they also deserve a voice and a seat on the board.
Tom Gaydos of Pelham was nominated by the MVRWD to serve on the Pennichuck Board, according to McCarthy. While there was some confusion as to whether Gaydos was originally eligible for the position since he serves as a town manager, according to the Pennichuck by-laws, Gaydos was eventually deemed eligible since his position is not an elected role.
Still, McCarthy said Pennichuck officials have not yet approved or rejected Gaydos’ nomination.
The city acquired Pennichuck Corp. in January 2012 for about $150 million, paying $29 a share for Pennichuck’s email@example.com