Pennichuck directed to divide $500,000 dividend
NASHUA — Instead of accepting a $500,000 shareholder dividend from Pennichuck Corp., the city of Nashua is instead directing the water company to return half of the money to local municipalities that assisted in the acquisition of Pennichuck.
On Tuesday, the Board of Aldermen voted for Pennichuck Corp. to return $250,000 to the Merrimack Valley Regional Water District for distribution to eight communities that spent significant amounts of money on legal fees during the acquisition process about two years ago.
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. Brian McCarthy, who serves as president of the Board of Aldermen and president of the MVRWD, said half of that dividend payment should be given to the water district for distribution among the participating municipalities.
Mayor Donnalee Lozeau agreed and requested 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.
Some city officials originally objected to the process in which the money was being returned, arguing that the $500,000 should be given directly to the city, and that the city should then distribute the $250,000 to the water district.
However, McCarthy explained Tuesday that if the city accepted the $500,000 and then returned half to the water district, the funds would have to be applied toward the city's spending cap. If that occurred, Nashua would have only $90,000 in funds remaining before it reached the spending cap, he said, warning board members that may not be appropriate.
Alderman-at-Large Mark Cookson echoed those comments, recommending that Pennichuck give the funds directly to the water district to avoid having the city's finances calculate so close to the spending cap limit.
Several of the communities that make up the MVRWD spent money on legal fees, developing a charter and ultimately supporting the acquisition, McCarthy said earlier.
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 firstname.lastname@example.org