SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported)..September 10, 1997
BIRMINGHAM UTILITIES, INC.
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(Exact name of registrant as specified in its charter)
Connecticut 0-6028 06-0878647
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
Incorporation)
230 Beaver Street, Ansonia, CT 06401-0426
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 735-1888
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Former name or former address, if changed since last report)
Item 5. Other Events.
Birmingham Utilities, Inc. (the "Company") announced on September 10 that
it had accepted an offer from Nemer Associates, Inc. for the latter to acquire
from the Company all six of the building lots in its approximately 10 acre
Lakewoods subdivision in Seymour, Connecticut. The agreed purchase price of
$300,000 is above the minimum purchase price required by the Connecticut
Department of Public Utility Control (the "DPUC") in its December 31, 1996
generic approval of the Company's application to sell the property. The DPUC
must approve the final contract terms which are currently being negotiated, but
the Company knows no reason why such approval would not be forthcoming and
expects to close on the sale during the fourth quarter of this year.
Connecticut law requires that (a) the net, after-tax proceeds from the sale of
any land by a water company be used by the company to finance the construction
of utility plant improvements and (b) the net, after-tax gain from such sales
be shared between a company's ratepayers and its shareholders as ordered by the
DPUC in each case. The DPUC's December decision requires that the net after-tax
gain (estimated by the Company to be $145,000) with respect to the Lakewoods
sale be shared between the Company's ratepayers and shareholders in an
approximate ratio of 33% to ratepayers and 67% to shareholders. The gain
sharing mechanism used by the DPUC involves an amortization of the gain into the
Company's rate base over time for ratemaking purposes.
The Company's announcement follows its receipt last week of a preliminary
Draft Decision from the DPUC on the Company's application to sell approximately
245 acres of additional land in Seymour to M/1 Homes, LLC for a purchase price
of $3,950,000. In that preliminary decision, the DPUC determined that the
estimated net, after-tax gain of $2,119,300 from that sale must be shared in a
ratio of approximately 27% to ratepayers and 73% to shareholders. The DPUC's
preliminary Draft Decision must be reviewed by three Commissioners before a
Final Decision is issued; the Company expects such a Final Decision to be issued
on or about September 17, 1997. The Company's Purchase and Sale Agreement with
M/1 Homes provides that the buyer may terminate the agreement if it is unable
to obtain, by December 31, 1998, various local, state and federal land use
approvals necessary for its proposed development of an 18-hole golf course
together with not less than 180 detached housing units.
The DPUC also held a public hearing last week on the Company's unrelated
application to sell approximately 145 acres of additional land to the City of
Derby, Connecticut for $1,800,000. Public comment at that hearing was uniformly
favorable with respect to the planned "open space" use of the property by the
City. While it cannot predict the outcome of the DPUC proceeding, the Company
knows of no reason why the DPUC should not approve the Company's application.
The Company cannot predict at this time what gain sharing ratio the DPUC will
order. The Company expects a Final Decision in the Derby case by early November
and, if it is favorable, to close on the transaction in December of this year
or January 1998.
In a related matter, the Company confirmed that it is negotiating with the
Trust for Public Land, a not-for-profit organization acting as agent for the
Town of Seymour and the Town of Oxford in those towns' respective efforts to
acquire approximately 273 acres of the Company's remaining excess land in
Seymour (not including approximately 78 acres on Great Hill Road north of
Cemetery Road) and all of the Company's excess land (approximately 465 acres)
in Oxford. It is premature to predict whether or not the Company will be able
to enter into an agreement for the sale of any or all of the land currently
under discussion or for what price such land might be sold.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused the report to be signed on its behalf by the undersigned
hereunto duly authorized.
BIRMINGHAM UTILITIES, INC.
(Registrant)
Date: September 12, 1997 By /s/ Aldore J. Rivers
Aldore J. Rivers, President
