There’s uncertainty who can cast Nashua’s lone vote as Pennichuck shareholder

NASHUA – The city’s unprecedented ownership of a private water company has again stirred complicated questions – this time, over who fills the $12,000-a-year seats on the board of directors running Pennichuck Corp. Usually it’s the company’s shareholders who elect directors. Nashua is Pennichuck’s only shareholder, so who makes the call? It may be just one person: The mayor or the president of the Board of Aldermen, or it may be somebody else. Aldermen weren’t sure Tuesday when the issue came up at a Pennichuck Special Water Committee meeting with Pennichuck officials. Like much of the company’s operations since the city acquired it for $152 million a year ago, the situation is complex. The city became Pennichuck’s sole shareholder when it acquired the company in January 2012. It paid $29 a share for Pennichuck stock, for about 4.7 million shares totaling $137.8 million. On Tuesday, aldermen and Pennichuck officials discussed the company’s first shareholders meeting since it came under city ownership last January; the meeting is slated for March 23 at the Radisson Hotel. According to the corporate structure, the annual meeting is the one piece of Pennichuck operations required of the shareholder. The meeting is meant to give updates about the company and to fulfill shareholder responsibilities, Pennichuck board Chairman Jay Leonard said Wednesday. “This is kind of a new area for us all,” Leonard told aldermen Tuesday, comparing the Board of Aldermen to an institutional owner of stock. “The Board of Aldermen acts as one, and they own the only share of our stock in the company,” Leonard explained. As a result, aldermen may need to pass legislation that elects a single representative to vote the city’s single share at the shareholders meeting and other special sessions. “That same process applies to things like any modifications to the bylaws,” Leonard said. Pennichuck’s proxy statement will include nominees to the board of directors and “housekeeping” changes to the board’s bylaws, such as how directors refer to officers, he said. Board of Aldermen President Brian McCarthy suggested Tuesday that the mayor of Nashua should vote the city’s share at Pennichuck’s annual meeting – but the company’s current structure also puts a wrench in that solution. Mayor Donnalee Lozeau is serving a two-year term on Pennichuck’s board of directors during the company’s transition from private to city ownership. “That’s probably not the right thing to do, given the mayor’s inherent conflict as a director for the duration of that term,” McCarthy said.